1940 CONGRESSIONAL RECORD-SENATE 4107 SENATE Mr. TYDINGS. Mr. President-- The VICE PRESIDENT. The Senator from Maryland. MONDAY, APRIL 8," 1940 Mr. TYDINGS. Out of order, I ask unarlimous consent for the immediate consideration of House bill 8913, the legisla The Chaplain, Rev. Z~Barney T. Phillips, D. D., offered the following prayer: tiv ~ appropriation bill. The VICE PRESIDENT. Is there objection to the request 0 God, the everlasting Lord and Father, who art with us in of the Senator from Maryland? all our ways, we beseech Thee, as we bow our hearts in prayer. Mr. BYRD. Mr. Presiden-t, I inquire if the motion of the to fill us with the strengthening peace of Thy conscious pres Senator from Maryland takes precedence over a resolution ence and with the knowledge that love is at the root of every which has been on the desk for some time and which went thing, for it alone can bring us back from the solitude which over under the rule. is haunted with perplexity into our true relationship with our The VICE PRESIDENT. The Senator from Maryland is fellow man and the Christ who knows the joys and sorrows of asking unanimous consent to dispense with the morning hour our ever-changing life. May we always place the value of the for the purpose of considering a certain appropriation bill. soul above the body, character above circumstance, and with Mr. BYRD. I will have to object. A resolution submitted s1mple loving worship, by continual obedience to the call of by me has been on the desk for nearly 30 days, and it is very duty and by purifying ourselves, even as Thou art pure, may important, I think, that it should be acted on. .we creep ever closer unto Thee who art the last great cer Mr. TYDINGS. Mr. President, would a motion be in order tainty of life. We ask it in the name and for the sake of to proceed with the consideration of the bill to which I ·have Jesus Christ our Lord and Savi our. Amen. referred? THE JOURNAL The VICE PRESIDENT. No. The Senate met this-morn ing following an adjournment, and the provision of para On request of Mr. BARKLEY, and by unanimous consent, the . graph 3 of rule VII as to the call of the calendar on Mondays reading of the Journal of the proceedings of the calendar day is effective. Friday, April 5, 1940, was di~pensed with, and the Journal Mr. BARKLEY. Mr. President, let me say that the morn was approved. ing hour will probably not last long; it does not usually do MESSAGES FROM THE PRESIDENT-APPROVAL OF BILL AND JOINT so; and I think there ·will probably be no difficulty about RESOLUTION having the bill of the Senator from Maryland considered. Messages in writing from_the President of the United States TRIBUTE TO THE LATE SENATOR BORAH were communicated to the Senate by Mr. Latta, one of his secretaries, who also announced that the President had ap Mr. HO;LT presented resolutions adopted as a tribute tc. . proved and signed the following act and joint resolution: ·the memory of Han. William E. Borah, late a Senator from On April 4, 1940: the State of Idaho, by Townsend Club, No. 1, of Moundsville, s. 1955. An act to authorize the Secretary of Agriculture to W.Va., which were ordered to lie on the table. delegate certain regulatory functions. RELIEF OF M. E. M'GIVERN On April 5, 1940: The VICE PRESIDENT laid before the Senate a letter s. J. Res. 226. J.oint resolution providing for the filling of from the Secretary of the Interior, transmitting a draft of a vacancy in the Board of Regents of the Smithsonian Insti _proposed legislation for the relief of M. E. McGivern, which, tution of the class other than Members of Congress. with the accompanying papers, was referred to the Commit CALL OF THE ROLL tee on Indian Affairs. Mr. BARKLEY. I suggest the absence of a quorum. RELIEF OF GUY F. ALLEN The VICE PRESIDENT. The clerk ·Will call the roll. The VICE PRESIDENT laid before the Senate a letter The Chief Clerk called the roll,. and the following Senators from the Secretary of the Interior, transmitting a draft of answered to-their names: proposed· legislation 'for the relief of Guy F. Allen, Chief Dis Adams Donahey King Schwellenbach bursing Officer, Division of Disbursement, Treasury Depart- Ashurst Downey La Follette Sheppard , ment, which, with the accompanying paper; was referred to Austin Ellender Lee Shipstead Bailey Frazier Lodge Smathers the Committee on Claims. Ba!!.khead George Lundeen Smith Barbour Gerry McCarran Stewart PETITIONS Barkley Gibson McKellar Taft The VICE PRESIDENT laid before the Senate a cablegram Bilbo Gillette McNary ·Thomas, Idaho Bone Green Maloney Thomas, Okla. 'from the president of the Senate of Puerto Rico, stating Bridges Guffey Mead Thomas, Utah that "The Senate of Puerto Rico at the meeting held on Brown Gurney Miller Tobey April 3, 1940, unanimously resolved to request from the Bulow Hale Minton Townsend Byrd Harrison Murray Tydings United States Senate the approval of Senate bill 2547, intra- Byrnes Hatch Neely Vandenberg . duced by Senator MURRAY, to impose additional duties upon Capper Hayden Norris VanNuys Caraway Herring O'Mahoney Wagner the United States Public Health Service in connection with Chandler Hill Overton Wheeler the investigation, treatment, and control of tuberculosis," Clark, Idaho Holman Pepper White which was referred to the Committee on Finance. Clark, Mo. Holt Pittman Wiley Connally Hughes Reed Mr. HOLT presented a paper in the nature of a petition Danaher Johnson, Calif. Reynolds from members of Local No. 25, American Flint Glass Work Davis Johnson, Colo. Schwartz ers' Union of North America, of Pennsboro, W. Va., praying Mr. MINTON. I announce that the Senator from Florida for the imposition of higher tariff duties on glassware, and [Mr. ANDREws], the Senator from Nebraska [Mr. BURKE], also that the control of all tariff legislation be retained in the Senator from New Mexico [Mr. CHAVEZ], the Senators the Congress, which was referred to the Committee on from Illinois [Mr. LUCAS and Mr. SLATTERY], the Senator Finance. from Maryland [Mr. RADCLIFFE]. the Senator from Georgia REPORTS OF COMMITTEES [Mr. RussELL], the Senator from Missouri [Mr. TRUMAN], Mr. CLARK of Idaho, from the Committee on Irrigation and the Senator from Massachusetts [Mr. WALSH] are de· and Reclamation, to which was referred the bill
ENROLLED BILLS AND JOINT RESOLUTION SIGNED ruary 17, 1931, which position is hereby abolished as of July The message also announced that the Speaker pro tempore 1, 1940"; and in line 17, after the words "in all", to strike out had aifixed his signature to the following enrolled bills and "$142,880" and insert "$144,540", so as to read: joint resolution, and they were signed by the Vice President: Salaries: Secretary of the Senate, including compensation as dis S.1372. An act for the relief of W. B. Tucker, Helen W. bursing officer of salaries of Senators and of contingent fund of the Senat_e, ,$8,000; Chief Clerk, who shall perform the duties of reading Tucker, Lonie Meadows, and Susie Meadows; clerk, $5,500 and $1,500 additional so long as the position is held by S. 1790. An act for the relief of the Eberhart Steel Prod the present incumbent; financial clerk, $5,000; assistant financial ucts Co., Inc.; clerk, $4,500; Parliamentarian, $5,000 and $1,500 additional so long as the position is held by the present incumbent; Journal Clerk, · S. 1856. An act conferring jurisdiction upon the United $4,000; principal clerk, $3,780; legislative clerk, $4,000 and $1,000 States District Court for the District of Rhode Island to hear, additional so long as the position is held by the present incumbent; determine, and render judgment upon the claim of George enrolling clerk, $4,000; printing clerk, $3,540; chief bookkeeper, Lancellotta; $3,600; librarian, $3,600; assistant Journal Clerk, $3,360; executive clerk, $3,180; first assistant librarian, $3,120; keeper of stationery, S. 2609. An act to reimpose the trust on certain lands $3,320; clerks-two at $3,180 each, three at $2,400 each, three at allotted to Indians of the Crow Tribe, Montana; $2,640 each, clerk in Disbursing Office, $2,400, six at $2,400 each, three S. 3068. An act to provide an additional swn for the pay at $1,860 each, three at $1,740 each; special officer, $2,460; press rela tions officers-one at $2,140, one at $1,900 in lieu of one of the posi ment of a claim under the act entitled "An act to provide tions authorized by Senate Resolution No. 428, agreed to February for the reimbursement of certain personnel or former per 17, 1931, which position is hereby abolished as of July 1, 1940; sonnel of the United States Navy and United States Marine messenger, $1,260; laborers-one at $1,740, one at $1,620, five at Corps for the value of personal effects destroyed as a result $1,380 each, one in Secretary's office, $1,680, one, $1,560, one, $1,260; of a fire at the Marine Barracks, Quantico, Va., on October in all, $144,540. 27, 1938," approved June 19, 1939; and The amendment was agreed to. H. J. Res. 407. Joint resolution to extend the authority of The next amendment was, under the subhead "Committee the President under section 350 of the Tariff Act of 1930, as employees", on page 6, line 19, after the figures "$2,880", to amended. insert "assistant clerk, $2,520"; and in line 20, before the word ORDER DISPENSING WITH CALL OF CALENDAR "assistant", to strike out "four" and insert "three", so as to The VICE PRESIDENT. The calendar, under rule VIII, read: is in order. Post Office and Post Roads-clerk, $3,900; assistant clerk, $2,880; Mr. BARKLEY. I ask unanimous consent that the call aEsistant clerk, $2,520; three assistant clerks at $2,220 each; addi tional clerk, $1,800. of the calendar be dispensed with. I may say to Senators that it is my pm·pose to try to arrange for a call of the The amendment was agreed to. calendar on ·wednesday of this week. The next amendment was, on page 7, line 13, to change the Mr. McNARY. Mr. President, I shall not object to dis total appropriation for committee employees from "$505,960" pensing with the call of the calendar this morning, but I to "$506,260." did want to have assurance that we would proceed with the Th'e amendment was agreed to. call by Wednesday. Mr. KING. Mr. President, I should like to ask the Senator Mr. BARKLEY. That is my purpose. from Maryland what change has been made in the existing The VICE PRESIDENT. Is there objection to the request law with respect to the Capitol police. of the Senator from Kentucky? The Chair hears none, and Mr. TYDINGS. None. Let me say at this time, so that it is so ordered. Senators may understand, that the bill as it came from the LEGISLATIVE APPROPRIATIONS House contained recommendations for appropriations of Mr. TYDINGS. Mr. President, I move that the Senate pro $23,907,744. The amount of the reduction by the Senate com- · ceed to the consideration of House bill 8913, the legislative mittee is, net, $202,224. The amount of the bill as reported to appropliation bill. the Senate is $23,705,520. The Senate committee made net The motion was agreed to; and the Senate proceeded to· reductions in the bill, and only a few routine items were dis consider the bill to create more wealth; we 'steadily make it more and more ton. It is the picture of a happy-loo~ng man, I suppose of difficult for persons past 60 to obtain any job; and then we 65 years of age, expecting that he is soon to come into relief neglect and refuse to give to retired workers the means of and security through his annuities under the Social Security buying the abundance which those machines, manned with Act. As a matter of fact, Mr. President, if we could bring younger workers, could so bountifully produce? Not only our before the Senate the portraits of those men whom this pic industrial and social realities but our political realities de ture is supposed to represent, their faces would mirror anguish, mand that the age limit shall be dropped from 65 to 60. despair, fatigue, and insecurity as they seek and fail to find That is the first important respect in which the Townsend any relief in present pension laws. bill differs from the present Security Act. Let me discuss the typical case, Mr. President; let us take What is the next important difference? Well, the proposed the average man; let us not descend into the inferno of those bill would provide about $600 a year for a retired worker. unfortunates living in the jungles, sleeping on gratings in the Fifty dollars a month is not very much to live upon. Prob streets, existing in misery in the poorhouses and old-age ably few of us could believe that a man and his wife could farms. Let us take a fortunate case; let us take the average live upon that amount. Certainly no one would say it is too case of an employed worker and see what the Social SecuritY high. I ask Senators to review the unchristian, indecent Act does for him. amounts paid under the present Social Security Act; and I Mr. President, in the covered occupations reported to the challenge contradiction when I state they are grossly insuffi Social Security Board, the average earning was almost exactly, cient. Millions of words have gone forth from the Social though not quite, $900 a year-$890, to be exact-let us say Security Board misleading and deluding the older people of $75 a month. Eighty-seven percent of those men who are America into the belief that at last their anguished hearts married when they become 65 have wives under 65. These were to have some relief and they were to be provided enough will receive no additional benefit. As a matter of fact, the to live on. average age of the average wife is about 5 years younger than There are two basic provisions in the Social Security Act: her husband at that age. First, the Federal-State matching plan; and, second, old Here, then, is the average American citizen who has helped age insurance, the contributory plan. Considering all the to build our homes and stores, to construct our railroads and pension recipients together, they average about the sum of our highways, who has helped to create the abundance of this $4 a week for each one; and we, in the wealthiest land of Nation by sweat and toil in his working years. He has reached the whole world, we who love to boast to other nations of our 65; he is filled with delight at the thought that his Govern generosity and our bounty, are content to run our factories ment is going to assist him and that he and his wife are to and machines at 50- or 60-percent capacity and point to the receive security and care from then on. So he goes to · the payment of pensions of $4 a week as a generous Christian act. Social Security Board and says, "I am married; I shall be 65 Mr. President, in the past year . I have received tens of this January 1; my wife is ·60. I have been employed for 3 thousands of letters from anguished hearts and miserable years, making $75 a month. How much am I entitled to?" homes, from men and women who have helped to build the The Social Security expert says, "Well, that is easy. Take wealth upon which the rest of us live, who now, in their de your average earnings of $75; we give you 40 percent upon clining years, are facing conditions so intolerable and so the first $50, or $20; we give you 10 percent upon the second terrible that many of them take the short suicide route to $25, or $2.50 additional. So you will receive $22.50, plus 1 escape, and many of them die of broken hearts. I can prove percent of tpat amount for each year, which for 3 years would it by my correspondence if proof is desired. make it about $23." Mr. President, generalities and figures do not mean very Mr. President, I sometimes think that most men who have much. Let us reduce the problem to one concrete case. led easy lives, most men who have been insulated against the Let us take a typical case· under the social-security law to tribulations of adversity, know but little of the great common see why it is that contributory workers in America are not heart of America, and the suffering and problems of our applying for these pensions. Because, Mr. President, that is people, because the Social Security Board in its figures to the the truth-the prophecies made by the Social Security Board Finance Committee prophesied to the Finance Committee, in that a certain number of applications would be filed and a effect, that the great majority of the men thus making $75 certain amount of money would go out are not being fulfilled. a month would retire at 65 and live on the $23 a month. In other words, the Social Security Act today is of such Mr. President, have these gentlemen ever stopped to ask negligible importance that we may say that it is practically themselves how men can do that? Apparently not, for they worthless so far as the great bulk of the American people are are now surprised that men are not retiring, and when they concerned. send out their social-security experts to investigate-to Mike Mr. LUNDEEN. Mr. President, will the Senator yield? or Jim or Bill, they seem surprised to learn that 19 times out Mr. DOWNEY. I yield. of 20 the worker will say "Mr. Social Security Expert, i: have Mr. LUNDEEN. The able Senator refers to the Social not $1 of insurance or of savings or of property and I simply Security Board. Perhaps it might better be referred to as cannot exist with my wife on $23 a month. As a matter of the Social Insecurity Board. I voted against the present fact, the Social Security Board members should not be sur Social Security Act. I exposed its fallacies. On the day after prised, for their records show that of the men working at 65, its passage I denounced this social insecurity and demanded earning $75 a month, 19 out of 20 of them have no savings or its repeal. I then called attention to the fact that action insurance. must be by the National Government and not by States As a matter of sad fact they are generally in debt two or that funds should be collected by the United States of Amer three hundred dollars. ica and disbursed under the general-welfare clause of the And the records of the Social Security Board itself show Constitution. These principles are fundamental and must that 19 out of 20 of the men in that class have no children stand. Any other course will lead to disaster. There is yet upon whom they can thrust themselves and gain anything time to mend our failures by constructive legislation. thereby. Their descent upon the homes of their relatives Mr. DOWNEY. I thank the Senator, and he is correct, for cruelly burdens those homes and brings no relief to tl;lem. Oh, it is insecurity; it is not security. But in the misleading and yes; many of them may go into homes already struck by delusive columns of newspaper propaganda that have gone poverty; many of them may bring greater misery and insecu forth to the aged people of America from the Social Security rity into the lives of their children; but the harsh fact is, Mr. Board they have been led to believe that the Social Security President, that 50 percent of the workers of America cannot. Act is a generous, effective law, when, as a matter of cold fact, help their parents, and those are the very parents who need it is a futile, impotent instrument of poverty and neglect. help. In the preparation of their propaganda the Social Security Let us see, Mr. President, how absolutely meaningless, how Board has issued this placard which I am now exhibiting. I absolutely worthless is this $23 a month to the elderly citizen. secured this from one of the streetcar companies of Washing- I take now the t:ypical case developed by the Social Security 4118 CONGRESSIONAL RECORD-SENATE APRIL 8 Board figures themselves. Mike and his wife pay $20 a month get as a matter of charity under the matching plan is greater -'tor their rent; and they have a most modest home for that than the amount the Government gives him under the plan rental. Their food costs them another $20 a month. Mike which involves taxing his wages. In other words, in many spends $5 a month on streetcar fare. He is paying $15 a States-New York, Ohio, I am not sure of Michigan, but month upon dental and medical and other bills. He has many, many States-the amount of money which is paid out about $10 a month left for clothing and recreation and news as a matter of governmental subsidy substantially exceeds the papers and telephone. As a matter of fact, he cannot live on amount of money paid out on old-age insurance based on that $75 a month, counting the unforeseen items of sickness, contributions. dental, and medical attention and other unforeseen burdens. Not only that, Mr. President, but think of this: The man Yes, Mr. President, we may degrade him down into a home whose wages are taxed, if he is married and his wife is past in the slums that he might rent for $14 or $15 or $16 a.month; 65, will have his allotment increased 50 percent, while if he we might slowly starve him and his wife by malnutrition by receives a pension as a matter of charity it will be doubled. cutting their food allowance down, perhaps, to $15 or $16 a If the man dies his wife will get 100 percent under the month; but that man and his wife cannot possibly live upon matching plan, the charity plan; but if he dies, under the that $23 a month. Hence, I say to the distinguished Senator contributory plan the wife, for some strange reason, will who honors me here with his presence, the chairman of the receive only 75 percent of the amount. Finance Committee [Mr. HARRISON], if and when he attempts Mr. President, think to what an end we· have come in the to reappraise and reexamine the workings of the Social Se State of California. Here is the Social Security Board set curity Act, he will find that the money the Social Security ting up a vast actuarial scheme to determine the pensions Board promised would be disbursed is not being expended, workers in California will receive 25, 50, yes 100 years from because men who are earning $75 a month cannot retire and now; and the amount that the workers in California will live on $22 or $23 a month. They cannot even slowly starve receive 50 years from now under the actuarial plan is ex to death upon that amount, but their starvation would be ceeded by 97 percent in the case of those now receiving rapid, indeed. charity payments. In California, the pension State, we give Mr. President, I wish I could bring before the Senate a a single man $40. If he is married we give him $80. If he composite of the hundreds of thousands of letters which are is married and his wife is past 65, under the contributory now in our records, and in the records of the Townsend or plan he will generally get around $25 or $35 a month. ganization, reciting the history and the misery of the retired Mr. President, I have talked to some persons who have people of America. Less than 20 percent of those past 60 now seen the files of the Social Security Board at Baltimore. have jobs. About 15 percent have savings. All the rest of They tell me they never could have conceived that there them are thrust into a precarious and insecure existence in a ·could be so many files in existence. A young boy from Cali land of superabundant wealth. fornia wrote me. He was 15 years of age. He had started Well, you ask me, what are the aged people of America to work in a covered occupation. The Social · Security Board going to do? I reply, if there is any Senator here who can has his card, and for 50 years the Social Security Board in answer that question, I wish he would rise and declare him tends to keep track of his earnings. Fifty years from now, self. under the actuarial scheme, it is going to allocate him less Mr. LUNDEEN. Mr. President- at the very maximum· than we now pay as a matter of gov The· PRESIDENT pro tempore. Does the S nator from ernmental subsidy in California. California yield to the Senator from Minnesota? Think again, Mr. President: If that boy of 15 should ulti Mr. DOWNEY. I do. mately marry a wife 15 years younger than he, who should Mr. LUNDEEN. He might transfer himself to the mercies live to be 85, that would mean that the.Social Security Board of the Surplus Commodities Corporation, which has recently have in the present determined by an involved actuarial sent food to some of our citizens, valued at 1 cent, and in scheme what that widow will receive one century from now. some instances, 1% cents per meal per person. See W. P. A. What omniscience! reports. All they get, I understand, is some old apples, onions, Why, Mr. President, if anybody can look back over the past and inferior flour. That might make a good text for some 20 years, with its blood and destruction and dynamic changes; totalitarian dictator. What a grand standard of living for a with its ever-increasing tempo of production; and then wlth democracy. its ever more potent machines, believe he can work out a DR. FRANCIS E . TOWNSEND plan that will successfully determine from wage payments Dr. Townsend will live in history. He stirred a Nation to its over the next decades what wage earners and their widows very depths by his fervent appeals. For years we liberals and will be paid 25, 50, 75, or 100 years from now, I must admit progressives appealed to our fellow citizens for social-security he has more confidence in his intellectual processes than I legislation. Dr. Townsend did more than all of us-he made have in mine. us social-security minded. He talked not only old-age pen Mr. President, let us go back for a minute to the typical sions-he advocated recovery legislation, and there must be case we have been discussing-the man making $75 a month. sane and sensible recovery legislation-recovery before it is too Let us see what he is going to do; and if there is a Senator late. Hats off to Dr. Townsend and the mighty host he leads here who can give him a message as to how he should live onward to paths of progress and prosperity. from now on, I should like to be able to bear some hope and Mr. DOWNEY. Mr. President, it is true that Mike may encouragement to that man, because this is what his letter go to his State and receive from his State an allocation for tells me is happening to him: a portion of the charity pension if the charity pension is Let us take the case of a man who is a janitor, we will say, greater than what we call old-age insurance. And that in a private school, earning $75 a month. He is beginning brings us to another weird provision of the Security Act. to get tired and ailing. He has worked since he was 15 or 18 As I have already indicated, we have two pension phases of years of age. His heart begins to bother him when he works the present law. We have the contributory system, under vigorously, when he arises early in the morning in the cold which the worker is now paying 1 percent upon his wages, and the darkness. The spring has left his limbs; his vitality and his employer an equal amount, which amount will finally has begun to fail. He is subject to sickness and dizzy spells. be raised to a total of 6 percent. We have the matching The doctor has told him he has to stop working so hard. The . plan, under which the pensions are given as a matter of truth is, he has worked for this civilization of ours for 50 years. charity, the Federal Government matching the State pay Now he is old and tired and ailing. He is entitled to rest and ments up to $20 a month. Now, let us see just how strangely a serene retirement~ A younger man ought to take his job. these plans work out when compared to each other. But poor Mike's days are not filled with the hope of a happy The Federal Government has created a system in which, and dignified retirement-only with worry for fear he may in almost one-half the States, the amount that a man may lose his job. He suffers from insomnia at night as the specters 1940 CONGRESSIONAL RECORD-SENATE 4119 of insecurity thrust themselves upon him, and he says to being taxed 1' percent of his pay, and that rule holds for the himself, "What would happen to my wife if I should die past 3 years and the coming 3 years. It means that for those tomorrow?" And sometimes, in the gloom and fear of the six years a man getting $3,000 a year would pay in only $180, night, he figures that he will do what tens of thousands of and his annuity would be valued by an insurance company old persons do every year in the United States-kill himself. as worth about $10,000. As a matter of fa.ct, the tables of the And in despair he questions, "What will happen to my wife if Social Security Board show that the annuities which will be I do?" And he thinks, "Well, maybe she can go out to the earned by the workers will be paid almost wholly from public county poor farm." So Mike takes a trip out to that dismal funds. abode of hell, and he sees what Mrs. Roosevelt saw, what Mrs. Mr. President, the question is asked, How will this system Roosevelt should have known she would see, because you can ultimately work? How much of the pensions will :flow from see the same fearful, tragic sights in 9 out of 10 old-age homes public sources; how much from the worker's contributions? and poor farms in the United States, where hundreds of The advisory council of the Social Security Board plans that thousands of persons who have been loyal, decent American ultimately the cost be met in approximately equal shares .by citizens now exist in tragic decay that is worse than death employers, employees, and the Federal Government·. itself. But Mike clutches at the hope that the county poor So that the Social Security Board itself estimates that, farm would be a haven for his widow if he should pass on; looking ahead, say, 20 or 25 years, when the plan is fully in and he goes out, and he sees a plain building like a canton operation, only one-third of the annuities disbursed will come ment. He walks in over a plain pine board floor, unvarnished, from the contributions of the workers themselves. The rest with 20 or 30 beds on one side of the room and 20 or 30 beds will come either from an employers' tax, which becomes a on the other side. And there he sees to what unhappy fate consumptive tax, or from Federal deficit appropriations. his own wife may come if he should die or lose his job. As These figures would seem to indicate that to the extent of he steps into that room he is met with the nauseating odor at least one-third these annuities would be financed by the that comes from the uncared-for bodies of human beings. workers' contributions. But Iet me call attention to the fact And he sees the meager food those poor, doomed persons are that the workers who pay in that one-third do not comprise given; in this land where food is destroyed. He sees all the all of the ones who get the money. And why do I say that? tragedy of the indigent aged. Let us not paint further that Here is something which should interest to the very heart tragic picture, but when the husband has seen it, he knows the distinguished chairman of the Committee on Finance, that if he leaves this world he would better take his wife along because under this strange law, while we tax workers receiv with him than let her go out there. ing less than $200 a year, we do not pay them anything at Mr. President, I realize that these are not pleasant sub all. We take their money but we exclude them from all jects to discuss. It is much nicer to put them behind us, and benefits. In other words, what this strange, undemocratic, think of our generosity to foreign nations, our wealth, and cruel law does is to take the most unfortunate, submerged our great achievements. Nevertheless, there are millions groups in America, the low-paid and the part-time workers, upon millions of American citizens anguished and insecure many of whom are doing the hard, dirty work of the world, not knowing where they can turn, who can think only of who cannot make $200 a year in money income, and we tax their own tragic plight and look only to us for relief. their hundred dollars, or $150, or $199, and, having added And what I have said I repeat, if there is one Senator who their contributions to this great fund, we then deny them knows how the aged of America can exist under the Social all benefits and pay out their money to the workers who Security Act, let him tell how a man earning $75 a month and have been permanently employed and have received higher supporting a wife, can retire and take this $22.50 or $23, be incomes. cause the Social Security Board is now met with that very I stated to the distinguished chairman of the Finance Com problem. And, sadly enough, they do not know how to solve mittee that this argument should penetrate to his heart, be it. All this vast actuarial scheme means almost nothing. For almost no money of any considerable amount is going out, cause about 50 percent of the workers in Mississippi receive less than $200 a year. So we have the strange spectacle because men who are working and making hardly enough on under this law of the money being drained out of the farm which to live cannot retire and take one-third or one-fourth areas and the poorer States to pay workers' contributions in of that insufficient amount. the wealthier regions and the wealthier States. The figures I But perhaps some of my colleagues are saying, "Will not have given to the distinguished Senator from Mississippi some of them get more than $22.50 a month?" Oh, yes, Mr. [Mr. HARRISON] hold true, though to a lesser degree, in all President; some of them will and do. Some of them get $40 the other States in the South and in all the farm areas, in a month, plus 3 percent on that for 3 years, or $41.20 a month. cluding the State of Nebraska. The great industrial, wealthy Who are those fortunate people thus comparatively blessed States and cities will profit immensely by this law. The under this strange, weird law? They are the people who are poorer rural regions suffer immeasurably. making upward of $250 a month. In other words, if one has been a wage earner at $250, $500, $1,000, or $10,000 a month, I will make a remark which might seem exaggerated, but the Government will pay him a monthly pension of $41.20. I make it after months of deliberation: If Thaddeus Stevens, If he should die and leave a widow and four children, they with all his talent and vengeful fury of reconstruction days, would be so fortunate as to get $85 a month. Consider the had desired to degrade and pauperize the South, he could not cruel machinations of this law. As I shall show later, the have worked out with his clever mind an apter constitutional money that is paid out does not come from the workers' con way of doing it than through the contributory plan of the tributions to any substantial extent. This annuity.plan will Social Security Act. be financed chiefly by public money, as I shall demonstrate I have stated to the Senate that old-age insurance would later. The Social Security Board now knows it. While in pauperize the farm States, the Southern States, the poorer the hearings before the Finance Committee they argued to States, to the advantage of the wealthy States. the members of the committee that this was a contributory Let us take one case to see why that is true. Take the plan, they now have dropped all pretense of that and admit State of Michigan, which is at the top because of its great it is not a contributory plan, but they justify it in this way: body of factory and automobile workers. In the State of "Hereafter we are going to pay pensions in America whose Michigan approximately 50 percent of the workers between amount will be determined by the amount of the earnings," 15 and 65 years of age pay contributions. In the Southern not by the amount of contributions, but, I repeat, by the States the number runs to 12, 14, 15, or 16 percent. Conse amount of the earnings. quently, in the great industrial States of the Nation about Mr. President, I have here the reports of the Social Security four times as many workers are subject to the terms of the Board, showing that for the next 20 years the amount of act as in the farm regions and the Southern States. contributions paid by a worker would not by any appreciable Let us pass on to the next factor. In Michigan-and ·amount contribute to the sum that is to be disbursed to him. Michigan is to be congratulated on it-only about 15 percent Think of it for a moment. An employee at the present is of the workers receive less than $200 a year. Consequently, LXXXVI--260 4120 CONGRESSIONAL RECORD-SENATE APRIL 8 85 percent of those who pay contributions will receive can fully understand the Security Act only after months of pensions. study, and even then there remain many uncertainties. But As I stated, in the State of Mississippi one-half the work I desire to make this point clear, and if there is any Senator ers receive approximately less than $200 a year, and of the who differs with my view I would invite his participation in pitiful percentage in Mississippi who pay contributions, only the discussion, so that what is the viewpoint of the Social about 7 percent of the total population of the State will be Security Board may be frankly defended and discussed. paid annuities. So that the law works out in this way: Out In the first place, Mr. President, as I have already endeav of funds that are principally coming from public sources, $7 ored to show, the contributory plan has degenerated into a per inhabitant will go to Michigan for $1 per capita which scheme of social dividends under which the workers will re will go to the State of Mississippi. I may say that South and ceive 80 percent of their annuities from public sources. The North Dakota are deprived equally with the Southern States Social Security Board defends such a policy. Tacitly admit in that respect, and I have the figures here to show anyone ting that the contributory plan is a social-dividends plan, who may desire to see them. they say, nevertheless, we should give out benefit in the in Mr. President, let me return to the point I was making a verse order of the need of the recipients. That is my charac while ago. While, as a matter of fact, the Social Security terization of their policy. Board now estimates that ultimately one-third of the money I think it is a fair one, because they propose to give out paid out to annuitants will come from the contributions of substantial annuities to the groups at the top and miserable the workers, those figures must be qualified in this way: and meager payments to the groups at the bottom. That amount includes the contribution from the partially Let me read to the Senate their last statement on this sub employed and the low-income group, so that one can safely ject, and Senators will notice in this statement they have say that in the State of Michigan not 20 percent of the money abandoned all pretense that this is a contributory plan. Let which is paid out in annuities will come from the contribu me quote from their own publication: tions of the workers receiving the annuities. In other words, The Social Security Act laid upon the Board an administrative if the Social Security Act is maintained upon its present responsibility probably unparalleled in the history of social. insur actuarial base, this plan will remain 80 percent a social ance--the responsibility for devising a system applicable to millions of workers whereby each person who qualifies for benefits receives dividend plan-a social-dividend plan under which we will an amount determined by his individual wages in the covered em disburse $5 and $10 to the wealthy State for every $1 for the ployment. poorer State. It has been generally accepted that the relation of benefits to Let me say, Mr. President, if there are Senators here who earnings reflects American traditions and provides for adjustments to the wide differences in the wage scales and living standards hold dear their farm population, in States which have both within the Nation. city and farm population, the Social Security Act will do this: For every dollar that will go into the rural regions, The Board has dropped all pretense that payments are to $10 or $20 will go into the city regions. In other words, I be proportionate to contributions, and now finds the index might say to the distinguished Senator from Michigan [Mr. of amount of benefit solely in earnings. VANDENBERG], whose high intelligence I have always admired, I have the honor to have present several Senators from the tl:lat if in Michigan certain counties are purely farm and South. I want to know: Are they willing, to accept that rural, as compared with Detroit, on a per capita basis, Detroit standard, under which $5 or $10 will fiow into the more under the contributary plan of old-age insurance will get .prosperous industrial communities in the North as compared $10 or $20 for every dollar paid out in the farm regions. to every $1 that they will receive in their States? Mr. VANDENBERG. Mr. President, will the Senator yield? Mr. President, that is the position of the Social Security Mr. DOWNEY. I yield. Board, for its members believe that we must perpetuate in Mr. VANDENBERG. Since the able Senator has been kind America in retirement a caste system. If a man has been enough to address himself to me, I should like to make an harassed and driven by low wages and unemployment during observation. I am somewhat familiar with the intricacies his working years, he may be enttrely excluded from benefits and the inadequacies of the Social Security Act, to which the or handed $10 or $12 a month; but if he had been so fortu Senator is so ably referring. In many aspects I agree with nate as to have had steady employment and to earn $250, him in his strictures. I think that in the long view it is going $500, or $1,000 a month, then we will give his widow and his to be utterly impossible to satisfy the security demands of orphans $85 a month. the American people with the Social Security Act, in its pres Mr. President, is it .possible that that is the viewpoint of ent prospectus; and I am completely convinced that the Sen the Chief Executive of the United States? I do not know, but ator is correct to the extent that just so soon as the resources he should speedily declare himself, for it is the viewpoint of can be safely provided to do it, without upsetting our general the Social Security Board, whose members are appointed by recovery, pensions, as a matter of right to the senior citizens him. of the United States, are, and should be, inevitable. Is it possible that it is the viewpoint of the Senate or the Mr. DOWNEY. Mr. President, I, of course, need not say House of Representatives? I cannot believe it. how happy that remark makes me, coming, as it does, from Mr. President, it happens that in the past 2 months two one of the distinguished statesmen of America. clients of mine died in the State of California. I should I want to say now that, while my attack upon the social like to tell about them. One of them was a man of high security law is a rather critical one, I have no criticism to ability, who died worth perhaps $2,000,000 or $3,000,000. make of either the House committee or the Senate com At the time of his death he was a comparatively young man mittee. Many of the points which are now developing were and was -receiving a salary of about $50,000 a year. He left a not foreseen even by the social-security experts. It was an wife and three or four young children. The wife and children involved and complicated subject, and I know that every will now be paid $85 a month until the children reach the Senator and every Representative took this law believing that age of 16 or 18, and thereafter, when the wife shall reach it was the best law that could be provided at that time. the age of 65, she will receive three-quarters of the primary But, Mr. President, I am compelled to say further, that annuity of the husband. That man had paid into the sys~ the Social Security Board now is actually taking the position tern a total of $90. The annuity will pay his wife and chil that, regardless of money coming from contributions, we must dren probably somewhere in the neighborhood of $20,000 to set up a plan in the United States under which what are vir $25,000. ·tually social dividends will be disbursed in the inverse order Another client of mine who died was a poor cannery of the need of the recipients. worker, whose steps were always dogged by misfortune, who I approach this question now in the hope that I can make was always cursed by lack of the opportunity to work. Per myself clear to the Senators who are kind enough to listen to haps he was not as able as some other men, but in a hard me, but this is an involved and abstruse subject, and a person world he did the best he could. His average earnings had 1940 CONGRESSIONAL RECORD-SENATE 4121 been $25 a month in covered employment, entitling him to were living on the hand -outs of friends and relatives. In a primary benefit of $10 a month. He, too, left several short, in a relatively prosperous year at least 14 percent of our small children and a widow. The maximum she can receive senior citizens-and probably more-were gravely in need of is double what his primary benefit would have been, or $20 Federal benefits. · a month. When that husband died probably there was not Mr. President, I shall assume-unless some Senator rises sufficient food in the house. The children probably had not and declares himself in opposition to me-that there is not a had sufficient medical care. Their bodies probably lacked single Senator who does not in his heart desire to provide soap and decent cleanliness. The family was probably 2 dignity and security of a decent kind for retired workers past or 3 months behind in its rent. Yet we have worked out 60 years of age. I assume that there is only one question in a plan which will give to the wealthy widow and children the minds of Senators, and that is, Can it be done in justice out of public money, and not out of the contributions of to the other segments of our population? Can it be done the man himself-a substantial annuity of $85 a month, without injury to our general economy? whereas the woman who needs help desperately will receive Mr. McNARY. Mr. President, I suggest the absence of a $20 a month, or less than a fourth of the amount paid to quorum. the wealthy widow. The PRESIDING OFFICER (Mr. HILL in the chair). The Mr. President, Senators who are lawyers know that ordi clerk will call the roll. narily the widow of a man who has earned $250, $500, $1,000, The legislative clerk called the roll, and the following or $10,000 a month has the benefit of insurance, property, Senators answered to their names: and savings, and usually there are wealthy relatives. Such Adams Davis Johnson, Calif. Reynolds a widow has ample protection. Her husband was among Ashurst Donahey Johnson, Colo. Schwartz Austin Downey King Schwellenbach the upper 3 percent of the wage earners of America, because Bailey Ellender La Follette Sheppard we have only that percentage earning upward of $250 a Bankhead Frazier Lee Shipstead month. Senators also know that when some poor unfor Barbour George Lodge · Smathers Barkley Gerry Lundeen Smith tunate in life, earning $25 or $50 a month, dies leaving a BUbo Gibson McCarran Stewart widow and small children, usually there is no insurance, and Bone Glllette McKellar Taft there is no money in the home. There is no property, and Bridges Green McNary Thomas, Idaho Brown Guffey Maloney Thomas, Okla. there are no savings. Bulow Gurney Mead Thomas, Utah I for one will to my dying day attack and indict this law, Byrd Hale Minton Tobey Byrnes Harrison Murray Townsend which has now degenerated into a scheme of fake social Capper Hatch Neely Tydings dividends, under which, in democratic America, we now · Caraway Hayden Norris Vandenberg intend to disburse public money in the inverse order of the Chandler Herring O'Mahoney Van Nuys Clark, Idaho Hill Overton Wagner need of those receiving it. Clark, Mo. Holman Pepper Wheeler Mr. VANDENBERG. Mr. President, will the Senator Connally Holt Pittman White yield? Danaher Hughes Reed Wiley Mr. DOWNEY. I yield. The PRESIDING OFFICER. Eighty-four Senators having Mr. VANDENBERG. The Senator has indicated that, on answered to their names, a quorum is present. the average, the contributory system works to the apparent Mr. DOWNEY. Mr. President, before taking up my argu average advantage of the larger industrial States-let us say ment where I desisted, I ask unanimous consent to place in the wealthier States. But, of course, in the final break the RECORD, at the conclusion of my remarks a copy of gross down, that becames a snare and a delusion, because within income table for 1936, referred to in my main argument; the so-called industrial or wealthier States we confront in two newspaper articles of a statistical natqre, by noted turn precisely the problem to which the Senator now refers, statisticians of America, showing that the burden of non the horrible discrimination against the less-advantaged and productive workers upon th.e productive groups is less now less-privileged people in the States. So, in the final analysis, than it has ever been, and that it will be no greater in 1980 it is not a problem invidiously between the States. It is a than it is at present, or was in 1929. A table showing the problem invidiously between the citizens themselves, wherever average per capita payments to participating earners under they may live. We have the same problem in Michigan as the old:..age insurance plan by States; and the inscription exists in Mississippi as between the citizens of our own States. upon the placard which I have displayed to the Senate. Does not the Senator agree to that statement? The PRESIDING OFFICER. Without objection, the mat Mr. DOWNEY. Mr. President, I am in wholehearted agree ters referred to by the Senator will be printed in the RECORD ment upon that question. If I had been able to secure the at the conclusion of his remarks. tables from the Social Security Board, I should have de (See exhibits 1, 2, 3, and 4.) veloped the figures showing the difference in the future fi.ow Mr. LUNDEEN. Mr. President, will the Senator yield? between city and rural annuities; but if the Social Security Mr. DOWNEY. I yield. Board has such figures, at least I have not been able to Mr. LUNDEEN. Before the Senator resumes his very able secure them. argument may I call attention to two books so well written And let me add to what the distinguished Senator from by the able Senator from California on the subjects, "Pen Michigan has said that what happens in the State of Mis sions or Penury?" and "Highways to Prosperity." I ask the sissippi is vital to us in California and to him in Michigan, attention of the American public to these books from the because we are one Nation, one people. We shall live and pen of the learned Senator from the great State of Califor prosper together or finally be all together involved in common nia, and I ask especial attention to the volume, Highways national ruin. to Prosperity, just now off the pres.s. Mr. President, as I have previously stated, I wish that I Mr. DOWNEY. I . thank the Senator. could read one composite letter of the millions which have Mr. President, before the quorum call, I had stated to the come in from the older citizens of America. Sitting in Wash Senate that it was my opinion that every Senator, without ington, it is difficult to understand what is happening in the exception, would be delighted to work out some sort of a great cities, on the farms, and in the factories of America. pension plan for people past 60, of an adequate nature, if Marjorie Shearon, in a report to the Social Security Board they believed that such a plan could be worked out without after an examination, reported that of an average group of injustice to the other segments of our population, and with 1,000 Americans beyond the age of 65 in 1937, only 128 had out injury to our economy generally. I myself am confident current earnings; only 150, or 15 percent, had savings; and that that can be done, and I wish now very briefly to ad only 73 had public or private pensions, while 203 were depend vert to certain figures which I gave at the beginning of my ing in whole or in part on private or public charity, and 446 argument. 4122 CONGRESSIONAL RECORD-SENATE APRIL 8 It is our op1mon, though it may be subject to a certain Mr. President, I may say that this problem of pensions amount of change upon further investigation, that a 2-per is, in an integral way, tied into the problem of excess sav cent gross-income tax on a national income of $75,000,000,- ings. I believe that a wise and bountiful pension plan such 000 would raise about $6,000,000,000, which would afford $50 as that provided by the Townsend bill would so tend to in a month for 10,000,000 people past 60. crease prosperity that the added consumptive tax would be As I said, 10,000,000 people constitute 8 percent of the absorbed in greater profits and in higher wages. For the population, and $6,000,000,000 is 8 percent of the national purpose of this argument, however, I am not making that income of $75,000,000,000. If a 2-percent gross-income tax contention, although Dr. Townsend primarily conceives his would raise 8 percent of the national income, one might plan to be one of recovery and full employment rather than logically expect an 8-percent increase in the cost of living relief; and I may say that Dr. Townsend, with his genius to compensate for that tax; but let me show the Senate that and his common-sense vision, has anticipated most of the that viewpoint overlooks the saving that will be made by economists in America with his theory on the effect of excess this type of pension. savings, and the need of greater purchasing power among In the first place, the present Social Security Act is levied, all of our impoverished groups. I shall later consider Dr. roughly, upon almost $30,000,000,000 of pay rolls. In a few Townsend's pension plan from the standpoint of national years it will be a 6-percent levy, which will raise $1,800,000,- recovery. But that on some future day. 000. We are now paying out approximately $400,000,000 in The argument may be passing through the minds of cer old-age assistance, and we are paying out not less than $300,- tain of my auditors, "Yes; while it is true that well-to-do 000,000 more for the benefit of workers on the W. P. A. and America ought to be willing to tax itself 5 percent upon its others on general relief rolls who are past 60 years of age. living to provide decency and security for our retired So we may say with certainty that if a general pension law workers, what of the rest of the impoverished groups of were put into effect we would save about $2,500,000,000 of America? What of the unemployed, the W. P. A., the present and contemplated expenditure under the pension and C. C. C., and the other great groups, desperate and insecure and hungry and unemployed?" Well, Mr. President, if general relief laws. As a matter of fact, in addition to that we know that hundreqs of thousands of workers past 60 there are Senators here who take the viewpoint that we would give up their jobs, which probably would make a certain must continue to live in an economy of scarcity, that we must continue to apportion out poverty, either by way of saving in relief and W. P. A.; but I do not count that savil).g, if any there would be. But asstiming a saving of $2,500,- increasing the national debt or increasing taxes, that is a legitimate argument. If, on the other hand, Senators believe 000,000, and deducting that from $6,000,000,000, we would according to the pension philosophy not only that we have have a net increase in the burden of taxation of $3,500,000,000, in America a sufficiency for all our people, but also that we which would be something less than 5 percent of a national should have the ability and will to distribute it, the argu income of $75,000,000,000. Is there one Senator here who, if ment ceases to be a legitimate one; for this particular plan he believed that a tax which would increase his cost of living will not take $1 from any of the other great groups who by 5 percent would solve this great and serious problem of are in need. As far as I am concerned, my heart and mind old-age relief, would not be willing to pay that tax? are devoted to any fair and reasonable solution of the prob Much argument has been made, Mr. President, upon the lems of all our impoverished groups. I am not concerned burden which would be thrown upon the worker by a con solely with our senior citizens; but I do not concede that sumptive tax. Let me now advert to that point. we must sit here year after year distributing poverty among · Under the Townsend bill there is an exemption for sal our people when our farms and factories are now working at aries up to $250 a month. Consequently, we may say that little more than half capacity. very probably. the worker would not pay very much more in So, Mr. President, I should like to drive home this point: increased cost of living than the pay-roll tax of 3 percent If anyone says we cannot afford, under the Townsend bill, which is designed to be levied by the present Social Security to give this amount· of wealth to our retired workers, let me Act against his wages. As a matter of fact, as far as the say to him that' there is no lack of ability in the ·business worker is concerned I think it is wholly illogical to consider men of America, in our factories and farms and workers, that levy upon his consumption as a tax at all. In reality, to produce factory and farm products for the older citizens it is an involuntary form of savings under which he and his of America as outlined in the Townsend bill. If there is family pay into a social fund a volume for which he will any lack, it is not in the productive power of the American receive at least two or three times as much as he would get if Nation; it is in our ability to distribute the purchasing power he paid the same amount of money into an insurance com under a capitalistic economy. pany; and in lieu of getting his annuity at 65, as under the I am certain, in my own mind, that under a capitalistic present act, he would get it at the age of 60, and would escape economy we can operate our productive instruments at full the worries and hardships incident to the 5 precarious, des capacity, and I hope there is no Senator here who is so de perate years between the ages of 60 and 65. featist and so dismal in his outlook that he believes we must Mr. President, it is true that as far as the more prosperous continue to operate in an era of scarcity so long as we main groups in America are concerned, they would be taxed under tain a free civilization. this measure much more than under the present law, and Mr. President, in 1929 I went out into the Sacramento Val they would be substantially taxed. As far as a man making ley, where I was practicing law, and I talked to the poultry $10,000 a year is concerned, it would cost him in increased producer; and I found that the poultry producers, with labor living probably 5 percent, or $500 a year; if he had an income that was available, could easily produce twice as many hens of $100,000 that he spent in consumption, it would cost him and twice as many eggs as he was then producing. I went $5,000; if he were one of our fortunate multimillionaires, with to the dairy people, and I found the same thing. I went to a spending income of $1,000,000 a year, it would cost him the fruit and truck people, and I went to our factories and $50,000, and the benefit of his payments and those of the railroads and stores; and everywhere in the Sacramento Val prosperous groups in general would go largely to the workers ley, in 1929, I found a latent capacity to double our produc earning less than $250 a month. tion of wealth, and I am prepared to show the definite figures What this group of our fortunates must determine, what to anyone who desires to challenge that statement. Then I successful Americans must decide, is whether they are willing carried on an investigation in the State of California; and I to give up by a consumptive tax, by way of an increased cost found that our great utilities, our factories, our great stores, of living, about 5 percent of their consumption income; and our farmers everywhere, could produce far, far beyond what I cannot conceive that there is a single American who, if he they ever had produced, lacking only the market and the believed we could thus pay our great and tragic debt to the buying power to stimulate ever-increasing production. retired workers of America, and give them security and peace Mr. President, as we all know, the most conservative esti and dignity, would not be willing to do so. mate by reputable economists shows that, in the United States, 1940 CONGRESSIONAL RECORD-SENATE 4123 we could now produce upward of $110,000,000,000 of wealth, as Sometime, some place, somewhere, some wise man will compared with the sixty and seventy billion we have been drive through Congress a measure, or the American people producing. Consequently, I say that no one can legitimately will adopt a constitutional amendment, providing that there make the argument that America is not wealthy enough to shall be no appropriation without a tax to accompany it. take care of its own retired citizens; of men who have been That will prove to be something which will aid the Govern forced out of jobs by the infirmities of life, or by the oncom ment in meeting its bills in the future. It might prevent ing power of technological development .. extreme inflation. senators would find a pleasure in know Mr. President, this brings me to one final point, and upon ing that when they made an appropriation there would be a this I desire to conclude my argument. I might very hon tax accompanying it to pay for it. Am I correct in saying estly say that if it were not for the proprieties I would like the new bill so provides? to talk here a week upon this subject, but I am going to talk Mr. DOWNEY. The Senator is correct. only a very few minutes longer. The complications of the Mr. ASHURST. I have studied the new Townsend bill, to Social Security Act cannot even be explained in the course of be proposed by the Senator from California, for more than 2 hours because its defects and contradictions are so many that months. I have given it the best thought of which I have the human tongue and the human brain cannot reckon with been capable, and I hope the House will send it to us; I them in any brief period. suppose the House will have to originat-e it. I happened to Mr. ASHURST. Mr. President, will the senator from Cali know the Senator from California when he was a very fornia yield? young boy, and I inflicted a torrent of words on an occasion Mr. DOWNEY. I yield. when he was present more than 35 years ago, in a county Mr. ASHURST. The able Senator said he would be de courthouse in the West. I happen to know that he is a lighted to speak a week. I am sure that I am one out of many very able lawyer, and his career at the bar demonstrates senators who would not be wearied if he did speak a week. that he has practiced law with much success. He spoke If the Senator will pardon me for a reference-it is hardly a earlier in the day about two clients, one of whom was opu question-! want to interject something in his speech. I fear, lent-and I do not make any point against that; I have no however, I will mar the symmetry and strength of the Sena envy of any opulent man or wealthy man-who had paid tor's remarks. in only $90. Is that true? A very able citizen, not residing in my State, wrote and said Mr. DOWNEY. That is true. to me, "I understand you are ·going to support the Townsend Mr. ASHURST. Whereas his beneficiaries will receive $85 bill as it is to be introduced by Senator DowNEY. I would like a month for many years. That does not arouse any envy to know what you mean by such a thing. Can you explain in my breast. The Senator adverted,. in the course of his it?" The explanation I made to that citizen was to send him able speech, to the fact that the beneficiaries of another the bill, with the statement, "The bill itself is the strongest citizen would receive a very small sum, though it is entirely argument I can make." He was fair enough to reply, "Having possible that the citizen of small means may have paid into read the bill, I am for it." the social-security fund a larger sum than the citizen of In this 1ife we are beset by many perplexing things, and fre opulent means had paid in. Could that happen? quently we are in doubt as to which way to turn. One of the Mr. DOWNEY. That might not only happen but will ·rules of moral philosophy is that, in the effort to discover what occur countless times. is right and what is wrong, we should search for simplicity. Mr. CLARK of Idaho. Mr. President, will it disrupt the Truth is generally to ·be identified by its extreme simplicity. Senator's argument if I ask him a question? A complicated matter, crisscrossed by many lines, difficult of Mr. DOWNEY. Not at all, but before I yield I wish to discernment and of analysis, may be suspected. The very sim thank the Senator from Arizona for his distinguished and plicity of the Senator's new Townsend bill indicates its truth happy contribution to the subject. and its strength. Mr. CLARK ot Idaho. I rise merely to add a confirmatory If I am correct in my analysis of the Senator's bill, it does note to the very able and eloquent address which has been not stop any issue, rent, profit, or income any man receives.· delivered by the Senator from California this afternoon, A man may be eligible for this pension at 60 years of age, pro and to the further illuminating interjectory comment just vided he does not receive or earn any salary or wages. Am I contributed by the distinguished Senator from Arizona. I correct in that? think the Senator from California would probably have little Mr. DOWNEY. That is correct. difficulty in obtaining an agreement among Senators that Mr. ASHURST. Secondly, a boy 12 years of age could fig when money is in circulation in the United States we have ure on the back of a postal card just how much each citizen what is called prosperity, that is, we have our economic plant owed and should pay the Government under the new 'Town running at somewhere near full capacity. send plan. Am I correct about that? In the days of laissez faire capitalism, in the twenties, Mr. DOWNEY. That is correct. private capital kept itself in circulation largely by the device Mr. ASHURST. Note the simplicity. They send experts of private spending and private borrowing. Then, when the from the Bureau of Internal Revenue each year so that we crash occurred, in 1930, and the present administration took may forsooth have help in making out our income-tax returns. charge of the economic and other affairs of the country, the Under existing law the wisest and the keenest and most com same money was kept in circulation by Government bor petent man must have the aid of an expert in making out his rowfng and by Government spending, in place of the old return. That is what annoys and perplexes the citizen. The private borrowing and private spending, which has more or American citizen is glad to pay something to his Government, less dried up, due to the accumulation of savings which the but he objects to the annoyance of being constantly beset by a Senator very well points out in his excellent books. Since number of perplexing questions he must answer, with the fear then we have been maintaining the plant of the United that he may be entrapped, notwithstanding he is trying to be States running at part capacity largely by Government fair. borrowing and Government spending, which it is perfectly I wish to commend to the Senate and to the country this obvious cannot go on much longer. It has probably averted new Townsend bill which the Senator from California [Mr. catastrophe, because it has kept money in circulation, but it DowNEY] has proposed. Senators will be amazed at its has done it at the expense of increased debt. simplicity. I repeat, a 12-year-old boy with his pencil could The plan the Senator proposes in his bill, which is known figure on the back of a postal card how much any citizen. as the new Townsend plan, is the only plan I have seen owed the Government under the Townsend income tax law. presented which promises to keep money in circulation, Moreover, in this bill Dr. Townsend has ·hit upon a truth which promises to maintain our economic and industrial which may ultimately prove to be the solution of this coun plants running at somewhere near capacity, without the try's financial troubles. We may come to it, and I think we vicious· counterpart of continually going into debt. should. The suggestion is, no appropriation without a tax If anyone can suggest another method of doing what side by side with it to pay for the appropriation. everyone realizes must be done, that is, keeping money in 4124 CONGRESSIONAL RECORD-SENATE APRIL 8 circulation, keeping the exchange of goods and services and speakers and philosophers of America was born there, flowing freely, yet at the same time showing us how we can to wit, the Senator from Arizona [Mr. AsHURsT]. I have do it without going further into debt, other than by the never told the Senator that before, but many times when I very direct method of gross-income taxation, I think we have been out in the lonely mining camps in the deserts of would be more than glad to hear about that plan. Nevada I have found the people there still talking of Senator Mr. ASHURST. Mr. President, if the Senator from Cali AsHURST. Senator ASHURST was taken to Arizona when a fornia will yield, the able Senator from Idaho made a state mere child, and his high ability there immediately mani ment which should not pass without more notice, although fested itself. we always notice what he says. He says that if someone can At one time, when I was about 17 or 18 years of age, when devise a better plan than the bill the Senator from California I had been expelled from a preparatory school, my father [Mr. DOWNEY] is urging, the new Townsend bill, let such a sent me out to labor in the world with a surveying crew and bill be brought forward. If someone can devise a better bill, one day I came into the town of Flagstaff, Ariz. And as I let it be done, and we will give it consideration. approached the courthouse I saw a great crowd surrounding Mr. CLARK of Idaho. Mr. President, the difficulty is that the building and there was a great air of excitement. As almost anything that is presented in order to keep this totter I walked up to the steps to see whart the occurrence was I ing economy of ours from completely collapsing involves heard a booming, vibrant voice coming out from the court deficit financing. room. I asked one of the bystanders what was up and he Mr. ASHURST. One further suggestion to the Senator. Let told me there was a famous murder case at trial, and that us assume a Senator whose salary is $10,000 a year; he and all a young district attorney, who was known as the silver other citizens should first be entitled to deduct $3,000 as their tongued orator of Coconino County, was making an address exemption. All citizens should be entitled to that exemption, for the prosecution. Even then I was interested in oratory, $250 a month free from tax, or $3,000 a year. Assuming a so I decided to listen and finally wormed my way up into a Senator's salary is his only income, $10,000 minus $3,000 crowded window and I looked out into the courtroom, where would leave $7,000, and his tax would be $140 a year. I could see the judge upon the bench, the unfortunate de There is not a Senator, not a Member of the House, in my fendant,. and the jury, and there addressing the jury was a judgment, if I understand my fellow Senators and Members great, broad-shouldered, fine-looking young man, I guess of of the House, who would not be delighted to make that con 26 or 27, holding forth with powerful magnetic oratory. The tribution. The precedent set would be wholesome. first thing I heard him say, Mr. President, was this: Mr. CLARK of Idaho. Mr. President, I may add further, Now gentlemen of the jury, as I stated to you when I began this if the Senator will yield, to say that this conception of a gross argument 1 week ago [lau ghter], I had 10 points to develop. I income tax is not new. The State of the distinguished Sena have now covered the first 2, and I am going to proceed to the third one. [Laughter.] tor from Indiana [Mr. MINTON] has a gross-income tax now and has had for some time. I assume it is working out satis I might say, Mr. President, that right there my surveying factorily. Several of the European nations, notably Italy and crew lost an employee, because I stayed to listen to all the France, have gross-income taxes, the proceeds of which are points, and I lost nearly a month's salary. applied to particular purposes; and what purpose could be Mr. MINTON. What happened to the defendant? more worthy than the retirement of the old folks to whom this Mr. DOWNEY. The defendant was convicted. For Sena- . Nation owes so much. So there is nothing· revolutionary in tor AsHURST had even then the great power of oratory which this matter. It is a perfectly fine, tested theory of taxation. has made him so noted here. The only revolutionary thing is that for once we would have When I was an amateur in the Senate several months ago, the proceeds of the tax earmarked and put right back in in my first session, there had been long and laborious argu circulation and paid to those who deserve it most. ments, and some of the columnists had been complaining Mr. ASHURST. Mr. President, when the able Senator because the Senators were taking up so much time, either from California yielded to me I was fishing around in the stating what was obviously so, or worse what was obviously dark recesses of my mind to find a world appropriate to ex not so, and I think our most distinguished orator, the Sena press what I wished to say. I could not think of the word tor from Arizona, who combines a perfect facility of language "earmarked." That is the word I meant to use. with a great philosophy and a great poetical imagination, If the Senator will pardon me further, I hope the time will rose and said there and then that he believed that any Sen come when every appropriation must be earmarked by a tax ator, without exception, should be able to say all that he to accompany it. had in his mind in the brief space of 15 minutes. That took Mr. SHIPSTEAD. Mr. President, will the Senator yield? me back to those Flagstaff days when I had heard him Mr. DOWNEY. I yield. talking as a young lawyer. Mr. SHIPSTEAD. I might add that the State of Minne Mr. ASHURST. Mr. President, I would be lacking in sota for more than 40 years has taxed its railroads on the grace and would be either less than human or more than basis of gross earnings, and many of our State taxes are human if I did not seek this opportunity to thank the genial earmarked for certain purposes. and able Senator from California, whom, as I said, I have Mr. DOWNEY. Mr. President, I am profoundly grateful known since his boyhood, and whom I am particularly proud for the contributions that have been made to this discussion to call my friend, and with his kind permission, I know he by the Senators from Arizona, Idaho, and Minnesota. I hope will not be offended if I circulate some portions of his speech at some future date to present a discussion of the problem in my State in the forthcoming campaign. [Laughter.] of excess savings as the cause of the break-down of our Mr. DOWNEY. Mr. President, our ever-distinguished col economy, and I hope and trust that the Senator from Idaho league has the happy closing word, and I cannot close upon at that time will enlarge upon the theory which he has any happier note than he has done, so I will now again adverted to here. advert to the last point, which will not occupy more than a I cannot conclude my remarks, Mr. President, without dis few moments. cussing somewhat the experience I had with the Senator Mr. President, one of the contentions made against the from Arizona [Mr. AsHURST] to which he adverted a while Townsend plan, and indeed any general pension law, is that ago, and I must say that it is partly the example of the dis it is not ethically or morally just to grant pensions to people tinguished Senator from Arizona that makes me want to past 60 or 65 years of age as a matter of social right, but talk another week upon this subject, though I feel compelled that those pensions should be based upon what is termed to restrict myself to an additional 15 minutes. need, and some of the most distinguished members of our Like the Senator, I come from the great and boundless executive branch have so expressed themselves; that we can West. In my younger days I spent some time around a only maintain thrift and energy and a better character by lonely mining camp near Winnemucca, which is out on the compelling the people to save, upon penalty that if they do desert of Nevada, where the great boast of the prospectors not save they shall be consigned to the poorhouse, to inse and the people generally is that one of the great statesmen curity, and lack of dignity and protection in their old age. 1940 CONGRESSIONAL RECORD-SENATE 4125 First let me say this also, Mr. President. It ill behooves ·Mr. President, a social-dividend plan can be urged upon any member of the executive department, or any Senator or another noble ground. It can be put on the basis of simple any Representative who has voted for the social-security justice. For our older who are now in desperate need, whose plan-the contributory part I am talking about now-to in savings have been wiped out by a gigantic depression for voke that sort of an argument against the Townsend plan, which they were not responsible, are the .very ones who have because by figures that I employed here before, which the built the productive instruments from which our food, shelter, Social Security Board cannot deny, the present contributory and clothing now come. plan is a fake . scheme of contributions, and is in reality a Mr. President, I have often said to my children that they thinly disguised social-dividend plan. will never know what real work is. I refer to the work done The only difference between the social-dividend plan of the by the last generation. The men and women who are now Social Security Act, and the one embodied in the Townsend 60, 70, and 80 years of age were largely active in the latter bill is that under the latter our social dividends would be paid pioneering stage of our Nation. They worked 10, 12, 14- equally from public moneys to all citizens of the United States yes, 18-hours a day; and if there are Senators who were past 60 who had retired from gainful employment, but under boys on farms in New England. the Middle West. or the West, the present un:Pappy social-security plan, with its social divi they will know that I speak the truth. Those are the men dends, annuities are now being distributed, but in the inverse and women who built this great industrial empire under which order of the need of the recipients. Consequently, I cannot the rest of us now live--warm, secure, and c