10306 ~ CONGRESSIONAL RECORD- HOUSE June 5 forget when the time comes, but only time CONFIRMATIONS for the Department of Defense for the will tell. Executive nominations confirmed by fiscal year ending June 30, 1959, and for Federal payments would be made to any other purposes, which the Clerk.will re unemployed person who has exhausted his the Senate June 5 (legislative day of State-financed benefits since last July 1·, if June 4), 1958: port by title. he is still unemployed, or to anyone who ex The Clerk read the title of the bill. hausts his benefits between now ·and next SEcuRITIES AND ExCHANGE COMMISSION The SPEAKER. The question is on April 1. It is estimated that more than 3 . Edward N. Gadsby, of Massachusetts, to be the amendment reported from the Com million persons might be eligible for some a member of the Securities and Exchange mittee of the Whole House on the State $700 mlllion of extra benefits if all State gov Commission for the term expiring June 5, of the Union which, without objection, ernments were to accept the Federal aid of 1963. the Clerk will report. fered. But there's the rub. THE COAST AND GEODETIC SURVEY There was no objection. The Labor Department officials who will ad The following-named persons for perma The Clerk read as follows: minister the program predict that, barring a nent appointment to the grades indicated in worsening of the unemployment situation, the Coast and Geodetic Survey, subject to On page 6, line 15, strike out "$2,901,- not more than a half dozen States wlll agree qualifications provided by law: 400,000" and insert "$2,946,400,000." to the distribution of Federal funds within On page 8, line 24, strike out "$3,039,- their borders. To be lieutenants (junior grade) 208,000" and insert "$3,078,208,000." Approximately one-quarter of the unem Lawrence L. Seal Dale V. Bedenkop On page 11, line 15, strike out "$1,644,- ployed workers covered by unemployment in Larry H. Clark Joel P. Porcher 600,000" and insert "$1,659,600,000." surance live in 6 or 7 States. Those are the Allen J. Lewis Richard G. Hajec 'States that are expected to accept, because Vastine C. Ahlrich William A. Hughes The SPEAKER. The question is on they will be under intense pressure to do so. G. Thomas Susi Joseph M. Rodgers the amendment. New York has already indicated that it would. James K. Richards James R. Schwartz The question was taken; and the The primary reason for a State's not ac Jordan S. Baker Verle B. Miller Speaker announced that the ayes ap cepting the aid is a simple one and directly Richard H. Garnett, Jr. peared to have it. related to the reasoning behind the insertion To be ensigns Mr. MAHON. .Mr. Speaker, I object of the option clause by both business men Richard E. Alderman Ronald L. Newsom to the vote on the ground that a quorum and many State governments hiwe a mutual James B. Allen Harvey A. Peterson is not present and make the point of or interest in keeping employers' taxes as low Karl R. Anderson Edward L. Talbot der that a quorum is not present. ~s possible. Business is naturally interested Lawrence S. Brown James A. Ten Eyck The SPEAKER. Evidently a quorum in low taxes and States want to attract new Charles A. Burroughs Charles K. Townsend plants. Low employment taxes are used by David Cummings Richard L. Turnbull is not present. many as a drawing card. Glenn DeGroot Phillip W. Ward The Doorkeeper will close the doors, Even if every State were eager to receive Wesley V. Hull Dunston Wingfield, Jr. the Sergeant at Arms will notify absent the aid from Washington, each must go Frederick A. Ismond David I. Wolsk Members, and the Clerk will call the roll. through the process of making a decision to Arthur C. Korn that effect. A Senator who polled governors The question was taken; and there on this point found only a few who thought . were-yeas 225, nays, 159, not voting, 47, ...... as follows: they had the power of decision in their own hands. Most thought it would r~quire leg -HOUSE OF REPRESENTATIVES [Roll No. 87] Islative action; constitutional amendment in YEAS-225 a few States and a popular referendum in one. THURSDAY, JUNE Abernethy Dent Ikard There are few, if any, State legislatures in 5, 1958 Adair Denton Jarman session now. Thus, there are hurdles to be Addonizio Dollinger Johansen cleared before much ald could be extended. The House met at 11 o'clock a. m. Albert Donohue Johnson The Chaplain, Rev. Bernard Braskamp, Alexander Dooley Jones, Ala. D. D., offered the following prayer: Anderson, Dorn,N. Y. Judd Mont. Dorn, S.C. Karsten TRANSACTION OF ADDITIONAL Ephesians 4: 25: We are members one Andrews Doyle Kean Anfuso Durham Kee ROUTINE BUSINESS ot another. Ashley Dwyer Kelly, N.Y. By unanimous consent, the following Almighty God, in whose presence there Ashmore Eberharter Keogh is fullness of joy, help us to appreciate Aspinall Edmondson Kilday routine business was transacted: Avery Ell1ott Kilgore what a sacred blessing it is to worship Bailey Engle King Thee, who art our salvation, and Baldwin Everett Kitchin strength, and the source of the true, the Bass, Tenn. Evins Kluczynski MUTUAL SECURITY ACT OF 1958- Beckworth Fallon Lafore beautiful, and the good. Bennett, Fla. Farbstein . Landrum AMENDMENTS May we see the elemental and eternal Bennett, Mich. Fascell Lane Mr. ELLENDER submitted amend truth that humanity is a family and that Berry Feighan Lankford Blatnik Fino Latham ments, intended to be proposed by him, there is one heart in the world, having Boland Flood Lennon to the bill CONGRESSIONAL RECORD- HOUSE June 5 Ten years ago I satd that thls was work and effort. So the Germans set You must not- expect of me a detailed something quite new in world history: to work and put life into their economy exposition of our domestic German diffi Up to May 8, 1945, the American citizen again. In 1949 and 1950, I told promi.. culties. National reunification not only had to pay heaVY taxes in order to de nent American businessmen frequently remains the object of German longing stroy the German State whereas after that the Marshall plan funds were well but also the prerequisite for Europe's May 8 he had to pay taxes in order to invested in Germany. Can you hold this recovery. The. slogan of coexistence save the German people. But there was against a people that they have regained may imply the coexistence of different not merely the taxpayer's burden which economic strength through industrious ideologies in different national territories after a few years was absorbed into the ness and skill, and thanks to the eco .. but it is absurd to base it on a relation grand design of the Marshall plan nomic commonsense displayed by the ship of total power on the one hand and which, in turn, had . evplved from the United States which was the essential total impotence on the other, which Hoover report. In addition there was condition for German economic re look at the situation of 1945---disrupts a the aid given by the individual Ameri covery? I find nothing more interesting nation and denies it democratic self can, by the churches, the charitable or than to read in some newspapers of the determination. ganizations, by the countless and un Western World-though not in the The settlement of the Saar question countable men and women no matter United State$--that the Germans are has shown that a patient policy which whether they were of German origin or once more becoming imperialists be recognizes democratic rights can lead to not. The love of one's fellow man dis cause they have more or less recovered a happy result. An onerous burden has solved fear and hatred. I do not come their share of the world's market. been lifted from German-French under to you as a petitioner. I wish simply Surely, there is no imperialism but much standing, the cornerstone for strength to express my gratitude for the action useful work in building sturdy cranes en,ing an all-European consciousness. which your Government has taken as and manufacturing medical supplies. The German and the French people have well as for the help rendered by millions During the past 50 years Germany has equally contributed to this success and' of individual Americans. The material had the misfortune to acquire the repu .. thereby have at long last brought about side of this assistance was important tation of being the nation which em a good neighborly relationship between but not decisive: It gave us moral uplift bodied, so to speak, eternal unrest and the two countries. and encouragement. Without the help overweening ambition. A hundred years This much is evident: The Germans of the United States it would have been earlier-following the French revolution know where they belong. Their history, inconceivable for 10 million Germans and the first Napoleon--other countries their intellectual and Christian-religious expelled from their homeland to be of enjoyed this reputation. It would seem traditions have made them an integral fered food, work and shelter. The fact to me a good idea to get rid of such part of what is called the Western that week after week several thousand cliches encountered here and there in people fiee to the West from intellectual World. On. this point there can be no newspapers and schoolbooks. neutrality for us. There is something and spiritual slavery in the Soviet-oc We, all of us, must shed this habit of cupied zone continues to weigh heavy disquieting in the fear sometimes ex thinking, while, at the same time, not pressed in the Western press: Tomorrow on the Federal Republic--their numbers abandoning our traditional values. The have swelled to many hundreds of they will reach an understanding with German people-who here and there are Soviet totalitarianism-that is what we thousands. That stream of human be still strangely suspected of exemplifying ings is at once a lasting grievance and term the "Rapallo complex''-or in the aggressive nationalism-existed as the specter sometimes evoked in Germany: a perpetual reproach. Holy Roman Empire, as a European en I do not wish to take up the time at Washington and Moscow will come to an my disposal by discussing, in terms of tity, imbued with a sense of responsi agreement and Germany will be the personalities, the German contribution bility toward Europe as a whole. And victim. It. was very important to us- to the growth of American statehood and that was at a time when Spain, Britain, reassuring in a way-that President the development of the American way France, and later Russia, had long em Eisenhower repeatedly made it very clear of life. But I think I may say this barked upon a very concrete policy of how much he felt Germany's tragic par much: The two great Presidents of the expansion. I do not say this because I tition to be one of the heaviest mortgages United States, who have become leg want to engage in polemics against his.. on Europe's future. We shall never, endary figures, come to mind-George toric events of bygone centuries-that is never forget how President Truman by Washington knew that he could depend always a senseless thing to do-but in means of the so-called airlift in 1948-49, on the solid work of organization done order to make the discussion about our with the approval of the entire American by the German General von Steuben present situation a little easier. people, saved Germany's old capital of just as Abraham Lincoln could rely on It is remarkable: The Korean crisis Berlin-literally saved it-and thus de .. the German champion of freedom, Carl a scene of secondary importance in the cided the fate of Europe at a crucial Schurz, the most prominent representa traditional European concept of his point. The Germans, too, have per tive of the many young Germans who tory-has laid open, both materially and ceived it as ·their duty to participate as came to the United States in quest of psychologically, the fundamental issue free and active partners in the poten those civic and political rights for which respect for law or for arbitrary power, tialities of peace and freedom implicit in they had fought vainly in Germany in for violent action or for free self-deter this concept of the fate of Europe. 1848. The liberal and idealistic element mination. I cannot here dwell on this. Hence, the Federal Republic's loyal co .. represented by those groups was easily But I can say what the effect has been operation in the overall defense plan integrated into the American historical on us in Germany. National freedom ning of NATO. Never again in the fu concept. And this concept was ex including that aspect of it which con.. ture shall German and American soldiers panded and strengthened by the tradi cerns the social order-is a value which fight each other. And we realize that tion of diligent, skillful labor of the mil must be defended. It must be defended the sacrifice made by American mothers lions of people of German descent who not only by those who are immediately in having their sons in German garri have been absorbed-for which they are affected but by all those to whom peace sons-not, indeed, for the purpose of grateful, I may say-into the substance is a value per se and democracy a moral preparing wars but to prevent them by of the American Nation. v.alue. Believe me, it was not easy in their presence and thereby to secure the We in Germany found ourselves in a Germany to explain the duty to do mill.. democratic way of life for the future strange situation after 1945. The people tary service to the man-in-the-street we realize that this sacrifice corresponds were exhausted and starving; the atti who had been persuaded by propaganda to the great sense of duty which marks tude of many toward the victorious pow that his military service had been some your tradition of liberty. And I am ers was "Do what you like with us." sort of crime because the supreme com pleased to be able to state that, apart At that time the reproach was heard mand had been in the hands of criminals. from a few unhappy incidents, many also from this country-that the Ger And yet it was possible to establish in good, personal, and even, in some cases, mans were sorry for themse~ves. There people's consciousness the natural feel .. family connections have developed, as was something in that. But with the ing-that he who cherishes the security well ·as much fruitful cooperation in the coming of a sound currency and of the of his native soil and the maintenance cultural and intellectual spheres. Marshall plan, people in Germany saw. of freedom must also help to safeguard It is not the case-as simple-minded that there was purpose again in hard them. people sometimes will have it-that it 1. 1958 CONGRESSIONAL RECORD- HOUSE 10313 took two lost wars to force the Germans The Doorkeeper escorted the invited in the Kremlin, who "systematically vio into the school of democracy. One of guests from the Chamber in the follow lated the norms of behavior for diplo my pleasant memories is how a scholarly ing order: matic representatives" by making a American o:tncer in 1945 or 1946 explained The members of the President's Cabi direct appeal to individual Members of to me that not only the Americans but net. Congress, over the heads of President also the Germans should know more The Ambassadors, Ministers, and Eisenhower and Secretary of State about Germany's old democratic tradi Charges d'Affaires of foreign govern Dulles, in a futile· effort to influence tions which were preserved amidst the ments. them to support the objective of the absolutism of the princes, and he gave Russian despots. One of Menshikov's me a lecture about the self-government JOINT MEETING DISSOLVED objectives is to prevent the rearming of of the old free and imperial cities of Ger the free and democratic Government of many. I have never forgotten this con The SPEAKER. The Chair declares the Federal Republic of Germany in versation, which struck a chord in my the joint meeting of the two Houses now order to defend itself against further own family tradition. That was, indeed, dissolved. Russian Communist aggression. Men a great German contribution to the Thereupon TABLE 2.-Receipts of the Federal Government, actual for fiscal year 1957, estimates for Mr. MILLS. That tax is not involved. fiscal years 1958 and 1959 As I recall, that was enacted in the [Millions of dollars] Revenue Act of 1942. It is not in the bill before us. · Mr. BAILEY. Will the gentleman Estimated, 1958 Estimated, 1959 agree with me that in view of the sad Source Actual, plight of the coal industry we cannot 1957 January Current January Current budget staff esti budget staff esti justify the continuation of the transpor estimates mates estimates mates 1 tation tax? Mr. MILLS. I think I can justify to Individual income taxes.------39, 030 40, 800 39, 060 42, 300 39, 600 the House all of our present taxes, if the Corporation income taxes------21, 531 20, 800 20, 600 20, 815 17, 716 Excises------10,638 11, 192 10, 743 11,633 10,506 gentleman will just bear with me. Estate and gift taxes------1, 378 1, 500 1, 450 1, 585 1, 550 Mr. BAILEY. I will be glad to bear with you, but I do not agree. 7, 8, 8, 8, 8, ~:~~~~:-~~~~~~~======:======2 m ~~~ i~ :g ~ Miscellaneous receipts ------2, 764 3, 330 3, 300 3, 526 3, 500 Mr. MILLS. I would expect the gen I------·I------1------I------I------tleman to have his own opinion. Total...... 83,676 87, 132 84,388 89,622 82,312 Deduct: The Committee on Ways and Means Transfers to Federal old-age and survivors reported this legislation without amend insurance and disability trust funds.------6, 634 7, 763 7, 525 7, 988 7, 750 Transfer to railroad retirement account.------· 616 620 585 625 550 ment, after the committee was apprised Transfer to highway trust fund______1, 479 2,120 2, 088 2, 164 2, 112 of certain facts with respect to our fiscal Refund ofreceipts------3, 917 4, 229 5,100 4, 445 5, 000 1------·1------·I------I------J------situation. The Secretary of the Treas Net budget receipts------71,029 72,400 69,090 74,400 66,900 ury reported to us in his statement, which is also included in the report at t Assuming continuation of present rates of all taxes. page 17, that it is contemplated that our 2 Includes taxes not elsewhere classified. expenditures in fiscal 1959, beginning NOTE.-Detail may not add to totals because of rounding. July 1 next, will be in the neighborhood Source: Staff of the Joint Committee on Internal Revenue Taxation. of $78 or $80 billion. Think of it; $78 TABLE 3.-Estimated revenue gain from post Total personal income-Continued or $80 billion. The staff of the Joint pon·ing scheduled rate reductions from [In billions] Committee on Internal Revenue Taxa July 1, 1958, to July 1, 1959 tion at the same time reported to us that [Millions of dollars] 1957 1958 its best estimates of revenue within the fiscal year 1959 is $66.9 billion. If our Net expenditures are no higher than $78 bil Full- effect October_ ___ ------$346.8 November_------346.2 lion, that means a staggering deficit of Schedule rate year in fiscal ·December.. _. ______------•. change effect year 343.6 $11.1 billion in the next fiscal year. That 19591 amount would be increased by the Total personal income: Billions amount of revenue that will be brought Corporation in- Reduce normal 1, 710 845 Average, 1st 4 months, 1957------$339. 0 in under this bill, if the legislation is come tax. tax 5 percent- Average, 1st 4 months, 1958.·------342.6 age points. Source: Economic Indicators and Business News Re not passed by the Congress. It is antici ------port, Department of Commerce. pated that the revenue in the bill before ·Excise taxes: NOTE.-The total figures do not show the complete Alcohol taxes: picture, because wages and salaries have been dropping us, for fiscal 1959, is in the neighbor Distilled spirits_ $10.50 to $9 per 127 227 considerably while at the same time the so-called "trans hood of $1,800 million. It will bring in gallon. fer payments," such as social security, public assistance, revenue over a full 12-month period of Beer------$9 to $8 per 83 91 etc., have been steadily increasing. For example, in Wines ______barrel. December of 1957 the "transfer payments" amounted around $2% billion, but you understand Various.------10 14 to approximately $23 billion, whereas in April of 1958 there is some lag in the collection of rev ------they amounted to approximately $25.4 billion. Total alcohol ------220 332 enue, so that some of the revenues which taxes. It will be noted from the above tables will be derived under this legislation will Tobacco taxes: (to $3.50 per 210 229 Cigarettes thousand. the excise taxes that are involved are actually come in during fiscal 1960. So (small). to be found on page 6 of the committee we would have to add onto this $11.1 Passenger auto- 10 percent to 7 300 . 311 mobiles. percent. report also. You will observe that the billion the amount that we would refrain Parts and acces- 8 percent to 5 64 66 tax on distilled spirits would be reduced from continuing to raise if we do not sories for auto· percent. from $10.50 to $9 per gallon; that the mobiles. pass this legislation. That would mean ------tax on beer would be reduced from $9 approximately a $13-billion deficit in Total excise ------.... 794 928 per barrel to $8 per barrel; that the tax 1959. But, thinking in terms of what the taxes. on wines would be reduced in varying deficit might be if our expenditures ac TotaL •••••••• ------2, 504 1 1, 773 amounts; that the taxes on cigarettes tually rose to the level of $80 billion, with would be reduced from $4 to $3.50 per the estimates of revenue remaining the 1 1 ·thousand; that the manufacturers' ex same, $66.9 billion, we would find our tn t1~s!R~:fti~~ ;r~~~~ ~~~~er~~~J;i~~~Jtsg:;:,~ cise tax on passenger cars would be re selves with a defiCit of $13.1 billion, plus which would otherwise be paid in fiscal year 1959. These have been shown as additional revenue losses in the duced from 10 to 7 percent; on auto the amount of revenue involved in this fisr.al year 1959 for the various excise taxes. mobile parts and accessories from 8 to bill, or very close to $15 billion of defiCit. Source: Staff of the Joint Committee on Internal 5 percent. It is argued by many people that we Revenue Taxation. Those are the items which are in ought to use tax policy in order to stimu Mr. Chairman, I also include at this volved in the bill before the Committee. late the economy by either providing for point figures which may be of general There has been some misunderstanding a general tax reduction in all taxes at interest relating to personal income: as to what is involved here. I think it this time or by providing a combination is well for us to repeat that in the bill of general tax reductions affecting indi Total personal income before us, the tax rates that we are ex viduals and excises. It has also been ar gued that we ought to confine our reduc [In billions] tending with the exception of the corpo rate tax rate are confined to the excise tions to excise taxes. Let us look at the situation that we have before us. If we 1957 1958 taxes on . distilled spirits, beer, wines, should provide, in the face of the figures cigarettes, and automobiles in the main. I have just given you, in addition thereto, January___ ._-----.----______•• $335. 9 $343.6 Mr. BAILEY. Mr. Chairman, will the February._------ 337.9 341.7 general tax reductions, we would have to March_------339.5 342.2 gentleman yield? anticipate in fiscal year 1959 a deficit ApriL ... ----. ______----______••. __ 340.6 342.8 Mr. MILLS. I yield. in May------ 342.9 the neighborhood of around $18 bil June_ •. ------ 344. 8 Mr. BAILEY. Are you removing the lion-maybe more. 346.3 4 July_August ••. ------·------______• ____ ----__ ------_ 347.3 cents per short ton of coal transporta If we confine our action, though, to the September_------347.2 tion tax on the transportation of coal? excise taxes, it is anyone's guess as to 10316 CONGRESSIONAL RECORD- HOUSE June 5. the amount of revenue that would be in effects of our action are from a techni rapid amortization. I think there is volved in excise-tax reduction. I do not cal point of view, do not give much still perhaps in this period some neces believe it is possible for us, in answer weight to any offsetting increases in rev sity or some degree of advisability for to the question raised by the gentleman enue to come in as a result of reducing use of a program of rapid depreciation. from West Virginia, to satisfy the de taxes at this time. So we have to pro When we are participating or about to mand that exists throughout the coun ceed on the basis that we will be adding participate in this further technological try with respect to excise taxes without to the public debt a good part of what advance in the field of science, we have looking at them all. ever amount of tax reduction we create, come up with the need for new facilities If we undertook here today to confine and not just in this one fiscal year. Also, that will have no practical value ex our reductions merely to the 3-percent are we going to be willing as soon as cept to the defense effort. It may be tax on freight, I am satisfied that many the situation revives to restore the cuts necessary in some instances in order to of your constituents would contend, and which we would propose to enact now? get private enterprise to undertake such perhaps justifiably so, that we were over If we are not willing to do that, then construction to give them a degree of looking a situation which they have we are going to have a series of fiscal rapid amortization. But, at least, in which is just as meritorious, just as years in the future wherein we are going answer to the gentleman's question, worthy of our consideration in connec to have deficits also as a result of the rapid amortization under the limita tion with tax reduction as the particular deficit that we create or the further tions today is nothing to what it was class of reduction in the field of excise deficit we create by a tax reduction in during the Korean war or in the imme taxes that we might have selected. the fiscal year 1959. Do we want to diate years following the Korean war. My guess is, if we should again undertake that course of action until we Its application is very, very limited at hold hearings before our committee on know absolutely that a tax reduction is the moment. We have been keeping excise taxes, that most of the people required and is the last effective remain up with it, and that is the conclusion who are in businesses affected would be ing vehicle that we can use in order to that I have reached from my studies able to make a case before the commit ·. bring us back from the downturn in of it. tee, one probably just about as good as · which we presently find ourselves? Re Now, with respect to the question how the other. · So, in all probability, if we member that, in addition to higher def much ·money do we lose on depletion al undertook to reduce excise taxes, we icits, we will have higher interest on the lowances, I have forgotten the exact might end up with two or three billion publjc debt as well as the possibility of figures of what is involved. I am not dollars in reduction. If we did that, inflation. sure that all of the depletion allowances that would have to be added to the I cannot now reach the conclusion that are now in effect or that have been amount that we can presently foresee that this economy will not come back urged are proper or · necessary. The as the deficit for fiscal 1959. short of a tax reduction. When we committee, however, and the Congress Let me ask how much of a deficit is reach the point that I feel it cannot have decided by their affirmative votes required in the opinion of those who say come back or that it will not level out in our committee, at least-over the that we should create more deficit in or come up the hill short of a tax re- years not to do anything to reduce de order to affect the present downturn in . duction I would be willing under those pletion allowances. It is not just for business activity and in the economy circumstances to be for a tax reduction. oil, but it applies to all the minerals and generally. How much is required? Does I cannot reach that conclusion today. all the nonmetallics. It has been said anyone know? Actually whether or not I hope my colleagues will recognize that maybe we have included too many a deficit in Federal spending in thejiscal the fact that the Committee on Ways items, and perhaps we have. year 1959 of $11 billion or $15 billion and Means will continue to stay abreast Does the gentleman from New York would be sufficient to serve as the stim of the situation. We will recommend [Mr. REED] have in mind What is in~ ulus to the economy to get back into a to the House such courses of action as volved in the way of revenue? period of growth is anyone's guess. Can we feel to be in the best interest of all Mr. REED. No. . we say, under present conditions, that and in the direction of promoting Mr. MILLS . . l. remember__ one propo actually we must add more deficit to growth. sal made some years ago with respect to that through tax reduction in order to Mr. WIER. Mr. Chairman, will the reductions of the depletion allowances create the stimulus that is required gentleman yield? from the existing levels, and it was re within the economy to restore it to Mr. MILLS. I yield to the gentleman ported that there was about $400 mil growth? I do not know. from Minnesota. lion of revenue in so-called excess al I should point out that it is argued Mr. WIER. I want to approach this lowances in that study. I do not know by many people that tax reduction as question from another angle. I pre the total figure as of today. such will not be the answer in the way sume the gentleman's committee or his Mr. ROOSEVELT. Mr. Chairman of a stimulus, that the trouble is with staff has kept track of the 5-year tax will the gentleman yield? ' respect to the durable-goods industry as amortization writeoff which was an Mr. MILLS. I yield to the gentleman it is with respect to the liquidation of other Korean war action during the from California. emergency. That has been going on Mr. ROOSEVELT. As the distin inventories. They think that might not now pretty nearly 8 years. What are be affected by general tax reduction at guished chairman knows, a great many all. the losses that occur through lack of a Members from both sides of the aisle tax being restored where they were have appeared before his committee It remains, however, for our committee written o1f under that plan? And, also, and for the Congress, I think, to keep a urging relief for small business, in par while I am on my feet, what are we ticular have asked for consideration of close watch on the situation and to take doing with reference to the depletion further action with respect to the eco tax relief for small business as well as allowances? Those are two items that other relief within the jurisdiction of nomic situation if things do not im I think would bring in an equal amount prove as expected. I know that many the gentleman's committee. Can the that some of these excise taxes now gentleman tell me whether this will be contend that we have taken action al bring in. ready. Many · are contending that we considered by the committee in the fu Mr. MILLS. The gentleman refers to ture so that we may have some idea will take more action on the expenditures rapid amortization or to rapid depre side that will have its effect on the econ where small business will go from here? ciation as being a loss of revenue. Ac Mr. MILLS. Let me saY. it is not go omy. If we should reduce these and tually, this depreciation does not repre;. ing to be considered in the future; we other taxes at the moment and create a sent loss of revenue. It represents a larger deficit we may raise the indebt are already in the process of considering postponement of revenue. To the ex it in executive session. We will-pos.. edness of the Federal Government by a tent that there is postponement you dollar amount almost equal the amount sibly tomorrow-be able to conclude can say that within a particular fiscal our consideration and be in a position of the tax reduction. We can talk all year there is a loss to the Treasury. we want to about the stimulus it gives to have perfected a bill that we can Let me say about rapid amortization report to the House next week. I have to the economy to reduce this or to re that I had a bill pending for a long time duce that; but those people in the Gov said for the benefit of those interested to eliminate it. I did not pursue that in small-business legislation of this sort ernment who make the estimates of rev bill because of action which was taken for some time that it was on the cal enue, and who advise us on what the last year to make limited use of endar before our committee and that 1958·· CONGRESSIONAL RECORD-· . HOUSE 10317 we would re~ort· legisla:tion. · · And; I a motion to recofnmit with 'instructions. my own present· feelings with regard to want- to thank ·the gentleman and the I remember that when the depletion al the situation. The gentleman knows the other members of hiS Committee on lowance for oil initially passed-- position of the administration with re..; Small Business for the very valuable Mr. YATES. That was 1926, was it spect to this matter. The President has suggestions and recommendations that not? said, himself, that these matters will con they have made to the Committee on Mr. Mn.LS. 1926 is the year I be tinue to be reviewed. We have said in Ways and Means during the course of lieve; the House passed it at 25 percent, our committee report that these matters the hearings that we · conducted on this the Senate raised it to 30 percent and in will be reviewed continually, but that at matter and since that time. You have conference they agreed on 27% percent~ the moment, in connection with the pro been very helpful to us. It has remained at that level ever since; posed legislation to extend these Korean I hope the bill we will report will be In spite of the fact that some Presidents tax rates we did not deem it advisable to generally acceptable. I want to point in the past have recommended that it come to the House with any tax reduc..; out to the gentleman that perhaps it be reduced, it has never been reduced. tion. . may not go to the full extent with respect Mr. YATES. The gentleman has not Mr. MORANO. If the gentleman will to all matters that the gentleman and his told us whim was the last time the yield further, then there iS a longshot subcommittee suggested that we go, but I House had the opportunity to amend it~ possibility that there may be a general hope it will be satisfactory to the gentle Mr. MILLS. The gentleman said that tax reduction bill presented to this Con man and his colleagues. he has not had that chance in 10 years~ gress before adjournment? Mr. ROOSEVELT. I thank the gen I believe this is my 20th year here, and Mr. MILLS. I do not want to lead the tleman. I do not believe that I have ever had gentleman into believing that that is a Mr. BAILEY. Mr. Chairman, will the a chance on the floor to vote on this probability although I think there is a gentleman yield? matter under an open rule. possibility if the economic situation Mr. MILLS. I yield to the gentleman Mr. YATES. That is right. should worsen. from West Virginia. Mr. MILLS. Because it has always Mr. MULTER. Mr. Chairman, will Mr. BAILEY. I would like to inquire been included in a revenue bill under a the gentleman yield? with respect to the matter brought up by closed rule. Mr. MILLS. I yield to the gentleman the gentleman from Minnesota [Mr. Mr. YATES. Mr. Chairman, may I from New York. · WIER] regarding depletion allowance. ask the gentleman a second question? Mr. MULTER. In the report of the Is it a fact that this depletion allowance Does the fact that the Committee on gentleman's committee on pages 3 and applies to the development, for instance, Ways and Means has brought in this 4 there are set forth the estimated rev of foreign concessions held by a company bill to extend certain excise taxes mean enue losses if these reductions which like your oil companies operating in that the Committee on Ways and Means are now called for were not postponed. Venezuela? is likely not to bring in another bill One of the items is the corporation in Mr. MILLS. Depletion allowance does seeking to cut other excise taxes without come tax. Does the gentleman's com apply to the development of oil or min having first been requested to do so by mittee have a breakdown on how much erals, anything to which it would apply the administration? of that corporate income tax comes from domestically, also abroad. Of course, Mr. Mn.LS. Without having been re small-business corporations? there has to be an American taxpayer quested? Mr. MILLS. I do not have that figure involved in order for it to apply abroad. Mr. YATES. Yes; requested to do so before me. It is my recollection .that But, it does apply. · by the President or his administration. by far the larger part of the corporate Mr. B.All.EY. In this case they are Mr. MILLS. Mr. Chairman·, let me say tax is paid by the few hundred larger American taxpayers. to the gentleman that as far as I am con corporations in the United States and Mr. MILLS. That is right. They are cerned, as chairman of the committee that a much smaller part is paid by the American taxpayers abroad who do ob and I am being perfectly frank with the several hundred thousand of the smaller tain the benefit under depletion allow gentleman-unless conditions get some corporations and the medium-sized·cor-· ances. what worse than they are today, I have porations; but I do not remember the Mr. YATES. Mr. Chairman, will the no plan for calling the committee to exact figure. gentleman yield? . gether for the purpose of considering ex Mrs. CHURCH. Mr. Chairman, will Mr. Mn.LS. I yield to the gentleman cise tax reductions or a tax reduction the gentleman yield? from Illinois. generally. I am not the boss; I am the Mr. MILLS. I yield to the gentle Mr. YATES. May I ask two questions servant of the committee. Any time the woman from Illinois. regarding this subject? First, with re committee does not agree with the posi-· Mrs. CHURCH. I was glad to hear spect to oil depletion allowance, when tion which I am maintaining, the com the gentleman say that special attention was the last time that the House had an mittee has a way of considering these is being given to the problems of small opportunity to vote on this matter? I matters. But I think that the Committee business, as it should be, but I rather felt have been here 10 years, and I do not on Ways and Means is as cognizant as the knell of doom was sounded with re remember that the question was ever any group can be of what will be the con spect to any tax reduction in this Con-· presented to the House during that sequences to our deficit situation from gress. period. When was the last time we were any general tax reduction. That is not I want to ask the gentleman this: permitted to vote on this question? to say that I, and .all members of the There are some of us not as experienced Mr. MILLS. In the· Revenue Act of committee would not like to see tax cuts as the gentlemen who do hold the 1954 there were some changes made with if we could afford. theory that some slight reduction in ex reference to depletion. There were some Mr. MORANO. Mr. Chairman, will cise taxes would stimulate buying power. increases and other modifications. There the gentleman yield? That is particularly true as regards the has been one subsequent piece of legisla Mr. MILLS. I yield to the gentleman automobile industry. It is also true that tion passed in . the last session, which from Connecticut. some of us feel very strongly that con extended depletion allowance on sand Mr. MORANO. Mr. Chairman, the sideration at least should be given to the and gravel to the operators of licensees distiniuished gentleman from Arkansas removal of the excise tax on passenger on navigable streams. has partially answered the question I and freight transportation: In the light Mr. YATES. Will the gentleman tell had intended to ask. That is: Is the of what the gentleman said, and I realize us whether those bills were brought up House to conclude from what the gentle-· why he said it because I have such faith under clo·sed rules? man has said, and from the fact that in his sincerity as well as his experience,· Mr. MILLS. Major tax bills are as this bill is being considered now, that we could we not consider these matters on the gentleman knows. may not expect any general tax reduction their separate merits and expect to see • Mr. YATES. When was the last time or any excise tax reduction in this ses-· a tax reduction of that nature? the House had an opportunity to vote sion of Congress? Mr. MILLS. Let me -say this to the· to change the oil depletion allowance? Mr. MILLS. I cannot tell the gentle gentlewoman from Illinois: Mr. MILLS. I am not certain when man definitely and finally what may There is over $700 million of revenue the House had such an opportunity on happen during this session -of Congress.· involved in the transportation tax on the floor. Of course, closed rules permit· I have tried to indicate to the gentleman property and persons. · There is over $1 · '10318 CONGRESSIONAL RECORD-· HOUSE billion of revenue involved, as I recall thought that that tax has a pyramiding man if it is not true tha.t the SecretarY the figure, in the excise tax on automo effect. One individual figures his profit of the Treasury told our committee that biles. I doubt very seriously that those on his total cost including this tax and if this bill is adopted today, there will are the only excise taxes about which the another individual figures his profit on positively be no recommendations for any affected parties could make a good case the basis of the cost and so on. I would reduction in any kind of tax in this ses for some reduction; If we should, how suspect that tax is pyramided with re sion of the Congress. ever, disregard the pleas of the others spect to many articles bought in the Mr. MILLS. That is what he indi who are interested and concerned and market place 2 or 3 times. For that cated, but I was asked the question confine our action to a reduction of these reason, I have always thought it to be whether or not the Ways and Means alone, I do not know what psychological the most undesirable tax and, perhaps, Committee might do something, and I reaction we might get from the people the worse tax that we have. There are was trying to answer that side of the who feel just as entitled to a reduction other bad features of this tax. I have situation. and who would not be offered any reduc also given considerable thought to the Mr. CRETELLA. Mr. Chairman, will tion. tax on passengers as well. But, I can the gentleman yield? I tried to say in my opening statement not now reach the conclusion that we Mr. MILLS. I yield to the gentleman that I thought if we went into this matter are justified in confining our action to from Connecticut. of reducing excise taxes it might take $2 the mere elimination or. reduction of Mr. CRETELLA. Can the gentleman or $3 billion of revenue loss in order to these taxes without doing something to tell us if this tax is being reduced, as far satisfy the demands that would be made other excise taxes that may also be on as excise taxes is concerned, on alcohol for reduction. I do not believe in view erous and burdensome upon the indus and other items mentioned in the bill? of our budget situation that we can now tries to which they apply. Mr. MILLS. This bill is necessary in afford to take that step. Perhaps the Mrs. CHURCH. I thank the gentle order to prevent a reduction in the rate gentlewoman is correct. The elimina man. I would hope that the door might of tax on distilled spirits, as well as some tion of some excises might stimulate pur be left open for further consideration of other excise taxes. If we do not pass chasing, to the extent that they affect these problems. this legislation, the tax would drop from prices, because there does appear to me Mr. HIESTAND. Mr. Chairman, will $10 to $9.50 per gallon. to be some resistance at the moment on the gentleman yield? Mr. CRETELLA. How much is in the part of consumers to present prices. Mr. MILLS. I yield to the gentleman volved in the freight transportation tax? Let us take the automobile situation. from California. Mr. MILLS. Around $500 million of It was proposed in our committee by the Mr. HIESTAND. Mr. Chairman, I revenue, but those items are not involved gentleman from Michigan, a member of know that most of us have heard that in the bill before the House. the committee, that we not extend this we could stimulate business, and at the Mr. CRETELLA. At least the commit 10 percent rate on automobiles, that we same time increase the Federal revenue, tee considers alcohol and cigarettes let that rate revert as of June 30 or July if we cut the capital gains tax in half. against other taxes? 1 next, to 7 percent. That was the sub I would appreciate the gentleman's com Mr. MILLS. No, sir. The situation is stance of the gentleman's amendment. ments on that. Is there anything to it? this, that we are endeavoring to comply He offered the amendment because of the What do the gentleman's experts say? with the requests and the decisions that very critical situation which exists in his Mr. MILLS. I am opposed to a cut were made, that at this particular time home city of Detroit. in the capital gains tax in half until we no taxes should be permitted to be re· I know that there are a great number at least cut everybody else's tax. To be duced. If we do not pass this legislation of people who believe that that amend frank with the gentleman, I do not know certain taxes would be reduced automati ment if put into law would materially af that it is the reduction in the rate that cally, such as the tax on cigarettes, beer, fect the sale of automobiles, but let me an expert would tell us would mean the whisky, wine, and automobiles, and the describe to the gentlewoman from Illinois most to the exchange of capital goods. normal tax on corporation profits. what is involved. If we reduce the au They tell me it is a question of the hold · Mr. CRETELLA. Then this actually tomobile tax from 10 to 7 percent we are ing period that they would like reduced cannot be called a tax reduction bill? reducing the tax by 3 percent of the man as much as, or, perhaps, more than the Mr. MILLS. Oh, it is· not a tax reduc ufacturer's price. rate itself. The reason I say that, and tion bill. The purpose of it is to freeze Let use take a car that has a manu let me be perfectly clear in the RECORD, rates through the fiscal year 1959 that facturer's price of $3,000. I do not is that the code, as my friend knows, is existed in fiscal year 1958. _ know what make of automobile that rather voluminous and I do not know Mr. CRETELLA. No tax relief. would be, but it might be a medium whether my friend knows that two-thirds Mr. MILLS. No tax relief. priced car, a Buick, let us say. That, of that code is devoted to the subject Mr. PELLY. Mr. Chairman, will the perhaps, would mean a reduction in the of converting what would otherwise be gentleman yield? price of $90 paid to the manufacturer. ordinary income into capital gains. .I Mr. MILLS. I yield to the gentleman I cannot believe that the problems of have said repeatedly that we have so from Washington. the automobile industry can all be re proliferated the idea of capital assets Mr. PELLY. I would like to express solved, or to a great extent resolved, by that we are now to the point where now to the gentleman my feeling that the a drop in the price of a Buick car of we have capital gains treatment apply reasons he advanced as to why these $90. If that were the case, I am satis ing where there is no capital asset in taxes should be extended are certainly fied that the automobile industry would volved and where there is no sale or ex very sound, and I commend him for it. have decreased the price by $90 already. change involved. Now until we can I think we have heard some good fiscal But, it would mean a considerable loss make adjustments with respect to the responsibility. in revenue to the Federal Government. definitions, I would be very reluctant to There is just one point I would like I cannot assure the gentlewoman from reduce the rate and certainly not at a to make. In this bill it refers to the 52- Illinois that if we took that course of time when that would add to the deficit percent tax as a normal tax. It seems action, it would result in the good to or public debt. to me that is unfair. the industry that she and I hope will Mr. MACHROWICZ. Mr. Chairman, Mr. MILLS. No. It is not. I am sorry. come through some course of action to will the gentleman yield? If we do that we are in error. I think that industry. - Mr. MILLS. I yield to the gentleman the gentleman has misunderstood what Mrs. CHURCH. Would the gentleman from Michigan. we do. The 52-percent rates on corpo feel that the same argument would hold Mr. MACHROWICZ. In regard to the rations include both the normal and the in regard to the removal of the tax on inquiries by the gentleman from Illinois surtax rates. The normal tax rate un freight and personal transportation so and the gentleman from Connecticut as der the Korean increase is 30 percent. far as helping the railroads in the situ to the possibilities of the committee con The surtax rate is 22 percent. This bill ation in which they find themselves sidering any reduction of taxes, some affects the 30 percent part. Without the today? time later in this session, the committee bill the 30-percent rate would revert to Mr. MILLS. I have always said I leaned very heavily, I believe, on its de the pre-Korean rate of 25 percent. thought the worst tax we had on the termination of this matter on the opin Mr. PELLY. I have paid both, but we books was the one relating to the trans ion of the Secretary of the Treasury. I should not take this as normal, because portation of property because I have would like to ask our distinguisheq chair- when we have 52 percent of the profits of 19·58 .. CONGRESSIONAL RECORD - .HOUSE a corporation · t~ken, away we are more The Sadlak bill changes the present .taken on this tax question and on many than ·being _solicitous, . and I hope that normal tax for· corporations of 30 per otper questions that have come before ·treating it as an emergency we get back cent and reduces it over 5 years to 22 our 'cqmmitt.ee. to a~ least less than 5o p~rc~nt. percent of .taxable income. And finally, Mr. Chairman, I regret that I am con I have said in the past that a reduc of course, there is a provision so that strained to call upon my colleagues in tion in Federal taxes, as has been clearly .tax reductions can be postponed in pe the House of Representatives to again demonstrated by tax cuts dur_ing the past riods of emergency by the President or support legislation providing for an ex _quarter of a century, can be such as to -Congress. tension of certain tax rates that have in both relieve overburdened taxpayers and This, as I said, is the type of legisla the past been termed "Korean war at the same time to produce an actual tion that I believe would be an incentive taxes." As my good friend and distin increase in the total revenue of the to give relief to the taxpayer and not guished chairman, the gentleman from United States Treasury. This has come result in a serious way on our overall fis Arkansas, has . explained to you, the about by giving taxpayers a feeling that cal picture. But until such time as such rates that would be affected by this leg it is worth their while to work and tax reduction is before this House, I islation, H. R. 12695, are the existing 52 produce, that it is worth their while in would agree with the Chairman and percent corporate rate and the existing the case of businesses to expand and risk members of the Ways and Means Com excise tax rates applicable to certain al investment capital, that. it is worth their mittee that we should extend for 1-year coholic beverages, tobacco, and auto while after figuring net return and profits the various taxes included in this bill. mobiles. after taxes to work more, or to invest Mr. MILLS. Well, that is my hope A good deal has been said here about more money, or to expand and employ that we can reduce all taxes as soon as the repeal of certain excise taxes. more people, and thereby create a sit possible. I have studied rather extensively the uation which results in greater income Mr. SCUDDER. Mr. Chairman, will tax systems of other countries. Great to the Federal Government. the gentleman yield? Britain places a great deal of emphasis . But I am sure the gentleman from Mr. MILLS. I yield to the gentleman on excise taxes for this reason: If the Arkansas [Mr. MILLS], who has so ably from California. income of the country goes down the discussed this bill and has such a grasp Mr. SCUDDER. I had a letter last income tax yield declines, and imme of taxation, will agree that this is not week from a friend who lives in Colo diately fiscal trouble, because then re the type of legislation which would have rado. He asked me if I thought the tax duced revenue results except what they any great effect one way or the other on automobiles would be reduced. He get from excises. of stimulating work and business expan needs an automobile. He would put off When we had the 1929 depression you sion. As I indicated to the distinguished buying his automobile until after .July will recall what happened; our income gentleman, I think it is unfortunate not 1 if the tax was to be reduced. I wrote taxes went down practically to the van to point up more emphatically that this him and told him I did not think the ishing point, and the only stability we is not a normal tax we are considering tax would be taken off. It is my opin had in the tax field was from the excise when we extend the corporate rate from ion, and I think your committee has been taxes. I mention that only to show that 47 percent to 52 percent. Only an emer giving very serious consideration to tax with the deficit that is in prospect of gency justifies such a high rate because, matters, but I believe the propaganda we some $3 billion or $4 billion for this fiscal as I said, anything over 50 percent is have been receiving from the automobile year, and $11 billion for the following getting closer and closer to socialism. dealers and other people has killed thou fiscal year, we have to approach this When you get to 100 percent you are sands upon . thousands of sales and at whole tax situation with a courageous there. . least broken down the salesmanship of view point. Not to extend this corporate rate would their salesmen in their effort to get out I think the Members know my stand mean a reduction in the tax on distilled and sell automobiles. I believe if the on the question of reduction of taxes. I spirits, beer, wine, and cigarettes and committee could definitely come out with think I introduced the first tax reduction would hardly justify a vote to cut on some statement to the effect that there bill under the present administration. those items. The cut in the excise tax was not going to be a reduction in taxes I thought I was right then .and I have on passenger automobiles is, I think, de on certain items we would immediately always thought so. I believe it would sirable but again I do not- believe that get a stepup in the sales, and the sales have relieved us of a great deal of the taken as a whole a cut in the items cov men would. be able to assure their people dimculty we find ourselves in at the pres ered by this legislation would hav~ any that they are buying at the best price ent time. In the matter of tax reduc effect of stimulating an increase in rev now. tion, however, I think our first duty is enue and, actually, if we fail to pass Mr. MILLS. to consider its effect on our country and the bill there would be a serious loss of As far as your Commit its security. I have thought out this Federal income which would mean tee on Ways and Means is concerned, matter of tax reduction as carefully as I higher Federal deficits and a higher na we have come out with the statement could consider it. At the present time tional debt. As it is that debt will go here in the report on this bill. the important thing to the welfare of up this year about $4 billion and next Mr. MILLER of California. It has the people is not to plunge them into year, as the Chairman pointed out, the been given wide publicity because I think inflation. deficit could be $13 billion to $15 billion. the uncertainty has been killing a lot When you get right down to, it in the . Let me say at this time, however, I of sales. I think we will have a pickup last analysis, the reason we have taxes hope the time is not far off when I can of sales of automobiles after this bill is because we spend the money. Here have the opportunity of supporting a tax passes. in Congress we appropriate the money. cut bill and here I have in mind one Mr. MILLS. I hope the gentleman is There is only one way to reduce taxes, similar to H. R. 6452 which is the so right. I think it has affected the sales and that is to cut expenditures; and I called Sadlak bill. I think a measure of automobiles. think I have as clear a record on matters such as the Sadlak bill would indeed re Mr. Chairman, I reserve the balance o:! of economy as any other Member of the sult in increased incentive to work and my time. House. I want to bring this point to you produce and employ, and thus stimu Mr. REED. Mr. Chairman, I yield very forcefully, because in the future we late more Federal income.- As Members myself 10 minutes. have got to cut the corners very consid know, the Sadlak bill provides for both Mr. Chairman, first of all I want to erably or we are going to be in an in personal and corporate income-tax re congratulate the Chairman of the Com flationary situation that is going to be ductions. In the case of individuals, mittee on Ways and Means. I have terrible in its effects. these reductions would run over a 5-year watched him very carefully through the · In view of the very able and learned period, changing the rates of a range years. I commend him for the able discussion by the chairman of the Com from 20 percent to 91 percent as they manner in which he has· presented this mittee on Ways and Means, it will not be are at present to a range from 19 percent situation that he has. presented here, my purpose to speak at length on this up to 82 percent maximum. At the end important legislative copsideration. I important legislation. I am sure it is not of the 5-year period the tax would level am glad. to support him in every possible necessary for me to call to the attention off to ·15 percent of income over $2,000 way that I can. I believe he knows that, of the Houoe that this is the second occa and on $200,000 to a tax of $67,880 plus and I want to commend him in the sion during this session of the 85th Con ~2 percent of. the excess over $200,000. highest terms for the attitude he has gress that we have been called upon to 10320 CONGRESSIONAL RECORD- HOUSE June 5 deal with the Important legislation af He has ably served his fine people. I Mellon. You recall Mr. Mellon advised fecting the fiscal facts of life as they re differ with the so-called tax experts on the cutting of taxes, and the people late to our Federal Government. The several phases of this situation. To be roared that they thought he was crazy first such occasion was the instance of strong, yes, we must remain: our Army, at the time. But, taxes were cut at that our being required to provide for a $5 Nav:y, Marine Corps, Air Force, and the time. But we did something else at that billion temporary increase in the statu Coast Guard. We have to protect our time, too. We did not-endanger every tory debt limit. The second occasion is selves. We cannot afford to take a business in this country by rebuilding before us today. It now seems inevitable chance. Although I could not. under.. all of the machinery in Europe so that that in the not too distant future we will stand the speech that the President of they could compete with us, and we put be confronted with a third occasion in West Germany made here awhile ago on a tariff, as we hope to do pretty soon which we will be required to deal with when he addressed us, I understand by here, to protect your industries in the important legislation pertaining to the -reading the ticker-news of the AP that South. And, when we do that, then I fiscal aspects of governmental affairs on he said he never wanted again to see think we can begin with some degree of the Federal lev:el. This third occasion his Germans fight our Americans. And, logic to cut taxes. I agree with you, and will in all probability be the instance of I am for that. But, in order to be sure, I have always advocated that the way our again having to increase by some I voted awhile ago for the Sikes amend· to get more revenue is to have fair rates amount the statutory debt limit. ment that would prevent a cut in our and lower rates. In the 20's I voted for It is useless and lacking in good faith Army. Here is the thing that concerns 4 or 5 tax reductions, and we raised to chide an administration or to admon me, Mr. REED. I have just returned enough revenue so that we paid $1 bil· ish a Secretary of the Treasury as being from down home. I have just engaged lion on the national debt every year for exclusively responsible for this duty that in a primary. My people are in financial 10 years. we must perform today. It is my view trouble they are suffering. In my little Mr. CHELF. My professional men tell that instead of ascribing fault elsewhere hometown of 5,000 there are 500 out of me this. Many nearing the sunset trail the .membership of the United States jobs-my farmers are in difficulty of life-men that are needed-doctors, Congress could properly spend time in frankly they want a tax cut; they want dentists, lawyers, and so forth-have an examination of voting records to de· to know what we are going to do here told me, I am in the upper bracket now, termine whether or not we as individuals about it. I have always had the theor:v., and I cannot save a cent. If I make $4, I have properly stood for frugality in Gov .. may I say to the gentleman from New have to give Uncle Sam $3 of it-there is ernment expenditures. Efficient and ef .. York, that if we could cut the income no incentive to work left. This is no fective economy in Government is always tax of the little fellow, give him, shall reflection on these gentlemen. Do not essential. When tax rates are as high I say, a better exemption, he, in the misunderstand me. But, that is just a as they are today and Government final analysis, would have more take· segment of my people who have poured spending threatens to exceed Govern· home pay. Regardless of what the their hearts out to me. For instance, ment receipts by as much as $5 billion bureaucrats and tax experts downtown businessmen tell me that no longer do in the current fiscal year and $10 billion tell us-if that little guy had more take· they discuss how this, that, or the other in fiscal year 1959, it makes frugality home pay, he would spend more money investment will advance or promote a absolutely incumbent upon both the leg put more of it in circulation; he would certain business or even the country as islative and the executive branches of buy more tires, he would buy more car a whole. The big question is: How can our Government. assessories, he would go to more football we work this thing out to save taxes- It is essential to our Nation's e~onomic games, baseball games, wrestling pay as little as possible·? How can we and military security, as well as necessary matches, sports events and other things, keep from giving it all to the tax collec· to preserve the fiscal integrity of our and in the long run I think that paroled tor? We will be in a lot better shape Government, that this legislation receive tax dollar would get back into the Treas.. financially if we honestly and carefully the favorable consideration of the House. ury till. I am told-and I am like Will revise our entire tax structure. When a Mr. Chairman, I feel very deeply about Rogers; I only know what I read-that person is taxed so high he loses heart and this matter. If it were possible, I would Austria, one of our friends that we interest in carrying on, we have had it, be the first one in the endeavor to reduce supported, that we literally picked up in my opinion. taxes. I have voted against practically lying on the fiat of its financial and Mr. REED. There is a cloud hanging all of the appropriations for foreign aid economic back-thnt Austria has cut her over us that we cannot, any of us, dis.. and a ~ot of this blackmail and tribute taxes. They were threatened with all miss. We have the Russian menace we have sent abroad. I have done every kinds of dire consequences-unbalanced hanging over us, and we do not know thing I could, because I realize that the budget-treasury in the red if they did at what period of time they will strike. security of this country depends on its cut their taxes, but they did have the You know, in order to increase our ex .. financial integrity, its fiscal integrity. vision, courage, and wisdom to cut their ports, we thought it a wise thing to fur· We have got to stop and think now. income taxes, and instead of going into nish Italy and Germany with war rna .. This is no time to demagog' on this ques the red, they tell me that the treasury terial. Then a great hue opened up. tion of extending taxes. If we pursue is not only in the green-but that they Here, they said, "Japan wants to fight an irresponsible course now, our citizens have a nice surplus-and are doing all China." China was our friend then. So, and our Nation will suffer. Every insur· right. What do you think of my what did we do? We armed them. I ance recipient, every retirement an.. theory-my ideas on this subject-be· have the figures on the amounts we nuitant, and every wage earner in the cause I respect and admire my friend spent over there, and I will be repeating country is dependent upon the integrity from New York. In my opinion you them on the floor of the House here. of our Government. The only way we have forgotten more about taxes and Here we are sending our materials to all can meet our debts is to pay them with our Government than all of the tax ex.. of these countries in Europe by the bil· taxes. perts rolled into one. lions of dollars. The day may come Mr. CHELF. Mr. Chairman, will the Mr. REED. I want to compliment the when we may have another incident akin gentleman yield? gentleman. to Pearl Harbor. We have to have se .. Mr. REED. I yield to the gentleman Mr. CHELF. I m,ean, I am disturbed; curity in this country, do we not? from Kentucky. I am worried and my people are worried. Mr. CHELF. The gentleman is exact Mr. CHELF. I know of my good ! know that it takes money to operate ly right. I am cognizant of our real prob .. friend's sincerity, his ability, his under our great Nation-! understand the lem-that is why I am seeking your standing and his long and fruitful serv· problem. But, tell me what we must do sage advice and counsel because I have ice on this great committee. Let me in order to get some tax relief and to a bill in-as you do-to cut taxes, bless briefly state my position and then ask actually help our Treasury. your heart. the gentleman from New York, and my Mr. REED. I will tell you. First, we Mr. REED. And we cannot have it dear friend, what he thinks about the must stop spending. We cannot con· unless we have financial integrity in this possibility of a tax cut-especially for tinue wild spending. That responsibil· country, so that our dollar is worth our little wage earner-the head of the ity rests right in this Congress, and no- something. household-that the gentleman has such where else. I want to compliment the Mr. CHELF. That is one reason, may genuine sympathy and great under gentleman~ You have made a speech I say to the gentleman, last year for the standing for and has had over the years. that would have done credit to Andrew first time I voted against foreign aid; \ - 1958 CONGRESSIONAL RECORD·- HOUSE 10321 because, when the time comes in Amer this House is responsible for these heavY This has happened with reference to ica when I cannot get $10,000 for my taxes, these impossible taxes. This the automobile industry. people for a little preliminary flood con House is responsible because it has been I regret, Mr. Chairman, that many of trol planmng proJect-Just $10,000-not voting all of these expenditures many of my colleagues in the House and the other $10 million-then I had to vote against which were not necessary. Five or six body sincerely believe that the automo giving a way billions of dollars. I could billions could be cut on our own domestic bile industry is something which belongs not defend such a predicament back things, and 5 billion could be cut on our exclusively to the State of Michigan. home. If West Point, Ky., was in India foreign aid without endangering our na Our State is willing to let this tall tale· I could have gotten several million for tional defense at all. go by the board when it does not do any them. Let me point out why that is so. We harm to Michigan and to the whole Mr. REED. I congratulate the gen have spent since World War II in for United States-and for that matter to tleman on that vote and I hope he will eign aid over $60 billions-over $60 bil the economy of the whole world. continue to vote that way. lion. And what have we got for it? But when that tall tale becomes a Mr. Chairman, I yield 10 minutes to What is the result? Can you brag any monster gripping the whole economy of the gentleman from Illinois [Mr. MAsoN]. thing about Indonesia today, after what the United States by the throat and Mr. MASON. Mr. Chairman, I lighted we have spent on her? Can you do any strangling it, I feel it my duty as a Repre in this House 22 years ago. I had been bragging about India today, after what sentative of my State, and as an Ameri a student of taxation then for over 30 we have spent on her? Can we do any can, to become vocal in my protest. years. I was on the floor of this House bragging about Egypt and the ,Middle The fact is the automobile industry does and listened to Fred Vinson explain and East and the mess they are in after the not belong to the State of Michigan. analyze those technical tax bills, ·with amount we have spent there? Can you It belongs to practically every state my mouth open, because Fred Vinson do any bragging about Yugoslavia? Can in the Union. And what happens to the was a master at that work. When he you do any bragging about France? automobile industry influences the econ left the House I said, we will never Over $5 billion has gone to France. Can omy of every part of the United States. have anyone who can do that job·as well you do too much bragging about England, Any economist· worth his charts and as Fred has done it. Then along came the British Isles, the British Empire, graphs will tell you that he watches the Jere Cooper. Jere Cooper had a mas after the $7-odd billion we have given to automobile with the same alertness as a ter mind and an ability not only to grasp them? And I could go on with Algeria weatherman watches his barometer. He and analyze, but to explain these tre and a lot of them. well knows that what happens to the mendously technical tax bills. But let us come closer to home. What automobile industry happens to the rest Then Jere Cooper was taken and we about South America? Do they love us of the economy. have now in his place WILBUR MILLS as today because we have been so kind to It is true that the actual putting to chairman of the Committee on Ways them? gether of the cars and the management and Means. And from the experience We have spent on an average the last are centered in Michigan, but the assem of some 40 to 50 years in tax matters I 12 years of over $5 billion a year. Would bly and automQtive parts of the industry say this to the House, that WILBUR not that have made a nice tax cut for are located in 41 States. More than MILLs fills completely the shoes of Jere our people? half of the automotive manufacturing Cooper as chairman of the Committee So I say, let us balance the budget not employment and payroll is .outside Mich on Ways and·Means and he is following by continuing these taxes ·but by cutting igan. mighty close to Fred Vinson. these. tremendous expenditures. That is Here are some of the products used Now I know a little bit about this the way to balance the budget. My good in the manqfacture of automobiles, and subject and I feel that I do have the ranking Member said that Mellon cut the States where they are predominantly ability to estimate these various peo the taxes three different times and every produced. , Glass comes principally from ple in this tax field. So much for that. time after the tax rates were cut under Ohio, Illinois, West Virginia, Texas, and Our chairman has given you a mas Mellon more dollars flowed into the California. The top steel States are terly analysis of the situation. He has Federal Treasury. More dollars came Pennsylva~~a. Ohio, Indiana, Maryland, presented 1 side or 1 picture ·of the tax into the Federal Treasury because of the West Virginia, and Alabama. Leather situation that faces this Nation and of expansion of business. We had a tax cut manufacture is concentrated in Massa this bill that is before us. I want to under the Democrats about 9 years ago, chusetts, New York, Pennsylvania, Illi present the other side of the picture so the Doughton tax bill, and more money nois, Wiscqnsip, and Kansas. Synthetic that you will have both sides and weigh flowed into the Treasury after that tax rubqer States are chiefly Kentucky, cut. Then, we had a tax cut here, I be Louisiana, Texas, West Virginia, Ohio, one against the other. · California, Connecticut, and Pennsyl I have never voted for the extension lieve, it was 4 years ago under the Eisen hower administration, a tax cut of vania. And I could go on naming the of these wartime taxes, never, and I do top six States in the production of other not intend to this time. Because of the $7,400,000,000 and within a year more dollars poured into the Federal Treasury products used in the complete automobile fact, I am going to offer a motion to product, such as textiles, paints, plastic, recommit this bill, and I am doing it because of the tremendous expansion in petroleum, and so forth. for a definite purpose. If we can get business. These things are a matter of history today. This is history. That is , Let me shc;>w you what I mean in the substantial support for that motion to unemployment picture alone. recommit we will be making an impres the way it works. That is what we should do. So am offering a motion to Here is what has happened during the sion upon the-other body and give them i past 5 months since January in only a the encouragement to do what we could recommit this bill which I hope will get substantial backing in this House for the few important American industrial cities have done, and that · is; repeal the as a result of the current dismal condi transportation tax, for one thing; affect it will have in the other body-and tion of the automobile industry. · lower the tax on automobiles for we may then get some of the tax cuts that many of us want. In Trenton, N.-J., Canton and Youngs another thing, and a lot of other town, Ohio, a~d Pittsburgh, unemploy things that we ought to do but they The CHAffiMAN. The time of the ment rose on tp.e average of 3 percent, will do. When you go to your people gentleman from Illinois has expired~ bringing it between 9 to 12 percent. this fall in your campaign you will be -Mr. REED. Mr. Chairman, I yield 5 In Chicago, Indianapolis, Cleveland, able to say, "I didn't vote to cut your minutes to the gentleman from Michigan Minneapolis and St. Paul, Allentown taxes but -the Senate did." And what [Mr. CHAMBERLAIN]. and Bethlehem, and Joliet, Ill., the un position will that place you in? That is Mr. CHAMBERLAIN. Mr. Chairman, employment :figure also rose 3 percent, exactly what is going to happen. My somebody has been telling tall tales about bringing it between 6 to 9 percent. Still name is Noah, and I prophesy that both the State of Michigan. This is natural other cities like Lorain, Ohio, and Hunt the transportation tax and the automo in Paul Bunyan's State, where the lake ington, W.Va., and Ashland, Ky., went bile tax will be on the floor of the Sen winds are more healthful, the pine trees up to more than 12 percent unemploy ate even after we have passed this bill taller, and the weather better than any ment. simply extending these taxes. where else. All of these cities center around auto I agree entirely with the philosophy But sometimes a tall tale stretches-into production industries, such as metals, that our ranking Member presented, that a delusion and becomes accepted as fact. auto hardware, steel, rubber, nickel, tires, 10322 CONGRESSIONAL RECORD- HOUSE June 5 and other automotive equipment, or ac- war measure, would mean some tempo Mr. MILLS. Mr. Chairman, I ask cessories. rary loss in Federal revenues. But it unanimous consent that all Members Is it necessary for me to remind my would also produce additional taxable in-· may extend their remarks at this point colleagues that it has been just a few come which would be generated in the in the REcORD if they care to do so. days since this same unemployment was automobile and other related industries The CHAIRMAN. Is there objection? the subject of emergency legislation? as well as personal taxable income. There was no objection. Why put a band aid on a cancer? Let us Right now the Treasury has sustained - Mr. EDMONDSON. Mr. Chairman, I try to get rid of the cancer. a serious reduction of tax revenues from am glad to have the opportunity to join Now I am personally convinced from these industries as the result of the tax the many ·colleagues who have spoken all the evidence I can find, that this cur itself, simply because production is down out for tax revision, and have pointed to rent recession is due in large measure to about 34 percent from the comparable the oppressive effect upon small business the slump in the many rooted and ten period in 195'7. and the economy that proceeds from tacled automotive industry, which There is objection to this repeal on continuation of these excise taxes. reaches into the whole economy. Since the purported grounds that such a re I believe a very strong case can be coming to Congress I have consistently peal would be a special privilege for the made for the view that reduction of proposed that the remedy for this situ automobile industry. many of these taxes will have a stimu-. ation is the shot in the arm which the On the contrary, it is the present auto lating effect upon business and will lead industry would receive from the repeal motive excise tax that is discriminating to greater tax revenue, over the long of the Federal auto excise tax. against the automotive industry and the haul. Now what would this removal of this motor vehicle owner. Many of our war Nor can there be any doubt about the excise tax accomplish? . time excise taxes have been either re fact that these taxes-many of them, at Simply, more sales, more production, pealed or substantially reduced since the least---are unfair in their distribution of and simply, it follows, more jobs. Korean war. the tax burden, and have rested too long And more jobs are desperately needed - But this tax sits there untouched on upon small business. not only in my State of Michigan but in the statute books--at exactly the If we are not successfui here in elimi all these other industrial cities where wartime rates. Certainly it is only fair nating some of these taxes from the the unemployment is increasing steadily that automotive products manufactured extension bill, then I hope the Commit as the all-American automobile industry all over the United States should be ac tee on Ways and Means will proceed slumps further into this recession. corded the same tax relief as lipsticks, speedily to ·the work of revision prom Any businessman knows that a re Zsa Zsa Gabor chinchilla coats, lotus ised us by the committee's able chair duced price for a good product stimulates flower perfumes, golf clubs, and movie sales. man. cameras. Mr. DINGELL. Mr. Chairman, I want The American automobile industry If this Congress takes no action on this produces a good product. to join my distinguished and able friend bill, excise taxes on passenger cars and and colleague from Michigan, the Hon Remove that excise tax of 10 percent parts and accessories will drop 3 percent and down goes the price of that good orable THADDEUS MACHROWICZ in oppos on July 1. Yet, the recommendation of ing this bill. I will vote to recommit the product. the administration-Democratic leader Immediately the demand for more pas ship, in effect, asks us to raise these ex bill, and I will vote against this bill. senger automobiles will go up. cise rates above what they would other My reasons are ·simple. Unemploy Industries all over the country will wise be under current law on July 1. We ment is running at the rate of '7 .5 percent swing back into full-time output, not are, therefore, actually increasing this of the work force. My city of Detroit has· only of the finished product but of all the tax. unemployment exceeding 268,000, our variety of raw materials, parts, and other Certainly the premise that the auto State of Michigan has 465,000 out of products which go into the automobile mobile should be taxed because it is a work, 16 and 18 percent, respectively. . before it gets out onto the highway. luxury item is as outdated as the model . · Experts expect _" unemployment to in_- This increased auto production will be T itself. Last year '75 percent of all crease, to give us '7 million unemployed reflected immediately in the activities families in the United States owned a in the fall. Six million unemployed are of suppliers, subcontractors,! transporta car; what is more, it is estimated that expected in June 1958. tion mediums, dealers, and businesses 65 percent of all passenger-car mileage Fortune magazine predicts no upswing throughout . the country. The whole is directly related to the essential activi in employment as late as next spring. network of small businesses which de ties of earning a living. The program and platform of our pend so desperately on the auto industry - I dislike to disagree with my Repub Democratic Party advocated raising in-. would have a terrific stimulant. lican friends in the executive branch, but dividual exemptions to $700. I have From what I read · in the CoNGRES my first duty is to my constituents. On sponsored legislation to raise the indi SIONAL RECORD and in the newspapers it the current issue, I cannot help but be vidual exemption to $700 and to raise it looks as if a lot of the opposition to the lieve, in all sincerity, that a reduction or to $800. removal of the excise tax is coming from repeal of excise taxes on passenger cars As an antireqession measure, it has Texans, our President, the Secretary of and parts and accessories is not only in approval of almost all our country's top the Treasury, and Congressional leader the interests of my constituents, but also, economists. Most economists say it ship in both Houses. plainly in the interest of the entire Na should be used now. As I pointed out earlier, these Texans tion. The "Ayes" of Texas may be loud, I went before the great Committee on had better realize right now that their but on this issue I shall raise my voice Ways and Means earlier this year to urge cows are in on this too. with a countering "No" with all the this form of relief to our taxpayers in the: The automobile industry consumes '72 emphasis at my command, confident low- and middle-income brackets. I percent of all the leather in the United that the immediate reduction or repeal pointed out that this form of tax relief States, and the hides of their cows are of automotive excise taxes is in the in would cost no revenue if loopholes which riding around in every back and front terest of the public and the Nation. permit tremendous losses of tax revenues seat of every tailfinned automobile on It is my intention to vote for the mo-· to the upper bracket taxpayers were the hig!1ways of this Nation and a lot of tion to recommit this bill, wbich I under closed. I also showed that a reduction other nations too. stand will be offered. I wish to make' of this sort would generate huge pur What happens to the automobile in it clear, however, that my vote is in pro chasing power among the very people dustry will get around to happening to test of the extension of the automotive who would have to spend the proceeds of their cows. excise taxes and that it should not be· such a tax reduction for the necessities The cows might like it if they can graze construed as a vote favoring the reduc of life. This would return to the Govern a little longer in the Texan meadows, tion of the alcohoi, tobacco, or corporate· ment large new sources of revenue from but the owners of the cows will not. taxes. the resulting increased income of busi The owners of -the cows have to eat, _ I sincerely u~~e my colleagues in the ness and industry. and the men and women who work for' House to join me in correcting this tax, Another reruson for my opposition to them have to eat. inequity, and, at the same time, con the bill is that the excise tax on pas I am willing to concede that the repeal verting this legislation into an antireces- senger autos is extended for another of this excise tax, which was originally a· sion measure. · year at 10 percent instead of the auto- \ 1958 GONGRESSIONAL RECORD- HOUSE 10323- matic reduction to 7 percent programed I, asked the Ways and Means Committee · Third. State regulatory authorities in past actions of this body. for the privilege to come before the com- condemn the levy as "inimicable to - This was an emergency wartime tax mittee, and was told that I could come. the maintenance of reasonably priced passed to discourage purch~e of _autos.) before the committee in the event they and nondiscriminatory communications This tax, aimed at discouraging sales of had any hearings, but they expected to service," because it adds unreasonably to autos, now does that with a vengeance. have no hearings. the rates and charges which they have The industry at which this tax is We cannot forget that this tax is im carefully established. aimed is now badly depressed. Sales are posed upon the people. It is the cus· Fourth. An excise tax on telephone now at least 27 percent below last year. · tomer who pays-the same customer who communications is discriminatory since No upswing is expected before next year. is heavily taxed in this country, and who it singles out the telephone from other The auto industry consumes more is looking to this congress for some sort essential household utility services like steel, lead, tin, leather, chrome, copper, of relief from the high taxes which are water, gas, and electricity. and plastics than any other. One imposed. In the year ending June 30, . Fifth. The telephone excise tax was American wage earner in seven is de 1957, it is calculated that the customer enacted primarily to assist in conserving pendent on this industry for his wages. was taxed $347 million for local calls, and critical materials during the war. It One dollar in nine spent in America is $266 million for long-distance calls. was an emergency measure and should spent in connection with this industry. We now recognize the telephone as a not be permitted to become a permanent The buying power of the auto industry necessity. In 1949, the Government part of tax revenues. and its employees affects every man, recognized this communication as a Sixth. The telephone excise tax is a woman, and child in this country. Steel necessity because it instituted a loan for consumer tax. Its repeal would result operating at 52 percent of capacity is di rural areas telephone service at 2 per in a direct saving for the telephone rectly attributable to bad sales in the cent, declaring that as essential. user. No part of the tax saving could auto industry. . · I call to the attention of this Commit Elimination or reduction of this tax be retained by the telephone companies. tee the editorial of the Chester News, Mr. Chairman, I hope the Congress would be one of the biggest helps in Chester, s. C., of May 22, 1958. This fighting the recession that Congress will take cognizance of the telephone editorial, by the very able editor of that situation, and determine that future could take at this time. · paper, points out that if you are an aver I reject the argument that such action legislation will give some relief. age telephone user, you pay $9.50 in ex- I realize the bill today does not relate would unbalance the budget. A budget cise taxes each year. It goes on to point deficit of $3.9 billion is anticipated this to this subject, but since excise taxes out that this comes out of the pocket of are before us, I believe it appropriate to year. Best hopes at this time are that the average American, not out of the the 1959 budget will be out of balance by call this to the attention of Congress. pocket of the teleph_one company. Mr. ROOSEVELT. Mr. Chairman, about $10 billion. Not only are we not being given any - This country is losing purchasing the consideration today of extension of consideration on this this year, but there excise taxes brings up some very impor power at the rate of $30 billion to $40 bil- · is no promise in the future. Here is a lion a year. Personal incomes are tant and closely related questions. war tax, instituted as a war tax as an While I support the proposed extension, down-badly so. The national personal emergency measure. The war is over, income is kept up largely by the tre I personally regret that_the committee and the emergency is over. Morally, this has not seen fit to go as far as recom mendous amount of unemployment com tax should be taken off, and we owe it pensation pumped into the economy. mending an income tax cut. If properly to the American people, the telephone drawn this would have the effect of im Each month we wait we lose $4 bil user in particular in this instance, to lion in purchasing power and 700,000 mediately creating consumer purchas assert the moralities of good govern ing power, and if temporary, would not man-hours of employment. The time ment, and do something about this. for action was yesterday, today may be significantly disrupt the budget. too late. Tomorrow probably will be One of the reasons for my getting up . Anything less than an all-out effort to too la.te and certainly will require much today is to call this to the attention of start an upward economic trend is play more vigorous and costly action. Let us the congress. I publicly here ask the ing fast and loose with those who have move now, to recommit this bill to the · Ways and Means Committee of the been unemployed for many months, and. Ways and Means Committee and get a House of Representatives, to give their putting the jobs of many more in jeop good piece of antirecession legislation consideration to this matter either be· ardy. This risk is one that is too great for our people, and for our country. fore the end of this session, or early in to take. Moreover, I firmly believe that Mr. HEMPHILL. Mr. Chairman, I the session for next year. If they feel the alternative risks involved in reduc have asked for this time to bring to the · that we cannot abolish this tax alto ing Federal revenues, if indeed this hap attention of this Congress, and of this gether in one piece, then they could give pened in the long run, is much less im Nation, an inequity which exists in our us a graduated scale of reduction, ·and portant than the greater risk incurred tax structure. I speak specifically of the I am sure that the customers and the by human suffering and its consequent taxes on telephone communication, telephone people will cooperate. encouragement to communism. · known as the excise tax on telephones. I have not mentioned the cost of col I sincerely hope that this bill does not The history of this legislation goes lecting specifically, as I do not know the: in any way eliminate the strong hope, back to 1943, when the 25-percent tax cost of collecting. I do know, however, which many on both sides of the aisle was imposed on long-distance calls and that in the event some telephone bill is have held, that the committee will pro a 15-percent tax on local calls. This was not paid, nevertheless the tax must be duce a small-business bill of significant· a war measure, not only to raise revenue, . transmitted, whether it is GOllected or value. It is important to reemphasize but to discourage the use of telephone not. that our so-called free enterprise system communications, at a time when all lines · I should like to cite to you six reasons is becoming less and less free and less were subject to need for defense pur why the excise .tax on telephone com and less competitive. If we fail to give poses, and to discourage the tying up of munication should be repealed: small business relief in this session, we operators, from a manpower utilization · First. Telephone communication is are again running the same kind of un standpoint. Originally, it was a war essential to commerce, industry, and the necessary and unj usti:fied risks. measure, and the telephone people of social life ·of the Nation. It is not a' I was indeed pleased to have the dis this country, the citizens of this country, luxury item. Nevertheless, it is subject all patriotic, accepted the tax without tinguished chairman state that his com protest. The telephone people, I know. t.o an excise tax which normally applies mittee would report such a bill next did their best to give all-out effort dur to such luxuries as furs, cosmetics, alco week. I, of coursu, do not know what it ing the war, and their services to this holic beverages, et cetera. will contain, but it must be positive and country were magnificent. Second. The Gallup poll has found strong if it is to be fully effective. In 1954, the tax was changed and since - that the tax on telephone communica- Mr. BROWN of Missouri. Mr. Chair· that time there has been a tax of 10 per tions is the most unpopular of all the man, it is becoming increasingly obvious cent on all telephone communications. excise taxes because it adds to the cost that we are facing a stone wall in secur Because of this inequity, and this extra. of a genuine necessity in the American ing meaningful tax re.vision, and this tax on the taxpayer who has a telephone, way of living. disturbs me. CIV-650 10324- CONGRESSIONAL RECORD- HOUSE June 5 There are inequities in the present tax in my opinion, if we changed the taxes ture.- Thus,- in 1956, 36 percent of the structure that do serious injustice to in in this bill. radios produced in this country went dividuals and business, and, even more I sincerely hate to see this House ex into cars. In 1956 the purchase and important, do harm to the economy as a tend them. operation of cars claimed almost 10 per whole. Mr. RABAUT. Mr. Chairman, the cent of all disposable personal income, a The Korean war-emergency taxes were so-called luxury tax .on automobiles vastly significant amount when it is re not intended as permanent taxes or even must be abolished. The failure of the membered that out of the remaining as long-term emergency taxes. They Congress to act quickly in the present amount had to come the purchaser's should be revised. And do not wait for economic emergency will have far food, rent, light, heat, telephone, medi a proper time. Good times, bad times, reaching effects which may prove disas cal expenses, and savings. Forty-three inflation, recession-the time to correct trous to the national economy. million sealed beam lamps were pro a handicap is when it is diagnosed. In First, two grave misconceptions must duced in 1 year for cars, as were 85 mil this instance, correction is overdue. be discarded, and the problem viewed in lion passenger car tires, 107 million gal Small business is being hampered by its true perspective. lons of antifreeze, 9 Y2 million gallons the present tax structure. Everybody The question of the automobile lux of brake ftuid; $19% million of woolens knows it. I am glad to hear the dis ury tax is not, as many think, a problem and worsteds, 2% million electrical tinguished chairman of the Ways and of concern only to one area of the coun measuring units, a billion barrels of Means Committee promise action soon try or to one industry. It will be shown automotive gasoline. Of one wooden on this matter. However, I am a little that the production, maintenance, and item alone there were more than a bil uneasy about his warning that it is apt general servicing of automobiles touches lion units produced. For a dollar figure, to be less than the revisions recom every segment of our national economy almost $6 billion in automotive products mended by the Small Business Com and involves persons working in count were produced in industries other than mittee. less interrelated industries and occupa the motor vehicle industry in. the single Our proposals are minimal. Anything tions. And, to the same extent, the year 1954. less, in my opinion, is apt to be just a continued vitality of the automotive in One out of every six patents issued is token effort or a mere nod in the direc dustry-a vitality theatened by an un automotive. Auto factory payrolls in tion of a problem that demands sub justifiable tax-is essential to the vital 1956 totaled over $3 billion, dollars spent stantially more than tokens or nods. ity of the economy as a whole. in turn by those factory workers for food Now, as to this bill before us, I feel A second, common misconception is and manufactured goods. very strongly that some of these excise that the automotive industry is localized There exist today 264,000 retail auto taxes should not be renewed. in one State. But it will be shown that motive establishments, 80,000 car repair For example, everybody in Government the manufacture of automobiles is car establishments, and 8,500 car storage these days is talking about the plight of ried on today in all parts of the country facilities, and a grand total of over 4 the automobile industry. Speakers urge and by citizens separated by the moun million automotive business establish the industry to reduce car prices and tains and plains, by the rivers and even ments-that is, 16 percent of all United change car designs; But let the RECORD the traditions which go to make up the States business establishments. show that, as far as this House is con vast United States. Only those who refuse to grasp the cerned, the Government is not willing No less than 19 States vie with Michi significance of those statistics to the to take the first Step by lowering car gan in the production of motor cars. yearly economy can ignore the fact that prices even 3 percent. California, Missouri, New Jersey, Geor-. the healthy economy of this Nation, in I, for one, want to see the automobile gia, and Wisconsin had, in 1956, a com even normal times, is dependent in the Industry on sounder, healthier basis. It bined automobile production in excess greatest measure upon the production, is a vital industry in our economic struc of that of Michigan. Twelve other maintenance and general servicing of ture-affecting every city and town. I States, as far separated as Texas in the automobiles. And it is obvious even to feel that Congress, in the national inter Southwest and Massachusetts in New those who have not familiarized them est, could lead the way- to fairer auto England produced cars which, in num selves with the problem that, today, prices by revising the excise tax, cutting ber, far outweighed the production of many persons are deciding against the it at least 50 percent. Michigan. Tradition may have invested purchase of a car because of a luxury The national interest demands no less. Detroit with the title "Motor Capital," tax which prices the car beyond their Automobiles are second only to homes but the hard fact is that there has been ever more limited :(each. as the largest single purchase an Ameri an outward thrust of the automotive in We cannot work at cross purposes. can makes. dustry to all parts of the country. The We cannot inhibit the sale, operation, Lower auto prices would have a pro automobile luxury tax has raised a very and maintenance of the 6 million cars found psychological effect upon the coun real problem for millions of persons in produced in a normal year and at the try as well as a very tangible effect upon California and for millions in New Eng same time have a vital economy. We the cost-of-living index. land. cannot seek the healthy economy neces I respect profoundly the chairman In short, the problem is no more a sary to our country when we preserve a and members of the Committee on Ways local problem than the economic crisis tax which impedes that industry on and Means. I know they are completely which basic industry, such as steel, plant which besets the country is a local prob manufacture. lighter manufacturing. sincere and it is a grave burden they lem. and countless service businesses are de bear. In spite of this, there are those per pendent. No one likes taxes; and there is no sons who fail to see the way in which a The impeding luxury tax on automo such thing as a good tax. But, in my tax which impedes the automobile man biles must be speedily repealed. Recog opinion these excise taxes are worse than ufacturers of the country threaten in nizing. as I do, the tremendous value of most taxes. They are built-in inflation dustry in general. the automotive industry to the entire ary forces. They are pyramided into The plain fact, supported by statistics economic structure of America. I am taxes on taxes on taxes, and lead only presently on file, with gathering agen vitally opposed to the legislation before to higher prices. cies, is that 1 business in 6 in this coun us today. And, I will seek to put the An excise tax on automobiles-a $3,000 try is an automotive business. House on record as to the stand of the to $10,000 purchase-is particularly bad. The United States is a nation of car membership on this very important · Mr. Chairman, if we cannot stop this owners, a nation which, since 1945, has measure dealing with an industry giv extension in this body at this time, I produced 56¥2 million automobiles. To ing employment to 1 in 7-an in sincerely hope that the distinguished day 77 percent of individuals, 10 years dustry which creates 1 out of every 6 chairman of the Ways and Means Com and older, live in households which own business enterprises in the country-and mittee will take another look at this cars. which attracts the expenditure of 1 matter and that he will have a change The automobile is not an item di r.etail dollar out of every 5. The in of heart. There will never be a better vorced from the mainstream of our direct impact is beyond the comprehen time to revise and readjust taxes. economy. The components of an auto sion of most economists. Justice, economic growth, and the na mobile are, percentagewise, the com Automobile excise taxes are unfair tional interest would be better served, ponents of our gross national m.anufac- and in my opinion unjust to the lower - 1958 CONGRESSIONAL RECORD- HOUSE 10325_ income groups who constitute 44 percent dustries and are adding to the burden of prompt tax reduction. Normally, to cut of passenger car owners-although these unemployment on a large scale. taxes in an election year is popular but people earn less than $4,000 a year. Ex Mr. REUSS. Mr. Chairman, I believe unwise. Confronted as we are with a cise taxes are reflected in the used car that H. R. 12695 should be recommitted sharP recession this year, a tax cut is prices. The tax was imposed originally to the House Committee on Ways and assuredly wise, whether popular or not. as an emergency measure-long since Means, in order to permit presentation to I hope that we will not delay in enacting gone. The automotive industry has a the House of a bill containing a substan one. multiplying e:tiect on other industries tial reduction in taxes that will do the Mr. MACK of Dlinois. Mr. Chairman, rubber, plate glass, upholstery, leather, most to stimulate lagging consumer pur although I appreciate the hard work and steel, paints, lacquers, wool, cotton, chasing power. It is quite apparent that conscientious study that members of the synthetic fiber, nickel, lead, zinc, and the 85th Congress is going to have only Committee on Ways and Means put in many, many other products. one last opportunity to vote on an over on this bill, I must say that I am disap The automotive output is now 30 per all tax measure before it adjourns. I pointed by their decision to retain cer cent curtailed and a continuation of the believe that the realities of our economic tain excise taxes at th~ir present levels. depressed market will further accentuate plight require a tax reduction now in or These levies were imposed during this percentage with a corresponding re der to restore employment. World Warn when the purpose was to flection in the industries dependent The Employment Act of 1946 imposes curb consumer spending for scarce goods upon it many of which regard the au a duty on Congress to maintain "condi and services. They were quite e:tiective tomobile manufacturers as their best tions under which there will be afforded in doing that and they are operating customers. useful employment opportunities for the same way today. The di:tierence is Mr. BROOMFIELD. Mr. Chairman, those able, willing, and seeking to work." that today we are in a recession and we in Michigan have been proud of the Today more than 5 million Americans, we should encourage consumer spending contribution our great State has made able, willing, and seeking to work, are un instead of discouraging it by exorbitant to our Nation in times of war and peace. able to find work. levies which discriminate unfairly in the During the past half century, the auto According to the best information areas to which they are applied. motive products of our State have available to me as a member of the Joint Is it not ironical that we still collect helped to radically change the mode of Economic Committee, there is little like the wartime 3 percent tax on transpor living for many of us, giving us the free lihood of any substantial recovery, in the tation of goods and the 10 percent tax dom of movement to live and work absence of action by Congress, until at on passenger service at a time when we where we choose. During World War U least the middle of 1959. I am not will are considering voting a multi-million and the Korean war, Michigan was ing to see our economy stagnate for an dollar subsidy to the railroads? Now I noted as the arsenal of democracy and other whole year, even if we could be realize that because there is no cutoff was one of the industrial cornerstones sure that we would then start moving date for the transportation taxes they upon which the defense of the Free forward. I am certainly not willing to are not included in the extension bill. World rested. take the chance that our unemployed This would have been a good time, how The people of Michigan did not com will reach 7 million or more, which is a ever, for us to have repealed them and plain when wartime taxes were imposed distinct possibility if we continue to do taken them off tile books once and for upon them to help pay for our huge war nothing. all. e:tiort and to cut down the use of such An immediate tax cut can promptly The same might be said, I think, for strategic materials as metals, rubber, affect both consumer buying power and the excises on passenger cars which the gasoline, and oil. This was necessary to the attitudes of businessmen. Unlike ex committee has recommended we extend win a war for our very lives. The peo panded Government expenditures, a tax at the 10 percent rate for another year. ple of Michigan even went along quietly cut can take hold at once. It is true that Removal or drastic reduction of this when these taxes were allowed to remain a tax reduction does not put money di• levy, as well as the 8 percent excises on far after the national emergency was rectly into the hands of the unemployed, auto parts and accessories, would do a past in an effort to cut down our tre but by increasing consumer spending in great deal to revitalize the currently de mendous national debt. general, it improves business and helps pressed automobile industry. But now, these excise taxes on auto to put the unemployed back to work. Removal of all the wartime excise mobiles are working a severe hardship In its report of May 28, 1958, the staff taxes would be a major victory in our upon our State. This 10-percent levy on of the Joint Committee on Internal war against recession. · car sales has priced many potential cus Revenue Taxation estimated a deficit in Mr. DINGELL. Mr. Chairman, the tomers out of the automobile market. the Federal administrative budget for present recession has been going on As a consequence, Michigan fa_ces fiscal 1958-59 of $15 billion. A tax cut since last August, or for about 10 months. severe and cruel unemployment. It is now may increase the deficit for a quarter Historically we are informed that the striking across the board from the fac or two, but thereafter will more than pay business cycle generally turns within a tory worker to the vice presidents of cor for itself through increased revenue from year of the initial decline. The admin porations. Here are· some of the latest expanding incomes. By incurring a mod istration's gambling with the historical labor statistics concerning Michigan I erate deficit now, we can avoid a stag tendencies of recessions may be too dan was able to gather from the Department gering deficit in a matter of months. gerous at this time and should be ex of Labor. Nor is a tax cut at the present time amined carefully, especially in view of In Michigan, almost a half million inflationary. A year ago, with the econ the remarks of many distinguished econ some 460,000-are unemployed. That is omy's resources strained, I opposed a tax omists, not the least of whom is William 15.7 percent of Michigan's total work cut, because the additional consumer McChesney Martin, Chairman of the force. Out of 8 cities in our State with purchasing power could have added to Federal Reserve-Board, in whose opinion populations of more than 50,000 resi the inflation. Today, with our total it is quite possible that the present re dents, '7 of these have been declared crit manufacturing resources operating at cession may not end in the near future. ical labor-surplus areas by the Federal less than 70 percent of capacity, and Moreover, it appears that if any end Government. Another 12 smaller com with more than 7 percent of the working in the recession occurs, the bottoming munities are in a similar situation. force unemployed, a tax cut would simply out will take quite a while and even ac There is no doubt in my mind that it put resources and men back to work, not cording to such authorities as the Chair is more than coincidence that the present raise prices. · man of the Federal Reserve Board whom employment and ~usiness . recession is I am fully aware that large numbers of I have just quoted, we will probably have very largely centered in those areas our people, including many of my own 5 or 6 million unemployed next year which come under Federal excise taxes. at this time. ThesP. taxes were designed to cut down constituents, oppose a tax cut on what customer demand. In this instance, seem to them patriotic grounds-"We So far, antirecession measures which they certainly are doing their job with' a want jobs, and are willing to pay our have been taken have been inadequate, vengeance. It is imperative that these present taxes to have them." The fal and most of these have been forced upon excise taxes, particularly on automo lacy in this is that jobs can be restored an administration, which is most reluc· biles, be either cut or lowered drastically. quickest and best by increasing con tant, by a Democratic Congress or have They are crippling our durable goods in- sumer purchasing power through . a been built into the economy by previous . 10326 CONGRESSIONAl. RECORD-· HOUSE June 5 Democratic Congresses and administra this bill, H~ R. 12695, now being consid~ · economic· programs overseas, the balance of tions; for example; the cushioning af ered under a closed rule, permitting no the increased outlays should be apportioned forded by unemployment compensation amendments, and which in effect is. a. · among vitally needed domestic programs to achieve the per capita expansion set forth benefi~. These benefits, ·incidentally, tax-increase bill. above. The combination of expanded unem have risen tremendously over the past If this bill is not enacted, existing law ployment benefits, tax reduction, and in 10 months. · will reqUire that the normal taxes of creased Federai outlays, taking into account The Chief Finance Officer of the De corporations be reduced by 5 percent and direct and indirect effects, would give a lift partment of Defense advises us that the that the excise taxes on passenger auto to the whole economy of twenty ·or more bil administration is spending no more on mobiles and parts for such automobiles lion dollars for fiscal1959, and perhaps thirty security in the calendar year 1958 than will be reduced by 3 percent. The bill or more billion for calendar 1959. This would be on the low side, relative to our needs. in the calendar year 1957. Total Fed also would prevent an inconsequential The Federal deficit under these programs in eral outlays will not rise over $3 billion tax cut on certain alcohol and tobacco fiscal 1959 and in calendar 1960 would be this year; and this considers the increase items. less-and if two or three billion were re in outlays under the road program, the The bill does nothing for small busi couped by closing looph-oles, much less-than tremendous surge in unemployment ness, it does nothing for the wage earner, the deficits now estimated to result from the compensation benefits, and the Federal it does nothing for personal-income tax President's program and the unfavorable eco Government acting under the Housing payers, it does nothing about any of the nomic developments likely to follow it; Act and under proposed area redevelop other excise taxes. 4. The tight money policy should be re versed. All Government housing credit and ment legislation. In my opinion, the enactment of this insurance programs should immediately be The worst thing that has taken place bill is a violation of the pledges con liberalized as to interest rates and amortiza in this regard has been the vigorous tained in the party platforms of both tion, and combined with expanded Federal opposition of the administration to an parties. It runs counter to the recom outlays for low income housing and urban adequate tax-reform program. mendations, the unanimous recommen redevelopment, aiming at total construction I refer specifically to a program which dations, of the Small Business Commit of about 2 million new homes a year; would close many of the enormous tax tees of both Houses of Congress by fail 5. The farm program should immediately be revised drastically, with unifie~ goals for loopholes and which .would increase ex ing to give any tax relief·to small busi ample farm production for domestic needs emptions in the low- or middle-income ness. If the bill is recommitted the and exports, for farm production facilities brackets very substantially. The most Ways and Means Committee can then and population adjusted to these needs, and equitable way to handle it would be by bring forth a comprehensive tax bill for farm incomes pointed toward parity of raising individual exemptions from $600 which could do justice to the American income; · · · to $700 or $800. At the present time the taxpayer and at the same time aid in 6. Some key industries should now make latter is almost essential. bringing the current recession to an end. price reductions and wage increases geared I do not intend to get into any debate to expanded consumption. They will be Another gravely needed change in the able to do more when the Government as-· tax structure is a repeal or a sl:lbstan as to whether the recession has come to -sumes its prime responsibility to combat tial reduction in the automotive ex an end or, as some people say, "bot recession; · · cise taxes, which today add from $150 tomed out." The most optimistic .dare . 7. Full prosperity and full economic to $500 to the price of ·an· American not say things are getting bett.er. The growth are less inflationary than stagnation made automobile in times of substan most they can hold out is that we have or recession. Since September · 1957, both tially increasing imports of cheap for- reached the bottom. That I personally cons~mer - and wholesale prices ·have risen eign automobiles. · think that things· will get worse before faster than. during the period 1948-53 as a This country is losing income at a they get better is unimportant. What is whole, which was marked by very rapid eco present rate of $30 to $50 billion·a year. important is that I am sure that. the nomic growth in a generally full economy. - Our gross national product has dropped American people will never be satisfied The Conference on Economic Prog from about $440 to about $420 billions with st.aying at the bottom, assuming, ress includes the following eminent and it is not unlikely to expect that it without conceding, that we have reached Americap.s: could slip further during the last half of the bottom. If we have reached the Thurman Arnold, attorney; former this year. bottom it is time to start climbing to the Assistant Attorney General of the Failure to· deal with recessions prompt top. . We cannot do that by passing a United States, judge, United States ly and lack of adequate Federal pro bill of this kind. Court of ·Appeals. · grams to ~eet them at the proper time In that connection I am pleased to William H. Davis, attorney; former has often resulted in severe depressions. direct the attention of our colleagues to Director, Office of Economic · Stabiliza On the basis of a loss of income at the the following excerpt from The Reces tion. rate of $30 to $50 billion a year the fail sion-Cause and Cure, published June Abraham Feinberg, chairman, Julius ure of the administration to act costs 1958 by the Conference on Economic Kayser Co. . - us about $4 billion a month and about Progress. The excerpt is as follows: · A. J. Hayes, president, International 700,000 man-hours of unemployment. At NEEDED IMMEDIATE PROGRAMS FOR RECOVERY Association of Machinists; vice presi- a time when unemployment is about 7.5 AND GROWTH dent, AFL-CIO. . percent of t.he work force and when we · 1. Inimediate but permanent Federal as Fred V. Heinkel, president. Missouri have something on the order of 468,000 sistance should be extended to States in Farmers Association,-Inc. · and 268,000 respectively unemployed in amounts sufficient to provide insured and J. M. Kaplan, industrialist. the State of Michigan and city of De .uninsured unemployed workers with pay Leon H. Keyserling, economist and at " troit it appears that something must be ments equal · to at lea!>t halt their usual torney; former Chairman, Presideat's done forthwith. wages -for so long as _they may be unem ployed. This could add perhaps $2 billion Council of Economic Advisers. Mr. Chairman, the Congress of the to the spending stream by 1959. Old-age 0. A. Knight, president, Oil, Chemical; United States should act if the Presi insurance benefits and assistance should be and Atomic Workers; vice president, dent refuses. One of the first things we increased rapidly, and close to doubled by AFL-CIO. . . can do is have an adequate tax adjust 1964; Murray D. Lincoln, president, Nation ment. We should plug loopholes and 2. An immediate tax reduction of six to wide Mutual Insurance Cos . . seven billion mainly for low- and middle raise the individual exemptions to in Armand May, president, American crease purchasing power in an area income consumers, should be enacted; 3. The President's original budget for fis Associated Companies, American Fac where greatest benefit is conferred on cal 1959, proposing $72.8 billion for specific tors Co. the economy. We should eliminate the purposes (with $1.1 billion for contingen James G. Patton, president, National tax on automobiles to permit the larg cies), should be raised by $4.6 billion Farmers Union. est single industry in this country to act above the $72.8 billion for fiscal 1959, by more Miles Pennybacker, president, Voltarc as a prop to the economy rather than as than $11 billion by calendar 1960, and by Tubes, Inc. more than $23 billion by calendar 1964. a ball and chain. We must have this Walter P. Reuther, president, United tax reduction at the earliest possible Major national security_outlays should be lifted by about $2 billion for fiscal Automobile Workers; vice president and moment. 1959, by about $5 b1llion for calendar 1960, member, executive committee, AFL-CIO. Mr. MULTER. Mr. Chairman, I am and by more than $10 billion by calendar Marvin Rosenberg, chairman, Cameo constrained to urge the recommittal of 1964. With some allowance for expanded Curtains, Inc. 1958 CONGRESSIONAL RECORD- HOUSE 10327 Glenn J. Talbot, president, North Da· guished chairman for whom I have a very sideration and favorable action, will be kota Farmers Union. high regard and esteem. Probably the to vote to recommit the bill to the co-m~ M. W. Thatcher, president, National better way to express my position is to mittee so as to enable it to come back Federation of Grain Cooperatives. say that I deeply regret that the majority with a new bill, more realistically treat• Mr. NEAL. Mr. Chairman, in being of the committee did not see fit to join me ing the important problem before us. requested to renew the wartime excise in voting against reporting the bill in the Since this is an important issue, I hope tax bill we are experiencing a thunder form in which it is being presented to the that we will have a rollcall vote so that ous reminder of our Nation's predica· House today. every ;Member. can have an opportunity ment resulting largely from former Con Mr. Chairman, let us make no mistake to show how he or she stood on this issue. gressional approval of temporary and about the importance of the vote on this Mr. Chairman, I oppose the Tax Rate ofttimes ill-conceived legislation. bill. It may well be one of the most im Extension Act of 1958, because of my All too often emergency revenue bills portant votes in this session and it may concern for the economic welfare of the passed in haste later become the instru well determine for the record what our people of the United States and because ments through which funds may be position is toward an effective program of the fundamental implications for tax found available for experimental as well to end the present recession and to re policy contained in the bill. as accepted Government functions. Un store health to our national economy. Each and every Member of this House der normal economic conditions it is an If there be any doubt in anyone's mind has first-hand knowledge of the inroads unfair imposition upon all the people to as to this, or if anyone thinks that he can that the current business recession or, if continue wartime taxes to defray the vote against a recommittal of this bill you will, depression, is making into the costs of Government operations in peace to the Committee on Ways and Means, economic stability of the Nation as a time. and still tell his constituents that he is whole and of the hardship that is being We are still paying Korean war ex for tax reduction in any field, personal exacted of the people who have sent cises 6 years after that war ended, and tax or other at this time let me assure us here to represent them. The respon still faced with demands for domestic you that this is probably your last op sibility which each of us owes to our outlays, foreign aid, and an unprece portunity to vote for tax reduction at people behooves us to examine this bill ' dented national defense incident to the this session of Congress, unless of course, on its merits, with a full appreciation cold war. the other body in its wisdom will refuse of its implications for our own districts Anticipated revenue from all sources, to ratify our decision today and will ask and for the country as a whole. - There including excises, promises to fall some certain tax reductions as amendments to are many areas in which tax relief has billions of dollars short of the budget's the bill. I hope we do not have to re· been suggested. They should be care· proposed appropriations, leaving no al sort to this method of getting relief, fully considered by the committee. In ternative to a sizable overdraft to add to constitutionally, the jurisdiction in these my opinion, the one area where tax relief an already hopeless national debt. · matters belongs in the House, and it is today especially justified and where The position of the Ways and Means would be sad indeed if we were to shirk relief will rebound to each and every Committee, admittedly one of choice be our responsibility and have to assume it part of the country receives no consid· tween two evils, is one to be unavoidably only under the pressure and on the eration in this bill. I refer of course repeated if the Congress neglects to re initiative of the other body. to the Federal excise tax on automobiles. verse its former record of approving I said this will be your last" opportunity If some think that I am overstating my authorized programs and agencies that at this session to vote for tax relief. case at the onset, let me remind them add mandatory Treasury obligations year What is the basis of this statement? It that $1 in every $9 spent by the Amer· after year. As long as this Congress is no secret that the decision for this ican tapayer and consumer is spent for holds this committee responsible for tax action urged upon Congress today is that products or services related to the auto producing legislation to pay the pyra of Secretary of Treasury Anderson, who motive industry, and further that 1 out miding costs of ever-increasing Govern has managed to convince the President of every 6 jobs in the country depends ment functions, there can be no tax and the leadership of Congress of the either directly or indirectly on the auto relief without deficit spending, inflation, necessity for this action. It is also no motive industry. However, my views and and impaired national credit. secret that he has managed to convince my position to this bill are premised not Repeal of excises promises a consider the President despite the fact that the only on the fact that the temporary Ko able stimulant toward a restored econ President's own advisers on economic af rean excise tax made on automobiles is omy. Regardless of anticipated revenue fairs, certainly in a better position to not being permitted to expire as it should, from extension of this tax measure, the judge the overall problem, than the Sec but also upon the fact that the action 1959 budget promises to fall short of retary of the Treasury, that the Vice being advanced by the bill, which is being proposed spending. Since it appears President, the Secretary of Labor and undertaken without public hearings in certain that the debt limit will have to others close to the administration, have the Committee on Ways and Means, be raised in any event, the loss of reve been urging the President for some tax slams the door on any chance for any nue resulting from repeal of excises at relief, in one form or another, as the best tax reduction this year, a truly lmportant this time could conceivably be balanced cure for the present recession. And cer decision. by revenue received through expendi tainly it is no secret that he has also A decision not to reduce taxes when tures of tax savings by those affected. managed to convince the House leader the country is experiencing a business I am one who believes tax relief is ship of the wisdom of this action despite recession of the magnitude currently timely, especially relief from excises. I the fact that many distinguished Con being experienced can only be based will, therefore, vote to recommit this bill gressional leaders believe that tax-reduc upon a finding that the recession is bot to the Ways and Means Committee. Our tions now are justified and necessary. toming out and that actual recovery and people are not only tax-weary, they are This same Secretary of Treasury, who renewed growth have begun. Diligent tax-resentful. It is time we in the Con seems to wield such great influence, has efforts on my behalf have not turned up gress gave them a break. If they will categorically stated to our committee in any such evidence, and I have not, nor demand less of their Government, the answer to my questions, that if this bill have my colleagues, had presented to us Congress will do just that. is adopted there will be absolutely no tax any such evidence by the administra .. Mr. MILLS. Mr. Chairman, I yield 15 reduction recommendation to Congress tion. As a matter of fact, the over· minutes to the gentleman from Michi at this session. And he stated further whelming body of economic and busi gan [Mr. MACHROWICZ]. that the administration has no further ness opinion as expressed by those Mr. MACHROWICZ. Mr. Chairman, I plan which it intends to submit to Con trained and skilled in the art of evaluat voted in the committee against favorably gress for the ending of this recession. ing the position of the economy is to the reporting this bill and intend to vote for So the choice is clear today, under the contrary. Virtually every economist of its recommittal to that committee for rule adopted, no amendment can be of note and every outstanding business such action as is to me quite obviously fered to the bill. The entire debate on group in the country are on record dictated by the needs of our times. I this vital and important subject will last favoring immediate tax reduction as an deeply regret that I must take this posi· a mere 2 hours, and the issue will be de antirecession device. tion against the decision of the majority termined finally and unequivocally. The Tax reduction should have been ad· of my committee and that of our distin- only hope that exists for deliberate con- vanced as long ago as the first of March, 10328 CONGRESSIONAL RECORD -HOUSE June 5 by which time tt' had become evid-ell't .to eoneern. Conservative estimates now .In .concl:usion, I would -like to refer you an that :stirong aeticm ·was neeessaTy w appraise the .size of these deficits as $349 to the dissenting views which I have filed reverse the :eccmomic decline. Th'e ad· billWn f - 1958 CONGRESSlONAL RECORD- HOUSE 10329 Mr. MACHROWICZ. I · yield to the be the bold-stroke that routed the reces portunity to consider separately, and on gentleman from New York. sion." We have heard a great deal about its own merits, repeal of the unjust, dis Mr. MULTER. I intend to support present and impending deficits, but it is criminatory tax on passenger automo the motion to recommit for all the rea my conviction, shared I know by a great biles and accessories. sons the gentleman has urged. In ad many Members of this body, that the The excise tax on autos and trucks dition to that, I will support it for the quickest way to strengthen the revenue was one of several taxes imposed during reason that the Small Business Com -base and return to balanced budgets the Korean war to discourage sales and mittee of the House for the last 4 years would be to enact rate reform legislation. production in some fields so that man has been urging, unanimously urging, We heard this afternoon the remarks power and materials thus saved could be tax relief for the small-business man. As made by our dear friend and colleague, diverted to war production. This tax a matter of fact, the platforms of both the gentleman from Kentucky [Mr. should have been permitted to expire 5 parties promised tax relief to the small CHELF]. He has just come, as he said, years ago. When the war ended it be business man, and under this extension back from the grassroots and what he came unnecessary, and today it is de .of the corporate tax, they will get no .said· was a very impressive speech, in pressing one of our giant industries and relief at all. Does not the gentleman my opinion, for enactment of the promoting unemployment and human agree? Sadlak-Herlong bill. misery. Mr. MACHROWICZ. The gentleman The support for this legislation dur 'The very argument for its original en is absolutely correct. ing the tax revision hearings conducted actment is now the argument for its re Mr. MACK of lllinois. Mr. Chairman, by the Ways and Means Committee was peal or reduction. will the gentleman yield? overwhelming. In addition to this sup There is no reason at this time to be Mr. MACHROWICZ. I yield to the port, there have been hundreds of fine discouraging, through taxation, the buy gentleman from Illinois. editorials throughout the country and ing of automobiles and trucks, parts, and Mr. MACK of Illinois. I wish to com thousands of letters from citizens in all accessories. We have the capacity to mend the gentleman on the very fine walks of life. The gentleman repre supply the materials and manpower for statement he has made. I think we all senting the Fifth District of Florida and auto production without in any way en recognize that we have two very sick I are extremely grateful for the expres dangering defense production. As a industries in this country, the automo sions of support that have come from matter of fact, the pool of trained labor bile industry and the railroad industry. Members of . this body on both sides of and production ·facilities in auto manu The railroads are presently requesting a the aisle and we hope that the chairman facturing are among the great resources subsidy of $700 million from the Con of- our committee will give this House an we want to keep available for immediate gress. We are presently working on a opportunity to vote on this measure be use in defense mobilization. bill to provide borrowing power of $1 bil fore we adjourn. I can think of no Extension of this tax is adding fuel to lion for the railroads. Now, is it not single action that would be more bene the fires of the present business reces ridiculous that we continue the 3 percent ficial to our economy, both in the short sion. The automobile industry is one of excise tax on freight and the passenger range, and for decades to come. the most vital segments of our economy. tax in view of those circumstances? If Mr. REED. Mr. Chairman, I yield 5 One out of every seven jobs in the Na we are not careful, the automobile in minutes to the gentleman from Indiana tion is dependent upon it.. The business dustry will be in here, too, asking for a [Mr. NIMTZ.J. that creates these jobs is in a depressed subsidy to take care of them. Mr. NIMTZ. Mr. Chairman, on sev state today. Mr. REED. Mr. Chairman, I yield 3 eral occasions, Members of the House, · There is no question that the Federal minutes to the gentleman from Connec particularly from Indiana and Michigan, Government needs revenue. But de ticut [Mr. S'ADLAK]. have taken the :floor to advocate repeal, pending on·a tax that is obviously in Mr. SADLAK. Mr. Chairman, I rise in or at least a reduction of the excise tax tensifying and expanding the business on passenger automobiles and trucks recession is dangerous. support of the bill before us today and and the excise tax on parts and acces wish to indicate that I do this consistent Sixteen months ago I introduced H. R. sories. On March 17 last, a number of 3854, providing for repeal of this unjust with my vote in the Ways and Means my colleagues joined me in discussing Committee. However, like many of my tax. Other Members have introduced and debating this subject on the :floor similar measures. Since that time the colleagues, I do not want this support to for an hour. At that time, I stated indicate any retreat on my part from my need for such action to stimulate auto that it was regrettable that last year the mobile sales and benefit the entire fervent belief that we must, at this ses committee included the extension of the sion of Congress, enact a thorough pro economy has become even more ap excise tax on passenger automobiles, parent. gram of income tax rate reform. parts, and accessories with the exten I should like to remind my colleagues I am deeply disappointed that Mem sion of the tax on distilled spirits and bers of the House have not had an op that I have the honor to be the sponsor tobacco. Because the bill was reported of H. R. 6453 which, commingled with portunity to vote on this proposal, and out under a closed rule, no amendments the only way I know of to express my H. R. 9119, sponsored by my friend and were permitted from the :floor. One distinguished colleague, Representative had to vote either for the bill, or against disappointment is to vote against the ex A. H. HERLONG, JR., of Florida, is known it, as it was reported out of the tension measure under consideration to the membership as the Sadlak-Her committee. today. long bill. Like myself, the gentleman It is unfortunate that the committee This excise tax on passenger cars and from Florida [Mr. HERLONG] is a mem has this year again reported out a simi accessories is not a matter which affects ber of the Ways and Means Committee. lar measure which places the extension only Indiana and Michigan. It affects This legislation was conceived before of these taxes on passenger automobiles, the entire country and every segment of the current recession arose to compound parts, and accessories with the extensiorr our economy. our economic problems. I believe that of those taxes on distilled spirits and Mr. Chairman, I urge my colleagues to conditions today make the urgency of tobacco in the same bill. Again, no consider this matter carefully as it af this legislation even more apparent than amendments are permitted from the fects your district, your constituents, was the situation when it was first intro :floor. . and the country at large. I urge you to duced almost 15 months ago. Both from Because it is my belief, and also, I support the motion to be made by the the standpoint of our domestic well am sure, the belief of a majority of my gentleman from Illinois [Mr. MASON] to being, as measured by plentiful jobs and constituents, that the tax on passenger recommit this bill to the committee. an advancing standard of living, and our automobiles, parts, and accessories Mr. MADDEN. Mr. Chairman, will international strength and prestige in should be repealed, or at least reduced, the gentleman yield? this turbulent period, it is vitally neces I cannot vote today for this bill which Mr. NIMTZ. I yield to my colleague sary for our Nation to get out of the extends these excise taxes. ·from Indiana. slump and resume economic growth on a Mr. Chairman, my vote today against Mr. MADDEN. Mr. Chairman, I com substantial scale. I believe, along with the extension of corporate and excise mend the gentleman from Indiana [Mr. the Saturday Evening Post, which said tax rates at present levels will be a vote NIMTZ] and also froni Michigan [Mr. editorially, on May 17, that enactment of of protest against the failure of the Ways MACHROWICZ] on their remarks about this legislation "might well turn out to and Means Committee to give us an op- removing the excise tax on automobiles. CONGRESSIONAL RECORD- HOUSE June 5 I also am in favor of r~moving the excise MT. 'McCORMACK. The progTam for "RS l)ossible in getting the money into ·tax on transportation. This tax is one :n:ext week is as f-ollows-: the hands 'Of the executive branch so of the main -contrtbutillg factors to the Monday, the conference report ,on S. that whatever good, little a.-s it may be, present plight of the railroad economy. llf2, the civil serviee retirement annuitants 'might be aeeom'Plished. I have received hundreds of letters bBl. 'Mr. MA.RTIN. 'I th{}ught that bill was from my district sin'Ce January 1 -asking Then general debate will be ha:d on the rnther well padded. I did :n:ot think it for the rer>eal of these two wa1·time bill, H. R. 125'91, the Trade Agreements was a litt'l.e bill. excise taxes. Extension Act of 19'58. General debate Mr. TABER. It is only $-640 million. Over 500,000 new 1958 automobiles are on that bill wiU continue on TUesday. Mr. MARTIN. Peanuts. in the retail dealers' showrooms today There is a primary in South Carolina The CHAI!aMAN. The time of the waiting for purchasers. The removal of on Tuesday and any roUcalls that may g~ntleman from 'Massa:chusetts has ex this tax will be a great im_petus toward come up on Monday or Tuesday will go pired. aiding auto sales. The repeal of trans over until Wednesday. Mr. REED. Mr. Chairman, I yield 5 portation tax will help the railroads and On Wednesday, the first order of busi minutes to the gentleman from Wis give employment ro some of the thou n-ess will be the further consideration of .consin [Mr. BYRNES]. sands who are unemployed in that indus the Trade Agreements Extension Act of Mr. BYRNES of Wisconsin. Mr. try. 195'8 under the 5-minute rule. Of course, Chairman, to those of us who have been The parliamentary situation on this as we know, there is the Simpson substi concerned for some time about the bur:.. bill is such that I must vote to recommit tute which is the only amendment in or den of present Federal taxes, the discus with the recommendation that it be re der on that bill. There wi11 be 5 minutes sion today has been an interesting and turned to the House providing for repeal on each side on that. Members will be I think an encouraging one. I think all of the autom.obile transportation and protected because there will only be gen members of the Ways and Means Com communications tax. eral debate on Monday and Tuesday on mittee, who have the distasteful respon Mr. NIMTZ. I than'k the gentleman. t'he exten.sion of the Trade Agreements sibility of trying to find the wherewitha1 Mr. REED. Mr. Chairman, I yield 2 Act and the Simpson substitute will come . to meet the bills that are incurred by minutes to the distinguished gentleman up in Committee of the Whole on this Government, find it refreshing ta from Indiana [Mr. BRAY]. Wednesday. hear some of the recognition given today Mr. BRAY. Mr. Chairman, on the After that bill, ther.e 1s H. R. 12541, by some Members of this Congress to the fact that taxes are unduly burdensome. _17th day of March I also spok~ on the the Department of Defense Reorganiza floor, along with the gentleman from tion Act of 1958. 'I would hope that the Members making Indiana [Mr. NIMTZ] and other M~mbers U,pon the completion of that bill there those speeches recognize the fact that of this body, requesting that Congress re is the public works appropriation bill the burden of taxes is directly related peal the excise tax on automobiles and ior 1959. · to the expenditures of the Federal Gov automobile accessories. I along with Might I suggest to my friend that there ernment. There is no .need to worry others introduced bills to accomplish is one further bill which is not on my about the burden of taxes unless we that. _program, but I am glad that it has come worry too about the expenditures which My purpose in .Slllpporting such a to my mind at this time. It is a supple we are making and which make those measure was that the purpose of an ex mental bill ootru.ng out of the Commit taxes necessary. 'In fact, it is rather a cise tax is twof'Old. .It is to raise money. tee on Appropriations in relation to the peculiar situation which I must point out .It is also, and. perhaps mo11e important, appropriation for the so-called Unem to the membership this afternoon that to reduce the manufacture and sale of ployment Compensation Act, which it was less than 2 hours ago that this a specific article~ in this case automo _passed both branches of the Congress House, by a majority vote, insisted on biles. Today we certainly are not in and which was signed by the President going b.eyond the extent to which the terested in trying to reduce business and the other day. Appropriations Committee desired to go ·reduce the manufacture and sale-of auto Mr. MARTIN. That should not take by way of expending further sums went mobiles. I deeply regret that this bill long. beyond what the President and the ad . to extend certain excise t~es comes up Mr. McCORMACK. I would not think ministration recommended as necessary under a closed rule so that Members so. I would bring that up as quickly as expenditures of the Government. A ma either have to vote for it or vote against possible. I am ;putting it down for next jority of us in.sisted-1: ditt not join the lt. An amendment will not be able to week and it will be in order for considera majority,; 'I happened to be in the mi be offered on the floor except by the tion ·some day next week. T.he gentle Ror.ity .on tha;t occasion, as I find myself Ways ,and Means Committee. For that man from Rhode Island [Mr. FoGARTY] quite often in the spending field-but .a reason, I am strongly against -extending advised me on this today and I see my majority insisted that we should spend all these excise taxes at this time and l :friend. the gentleman irom New York -at least somewhere between $100 million do intend to vote agai:mst the bill. If [Mr~ TABER] in the Chamber, and he has ~nd $800 million more than the Appro we are able on the :fioor he11e to defeat llad some discussion with the gentleman priations Committee found justified, and . this bill then, perhaps, the Committee from Rhode .Island about the bill com much more than the administration rec on Ways and Mean.s will go into a thor ing up next week. ommended in the appropriations for the ough study Df these matters, which it Mr.' TABER. Mr. Chairman, will the Department of Defense. has not done, and bri:n,g out legislation gentleman yield? · I would r.ecommend, Mr. Chairman that will eliminate or reduce the excise Mr. MARTIN. I yield. -that those who have become concerned_: tax on automobiles. If we defeat this Mr. TABER. That legislation will be and I hope they stay concerned-about exten.slon at this time, possibly when reported on Monday noon when the the level and the burden of taxes, that this legislation is ag.ain brought up it · House meets. It is a joint resolution they remember and continue that con may not be in a closed rule, but on a and a request will be made to take it up cern when matters involving increased ru1e that will allow Members of Congre.ss at any time that the leadership will expenditures are before this Congress. to offer amendments to the bill. As it i.s permit. There is not a member of the Ways :and now we can either take this extension of . Mr. McCORMACK. Can the gentle Means Committee who will appear be excise taxes as is or vote against .it. 1 man advise tb.e House, including ,the iore you and say that oar taxes today will vote against it. leadership, as to wb.ether it is intended are at a reasonable level. We an -ad PROGRAM FOR NEXT WEEK to be brought up by rmanimous -consent? mit that they .are burdensome .and oner Mr. 'TABER. I believe the gentleman ous, but we also recognize that the Mr. REED. Mr. Chairman. I yield 1 from Rhode Island [Mr. FOGARTY] would money has got to come ir.om some place. minute to the ll)inority leader~ the dis like .to do that. We just cannot ..spend it and not pay tinguished gentleman from Massachu Mr. McCORMACK. 'The leadership, the bills. setts [Mr. MARTIN]. nf co'Ull'se, will .cooperate .because if the Ev~n with these burdensome taxes we Mr. MARTIN. Mr. Chairman, I have bill is going to do any good at ail, we are not raising enough revenue to pay asked for this time in or-der to :inquire want to get "the money appropriated as .ou-r bills today. Let us recognize that of the majority leader as to the legisla JIUicldy .as possible. The leadership on .when there is talk .of tax reduction or tive program for the coming week. both sides wants to coope1~te as much refusal to continue .certain taxes that 1958 CONGRESSIONAL RECORD- HOUSE 10331 will expire. Let us recognize that in for small business the proposition of re deadline and unless you meet the dead February this year we voted to increase pealing this tax on transportation. It is line these specific taxes expire; you add the debt limit by $5 billion because we a tax that has· a special impact on small to the debt by $2% billion. recognized we would have to borrow in business, the small man who cannot af I trust we will not delay this matter excess of the $275 billion limit that had ford to buy his own fleet of trucks and but that we will vote to send this bill been set. avoid the tax, but must ship his product ·on its way to the Senate and the Presi- Present estimates are that in this by common carrier and pay the transpor dent. - fiscal year which ends June 30, this tation tax. I believe very strongly the tax Mrs. ROGERS of Massachusetts. Mr. month, we will have operated as a deficit should be repealed, but the repeal of that Chairman, under leave to revise and ex of $4 billion-during this current fiscal tax should not be considered as part of tend my remarks in the RECORD before year; and the estimate for next year is the bill now before us. the passage this afternoon of H. R. 12695 for a further deficit of $11 billion. Mr. ALLEN of Illinois. Mr. Chair by the gentleman from Arkansas [Mr. What does that mean? That means man, will the gentleman yield? MILLs], chairman of the Ways and without doubt, Mr. Chairman, that be Mr. BYRNES of Wisconsin. I yield Means Committee, I include in them fore this session of Congress adjourns, to the gentleman. some material on the recession by Mr. there is going to be another increase in Mr. ALLEN of Illinois. First of all I Carrol M. Shanks, the distinguished the statutory debt limit; and, unless it want to compliment the gentleman from president of the Prudential Insurance is a pretty big one we will face another Wisconsin for recognizing that the Con Company of America. increase when we return next January. gress of the United States has some fi Mr. Chairman, 2 weeks ago I addressed Mr. NICHOLSON. Mr. Chairman, will nancial responsibility. I am sure that a letter to the President of the United the gentleman yield? all of us are not unmindful of the fact States concerning a reduction in Federal Mr~ BYRNES of Wisconsin. I yield. that the executive branch of the Gov taxes. Having made a careful and accu Mr. NICHOLSON. For 10 years we ernment cannot spend one dime that rate study of Federal taxes, giving spe have been sending from $3 billion to $5 is not appropriated by the legislative cial attention to their relation not only billion a year to foreign countries. Had branch, by this Congress. Some people to Federal income but also to the na we saved that money-! think it runs up seem to feel that they have relieved tional economy, I believed my conclu to $60 billion-we never would have had themselves of responsibility by saying sions would be helpful to President to increase our debt limit. that it was this administration that Eisenhower regarding the subject of Mr. BYRNES of Wisconsin. \Ve have put us into the red, that. they are the general tax reduction and its immediate plenty of places to save, I might suggest ones that forced us to raise the national effect upon the national economy. My to the gentleman. debt. I repeat, therefore, that the ex entire purpose in writing to the Presi The CHAIRMAN. The time of the ecutive department cannot spend one dent was to be helpful. gentleman from Wisconsin has expired. cent that this Congress does not appro The contents of my letter to the Pres Mr. REED. Mr. Chairman, I yield the priate. If the Government becomes un ident expressing my conclusions and gentleman 6 additional minutes. stable financially, it is not on the recommending a reduction in income Mr. BYRNES of Wisconsin. Mr. Chair shoulders of the executive department taxes, excise taxes, and corporate taxes man, we have to be concerned .about every but on the shoulders of the Congress of were printed in the CONGRESSIONAL REC authorization and every appropriation the United States, the only branch ORD of May 27 on page 9622. This con bill to see that we do not spend any more which can appropriate one cent of clusion was based upon economic facts. money than is absolutely necessary. It is money. I made the recommendation to the Pres only when we approach expenditures on Mr. BYRNES of Wisconsin. I thank ident confidently and accurately believ that basis that we will be creating an en the gentleman. ing a reduction in these Federal taxes vironment in which we can consider le Mr. BAKER. Mr. Chairman, will the would have an immediate impact upon gitimate and reasonable tax reduction gentleman yield? the national economy, being a positive and the elimination of some of these ter Mr. BYRNES of Wisconsin. I yield to step on the part of the Federal Govern l·ific burdens we have put on our people. the gentleman f1·om Tennessee. ment to end the recession and bring Let me suggest to some of the Members Mr. BAKER. The gentleman from about a recovery. Of course, this would that they take the committee report and Wisconsin answered my question when relieve the unemployment situation by look at page 4 and find out what taxes he pointed out to those who would vote the creating of millions of jobs. they are going to vote not to continue if to recommit that it simply applies to al Economics, and particularly as they they vote to recommit the bill or vote cohol, distilled spirits, beer, wines, to relate to the national economy, in my against it. Look at the taxes that you bacco, passenger automobiles, parts and view should not be considered from the are goihg to say you are going to repeal, accessories and nothing else. viewpoint of political advantage. There and you are going to repeal all of them if Mr. BYRNES of Wisconsin. There is is no room for politics in an ailing econ you vote against the bill, because let us one final point I would like to make. omy in this Nation. When the economy remember that there is a deadline on Some people are losing sight of the fact is sick, the only thing to do is to take these taxes, an absolute deadline of June that this tax legislation cannot and is action that can quickly result in a cure. 30. We must pass this bill through this not being considered· today in the en People who are unemployed and who are body and the other body and have it on vironment that we normally consider tax wanting for certain necessities have no the President's desk and signed into law legislation or any other kind of legis time for a wait-and-see program. by June 30 or you will take off all of those lation. Let me emphasize the point that The conclusions I have reached re taxes and incur losses estimated at $2.4 we are considering this particular piece garding a reduction in income taxes. billion a year, which will be added to the of legislation faced with a deadline. A excise taxes, and corporate taxes appear estimated increase of the national debt. delaying motion, a motion to recommit to be in agreement with those of some The taxes that we are asking you to ex for the committee to consider other very distinguished persons and institu tend today are few, but look at the taxes studies, consider other areas, can do tions. Here in the Federal Government you are going to vote against extending. nothing else but delay the matter. This this general conclusion appears to be You are going to vote against extending bill must not only be passed by the House, the conviction of Vice President Nixon, by 5 percentage points the corporate in it has to be passed by the Senate, it has Mr. Raymond J. Saulnier, Chairman of come tax. You are going to reduce the to be sent to the President and that has the President's Council of Economic Ad tax on distilled spirits, the tax on beer, to be done by June 30. Let us just re visors, and the Secretary of Labor, the the tax on wine, the tax on tobacco, pas member that when it is proposed that Honorable James Mitchell. Organiza senger automobiles, parts and accessories something be done which will delay en tions have reached the same conclusions, for automobiles. That is all. actment of the bill. If this were a mat such as the Rockefeller Brothers Fund, We hear all this talk about the trans ter that involved no deadline and the the United States Chamber of Com portation tax-may I say to my friends, r desire was to send it back to the com merce, and the Committee for Economic think that is an evil tax and I am willing mittee for the committee to rework it, Development. The economic advisers to vote tomorrow to repeal completely the and it did not make any difference for some of our large industries have tax on the transportation of property. whether we passed it in June, July or reached the same conclusions. I refer Tomorrow I am going to present to the August, there would be no reason to to the Ford Motor Co., General Motors committee as part of the tax relief bill stress this point; but here you ha.ve a Corp., and the United States Steel Corp. -· 10332 CONGRESSIONAL RECORD.;..;... HOUSE June 5 Opposing a reduction in Federal taxes ture, and some of the things that we all With inventories being reduced at 8. $7 fs the Secretary of the Treasury, the can do to expedite it. b1Uion annual rate (as has been true of the RECESSION! THE PAST opening months of this year), $7 billion in Honorable Robert Anderson. The Sec production is actually being withheld from retary has counseled a wait-and-see First, let us see what has happened so far the economy-a $7 b1llion short circuit, so policy. I disagree with this policy and in the recession: to speak. If we should end the inventory do not believe that it can be substanti Gross national product (the value of all adjustment, and move to a moderate in ated or justified by economic facts. goods and services produced in the United ventory accumulation at a $2 blllion rate There are many who share my view. If States) fell from the peak rate of $440 b11- by the end of 1958, we would thereby add $9 this policy can be justified, then I be lion in the third quarter of 1957 to about billion ($7 billion plus $2 billion) to the $426 billion in the first quarter of 1958. The rate of production, even 1f there were no in lieve the economic facts upon which it is more obvious, or immediate reasons for this crease in the rate of consumption of goods. based should be accurately and precisely decline were the autumn cutback on Federal An increase of $9 billion is a very large presented to the Congress. Government spending and th3 beginning of increase in production and would lift em In the May issue of Think magazine, the decline in business expenditures on plant ployment and incomes well above current which is published by the International and equipment. levels. Business Machines Corp., Mr. Carrol M. The more basic, underlying reason for the IT'S UP TO US Shanks, the distinguished president of recession was, however, a change in the The one weak link in this chain of rea the Prudential Insurance Company of pattern of consumer spending which dates soning, however, is the possibility that the back to the beginning of 1956. Consumer final demand for goods-largely consumer America, has written a very clear analy purchases of nondurable goods and services sis of the current recession and its cause buying-might not hold up as well as it moved ahead strongly in 1956 and 1957; but has thus far. Consumer buying must not and cure. Under the subheading "What consumers spent no more on durables in the decline in the coming months, or the in Government Can Do," Mr. Shanks rec fall of 1957 than they were spending at the ventory turn-around cannot be accom ommends a reduction in income taxes beginning of 1956-and the manufacture, plished quickly, and the recession might and clearly states his reasons. I agree distribution, ana sale of durabJe goods repre drag on. Actually, people can well afford to with him and believe his conclusions sent a major segment of our economic pat buy now: Prices are not likely to go lower. are sound and are based upon economic tern. Federal, State, and local government ex facts. Following is this very excellent The first thing that happened was that penditures must also continue to expand analysis of Mr. Shanks'. I recommend manufacturers' durable goods inventories ac if we are to recover fast, but there seems to cumulated. Despite a decline in industrial be no doubt on this score. A cutback in it to the Congress, to the President, and production beginning as early as January Government orders at exactly the wrong to the Secretary of the Treasury. It is 1957, the ratio of manufacturers' inventories time contributed to the current recession. a valuable contribution to our economic to sales kept climbing month after month The upturn in Federal Gov~rnment spend thinking at this time: during the year. The inevitable inventory ing was long delayed, but now it is making adjustment began in October 1957; produc RECESSION-THE CAUSE AND CURE itself felt, and Federal purchases, it would tion was slashed well below current sales in appear, will rise about $3 billion over the (By Carrol M. Shanks) an attempt to use up inventories. remainder of the year. State and local Despite our present problems-and there A marked decline in business capital spending will also be up, by about $2 bil are many of them-we can afford to be opti spending as a result of curtailed industrial lion. This increase of $5 billion will be an mistic about our economic future, both for activities coincided with a sharp reduction important factor in maintaining and ex the short run and for the long run. in Federal Government spending. All this panding final demand in the coming Things are seldom as good as they seem, reduced manufacturers' sales, necessitating months. or as bad as they seem. It was our extended still further cuts in production in order to WHAT BUSINESS CAN DO prosperity-good as it seemed at the time make any headway in reducing inventories. that laid the groundwork for our present Business expenditures on plant and equip In the first quarter of this year it is esti ment have declined from the record levels situation. A great depression like the one mated that production has been cut $7 bil in the 1930's is unlikely to occur in the near of the recent past, and surveys indicate a lion below the rate at which goods are being further decline of about $3 billion during future-or ever again. But we must expect consumed. This cutback in output, along business activity occasionally to drop and un the remainder of the year. This decline in with the decline in business spending on business capital spending is distressing for employment to rise as the economy adjusts plant and equipment, has resulted in wide to changes in demand or to maldistribution e. number of reasons. First, and most ob spread layoffs in the manufacturing and vious, the decline, if it continues, can offset between the various stages of production. construction industries. The record of our economic system in pro entirely the rise in Federal Government viding a rapidly rising standard of living RECESSION: THE PRESENT spending, and will thus retard recovery. and an amazing diversity of goods and serv With unemployment high, and the aver Second, the decline is in most cases not jus ices, in bringing about high standards of age workweek reduced in many industries, tified in the long run. Many businesses, health and education, and in increasing one might guess that retail sales would faced with booming demand during the leisure time is convincing evidence of the have fared very badly. Yet the remarkable next few years, will regret their failure to - basic soundness and efficiency of our eco fact is that retail sales in the first quarter . have seized the opportunity to build plants nomic system. of this year were down less than 3 percent and secure equipment while supplies were Even so, -today's business setback has in from the fourth quarter of last year, and readily available in 1958. And they will spired some to predict the end of rapid were not down at all when compared to the regret it in dollars, as they will pay higher growth for our economy. We are told that first quarter of last year. Consumer spend prices in the future for what they could we have too many factories, too many dur ing on services is also being well maintained, have secured under more favorable condi able goods--even too many workers. Ac so that the recession is thus far being con tions today. Third, · our defense against ag cording to the prophets of gloom, the reces fined largely to the manufacturing and gression from without and our strength in sions of 1949 and 1954 turned out to be mild mining segment of the economy. providing a higher standard of living at adjustments because we st111 had a large The two most significant aspects of the home, rests pr1nc1pally on our stock ot backlog of demand held over from the 1930's present recession have been, therefore, (1) plants and equipment. We cannot afford to and the early forties, which isn't true now; the maintenance of final demand, which has cut corners on this vital asset. Productive so the current recession, they say, will be remained at near record levels, and (2) the capacity is our best defense. prolonged and may drag on for years. very rapid rate of inventory adjustment, Businessmen can make an important con I think these people are dead wrong. which means that manufacturers will soon tribution to recovery generally and to the The fact is that our plant and equipment have to stop taking orders or else start up future of their individual businesses by buy are not excessive by any standard except the their machine again. ing-by enlarging, rather than cutting back, plant and equipment expenditure programs. temporary measure of currently depressed RECESSION: THE POSSIBLE FUTURE demand. We have a shortage, not a surplus, WHAT THE CONSUMER CAN DO of able workers; anti this shortage will get Let's look ahead: Production in most basic industries ap AB important as Government purchases worse before it gets better. The expanding pears to have stabilized, and advance indi and business capital expenditures are as economic needs of the American people are forces for recovery, the really strategic ele far from satiation. And the provisions of an cators (such as new orders for paperboard, heavy construction contract awards, machine ment in the current business picture is the adequate defense on top of our private de consumer. The consumer, by his purchases, mands will, in the years ahead, test our pro tool orders, and applications for FHA com will determine whether the inventory ad ductive capacity to the utmost. mitments) are rising. justment can be completed speedily and It is a fairly safe bet that by the middle If retail sales continue to hold up, the rate whether the turn-around comes quickly. of 1959 the economy will be operating at of inventory liquidation in the second quar I believe that the consumer will come capacity and that our principal economic ter will slow down and the inventory adjust through in the present situation just as he worry will be the threat of further inflation. ment should be completed by the third has time and again throughout the postwar Let me tell you why I arp. confident of an quarter. By the fourth quarter, businessmen period. Consumer savings are high, a large economic upturn in the not-too-distant fu- may well be building inventories again. portion of consumer's installment indebted- 1.958 CONGRESSIONAL RECORD - ·HOUSE 10333- ness ts being pa.ld off this year, and the pub The CHAIRMAN. AD time has ex House adjourns -today it adjourn to meet lic has given evidence o! real stability and pired. Under the rule, the bill is con on Monday next. ·strong resistance to panicky action. The sidered as having been read for amend consumer knows the American economy is The SPEAKER. Is there objection to not on its last legs. He knows we have ment. No amendments are in order to the request of the gentleman from been through these adjustments before, and the bill except amendments offered by Massachusetts. the continued buoyancy of the economy in direction of the Committee on Ways There was no objection. recovering and surging ahead amazes even and Means. Are there any committee the experts. amendments? WHAT GOVERNMENT CAN DO Mr. MILLS. There are no committee CALENDAR WEDNESDAY Even though we should soon be out o! amendments. Mr. McCORMACK. Mr. Speaker, I this difficult period, there are, nevertheless, The CHAffiMAN. Under the rule the ask unanimous consent that the business sound things that I think the Government Committee rises. in order on Calendar Wednesday of next can and should do to help. One of these Accordingly the Committee rose; and week be dispensed with. things is to reduce income taxes. An across the Speaker having resumed the chair, The SPEAKER. Is there objection to the-board income-tax cut in the immediate Mr. FLYNT, Chairman of the Committee future would, I am convinced, provide a the request of the gentleman from sPark to move consumer buying ahead more of the Whole House on the State of the Massachusetts? strongly. It is because of its immediate ef Union, reported that that Committee There was no objection. fect--at the time it is needed-that an in having had under consideration the bill come-tax cut is highly preferable to proposals EXTENSIONS OF REMARKS The Visit of President Heuss tions and what has brought them about. for the German future. He said that he It is also an appropriate moment at believed his task to be that of influenc EXTENSION OF REMARKS which to review the great developments ing Germany toward a national political which have taken place within Germany life in which moderation and strong -in OF itself during the past decade. dividual liberties would serve to defend HON. KENNETH B. KEATING President Heuss has.had an important the country against a new dictatorship. OF NEW YORK part in this recent German history. Now in his 75th year, Mr. Heuss con tinues to seek this goal. IN THE HOUSE OF REPRESENTATIVES Theodor Heuss has played the vital role of helping to unify the people of West In the course of the last decade the Thursday, June 5, 1958 Germany during these truly difficult President has seen his divided nation Mr. KEATING. Mr. Speaker, the days. Theirs has been the herculean move from the despair and hopelessness United States was honored to welcome task of rebuilding their war-shattered of military defeat and utter social col last year that great statesman of the Free economy, finding a new position of re lapse to become a sovereign independent World and architect of postwar Ger spect and responsibility in a changed state, the leading industrial power in many's revival, Chancellor Konrad Ade Europe, and building a new society along Western Europe, a member of the NATO nauer. This week we have been pleased democratic lines. As leader of the Free alliance, and the seat of a democratic to welcome another leader of our Ger Democratic Party, Mr. Heuss had the government. Some have called this man friends, Mr. Theodor Heuss, the confidence of both Mr. Adenauer's Chris complex of changes a miracle. It is a President of the Federal Republic. tian Democrats and the Social Demo tribute to the energy, abilities, and per It is significant that this is the first crats under Mr. Ollenhauer. When the severance of the German people and time the head of the German ·state has federal constitution was being drafted their leadership. But it is also a reflec ever visited our country. This visit is a in the summer of 1949 it was Theodor tion of the major revolution in interna symbol of the close and friendly relations Reuss who became known as the father tional politics on the continent o! which have developed between Germany of the Bonn Constitution, though he Europe, and the new involvement of the and the United States in recent years. wittingly remarked he was, "not the fa United States and Europe in each Indeed, it is not too much to say that ther but the obstetrician." His abilities other's destiny. German-American relations have never as a political scientist, man of letters It is the basic policy of both Britain been better than they are now since the and respected humanitarian are widely and the United States to stop any one rise of the modern German state. These renowned. These, plus the mediatory role power from dominating the great indus close bonds of friendship between the two of the political party which he led, soon trial continent of Europe. The threat made him a natural choice for the presi today comes from the Soviet Union. nations are particularly fitting in view dency of the new Federal Republic. In Today, Germany is threatened just as of the many fine citizens of this country 1949 he was elected on the second ballot France, Britain, and the other countries of German descent, who have contrib for a 5-year term. But in 1954 when he of Western Europe. This is a revolution uted so greatly to the building of our was again chosen, it was with the unan in European politics that has resulted in Nation. imous support of all parties in the Bun a variety of movements toward unity in It seems :fitting on this occasion to con destag. In his :first acceptance speech, Western Europe and its peacetime am.;. sider these changes in our foreign rela- President Heuss stated his philosophy ance with the United States. Germany
HOUSE of REPRESENTATIVES [Roll No
