Q:ongrcssional Record United States of America PROCEEDINGS AND DEBATES OF THE 9 I st CONGRESS, FIRST SESSION
HOUSE OF REPRESENTATIVES-Monday, February 24, 1969 The House met at 12 o'clock noon. forcible incorporation of these countries attention are not to be found in any law The Reverend Rudolf Troost, Estonian into the U.S.S.R. The Soviet assault in book or in any moral code. 1940 against its Baltic neighbors marked The challenge of freedom is in the safe Lutheran Church, Silver Spring, Md., of guarding of that freedom. Thousands of fered the following prayer: the first step westward in the ruthless young soldiers have met that challenge with Dear Heavenly Father, on this 5lst Es march against Europe. t heir death. All the great legislation handed tonian Independence Day we pray for the Mr. Troost, whose presence here today down to us by Congress in the nearly two return of freedom and independence to we acknowledge, has not himself been a hundred yea rs of our n ation's existence, was stranger to this Soviet and Nazi aggres formulated by men who wanted to do a little long sut!ering Estonia. Save us and other more than was required of them to promote countries from the evil teachings and sion. He was captive in a Nazi prison camp for some 40 days at which time he freedom. doings of communism. But anyone can tell you that soldiers and Make us thankful nations, knowing was able to make his escape. That he is statesmen alone have not made America. that "if the Son shall make you free, ye here today espousing the cause of the great. But rather it is the great number of shall be free indeed" (John 8: 36) and let Estonian people attests to the irrepres individual, responsible citizens who find it the wicked know "that his day is com sibility of the longing for peace where their duty to do all they can to promote there is no peace. Americans view with freedom. They confess, though not in the lit ing" 0m munity. ceive twice as much, or another $28,000, do activities." And the final quotation-and the Under Title I of the Act, we have in you think that ought to come in Title I or one that I think is very important--one volved 13 public schools and eight private be spread amongst some of the other Titles teacher said "The students have been stimu schools in the Title I program. Our evalua as well. Or should we give it to you in some lated to investigate more subjects." tion of the program, has been that it prob thing akin to general aid? • • ably should be classified as one of the most She answered: I could go on at length sharing with you important and inspiring programs that has I personally feel that it should come in the impact of ESEA Title II programs in been added to our educational system in North oarolina and in other States. I have many years. Title I. I think it has provided a tremendous impetus in our school district in solving some many examples here on the table before me. problems which we are solving very nicely. However, at this time, I will simply state Mr. G. Warren Phillips, superintend that Title II is a program essential to the ent of schools for Valparaiso, Ind., and During these first 9 days of testimony improvement of educational opportunities of chairman of the Federal Policy and there has been discussion about the all of our children. The full potential of the Legislation Committee of the American validity of those few reports which have program has not been attained because of Association of School Administrators in been critical of title I, such as the Tempo the limitation of actual appropriations. We dicated their title I program has been report. Speaking specifically about that therefore recommend that appropriations be evaluated in a number of ways: up to the level of current authorization. report, Mrs. Frances Carnochan, chair Because of drastic reductions in appropria We have evidence shown by tests, by stu man of the Legislative Commission of the dent behavior and by the judgment of teach tions this fiscal year and the recommended ers that we are making significant progress. NEA, an organization representing some appropriations in the 1970 budget, many This is a good progm.m. As we have acqu.ired 2 million teachers, said: Title II programs initiated the first three staff that is skillfUl, the program has be We are aware of the so-called Tempo re years of the Act will be drastically curtailed. come stronger. port which the public press has, perhaps un The second recommendation: Advanced wittingly, blown out of all proportion to its funding be implemented as soon as possible. Mrs. G. Theodore Mitau, vice chair "findings." This report is based on evalua Congress is to be commended for authorizing man of the board of education for the tion of programs in eleven school districts this advanced funding last session. independent School District No. 625, St. out of 16,000 school districts with Title I New York City has been a leader in the Paul, Minn., in her evaluation, said: programs, and 35,000 children in 132 schools school library field. We have a great number in these districts, out of some nine million of very fine librarians and many teachers Never in the history of American educa and principals who are dedicated to the tion have programs been introduced that eligible Title I pupils. It is in our opinion virtually worthless. concept of enriched learning through a va have had a more dramatic impact upon the riety of resources. Title II has helped to quality of educational offerings in the cities Speaking of his title I programs in provide these resources. I strongly urge its of the United States than those introduced Cleveland, Superintendent Briggs also continuance, its full funding and its ex under ESEA. The professional staff judg pansion. ments, commUnity reactions, and pupils' per disagreed with the critics. He said: formances all testify to their effectiveness. I am in total disagreement with the critics, Miss Frances Hatfield, supervisor of - In St. Paul, the ESEA and kindred laws particularly as it applies to Cleveland. When instructional materials, board of public have made possible a broad range of new and I see our schools open in the summer, when I instruction, Broward County, Fla., said: exemplary educational programs. Of par see swimming pools, neighborhood swim ming pools that we put into the inner city, I am grateful for the opportUnity to dis ticular significance today are those programs cuss some of the phases of Title II which that provide direct benefits under Title I of 23 of them last year and thousands of chil dren lined up every day using them, when I I see from my vantage point as a super ESEA to children suffering from poverty and visor of the library program in a large school other forms of educational disadvantage. For see children in 40 preschool centers now operated under Title I, 4-0 preschool centers system which serves 110,000 children in 103 children whose worlds are only a few blocks schools ... wide, we can offer extensive field trip pro in Cleveland with their mothers in there nearly every day, or at least every week their On behalf of the American Library Asso grams, enriched elementary library services, ciation and especially of the over 12,000 and an educational horizon that puts fewer mothers are in, when teachers tell me that children are coming into kindergarten and members of the American Association of limits on what children may dream of be School Librarians, I wish to thank this com coming. first grade better prepared, when I see the dropout rate in the five inner city high mittee and the Congress for its interest in There is not time to ten of the 4-00 chil providing legislation which has such bene dren from the very poor who, because of schools drop ten percent, I cannot help but feel that the critics are wrong. I know very ficial effects. Title I money, had their first dental examin I strongly urge passage of the Elementary ations. (We bought a Hi-Speed dental unit well they are wrong. It does not make as much news though. and Secondary Education Amendments of for Jackson School. We need ten more like 1969, and full appropriations in order to it.) Nor to tell of the work of our Parent Much of the discussion in the hearings assure a continuing effort to achieve qual Consultant, who serves as a special kind in this period has centered on title I. ity education for all boys and girls in the of person to parents having handicapped schools of the United States. children so that benefits carry over and Too frequently I am concerned that we build home-school relationships int.o the fail to recognize the significances of and That the Elementary and Secondary family Unit. Nor to tell of our consultant the contributions being made by title II Education Act has been effective in im in the area of inter-racla.l activity, who of the act which provides support for proving and expanding the availability works to establish community rapport wLth library materials and textbooks. The and quality of instruction for migrant 4182 CONGRESSIONAL RECORD- HOUSE February 24, 1969 children was attested to by Austin H. of ESEA at the mere level of appropria aware of the problems brought about by Armitstead, chairman, National Com tion recommended for the fiscal year 1970 our failure to adequately finance our will simply permit the withering to begin. mittee on the Education of Migrant Chil High expectations in the community, as well education programs. In the face of in dren: as among educators, will turn to frustration creasing costs, it is clearly not enough Today we would like to confine our re and that is a most volatile kind of alchemy. even if we keep the programs at a con marks largely to the effect of the Migrant stant level. Amendment to Title I of the Element ary Dr. Gary N. Pottorff, vice president, Mrs. G. Theodore Mitau, vice chair and Secondary Education Act (PL 89-10). board of education, Wichita, Kans., man of the board of education for the Before making these comments we would added: Independent School Dictrict No. 625, St. like to say that they are based on st aff ob I think probably in our case the original Paul, Minn., advised us of what hap servation of dozens of classrooms in a num plan drawn up for the benefit of the local ber of states, st aff part icipation in teacher pened in St. Paul because of inadequate citizens, community action programs, paro financing. She stated: training programs, the r eading of state edu chial and public schools, to determine where cation agency program reports and consul the need was the greatest. I don't think the We desperately need the Title I funds to t ation wit h numerous program st aff at the need has changed from the five years of the continue and expand this most important local and state levels. present bill. I think perhaps the extension endeavor. One of our most successful Title There is no doubt that the funds which of the title I funds would be of the greatest I programs was a tuition-free summer school have been available under the ESEA Mi importance to us. serving 3,500 students. Our school funding grant Amen dment-up to $45 million in the does not allow for summer school expenses. current fiscal year-have made a difference Superintendent Ohrenberger of Bos Therefore, we have to charge tuition fees to in the stat us of migrant children's educa ton, like Dr. Shedd and virtually every make the program self-supporting. This fact tion . Although it might have been presumed one, recommended not only extension serves to eliminate those very students that t h at Tit le I funds, which were int ended to but also full funding of ESEA, particu need the most help. Title I funds for a time provide for all disadvantaged children in larly title I. served this program. Our 1966 summer school cluding migr ants, would indeed, wit hout ii for deprived students was immensely suc special program for migrants, provide in Dr. Ohrenberger stated: cessful. These students didn't become street creased educational opportunity, they did I earnestly request that Congress not only roamers. Many have ret urned to our regular not make any substantial change in its first extend the Elementary and Secondary Edu classes by making up deficiencies. Certainly year of opera tion. We found in a survey of cation Act for five years, but also that it the presence in summer school of large num 1966 programs that only 11 states could re increase substantially the funding thereof. bers of Negro youths helps to defuse difficult port any use whatsoever of Title I funds for At present, federal funding under Title I is summer confrontations. These young stu migrant children. And even in most of these not adequate to meet the needs Of all chil dents, disillusioned, alienated, frustrated, 11 instances, aid was not of any substantial dren for whom the legislation was designed. comprise the social dynamite which has been or special form. This is a sharp contrast to The present programs serve approximately so well described by Dr. Conant. This sum the 44 states who participated in the Mi one-half of the disadvantaged children in mer school program was eliminated because grant Amendment program in 1967 and 1968. Boston. of the cuts in the Title I allotments during This would seem to indicate very strongly the past year. It needs to be restored. We that states had little interest in educating Superintendent Donovan, of New York also had to eliminate a fine program known migrant children until earmarked funds City, spoke of title I as follows: as the Remediation Center, the Curriculum were made possible for that purpose alone. On Title I , I might tell you that this Title Centers and in-service training for teachers in our city has served a particularly impor because of the cuts made in fiscal year 1969. Mr. Speaker, do local school officials tant purpose. I hope that Title I continues support a 5-year extension of ESEA? to be funded fully in the future and I hope In Trenton, N.J., the problem was simi The answer to this is a resounding that Title I remains categorized because I do lar. Mr. David Tankel, director, ESEA "Yes." believe that only through that way can we title I, Trenton public schools, said: The deputy superintendent of schools devote it to this p articular purpose. For example, in the next school year we for Los Angeles, Graham Sullivan, said: He added: must release one-half of our teacher a.ides First, may I say to you that we support because of a smaller 1969-70 allocation. I re I think unless you continue to fund this peat, it is unrealistic to expect local boards fully the extension of ESEA for a period of and fund it with even greater funds than of education to pick up the programs that five years. you have up to now, the big cities of this Without question, ESEA as well conceived, are dropped. They just do not have the country-and my city in particular-are go wherewithal to consider this step. was carefully planned, provided broad cover ing to be in a terrible situation in their pub age through its various titles. Its authoriza lic schools. Our city and our State are find Mr. Speaker, I should like to clarify tion is flexible enough to permit states and ing difficulty in funding, the city because of one very important point-the testi local districts to use funds provided by the constitutional limitations and the State for mony before the committee is not with legislation to attack most of the major prob other reasons in its funding. This has come out a sense of priority. All of us realize lems. I think one of the interesting things to us as a particular help in the most criti about ESEA and the real important things cal area. we have, which is the growing num that much has to be done-and that at about ESEA is the fact that the various ber of disadvantaged children in the cities. this point in time, there are limited re titles each make their own contribution to I would like it to continue to be categorical sources. Local officials appearing before programs that will improve and strengthen aid until such time in the future as perhaps the committee are very well aware of education, and yet there ls a linkage from the Federal Government can so fund educa this. Let me share with you some of one program to another. tion that we wouldn't have to worry about their notions of priority. categories. I don't see that time right now. Superintendent Shedd, of Philadel I want it devoted to the critical areas of our Deputy Superintendent Sullivan, of phia, added: city where it is going now. If you cut it off, Los Angeles, said: My message is really quite simple. To fall sir-and I do not mean you but if this Con As far as I am concerned, our most criti to extend H.R. 514 at this time will be gress should cut this off, I really don't know cal task right now is strengthening the edu calamitous. To fail to provide a substantially where we would turn. cation program in the disadvantaged areas increased level of funding soon will be un before a nything else. fortunate. ESEA funds have become an Mr. John Wagner, South Bend Com essential part of our program in the school munity School Corp., South Bend, Ind., He was asked: district of Philadelphia, and for two basic said: Is that your No. 1 priority? reasons. I think it is very important that the Title The first lies simply in the nature of the I program be expanded because at least in He responded: programs we h ave been able to mount and our own situ ation the results that have been That is my No. 1 priorit y? will be able to continu e only wit h Federal obtained with the limited funds indicate a funds. They are essent ial programs. much greater potential if adequate moneys Our panel of school board members The second is that ESEA fu nds constitute were provided , because we have been limited indicated that indeed full funding of title for us, and I believe for most of the big cities, by some of the reductions and the increase I has the highest priority. the crit ical increment-the change dollars in costs .are forcing us to cut the programs. Mr. Hazen Schumacher, board mem necessary to overcome institutional inertia We have had to drop several people from the ber and past president, board of educa and produce institutional change. staff that we would like to continue. As these I believe we are at a critical juncture in people are dropped the program cannot help tion, Ann Arbor public schools, said: Federal involvement in the funding of pub but become less effective. I think it is a I think all of us have stated in one way lic education precisely because we are at a worthwhile program and should be financed or another that we feel this is probably the point where t he clear gains realized through to the maximum. highest priority; yes, sir. That is the way I ESEA will either be consolidated and ex feel. panded, or they will wither away. It is the Mr. Speaker, I am sure that there is simple facts of life that the extension not one Member of this body who is not Mrs. Nielson, of West Bend said: February 24, 1969 CONGRESSIONAL RECORD- HOUSE I would agree that the highest priority not in lieu of, existing programs-and Dr. Bernard Donovan, of New York would be to fully fund Title I. only after these are fully funded. City, adds: Mr. R. Winfield Smith, president, Na Mr. Tanke!, of Trenton, said: What I am concerned about is that when tional School Boards Association, and If we begin cutting out Title I programs, we get block grants that go into general director, upper Perkiomen board of we have people back home in the rural areas, funding, that general funding then becomes school directors, added: in the cities, who are going to be disappointed approachable by all. For example, in my once again. We are just going to be building city I wouldn't want that fund to disappear Surely we all agree with that. up a constant series of frustration with all in collective bargaining instead of going to Dr. Kottmeyer of St. Louis was asked: of the inevitable problems that follow these disadvantaged pupils-and it very well frustrations. You are absolutely right. could. If Congress would fully fund the author ization for Title I, so that you could obtain Mr. William Raymond, director, ESEA As Dr. Donovan's response indicates your full entitlement of $8 million, are you title II, Tempe Elementary School Dis there is again confusion about the presently in a position to wisely expend $8 trict, Tempe, Ariz., added: meaning of the proposed "block grant" million? I agree exactly. As I stated before, I think approach to providing aid to elementary Dr. Kottmeyer responded: you create a lot of dissatisfaction, frustration and seconaary education. Sir, as we are spending 70 percent of that and psychological damage in a community Mr. Speaker, as I am sure my col money at the point that I indicated to you where you have initiated programs and then leagues expected there has been consid before, we would simply continue to expand you cut back. Parents see their children erable discussion about the so-called this program again and again and again, and in these programs and they see progress being made, and then when they are stopped they block grant approach in the initial days I think would be the wisest way and would of our hearings. Yes, there has been not be a salutary lift to the school program in wonder why. So I wholeheartedly agree I feel, our city. that general aid should be on top of these only considerable discussion about but programs. also considerable opposition to such an He was asked: The following statement made by Dr. approach. Would you place the priority on programs Joseph Manch, of Buffalo, N.Y., is a fur The following will illustrate my point: for disadvantaged youngsters before we go ther illustration of this point of view: Mr. William Raymond, Tempe Ele to general aid? mentary School District, Tempe, Ariz.: The first point refers to the issue of general Dr. Kottmeyer answered: "Yes." aid versus categorical aid, and I notice there Regarding block funding, I at this point He was asked "Why?" some members of the committee very in time believe I would be opposed to it. And he responded: much interested in that. While public edu cation continues to be fundamentally a local Dr. Graham Sullivan, deputy super Because we all at least give lip service to intendent of instruction, Los Angeles equality of educational opportunity and problem, it is a national concern. It is in the equality of educational opportunity obvi national interest that we do at least two City Schools: ously does not exist. things: upgrade the whole level of education Well, as I indicated in my prepared testi I think we should strive to do that and and at the same time, narrow the wide range mony, we have great concern about a block achieve that first. of educational opportunity which now exists grant approach that does not provide and in the schools of this nation. But in attempt assure adequate funds going to the big cities. In our discussion of priorities I should ing to work in behalf of this nation's general I would say, as far as we are concerned in Los mention that quite clearly the testimony interest, we must allocate our financial re Angeles now, we certainly would prefer it as during the first 9 days of hearings places sources in the most emcient, effective man it is rather than moving in the other direc a higher priority on extension and full ner possible. Categorical aid, as reflected in tion. funding of ESEA than on general aid Title I projects, meets this test. The point is-as I said to the Senate coun Mr. David Tanke!, Trenton Public to education. Asked whether they were terpart of this committee 18 months ago--if Schools: advocating general Federal aid to edu we have limited Federal funds available for I believe I understand the point, Mr. cation before full funding of title I the equalizing educational opportunity, the Chairman, I personally, and I am not speak members of our school board panel greatest attention should be paid to the most ing for ?ll""EA, would be against block funding. responded: glaring deficiency-the problem of educa If I dare in these august halls to mention Mr. SMITH. I think what we are looking tional deprivation which works to disequalize the word, I am afraid we would be opening for is that on top of Title I. educational opportunity, particularly in the up a keg of worms in the political situation Mrs. NIELSEN. I would agree. large cities. This is where we must develop a what would be very, very hard to control. Mrs. SPICER. Me, too. sharper focus. I think that vested interests within the Mr. WAGNER. I concur. states would very often tend to push the Mr. SCHUMACHER. Yes, I agree. In a series of responses Dr. Edward money to needs that they see rather than to Palmson, of Seattle, made the following using them in the manner that they are not In a similar vein Dr. John Lumley, observations: being used. I would be opposed to block grants. executive secretary, NEA Legislative The only other objection I would have is Commission, and NEA assistant execu that militant teacher groups would try to Dr. Mark Shedd, of Philadelphia, com tive secretary for legislation and Fed negotiate grants for higher salaries. mented: eral relations, said: • At the time when you get the categorical As you know, our position is that general If you gave us a grant of $100 per child, for aid program funded at full level of author federal aid is needed in this country, but example, for a school year, the teachers ization and beyond, if it were up to me, then it is needed on top of these programs. would want the whole hundred dollars. With I would be willing to take a look at block Mrs. Carnochan of the NEA, com the negotiation law that we have in the grants, but under the present circumstances, State of Washington, if we didn't grant them I think it would be a calamity to go to the mented: the increase that they asked for, they would block grant concept. Mr. Chairman, the Commission has tossed impose sanction or go on strike. this around many, many times at the leg Dr. Ohrenberger, of Boston, added: islative commission, and we concur that • • • I prefer the present program, Mr. Chair these programs must be continued because We would spend in on basic programs, buy man. I perhaps could illustrate that by indi we are not just talking about the tangible ing books and planning curricula and things cating that if a block grant approach were things, we are talking about the many we need. made to my particular state, I am afraid tntangible things which are going through • • that the real problem of the urban commu the mind of these youngsters and devel This is just manna from heaven, if it is nity is not felt statewide. oping, and if this were dropped now it would categorized that they cannot get their hands Under categorical aid specific amounts are be just one disaster on top of another dis on it. allocated to me to perform functions and aster. The small challenge of the greater programs that I have dreamed of for many challenge which these youngsters have had • • • years in the area of the disadvantaged, which would disappear and they would be disap The big advantage of the Title I funds is is Title I. We have inaugurated a program pointed once more. We cannot afford this as that we can use them for food, hungry chil on our own in one district. There were still a nation and the Commission does concur dren, or their health needs, use for some 12 districts without this service. This is what wholeheartedly that we need this and then, of the bare educational factors. This is the categorical aid did for us. on top of it, general aid to education. point I am making. The money can be used If this were a block-grant type, I am afraid for disadvantaged poverty-stricken children. that perhaps other priorities would have gob Other associates on the NEA panel True, we have to have teachers to teach bled these funds up, particularly with refer agreed with the statement that general these children, but at least we can funnel ence to teachers' salaries. I favor the cate aid is needed but must come on top of, some of the funds into these other areas. gorical aid and I would also hesitate or I 4184 CONGRESSIONAL RECORD- HOUSE February 24, 1969 would be inaccurate by say if block grant tended for block grants, I could make a A FARM LEADER SPEAKS OUT came to us I would take it over and above. better answer. AGAINST HIGH INTEREST RATES • • Frequently, when I raise questions I find In other words, we have to attach priori that there are certain limitations or direc Missouri.) For what reasons are the complicated method of distributing state without any change in the procedure. I do not know whether that is an answer to your the ut1llties seeking higher prices for their funds is such that you may be pretty sure, services? At the top of their list are two, both unless some guidelines are set up on your question or not, but I am a little on the fence. tied to increased interest. One, they main block grants, the money is not going to get tain they're entitled to higher gas, power and to the children of the inner city. Mr. Speaker, during the course of telephone rates because interest is adding to these hearings I stated that it was my their costs. Two, they feel they must have Mr. Phillips, of Valparaiso, said: higher profits in order to attract new capital This act was designed for a specific need firm conviction that we must take care in the face of rising interest on other se confronting this nation. Goals have been of first things :first-that we should not curities. established at the national, state and local go to block grants until we take care of If higher interest raises prices then how is level. The program is in being basically three o~ :first priority-properly educating the this supposed to control inflation? years. Know-how is being developed. I think disadvantaged by providing adequate The theory is that as interest rates are it is imperative that we follow through on funds. boosted then the demand for credit will sub this. I think it would be a tragedy if we were Dr. P.almason of Seattle commented: side, this will lessen the money supply and to start off in another direction and leave thus curtail demand and prices for goods and this, if I am in touch with your question. I agree. services. Dr. Richard Ando, of Honolulu, added: Well, let's look closer at that. Mr. Phillips was asked: Who will back off from credit because in Do you feel that a block grant would take Hawaii agrees. terest costs are up? us completely off the path we are on? Will consumers desire less financing for Mr. Speaker, I am convinced that autos, tv's and the like? Ridiculous! Interest He responded: American education agrees, and to the charges on these loans already are much I have some difficulty in defining a block accomplishment of this basic goal shall higher than seven per cent; they run three grant. If I knew specifically the meaning in- we direct our efiorts. and four times that amount--as high as the February 24, 1969 CONGRESSIONAL RECORD- HOUSE 4185 law will allow. That is what is tying up credit the most part been satisfied that the No. Truth in Lending will fix no maximum now. Small loan companies and banks are Board has carried out the congressional or minimum charges for credit. It will mere scrambling to write all of that kind of credit ly insure that a customer is advised of all they can get hold of. intent. The reservations will surely be the costs and conditions of the credit he How about big businesses? Will they cut worked out. In any event, the gentle is seeking. borrowing for expansion and inventories be woman from Missouri who contributed 4. Is there a government regulation spell cause the interest rate is up? Some may. But more than anyone else to the strength ing out how a creditor should comply with many large industries so control their selling of this law has indicated that her Sub the law? prices they can pass on costs. Higher prices committee on Consumer Affairs will hold Yes. Congress assigned the task of writing will be their reaction. Look at the example hearings at which the responsible officials the Truth in Lending regulation to the Fed of the utilities. of the Board will discuss the regulations. eral Reserve Board. The basic regulation What about farmers. They can't pass on designated Regulation Z by the Board the cost. But will they borrow less for fer Shortly after the publication of its was published on February 11, 1969. En tilizer and seed? Will they feed their live regulations, the Board prepared a ques forcement of the law and the regulation, stock less? Not if they want to remain in tion-and-answer summary designed to however, is divided among nine different business. A farmer has no real choice. He explain the regulations in simplified Federal departments and agencies according can't afford to use less capital for these in terms to creditors as well as consumers. to classes of creditors. puts essential to maximum efficiency. The document is a good job. It trans 5. What's the effective date for Truth in Who, then, is going to use less credit be lates the most complicated provisions of Lending? because interest rates are up? The answer is, July 1, 1961>. Beginning on that date, all nobody. the statute into terms that all can readily creditors covered by the law must comply There is an approach the Federal Reserve understand. Complaints to Congressmen with the disclosure and other provisions of governors could use which would effectively over the incomprehensibility of bureau Truth in Lending. aid control of inflation. They have the au cratic regulation go with our jobs. One 6. What types of credit are covered by thority to buy and sell government securi only wishes that all Government agen Truth in Lending? ties. By exercising it they can immediately cies would interpret their regulations for Generally speaking, only credit to individ and directly reduce the amount of money in the general public in this simplified uals for personal, family, household or agri circulation. This would ease pressure on cultural purposes which does not exceed prices. manner. $25,000. All real estate credit made to in This wouldn't help interest costs. To main The question-and-answer summary dividuals for such purposes is covered, how tain them would require other, simultaneous, prepared by the Federal Reserve Board ever, no matter what the amount. action to cause a corresponding reduced follows: 7. Are any types of credit exempt from demand for credit. FEDERAL RESERVE, Truth in Lending? A few year's ago credit regulations were February 13, 1969. Yes. Business and commercial credit are loosened. Where payment for consumer prod What is Truth in Lending? exempt as is credit to governmental units at ucts had formerly been scheduled over a 24 When Truth in Lending goes into effect the Federal, State or local levels. A govern month period, new provisions permitted re on July 1, 1969, how will it affect depart mental unit which extends credit to an in payment of consumer notes over 36 months. ment stores? Automobile dealers? Mortgage dividual for personal. family, household, agri This has sucked up available credit like a lenders? Banks? cultural purposes must abide by the law, blotter takes up ink. Could retailers be sued for failing to dis however. Also exempt are transactions in se This easy money policy has gotten us into close the cost, terms and conditions of the curities or commodity accounts with a trouble. It has redirected buying and selling credit they offer? broker-dealer registered with the Securities techniques. Buyers used to ask how long will These and other questions are answered and Exchange Commission and some types a product last? Will it perform? Is it worth in a series of explanatory questions and of transactions under regulated public util the price? Such questions have more and answers developed by the Board of Gover ity tariffs. As mentioned earlier, credit ex more given way to the one: Can you finance nors of the Federal Reserve System to foster ceeding $25,000 is also exempt except for real it for me? better understanding of the Truth in Lend estate credit. The result: Inflated prices and a shortage ing law and the Federal Reserve regulation 8. Can a State law substitute for the re of credit at higher cost for business expan implementing it. Both go into effect on July quired Federal disclosures? sion and farm production. 1, 1969. Under the law the Federal Reserve Board Tightening of consumer credit should ac Truth in Lending will require the disclos shall exempt from Federal disclosure require company a reduction in money supplies. ure of credit terms on virtually all types of ments classes of transactions within a State Such a two-pronged attack-reducing the consumer credit beginning July 1. Regula if it determines that State law imposes sub amount of money available and the demand tion Z, which was published by the Federal stantially similar requirements and adequate for credit--would cool inflation. Reserve Board on February 11, spells out the enforcement is provided. Guidelines for The cost of living index, the best measure rules to be followed by the nation's creditors States seeking this exemption are being of inflation available, has gone up more than in carrying out the provisions of Truth in drafted by the Board. 10 per cent in the last three years. This price Lending. 9. Who must comply with Truth in Lend spiral is particularly hard on those in rural The special question-and-answer sum ing? areas--on farmers, small businesses, work mary attached outlines Regulation Z in Any person or business which regularly ex ers in local industry and service employees. broad terms. Creditors who must comply tends or arranges for credit to individuals for I don't presume to be a financial expert. with the law should refer to the regulation personal, family, household or agricultural Nor do I want to leave the impression that in itself for specific provisions. purposes. This includes banks, savings and flation is simple. It isn't. But I do know that loan associations, department and other re inflation is serious and that a direct ap'[Yroach TRUTH IN LENDING: SOME QUESTIONS AND tail stores, credit card companies, automobile such as I have suggested is needed if we ANSWERS dealers, credit unions, consumer finance really want to put the brakes on these run (NoTE.-These questions and answers are companies, mortgage bankers and even hos away prices. published by the Federal Reserve Board to pitals, doctors, dentists, plumbers and elec foster bette!" understanding of truth in lend tricians if they regularly extend or arrange for credit. TRUTH IN LENDING MADE SIMPLE ing. They are no substitute for the truth in lending regulation Z which should be con 10. In what way must the credit terms and sulted by persons who must comply with conditions be disclosed? (Mr. PATMAN asked and was given The information must be in the terminol permission to extend his remarks at this the truth-in-lending law.) ogy specified in Regulation Z and must be point in the RECORD and to include ex 1. What is Truth in Lending? clear and conspicuous and in writing. The traneous matter.) It is a major part of the Consumer Credit Protection Act signed into law on May 29, creditor may include additional information Mr. PATMAN. Mr. Speaker, in a few 1968, following its adoption by the 90th beyond that required by law and regulation, months the truth-in-lending provisions Congress. It will require creditors to inform but must not confuse the required disclosure. of the Consumer Credit Protection Act their customers of all the direct and indirect 11. In general, what information must be of 1968 will be in effect. One of the rea-· provided? costs, terms and conditions of a credit ar The charges a customer must pay to obtain sons for postponing the effective date rangement. credit including, in most cases, the finance until July l, 1969, was to give the Federal 2. What is the purpose of Truth in Lend charge and the annual percentage rate. Reserve Board time to draft and pro ing? mulgate the implementing truth-in Its purpose is to foster the informed use of THE FINANCE CHARGE AND ANNUAL PERCENTAGE credit by consumers. It is designed to make RATE lending regulations. Last week the Board consumers aware of the cost of credit and 12. What are the finance charge and the completed its work and the regulations enable them more readily to compare the annual percentage rate? were published. terms available from various credit sources. They are the two must important concepts Those of us who have been following 3. Will Truth in Lending fix a maximum evolving from Truth in Lending. They will the progress of the regulations have for charge for credit? tell the customer at a glance just how much CXV-265-Part 4 4186 CONGRESSIONAL RECORD - HOUSE February 24, 1969 he is paying for credit both in dollar terms obtained at nominal cost from the Federal SPECIFIC DISCLOSURES--CREDIT OTHER THAN and as a percentage. Reserve Board in Washington, or from any OPEN END 13. What must be included in the finance of the 12 Federal Reserve Banks. 31. Is a different set of disclosures required charge? 24. Can you give some examples of the for credit other than open end? In general, all charges imposed by the actuarial method? Yes. The disclosures are spelled out in the creditor and payable by the customer-or by Yes. Using a bank loan of $100 repayable Truth in Lending regulation. another party for the customer's account- in monthly installments over one year at a 32. What are some examples of this type either directly or indirectly to obtain credit. 6 per cent add-on finance charge, the an credit? The finance charge includes not only interest nual percentage rate would be 11 per cent. A loan from a bank to buy an automobile but also such charges as loan fees, finder's In this case the borrower would repay $106 is a good example. Another is credit by a fees, time price differentials, investigation over one year but would have use of the store to buy a big ticket item such as a wash fees, premiums for credit life insurance re $100 loan only until he made his first pay ing machine or television set. In an cases, quired by the creditor, points and other ment. At that point he is repaying part of the loan or credit sale is for a fixed period of similar charges. the principal and has less money at his dis time and the amount and number of pay 14. Are all charges and ·fees part of the posal. ments is specified as well as the due date of finance charge? Using the same set of circumstances but each payment. No. Some costs-specified in Regulation Z this time with a 6 per cent finance charge 33. Are the finance charge and annual per may be excluded if they are itemized and discounted in advance, the annual percent centage rate disclosed in this type transac· disclosed to the customer. Examples are taxes, are rate would be 111h per cent. Thats' be tion also? license fees, registration fees, a fee for a cer cause the customer in this case would receive Yes, except in some specified first mort tificate of title and fees fixed by law which $94, must repay $100 and again would have gage real estate transactions where the to are paid to public officials. Some types of real full use of the loan only until he made his tal dollar amount of the finance charge estate closing costs such as title examination first payment. need not be stated. fees, notary fees, appraisal fees and fees for SPECIFIC DISCLOSURE~PEN END CREDIT 34. What other disclosures must be made? the preparation of a deed may also be ex The customer must also be told: cluded from the finance charge. 25. What specific information must be dis closed at an open end credit customer? The date of the transaction or, if different, 15. In what form must the finance charge the date which the finance charg·e begins to be expressed to the customer? That depends on whether the customer is opening a new account or already has an accrue. It must be stated both as a dollar and The number, amount and due dates of the cents total-except in the case of the sale of account, for example, with a department store. payments. a dwelling where the total dollar finance The sum of these payments except in the charge need not be stated at all-and as an 26. What information must be disclosed before a person opens a new open end ac case of a first mortgage to finance purchase annual percentage rate. of a dwelling. 16. What is the annual percentage rate? count? Simply stated, it is the relative cost of The customer must be advised in writing The amount or method of computing any credit in annual percentage terms. of the following provisions: default, delinquency or similar late payment 17. Is a creditor required to state the an The conditions under which a finance charges. nual percentage rate along with the finance charge may be imposed and the period within A description of any security interest to charge? which payment may be made withowt in be acquired by the creditor. Yes. It must also be stated in the case of curring a finance charge. The method of computing any penalty the sale of a dwelling, although the total The method of determining the balance charge for early repayment of the credit plus finance charge need not be listed on this type upon which a finance charge may be imposed. a statement outlining the charges which transaction. Until January 1, 1971, the cred The method of determining the finance may be deducted from any rebate or refund. itor at his option may state the annual per charge. 35. Must the creditor always disclose the centage rate in dollar terms, such as $11 The periodic rate or rates used, the range annual percentage rate? finance charge per year per $100 of unpaid of balances to which they apply and the cor On credit other than open end credit the balance. After this transitional period, how responding annual percentage rate or rates. annual percentage rate need not be stated ever, the rate must be stated as a percentage. The conditions under which additional if the finance charge is $5 or less and applies 18. How accurate must the annual percent charges may be imposed and the method for to credit of $75 or less; or if the finance age rate be? determining them. charge is $7.50 or less and applies to credit It must be disclosed to the nearest one A description of any lien the creditor may exceeding $75. quarter of one per cent. acquire on the customer's property. 36. What other disclosures must be made? 19. How is the annual percentage rate The minimum periodic payment required. That depends on whether the transaction computed? 27. Must similar information be sent to is a loan or a credit sale. persons who already have open end accounts That depends on whether the credit is open LOANS end or other credit such as instalment credit. on July 1, 1969? Yes. The saime information must be sent 37. What must be disclosed in a loan trans OPEN-END CREDIT to the customer by July 31 if the account action? 20. What is open end credit? has an unpaid balance. For accounts on In addition to the basic disclosures listed It is an arrangement under which credit which no balance is owed, the same set of under questions 33 and 34 above, the cus may be extended from time to time with fi disclosures must be made by the first billing tomer must also be told: nance charges levied against any unpaid which follows use of the account. The amount of credit which will be paid balances each month. Many revolving charge 28. Is a periodic statement required on to the customer or for his account includ accounts offered by department stores and open end accounts? ing all charges, iteinized individually, which credit card accounts are of this type. Yes, if there is an unpaid balance exceed are included in the amount of credit but 21. How is the annual percentage rate com ing $1 or if a finance charge is made. are not part of the finance charge. puted on open end credit? 29. What information must be disclosed in Any amounts deducted as prepaid finance The finance charge is divided by the un the monthly statement? charges and required deposit balances. paid balance to obtain the rate for one month These provisions to the extent they apply: The total amount to be financed. or whatever other time period is used; this The unpaid balance at the beginning of the CREDIT SALE result is multiplied by 12 or the number billing period. 38. What else must be disclosed in a credit of time periods used by the creditor during The amount and date of each purchase or sale? the year. In the case of a typical charge of credit extension and a brief description of In addition to the basic disclosures listed 11h per cent of the unpaid balance with bills each unless this was furnished previously. under questions 33 and 34 above, the credit presented monthly, the annual percentage Any payments made by the customer; re sale customer must also be told: rate would be 18 per cent. turns, rebates and adjustments. The cash price. The finance charge expressed in dollars INSTALMENT CREDIT The downpayment. and cents. 22. How is the annual percentage rate The difference between the cash price and The periodic rate or rates used to compute downpayment. computed on credit other than open end? finance charges on the account and the range It must be computed by either the actu of balances applicable. All other charges, itemized individually, arial method or the "United States rule." The annual percentage rate. which are included in the amount financed Under both methods the annual percentage The unpaid balance on which the finance but which are not part of the finance rate is the same where payments are equal charge was computed. charge. and are made at equal intervals of time. The closing date of the billing cycle and The unpaid balance. 23. Is there a convenient way to determine the unpaid balance as of that date. Any amounts deducted as prepaid finance the annual percentage rate? 30. Where must these disclosures be made? charges or required deposit balances. Yes. Tables have been prepared by the Some must be made on the face of the The total amount financed. Federal Reserve Board to determine the statement; others may be made on the face The sum of the cash price, the finance annual percentage rate based on the finance of the statement, on its reverse side or on charge and all other charges. This item need charge and the number of weekly or monthly both the periodic statement and a separate not be disclosed in the case of a first mort payments to be made. These tables may be form enclosed in the same envelope. gage. February 24, 1969 CONGRESSIONAL RECORD- HOUSE 41187 39. When must all this information be The Federal Deposit Insurance Corporation basic strength of America and this bill is furnished? for other insured State banks which are not full recognition of that fact." Generally before the credit is actually ex members of the Federal Reserve System. Mr. Patman said he anticipated that there tended. The Comptroller of the Currency for Na would be charges that the $2,000 exemption 40. Where should the disclosures be made? tional banks. would reduce Treasury revenues too dras They may be made on the face of one of The Bureau of Federal Credit Unions in tically. the loan or credit papers, or on a separate the Department of Health, Education and "This is the kind of charge that will statement. Welfare for Federal credit unions. come forward from those who do not want 41. Are monthly statements required in the The Federal Home Loan Bank Board for to close the tax loopholes on the wealthy," case of credit other than open end? savings and loan associations. he charged. "If these loopholes are closed, No. But if the creditor does send state The Interstate Commerce Commission for there will be more than enough new revenue ments he must list the annual percentage carriers-trucks, buses and trains-which it to t h e Treasury to offset this $2,000 exemp rate and the period in which payment must supervises. tion." be made to avoid late payment charges. The Civil Aeronautics Board for air car "I feel strongly that tax reform-the clos ing of loopholes-should be accompanied by REAL ESTATE CREDIT riers it supervises. The Agriculture Department for certain an immediate removal of the heavy bur 42. Is real estate credit covered by Truth creditors under the Packers and Stockyards dens of taxation on the low and moderate in in Lending? Act. come fainilies." Mr. Patman said. "Such a Yes. Real estate credit to individuals in any The Federal Trade Commission for all two-pronged attack-the closin g of loop amount is subject to Truth in Lending dis other creditors, such as retail stores, small holes and tax relief for the average Ameri closures. loan companies, service establishments, pro can family-will stop the taxpayers revolt 43. What special provisions apply to real fessional people, etc. before it gets started." estate credit? 52. What are the penalties for violating There is no need to disclose the total dol Truth in Lending? lar amount of the finance charge on first Willful violations are punishable by a fine SPEAKER McCORMACK RECEIVES mortgages to purchase dwellings. The cus of up to $5,000, up to a year in jail, or both. COVETED MINUTEMAN AWARD tomer in some cases has the right to cancel Furthermore, if a creditor violates the law, a credit arrangement within three business the customer may sue him for twice the (Mr. MONTGOMERY asked and was days if his residence is offered as collateral amount of the finance charge (and if suc given permission to address the House for credit. cessful, the customer could collect not less for 1 minute and to revise and extend 44. Does a first mortgage on a residence h is remarks and include extraneous carry this right of cancellation? than $100 or more than $1,000), for court A first mortgage to finance purchase of the costs and reasonable attorney's fees. matter.) 53. How long must a creditor save his Mr. MONTGOMERY. Mr. Speaker, I customer's residence carries no such right to papers to prove compliance with the law? cancel. A second mortgage on the same resi had the honor and pleasure of attending Evidence of compliance should be pre the Reserve Officers Association's mid dence, however, is subject to the cancellation served by the creditor for at least two years provision, as is a first mortgage which is not from the date of the transaction. winter conference banquet held last used to finance the purchase of the cus Friday evening here in Washington. tomer's residence. 54. Is inspection of creditor records pos sible? Our own Speaker, JOHN McCORMACK, 45. Is a mechanic's lien-an interest re was honored that evening when he was tained in a residence by a plumber or other Yes. Under the law each creditor must craftsman who does work on credit--subject make his records and evidence of compli presented the coveted Minuteman Award, to the right of cancellation? ance available for inspection by the appro the Reserve Officers Association's annual Yes, if the craftsman imposes a finance priate enforcement agency. citation to the American who has con charge or allows payment in more than four tributed most to our national security instalments. And this will probably prompt in these times, 1969. the plumber to wait three business days after TAX RELIEF FOR THE AMERICAN The Minuteman Award was presented an agreement is signed to begin work. FAMILY to the Speaker by the very capable Sec 46. May this right of cancellation be waived if the customer needs emergency repairs and (Mr. PATMAN asked and was given retary of Defense, Mel Laird. can't wait three days? permission to address the House for 1 In accepting this award, the Speaker Yes. A customer may waive his right to minute and to revise and extend his re made a forceful, hard-hitting speech, re cancel a credit arrangement if his safety, marks and include extraneous matter.) lating to those present some of the his property or welfare would be endangered by Mr. PATMAN. Mr. Speaker, today I toric debates and decisions he has been any failure to make repairs immediately. am introducing legislation to provide a a party to, decisions which have shaped 47. Must the creditor or craftsman disclose $2,000 personal exemption for all tax the destiny of this country. to the customer his right to cancel the con tract within three business days? payers. The Reserve Officers Association is a Yes. It must be disclosed in writing and in Mr. Speaker, this legislation will give great patriotic group dedicated to keep specified language before the three day pe the low and moderate income families ing America strong. Our Speaker has the riod begins. long-overdue relief from high taxes. The same dedication. CREDrr ADVERTISING Ways and Means Committee is now Mr. ALBERT. Mr. Speaker, will the 48. Is the advertising of credit covered by studying tax reform and is considering gentleman yield? Truth in Lending? the closing of the massive tax loopholes Mr. MONTGOMERY. I am happy to Yes. In general, no advertisement may for the rich. yield to the gentleman from Oklahoma. state that a specific down payment, instal Now the Congress must move on the Mr. ALBERT. Mr. Speaker, I thank ment plan or amount of credit can be ar other front-by removing the inequities the gentleman for yielding. ranged unless the creditor usually arranges from the average American family. I am happy, Mr. Speaker, that the terms of that type. gentleman from Mississippi has brought 49. What other general advertising provi Mr. Speaker, I place in the RECORD a sions are provided? copy of a news release which I issued to the attention of the House of Repre No advertisement may spell out a specific today on the this bill : sentatives this honor which our great credit term unless all other terms are stated WASHINGTON, D.C., February 24.-Repre Speaker has received. If there ever was clearly and conspicuously. sentative Wright Patman (D., Tex.) today in a "minuteman" from the great city of 50. Does this apply only to newspapers, troduced legislation to raise the personal Boston, that "minuteman" is the Hon radio and television advertising? income tax exemption from $600 to $2,000 orable JOHN W. McCORMACK, and I am No. It applies to all forms of advertising "as a means to wipe out the inequities in delighted to join the gentleman from including magazines, leaflets, flyers, catalogs, our t ax system." Mississippi in saluting our distinguished public address system announcements, direct Mr. Patman described his bill as "a prime mail literature, window displays, billboards ant idote for the taxpayers revolt." Speaker. or any other media. Mr. Patman's bill would exempt the first Mr. MONTGOMERY. I thank the ADMINISTRATION AND ENFORCEMENT $2,000 of income for the individual taxpayer gentleman. and would provide a similar $2,000 exemp 51. What Federal departments and agen tion for the taxpayer's wife and for each of cies enforce Truth in Lending? his dependent children. Mr. Patman said his BILINGUAL EDUCATION: :V.CORE IS Although the Federal Reserve Board issued bill was designed primarily to give tax re NEEDED the regulation to carry out Truth in Lending, lief to families. enforcement is spread among these nine de "It has been the low and moderate in prayers and guidance, others fast in quest People-getting along with other people- A REMUNERATIVE SHRINE of holy visions. came before personal possessions. It was both Recently, a group of white men decided to "A real Indian," he said, "never begs. We physically awkward and unnecessary to lay absolve their fellow Americans of any linger never try to go into the poverty program. Our aside great stores. Abundance was shared. ing guilt. They formed the Wounded Knee young people-they walk the highway and The natural rhythm of the land and the Memorial Association Inc. to raise several try to thumb a ride. I will walk the highway strength of the family provided the security million dollars to erect a monument at the all day long and never ask for a ride." for the future. The Indian sense of time has site of the massacre. Most of the Indians are Christianized, but always struck white men as hopelessly im "This monument," they announced, "will three generations of missionaries have not practical. be built by the American people to, in part, extinguished the Indian religion. The spirit Remnants still survive. When a teenage fulfill an unpaid debt in the cause of human ual men, still numerous on the reservation, boy died recently in an auto accident, his rights and as witness to one of the darkest are regarded by their own people with mix grandmother, despite the family's poverty, pages in the history of American progress." tures of derision and awe. The people fre- gave away cherished possessions to the February 24, 1969 CONGRESSIONAL RECORD - HOUSE 4199
mourners-his porta·ble radio, his clothes, churches, a hospital, two gas stations, a gro THE HISTORIC FUTURE her handmade quilts. Funeral sharing is less cery store and a lunch counter cafeteria. For William Good Voice Elk, whose name civilized than Probate Court; still, it persists the rest of life's necessities or luxuries, the evokes beauty and harmony to the Sioux, among the very poor. people drive off the reservation (even for stood amid his squalor and six children and "The Indian is not one bit like the white their alcohol, since the tribe enforces tried to talk about the future. Ask him a.bout man, who thinks about nothing but his prohibition). tomorrow, and he begins by discussing to money," a high school senior said in a class Aside from the modest welfare checks and day and yesterday. room essay. "The whites also never help any all of the social services it provides, the Gov "We wanted to get one of those new body. They must always get paid for it." ernment is the only stable employer. Unem houses," he offered, pointing to Army-sur But the essayist conceded that things are ployment runs close to 40 per cent on the plus homes across the road. "We filled out changing: "They will keep changing for the reservation. Of the Indians who do receive an application." His family lives in a small Sioux until they live like white people. When paychecks, more than half work for the Gov tent heated by a wood stove, and has been that happens, this reservation will be a liv ernment--as school bus drivers or account living there for five years. ing hell." ants, policemen or highway crewmen, as "We were going to get a pump so we A PRICE TAG ON SHARING bureaucrats for the tribe's elected council or wouldn't haul water," his wife Rose put in. The money economy has already obliter as subjects of an antipoverty program. "I asked the Public Health for a pump, ated the basis of the old values and the Inevitably, the better educated, the mixed but I never did get it." cultural fabric is torn beyond repair. An breeds who look and act more like white A basket filled with rotting garbage stood Oglala family is still likely to take in a men, get most of the jobs, which sows re outside the tent. A small boy with a runny brother's or sister's family that is homeless, sentment. "If anything comes along," said nose and puffy face, with a ring of dirt on further crowding the cabin. But a son-in an old full blood, "the ieska (mixed breeds) his belly just above the trousers, stood by law with a car may charge Grandma $5 to get it first. Whatever it is, the housing or his father. drive her into town so she can consult the the cattle loans, it will reach the Indian last." Mrs. Good Voice Elk complained about the free Government clinic. EVEN FISHHOOKS FAil. welfare checks. They work summers on the When a missionary introduced the simple For one reason or another, the long suc farms in Nebraska and every year their lease institution of a rummage sale, his parishion cession of attempts to make the Indians into check is $375, but mainly they are living by ers were unsettled. "They were happy to self-sufficient white men have failed. So the the hands of others. donate their old clothes to the church," he Sioux are developing a peculiar reservation The father and mother are 36 years old but recalled, "but they were shocked when we culture. their faces seem past 50, an age which the percentages say they will never reach. "I put them up for sale." In time, they ac Cattle ranching has increased over the last cepted it. decade, but it has a limited future because went down to the Pine Ridge last month to When telephone service was extended to of the huge amount of land required. The see about a job," he said. "There's no jobs the more amuent Indian families, many of Bureau tried relocating the people in cities, around here at all." them found it necessary to get unlisted num but many of them came back. The outlook Good Voice Elk looked off down the road, bers. Other, less fortunate Indians were for economic development is not especially then glanced over at the visitor. For an in using their numbers to make long-distance promising. stant, when their eyes met, a flicker of em calls. Sharing has its limitations in the barrassment crossed his face. He had not A fishhook factory opened at Pine Ridge in answered the question. modern scheme. 1961 and employed 200 to 300 Indians. The The landscape of Pine Ridge, raw but THE PERISHABLE YOUNG beautiful, is littered with evidence of the wages were low and the jobs had no future, cultural conflict. Trails of cow dung and but the workers, it is said, were adjusting to "These Indians,'' said Hobart Keith, an beer cans line the main-traveled roads across a time clock-and-paycheck mentality. Last Indian, too, "better learn to swim or they're the prairies. Along the canyon creeks, where summer, the fishhook factory closed. Its going to drown." cottonwoods have grown twisted by the wind, managers explained that competition from As tribal judge, Keith presides over the the tiny shacks and log cabins are surrounded imported fishhooks made the reservation weekly procession of drunks, disorderly con by junked cars, an incredible number of production impractical. ducts, petty larcenies and truants who con junked cars. Over the years, the failures and frustra stitute Pine Ridge's juvenile crime problem. Each fall, most families receive their lease tions, the shifts of Government policy have In line with the other constrictions of checks, usually several hundred dollars, created such divisions among the people that reservation life, the kids face arrest for vio money collected and distributed by the Bu it ls hard to get them to agree among them lating a 10 p.m. curfew on weekends. To get reau of Indian Affairs, which leases the In selves on solutions. A promising proposal for drunk, they drive over the line to Nebraska dian-owned lands for cattle grazing and an Indian-controlled demonstration school saloons, and occasionally the ride back ends farming. During this brief false prosperity, ran afoul of tribal politics and was defeated in death. Many of the younger ones get high the used car lots in the surrounding white in a referendum. at home sniffing glue or gasoline. towns do a rush business: if a family lives Full bloods resent blond, blue-eyed In "It seems like we bury more of our young in an isolated cove, owning a car can be a dians who are making it as cattle ranchers people than the ;)ld ones who are through matter of survival. As the cars break down, on Indian land leased at preferential rates. with life," a parish priest observed. parts are swapped or tires are sold. The hulks The mixed breeds say that the "old Indians" The young people of Pine Ridge are the accumulate. would rather perish than face realities. They most perplexing because they seem so prom all resent the Bureau and its red tape, yet ising. Clothes-conscious and pretty, the girls TENTS STil.L PERSIST live with the fear that the Government will wear miniskirts and bell-bottom slacks and With the introduction of trailers and the someday walk away and leave mass suffering green eye shadow. The boys carry transistor construction of several public housing proj in the vacuum. radios tuned to KMOA, the rock voice of the ects, reservation housing has improved con These pressures seem to be cracking the middle border. siderably in recent years. But a third of the tribe's strongest institution-the family. All "Everything should be geared to the chil Indian families still live in log cabins and of the statistics on divorce, separations, un dren," said Toby Eagle Bull, the tribal leader. a few still live in tents. Because their homes wed mothers suggest that the family is los "We can't do that much for the older group; are so small, the ya.rd is used as an attic. ing some of its durability. Foster children, we can't stay on the reservation forever. We When the spring snows are done, families once unheard of among the Indians, are be have to educate these kids so they can get move outdoors to tents and makeshift beds coming commonplace. along with the whites." in the abandoned cars. Against this history, the Oglala Sioux do Most whites would buy that, probably. Es Some prefab buildings are scattered across not talk about dramatic breakthroughs. A sentially, that has been the policy of the the reservation, left over from an Army ord few young men who have been away to col Government from the start. Assimilate. Let nance depot which closed. They are warmer lege are trying to organize business co-ops, them jump into the melting pot with every than a tent, bigger than a log cabin, but but their ideas are still vague and untested. one else. some families regard them as mixed favors. They already face opposition within the Somehow, something goes terribly wrong. In a blizzard, the people cannot find the tribe. Six out of every ten Pine Ridge high school bottled gas to run the stove or the money kids quit school without graduating. Many to pay an electric bill by searching the As one missionary suggested, most of the Sioux have tried to invoke their ancient never start. Suicide attempts-including a creek bottom, where they once found wood. lot of young people--are twice as high as Survival now depends almost exclusively adaptability to conform with the welfare colonialism. "They see these programs com the national rate. Juvenile crime is nine on the Government. The 10,000 Indians are times greater than in other rural areas. Alco scattered over acreage twice the size of Dela ing from Washington, and they've seen so ware, but the economic center is Pine Ridge, many of them," he said, "they view them in holism starts early. a community of nearly 3000 with the Spartan terms of survival. A Public Health Service study of mental appearance of a temporary Army post. "We had a committee to decide who would patients at Pine Ridge reported that "55 per The BIA, the police, the municipal center get jobs in one of the poverty programs. The cent of the dreams and early memories dealt are in brick buildings. There is a row of whites on the committee would look at an with problems around dependence-independ identical white houses where the Govern applicant's work record and experience. The ence, that 40 per cent dealt with the prob ment officials live. The rest consists of flot Indians were looking at who had the most lems of aggression . . Of the dreams and sam housing surrounding several schools and children." early memories related to aggression, 68 per 4200 CONGRESSIONAL RECORD - HOUSE Februa1·y 24, 1969 cent dealt with themes of being hurt, either change Commission, and I understand DEPARTMENT OF AGRICULTURE by others or by oneself." that a thoroughgoing SEC investigation TAKES FIRM STAND AGAINST THE BREAKING POINT has been requested. EEC'S PROPOSED INTERNAL TAX Studies of school performance suggest the However, it occurs to me that the ICC ON SOYBEAN OIL AND MEAL personal agony. The Indian kids start out also should look into this situation, which (Mr. MIZE asked and was given per below average on the national tests, then promises to be repeated if the Carter mission to extend his remarks at this they seem to catch on and actually score Group should be successful in their Rio above average for several years. At adoles point in the RECORD and to include a let Grande venture. The railroad industry, ter from the Deputy Under Secretary of cence, their performance falls apart--at the after all, is one of the most heavily point when they grasp what it means to be Agriculture.) an Indian in a world made for white men. regulated in the Nation, and surely the Mr. MIZE. Mr. Speaker, every Member A group of teen-agers kicking it around Commission would look with alarm at the of Congress is a ware of the crucial im found different words. At an age when most demise of an expert management by a portance of a favorable balance of trade. kids feel like conquering the world, they group which-to quote the prospectus That fragile balance, smaller this past talked of the future realistically, without again-is trying to pro.fit by "the crea year than anticipated, is truly one major inspiration. tive interplay of the acquisition tech foundation upon which our currency "They're just fed up and trying to get nology." out," said Louis Moves Camp, a 16-year-old must depend for support. full blood. "The reason a lot of teen-agers In the past few weeks, many knowl drink ls because the parents drink. A lot of DRAMATIC INCREASE IN THE PRICE edgeable Americans have become in kids want to go, but they don't want to OF LUMBER creasingly concerned over reports from leave their families. the European Economic Community in "I've been in big cities," said Iris Between (Mr. MARTIN asked and was given Lodge, "and I felt like I was that low-like permission to address the House for 1 dicating that those nations are seriously I was dirt because I was an Indian." minute, to revise and extend his remarks, considering imposition of an "internal Yet she and her friends want to go, too. and to include extraneous matter.) tax" on oilseed products. The proposed "We want to be with our people, said Mr. MARTIN. Mr. Speaker, I would tax is so high that it would, if imposed, Louis, "but if there's no jobs, what's the like to call your attention to the dramatic effectively deny U.S. access to an annual use?" market of nearly $500 million in oilseed That ls the push-pull which the sociolo increase which has occurred in the last 15 to 18 months in the price of lumber products. Its impact on American agri gists think is tearing them apart. They have culture would be serious; its impact on one eye on the outside world, which means and plywood in our country. As a retail opportunity and fears; the other eye on the lumber merchant, I am thoroughly fa the U.S. balance of trade would be cata reservation, which means security and hope miliar with this situation. strophic. lessness. I would like to call your attention, Mr. Mr. Speaker, because of the wide Gerald One Feather, a 30-year-old college Speaker, to statistics put out by the spread interest Members have shown in graduate who returned to Pine Ridge in the Bureau of Labor showing that between this delicate trade problem, I insert a hope that he could aid !.ts development, de December 1967, and December 1968, the recent letter I received from the Honor scribed the dilemma: able George V. Hansen, Deputy Under "The people have been trying, but you average mill price of softwood lumber reach a point where you give up. You don't rose 30 percent, and the price of plywood Secretary of the Department of Agricul have the power to do anything. The kids are rose 77 percent. ture, in the RECORD at this point. I am forced to make a decision--either be an In Since December of 1968, however, we pleased that the administration has dian or be an American. The kids say, 'Well, have had further dramatic increases in chosen to take a firm stand on this issue. I'll try to be an American'." the price of both softwood lumber and DEPARTMENT OF AGRICULTURE, Some of them make it. But many drown, plywood, both items of which are funda Washington, D.C., February 20, 1969. the modern casualties of the Indian wars. mental and basic the construction of Hon. CHESTER L. MizE, Since Wounded Knee, the pacification has to House of Representatives. been going rather badly. new homes. DEAR MR. MIZE: This is with respect to the Dimension lumber which consists of concern which you have expressed over the 2 by 4; 2 by 6; 2 by 8; et cetera, in green European Community's proposal to place a DENVER & RIO GRANDE WESTERN fir sold late in 1967 at approximately $70 consumption tax on oilseeds and oilseed RAILROAD TAKEOVER per thousand. The price on January 16 products. was $112 per thousand; on February 12, As you may know, on December 19, 1968, (Mr. BROTZMAN asked and was giv $128 per thousand; and last week $140 the Commission of the European Community en permission to extend his remarks at per thousand. One-quarter-inch AD ply submitted to the Council of Ministers (the this point in the RECORD.) Community's Executive Body) its long wood-the price on this item indicates awaited policy program to reform the agri Mr. BROTZMAN. Mr. Speaker, the general prices on various grades of ply cutural sector, including specific provisions Denver & Rio Grande Western Railroad, wood-was approximately $60 per thou relating to fats and oils. The Commission which is domiciled in Colorado, recently sand late in 1967; by January 16, the proposes to introduce a tax of $60 per metric found itself involved in an apparent take price was $125 per thousand; and la.st ton on vegetable and marine oils and $30 over maneuver by an organization which week it was $144 per thousand. per ton on meals and to take the initiative describes itself as an "investment bank The lumber manufacturers on the west in launching negotiations for an interna ing-holding company." coast today do not seem to have any tional arrangement for fats and oils. Such This firm, the Carter Group, Inc., has measures ostensibly designed to stabilize the established price list, but it is simply edible fats and oils market, particularly but only been in existence since September handled on the basis of an auction with ter, are in fact designed to plug the hole in 1968. This is an unusual organization in the sale going to the highest bidder. the otherwise highly protective wall of their several respects. We had an instance which occurred Common Agricultural Policy through which For one thing, it was formed without in one of my retail yards 2 weeks ago oilseeds and high-protein meals enter duty a single member of its executive com where we had a quotation from a mill free without restriction. mittee having a substantial background on a carload of plywood that a contrac We consider this to be most important in railroad management-the individual tor needed. We quoted the contractor a trade problem that has arisen in agriculture resumes in the firm's prospectus bears between the United States and the European price, called the mill back on the tele Community because of the magnitude of our this out-and yet the first acquisition phone 2 hours after the quotation was trade in oilseeds and oilseed products which the Carter Group has its sights on received, were advised that they were nearly $500 million in 1967/68 and expand is the very successful Denver & Rio sorry but the price had gone up $8 per ing. Impairment of our access to the im Grande Western Railroad. thousand. portant European market would have a seri For another thing, I find it remarkable I urge, Mr. Speaker, that the Com ous impact on farm incomes and on the U.S. that two-thirds of the stock in this com mittee on Banking and Currency and balance of payments. In addition, it is an other example of the Community's policy of pany-which appears to be the principal also the Judiciary Committee investigate shifting most of the burden of supply ad trading commodity in the threatened this tremendous increase in the price of justment to third countries through inten tender offer-would be owned by a group lumber and building materials, which is sification of import restrictions and export of men who have put up only 8 to 9 per going to seriously hamper new construc aids. We have, therefore, taken an extremely cent of the tangible assets. tion and President Johnson's program of strong position in opposition to the tax. I believe this matter should be the con construction of thousands of lower-in The U.S. Government has continuously cern, primarily, of the Securities and Ex- come housing units in this country. and forcefully warned the European Commu- February 24, 1969 CONGRESSIONAL RECORD- HOUSE 4201
nity that their proposed tax would sharply are being abused for partisan political in the field of law and the administration of reduce the Community's imports of oilseeds activity. law, has prepared a model law which would and oilseed products and would result in a Certainly, all of us would agree that chari govern the activity of tax-exempt organiza massive impairment of the present access table and humanitarian purposes rightly re tions. The Committee on Tax-Exempt Orga available to American exporters. We made it ceive support and encouragement from the nizations of the American Bar Association clear that we could not agree to any action Federal government in the form of special tax concluded that a distinction should be made or subscribe to any arrangement which would privileges. In equal degree, however, I am between supporting a political candidate and limit our export opportunities, or deny to us sure we would also agree that combatants a political issue as exemplified by proposed the benefit of concessions negotiated under in the political arena should all labor under legislation. GATT. We also made it clear that such ac the same set of rules and the same handicaps. The very purpose of many trade associa tion would leave us no choice but to retaliate From our mutual experiences in the realm tions is to promote legislation of interest promptly to restore the balance of conces of politics, I am sure we will all likewise to that trade association. The proposal of sions. You may have seen 1n newspaper agree that money is the mother's milk of the Subcommittee of the American Bar As stories the thought that our retaliation a political campaign. To the degree that one sociation did not prohibit such activities. might include such important exports as combatant in a political campaign receives In my own opinion, it ls a legitimate exer European automobiles, typewriters, office direct or indirect financial or material sup cise of the right of freedom of speech for a equipment, wines, and similar items that port to his campaign from a source enjoying group of lnvididuals, whether they be busi Americans buy from them in large amounts. a financial subsidy through special tax nessmen, la.borers, or churchgoers, to estab What we, in fact, are saying to the Euro privileges, to that degree the equality of lish an organization to present their views pean Community ls that the enactment of a rules between two political opponents is to legislative bodies and individual legis consumption tax on oilseed products could upset. lators for consideration. lead to the most serious trade policy con I noted with considerable amusement news The activity which ls prohibited in the frontation between the Community and the accounts of the appearance of Mr. McGeorge recommended code of the American Bar As United States with commercial and political Bundy, the Chairman of the Board of the sociation is direct intervention in a political implications extending beyond agriculture. Ford Foundation when he explained a dis campaign on behalf of or in opposition to a We will continue to make representations bursement of in excess of $131,000 to indi particular political candidate. to the Community through all available viduals who had been closely associated with I have incorporated in my proposed legis channels to keep unimpaired our access to the late Senator Kennedy in his campaign lation the language of the model law drawn Community markets for our oilseeds and oil for the presidency. It is my understanding by the· Committee on Tax Exempt Organiza seed products. that the purpose of the Ford Foundation is tions. This language would permit organiza Our latest information is that the Council to encourage research into fields which would tions to "lobby" on behalf of the causes and of Ministers is not likely to act on the pro otherwise go begging for research. I would purposes of the organization and permit or posal in its present form. Final action, if any, assume that any organization having this ganizations enjoying tax benefits to seek is not expected to be taken in the immediate purpose, before embarking upon a new ven public support for the causes which it future. ture involving considerable expenditure of espouses. Please let me know if I may be of further funds would first ask itself "What results The language of this proposed code, how assistance to you. are expected from this expenditure?" Indeed, ever, presents an absolute prohibition Sincerely, any business organization or government or against the use of funds by a tax exempt ganization which did not ground all of its GEORGE V. HANSEN, organization on behalf of a political party Deputy Under Secretary. activities upon this fundamental question or a political candidate. could not long survive. The penalty for violaitlon of the prohibi Mr. Bundy, however, is a man of great tion would be the loss of tax-exempt status imagination and is not limited to such sim (that is the deductability of donations or TAX REVISION AND TAX REFORM ple business or government fundamentals. gifts by supporters of the organization and It appears that his primary motive in mak the treatment of all revenues from any Internal Revenue Service, by labor organizations of their general funds opposition to the views of the members Washington, D .C. for political purposes. themselves. DEAR MR. COHEN: As you know, for the There is a grievous inconsistency between The article referred to above in the Wall past ten months the National Right To Work the language of the Corrupt Practices Act, Street Journal reveals that union dues were Committee has been the subject of an inten the Internal Revenue code and the practices used for the express purpose of propagan sive investigation by the Internal Revenue of the Internal Revenue Service. The incon dizing the union membership on behalf of Service for the purpose of determining sistency in the law arises because the statu political candidates for whom a heavy per whether the Committee is entitled to retain tory prohibition contained in the Corrupt centage of the membership had no sym its tax exemption status under section 501 Practices Act is not carried over into the pathy. Thus the membership was being com (c) (4) of the Internal Revenue Code. Internal Revenue code. In short, activity pelled to pay for the political propaganda During the course of this investigation which is subject to criminal prosecution in designed to change their minds. your representatives have made an intensive one section of the law is not prohibited under What I am seeking to illustrate is this- effort to find some evidence of political ac the Internal Revenue code which authorizes union leadership can and does use union tivity on the part of the National Right To tax privileges for labor organizations. funds for political campaigns at their own Work Committee. They have quite frankly Indeed, the Internal Revenue Service does whim in callous disregard for the rights of advised us that this is what they are looking not recognize the Corrupt Practices Act as the members. The Federal government has for, and in this connection they have being a part of the U.S. code. When one no right to subsidize through tax privileges scrutinized all of our expenditures for group, the National Right to Work Commit such activities. The purpose of my legisla printed material, staff travel, legal services, tee, was under investigation by the Internal tion is to prevent the use of union dues for and membership promotion, h ave asked us Revenue Service for the avowed purpose of political purposes. for a breakdown of the activities of staff per finding justification for stripping them of It is essential that we write such prohibi sonnel particularly during the period pre their tax privileges, a;n inquiry was made to tions into the law if such prohibitions are to ceding the 1964 national elections and even the Internal Revenue Service as to whether be meaningful. Efforts by individual union subpoened the books of those printers who a like investigation would be proper with re members to prevent such abuses of their have done business with us. We have been gard to labor organizations. We all recognize union dues have proven to be time-consum expressly told by your representatives that that the National Right to Work Committee ing, expensive and ofttimes rendered moot if they turned up any evidence of political and labor have purposes that are exact oppo by reason of the delay of court proceedings. expenditures or political activities by our sites to each other. I am attaching hereto For example, see the Streeter-Looper Case staff on paid time our exemption could be copies of the correspondence for the benefit 367 U.S. 740 (1961). cancelled. of the committee. The correspondence speaks The Congress owes a duty to the members We are, of course, well aware that as an for itself and reveals a callous disregard for of labor organizations to give them protec exempt organization we cannot engage in the principle that all groups similarly situ tion from the abuses of their earnings which any political action, and we have scrupu ated are entitled to equal protection and they, as individuals, are powerless to prevent. lously avoided any involvement in politics or equal treatment under the law. The position A recent case which received great national political activities. The only purpose of the taken by the writer of the letter from the publicity (-- F. Supp. __ U.S. District National Right To Work Committee is to Internal Revenue Service appears wholly Court, Eastern District of Missouri, Eastern promote the principle of voluntary union without legal foundation and is obviously Division, September 19, 1968) reveals the ism. By reason of this we have incurred the contrary to the criminal activities prohibited stark reality of the degree to which union enmity of union officials who have publicly in the Corrupt Practices Act. members can be compelled to contribute expressed their intent to bury us by one I think it's appropriate to call to :the at their wages for purposes of which they have means or another. tention of the members of this committee neither control, knowledge nor sympathy. This brings us to the point of this letter. the method whereby labor organizations fi In conclusion, the testimony of the pre Are not labor unions, as tax exempt orga nance the activities of the official propa vious week, and I assume during the coming nizations under section 501 ( c) ( 5), subject to ganda agency of labor unions, that is, the days, will continue to reveal instances in the same restrictions on political activities Committee on Political Education (generally which the taxpayers are subsidizing activities as the National Right To Work Committee referred to as COPE) . which should not be subsidized if our politi and other exempt organizations? And, if this COPE is without serious debate one or cal system is to remain free and operate in is so, why is it that labor unions can openly the most militant political organs in the the best interests of a democracy. To permit and flagrantly use the monies collected from country. Its publications, ostensibly mailed any person or group of persons. whether they membership dues to make contributions to for "educational" purposes, represent one of be capitalist, philanthropist, or labor leader political candidates, and assign their staff the finest examples of pure propaganda to to have uninhibited use of funds augmented personnel to electioneering activities on be grace the American literary scene. by the indirect subsidy of special tax privi half of union-endorsed candidates? That I repeat again, that COPE or any organi leges, presents a hazard to our political they do all of these things on a large scale is, zation has a right to promote causes which system. of course, well known and well documented. its leadership determines to be in their own I am proposing legislation which will per Just by way of example, in International As best interest. What I do object to is the mit groups and organizations to function sociation of Machinists v. Street, 367 U.S. method whereby funds collected by a tax with tax privileges to promote purposes 740 ( 1961) , the defendant unions stipulated exempt organization are used to support which they espouse. My legislation, in like that the dues monies collected from their political parties and political candidates. measure but in opposite direction, will pre members under compulsory union shop It is the manner of financial support and vent the real danger of our people finding agreements were "used in substantial tax privileges enjoyed by COPE that I con themselves with legislators who are be amounts to support the political campaigns sider subject to question. holden to sources of great wealth. of candidates for the offices of President and Each union member supports his local I am compelled to observe that under ex Vice President of the United States, and for union and national union through dues. isting law, organizations with similar labels the Senate and House of Representatives of Any organization, if it is to function, must but opposing political views are ofttimes the United States ... and candidates for state have revenue, and union dues are a perfectly treated differently. For example, we have the and local offices." 367 U.S. 740, 745, footnote 2. legitimate method of financing union activi National Council of Churches which reg In May of this year the newspapers in Wash ties. Inasmuch as such dues must be paid ularly appears before congressional commit ington reported a public announcement by by union members as a condition precedent tees to present the views which they have Charles Della, president of the Maryland to their eit her gaining or holding employ adopted. On the other hand, we have the District of Columbia AFL---CIO, that that ment under union shop contracts, such dues Billy James Hargis Foundation which, in organization would contribute the sum of are properly deducted from the union mem equal degree, presents itself as a religious $200,000 to support the campaign of Carlton ber's gross receipts as a necessary expense organization but, having opposite political Sickles for Governor of Maryland. Enclosed to his holding employment. conclusions from the National Council of is an article written for the May 1966 issue Each union is assessed each month for its Churches, finds itself denied equal tax of Commonweal magazine by Sidney Lens, a share of support to COPE. This assessment treatment under the law. I think most long-time union staff official, which points is based on the number of union members Americans will say that the fundamental out, among other things, that the United belonging to that particular local. The principle of equal treatment under the law Auto Workers Union recently donated amount assessed against each local is taken is essential to fair play in a democratic so $30,000 to the campaign of Senator Paul from the dues which have been collected ciety. I say we should permit such groups to Douglas of Illinois. The article goes on to from the members of that local. adopt "causes" and positions on the issues of point out: Any argument that the deduction from our time and present such facts and opinions "Equ.ailly impoo::tam.:t t.s mMl.pawer. Around the member's dues for uses by COPE is a as they deem necessary in promotion of election time labor mobilized thousands of voluntary contribution is a ludicrous sham. their interest. But let us draw a firm line of workers from the shops as well as m any full I enjoy the support of t he majority of distinction between political and moral time organizers. The offices of the auto union, union members in my district because they causes and political candidates and political perhaps the most active of all politically, be feel that I am representing their views in parties. come depopulated by as much as one-half February 24, 1969 CONGRESSIONAL RECORD- HOUSE 4203 of the regular staff, all working the hustings tivities it can be established that the orga does not lose its rights to exemption under for union-endorsed candidates. These are nization is not sufficiently engaged in the section 501 because it engages in political men, it should be noted, with considerable union or labor activity to be characterized as activities, unless by reason of the organiza organizational talent, usually far above the a labor organization in the sense that that tion's improper activities it can be established caliber of ordinary Democrats .... Union term is used in section 501 ( c) ( 5) . that the organization is not sufficiently en leased autos, painted over with the names of As you may know, contributors to labor gaged in the union or labor activity to be union-endorsed aspirants, plastered with organizations are not entitled to a charitable characterized as a labor organization in the signs, participate in parades and make tours deduction; however, under certain condi sense the term is used in section 501 ( c) ( 5) . with loudspeakers blaring their message. In tions payments may qualify as a business ex As you may know, it is the responsibility small towns especially, such as Peoria, Illi pense under section 162. With respect to the of the Service to administer the Federal in nois or Muncie, Indiana, big unions like steel deductibility of dues paid to a labor union come tax laws enacted by Congress as effi or auto can mobilize thousands of members or trade association as a business expense, ciently and impartially as pos·sible. We have to fill a meeting hall or listen to an open the Revenue Act of 1962 amended section no power to amend the laws or to act c-0n air speech. On the first Tuesday in November 162 by adding a new subsection (e) which trary to their provisions. Your concern in innumerable union men, paid from the provides for the deduction of ordinary and this matter is appreciated and we want to union treasury, can be seen driving voters to necessary expenses paid or incurred in tax further assure you that the Service is inter and from the polling booths, acting as watch able years beginning after December 31, 1962, ested in applying the internal revenue laws ers to assure an honest count, and calling for certain activities directly connected with fairly and unif-0rmly in all cases. We do on 'sure' voters who have not yet cast a bal legislation or proposed legislation of direct everything we can to administer the applica lot. Thus by concentrating on mr.rginal areas, interest to the taxpayer. In no event shall a ble regulations without regard to the politi by doling out $1,000 to $5,000 for Congres deduction be allowed for that portion of a cal leanings of any taxpayer or organization. sional hopefuls who need just a little push special assessment or similar payment (in We trust this information will be helpful to put them over, labor can make an impor cluding an increase in dues) made to any in explaining the varying limitations or orga tant contribution." organization for any activity which does not nizati-0ns qualifying for tax-exempt status Also enclosed is a recent article by one of constitute an appearance or communication under different sections in the Code. the well known labor columnists, Victor with respect to legislation or proposed leg Sincerely yours, Riesel, who points out that the AFL-CIO has islation of direct interest to the organization. FORREST P. NEAL, assessed its 13.7 million members at a nickel We appreciate your concern in this matter Chief, Technical Coordination Branch. a head for a special election fund of $850,000 and want to further assure you that the to be spent for campaign activities in this Service is primarily interested in applying H.R. 7432 year's national elections. the internal revenue laws fairly and uni A bill to amend the Internal Revenue Code Since the Internal Revenue Service insists formly in all cases. We do everything we can of 1954 to deny tax exemption to organiza that the National Right To Work Commit to administer the applicable law and regu tions which endorse political candidates, tee must strictly observe the rule against lations without regard to the political lean and for other purposes political activity, and since the flagrant po ings of any taxpayer or organization. litical activities of labor unions are largely Be it enacted by the Senate and House We trust this information will be helpful of Representatives of the United States of ignored, it would seem that a double stand for your purposes. ard is applied under the Internal Revenue America in Congress assembled, That Section Sincerely yours, 501 of the Internal Revenue Code of 1954 is Code. As the public becomes more and more S.B. WOLFE, aware of this selective enforcement of the amended by redesignating subsection (e) as law the effect can only be to break down Director, Audit Division. subsection (f) and inserting after subsection respect for the law, a trend which seems to (d) the following new subsection: be rapidly undermining the foundations of U.S. TREASURY DEPARTMENT, " ( e) APPEARANCES, ETC. WITH RESPECT TO orderly society. INTERNAL REVENUE SERVICE, LEGISLATION.- We feel that you can quickly restore pub Washington, D.C., October 10, 1966. " ( 1) None of the t'ollowing activities by lic confidence in the integrity of the Internal Mr. F. R. DICKERSON, an organization described in subsection Revenue Service by issuing directives to your President, Roper Industries, Inc., Commerce, (c) (3) shall be deemed 'carry on propaganda, agents and offices throughout the country Ga. or otherwise attempting, to influence legis to undertake a sweeping investigation of the DEAR MR. DICKERSON: Thank you for your lation': political activities of organized labor in this letter of September 6, 1966, concerning the "(A) Appearances before, submission of year's state and national elections, and re political activities of organized labor and the statements to, or sending communications voke the tax exemption status of any union tax-exempt status of the National Right to to, the committees, or individual members, that engages in such political activities. Work Committee and the Sierra Club. of Congress or of any legislative body of a Very truly yours, The records of the National Office disclose State, a possession of the United States, or REED E. LARSON, that the National Right to Work Committee a political subdivision of any of the foregoing Executive Vice President. has qualified for tax-exempt status under with respect to legislation or proposed legis section 50l(c) (4) of the Internal Revenue lation of direct interest to the organization. U.S. TREASURY DEPARTMENT, Code, while the Sierra Club is exempt under "{B) Communication of information be INTERN AL REVENUE SERVICE, section 501(c) (3), and labor unions fre tween the organization and its members of Washington, D.C., September 28, 1966. quently qualify under section 501(c) (5). contributors with respect to legislation or Mr. REED E. LARSON, The Internal Revenue Service maintains a proposed legislation of direct interest to the NATIONAL RIGHT To WORK COMMITTEE, program of periodic audit and review of the organization. Washington, D.C. operations of tax-exempt organizations. If "(2) For purposes of this paragraph, mat DEAR MR. LARSON: Thank you for your let it is determined as a result of the audit pro ters of direct interest to the organization ter of September 2, 1966, with attachment, gram that any tax-exempt organization is include- concerning the political activity of labor engaged in activities to an extent proscribed "(A) those directly affecting its exemption unions. by that section of the Code under which it under this section You asked whether labor unions, as tax has been held exempt, we will take appro "(B) those directly affecting the deduction exempt organizations under section 501 (c) priate action to revoke or modify our prior of contributions to such organizations under (5), are subject to the same restrictions on ruling. This is a factual question in each case, sections 170, 642, 2055, 2106, 2522; political activities as other exempt organiza and the Service must examine all of the op " ( C) those directly affecting any exempt tions. Although certain sections of 501 (c) erations for the years involved. purpose or function for which the organiza of the Internal Revenue Code and their im You expressed concern regarding the pos tion was organized and is operating, in the plementing regulations contain various defi sible nonuniform application of restrictions case of an organization which normally re nitions, limitations, and prohibitions rela on political activities for various tax-exempt ceives a substantial part of its support (ex tive to political and legislative activities, organizations. It should be noted that al clusive of income received in the exercise or there is no such proscription with respect to though certain sections of 501 (c) of the Code performance by such organization of its a labor organization otherwise qualifying for and their implementing regulations contain charitable, educational, or other purpose or exemption from Federal income tax under various limitations and prohibitions relative function constituting the basis for its ex section 501 (c) (5). to political and legislative activities, there is emption under this section) from the United The qualifying character of a labor orga no such proscription with respect to a labor States or any State or possession or political nization, as the term is used in section 501 organization otherwise qualifying for exemp subdivision thereof, or from direct or indirect (c) (5), is that it has as its principal pur tion from Federal income tax under section contributions from the general public. pose the representation of employees in such 501(c)(5). "(3) Activities described in paragraph (1) matters as wages, hours of labor, working The qualifying character of a labor orga shall not include any attempt to influence the conditions and economic benefits, and the nization, as the term is used in section 501 general public, or segments thereof, with general fostering of matters affecting the {c) (5), is that it has as its principal purpose respect to legislative matters, elections or working conditions of its members. As a mat the representation of employees in such mat referendums." ter of law, a labor organization does not lose ters as wages, hours of labor, economic bene SEC. 2. Section 170(c) is amended by adding its right to exemption under section 501 be fits, and the general fostering of matters af the following new sentence at the end there cause it engages in political activities, unless fecting the working conditions of its mem of: "For purposes of this subsection, the by reason of the organization's improper ac- bers. As a matter of law, a labor organization phrase 'carrying on propaganda, or otherwise 4204 CONGRESSIONAL RECORD- HOUSE Februa 1·y 24, 1969 attempting, to influence legislation' in para sented for nomination for or election to pub Barnesboro area. Lancashire will need graph (2) (D) shall be subject to the quali lic office. an expanding number of men to operate fications set forth in section 501(e) ." "(b) The table of sections for such part I is the versatile machines that extract coal, SEC. 3. Section 2055(a) is amended by add amended by adding at the end thereof the ing the following new sentence at the end following: transport it to the surface, and load thereof: "For purposes of this subsection, "SEC. 505. Exemption denied to organiza railroad cars at the rate of 3,250 tons the phrase 'carrying on propaganda, or other tions engaged in political activi an hour. Because miners' wages are wise ruttempting, to influence legislation' in ties." among the highest in manufacturing and paragraphs (2) and (3) shall be subject to SEC. 8. The amendments made by section 7 processing industries, employees of the quaJifications set forth in section 501 of this Act shall apply to acts occurring after Greenwich will have an opportunity to (e) ." the date of the enactment of this Act. invest in the homes already being SEc. 4. Section 2106(a) (2) (A) is amended planned by farsighted and confident bus by adding the following new sentence at the iness leaders in the area. end thereof: "For purposes of this subpara A FLAG FOR ALL TO SEE AND graph, the phrase 'carrying on propaganda, To Barnes and Tucker President or otherwise attempting to influence legis HONOR Richard T. Todhunter, Jr., Vice Presi lation' in clauses (ii) and (iii) shall be sub RICHARD NIXON. billion in fiscal year 1970. These surpluses this basis, a limit of $300 billion should THE WHITE HOUSE, February 20, 1969. in the trust funds provide cash to the be adequate to permit efficient and re Treasury, but only through the medium sponsible handling of the Government's financing for the foreseeable future. This PUBLIC DEBT LIMIT-MESSAGE of investment in special Treasury issues. The consequent increase in such special compares with an outstanding debt on FROM THE PRESIDENT OF THE the unified Budget concept of $293.7 bil UNITED STATES (H. DOC. NO. issues is subject to the debt limit, under the debt sub lion on January 21, 1969. 91-79) present definitions. Hence, ject to limit will rise even though bor On the present public debt limit con The Speaker laid before the House rowing from the public will decline. cept, the debt outstanding on January the following message from the Presi In addition, we must acknowledge the 21, 1969 was $364.2 billion as compared dent of the United States; which was seasonal pattern in Treasury receipts. with the current debt limit of $365 bil read and referred to the Committee on Net cash requirements prior to the mid lion. An increase in that limit to approxi Ways and Means and ordered to be April tax date are regularly very substan mately $382 billion would correspond in printed: tial, while after that date the Treasury the next fiscal year to the $300 billion To the Congress of the United States: will be repaying a large amount of debt limit I am proposing on the unified budg When I took office as President of the on a net basis. et basis. United States, the public debt subject to While a small, temporary increase in RICHARD NIXON. limit was $364.2 billion-only $800 mil- the debt limit might prevent the undue THE WHITE HOUSE, February 24, 1969. February 24, 1969 CONGRESSIONAL RECORD- HOUSE 4207 PUBLIC DEBT LIMIT would simply mean that the concept of I can think of no better vehicle by India will be 1 billion people Mr. PODELL in three instances. H.R. 7426. A bill to amend title VI of the by the year 2000. Voluntary family plan Mr. BURTON of California in two in Civil Rights Act of 1964 with respect to the ning in conjunction with new methods of stances. use in gOOd faith by State and local authori agriculture represent the answers to Mr. JOHNSON of California in two in- ties of freedom-of-choice systems for the as stances. signment of students to public elementary these problems. and secondary schools; to the Committee on So, Mr. Speaker, again I say that I Mr. HATHAWAY in two instances. the Judiciary. appreciate the interest of the gentleman Mr. GONZALEZ in three instances. By Mr. ADAIR: from Georgia, and the kind remarks he M:r. BARING. H.R. 7427. A bill to amend the Railroad has made about this important subject. Mr. RYAN in three instances. Retirement Act of 1937 to provide for cost Mr. Speaker, I yield back the balance of Mr. MEEDS. of-living increases in the benefits payable my time. Mr. HICKS. thereunder; _to the Committee on Interstate Mr.O'HARA. and Foreign Commerce. H.R. 7428. A bill to amend title II of the Mr. OTTINGER. Social Security Act to provide cost-of-living GENERAL LEAVE Mr. PATTEN. increases in the insurance benefits payable Mr. BUSH. Mr. Speaker, I ask unani Mr. PICKLE. thereunder; to the Committee on Ways and mous consent that all Members may have Mr. HAGAN in four instances. Means. 5 legislative days in which to extend their Mr. ST. ONGE in three instances. By Mr. ADAMS: Mr. OLSEN. H.R. 7429. A bill to enable citizens of the remarks on the subject matter of my spe United States who change their residences to cial order. vote in presidential elections, and for other The SPEAKER. Is there objection to purposes; to the Committee on House Ad the request of the gentleman from ADJOURNMENT ministration. Texas? Mr. MIKVA. Mr. Speaker, I move that By Mr. BENNETT: There was no objection. the House do now adjourn. H.R. 7430. A bill providing an exception The motion was agreed to; accord to the Revenue and Expenditure Control Act of 1968; to the Committee on Ways and ingly EXTENSIONS OF REMARKS AMERICAN MEDICAL ASSOCIATION tivi ties. The following table demonstrates 388,897 ,000 to individuals because of dis REPORT ON FEDERAL MEDICAL the substantial growth in Federal ap ability through programs in which it par HEALTH APPROPRIATIONS FOR propriations in the medical-health field: ticipa.tes. This makes a total of over $26 FISCAL 1969 Fiscal year: billion that the Federal Government 1953-54 ------$1,775,882,197 contributes to medical-health activities 1955-56 ------2,268,800,000 for the current fiscal year. HON. DURWARD G. HALL 1957-58 ------2,541,483,506 This objective report has been and is OF MISSOURI 1959-60 ------3,161,151,325 available for Members of Congress upon IN THE HOUSE OF REPRESENTATIVES 1961-62 ------4,437,746,072 1963-64 ------5,508,951,287 reques·t. It serves as a valuable reference Thursday, February 20, 1969 1965-66 ------6,581,372,121 tool in locating various Federal health Mr. HALL. Mr. Speaker, the Washing 1967-68 ------15,507,885,089 programs. ton office of the American Medical As 1969 ------16,771,182,095 Mr. Speaker, under unanimous con sociation has published annually since In addition to the $16,771,182,095 ap- sent, I insert "Federal Medical-Health 1952 a detailed report how Federal propriation in fiscal 1969, the Federal Appropriations" into the RECORD, as fol moneys are used for medical-health ac- Government will make payments of $9,- lows: