13480 COXGRESSION1\L RECORD-SENATE. AUGUST 31,

By 1\fl·. LIKTHICUl\I: Petition of James A. Boone, of Balti­ These telegrams, 1\fr. President, merely emphasize the critical more, :M

'tllem. No strategy of any 1dnd can . play any part in the decision of to the businesR of this country, nnrl I hope nml tru!';t that .this great issue without producing a national calamity. R. F. CLERC, some means may· be dE'vised wherE-by the strike will he averU'll. A.vting President tl1c Neto Orleans Board of Trade. Mr. VARDAMAN. Mr. Presitlellt, I hnve reeeivenate this morning. "-·ill be simply noted in the REconn and referred to the Com­ I agree with the Senator from Utah ·[Mr. SMo AmPrl­ _perishable goous is imperiled by the railway embargo. I ask ' can people and the Congress the horrors of the di~a:-:tE>r with which · the country is threatened to-day; and, of cour:;;e. the that the telegram be printed. in the ·REcoRD and referred t~ the · Committee on Interstate Commerce. · spirit of such conduct is 1·eprehem;ible. I think thnt the Con­ The V.ICE PRESIDENT. Without objection, it is .so ordered. ·gress should take action, coupled with that which the PrP~i­ dent has already done, looking to a postponement, if possible, The telegram is as follows : of the day of the strike. [Telegram.] 1 appreciate, as every other American citizen appreciRtes, the SACRAMENTO, CAL., A.ugt,St 30, .191B. fearful consequences of this strike. I rto not hesitate to say Hon. JAl\JJ"S D. PHELAN, U-n1ted States Senute, Washington, D. 0.: that my sympathies are entirely with the employees of the rail­ We '3ppt>a! to lou in behalf ·of the table-grape growers ot' this State, roads. I do not think they get a fair share of the produet of whose balanee o -crop ttunging on the vines is estimated at $5,000,000 their own 'toiJ. I want them to win and therefore I am e~pe­ at present market prices. The threatened strike ha.~ caused the pa(·k­ ing companie::. to 1 E>fn.,e the grapes not already pieked ·bet-Ruse of fear cially desirous that they will so net as not to forfeit the shipments will perish P.n route. Grapes are ripening e-very day and l sympathy which the American people have for them, and which should oe ·picked. We have no capae1ty for handling in I'Olil storagE> , is so necessary to their success in any effort .to get ju:;;tice. 1 this enormous crop, and our only relief lies by way of averting the strikP or action by Con~E.'SS that will cause GovPTnmE>nt to handle : believe if a joint resolution should be passed by the Congress . tran~portatlon. Do t'VPrythln~ you p-0s~ibly can to C'trt·umvPnt the asking that the day for the strike be postpone<] that they will impending finnncial disaster to our table-grape growers. Commg ' hearken to that a•lvice. I know these patient toilers do not as it does on top of threatened Federal tax on wine-grape growers, California's viticultural industry is indeed in sorry pllght. can you want to do anything that will bring di:':;a~ter upon the country -help US? I which would surely follow ·a strike; anu wt all t·ealize that. if STATll BOARD OF VITICULTURAL COMMISSIOKERS, the matter goes on and the strike is called, the loss of prop­ E. M. SHEEHAN, Secretary. erty ·and the suffering of the innocent and helples.~ will be :Mr. OLIVER. I have r-eceived a telegram from the Chicago tremendous. It will not do to permit the strike to be called Association o{ Commerce, of Illinois. As the telegram is short, until Congress and the Executive shall have exhau~ted every I ask that it be -read and referred to the ·Committee on Inter-: legitimate means possible to avert it. I think if the Oon~:,rress state Commerce. would take action this morning looking to the· adoption of a The VICE PRESIDENT­ Without objection, the telegram ; joint resolution, not " demanuing," as the telegram just reatl by will be read. the Clerk says, but requesting that the day for the strike be The Secretary read the telegram, as follows: postponed until this Congress, which is seriously consi•lering

CHtcAG03 ILL.1 August 30, 1916. , the question of settling amicably the difference between the Hon. GEoaom T. OLIVER, railroads and their employees, can act in the matter. thPy will United States Senate, Washington, D. 0.: hearken to that advice. Any other course or the par·t of the The Lhicago Association of Commerce urges upon the President and upon Congress that it is incoi:sistent with the ideals of our GovPrn- · employees of the railroads would be very disappointing to tlwir ment anti ~ubversive of its principles that legislation should be had in ' friends in and ont of Congress. The exigencies of the pt·esPnt the pPndlng railroad cri~is without time and opportunity for due con- · time, the unusual conditions with which the American pPople sideration. The quesUond are complex and Intricate, and, 1 while thP Congress baR -the final reRponsibUtty, 1t has not ' hith~>rto bad . are confronted, and the problems that Congress is cnlle•l U[lon eithP.r the time or opJ.oortunity to <·onsiuer them. Wheu · the ·legislation to solve, demand the purest patriotism and the highegt cmler i)Ccurs it should t.. ~ well conRidPred and fair to all Interests. ft is im- ! pos.<;iblf' anrl inconststf'nt with the dignity of Congres!'l and of the of statesmanship to treat the situation successfully. SelfiRbness American -pPople that tbt!'l should be aeeompUshed und~r the shadow of and a desire to achieve a mean personal advantage are wholly · the impending strike. We therefort' inRist that -thE' President arul the ' out of place ·at this critical moment. Co.ngreRB, jointly or acting sE>paratel~, as may be determined, demand ·that the daft: for thP penrllng strike bE> postponed for such reasonabiP l\Ir. REED. l\Ir. Presirlent. I desire to can the attention of time as may permit Congress to act freely and intelligently and· ·call · the Senate to some telegrams I have received from my home •upon the patriotism of the trainmen to accede to such demand. ; city, three or four of which I want to read in full, some I shall ThE' CHICAGO ASSOCIATION OF COMMERCE, only quote from briefty. JOHN W. O'LEARY, President. Here is one from the Townley ·Metal & Hardware Co.: 1\fr. SMOOT. Mr. President, I have received telegt~ms simi- · This proposed railroad strike is a crisis in our Nation. I beliPve this lar to the one the Senator from. Colorado [l\fr. THoMAs] has 'GovernmPnt should be big enough to forcE' arbitration. It look~ like ju..o;;t read, from all of the fruit shippers of my State. 1 have ~!~is fair to everybody. A strike would inflict great injury on every- not presented thPm to the Senate, because I took it "for granted that ·all Senators representing fruit districts had re­ I read a telegram from the Evans Smith Drug Co. : ceived similar telegrams In reLation to the railroads refusing .We believe legi;;latlon shoulo be immediately enacted prohibiting this to accept shipments of fruit at this time. So far as my own strike, thereby prevwtlng great loss and distress to thE> eountrv at State is concerned, I will say that mo:;;t of the fruits that ar"' large. We urge you to use your influence tn stopping this calamity. shippefl out of the 'State- of Utah go to points that It wouhl A similar telegram from the Faxon & Gallagher Drug Co. con­ take 10 or 12 days to reach, mo!':t of it going to Chicago and tains this statement: ·eastern points. I think It is very much better that the fruit We bPlleve leglslation should be promptly enacted prohibiting strikes growers .should understand that there is danger of a strike and lockouts-- · before the fruit could reach the point of shipment, than for And so forth, giving reasons. the railroads to receive the fruit, an11 then have it tied up· ' An excerpt from a telegram from the Adams Transfer & ·somewhere between the shipping point and the point of destina­ Storage Co. is as follows : tion. Liberal leftlslatlon should be promptly enactNl prohibiting strikes I, l\Ir. President, .;;o far ns the refusal of the rru1I·oads to and lockouts, thereby preventing great loss and distress. take fruit at Grand .Junction, Colo., or points in Utah is con­ One from the KanEjas City Fruit & Produce Dealers• Club cerned, would not at this time--there being only a few days contains this sentence : before the strike is to take place--find 'fault with the rail- Surely CongrE>ss will rise to the occasion and protect the entire coun­ . roads under the conditions, and if I were ·a shipper of fruit try from this injustice. I woulr to have the I;allroads -say that th~ There are other expre~ions in the telegrams, but they are all would not receive it because it could not reach its destination in a vein similar to the telegrams I have read in full. before the time set for the ·strike, rather than to accept it Here is a telegram of a little different tenor, from the Richru·ds and have it fail to reach its destination. · & Conover Hardware Co.: I recognize, Mr. President, the burdens that will be placed · .. Tn the mterest of all the people, hope you will use your best pfforts ,toward tl.tP quick enactment of some legislative men.surP which will avert ·1Jpon the fruit ·growers of every Stat-e in this · Union if the threatened railroad strike. Am sure all good Americans will ~tand as a threatened strike takes place. We all know-what it will mean. unit in backing up any effort made by Congress to prevent strike. 13482 CONGRESSIONAL ltECORD-SEN.A.TE. AUGUST :31-,

Hf're iR one from the Moore Transfer Co. : When the men put that proposition up to the managers the We believe J?Ublic InterE-sts more vital than those of railroad employf'es managers simply flec1ined it. They offe1·e<1 to arbitrate. pro­ and that legtslatlon should be enacted Immediately to prevent the vided not only that question was arbitrated but n great num­ tht'E>atened strike and eons~:>quE>nt loss to all mercantile and industrial bei' of other questions were at the sHme time arbitrated--ques­ lines of bt~siness as well as individual sulrerlng and inconvenience. tions that bad been for a long time settled between the men and Here is a telegram of speciai interest from C. A. Phelan, of the companies. 'l'he men repliecl that they would arbitrate Harrison, Ark. : the~e other questions, hut that they wanted the f'ight-hour clay Being intere. tE>d in railroad property of Joplin Union Depot Co. and conceded. The managements of the roa•ls respoutled thnt they Mls.'louri & Northern Arkansas Co., I want to ask that you use your could not grant the eight-hour day, because it would so in­ influence toward granting mlli'oacls an increase in passenger and freight ratE's In order to carry additional burden which may bE> placed on rail­ crease their expenses that the roads could not afford to make roads in P•:>eting demands of train and engine men for higher wages and the concession. shorter days. In that state of affairs the President of the Unitetl Stntes One ft·om the Kansas City Transfer & Storage Co. reads as undertook to exercise his influence to bring about an adjust-· follows: ment. The President. who has always taken an impartial view We urge that you bring all possible pressure upon Congress to show of these great questions, after hearing both sitles ~aid that it its band and prev~>nt the railroa1 men going out while peace negotia- seemed to him that the eight-hour day was an inevitable thing, tions can b~ at work. · that it was bound to come, and urged the manngewents to con­ The Smith-hlcCord-Townsend Dry Goods Co. wires as follows: cede the E:>ight-hour day, anct then urged that all the othe1· ques­ Union Pacific road refused to-liay to accept shipments of- nonper­ tions should be arbitrated, and offeretl his goocl uffiees to promote iRhabl!' merchandise • • • for points beyond Kansas. Other roads likely to follow, and by Friday a!J lines may refuse fr~ight. 8eems the creation of an arbitmtion board that would give clue and to U:i an outrage on the American people that the roads are obligePtf'tl tlw Presi­ encouragement? dent's proposition, ansitlent bad thf' l\1i'5souri Pacific Iron Mountain system : said to them in substanc·e und effect that if tlwre wa:;; any Respectfully urge upon you to work and vote for the inclusion of all neceRsity for an increase of rates in order to meet thf' additional railway employees In the proposed legislation to establish the eight­ hour day for the transportation employees. expense, as soon as that fad wns ascertained his recommenda­ Yours, respectfully, tion to Congress would be mude fo1· that increase. Let this SEDALIA LoCAL FEDERATIO!f, Congress uptlerstand and let the country understand thnt the W. S. SIMS, Secretary. President. occupying his great position of intluence, gave that Mr. President, in connection with these telegrams, I want to assurance to these railroad presid~nts. offer one or two observations, and I shall be exceedingly l..et the country understand, as· Congress now does wf'll un­ brief. derstand, that if this increase of expense should be macte un­ A number of the gentlemen who send t11ese telegrams seem der these conditions, the Interstate Commf'ree Cnmmif\~ion ·to think that Congress has the power to pass a law forbidding would be bound to take that inereasecl expense into eonsitl~J·a­ the 1·ailway trainmen to quit work. There is little to be snid tion in passing upo~ every freight rnte filed with it. and that, in addition to what the Senator from Iowa [Mr. Cm.nnNs] as far as the laws and cnstnms of the country can gh~e gunr­ sahl on that question yesterday. Of course, it is utterly impos­ anty, the railroad presidents have that gunrnnty alr·eatly. sible to pass a law that will meet this emergenl'!y if we are Every one of tbf'm absolutely knows, as <'ertainly as he can to undertake to meet it by simply enacting a statute which shall know anything th.at lies within the womb of the fuh1re, that command the men to continue fn their employments. Neither they will he granted an increase of rates if they can show t11at can such a result be accomplished by indirection. \Ve can not their income and expenses, when laid side by Ritle, warrant meet this issue in the way the authot·s of these telegrams SU<'h an lncreasf'. With thes~ facts fnirly heforP them the evidently think it can be met, namely, by passing a law com­ railroad presidents took the action which they knew would mantling these mf'n to stay at their posts and to perform their bring on this strike. usual duties on the railroads. But I want to call special at­ tention to this clnnse in a telegram which I hnvf' already reau: So far as I am concerned, I believe that it is a mistaken Heems to us an outrage on the American people that the roads a.re economic policy to work men over eight hours when thev are obliged to take this action. engaged in the dangerous and luizarduus busine. s of rniirmid­ tng. I believe that the interests of the traveling puhlic · de­ Thnt is, to refuse to receive frei~ht. 1\lr. President, is that true? Is that a correct statement of the mand that men shall not be put under the intense ·stritin that facts? I think the country ought to know who are responsible men operating trains necessarily endure mm·p than eight hours. for the present condition. ·what are the facts? Investigation bas shown that the great majority of r11ilwny ac-· The trainmen long ago asked an eight-hour day. They fur­ cirlents in this country have occwTed because of some lnpse of ther askemen­ only the men suffer the inconvenience of working overtime, dous disadvantage of Joss which will re ult from a t~·in~ up but that the great shipping public suffer, because, as these men of all its transportntion lines, the gentlemen who stand ~11on ors put it, the public ought to be entitle(} to have ~r·eight hauled for the conduct that produced tbe strike will in the entl haYe at least as fast as twelve and a half miles an hour. They cite. cause to seriously regret their action. There are a half tlm.:en in proof of the fact that it is entirely practicable to move men in . who can prevent this :;;t,·il;:e, awl they freight at tllat rate of speed, the example of two or three can do it without taking any serious chnnce of ever lo.'i!H! a railroads that have voluntarily made arrangements with their ·dollar to their properties. The only thing ~1ece~sury for tht:>:u men based upon the moving of a train at least as fast as twelve . to grant is the· eight-hour t.lay-aU other questions to be arbi- and a half miles an hour. trated and settled. 1916. .CONGRESSION.A.L RECORD-SENATE. '13483

Mr. NELSON. i\Ir. President, will the Senator yield to me that transportation to be interfered with, the courts can take ·for a minute? . possession of. the railroad and run it. Railroad companies h~ve 1\Ir. REED. I yield. . . had no difficulty in getting _receivers appointed when they have l\fr. NELSON. Is there not much more involved in it than had little controversies among their stockholders. They have the mere question of eight hours? Does it not_ involve practi­ had no difficulty in getting receivers appointed when they had cally an increase of pay? Does it. not amount in this instance made a contract to pay somebody interest on a certain n, but I think ferently, that they be insured the eight-hour day by a penalty along with that resolution· of appeal to the men Congre~s can affixed for working the men over eight hours, namely, by pay .well turn a countenance that is not altogether amicahle and :for time and a half in lieu of straight pay for time. - smiling toward the men representing the other side of this Mr. VAHDA~IAl~. ~lr. President, I suggest to the Senator controversy, who can by complyipg with the just requests of the that my under~tanding is that the. railway employees · ha.ve .President of the United States end the possibility of this strike agi·eed to' yh~ld the time and a half pay for hours of wm·k in within the next hour. ex~ess of eight hours, if they can . get the eight-houl' day con­ 1\11·. V ARDAl\IAN. l\Ir. President. everything that has trans­ cession. The extra hours worked will be at the regular day pil·ed since. this question .came before the Senate but adus proof wages. Ami 1 think it a liberal concession, becau . ~e I huve to the correctness of the position that I announced a few mo­ been told by ~om~? of the members of tlle brotllerhood that they ments ago, that we need time. I am personally, nnd fn the really desired thnt the hours of labor per day be i'estricted to performance of my function as a part of this great governmental eight hours. I think eight hours is long enough for some of body, as muctl oppo.o;;e<.1 to doing an injustice to the railroad ti.e railroad men to work-the engineers, for instance, who suffer companies as I am to the men who labor to make the railroad great nervous strain while on duty. companies or their stock worth anything. I desire to be ai.Jso- ·l\Ir. REED. The Senator may be correct in that. That is not lutely just to both parties to this controversy. · . the question I am discussing. I am discussing the question of Hasty legislation at this time on this new question may be responsibility. · more hurtful than the damages which will re:.;ult from tying -Here are 450,000 employees on one ~and ; on the other hand, up the railroads. dogging the channels of c·Ol!.Jlllt>rce, antl we there are a few financiers. The financiers can avert the strike <·an not afford to uo it. We can not afford to legislate in the if they want to. Let nobody make the mh;take of thinking heat of passi~m. It would be eminently unwise tu yielu to our that it is any other influence or power than the financial power resentment, if we have any, at the stubborn and selfish conlluct that is controlling the railway presidents. of the railroad presidents who, in the event a str·ike shall be The president of one of the great railroad systems of this culled, have not anything but dollars and cents to luse. They country, who, I think, conti·ols nearly 13.000 miles of railroad, are not going to suffer for a morsel of bread. ThPy are not was a practicing lawyer of rather limited experience in my going to be denied any of the luxuries of life. Others are to city up to a few months ago. He was absolutely without any suffer-the helpless women and children ·and thost:> dPpen railroads, to ago, where a prominent manager of a large railroad system made postpone the day of the strike, I am sure they woulct do it. I the statement that in these days railroad presidents amount to think they can very well trust to Congress to do them absolute nothing more than the representativ-es and mouthpieces of New justice. I believe a majority of the American people llre iu sym­ York financial interests. pathy with the laboring people of this country, nnat earnestne:-:s. that we can inve~ted their money in the stocks and bonds of railroarts. I not afford at this time to deal hastily ami without due consid­ wa.nt them treated fairly, but I warn those gentlemen that the eration with this great problem. United States wil1 hardly look with favor upon a line of policy 1\fr. CLARKE of Arkansas. Mr. President, this morning I that permits all thP. transportation of tlle counh·y to be tied up. received the following telegram: I have aid more than I intended to say. The Senator from Lrr'l'LE ROCK, ARK .• August SO, 1916. Minne:;ota [Mr. NELSON] asked me a que:;tion as to whether JAMES P. CLARKE. we could compel the payment of certain wages, for that is really Member of Senate, WaJ~ltitt[1ton, D. 0.: the meaning of the Senator's question. Although recent de­ Thls is to advise you that the railroad shopmen are ne~otiatlng at present seeking the eight-hom· da.v. and we would bl" piPased to see cisions of the Supreme Court hn ve extended the power of Con­ the shopmen be included in any eight-hour law Congress passes affect­ gress to regulate interstate-commerce carriers far beyond the ing railroad men. limit that I thought would be set, I very much doubt the power E. L. KJ~G, of Congress to regulate . the wages of the men ; but I will tell President Federation Iron Mountain Shops. you a power I do not doubt. Congre. s has the inherent power, Just one word in conne<'tiun with this tt:>le~raru. It •·elutes to and the power under the Constitution, to keep the grPat lines the momentous controversy which is now pending before the of interstate commerce open. If this matter is pre~seU. to the country, which has excited so much int~?rest and so llluch con­ extremity, it will be discovered by the owners of these roads cern. Its importance and far-r~?uching charactPr is recognized that Congress can keep them open; that when a management by all and its complex character is rPcognized hy mHny. ~~n ·not keep its road running, legal authorities can keep it The power of Congress to establish no eight-hour day for running. . railroad operatives is a matter of very grave doubt. It hns - h~n I said yesterday, and I say now, there ought to be a plain left so by s. statute upon the books provffling that whenever it shall b~ 1\lnny States have attempted to establish nn eight-hour law. made to appear that the United States has contracts with a '~hey have been almost invariahly dedar~l im·alitl, exeept in railroad company to curry tlle mails aDr, Ky.), do t>arnestly besperh you to use your good office to promote a.n dulged. to Congress. There is a so-called hours-of-lahor statute eight-hour national .abor law for all classes of railroad work. making railroads liable for damages that occur to employees who As the country Is VPry much agitated ovPr this matter:, we hope von will are required to work more than 16 hours a day. It' challenged, give this matter due co~slderation You will notice that we D.l'e working from 10 to 12 hours p~>r day · · • · • it will be snppurted upon the propnsttion that that is so obviously · Hoplng that this wll1 meet with your approval, we remalri,1 a matter that en1langers the publtc safety that it will be sus­ Very respectfully, yours, tained; but there is a zone of uncertainty. there is a line that J'. l\1. WALDEN has never yet been laid down to be considered, before we shall (And many others), , be Ju;.<;tified in saying that Congress has that very wholesome PADUCAH, KY., August 31, 1916. power. Senator OLLIE JAMEs, I make that ob~ervrition in connection with the suggestions Washington, D. 0. · of my conRtituents and friends at Little Rock, Ark., who have We indorse railroad men's request for eight-hour work dny . . done me the honor to send me .this telegram. ROY HURT, President Central Labar Union, Paducah, Ky. LEAVE OF ABSENGE. 1\lr. RANSDE~L. I ask that my colleague [Mr. BnoussABn] CoVIl'iGTON, KY., August 31, 1916. Hon, OLLIE M. JAMEs, may be excused indefinitely on account of illneRs. TVashinqton, D. 0.: The VICE PRESIDENT. The Senator's coll~ague is excuRed. 'I'he Trades and Labor Assembly of Kenton and Campbell Counties, · Mr. CHILTON. .1\tr. President, I have ·word this morning Ky., insist upon the eight-hom· work day at J)l'esent compensation for fTom my colleague [Mr. GoFF) that he is ill at his home, and the railroad employees, and protest agu.inst any law imposing Involun­ tary servitude. therefore. can not nttenrt upon the sessions ot the Senate. I W. R. MCLINDON, ask unan~mous con..~ent that, pending his illneSs. he be excusert Secreta.t·y T1·ades and Labor assembly. from .aTtendance upon the Senate and from the operation of the order· which the Senate has heretofore entered. LOUISVILLE, KY., .titl.gflSt 31, 1916. Tl1e PRESIDI:'\G OFFICER (Mr. HusHEs in the chair). Hon. OLLIE JA!I.fES, U11ited States Senate, Washin.gton, D. C.: Without objection, it will be so ordered. After a careful perusal of the contemplated legislative program in­ Jd:F..SSAGE FROM THE HOUSE. tended to meet ·the present contingencies surrounding the possibilities of a Nation-wide strike, we empnaticall~ rwotest a~nst the enal'tmt"nt A messa~eftom the House of Representatives, by D. K. Hemp­ of any law which fosters compulsory arbitration or any other method stead,. it~ enrolling clerk. announce<] that ·the Bouse agrees to whicu would ton:e il. condition of involuntary servitude upon the work­ the report of the chmmittee of conference on the disagreeing m:s of this Land. Respectfully, PHIL OssMANN. votes of tlle two Houses on the amendments of the Senate to Secretary United Trades and Labor Assenlbly~ the bill (H. R. 15774) making appropriations to provide, for the expenses of the governnwnt of the District of Columbia for . LoUISVILLE, K_Y,, Augt,st Sls JE1G. the fiscal year ending .Juue 30, 1917, and for other purposes. Hon. OLLJ'E J AlfEs, The m~s ~e also announced that the HouRE" recedes from its United States Senate, Washington, D. C.: oisa.greement to the amendments of the Senate Nos. 1, 354, The legislative committee of the Kentucky State Federation of Labor unqualifiedly subsctibes to the· demands of the Brotherhoods or · tbe 355, 356, and 359 to the bill (H. R. 15774) making appropriations RailroaC: Tral ·1men and empnatically pt·otest:> against tbe enactment to provide for the expenses of the government of the District of any lnw .~bleb ~ntnils arbitr a.i:JOn by comJJU.sion, with a view to 30. 1917. impose npon the workers of this country a 'condition which smacks ot of Columbia for the fiscal year ending June and for lnvuluntacy servitude. · · other purpo~~. antl agrees to the same; recedes from its rtis­ JOHN SCHNEIDEit, C11airman. anooreement to the amendment of the Senat~ No. 361 ami agrees to t11e same with am{:ncbnents, in which it requeRtert the roneur­ LoUISVILLE,' KY., August 31, 1916. rence of tbe Senate•• nd further insists upon its disngrt>ement to Hon. OLLIE M. JAMES, · the amendments of the Senate Nos. 58 and ~08 to the bill. United States /Senate, Washington, D. C.: Realizing the enormous and apparently unn~essary loss to wWch PE'J'ITIONS AND MEMORIALS. the proposed railrc.ad strike will subject the Nation, we t•espe.ctfu.lly 1\fr. OLIVER presented petitions of the Manufacturers' Club, urge that you use yonr influence In !avor of the passage of immediate legislation to prevent strike or defer same until just settlement can be of , ani! of the Bourse. of Philadelphia, Pa.. pray­ made through arbitration. ing that the present railroad controversy be submitted to ar­ BUll.LEY TOBACCO Co. bitration, which were referred to the Committee on Interstate .BILLS INTRODUCED. Commerce. Bills were introduced, read the first time, and. by unanimous Mr. CHAMBERLAIN presented a memorial of sundry citizens consent. the second time, and referred as follows: of Josephine County. Oreg., remom:;trating again~t the enact­ By l!t1r. SMITH of Arizona : ment of legislation for the compulsory observance of Sunday A bill ( S. 6975) authorizing Anton Hiersche to select other in the District of Columbia, which was referred to the Com­ iand in lieu of land now owned by him, required for reclamation mittee on the District of Columbia. purposes and fm• a bird reservation ; to the Committee on Irri- lie al o presented memorials .of sundry citizens of Oregon, gation arul Reclamation of Ariu Lnnds. - · remonstrating against the stamp tax on insurance companies, By l\1r. SMITH of 1\la.ryland : which were ordered to lie on the table. A"bfil (S. 6976) granting a pension to Elizabeth Gnte::~ Perry l\1r. PHELAN presented memorials of ~undry citizens of Cali­ fornia, remonstrating against increasing the tax on the net • (with accompanying papers) ; to the Committee on Pensions. income of llfe insurance companies; which were ordered to lie AMENDMENTS TO ~~ICIENCY APPROPRIATION BILJ.• on the table. . Mr. WILLIAMS submitted an amendment authorizing the · He also presented a memorial of the Board of SuperviRors of Commissioner General of Immigration to increa..~e tile salary San Francisco, Cal., remon..<¢rating against the enactment of an of the Commissioner .of Immigration at New Orleans, La.. and inheritance-tax 'law, which was orderP-<1 to lie on the table. to pay the same out of the lump sum appropriate() for that pur­ .Mr. JAl\lES. I pre.. ent a communication :;;igne

Mr. SHAFROTH submitted an amendment proposing to ap­ The VICE PRESIDENT. The question is on the motion of propriate $150,000 for the erection of a public building for the the Senator from Maryland. -· • United States post office in the city of Durango, Colo., etc., The motion was agreed to. intended to be proposed by him to the general deficiency ap­ Mr. SMITH of Maryland. I ftuther move that t11e Senate propriation bill (H. R. 17645), which was referred to the Com- agree to the amendments of the House to the amendmept of the mittee on .Appropriations and ordered to be ~rinted. · · Senate ~umbered 361. The VICE PRESIDENT. The question is on the motion of THE REVE~UE. the Senator from Maryland. ~h. GALLINGER submitted an amendment intended to be The motion was agreed to. proposed by him to the bill (H. R. 16763) to increase the The VICE PRESIDENT. The bill Ls passed. 1·evenue and for other purposes, which was ordered to lie on THE REVENUE. the table and be printed. Mr. PHELAN submitted an amendment intended to be pro­ The Senate, as in Committee of the Whole, resumet.l the con­ posed by him to the bill (H. R. 16763) to increase the revenue, sideration of the bill (H. R. 16763) to increase the revenue, and and ·for other purposes, which··was ordered to lie on the table for other purposes. Mr. SIMMONS. 1\Ir. President, on yesterday, just before we and be printed. adjourned, the Senator from Kentucky [Mr. JAMES], stating WITHDRAWAL OF PAPERS-JAMES D. HARRIS. that he had to leave the city, as we all know he is obliged to do, On motion of Mr. OLIVER it was requested that the Senate should consider out of order an Ordered, That the papers accompanying the bill (S. 5809) to increase· amendment which he offered to the revenue bill. I ask that the pension of James D. Harris, Sixty-fourth Congress, be withdrawn that amendment be now taken up, so that the Senator may fill from the tiles of the Senate, no adverse report having been made his engagement. - thereon. The VICE PRESIDEN'l'. Is there objection? The Chail' DIPLOMATIC CORRESPO~DE~CE WITH BELLIGERE!\T GOVERNMENTS. hears none, and tl1e amendment -referred to will be state(l. Mr. STONE. I ask unanimous consent to submit a resolution The SECRETARY. On page 144, after section 102a, it is pro- '(S. Res. 261) to print certain documents. I merely ask for its posed to insert the following: · reference to the Committee on Printing, or, possibly, to the SEc. 103. That whenevet· during the existence of a war in which the United States is not engaged the President shall be satisfied thttt Joint Committee on Printing. there ls reasonable ground to behc:>ve that under the laws, regulations, Mr. SMOOT. No; to the Committee on Printing. or practices of any country, colony, or dc:>pendency contrary to the law Mr. STONE. The Senator from Florida [Mr. Fr.ETCHER] and and practice of nations, the importation Into their own or any other country, dependency, or colony of any article the product of the soli the Senator from Utah [Mr. SMOOT] kpow more about the de­ or industry of the United States and not injurious to health or morals tails. I will read the resolution-it is very brief-and then I is prevented or restricted the President is authorized and empowered, can be better advised as to where it should .be referred: withln his discretion, to prohibit or restrict duling the per1od such !!roh1bition or restriction is in force, the importation into the United Resol1'ed, That 2,000 copies of volumes No. 1, No. 2, and No. 3 of s-tates of similar ot· other articles, products of such country, depend­ Diplomatic Correspondence with Belligerent GovernmPnts Relating to ency, or colony ns in his opinion the pubUc interest may require; and 'Neutral Rights, Duties, a.nd Commerce, Issued by the State Department, in such ca.se he shall make proclamation stating the article or articles be printed, a,nd that 1,000 copies thereof be delivered to tae State which are prohibited from importation into the United States; and Department for distribution, and that the remainder be so distributed any person or persons who shall Import, or attempt or conspire to 1m­ between the Senate and House of Representatives as to divide them as port, or be concerned in importing, such article or articles- Into the nearly as may be practicable equally between individual Senators and United States contrary to the prohibition in such proclamation, ~;hall be Members of the House. llable to a fine of not less than $2,000 nor more than $50.000, or to imprisonment not to exceed two years, or both, in the discretion of the Just a word, if I may impose upon the attention of the Senate. court. '.fhe President may change, modify, revoke, or renew such I bold in my hand volumes 1, 2, and 3. The. department ad­ proclamation . in his discretion. · vises me that to print 2,000 copies of No. 1 originally woult.l cost 1\fr. UNDERWOOD. ~lr. President", I should like to reserve $724; of No. 2, $1,466; and of No. 3, $2,663. That is approxi­ the right to object for the moment in order to ask ho\v the mately a totaLof $5,000. ';rhey have been printeti by the Stute amendment comes before the Senate? Is it on the initiative Qf Department, and I am told by the offi<'er representing the ~~ the Senator from Kentucky? retary of State, who was here on yesterday to see me about it, Mr. SIMMONS. I will state to the Senator from Alabama that by using electroplates of the prints already made the cost that the Senator from Kentucky a few days ago introduced this will be very mRtertally reduced. amendment in the Senate. and it was referred to the Fiuanee I ask leave to have this resolution, with the memorandum at­ Committee. The amendment was cOnsidered by the majority tached, and also the copies of the three volumes of corTe pond­ members of j:he committee, and I was authorizet.l to accept it. ence, referred to the Committee on Printing. Mr. UNDERWOOD. 'Vas the amendment prepared by the 1\fr. · FLETCHER. Mr. President, can the Senator give any Finance Committee, or did it come from the department? rea..c;on why the department does not order the copies printed? 1\lr. Sll\IMONS. My understanding, from the statement made :Mr. STONE. I am not advised as to that. by the Senator frqm Kentucky, was that the amendment mee~s The VICE PRESIDENT. The resolution and accompanying the approval of the department. documents will be l'eferred to the Committee on Printing. l\1r. UNDERWOOD. Well, I want to say to the Senator from PRESIDENTIAL A.PPROV AL. Xorth Carolina in reference to this question, that I am not A message ·from the President of the United States, by l\ir. opposed to the amendment offered by the Senator from Ken­ Latta, one of his secretaries,· announced that the President had, tucky; as a matter of fact, I think it is an amendment that on August 31, 1916, approved and signed the . following joint \Yill serve a great many people in the United States. It is resolution : · an amendment that will protect a ~reat agricultural product S. J. Res.129. Joint resolution extending until April 15, 1917, in the United States a~ain~t discrimination, nnd I am glad the effective date of section 10 of the act entitled "An act to that the Secretary of State has taken the initial step toward • supplement existing laws against unlawful restraints and preparing the amendment anct submitting it. I intend to sup­ monopolies, and for ot11er PUl1)0Ses," approved October 15, 1914. port the amendment. I think it will be of great value to tne agriculture of the United States in protecting the shipments of . DISTRICT OF COLUMBIA A.PPROPRIATIOXS. tobacco into neutral countriE'.s against the discdminations that The VICE PRESIDENrr laid before the Senate the action of are now being made against it by the warring <'Ountries of the House of Representatives a~reeing to the report of the com­ Europe. I understand that the amendment relntes not only to mittee of conference on the disagreeing votes of the two Houses tobacco, but to many other products of the United States. on the amendments of the Senate to the bill (H. R. 15774) - l\Ir. SMITH of Georgia. It applies to all of them. making appropriations to provide for the expenses of the gov­ Mr. UNDERWOOD. I am informed thut it is broad enough ernment of the District of -Columbia for the fiscal year ending to apply to all. It is a very meritorious amendment. June 30, 1917, and for other purpo es; receding from its dis­ I me1·eiy desire to call to the Senator's attention, howev-er, agreement to the amendments of tl1e Senate Nos. ·1, 354, 355, the fact that several days ago the Senator and .some of his 356, and 359 to the bill and agreeing to the same; receding colleagues on the committee singled · me out alone in the from its disagreement to the amendment of the Senate No. 361 Senate, and criticized me for offering an amendment to this and agreeing to the game with amendments, in which it re­ bill. Since that time a number of other amendments have quested the concurrence of the Senate; and further insisting been offered by Senators on the floor without criticism coming upon its disagreement to the amendments of the Senate Nos. from· the Finance Committee. Those amendments have been 58 and 108 to the bill. r·ecognized, considered, and adopted. I huve no doubt tl1at Mr. SMITH of Marylant.l. I moye that the Senate recede they are good, valid amendments; but, of course, I recognize f-rom its amendments numbered 58 aml lOS. that fact-and it is a fact-that there was no binding ru1e in 13486 CONGRESSIONAL llECORD-SENATE. .AUGUST 31,

the Democratic .caucus .nga.im~t the otfertng of amendments. I I nm not making .complaint, so far as I am pel'sonally con­ am informed, on inquiry made of the secrPtary of the caucuR, rerned, because, as relates to my action, I am alw ys willtmg that there was no resolution passed broad enough to .esp£>­ t() act in what I believe is the interest of the eople a: ·represent, clnlly cover the ri~llt of the romm1ttee to Inject new matter taking the .responsibility myself and asking o one to htl:e it into thi bill. or to TP~·erse the action of the ca ncus. w.tth me. I merely want these statements to go into the RECOliD, not In I merely desire to can the attention of the Senator fro <>PPO ition to the amendment offered by the Sen11tor from 1'-en­ to the fact that the action of his committee tucky at all. but to show the wi~dom of the Democratic cnueui'l ancl himself in reference to this matter, and the action of his when it assembled in not proceeding along the lines on which commlttE>e and himself in reference to the rever al .nf the caucus the Senator from North Carolin1l and one of his colleagues action relating to the munitions tax.. puts him and hi colL gues criticized me for my action. who criticized me the other day on ex-actly th arne plane Suppose, under the present circumstance.c:;;, the Democratle which I stood when I offered a minor amendment Chattging 'Boone caucus had gone so far as to prohibit the Senator from Ken­ figure.~ in one pHragrapb of this bill. tuch~ from offering thl~ amendment; an amendmPnt that ls I want the HECORD to show this. I thl:nk it l in the .interest germane to this bill; a.n amentlment that can probably not he Qf the- party that it should show it, bee 11 1l.lthough I Tealize paR ed as an independent bi11 at this se~sion of Congress, the anxiety of the Senator from North Carolina to get his bill with adjournment confront1ng us at every hour; an amendment through, and I am heartily desirous of aiding in the speedy that the SP<.'rt>tnry of Rtate thinks of sufficient importance to passage of the bill. and although I realize, becauRe I have oc­ the whole country tu bring before the Congress. cupied a similar position in another b ocJy, the tlesire of the More tm:tn that. l am certain that the Senator from North chrurman of the committee to avoid amendments to his bill so Carolina, \Yhen he take his sure, deliberate judgment of thl~ far as possible. nevertheless 'he can nut pu h that mtte to legi..late behin(l dosed doors, to the exclusion of destroying- the independence of acticm and thou::,'ht of the t>n­ the right of action of their colleagues on this floor. :ators who represent constituencies on this floor. ll .that ·nde­ l\1r. SIMMONS. l\Ir. President-- pendence is going to be destro~r eu, as ometime may be neoe - The 'VICE PRESIDE1\'"1.'. Does the Senator from Alabama sary in connection with .gi:"eat party me , then 1t an only -yield to the Senator from North Carolina? be done when every man is bound and ;the party it elf taruls l\Ir. lTh"'DEU\VOOD. I yield for a question. responsible to the country in place .of the responsibility of the 1\lr. SIMMONS. 1 thought the Senator was through. individual Senator. J\Ir. UNDEUWOOD. I am not throu"b. It is unspeakable to think that in the last analys· a legisla­ 1\lr. ll:~l..SON. Will the Senator from Alabama yield to me tive body would refer to a· open vidual judgment and freedom of .action in relaUon to the ·great when it takes that responsibility, an1l everybo1ly f'lhould be con tituencie.<; they represented ; and i-f the 'hour has come-­ .bound or everybody should be free. If a caucus proposE>!'~ to whlcb it bas not--jn the Senate of the United tat where 1egislate a!'t a eaueuR. 1t must take the party responsibility before have to legislate under gag rule and bebill(] clnsed doors, the the country; it must announc-e its legislation_nnd must stand people of the United tates :\ill repuui.ate the party taking :Rucb on it. Then the country knows -who is · responsible and wl10 a po ition. Therefore I want the RECORD no to show that :the is not. Democratic Party has uot takeu such a positicm; that-there 'is I can see that It would be wise to grant to a committee hnving no warrant for the claim that it stands for uch a po itien ; and charge of a bill the- power to make nmen(lments in minor de­ that it has not attempted either to gag or suppr tbe indi­ tails; ancl that privilege is often granted becnu e mistake~ may vidual action of Democratic Senator on the floor. of the enate. creep in; but to say that a party caucus shouhl delegate to a PROPOSED RAILROAD LEGISLATION. party· committee the right to inject new legislation into a bill, Mr. NELSON. 1\lr. President, I do not rise to ad action of the caucus 'itself, or to make important to the point raised h.v the Senator from Alahuma with respect and radic·al <:hant-.res in a bill after caucus action would he to to the merits of tl•e Democratic caucus or us to tts llmitati(m!'l, declare that. instend of having legislation by one of the great and so forth. I rise for another purpose, and that is to ay n parties in the Senate and by the membership of that great few words in behalf of a cia of men who are not heartlm thls · party, the right to think and the right to act is delegatee! to a Chamber. few men ami the remaincler of the membership of the ~enate 'l'here is a cia s of railroad men-and thPy nntnl)el' many are excludecJ from exerdRing frE>ec.lom of action and fref>dom of thousands-,Yho are entitletl to the con.~ueration of tlw Sennte thought. No party in thiR corintry could ever go to the ·people to a far greater extent than are some of the rnE>n wbo ure .L'oln­ and stam1 on such an outrageous perversion of free legislative ing here now under a threat and asking for legi. lation. I ef. r at1:ion affecting the interests of the American people. to the great army of section men. -switchmen. tl'lPgraph opera­ That was not done in this instance. I am merely here to de­ tors. train di. putcher!il, and .·tation agents. There is no -cl ' ot fend my party -on thi!'O que tion. I am advisetl that no sueb railroad emplo~· ees who receive lower wages and, in . orne in­ -action was take-n. There may have been an understantling, or ~tances, have to work longer bout·s · and I b·u. ·t tlmt in what­ a resolution may have been pasRed to aJJow minor details to be ever legislation shall be cnHcted grnnting r~:>lief to the men who ~mended, but there was no autb1)Tity given in that caucus to are connected with tbe operation of our railroa(l tbe ; nate reverse the action of the caucus o1· to propose new legislation will not lose sight of the ri,J!bt of the ·e men. They are renlJy by the committee or by anybody else, except that there wa no entitled to greater consideration, because they do not cowe here understanding that the caucus should be binding. It was merely with n threat. per uasive. • There wus no understanding tbut any committee Look at the poor seC'tion men! I bave often tbougb't. as l of the Senate hould have a right to legislate for the Senate. was riding on train at thE' rate of 40 or 50 mile~ 11.n bout·, ho ov instead of t11e Senate legislating for itself-atl of which was much we owe to tbe care and vigilnnee of tho ·e poor men. I do democratic, all of which was in accord with the great prin­ not know what they .are paid in the South. but in the North ciples of the party. the customa1·y wage • at leaAt In my pat·t of the country, are in The s~nator from Kentucky is not violating any caucus action winter ahout a dollar and a half a

Consider the poor pay the station agents receive.. Did you : making appropriations to provide· for the expenses of the. gov­ ever look into that question? They get a small monthly salary ernment of the District of Columbia for the fiscal year ending at the ordinary railway station. They are compelled. in or our c?nsidera- - them offered upon the. floor of the Senate when the item to tion. These men are not here in an~ threa~ernng attitude de- i which they related was reached.. I do not think anybody. ques.­ manding relief, but I mos.t earl?-estly and smcerely hope that. j tioned the right of the committee,. when an amendment-was re­ they will receive the cons1deratw~ of the Se~ate to an equal . ferred to it after the caucus had adjourned, ~Q. give considers­ extent with the other class of ra1lroarl men m whose behalf _tion to that amendment and,. when it was reached upon the. legislation is being urged. ; floor· of the· Senate,. ta express the- conclusion of the· committee: I am not hostile to the laboring men. I started my- ow_n llfe , Of course,. that particula.t: amendment waS: not the subject of in the lowest dregs of poverty, and had a hard stl"uggie m my . caucus actron.. and nobody would be bound by the action of the early days. My sympaihjes have always gone out to. the labor- I committee in. re-jecting; it or in recommending it. It was a. uew ing men; and yet, I thank God,. that althou~h· I am far from : matter. being a rich man, although I was. ~rought up- ID poverty, I have' , I have been speaking of the tariff. bill. Exactly -the. same never bad any prejudice or hostility· toward the- wealthy mell! i course was pw·sued witlL refe:re11~ to; the. shipping bil1. whfch or the capitalists of this country. . . l had beerr made a , parcy matter. When an. amendment was. o-f- Let us look the· question squarely m tbe- fac~ What 18 tll~re i fered upon- thE} floor Qf. the- Senate- and not referred to the- <'om­ in this e-igb.t-hour- proposition? Those who are now. clamo.nng. _mittee, the cliairman of the committee, without any dissent, for it do n<>t mean tha_t. they want to work. only e~ght hrn­ That is not the propos1t10n, for in the· ~e-xt .~reath they sa_y · · mittee approved or that the committee disapproved. Thnt uc­ " We want ti:Jne and a ~If for all ext:a time. They. are q!llte-. , tion was not covered by ~aucus, and the acti-on of the commit tee witling to work extra tnne. So tlmt LS' not the trouble.. What . was merely recommendatory. and ne. Democlia:ti~ Senator 1\TTIS they want is not a limi~tion of eiglrt hours a day on then· work~ . bound by it. ~ but they want us to gtve- them tl1~ same- pay for 8. hours- tl'lat Mr. President, on tlie 29th of August the- Se.natol!' fwm Ke~a­ ti.ey bave been in ~he- ~~it of g~ttmg: for 10· hours; Ql"' that they j tucky [Mr. .fAMES] offeEed this amendment. It ~as refen~~ get fou what is teimetl a. run. . to the committee. The caucus had taken. no action about 1t. We know the fact tha.t on many tra.ins, especially on. passen- : The committee did not think. because the cauc-us bad taken: no ger trains. the train (•rews: make their· runs in- four· or five or · action about this matter that its hands were tied, that it coHld sL hours, and. for this service the-y get pay for a fu}l day's wo~k. . not recommend action by the Senate, ur that it conld. not recom- That. is the case not only_ with pass:nger- tra;ns, bu~ Wlth i mend nonaction by the Senate~ I d'O not think anybody llere­ fa.

relief.. I and r as· chairmall, am not contending that any· Democrat or Mr-.. President, I am not hostile to. remedial lE.'~latrorr by anybody f'fse U:; bound in arry way b;y the acceptance oi this: allY means; but wbatevetr" we do~ . Senators., le-t us not forget amendment offered by the Senator from Kentucky. . thi great army of unorganized railroad men-switchmen; ~c-- 1\fr:. JAI\IES. - Mr. President, I presented this- amendment. tion men. telegraph operators. ancl statton agentsL While pro ' after consultation with the various farmers' organizations and viding for their more fol!tunnte brethren let us not Ioseo sight' dealers irr tobacco of the tobacco-growing States of Kentu<'ky,. of those de!:'erving men. Let us giv~ tb~m some reli~.~ fo~· they : Virginia, Tennessee-, Maryland, and North Carolina that as­ come here, if l may use the expression.. 1n a good ~Pll'It without sembled here the first part of the week. I ca11ed their atten­ any threats, invoking nrli"'lcy; or- coT~ny shall prohibit· the all the. morninO' to get a chanee to read itL The telegram is as, importation of any a:rtide the product of the- sml· or industTy o.f the . "' · · United ~tates and not injuriorut to health or ~orals, .the Pcesult>.nt, follows· within his discreti{)n shall b.ave po.wer. to proh1btt, durmg the per1od l-Ion. KNUT.E NELSONJ. ST. PAUL, MINN.~ August SO~ 191JJ. su(•b prohihition is ui force, the importation into the United ~tates ot Washington, D~ 0.: similar articles, or in case the United States does not import similar­ articles from that country, then other articles,. the products of such In the- name of 5,000 business men. from every_ disttict i:n Minnesota caun try,. dependency .. or colony. I wish to voice protest against favor:l.ble· action on the propost>d measure fixing the hours ot labor for railroad empJ.o-yt>es at elght I suggested to tbese organizations- that perhaps that secti~n honrs per day. Om·. rea on fo-r making. thi~ protest ts ~t; we· believe would. give to the tobacco. growers of these· States some relief' that sueb. action w1U result m ne(IE'SSltating a materml increas·P ln raitroad rate<. to mt>et tbe thn~att>'Ded strike· of railroad employee . against the- embargo or the contraband order issued by· Great. lly arbHrarily fmposlng this increased bur

of the enemy's coast. But in cases such as that now In judgment we administer tbe public law of nations. and are not at liberty to inquire treatment between nations; it assumes natural and normal com­ what is f01· the partl~ular advantage or disadvantage of our own or petition; it assumes that the principle of free competition is a another COUntry." sufficient regulator of economic conduct. Fr.ee trade never con­ The question of breach of blockade being- thus excluded, the court proceeded to consider the qut>stlon of the dt>stinntion of the cargo In templated that n nation would adopt the policy of obtaining con­ conn.-ction with the question of contrabanu. Taking up tbe usual trol of the raw materials of the world, which lie at the basis of classification of articl.-s with ref.-rence to this question-(!) those all industries, and by so doing acquire a monopoly both of -the us<'d primarily for purposes of war, I 2 l those used for purposes of raw materials and of the indut;tries upon wfiich they are de­ war or of peace according to circumstances, and (3) those used ex­ clusively for pea~eful purposes-the _court obset·ved that a consider­ pendent. Free trade never contemplated that a nation would ·able pnrt of the cargo was of the third class and nf't>d not be further organize its industries, with the aid of the Government, into vast considet"Pd. A large part. perhaps, was of the .sPcond class, but as it syndicates, with the avowed purpose of dumpin.g its prouuct~ wa.s "not prowd * * * to bay~> bPen actua111, destined to belligPrent lise," it therefore could not, sa1d the court, 'be treated as contra­ upon foreign countries at any price which would effeetually band. .Anoth<' r portion was, in our judgmt>nt," continued the court, d~stroy foreign competition and foreign industries. I quote "de~tirred ' dirt>ctly to the rebel military service. This portion of the the following from a recent work on Industrial Progress of cru-~o consist~d of tht> cases of artll,let·y _}larness. ,and of. articles de­ scribed in the involcf's as 'men's army bluchers,' 'art1llery_ boots,' Germany: UD!.l 'GovPI"Dlllf'Dt regulation gray blankets.' These goods come fairly The coke syndicate sells coke in Ausrtria at $2.50 per ton cheaper und£>r the dc>scrlption of g-oods primal"iJy and ordinarily used for than at home. The wire-naiJ syndicate furnishes its product to for­ milltat·y. purfose::; in time of war. They make part of tbe necessary eign customers for $33 per ton, while the price for tbe sarue goo(ls in cqi.lipmen"t o ·an army.,,_ the domt>stic mark~ts is $62.50 per ton. The sugar syndicatt>, wbich ' With regard to t hese articles, which were adjudg£>d to be condemned was formed in 1900. and controls 98 per Ct>nt of the production, bas as contra!mnd, the language of the court I.S to be spt>c1ally notPtl. fixed the price of beet sugar at $3.93 per hundredweight in Germany " H is true that even tbest> goods." said th<> court, " if reall.v intendl.'d and at $2.97 per hundredweight abroad. for sale in the markPt of Matamoras, would be free of liability, for contraband may be transpol"fed by neutrals to a Dt>Utl"ll) port, if in­ From the standpoint of those wbo believe in the theory of tendc(,l .to make part of its general sto{!k in trade. But tbere is noth­ free trnde experience has shown that it can not safely be ing in the casl' whlcb t.-nds to convince n~ tllat such was tht>ir real destination, while all tne circumstances indicate that these articles, adopted until the nations have reached a higher ethkal stand­ at least, were destin£>d for tbl' use or thf' rebel fot·ces then occupying ard ·of international commerce. Under modern tra.le condi­ Brownsvilll.' and other places in tbe vicinity. '"And contraband m.-t·cbandlsc is subjPct to a difi'£>reot rnle In respect tions free trade is ry nation imperatively demand eco­ contmband. '.l.' be latt£>r is liable to capture only when a violation of nomic independence, secured in the only way in whkh it can blockade is intt>nrle country OL' to lhe actual military or na\·aJ use of the enemy, wh.-thl'r blockadt>d be secured-through a protective tariff. Every economic theory Ol" not. . * * ;: Hence. while articles, not contraband, might be must be tried by a<•tual experience, by its application to ex­ sent to Matamoras and beyond to the r.-bel n>~ion where the com­ isting social conditions, and if it fails in this supreme test munications wt>re not interrupted by blockadE'. articles of a contraband chamct.-r destined, in fact, to a State in reb.-llion, or for the use of the theory, however logical in form, is not sound, because it is the rebel military forces, were liable to capture though primarially not based upon all the facts which enter into tbe problem. destined to Matamoras. We are oulig"f'd to concludE' that the portion 1\ir. President, the chambers of commerce of Great Britain, of the cargo which we have characterized as contraband must be cond.-mned." comprising more than 30.000 manufacturers. merchants, pro­ Restitution of the ship was decreed on paymE>nt of costs and ex­ fessional men, and traders in all parts of the United Kingdom, pens£>s. Tbis condition was impos£>d, notwithstanding the find '"'~ that recently passed the following resolutions: be1· destination was neutntl. ( 11 b£>causl' the mnster. wbt>n brought to by tbl' Vanderbilt, refused to send his papers on board : (2 l Iwcause This association destres to place on recorfl for the guidance of those papers wet·e dt>stroyed on board the ship at the time of the captm·e; who follow us in duys to coi:ne Its firm convi<'tion. hasety of the Empire lies in ability to found on IJoat·d "destined to the enemy," to bring the ship in for ad­ produce what it requires as largely as may be poJSsible from its own judication. (The Peterllo[J (1 661, 5 Wall., 28.1 soU and factories. In two other Matamoras cases decid.-d at the same term, the Suprt>me Then follows this lan~age: Court decreed rPstitution in the abs£>nce of proof of actual enemy destt­ nation. The first of these was that of the Science. Chief Justice Production within the Emptre is of vital Importance. Power of pro· Chase, delivering the opinion of the court, stat.-d that the evldt>nce duction mm.t c·ome befo.re exc·bange of commocllties. • !" * By our present systt>m of fr.-e acN~ss to our markPts for foreign producers, was "cl~ar that the vessel and ber outwa1d cat·go were n£>un·al prop­ erty,·dl'stinf'd to nentrnl conslgnf'PS ut Matamoras. and that the cargo * • * and in many oth.-r ways, tbt>rt> bas bt>~n no recognition of the had b£>en actuallv delivered as consign£>d." "Some of the proof," the fart that production at borne is infinitely preferabLe to the put"t base of court addl'd, ·• tPni'IPd to show tllat a portion of this cargo consisted goods abroad, even at a slightly rt>dU(•t>d priee. • * * What we of Confederate uniform cloth, but there was none sb RPI r-~m~taining and produce more, so as to enemy territory m: immedlatt> t>nemy use. Tb.-re was. tberefot·e, to imp.rove the status of our population. nothing in t he chal"3ct.-r of the vessel or of the outward cargo whlch The sentiments here expressed voice practically the unani­ warrants condemnation." ITbe RctetLCe, 5 Wnll., 178.1 mous opinion of the. United Kingdom. At thf' same timP · the court dPcidE:-d ti-JP <":lF.f' l'f thp l"n1ant. nnothPr Matamoras case. The Chief Justice, delivering the opinion, stated that Great Britain places her abandonment of free trade on the · th·e proof show£>d that the V£'SSel was tbe pt·opt>t·t.v of a neutral mer­ grounds of national safety and national welfare. Her position chant of tbe island of JE'rsey, documented as a British merchantman, and regularly clt>ar(.>(} from London to Matamoras. Tht> cargo was is that conditions require a change from an economic system .... J. Ejhipped by the charterPrs of the vt>ssel for n£>utral owners, and con­ which ignores the safety and wel·fnre of the people to one which not discha~ed signed to neutrals at Mabtmoras1 bot hart been at the regards these things as vital. She mnintains that commerce time of capture. " It eOD!':iStl'd,' said the court, . "in part. of bal£>~ and national safety are inseparable, and that each nation must of Confederate uniform cloth, of the same mark and of corresponding numbers witb like J!OOds found on the Science, hut there is no proof be made economically independent through a system of protec­ of unlnwful destination.'' Thl' (1.-cree of the court below. eondemning tive duties on foreign imports. This does not mean prohibitive the ship and cargo, was accordingly reversed. (The Volant, 5 Wall., duties but duties high enough to proteet home industries, home 170.) agriculture, home raw materials, and home labor. Grent The PRESIDING OFFICER. The amenrlrnent to the amend­ Britain now realizes that she was mistaken in the fundamental ment on page 6, which was passed over, will be Rtated. assumption on which the whole doctrine of free trade rests, The SECRETARY. 'lhere is an amemlment pending on page 6, namely, thnt nations will treat one another fairly and ju ·Uy. where the Senate reconsidered the vote by which the nmf'nd­ It wa.s Germany's aggressive protective policy which hns ment of the committe(' embraced in .lines 12 to 17 was agreed to. broken down free trade in England. Great Britain complains 1\lr. CLARKE of Arkam;;as. The amendment to the amend­ of Germany's "commerebl penetration" and "predatory com­ m'ent was pn ed ovPr until to-day at the requE:'j;;t of the Sen­ mercial methods." She charges Germany with the attempt "by ator from Oregon [1\fr. CHA"MBERLAINl, who cle.liHhetl in 1776, l.lut it "·as not until :practical>ility of fi"'('e tt;mle, or a tariff for reYenue only, nuder 70 years later, in 18-tG, that Gt·ent Br·ltain r~pealed the corn ~Fsting national co::lrpi·oductlon oi foreign ·e:ountt·ies. At presl:'nt they can deposit cvNything with us t.' "' >:< and it is the surfeiting of prepared to defend tho Nation against evei'y form of aggre sion, Germany with the overproduction . of other lands which most depresses physical or economic. our prices and checks the d!.'velopment of our indush·y and the rPstora­ l\1r. Nl£LSON. l\!r. President, I suggest the absence of a tion of om· economic conc.lition. * * * Let us see that we at any rate preserve the German mat·ket * * "' for German industry. • • • quorum. . The PRESIDING OFFICER The Secretary will call the roll. This reaction in fayor of protection leu by Germany spread The Secretary called the roll, and the following Senators an­ over Elll·ope. Russia, France, and Austria increased t11eir sweretl to their names : duties in 1881 and 1882. England alone remained steadfast to Ashurst Hughes O'Gorman Smith, Ga. ft-ee trade. But the history of Germany during the following Beckham Busting Ove1·man Smith, Md. 33 years llas convinced Great Britain tl1at free trade is im­ Borah .Tames Owen Smoot pos ·ible \lnder modern trade conditions. Brally Jones Penrose Sterling Chamberlain Kenyon Phelan Stone ML'. Pre ·ident, tlte acknowledge(] purpose of the Unde-rwood Chilton Kern Pittman wanson l.JHI, which became a law in October, 1913, was to destroy in a Clarke, Ark. Lane Reed Taggart Colt Lea, Tenn. , aulsbury Thomas large degree. the exi ting protective tariff and thus to open up Dillingham Lee, l\Id. Shaf1·otb '£hompson our home market to foreign competition ; and ~ it certainly ac­ dn Pont McCumber· ~heppard Underwoocl COllll)lishe

l\Ir. _SMOOT. Well, the normal tax is 2 per cent. articles bear to the total gross receipts from the sale and disposition of all m·ticles manufactured. ~Ir. THOMAS. The normal tax is 2 per cent, but in addi­ The dutv of establishlng to the satisfaction of the Commissioner of tion to the normal tax indlYiduals pay, as the Senator knows, Internal Revenue the fact that the net pt·ofit is less than 10 per cent surtaxes in proportion to the amount of their income. or that the payment of the tax wo_uld reduce the net profit below 10 per cent shall de>oh-c upon the person subject to the tax. . 1\Ir. SMOOT. _And in addition to the 2 per cent tax on cor­ SEc. 204. That when used in this title -the te~m " net pt•ofit" means ponttions they also have to pay.- 50 cents for each $1,000 of the aggregate gross receipts during the taxaule year from the sale and capital -stock and surplus. djspositlon flf such articles manufactm·ed in the United Slates less the following items, ·or the pt·oportionate part thereof chargeable to .Mr. THOMAS. There i a difference of 2! per cent for cor­ the manufacture of such articles, any deductions not kept separate porations as against imijviduals of large incomes who pay sur­ from similar items a1·Lsing in connection with the Joint manufucture of tax -in addition as high as 12 and 13 per· cent. - ' other articles not specified in section 201 ueing ascertained accordin" to the ratio above presctibed for the determination of the amount .1\lr. SaiOOT. I do not s~e why there is any difference. be­ invested : _ _ _ t\\een a partnership producing munitions of war and selling (a) The cost of raw materials entering into the manufacture; them to a manufacturer, and a company. doing the same thing. (b) Running expenses, including rentuls, cost of repait·s and main­ tenance, heat, power, insurance, management, salaries, and wages; 1\Ir. THOMAS. The Senator from Utah asked me for the (c) Interest paid within the taxable year on debts or loans con­ reason, and I ha-ve given it. It ma_y not be satisfactory, but tracted to meet the needs of the business, and the proceeds of which have been actuallv used w meet such ·needs; · that is the reason. (d) Taxes of all kinds paid during the taxable year with respect to ·, llll'. SMOOT. That is the reason, of course, as _the Senator the bl?siness or property relating to the manufactme; say., why _the Democt·atic Party has made the change. ' (e) Losses actually sustained within the taxable year in conne'ction - l\Ir. THOMAS. !·Yes •. with the lJusiness of ·manufactUl'ing such articles, including losses from fire, flood, storm, or otller casualty, and not compensated fot· by immr­ - 1\lr:. Sl\fOOT. ·I t}link the House of Representatives in pass- ance or otherwise : and ing the bill displayed a great deal more wisdom in inserting · · (f) A reasonable allowance, according to the conditions peculiar to the terms " person " and " partnerships " than has the Senate each concern, for amortization of the Yalues of buildings and ma· chinery, account being laken of tho exceptional oopreciation of special committee in proposing to strike them out; but that is for the plants. - · Senntc to. decide. SEc. 205. Any person manufactul'ing any of the articles specified in - l\Ir. THOMAS. Of course the Senator from Utah is entitleu section 201 through the agency of a subsidiary concern or of a sub· contractor, shall, fot· the purposes of this title, be deemed the manu­ to his opinion. facturer of such at·ticles, instead of the subsldlacy concern or tlle sub· The PRESIDING OFFICER Without objection, the amend· contractor.- SEC. 20G. Every person manufacturing in the United States any of mcnt is agreed to. the articles mentioned in section 201 shall on or before February 1 ot The reading of the bill was resumed.- each year, mnke a return under oath to the collector of internal reve­ The next amendment of the Committee on Finance was, on nue of the district wherein the principal office or place of business in. the United Str..te.<: is located, stating the amount of gross receipts from page" 71-, after line 21, to strike out: the sale and disposition of such artides during the pt·eceding taxable The term "manufacture" and its derivati>es, except as used in section year. All such returns shall be transmitted forthwith by the. collector 201. include the terms " smelt," "refine," "alloy," and their deriva­ t-o the Commlssionet· of Internal RevPnue, who shall, on or befor~ tives. March 1, notify the person making such retm·n of the amount of tax ' for which such person is liable, and such person shall pay the tax to The amendment was agreed to. the collector on or before April 1. SEC. 207. 'l'he tax may be assessed on any person for the time being The next amendment was, on page 72, after line 7, to strike owning or carrying on the business or on any person acting as agent out: for that person in carrying on the business, or, wbere a business has SEc. 201. That e>ery person manufacturing gunpowder or other ceased, on the person who owned or carried on the business or acted explosives shall pay for .each taxable year an excise tax equivalent to as agent in carrying on the business immediately before the time at the followin~ percentages of the gross receipts during such year from which the business ceased. · the sale or disposition of such explosives manufactured in the United SEC. 208. No person employed by the United States shall communi­ States, except blasting powder and dynamite: cate or allow to be communicated to any person not legally entitled Five per cent of the amount of such receipts not in excess of thereto any information obtained under the provisions of this title or $1,000,000 · and - allow any such person to inspect or have access to any return furnished Eight _per cent of the amount by which such receipts exceed under the provisions of this title. . $1,000,000. SEC. 209. Whoever vlolates this title or the re,oulations made there· Every person manufacturing (a) cartridges, loaded or unloaded, caps under, or knowingly makes a false statement in any return, is guilty or primers; or (b) projectiles, shells, or torpedoes of any kind, includ­ of a misdemeanor, and upon conviction, shall. In addition to payin::: ing shrapnel, load!'d or unloaded, or fuses; or (c) firearms of a.ny klnd, any tax to wWch Hable. fined not more than $10,000 or impt·isoned not inchttling ~:~maU arms, cann6ns, machine guns, rif:les, and bayonl'ts; or exceeding one year or both, in the discretion of the court. (d) any parts of any of the articles mentioned in ·(a), (b), or (c), SEC. 210. All administrative, special, and general provisions of luw, shall pay for each taxab•e year an excise tax equivalent to the follow­ including the laws in relat·on to the assessment and collection of taxes, ing percentages of the gross receipts during such year from the sale not heretofore sp':'cillcaJly t·epealed are hereby made to aru>IY to this or disposition of any such articles manufactured in the United States: title so far as applicable and not inconsistent with its provisions. Two per cent of the amount of such receipts not in excess -or SEC 211. The Commissioner of Internal Re-venue, with the approval $250,000; . of the Secretary of the Treasury, shall make all necessary regulations Threl' peJ.' c~nt ot the amount by which such receipts exceed $250,000 for carryi.ng out the provisions of this title. and do not exreed $500.000; Four per cE>nt of the amount by which such receipts exceed $500,000 And in lieu thereof to insert : and do not exceed $1,000,000 ; and - SEc. 41. (11 Tbat every corporation manufacturing (a) gunpowder· F~,· e per cent of the amount by whlch such receipts exceed $1,- and other explosives; (b) cartridges, loaded and unloaded, caps or 000 000. primers; (c) projectiles, shells, -or torpedoPs of .any b.ind, inl'iuuing Every p!>rson smelting copper ore or copper cencentrates, refining shrapnel, loaded or unloaded, or fuses, or complete rounds of ammuni­ metallic copper, or auo·ying copper, shall pay for E>ach taxahle year an tion; (d) firearms of any kind and appPndages, including small arms, cxci -e tax equivalent to the following percentages of the gross receipts cannon_ machine guns, rifles, and bayonets; (e) elPctric motor boats, during such yPar from- the sale or disposition of refined copper or copper submarine or suhmprsible vessels or boats; (f) any part of any of the alloys and from the sal'! or disposition of crude or unrefined copper articles mentioned in (b), (c), (d), or (e); shall pay for Pjlt'h taxable if sold or disposed of for any purpose except for refining or alloying: year an excise tax of 10 l'er cent upon its entire nPt profits aetually , One pPr cent of the amount by which such receipts exceed $~5,000 ::-ecelved or accrued for said year from the sale or disposition of such and tlo not exceed $1,000.000 : articles manufactm·ed within the United States. - 'l'wo per cent of the amount by which such receipts exceed '$1,000.000 (2) And every corporation selllng to or manufacturing for any cor­ anu do not exceed $10,000.000: and poration mentiont>nteri.ng into and Three per cent ')f the amount by which such receipts exceed $10,- used as a component part in the manufacture of any of the articles 000,000. - enumerated in (a), (b), (c), (d), (e), or (f), shall pay for each tax· SEC. 202. If any person during any taxable year or part thereof, able ycar an excise tax of 5 per cent upon Its oPt profits actmflly whether under any agreement, arrangement, or understanding, or other­ received or accruPd for said yt'ar f1·om the Flale or disposition of su<·h wise, sells or disposes of any such article at less than the fair market ma.tPrial so entering into or used as a component pat·t in the manu­ rice obtainabiP therefor, either (a) ln such manner as directly or facture in 'the United States of the articles so enumerated as afore- Endircctly to benefit such person or any person directly or indirectly said. . interested in the buHinP.ss of such person, or (b) with intent to cause (3) This section shall cease to be of effect at the end of one year such benefit, the amount of the gross receipts of such person during after the termination of the present European war, which shell be such year or part thereot from th~ sale or dispOEdtlon of such article P.videnced by the proclamation of the President of the United States shall be taken to be the amount which would have been recPived from declaring said war to have ell:ded. the '>ale or disposition of such article if sold at the fair market price~ - SJ::C. 203. That 1f the net profit derived during such year from. the ?.Ir. THOMAS. After the word "explosLves," on line 23 of sr..le or disposition o1 such articles manufactured in the United States the amendment, the committee offers the amendment which I is less than 10 p>'l' cent no tax shall be levied, collected, and paid .i.. and if the payment of the ta.x would reduce such net profit below 1 u per send to thP desk. - cent the tux to be levied, collected, and paid shall be equal to the net The PRESIDING OFFICER. The amendment to the amend· profit in excess of 10 per rent. Such net profit shall be computed on the amoont actually invested In the United States in the manufacture ment proposed on behalf of the committee by the Senator from of such articles, making reasonable allowance, in the case of the in­ Colorado will be stated. crease or decrease of such amount during the taxable year, for the The SECBETABY. On page 28, line 23, after the word "explo· proportion of such yt>a1· during which such increased or decreased amount has been employed in · the manufacture of such articles. slves," it is proposed to amend the amendment by inserting: In cases where stJch person bas undivided capital invested in the - Excepting blasting powder and dynamite used for industrial purposes manufa<'ture nf the art1clt>R Rpeciflt>d in section 201 and of othel' articles, and powder used fcr_:sporting purposes. the amount -invested to the manufacture of the a1·ticles specified in sec­ The PRESIDING OFFICER. Without objection, the amend­ tion 201 shall b, consld~red as in the same ratio to the total amount invested as the gross receipts from the sale and disposition of such ment to the amendment is agreed to. ·J3492 CONGRESS! ON .AL RECORD-SENATE A. UGUST 3.1',..

1\fr. THOl\!AS. On page 79, in line 9, after the name "United facturers' tax,, with otller titles, under special consideration. States," on behalf of the committee I move the amendment to the The subcommittee was compo~ed of the Senator fi-om New amendment which I eno to. the de. k. Jersey, now occupying the chair [1\Ir. HuoHES], the ·senator The PRESIDING OFFICER The amenomE>nt to the amend- from Colorado [l\lr. THOMAS], and my~elf. ment propo!'>ence~ Suh};ect:ion. 2 was be any objection to amending tlw amendment by inserting the debate<.) in the conference, and a majority approved of it, or, words" except those used for sporting purposes"? A very large at least, a majority voted agaim~t a motion to strike it out. number of cartridges art> so u~ept thol'e U-<:;ed for :'pOrting purposes!' I took the position that lead and zinc were not treated in the The PRESIDING OF~~ICEH.. The amendment to the amend- metal schedule. of the bill in a· way that ·put those rriE>tals upon mmt prnposell by thP Senator from Pennsylvania will be stated. a basis of equality, as a matter of fair treatment, with other . The SECRETARY. On page 78,1i_ne 24,after.the word "primers," metals. Of course, I am not going to iliscuss that now. I did it i~ proposed to im:ert "except tho e ust'd for 'porting purposes." discuss it then. :Mr. THO~!AS. I would suggest that the aruennator that the word this instance is inconsistent, but to save my life I can not . ee "commerdal " may be too broad, and I think, if he will use the how it cnn be said thut my position then and on this bill can_ exact language-- be said to be incon istent. l\1r. THOl\IAS. 'Veil. use the- word "industrially'-' instead of Here is what occurred so far as this bill is concerned. I u eommt>rcially." nave told you what occurred when · the 0ndE'rwootl bill was 1\fr. PEN HOSE. "Indm;trially It is the word. under consideration; but here, Mr. President, we founcl a bill l\11·. Sl\IOOT. That is right. of an entirf'ly different chnr.ncter; we fmm"Uage fereut situation. In this bill as it came to u. fmm the House suggestey [Mr. HuGHEs}, the l\h·. THOl\IAS. It will go to conference. at any rate. Senator from Colorado [~lr. THOMAS], ann myself, all reside The PftESIDL"'lG OFFICER. The amendment to the amend- in States producing other metals of like kinu and used for like ment will be stated. purposes. There is no copper produced in the State of Mis- The SECRETARY. On page 78, line 24, after the word" primE'rs,'' souri. and only in a small way, as I unw Jer ey, it is propo.ed to in. ert "exclusive of those used for industrial and comparatively in a .mall way in Colorado; but grE:>at and sporting purposes." quantities of zinc are produced in all three of th~e States, and l\Ir. STOl\'"E. Did the Secretary say " _industrial nnd sporting great quantities of · lead are prorlucecl in both Missouri and pm·pose~ "? Colorado. There was not a dis. enting voice- in the subcommittee l\1r. Sil\!lUONS. It should be "industrial or sporting pur- to the proposition that if copper ,-.;·a_c:; to- be taxed in the billA pose ." the other metals should go along with copper and bear the The PRESIOING OFFICER. The amendment to the amend- same burden. Is that if).consistency on my part? Lead and ment as proposed to be moclifie(l. zinc- were not In the. bill as it came from the Horu . I llid not The SECRETABY. On paue 78. line 2-1, after the word" primers.u try to k-eep them out, but, on the contrary. I insisteU up.on it i propo ent? Now, I leave or ~porting purpo e ." that question at that point, for it is after all only a very im- The amemlmt3nt to the- amenflment was agreed to. material side issue-. I wli bed merely to settle this talk of in- 1\lr. ASHURST. I move to amend tht:> amendment by striking- consistency in my position. once for all. out paragraph 2, beginning in line 10 and going down to line 19, Mt·. PrP-sident, a word now as to the motion itself. I inclusive. voted in committee to put ·ubsection 2 tn the bill, a'nd I voted 'l'he PRESIDING OFFICER. The que~tion is on the amend- ' In the conference to keep i't in. 1 e been for many years struggling in would divert the activities of quite a large number of the the de>elopment of a zinc mine in the Coeur d'Alene country in agent::) of the Treasu,ry Department to trace down these various Idaho. They hn>e put into it all the means which they could items and look after the colle<'tion of the revenues to be de­ command from their modest incomes, from their salaries, from rived therefrom, when the activities of these agents might be their earnings. Thcj· were all men of modest means, and are more profitably employed -in other directions. At least, that now. Nevertheless, being possessed of that redoubtable cour­ is "·hat I am infonned by men who ought to know more about age, industry, and pluck which characterize those who make it than I do. the mining busine s a success, they haYe stuck to it for quite Now, Mr. Pre ident, the Finance Committee, since the con­ a number of years, in the face of many discouragements, mean­ ference was held, has di cussed subsection 2 on several occa­ while undergoing many hardships themsel>es, much self-denial sions, striving to ~rriYe at a correct concluslmi There is a and struggling and working in the face of adversity and obsta: divided opinion among the members of that committee as to cles. A short time ago they succeeded in developing their min­ whether or not the subsectio~ ought to remain in the bill ; but ing property to a point where they could ship ore and where I will say that at the last meeting of the committee, some days there is a pl'ospect tl1at there may be some profit in the han­ ago, it was determined by the committee, on a divided vote, dling of the ore and the fm·ther development of the property. that if the Senator from Montana [Mr. MYERS]-who, we had But this gentleman, who has had considerable experience at been informed, would make a motion to stl'ike out this subsec­ mining, and who is a -very conservative and sensible business tion-should offer the motion, or if any other Senator should m~n, told me, while he was in this city n few weeks ago, while make that motion, the committee, although divided in opinion tlus matter was under discussion by the committee, that if any as to the efficacy of the subsection and as to whether it would tax were put upon zinc they would in all probability have to result in any substantial benefit to the Treasury-but, mind stop shipments from their mine and could not afford to put in you, not questioning the soundness of the proposition itself as a~y more money for its development. He said they would, he a legislative proposition-- expected, have to close down, and that, too, after years of work Mr. THOMAS. Mr. President-- under discouraging circumstances, and after feeling that they The PRESIDING OFFICER. Docs the . Senatol' ft·om 1\lis­ bad just arrived at the point where they could afford to ship souri yield to the Senator from Colorado? ore and get out some money and use it in the further develop· Mr. STONE. I do. ment of t11e property without going clown into their pockets for Mr. '£ROMAS. I merely wish to sugge t to the Senator that the capital. He said that any tax upon the production of zinc the ac1:ion of the committee was not unanimous. would almost necessarily cause the closing down of that prop~ Mr. STONE. I thought I hall said that. erty, and that it would work the same way with many other l\lr. THOMAS. I did not understand the Senator. lead and zinc properties in-:Montana and Idaho, which are just l\lr. STONE. I said that there was a dlYided opinion in the getting on their feet and struggling to arrive at the point where com ru ittee. the ore taken out and shipped will pay the operating expenses 1\Ir. THOl\lA.S. I "·ould not ha\e interrupted the Senator if and pay for fm·ther development of the properties. He was I had known that. very strongly opposed to any such tax. He is a practical Mr. STONE. I do not object to an interruption. I was mining man. I know many of them. I know their views, and nbout to say that if the Senate saw proper to strike it out, the they would feel that such a tax was a penalty on their cllsposi­ general opinion of the committee was that no serious harm tion to develop the country ; a penalty on their courage, on their would result. determination, on their pluck, and on their devotion to the line Mr. President, I am now acting as the spokesman of the com­ of business which they have been following. mittee. That is why I am on the fioor. I think a majority As far as copper is concerned, copper is and has been for of the committee in the final analysis is of the opinion that the a great many years on the free list. It enjoys no protection; retention of sub ection 2 would not add materially to the value probably it is in no particular need of any. At least, it is not of the bill or result in any particular advantage to the Treas­ asking for any. We are not asking any for it. I think for ury; nor, on the other hand, would it do any harm to keep ·40 years or more copper ·:1as been on the free list ; and yet there it in. is a great deal of copper produced in 1\Iexico in normal times, That much I wished to say as expressive of the attitude of and some· of it is shipped into this country and competes with the members of the committee, as I understand their attitude. the products of our own -copper mines. ·we ask no protection l\Ir. l\IYERS. 1\Ir. President, I have no criticism to make in on copper. I would be the last person in this body to ask for this connection of the Senate Committee on Finance. When the that; but when it is on the free list, and ~1as to compete with committee adopted subdivision 2 of the munitions paragraph, the copper mines of 1\Iexico, where labor is cheaper than here, it gave us a provision-which is immeasurably superior to the to say that its production should be penalized by having the provision for a tax on copper ns the revenue bill came to us beavy hand of a tax laid upon it, and laid upon all copper. pro· from the House. The provision given us by the committee as duced in this country, I think, under the circumstances, 'vould it now stands, and as it is embodied in subsection 2, is emi­ be unreasonable and unfair. Only recently has copper been nently fairer and more just and reasonable tl1an was the pro­ enjoying some prosperity. Eighteen months ago copper was vision for the tax on copper as it came from the House, and being produced in Montana at a loss, or was barely paying the I was yery glad that tho committee did as it did. Its action cost of production. was Yel-y agreeable to me. Under the present tariff law the duty on lead and zinc is However, I believed then, and still believe, that there should very much reduced, as compared with what it was a few years be no tax in this bill on raw material unless all raw materials ago. We are not making any complaint of that. We are satis· which nre now and have been for some time enjoying an un­ fied. But to go further and lay the heavy hand of a penalty in usual degree of prosperity are taxed all alike. I do not belieye the way of a tax on producing those metals in this conn try, I it is just to single out a product of the metal•producing States think, would be unfair; especially unfair to that group of and put a tax on metal'3 when there are runny other raw prod­ ·States which constitute the metal-producing States of the ucts enjoying just as great or greater prosperity which go Union. and which contribute in that line of production very untaxed. largely to the common welfare and prosperity of all the States A tax on metn.ls is peculiarly a tax on development, industry, in the country. and exploration of the western country. It strikes with pecu­ Therefore, whlle I felt much better satisfied with the fair­ liar force the far Western States-the metal-producing States ne:·s of the provision given us by the committee than I did of the Union. It would have very much of a tendency to dis­ with what I considered the very uilfalr and outrageous t~"'{ as courage .prospectors from going out and discovering new bodies the bill came from the House, I have been opposed to any tax of ore, and getting capital for their uevelopment, and opening on the production of metals; and I opposed subsection 2 in the up new mines for the benefit of the entire country. It would Democratic senatorial caucus with all of my power. There I have a very strong tendency to pisconrage the operation nne point, ot· b :~>e no more than reacbeu ·that point. have it ~h:icken out. Now, that the committee and runny of It "·ou1d be very strongly re3entet1 by the people of the mining the Senators seem disposed to take n different view of it, I am 13494 CONGRESSIONAL RECORD-SENATE- ~ I • AUGUST 31,•

very glad to be in accord with them. 'Xhe motion .to sb.·ike out tax I ask to have this_ statement inserted in the RECGRD n a entirely this provision was defeated by a very narrow margin p:irt of' my remarks. in the ca.ucu ;. and now that some of those who in. the caucus The PRESIDING OFFICER. The Chair hearing· uo obj~c- ~ ovposed striking it out seem inclined to take a different view· tion, it is so- ordered. of it and are now disposed to strike it out, I am very glad Mr. PENROSE. . And I want here, in the presence of the Sen, of it. I think the provision ought to be stricken out. I am ate and before the country, to brand this part of the bill ns a against any tax on metals, and hope that the motion. of the Sen­ brazen attempt to legislate purely on sectional lines. ator from Arizona will prevail. It is eminently just and The table above referred to is as follows: proper, and I am very heartily· in favor of it. I have always. Total income tam from individual& under tlte Democratic law of. Oct. 3 1 favm·ed raising the necessary money for preparedness by in­ 1913, and total emergency or " war tames u under the Democratic law creasing the income tax, providing- an inheritance ta~ and' of Oct. ff!, 1.9l_.. collected du-ring the /t8C1Ll' year.a ended Junct SO, 191-f, taxing munitions of war-the finished artict.e. Those three 1915~ and 1916, by States. · methods are my methods. This bill provides f01? all of' ther:rt: .ADDI!l'I.ONAL. TAXES LmVU:D BY DmMOCRA'l'IC LAWS. That is enough. Strike out the metal tax. Strike out all tax on raw materials. Total rank and State. Jndi-vidnal EmergencY' or Total tax col· Populat ion, Mr. PENROSE. :Ur. President, I can appreciate the gtadnesS' . Income tax. ·•war tax." lected. ! 1915 of the Senator from Montana [Mr. Mms]. in ha"'ing this· para­ graph stricken from the bill. The majority-and he belongs r. NewYark •• -..... 160, 11)2, 590. 3:t 134, 961, 722. O. 03 26, 580, &B. IIJ 8,3SJ,!Y.J~ fined to individuals and corporations largely in New York, 3. illinois-•. ·-·-... 9,1113, 49-L 36 14, 31 L, 5\IJ. 55 24,225, 085. 9 t 6,06J,51J 4:. Massachusetts •••• 8, 382, 798. 55 li,8U,!l.51.22 14,19.>,649. n 3,6a2,3lJ. Pennsylvania, and half a dozen Northern States; and the ta-x 5. Ohio... -- ...... · 4,810, 610.44- 7,.741.,007.31' 12, 55'.!, 217. TS. s,oss,o27- on munitions was all l"ight from his point of view as; long as it 6. New Jn:say.••••• _. 4, !123, 22.i. 2.J 4,ti3J,4J7.03 11,55J,O:H.'!.8' 2,88r, .tJ was confined! to-the higher Jn<.mufactories chiefly located in Con­ 7. California •• ~- ..... 3,60::1,06!)_17· 1 5, 632, :lR2. 32 l 9.241,642.49'' 2,84 ,275. !t. .Missouri •••••• _... 2, 791) 926. 00 ' 6, 040, 630. 44 in 8, 838, 556. 44 3,391, 78} necticut or Pennsylvania:. But 1ihe very moment direct taxes 9. Michi~an ·-·-· .... 4., 428, 79.3. 32 3, SH, 1J5. 10 8, 270, 90J. 42 3~01.1,442- were impo ed upon the component parts of' munitions,. which 10, Wisconsin •••••••. l, 05.3, 061'. 617 s, 311, 6:>1. os- 1 6, 36~. 65't. 70 2,473,533 1t. Minnesota ...... 1,821,()34:. 64 3, 57l, 6!-~. 99- affected .copper and zinc in his own State, and zinc. and l~ad 5, 39 !, 683. 63 2,245, 76li 12'. Connecticut...... 2,50t..51-l.95 1, RO"J~ 7!. 26 4, 3ll.J89. 21 1., 223,5SJ: in Missourtl and eotto-n in the S.outhern States, we find that 13. Texas.... - ...... 1 1, 459, 052..88 2, 46-'i, 30::1. 8.3 3',9~,36~. 70 4,34'3,no, their heroic stand foc raising- revenue fades away, and the 14_ Maryland •• ----· ' I, 89J, 965. 61• 2,01-l,lf-l'l.&l 3, 9t'i, 83& 48 l,351,9it 15. Indian~_ .._ _ ,_ ... . spasm of virtue which they had in t1leir cancus. when they 9313, 74-b 7!). ' z, iJil, 793. 23c : 3, 676, fl42. 9~ · • 2. 798, 142" 16. Iowa~.--- ... _..... : 68J,550. 71 2, 156., 563. 9.! . 2,.839, 1H.63 . 2,221,033- inserted this paragraph. disappears here on the ftoor of the· 17. Rhode Island ..... t, 441; 30i. 15• OOJ, 119. 70· 1 2, 3-H, ,,653• .)j, 1, 9-H, 148. Ol 1,471, Q.t1 tion? ~l. Nebraska ...... 36>, 791;31' 1, UJ; 7 J7: 5J· 1, 78 i, hl5. Sl 1',258,62"1 22. Kentucky ...... 426',548.83 1, 351, 471.51; 1, m, o~o. :H 2,365,Bi; Mr. PENROSE. In .a minute. This shows. l!r. President, 23. District of Colum- ! how sordid. bow selfish, and how sectional are the motives bia_ ...... ~...... 1, 161,,631. 81 526,,691. 6) 1, 6S'l, 314,41 35S,.61J which animate the· framers-of this measure. 2-t. Virginia ...... -·-· 590,.941. 56 1, 092, 290. :S2 1,683,2:n.3'3 2,171,01! l'(fr. President, I congratulate the. Senator from North C'aro.­ 25. Colorado ...... 681,0lU.K4 941.).0H. U, l,ln'2, 17J. 93 935, 79) 26. Georgia ...... 43!i,IDL.13 1,053,.65J. 57' 1,, 491<, 073. 7{) 2,816,28} lina, whom I see in the Chamber, that it will be no longer neces­ 27. Tennessee .••• _... 47l,.495. tl 985,1)3.!. 29 1,457, 17lli 7[} 2,.271,379 28. Oklahoma ...... 71.-6, 207. 9:1 . sary for him to press for the adoption of his amendment to 723,878.32 1,440, 085. 3L 2~114,300: 29; Kansas_. __ ...... 28-t. 239.1 7; , 9a'"3, 522~ 85. this para~, 140, 073-. G-1 ; . 102,730 The Senator from North Carol:ina is to be still further con­ 51. Alaska._ .. _-· _••••• 17, 72S:5D 23, 4&-1.62 ' 41,190.12 &-1,751 gratula.tell that he wm not have to press a further amendment Grand totaL_ .. aimed, doubtles , to make. doubly sure. the amendment to which j 137,,243;.211L57. 136, M'l~ 428.42 27.3, 590, 719. gg: 100,675, 651: I ~~~SIIUl'ilaNS.. Mr. President~ the Senator does oot state to Mr. . MYERS· 1\-tr. President, the Senator from Pennsytvania has been engaged in that kind, of business f

of the western and eastern farmers, but selected the South out The section was frame(] with great care and .a fter much C'on­ of which to rai .Your revenue. Yom· party did this, and I · sideration, and, in my judgment, it imposecl a Tate of taxation hope you are ·sorry for it. It was an unconstitutional 'tax, as not upon zinc mines, as the Senator from 1\Iontnna [1\~r. MYERs] thE> Renator knows. mistnkely suppo es, not upon ·<:opper mines, not upon lead mines, Wbut is the pl'inctple upon wll'icn this ·munitions tax is levied, nor yet upon cotton linters, but upon the profits derivecl by the MT. President'? The Senator does 11ot seem to be able to dis- owners of those materials oerived from sales to those engaged criminate between a tax on agricultural products and a tax on in 1the manufacture of muni-tions of war. munitions. 1 shall .not oppose tlle motion of the Senator, but I must say 1 am informed, and reliably informed, fllat every waT-tnx bill that thP -people of my section are not ihere asking for its exclu­ ln Austria. in France, in Hussia, in ~rmany, and in England ~on. Enormous profits have .been made, since the outbreak .of excepts ngricultural proc1uC'ts; and tllis amenrlment that I In- this war, upon zinc, and the zinc mine that ·can not TUn now. even trounced is in line wtth 'evP'ry tsx bill introuuceo to collect taxes M a tax five times as ~reat as tbh~. is a mine that ought ·not to (}Ut of these inordinate profit~ that He m:ule out of war. Manu- succeetl, because its inherent nature or tlH~ ·character of its factuTe.rs of powcler ansirable tax. because it distributed to a 1\lr. PE1\TROSE. Does not the -se-nator llrnow ftha:t over 80 per very .considerable degree tb~ revenues which the Govemment cent of t11ese explosives is composed of cotton? must .raise between those dlreC'tly manufacturing munition..<; and 1\lr. OVEHl\IAN. No, sir; I '(]o -not know what·percentage it is. those furnishing .materials therefor~ and because in some in­ I k11ow they have only .u ·ed about 1,500,000 bales of :raw cotton stnnces, 1\lr. 1'1·esident, t·he actual net profit to the IIUlterial man ancl about 900.000 ·linter-s. is .greater than tbe profit tc the manufacturer. 1\lr. PENHOSIVby not ·ha\e e'"'ery other .agricultural -much more were ·stricken from the ·bill it would relieve some - protlUC't beur its proportion? \\'ill the Senator vote for a tax part o-f my constituency. I Sh(}uld like to strike out the whole on wheat in this bit!? bill. 1\Ir. PENitOSE. Y-es; I wfi1 vote to tax ·everything ·on nn Mr. THOMAS. I nave no doubt the ·senator is sufferi:ng equa1ity and uniformly. from the '3ame defect which he so bitterly criticizes in the Sena- 1\Ir. OVE1U\1A... ~. That is not the _principle upon -which the tor from North CaroUna. That is lmmrrn ·nature. It was stated Senator's party act(>(] in 1868-'69, when you seleereti .a peo- to the ..committee, 'by a cltize...n of the Senator's State, that in the pie tllllt were sufferjng mHl \Yere in distress aml taxed tbE'lll .'3 manufacture of a nine-point-two .(9.2) shell the furniRher of the a bale-the most nntrn~eous tax that was ever levied rm 11uy forging makes :n net prdfit of :$9.-;m, the furnisher of the copper people in the world-ami now you come and charge the Demo- for the shell makes a net profil of $2.22, while the manufacturer crntie Party with being a sectional party. l:our ptu·ty hus of the shell makes a net cprofit of $9. Here is a profit tu the alwayR been .:i s-ectional party. 'The Senator reads the 1.tmount furnisher ·of the st-eel f'()rging very considerably in excess of tJ1e of inc·ome tax paid by 1-·ortl1 "Carolina, trying to ridicult> the . profit upon •the fini. bed product, -and in this particular il18tance tax that North Carolina pays; ..why in Penm;ylvania. The Repuhlican Party bear tbeir proportion of these taxes. I yield to the Senator with the exception of a few years h.us been in -power ancl has bee-n from Pennsylvania. malting prote-cti.-e-tarifl' ' bill~ r<•hbing our people and making Mr. -oLIVER. .[ just wanted to correct the Senator. ·y ·know hiR people rkh. Tluu is \Yhat your party has been doing. Sec- lhe does :not ilntPnd to creat-e u :faL e ·impression. I thirrK: the-re tionnli!';m ·! Why, yom· pnity has been sectional whenever you is .a large nurnller of other manufacturers ·besides the Steel adntinistere-rl this Gnvermu~nt. Corporation who furnisn tbese forgings. Mr. PENROSE. .lr. ~resident, the -Senator will doubtless 1\lr. THOl\lAS. Certainly; I merely mentianed tbe particular re<.·an · tllat whe-u :the Re.pohlican .Party was in power every 'instance. l have -no douht that there are a great many other procluct in North Carolina that came here anil wantP-tl a pro- manufacturers .outside of 'Pennsy;lvania ·wh-o funiis'h them. tE>ciive duty got it, notably lumber. It was put on the clutiable Mr. PENROSE. Will the Senator permit :me'? li~t and kept t11ere lar~ely in deference to 'the wishes f the 'Mr. THOl\IAS. Certainly. Southern States. The Itepuhlican Purcy knows no section, no 'Mr. PENROSE. I (lo not k-now what partkular t conceim~ the creethe tax the framers -of this bm will be astounded mense- fortunes, and the balance of the country bas grown 'to -see the little profit there bas ~been -in the -business. po.or · and then you come here as a Senator upon this floor .anu 1\fr. THOMAS. That may· be so. No Ruch munition makc:-rs, parade our po>erty because we uo not pay ns much lncome tax so far as I am aware, malle any such exhfhition of their affairs as you .do. 'befort> the members of tne ·Committee en F·inanee. The principle upon wbicb this mm1itions tnx is levied is that I wisn to a:y in this connection, Mr. PreRtclent. ltbat ·as far as growjn.g out of the waT and the munitions makers have m•H}t' my experience goes, the only interests which the bill prop0. es inordiruxte profits out of munitions fon,·ar(led tu the warring to tax \Vhich have not protested a-re the munition •mnkers. I uo nnt1ons. The South insteacl of making enormous profits out of not mean to say that they have not prote.o;;ted against the method. cotto.n has suffered by rea on of the low Jll'ke of .cotton, and but t11ey have not .Protested against the tax. They said. and 1 the hi~h pl"jce of cotton now .is not on account of tl1e war. The think very truly, the tax upon gross receipts as provided ·by the truth of it ·is, foT the first two years of the war no section suf- House was wrong; they f;aid the Hou~e bill wbicl1 tax.e(J one fered as .the Routh diu on account of the low p1·ice of l"otton., munition maker at a different rate from another munition maker and I protest againR.t taxing any agricultural product and my was wrong; they said the bill which exemp-ted fhe subC'ontrnf'tor nmE> ndment so provides, and I hope it wnl he acloptecl. from the ,operation of ·the law was wrong; but al' of hf'm a ill JU:r. THOMAS. 1\lr. Pre.8ident. hefore the hill i~ suhmitte<1 to "we are making munitions, and we rE>cogni'ze the neces. ities of n .finnJ vote, I intenu to say something in reply to the general line the Government anti are willing to pay our proportion." IA.ll of cli~·u . inn whkh has <·hal'acterizE>cl the clehntP~ upon the otlwr honor to them. 'Si.rence.s to tbe snhst:><'tinn to which the motion of the erul line of })rote ts which have been made a~ui.nst every other S~nato r from Arizona is direcle

. 13496 CONGl{ESSIONi\._L l{ECORD-SEN.A.TE. AUGUST 31 · ' Mr. President, I have here two copies of the House bill which in the regular ordinary ginning process they run it throu"h certain munition makers sent to the committee and whosP another process, trimming it still more, and then, after t11e meat names I do not think it ·rs necessary to mention, and who them­ of the seed was extracted from the hulls, they took the hulls selves suggested amendments to the munitions schedule. Among and crushed them, like you grind corn or wheat, and sifted the these suggested amendments is one which puts the rate of tax li~tle particles of the hulls out and the remnants of it, the fine, wllich tile Senate bill carries, 10 'per cent upon net vrofits. I mmute fiber, was used in the manufacture of munitions of war. may say that these bills as corrected were given to the commit· As I understand, the War Department declares this fiber is tee by two of the greatest institutions of the country. When the best of any. Even where you use lint cotton you have to the Du . Pont powder people came before the committee they run it through a cutting process to cut it up Into fine particles. expressed a perfect \Villingness to pay a reasonable tax upon But in addition to this new process of obtaining what they net profits. When 10 per cent was suggested their representative call hull fiber there was produced in this country from August instantly replied thnt it was perfectly satisfactory and they_ 1, 1915, to August 1, 1916, 944,000 bales of linters; 881,000 bales \\·ould be glad to pay it. I emphasize this, Mr. President, be­ were u ·ed in the flomestic consumption; 294,000 were exported. cause I think these people are entitled to tlie highest credit for I should h_ave said, in naming the other figures for 1914 and the position they have taken with regard to this tax. · 1915, that this domeRtic consumption includes from two to three Now, coming back to subsection 2, the people of my State pro· hundred thousand bales in mattress factories nnd elsewhere duce zinc and lead in very considerable quantities. The tax, where they use fiber for different purposes. Jnstead of falling upon the producers, fall upon the refiners, The a-verage price for 1915-16 for the linters consumed in and if not upon the refiners then upon those who furnish the munitions and otherwise was 5.8 cents. manufacturer of tile finished product with the raw material The impression has gone abroad that linters have soared to which thjs section covers. Nevertheless I want to go _on record an enormous price. Under the principle the committee has in behalf of my cqnstituency and assert that, in so far as they adopted of taking incomes that were in excess of what tlley are to be taxed by the provisions of subsection 2, they make deemed was necessary for the ordinary com eniences of life, no complaint whatever. the inheritance which was the wealth of a deceased one pas ing Mr. STONE. 1\1r. President-- over to those who had· not earned it, and explosives, the e.xces· 1\Ir. THOMAS. l yield to the Senator. _ sive profits made by virtue of the great demand for these ar· 1\fr. STONE. In this connection I wish to state what I uid ticles to support the European war, they included linters as not state when I was on the floor, that I have not had a single one of the things which was allege(l to have risen to enormous protest from a producer or user of zinc or lead from Missouri figures. against this tax-not one. As my friend from Colorado knows, I haYe quoted the pr-ice that we got for the linters. Take into the State I in part represent is one of the very largest producers consideration that it was only about one-quarter of all the cot­ of both those metals. ton fiber used, and _that the largest on miLl that consumed the l\Ir. THOMAS. Let me say that the copper refiners express greatest number of tons of seeds scarcely produced enough tl1emselves as satisfied with the provisions of subsection 2. linters to pay for the process of delintlng. I freely concede that the tax upon munitions is not as broad I venture the assertion that the oil mills hardly compute the as it should be, because I regard a great many things which value of linters in their profits and losses. But one million aml ordinarily would not be considered within the definition of a half bales, weighing 500 pounds each; were used last year that munitions of war become so when they are purchased· by can be accounted for in munitions. That means that 1,000,000 belligerents and needed in carrying on a war of offense or bales of cotton \Yere used in munitions. defense. 'Ve know that as n result of the tremendous demands Now, what are the facts in reference to the price of cotton~ of the belligerents upon neutral countries for material many I am going to take the official figures furnished by the depm·t­ other than munition makers have profited inordinately since ment. In 1909 we made 10,072,731 bales of cotton. The nYcr­ the month of August, 1914, and inasmuch as they constituted age price was 14.3 cents per pound. the great army of advocates for preparedness and have done In 1910 we made 11,568,334 bales, and the average price "';as more to propagate that ~ entiment and to crystallize it in recent 14 cents per pound. legislation which places the burden of hundreds aBd hundreds In 1911 we made what was, up to that time, the largest cotton of mi1lions of dollars upon the already overburdened shoulders crop in the history of America-15,553,073 bales. The average of the A.mel'ican taxpayers, I would be glad to see a revenue law price was 9.6 cents. · . that when placed in operation would put the entire burden of In 1912 we made 13,488,539 bales, anu the average price was this new expenditure upon their shoulders. Of course, that ls 11.5 cent.'3. impossibla \Ve have done the best we could in that direction. In 1913 we made 13,982,811 bales, and the average price waB \Vhile protesting again t striking out subsection 2 I shall not 12.5 cents. delay a vote upon it. In 1914, the year that the war occm·red, which was almo t Mr. Sl\IITH of South Carolina. :llr. President, I think there contemporaneous with the opening of the cotton market, which l1as been a misappr~hension about this matter, so far as the was August 1, we ruade 16,000,000 bales, and the average price cotton tax is concerne<:I. There seemed to be an opinion, which was 7.3 cents per pounds from Augn~t 1 to August 1. was erroneous, that the price of linters has gone up inordi­ In 1915. last year, we made 11,068,173 bales-i),OOO,OOO bales nately, like the price of other munitions res to the seed, and there is a little felt to be published in the RECORD. product, and this is known as linters. Mr. SMITH of South Carolina. I shall be very glad to do so. Those who framed the bill framoo tl1is paragraph upon the It has been intimated here that the South was in the saddle, presumption, seemingly, that there was an amount suffi<'ient to and that therefore she \vas getting the lion's share of all appro· meet the needs of munition manufacturers; and that it, likE> priations, but was protesting whenever It came to a question of other raw material , bad soared. The truth of the matter is tax. That is the reason why I have gone so fully into these that there were consumed something like 1.500,000 bales of figures to show that our protest was based upon a proper and cotton and linter . Whereas, according to tables furnished me just premise. by the department, tlJere were only produced in 1914-15, which l\lr. President, I do not want to delay a vote on this matter. 1s the cotton year___:whlch runs from August 1 to August 1- I think every Senator here ees the injustice of placing a tax 832,000 bale of lintE>Ts, ·412.000 of which were used in dome~tic upon a commodity which means so much to the whole United consumption, 222,000 of which were exported abroad, and States and whicll now is scarcely more than bringing enough brought the fabulou sum of 1~ cents a pound on an average to pay fot· the cost of production, even at the present figure, for the entire 12 months. I do not know what the lowest was; which is around 15 cent. a pound. I did not get that, but the average was 1! cents per pound. l\Ir. President. I ask permission to have the tables I have read Mr. THOMAS. For what year? _ placed in the RECORD and also to have placed in the RECORD Mr. Sl\IITH of South Carolina. For the year from Augu. t 1, a table showing the amount of tax collected in 1863. 1864, and 1914, to August 1. 1915. In 1915-16 they-dl covered a new 1865 and up to 1868 and nlso the action of the Federal courts JH·occss of getting tl1is fiber. After they llad delinted the s~d '"thich recognized that there was nn element of doubt as to the 191G. .CONGREBSIONAL-RECORD-_ SENATE.t 13497

righteou~e.c;;~ of this" tnx. thou~h the rfrrumRtnn<'E>~ may hffve ·for this purpose, but information concerning the quantity is not been justiftPCI nt the timE> thE> tax WM levied.. Certainly It was available. more ju~titialile thPD tllan it I!! now. The Unitect Stutes were Undoubtedly a ·large quantity of hull fih<>r was u~E>d rluring then ip actual wnr. Tlwy WPJ'e then put to it to find the m«:>ans the past year in the manufacttrre of ~mncotton. This fiber is of k eepin~ their ·rr«:>a!'ury filled: Now we ur«:> hoa~ting that obtained from tl1e cottoru:eed hull aft«:>r passing throu~h the otii· Treasury is i·t:mning nvet' rtnd yet we are a~kPr. it mu~t than tl1e ·cm:tt of production. have heen several hundred thommnrl hale~. the principnl use, I a ·k to haw the tnhleR incorporated. of course, being in the manufacture of guncotton an!l (>Xplosiv~. The ICE PitE~TDI~NT. Wit110ut objection, it is so ordered. While formerly many mills did not ~t mm·e than nO pounds of The tables _referred to follow. linters per ton cruRhed, during the past seaROn quite a number Linters. of mills obtained 150 pounds or more per ton. Informntion concerning the qunntity of cotton fih«:>r. which Season or- Produc- ton.;ump- Export. Avenge includes lint, linters, waste, and hull fiher, uS(>(} in the manu~ tion. tion. price. facture of explosives has not bE>en collected, but It ls generally believed to be in excess of a million bale~ . Cents. I9lt:-12 ...... : ••• :...... 556,000 23rts 8 !!8 cott:m and Running a~e c::>tt0n (e ,uit·a· Year. -bales. Equivalent price linters 500-pound net per (e mi1·a1ent (e mi ·a- lent 500. 'Mr. SMITH . of ·south Carolina. 'l'he a~ove tl _gures are in conn fin~ wei~tht lent 500- gound round as bales.uoss pound, 500-pound ropnd numhers. and " ·hiJe they are obtained from the Censu.q weight. or upland bales). bales). ales). Bu,reau, it is not, therefore, an official statement. half bales. bale c:> tton Prior to the European war the consumption of linters was (lbs.). (cents). . a,bout 30Q.OOO ,bales per year, of which proh~bly 25.000 to 50.000 bale~ went into the manufacture of munitwns. Owing to the 1915 ...... 11,068,173 11, 06.~, 000 484 7.9 7,277,357 6, 204,1R8 ~.900 1:), 90-5, R40 high co!';t of linters many com·erns which formerly used linters 19141913 _...... __ __ 16, 134,930 485 7.3 5,8.15,592 8,9:H,2.'i3 363,595 in the manufacture of mattre ~eR, and ~o forth, discontinued n,9 2,811 14,156,486 484 12.5 5, 702,6:39 9, 256,028 26.i, 646 1.912 ...... 13,488,539 13,703,421 486 11.5 5,63),835 9, 19),093 225, 46'J thi u e, • o that prohably a smaller quantity of linters went 1911 ...... 15,553,903 H,692, 701 483 9.6 5, 1t<1,826 10,~1. 332 229,238 into miscellaneous manufacture ilian before the war-say prob­ 1910 . . --.- 11,568,334 11,608,616 480 14.0 4, 516,779 8, 02.\ 991 231, lJl ably 200.000 bal . 1909 ..•..• 10,072,731 10,004,949 475 14.3 4,559,002 6,491.843 Ll1,395 1851.-- ··. 3,121>, 310 2, 799,290 4.28 9.5 617,46H 2, LIS6 , 461 512 The 'consumption · of linters during the pa!'t sem•o:n was 881~- 1850 ...... 2., 454,442 2,136,083 416 12.1 422,626 1,8.')4,47-1 3:0 000 bales; thus it is sE>en that more than 6r>o,ooo· bales likely 1849: ·---· 2,469,093 1,975,274 429 12.3 575,500 1, 2.70, 76:3 4 ~ 5 were u ed for this purpose. In addition, some low-grade cotton 184-8 .. - ·-- 2.866,938 2,615,031 436 7. .5 586,032 2, 05:3,20-1 ~ 1.847. ~ ••• 2,439, 786 2,128,433 417 8.0 537,42.7 1, fi2g, 549- .-rs .:wa al o used in the manufacture of guncotton, but no data. are 1846 ...... 1, 778,651 1,603, 763 431 11.2 385,916 1,054. HO 122 available as to the"" quantity. Some cotton waste was also used

S tat.ement ofa mount ofinu rna.l-ret;enue tax on ra.to cotton ccll!t:ted in. each Blatt during-the ji.8cal years 188.' to 18GB, inc!u..siDe. [NOTE.-The tax on raw cotton wac; levied by act of July 1, 1862 (12 Stat., p. 465), and repealed by a<.'t of Feb. 3, 1868 (15 Stat.• p. 34).1

1863 1864 1805 1866 1867 1853 Total. '.

Alabama ...... -· .. -...... -· ...... --...... -...... S3, 733, ff20. 25 S3, 049, 868.01 $3, fl04., 583. 81 $10, :l , 072. 10 ~~~..:.~: ::::::::: _. ::::: ~=: ::::::::::: ~:::::: ::: ~:=~=::: ::: :::::::::::: :::::::::::::: :::::::::::::: 203, n~:: 1, 641, ~: ~~ .••• :~~·- ::~·- ~~ _ 2, 555, ~~: ~1 Connecticut.-...... ~·-···--··------· · ------·--·---·--· · --···-- $17.72 $110.25 ·-··-~·------...... 65.67 ...... 1 19!. 64 F lori Ia _. -· ...... ·~--·---·· · - _...... ·····---··----·· ••. ---· •••••.•..••...... : • •• -· ··--·····--·· 97,488. 2-t 499,645.07 321,811.67 918, 9-H. 93 3 554 544 38 3 283 270 31 5 9 74 11 7 09 3 Georgia _·-~ ..... ••·•· .. - .. -~-· ...... • .... •• .. •••••• ...... • .. • .. -- .. - .. · • ---·as--,· ;,1.5--.·6·,; · · ..Q.;~ ·so-·2·.·1·9· • ' 113,' 732·. oo ' 76,'013· •. n' ' o:a'4', ;97.· ~~ '3~,9 ', t4~·. ~2 Iltinoi~ ----- ··-·-- · ·-- · ·--··-·----·-····----····--···------··----··· 53,ast. 71 u ~ ~"" v "" ...... Indian~.--- :- -- ~~··--- .---· -----~.-·---···--··------·---· - ----··--··- 8,999.9J 1 04l,ll0 703.3\J 52,42K40 14.,2J2.~ 15,351.19 1 92,727.~~ Iowa...... 2T ...... ~----·--···--- ...... ·····-·--··-·-· • KAnsas ...... ··---·-...•- ...... 151.34 102.64 32.17 ...... 286.15 Kent ucky·---~·--··--··-·-··--·~·······-····-··-- ...... ····-·-·- 12,779.67 83,050.15 83,658.34 121,550.89 149,905.16 102,3&!. 24 5-5.1,327. 45 Lmiliinna_ ... - ·-·. ~--.- ...•••••• ----· ...... _.... •• • ...... 19,920.93 436,044.52 593,108.02 4.,300, 150. 17 2, 971,708.19 1, 7Ti, 569. 1; 10,008,501. OJ Maryland...... 1,867.66 139.91 1,168.65 4,324.0 :~ 4,424.48 3\1 ,424.19 51,34\1.5.! Massachusetts...... ~~-----~-·--·-········.··-··-·-·--···-··-· 4, 412.79 6; 419. u 121. oo 28, li5. 46 16,576.85 to, 96i. 9ti 66,6i?. 3!) Mi: siss.ippL ...... - .... ~•••••••••••••••••• , ..._____ - ··--- -···-- --···-- ·-· ·.: .• ···-··--··-· 756,629.27 4,464,664.40 3,521,702.21> 8,742,99a.93 MhsourL...... ~ ...... ~...... 69,493.12 39,009.76 73,603.00 24-7,289.14 96,721.63 65,981. il 592,~8.36 NewJorsey ...... ~ ...... · ...... ~ ...... ···-··-····· 500.00 ...... 3,15fl.42 ·····-···--·--· 3,655.42 _New York~ .... ------···- ••• , .. _ .... ___ -· .., ...... ___ ••• 102,041.83 24,836.56 10,334.04 492,557.07 -112,570.54 125,602.64 86i, 942. 6S North Carolina ...... ·-·· ~---·-···--· ...... _...... _ .. _...... --. _.. -· ...... --·.. 211,658.57 860,704.55 88i,34L 7."1 1,959, 704.87 Ohio ...... -...... , ••.• - ••••oooo•n••--•••••••-oo••"'"""" 70,896.24 94,085.59 39,918.92 41,691.89 85,343.00 115,190.48 ~i,l27,12 Pennsylvania...... 5,060.89 57,895.38 ...... 6,080.62 146.03 9,352.14· 78,535.06 :!~0c~~~~;~::::::::::::::::-::::::::::~::::::::::::::::::::::::: .. -~:~~:~. -·- ..... -·: ~~ - ...... ~: ~- ... '73i.;939: 67' ··i;429;28i.'io. ·z:-oii;iijli39. 4, 11~:~: r~ Tennessee_ ...... ~...... 488,325.80 877,901.09 2,148,437.98 1,929,301. 72 2,429,494. L2 7,81 :~ ,460. 71 Texas ...... ____ ...... ·--·----.. _- -· ...... __ .. 1,395,524.17 2, 780, 307.31 1,326,569. 76 5,502, 4{J1. 24 Utah.... ·--·-·-············---···-·············-···-······--··· 36.75 11.00 48.90 241.31 389.64 647.74 1,375.34 ~;~::::::~:::~::::~::::::::: ::::::::::::::::::::::::::::::::: ::: ~:::::::: ···--i;425: sa· ···- i6;.us: 64- ·---~~..:.~~== _·- --299~147: 65--- ~33o;s79: 46. ~~:~ ~ TotaL ... ·-·-··· .. --·--·----·-· ..•••••. -··-•.•. ;~- ...... 351,311.48 1, 268,412.56 1, 772,983.48 18,409,654.90 23,769,078.80 22,50!>, 94.7. 77 63,072,38Jt 99

. TniAsunY Din'ARTME~T. was paid was conRtituttonal and the tax valid. The raRe was appealed Oli'll'TCE 01!' TIIF- !'IECRETARY, to thE> I.:nitl'd Stat~>s Supreme Court, and at·gued In 1869, anti rPat·gued Wa~ Mngton;. December !2, 1910. in that court in 1870 and 1S71, and the judgment of the lower court a.ffirmt>d by an t>quaJ division of the justices. (~ee Tru.nscript of Rec· SIR : Replying -to rPfen>-uce recpivl'd October t4. 191;~1 tnclosing- ("OPY of a bill (H. R. 25927) to provide for rt>paying. ou: ~ wegaUy collt>cted onls, Suprem(> Court. v.oL 1, 178.) by the Unltt>d StntP!> on cotton .. und<>r thp Civil War tax acts. and rp. Tbert> ls therPforP, no apparPnt rPnRon, founde-<1 upon jurlic-ial au­ questing that all information roncerning the matter tn this department, thority. for the allt>gation that the original tax. act was unconstitutional and an opinion touching thP mer1ts of the case, be furnil'lhed tht> Com­ or that tlu> taxes were illegally collected. mittt>e on Cia ims, I ha vt> thP honor to advise you that the records .n Rt>spectfnlly, the office of the CommiRRioner of Internal R~>v~>nue dt~lose the fact FRANKLIN MACVEAGH, Secretary. that the Governmt>nt <·ollt>ctNI tax on raw cotton, under the aet of The CHAIRMAN COJUMITTE.E ON CLAIMS, July 1, 1862, amounting to $68,072,388.99, us shown by printed state­ Hause of Representatives. ment he.rewlth inrlo R~> cl. .The tax act aforesaid was repealed Ft>brunry 3, 186g, and subsequently 1\Ir. GALLINGER. I ask unanimuru; cun."ent to offer a pro­ so much of thP tiL.'C n~> was rollectt>d on baggtng and ties (4 per cent posed amendment to the pending bill. which I desire to have gross weight b!'lng allowt•d for tare) wa rPfundPd on claims senson­ ubly madP. but no tax on cotto.n collected under the act aforesaid was printed anrl lie on the table. ever refundt>d. The VICE PRESIDENT. It is so orrlered. The constitutionality of this tax was testPd in the U.nitE>d States 1\lr. UNDER\VOOD. Mr. President. I propos:erl in the Demo­ Circuit Court for thE> Wt>lltern District of TPnneSRf>t' in the MISe of Far­ cratic conference when this bill . was under- considPmtiun to ringto~ v. Raunrters, collector, and deddt>d September 23, 1867, in favor of the Government, the court holding that the a<;t under which the tax strike out subsection 2, this munitions tax; and I am very glad 13498 CON GRESSION .A._L RECORD_-.SEN_A_ TE~ . Auousr 31,

that the question now comes before the Senate on a motion to It has not been the policy of either the House of Representa­ strike it out, ·intlorsed by a majority of the majority .members tives or of the Senate, as expressed by their committee , to . of the committee. I do not think that I subject myself at all levy this tax on all classes of munitions of war. A soldier's to the imputation of favoring legiglation .sectional in its tendency uniform is as much a munition of war as is the gun he carries because I favor the striking out of this subsection. on his back ; the uorse he rides and the bridle with which he I listened a moment ago to .what the Senator from Pennsyl­ conh·ols the horse are as much munitions of war us are the vania [1\lr. PENRosE] stated in reference to the South desiring guns that are carried al.ong in the marching of an urmy; but sectional legi ~lation. The main point under subsection 2 where the committee has not determined to tax the horse or the gnu the South woulc­ It is not, however, for that reason alone that I fn>or striking tion 1, then why should sub ection 2 be related to it at ull? out subsedion 2. If you consider the sectional benefits that cQme A man who is_producing lumber· in the· North does not know - from striking out that subsection, the great lumber industry whether his lumher goes into a -house or whetbet· it goes into se'ls portions of its pro(luct to the munition plants. I have no a caisson; the man who Is producing raw cotton in the South douht that tne lumber inania said in industry has been one of the industrie~ of this country which reference to this question, nnd I know, and the Senator from has· not prospered so greatly as have the other indush·ies of the Pennsylvania knows. that the large:;;t mnount of raw material country. The cotton indush·y has been the one indugti·y that that thE> munition plants of this country purchase is shrapnel has suffered by the European war. If time permitted I could steel. -I ha-ve no doubt that the amount of shrapnel steel tbut go fu.rtlier into the question of raw materials fill(} point out ha~ been sold to the munition plants of this country from the many from which there has been no great profit made. State of Pennsvlvania in 1 one month exceeds the entire amount 1\lore· than that: In most of these raw m{lterials the price of cotton that ·has been sold for explosive purposes in a whole has not been fixed by the price of munitions of war. but the year. It is not, howev·er. only shrapnel steel, but it is lllanu­ price has been fixed by the general demand in the home mat·ket, fuctured copper. manufactured rubbE>r, and other manufactured which to some degree may have been influenced by the fact goods of all kinds from the North which fall under this tax, that the man manufacturing munitions was in the field buying and one single commor Senators have fected. Therefore I felt that it was very unjust to have the bE'f'n so anxious to try to show that southern Representatives producers of these raw materials coupled up with the men who and southern Senators are sectional in their legislation, that were ·making instruments of death and making great profits thev have attacked them for proposing and supporting an out "of them. . - am~ndment which. nine times at least out of ten, is beneficial But there is another reason why I desire to have this amend­ to the grt>at industries of the North. ment stricken out: I~ is not going to raise much money. but it 'Ihat, however, is- not the reason why we should not support would be an instrument of annoyance to a great many people. - it. . If we get no benefit from it in the South, if it is just, This tax was to begin on the 1st day of last .January. You if the reason for striking it out is sound, it ought to be sup­ were going to tax a man for the profit he made before you ported. regarule!'s of the section of the country that may be announced that your tax started. You traveled back into every benefited or injured by it. . · 1ittle corporation in the iron and steel indush·~r, in the lumber So far as I am concemep, I am not overly enamored of this indush·y, in the cotton industry, anll in nUinE>rous other indus­ method of taxation. It is a temporary tax; it will expire when tries to find out how much went to· the munition manufac­ the war in Europe is over. The needs of the Government fm· turers and how much went to the public. Those people would money, however, will not have expired at that time. \Ve shall have to have their books inspected, and they would be put to need t11e money just the same. because I think it is idle to pre­ endless annoyance if this subsection 2 should l'cmain in the diet that imme European war is ture, however, If- subsection 2 remains in the hill. in my judg­ over just as we need it now. I would tlwrefore prefer a per­ ment every dollar of raw material which was sold -to munition manent tux. But there is a sentiment in this country tlmt rer­ factories would be sold by an indivitluul ainJ not ·by· a corpora­ tain men who have sold instruments of cteuth to the fighting tion, because if you. leave the door open, if you do not make it nations and who luwe made their fortunes out of it should nnla\vful, men urfl' not going to pay taxes when they 1lo not wun.t pny a portion vf the tax to support the military arm of the to do so. Do you suppose the ('Orporations that ha<.l lumber to Nntional Government. sell to a munition plant would sell it direct und huve to puy 5 There dQes not seem to be much opposition to this tax from pet• cent tax on its net profits, when they could sell it to an the men who will pay it, so far as subsection 1 is concerned. individual, who could make a legitimate sale to the munition Therefm.·e I am not complaining about the proposition, although plant and save 5 per cent, or the larger portion of it? I should like to see our fiscal agents adopt a system of saying tlwt the income tux and the inhE>rit..'1.nce tax justly distribute Mr.-TH01\1AS. Mr. President-- tlle burdens of ta.'{ation upon thE> wealth of the country, that they The VICE PRESIDENT. Docs the Senator from Alabama fairly distribute them ; and if the~· do not do it now, to so adjust yield to the SPnator from Colorado? them tllat they will be fairly distributed. and then make the Mr. UNDERWOOD. Yes. tax high enough to get the money which the Government nee United States know how much taxes large. Does· the Senator think that shifting would occur in they are paying and whnt they are paying them for, so ns to viPw of the large surtax which the iu<.lividual must puy and enable us to bring about economy in running the Government. from which the corporation is exempt? But the policy for the time lwing has been determined upon to Mr. UNDEH.WOOD. I do not think there is any distinction tax the manufa<:turers of munitions. in the matter. · 1_916. CONGRESSIONAL REOOR.D-SENATE. 13499

1\lr. THOl\IAS. If the Senntor will permit me, I will call his individual and the other is owned by the Senator from Penn­ attention to some figures ·which I had 1\lr. l\IcCoy make upon the sylvania through the medium of a corporation. He owns all subjf'ct. Take an income of $250,000. The corporation tax is the stock, owns the corporation, the corpomtiou llelougs to 2 per cent and the munition tax, we wilJ say, is 10 per cent. him, and he thereby own.s the building. Now. corning to the The total tax 'vould be $30,500 in that case. if the corporation income tax, 'if the building owned by rue protluces a hundred were the material ruan. If it wet·e an imlividual. the surtax thousn.nd dollars of net profits at the end of the yem·, I puy with the normal tax would be $15.920, anll the at1de<110 per cent 1 per cent normal tax on the lmndretl thousantl dollars of net or G per cent, a...;; the case may be-the difference would be the profits, and I pay a surtax in addition, · whlltever it may be. same in each im:tance--would increase the tax to $40,420, mak­ In the case of the other building, it also yields net profits of ing a difference in favor of the corporation as against the indi­ $100.000, but the corporation owned by the Senator from Penn­ vidual of $9.9~0. sylvania pays for him the normal tax of 1 per cent aml passes In the case of an income of $500,000 the corporation tax would the balance on to him, and he pays the surtux, just as I vil u as the home , of the "Interests" ann loatlecl clown with taxes, when · it became nee· then, after you have· pluncleretl her and taken her goods from <;ssary to ca~l out troops to polit·e the Mexkan I.Jorder the-se vet·y same her. taunt hPr ann now in ramp there l\fr. OLIVER 1\Ir. President, I wi~h to ealf the attention of yery· nearJ:v oue-balf, ()f about 4R,OOO. wNP suppltPrt u:v the four :::itntes. nam~d. Such galu.nt i5tates as North Carolina, South Carolina~ Georgia _ the Senator from New Jersey to the fact that the sectional Flol'Jda. Kentuek_v, T<:>nnPssPe, Alabama, Mississippi, and .A·rkansas hav~ question was first raised yestPrhes· the ruoney and a:ls() furnishes the men when Lherc is advocacy of rnPasures in behalf of my own State. a call for the mobilization of the National Guard. · 1\rr. OVEHM,AN. The Senator does not mean that I taxed him with sertionalism. _ 1\Jr. OVEUlU.AN. That L~ "waving the bloody. sllirt" again. 1\Ir. STONE. Mr. Pre ident, l would lilie to. suy something; l\1r. OLIVEH. I understood that Senator SIMMONS was th~ senim· Senator from North Carolina. It was Senator SruMo s before this vote is tak~n. provoked by the latest e1fusion of the senior Senator from Pennsylvania. nut Senator 0YERMA ~. In reply to that I was forced to- cail attention to the seetional provi io.Js of the measure now be­ · I have been sitting here for t1nys listening, with impatience to, fore the Sem1te. the variegated remarks of the Senator. from Penn~ylvnnia. Some· l\1r. HUGHES. 1\fr. Presirtent, I will say that my remarks time ago I cal1etl attention to· the fact at the en1l of· one of his had reference to what occurr{'d here- to-(lny. I do not thiok partisan philippics, one of his partisan ebullitions, dPliverecl after either the junior Senator from Pennsyl>ania [Mr. OLIVER] or a· long absence, that his principal mi~sion in the :::\enate no"' is the senior Senator from North Carolina [Mr. SnrMoNsl i . to to come here· occasionally at odd intervals to do what he- <'an to be charg:ed with having injected the sectional issue int(J this raise Cain. He then notified the Senate that h.e would' probably dL~us~ion, 01~ into, tl1{' greatPr lliscu~sion that is going _on be here until October, or until the·Senate adjoUI·ned. , throughout thlS country now. Tliat: credit, if credit it is, clearly Mr. President, the· Senator's special mi,' ·ion seem to be to belongs to the_Republican candi<.U.tte-for the· Presidency. · eritieize, to, make complaint. He seems to· have a pain in his 1\ir.. PENuo::;E. 1\lr. President, the sectional que::;tion was ponderous abdominal seetion· that he has to· reliev Jn-- some• not rmsed by me. Our Democratic friends have been accus­ method o.f expulsion, and hE'- cloes , that in the ";ny lre ha per·· forme<.l . to-day.. I do not believe the Senattll' from Pennsylvania. tomed ~o abusing th{' Repnhliean Party for 15 or 20 rears. The tu~,I1'f policy has been termed a robbt>ry. " Predatory in­ knows much about the biU before the· Senaw~ I (lo not helieve. terests and a lot of other terms ha-re been used with great ..he care mu~ about it. He care ·Jess than he knows· about it,, reckles ne:ss, anmptuou.s the wine sche<.lnle, immectiatefy tl1e terrific sectional battle be­ and criti.cal. And, Mr. P.reshlent, I am1 going· to nmture to• twee.t~ Culi!ornia and Ohio aFHl New .Jersey occurred. To-day say that the Senator from Penn yivania dQes not ~tanll aloue. ~ve llsteneo to speec:hP · that evi<.lently hnd been prepared before among his party colfeagnes in this attitude• . In comparison he. 1t had been determined to eliminate this paragraph, and ap­ holds only a rathei~ exceptionaL position as to his attell(luuce­ parently had to be delivered eYen if their delivery defeated the upon the_sessions of the Senate. Iii~ comes only no\v a:nd then, elimi-nation of" t-he paragraph. These things· show that the cot­ at rare iurervals, to deliver his maledictions, and; then tlh,ap­ ton- Senators, the copper Senator ·, the·· zinc Senators. the !earl pears. The senior Senator from. Utah [1\h·. &MooTl, who is gen­ Senators, 'vPre all united in n band of brotherhood' which couln~ttnrs on the othet:-si<.le. with The Secre~ry read as follows: the po~sible- except or the junior· Senatol."· from , Kan. as [1\lr. . CURns], -who did ha.ve the. audacity the othet· day to assail [From the Rochester (N. Y.) Chronicle of .Aug.· 14, 1916.] one or the great measures enacted' during this administration~ .THE NORTH ALWAYS THE GOAT. the Ferteral reserve bank act-- Th~ long list of names .:ompl~ed by· SPnator PE~UOSE " of mPn wha 1\Ir. CURTIS. Mr. Presitlent-- contributed to the Dt>mot'ratic· .ampaign fund and we.re afterwards re­ 1\Ir. -STONE. Never mind, now; sit down an_n 1t came to filling po~ltions of ulgnity anti re)'(ponsi­ the Senator from Utah [1\lr .. SMooT], the Senatm· from New blhty. A. au mterestlng postscript to th1!> list, the New York l">un Hampshire [Mr. GALLINGEul-none nf them will ri e here on shows that while six Nol'tb.•rners Wf're contrilmtor to the extC'nt of $1-!7,000, only ;;eve_n men from the South contril.!utf'd more than $100. the floor of the SC'nate and denounee in · specific terms· any of The Sun draws ttns conclusion: "In the distribution of offices unllcr the specific, important enactments of the Dt-~mocratic Congress 191G. - CONGltESSiONAL -RECORD-- SEN.A.'fE. 13501

and Democratic President since Woodrow 'Vilson was inaugu­ His conception of public policy is well set forth in what Iago rated as our Chief Exccuti'"e. Neither will they specifically snltl to Roderigo in Shakespeare's great tragedy of "Othello": assail anything tlJc PresiUent llas done \Yith respect to our Put money in thy pur~e. • • • Fill thy purse· with money. forl'ign relations. They \Vill do what l\Ir. Hughes is doing; * * * If sanctimony and a frail vo.w IJetwixt an erring barbarian they will indulge in glittering generalities by way of indefinite and a supersubtle Venetian be not too hard fo r my wits and all the tribe of bell, thou shalt enjoy her; therefore, make money. • • • criticism, but they will not specify. Go lllil.ke money. - Mr. President, I have never known such a motley group of uiscrcdited bosses and political nondescripts gather~d about i\lake money is the measure of duty and pah·iotism. any candidate for a great office as nre now gathered about Here we have this sweet quartet-Perkins, Roosevelt, PEN­ 1\lr. Hughes. Look for a minute at some of the leaders. ROSE, and SMOOT-fighting in the forefront, hand to hand, for I.ook at llooscYclt-:-the 'Yarwick who made Hughes. Except the electiOn of l\Ir. Hughes. It is an inspiring spectacle. for Uoosevelt, Hughes was not possible; except for Roosevelt, You have not:- distincti'"e public measure to propose. I chal­ Hughes would still be impossible. The whole country knows lenge you to state one. Moreover, I challenge you now to state that Hughes could not l1ave been nominate<] without Roosevf'lt's specjfically just what thing in the foreign or domestic affairs of support, a'lld to-day Hughes goes limping and leaning upon this country occurring under the Wilson administration you Uoo~evelt as upon a crutch. '.fben there is PE~IWSE, the Re­ particularly criticize and condemn. Numerous great construc­ publican boss supreme. tive -measures, as you know, have been pass.ed dm·ing this ad­ Mr. PENHOSFJ. Mr. Presiuent, as the Senator ha. referred ministration, almost every one of which yon opposed with more c to me, I want to assure him tllat I am a plain, bumble toiler in or les obstinacy. I imite you to . pick them out, one by one. tlie Yineyard. Shall I name them to you? Offhand, I will name some of them. 1\1r. STONE. l\lr. President, you see I haye books here before There is the Federal reserve bank bill, the Federal Trade me, but I do not wish to open them. Tlte books I have before c.ommissi?n bill, the land bank or rural-credits bill, the shit> me are, first, the bearings of the committee presided oYer by the bill, the mcrease Navy bill, the defense bills, and so on. Be Senator from Minnesota [l\Ir. CLAPP], examining into political game now and tell us \Yhicb one of these you assail and con­ contributions, and, secondly, bound copies of the Outlook, the demn, and exactly wherein you condemn them. GiYe us a bill puhl icatil)n of which ex-President Roosevelt was the chief editor. of particulars. 1\lt·. THOMAS. Mr. President, may I inquire wl;lether any of It is easy to stand up and in general terms denounce and the contributors who testified were appointed to office by Repub­ criticize, but there is not one among you who will pick out lican Presidents? any one of the great constructive measures that have been l\Ir. STONE. The items I have marked in these l>Ooks, l\Ir. enacted and condemn it. Dare you? I · repeat, you dare not · President, nn• these: In the testimony taken before Senator do it. I challenge you now to take these measures, one by one, Cr.Al'P's committee I have marked the testimony of Senator tho ~e I h_ave named, or others, and denounce them. You will PEXROSE and ex-President Roosevelt, and in the Outlook the not do it. The challenge stands. artides I have marked set forth some of the things ex-President 1\Ir. PENROSE. With the exception of the preparedness RooRevelt had to say in expressing his opinion of the Senator measure, every other bill mentioned by the Senator, in my from Pennsylvania as one of the then plain and hmnble toilers opinion, is a vicious measure, and I should have been Yerv in the vineyard of the Lord. sorry to have occupied any attitude toward it except that of Mr. PENROSE. 1\lr. President, I ltope the Senator does not condemnation and criticism. believe all he reads in the magazines. A few years ago I read · Mr. STOI\"TE. Does the Senator from Pennsylvania de· some very interesting stories about the Senator from Missouri nounce the Federal banking bill? and u baking-powder proposition in Missouri. Mr. PENROSE. Yes; I think there are a great many bad Mr. STONE. Yes. features in it. l\fe. PENROSE. But I passed them by as unworthy of m01·e 1\Ir. JAMES. But the platform of your party did not dare than a casual attention. It is true that inuictments were talked denounce it. · about. Mr. STOKE. No; the platform of your party did not de· Mr. STONE. Yes; that was written, but who wrote them? nounce it. 1\Ir. PENROSE. I do not know. l\Ir. PENROSE. It js what Thcouore Hoosevelt said about the Senator from and tell me just what it is in that measm·e they object to. Pennsylvania and what the Senator f1·om Pennsylvania said l\fr. GALLINGER. Mr. President, the schoolmaster is abroau . about r.rheodore Roosevelt. That is authentic anlll familiar articles we would see po ltion if you assign it to me. Then, on behalf of the President, agaiu what Wm'wick thought · of the boss and what the boss to whom evidently you refer us chief schoolmuster, on behalf thought of Warwick. of e\ery Democratic Senator, the deputy schoolmaster asks Then we ltaYe the Senator from Utah [Mr. SMooT], the su­ you little students to stand up and tell us what your obJections preme matbematical juggler. This Senator can marshal and to the law mentioned, or any of these laws, may be. Will the arrange figure~ to prove anything he wants to prove. He can beau of the class, the Senator from New Hampshire, rise, take unhorse Newton, Galileo, or any other man, even though he his position, and answer? may unsettle the Jaw of gravitation or astronomical systems. l\Ir. GALLINGER. l\1r. President, this discourse is so digni· Jusi: turn him loose and lle can proye ''batever he thinks it ·fi.ed that I would not like to interrupt it. necessary to prove. 1\lr. STONE. So the bead of the class takes his seat? Then tlJere is Perkin~. PENROSE and SMooT, of tlle -old guaru, Mr. GALLINGER. Yes. and Roosevelt and Perkins, of the new era. What is Perkins's 1\h·. STONE. Now, ;vill the Senator ft·om Pennsylvania rise mission in public life? Is that a mystery? We have beard and tell what there is in the bank bill that be particularly abont the" Wolf of Wall Street.'' I would not characterize l\1r. criticizes? I awnit. He rloes not rjse. He keeps his seat. Perkins as a "wolf," but rather as the !ago of Wall. Street. Mr. WEEKS. Mr. President-- 1 "13502 CONGRESSIONAL RECORD-- SENAr:E. ....£\.UGUST 31,"

Mr. STONE. HerE: is another student in the c1afis I am in- There can be no doubt about that. No honest man will deny structing who thinks he is able to answer. I presume the Sen- that. Whether somebouy was appointed in the bank forct> lUt­ ator from Massucl,nsetts rise.'l for that .vnrpmse. side of the civil service, 1 do not know. I decline to con idru· 1\fr. WEEKS. After the Senator from Missouri has finished a question so trivial as that. his scolti, I will take occasion to point out some things about Mr. President, substantially what I desired to say .has !Jeen the Federal re~erve act which I think lle does not know any- said; The Senator from Pennsylvania and his active colleagues thing about and which it might be well to correct for the benefit on that side seem to have no other mission Jn the Sennte at of the puhlic service. this time than to try t~ raise the devil us far as they can by .Mr. STONE. Let the Senator ten us now. bald cdticism and constant effort to excite suspicion agninst Mr. WEEKS. I will not brP.ak in ou the ·senator's speech. something or somebody. Tbey make no specific charges. They ! •will point them out after he gets through. do not attack anything specificully; they just cry out aloml iq ..Mr. STONE. The Senator is rather a rebellious student. general terms. That seems to be their dl.ief mission here. It He does not stand up when he is called. He says, " I will ta~e ,. they have anything else to do, they are careful not to disclose my time." The Senator from Massachusetts voted for th1s it. There is not one among our colleagues on the other side lJill? who sincerely devotes hirnF:elf to the work of ai-:er, m my JUdgment, w~o got a place. At least 1 know of 1\Ir. GALLINGER. But not in accordance with the Constitu- none from Kentucky who did. tion of the United States. l\lr. PEN.ROSE. I do not kno~v wher: the Senator from Ken- 1\f.r. STONE. In what way did he violate the Constitution? tucky was t.f the hungry Democrats Weie not well- fed. He was l\lr. GALLINGER. Well, 1\fr. Prec;;ident. I leave that to the noi ~n .i1ll~~· m always wlllino- if the Senator from 1\lis- Senator to work out for him~elf. If the P:esident of the United 1 r. · . . · . 1 a ' ...... b t I States can co rue to the Cap1tol and cull rnto conference a few sonn wul per~mt. me, to g~t a position. for a De.mo~rat.. u Senators to formulate hills.· and if that is in accordance with the was merely pomtmg ?ut that th~y reqUired an exammat..wn be- constitutional provision I read the Constitution incorrectly fore they woulu appomt anyone m the Federal Reserve System. that . all ' ' 18 I do not think that they ought to have done it. · • l\1r. PENH.OSE. It was not a competitive examination. The l\Ir. S'l'Ol\TE. Suppose it had bP.en some other President-a bill in that respect was a deliberate taid on the met·it -system Republican President-! a'm not speaking in a partisan . ense in one of the last departments of the Government wherein it just now. Suppose a Republican Presitlent desiring some vital should have been permitted., a great financial system, and in- legislation like that we are now calleu upon to. deal with-sup­ competent men from all over the counu·y were appointed in po~e he had been of the Senator's party and hlld sent for connec·tion with the work. the Senator from New Hampshire to eome over to the White 1\fr. JAl\lES. I recognize that if there is any champion of Honse that he might confer with him, would not he have gone? civil-service efficiency nnd competitive examination ()n earth l\Ir. GALLINGER. Mr. President, I have been here a long the Senator from Pennsylvania is the leader of all that crowd. while, perhaps longer than I ought to have been ; anu I have .Mr. PENROSE. Oh, no; but I abhor hypocrisy, and when the never been invited into that little room during the pendency lofty pretensions of the Democratic candidate for the Presl- of a bill by any President, Hepublican or Democratic, to have uency and their platform are compared with their performances, him outline what the legislative department of the Government any man of a logical, straightforward mental process will re- ought to do. pudiute such a transaction. 1\fr. STONE. Doe~ the SE>.nator from New Hampshire ser- l\1r. STONE. The Senator from Pennsylvania abhors hypoc- iously say to me that the President of his party has never in­ risy as applied to the civil ervice, but does so as a matter of vi ted him to confer with him? course, in theory only, ignoring it with the greatest complacency Mr. GALLINGER. Not in the Capitol of the United States. in practice. Mr. STONE. Bnt at the "White Hou~e? J.\lr. PENROSE. In connection with the financial system of Mr. GALLINGER. 'VP-11, at the White House; possibly that the country I could consistently advocate the strongest merit may have happened. The President did that, but, after uoing system, and it should have been applied. it, he-I will not say what he did. Mr. STONE. l\lr. President, that is one of the tricks of the l\fr. STONE. 'l'his room .in the-Capitol Js set apart for the Senator's oratory and perfon,pance. When he gets in a corner, President; it is the President's room. he b·ies to start some immaterial and insignificant issue to divert :Mr. GALLINGER. Yes. · attention from the main question. l\1r. STO:l\"'E. The Senate gave it to him. Did it give it to I <.Io not care, and the people of the country do not care, about him merely that he might come over here for a half bour some the issue the Senator now eeks to rai~e. But they ru·e inter- day to sign bills at the end of a session? ested, profoundly intere ted, in the Federal reserve bunk. I Mr. GALLINGER. l\l.r. President. th·e Renator from Missouri assart with confidence that that bank system has been most knows pl·eci.c;;e1y what I know, tllat there bus not been in 1he efficiently ud.mini.'tered; and if so, tllere is nothing more to be history of the Government Rudt intE>rfPrPn<'e with 1egislutive said on that subject. Under this administration it hus stood matters as hns o~curretl during the pre ent administration. as a bulwark against panic, and has been a source of constant The .Senato1· know·s that the President co_mes here for a "grand­ strength to the indu trial and financial activities of the coun.u·y. stand play" that the country may understand that he is dictat- 1916. CONGRESSIONAL RECORD-SENATE. 13503

ing the !e~i ~ l:ttion. H..- bPtWPffi the Pre"iuent has h.nppene(l all along tbe Hne in the r..-cent lHH::t. that dm·ing cowing to tbe r·ooru hPre in the Capitol Het upart fvr his use the consideration of this subject the Prefli majority, on whom the chief respon~i­ .nod sending -for Ren.ator!'l to -cume o:v-er to tlle White House to bility is cast .of working out tbis problem-will finfl littlE> uetive mPet him ther<> in the Blue Room or too Green ltoom or tlJe Red ·sympathy upon the other side. I nru merely waiting, nn&rn. am mistaken, I shall take occasion to rise and make the umenue Mr. GAL·LINGEU. The Pr.esident ha.."' not entirely confined honorable. him ~Jf to tbP room sM: apart for 'him in coming here to Mr. GALLINGER. Mr. President, the Senator from Mis­ talk ·\vitb Democr.utie 'Senators ·-on legislation, nnd th<> Senutor souri is traveling .on rather thin ice when he enters the realm knows that. of a prophet. The Senator has a great many accomplishments, Mr. .STONE. ·wen. it is · a fact that the Presid<>nt could but I wnuld J'ather trust to the old prophets than to the Senator not get to his roo10 without getting out of his machine in from Missouri when be enters that realm. front of the :Capitnl. ;vaiki-ng up the steps .or riding np nn the 1\lr. STONE. Well, I am one of the older prophets of the elevator, a.D11 com:in.g along tbe corridor; he ha..d them; he shall .do, and with this prophecy I end this talk. .knows that in his :l1ea.rt. He knows he is merely trying to 1\Ir. GALLINGER 1\Ir. President, I was unavoidably called mur myself, I 'had rather the President woutu come to me .1\fr. GALLINGER. I did not J'CCOgnize it when I came in. here at the Capitol than ask me to conu• to :biw .ut tlle White 1\l.r. w -EEKS. ]lr. Presi.Uent, the Senator from Missouri fl\Ir. Rouse. I think he shows more respect for Se.nat-<>rs anu Members SToNE], who has just been engaged in a uiscus&ion of vm·ious of the other Hou~e when he comes bere to see us than when lh.~ subjects,' suggested that no Senator could make any criticism :sends for u.s to c·ome .over to the White House.. It is a matter ,of any legislation which has bee_n passetl by the Demoeratic of choice. I .prefer the President's method. I 1\ve>uld ratb~r the Congres~ during this a tell us than· to :o;entl ·a cold. plate plllnt. tbe rural-credits bill, and tbe shipping hill, hut formal me.s..c;;ag~ in typewriting or in _print. That. again, .is a confin<'d himse1f to the on~ piece of Democratic legislation for ll'.atter of taste aml preferenee. but it is not of vital -importunee. which that party may take .some credit to itself for having l\1r. GALl...INGJtJR. 1\tr. President. what pnr.zl~~ nw is tbat passed . .afU>r the Pre!'iident did that on yesterday. be ha<1 to eome over After tbe panic of 1907 there was an urgent demand for and and ten the 17 Democratic majority bow they should make a attempt rnatle to pass fundamental Jegislation-I hope t.be Sen· .bilL It looks to me as though be had mighty -little regard foJ' ator from l\tissouri \\i1l not leave the Cbamber-- the capacity and ability of members of his own party 1n this Mr. ST01\""E. Oh, I am not going to leave. .body. · 1\Ir. WEEKS.. But as it wa.o;; impossible to do so 'fithout ac­ 1\fr. STONE. Upon ~Y honor. I do not know whom the Presi­ curate information, whHt was termed an .emergency bill was dent saw; 1 dld not 'see him, an(1 I do not eare whom he saw. passed, known a..:; the Aldrich-Vreeland bill, which bad, anwng 1 snppo.se -be ·came here to ilis.<:U$s with rnemben;; of the com­ other provisions. one authorizing a monetary commission to in· mittee~ of the two Ho.nses this :legislation about which he has ·vestigate the whole question .of banking and currency. 'l'he jrn;t eommunicated t() Congress. Aldrich-Vreeland bill provided .for two things which were of 1\lr. PENROSE. With the Democratic membP.rs. material value in connection with our currency sy~terri. One l\lr. STONE. Po~sibly ~o. Those are the (lflf'R with whom he was tbat a correct basis for a bank issue was commercial rience with paper, and the other the provision that -an issue of emergency .our friends ·on the .othf>'r side I sh·nuld say the President• would (:urrency should be pravict much sympathy, much assistanee, from them. The life of the bill was limitevP.r .senators 100 the .othe.l.' side will by one single :tct known at the time that it was not final legL.;;lation on th<> sub­ demonstrate their wHiinguesR to help, I am sure tbe PresidE>nt ject, -ami that. after the question l1ad been fully consitlt>l'ed. it -will he glad to ta.lk with them. This I know, and that is ~11 I was believ-ed that legislation of a fuul' wight wish to sav. I am a meruhet· of the Committee on Foreig--n be passed. What happened? The MonM:ary Commission :-:turl­ R~lutions. ··r.nis P ·~illPnt • .-Jike 1lthPr l)l'PRhiPnts, since I hnve ied this qll£'stion for se-veral years. W'11en it was ready to make . l:leen a member of tbat euiDJ.lrittRe-well, one otlwr :President~ I -its report the Sen:-~te -contained a Republiean majority, while speak of 1\h:. Taft-bas :sent. for the meml}('r~ of fhHt c·orrmdttee the Bouse of Representatives had a Democratic majority. Un­ ;vithout regwrd to ;pol:itieR to dise\:lss internntion:ai questions. iJe.r those eircumstances it was -impossible to pass the kind of .\Ir. GALLINGER. -That lWll:S -a goot.l habit which ;Pr~ident legis'tation that was re(-ommended by the 1\lonetary Collllllis- 'T;tft had. -sion, and t11e1•efore no 11ction was taken. . .1\ir. STO'NE. YPs.; an{! U is 11 gc>Od lmbit tha:t Pr.esident In 1912 both political parties hml plnnks in their platforms WiL·on hus. ,anct ll~hich both tmve practi~d. advocating fundamental legislution relating to our bunking llr. GALLINGER N(}t to iUDY ·greut <'A-tent. and currency system~ -and Congress, I believe, at least so fru· .!f'r. STONE. NP.itbe~· of tbPID did .it tn any :v~ry great PXtent. as this l"i-.asure in its indpien-cy, that ha.s not yet bee-n wcH'kecl out tion. It came tn the SPnate- nn1l \\~as referred to the proper by the ><:-ommittee-. uud yet the :Senator from Missouri stmuls committee. Senators will recall the time that that committee bere and ·elmrges th.nt ::;enators :QR this side of tbe Chamber ar-e took 'in the consideration of the legislation. Tbe Senator from i>bstr·ucting the legislation. · New York [Mr. O'GOR:YAN], the Senator from Nebraska [l\lr. 13504 CONGRESS! ON .A.-L RECORD-SEN.A.TE /. AUGUST 3f,

HiTcrrcocK], and the co11engue of the Senator from :Missouri Mr. GALLINGER. Could the Senator tell us on how many [Mr. REED] were as much opposed to that legislation, which, OCCI:I.Sions that law has been amended since it went on the statute I repeat, was approved by their administration, as any Repub­ books? Jican Senator. ·we insisted that experts should come before 1\!r. WEEKS. Mr. President, the law has been amended in a the committee anoted for the bill. I diu vote actly how a law of that kind can be applied to our own particu­ for it, because I knew the difficulties that surround the obtain­ lar conditions and work absolutely sati~factorily. We must ing of funuamental legislation affecting banking and currency. necesRarily change the law from time to time. That is the I believees :md which woilld ha>c been a discredit to any party cratic Party · re ·olved against one bank, and therefore we have which adopted it: . to have more than· one; and when in conference the proposition Mr. SMITH of Georgia. Mr. President, I think the Senator for 12 banks \Yas adopted there was no way to avoid the from Massachusetts hnrrve act. I ery to interrut)t him, I want to say that I heard the Senator from I'ecently. Georgia make that statement not long ago on the floor of the _M.r. 'VEEKS. Yes. Seuate, and I took occasion to write to some 20 prominent bnok- 1916. .CONGRESSIONAL RECORD-SENATE. -13505

ers throughout the country anrl a!':k tbPm if that statement were Mr. Sl\!lTH of Georgia. I understand that perfectly. Tl1e correct. With one :-:ingle exception, ~Yl:lich was a mooitied one, banks composed the clearing house. they werP unanimou~ jn saying tlrut the rate of interest churged l\Ir. WEEKS. They md. on the Aldrkh-Vreelaml emergency currency had nothing what­ l\lr. Sl\IITH of Georgia. The banks were the clearing Jlom;e, ever to llo "ith taking out the currency at the time of the break­ and when they paid interest to the clearing hou~ e they pakl it to ing out of the European war.. They saill that of course they themselves. I unuerstand that perfectly. The hanks cmnpoi-iing couly. they had paid an it to the cl~..tring house, it was paying it to itself, for the banks average of about 6i per cent for them. The rate varied in were the clearing house. different cities. These clearing-house certificates had remained Certain banks formed a clearing-house association. They put outstanding less than four months, on an average. Therefore up securities with tb~ clearing-house association. The clf'm•mg• it was estimated that the co~t of this currency would be less house association issued clearing-house certificates baekell by than the cost of clearing-house certificates during the panics those securities. and the bank..:; in the clearing hou~ obtained which we have had sin{'e the Civil War. them. The banks in the clearing house as a rule paid nothing, ·Mr. SMITH of Georgia. I ask the Senator to whom did they as they would be simply paying it to themselves: but tht>y pay the 6i per cent? loaned those clearing-bouse certificates to other bank~ and l\1r. \VEEKS. They paid it to whomever they borrowed the charged for them. If they charged an average of 6i per cPnt money from. · to the banks that bflrrowed from them when it cost them noth­ ing to get them, how could they have put up the ~eeuritieS' with Mr·. SMITH of Georgia. Why, they issued the clearing-house the Government and-obtained the privilege of issui_ng their notes certificates themselves. instead of clearing-house certificates and have paill 10 per <'ent iui·. WEEKS~ The Senator does not understand a cle~ring­ tax, when they had to put up also 5 per cent gold reserve to house certificate. secure their lo-ans? lUr. SMITH of Georgia. Yes~ I d(). I wish the Senator to The Senators can not dodge it nor get away from it. 'rhe make a statement, but I certainly understand clearing-house excuse the Senator gives is DQ excuse at all. The trnnsnction certificates. which he presents does not justify the tax: that under the l\lr. WEEKS. · I will make a statement. C1eartng-hou:-:e cer­ Aldrich-Vreeland Act as the Republicans passe<.l it hud to be tifica tes were made in this way : A bnnk would go to the clearing paid the GQvernment for the privilege of the banks issuing house and ask to take out clearing-house certificates. It woultl their own notes. - deposit its security against the certificates; usual1y C'er·tifieates Mr. WEEKS. Mr. President. I <'tid not think the Senator were issued based on three-fourthR of the par value of the securi­ from Georgia understood the question, and the di~cus!':ion in ties deposited. These were guarnntePd by all the bunk~ belrmging which he has ju~t indulged demon~trate~ it. What flifference to the clearing house. Then, insten1l of paying the differences at does it make to the Senator from Georgia whether he borrows clearing the next day and following ctays in currPncy, they U!':ed money of the Gover-nmen,t anrl pays 6i per cent for it or whether these clearing-hou~e certificates to pay the

~cnt. When it took out emergency currency it paid the· Gov­ clearing-house certificates, you admit that your Aldrich-Vreeland ernment interest. What difference does it make to the bor­ Act had in it a tax that killed lt. rower? Mr. WEEKS. Mr. Presiuent, I admit nothing of the kind. 1\:lr. SMITH of 'Gem·gin. Wby, it makes a vast difference. Any rate of lnterest-- The smaller banks which borrowE>d the clearing-house certifi­ Mr. SMITH of Georgia. I decline to yield except for a ques­ cat~:>s from the big hanks and paid them 6!1; per cent were not in a tion. If the Senator wishes to ask a question I will be glad to p•J::;ition to issue their notes for circulation under the Aldrich­ yield ; otherwise not. ' rPeland A<:t as it was originaily passed. 1\ir. WEEKS. I will ask tl1e Senator this question: Does the But few banks in the countr~., even if they had been willing to Senator know any responsible banker in the United States who pay tl111 enormous tax, could have put up the securities required will state that be would not have taken out that emergency cur­ by the act. rency under the criginal provis10ns of the Aldrich-Yre~lnn•l Act Tlw big banks in the financial centers, before the adoption of if it had been on the statute hook nt that time iu tll~t form? out· new banking and currency sy~tem, extended credits nearly Mr. S:\HTH of Georgia. The Senator nsked me t11at question every year to ·th~ other b~nks throughollt the country. They l>efore. I know plenty of them who would not have used it as could not is~ue their notes and pay the taxes required by the they used it. Aldrich-n·eeland Act 11nd lonn these overtaxed notes to the l\1r. WEEKS. I can not find them. small~r bunks. The rate of.tax they were called on to pay was 1\Ir. SMITH of Georgia. I am sorry the Senator can not. His more than tJ1e rate of interest wllich tlley would normal1y charge reason and his :.msiness knowledge ought to give him mi ac­ tlH' smallet· banks. quaintance with the facts. The banks hnd to charge 6i per cent These big banks, through their clearing houses, issued the interest for r.:Jenring-~1ouse certificates loa;Ied to other banks or cE-rtificates tu which you referred and loaned the other banks to customers. The original Aldrich-Vreeland Ad required them at 6i pe1· cent. If they had. been taxed from 5 to 10 per cent to pay tlw Government 5, 6, 7, 8, 9, and 10 per cent on their on the clearing-house certificates the loans could not have been hank notes. How c-ould this tax he pai hig bunks()~ per <'ent on their clearing-house certificates, did tion where I feel like calling upon Col. Roosevelt to designate not have in 1914 the class of securities that your old Aldrich­ his character. . Vreeland Act r{'(}uired to be put up with the Treasury Depart­ It can not be true, and it is stupid to ask us to believe that it ment to ::;ecure the privilege of issuing their bank noteg for is true. circulation. Your limitation as to the quantity to be issued, Mr. WEEKS. I hope the Senator from Georgia does not make your limitation ba~ed upon the circulating medium that they had that statement in its literal sense. nlrE>.a of 5 per cent. · they could not have done with the tax fixed by the old Aldrich- l\li". SMOOT. Then the Senator says that a hank that was ~~~~ A~ . in tli~t1.·ess could not afford to pay interest at thecause else. it can not be true. l\'lr. SMOOT. Of course, if the Senator decllucs to yield, I Mr. WEEKS. 1\lr. President, I know a great many instances ha\e nothing further to say. during the panic of 1907 where the banks called in loam; on l\Ir. SMlTH of Georgia. I do not wish to yield e.xrept for a which they were getting 10. 15, an(l 20 per cPnt and loaned the quE-stion. No bank could pay the tax on its notes required in money to their own customers at 6 pet· cent, and in previous the o1·iginal Aldrkh-Vreelant.1 Act nnd loan them to customers panics where they took out certificates bearing 7i'u per cent and at a normal rute of interest to meet the requirements of business loaned the money at 6 per cent. a,; they existed in 1914. The Senator says the tax was at the 1\lr. Sl\IITII of. Georgia. That may be true, but that ha~ no rate of 5 per cent per annum. Yes, for one montlt, but it was bearing whatever on '\\hat I have just statecl. It is impossible at the rate of 6 per cent the next month, it was 7 per cent the that an intelligently managed bunk would issue-Its notes just as next month. it was 8 per cent the next montL, nnd 9 per cent quickly paying on them a tax at 10 per c·ent as it wouhl at 6 per the next. and 10 per cent the sixth month. Not only is that cent or issue them as quickly paying on them a tux at 7 pet· •·ent true, hut the hank did not have the privilege of an issue that as it would at 4 per cent or 3i per cent. It is impossible that gave it the full $100 on which it had paill this tax. 'l~be 5 per such a statement ~an be true. If they think so they have pro­ cent gold reserve required rE>a11y reduced tbe increase of cir­ duced wheels in their own beads to reach the belief, and the culation to $95 on the $100. while the ,tax was Ol\ the $100. It fact that they never were i ·ued i a strong reason to show that \Yas 5 per cent on $100, with only $95 of increase. It was 10 they never would be. per cent on $100 with only 95 per cent of increase; and when But we brought tLc amount down to the rate of 3 per cent you admit that the big banks charged 6~ per cent for their fot the thirc.l month instead of 7 pel' cent, nnd your tax upon them 1916. CONGRESSIONAL RECORD-SENATIQ. 13507·

for the thir(l month at the rate of 7 per cent we left at 3 sary. Hence, you simply 1n that respect harmonized the new 1w r cent. It i~ impossible to force down the view upon the law with the old law. mine­ C'eJ·tai olv \Vould buve to c·harge as much as it paid. flow would land Act was a reuuction of the tax put upon the issue of bunk the mm-l ~y haw eve1· gotten out to the people? notes. The tax had been put so high that it was not a practical What confronted us in J914? We \:vere confronted with se- proposition for the banks to utilize the bills in conduct of busi­ curiti e~ astern market. "\Ve . ness and for the purpose of broadening credits. were eon fronted with l"tringency tJ1roughout the country. The 1\Ir. NELSON. Will the Senator yield? time had come when most banks throughout the country made :Mr. SMITH of Georgia. For a question. their settlen1ents. 'l'he time had come when the. g~·eal · eastern 1\Ir. NELRON. l..et us get at the truth in this matter. hnnlu:; wf'rt" aecustomed to collect the amounts due them frnm 1\lr. SMITH of Georgia. I yield for u question. banks throughout tl1e country. Yet the situation wa..;; ~uch 1\Ir. NELSON. There is no use if the Senator is going to put that if the banks away from the money centers took their funPn precipitated throughout the land. It was IH:'CPRsnry ator knows, the currency associations were formed nnnt the currency out to the · issue emergency currency; the occasion did not arise until the b:mk!-: through the country a.t a rate of interest at which those ' great war in Europe was pending. Those are the facts. bunkf'l horrO\ving could have tlone business? l\Ir. Sl\IITH of Georgia. This exception should be ma•le: If What cliC'essnrv to make :::. change on account of the passage of the the Aldrich-Vreeland Act in the i"ntPrmediate time would have reserve iaw? been issued even if the change you made in the Federal re~erve Mr. Sl\IITH of Gt>orgia. No. la\v had been maue, because there was no occasion for it. 1\lr. NELSON. The Senator will find, if he examines the Mr. S!HTH of Georgia. An intelligent l'UTency system pro- condition of the reserve law. that that change in the law was vide!' for the coming ·out and going in of the currency without macle necessary because of the reserve Jaw. waiting fot· a panic. You should not have to \vnit for a panic .Mr. SMITH of Geor~iu. I say " no " and " yes." to make some enlargement of currency at times when needed. l\lr. NELSON. I hav£> not the Jaw here; It is in my room; No intelligent syo.;tem of currency fails to furnish some plan for but if I hapuhlicans in­ that change was taking place, and to that extent, I agree with tended for it to die, ~nd It never passed a breath of help to the the Senntor. . Nation until after June 30, 1914, when, by the term~ of its Mr. NELSON. Will the Senator yield to me? creation, it was to cease existence, and it did it then because Mr. SMITH of Georgia. For a quPstion. _ we gave ·it life. Mr. NELSON. Does not the Senator know that the chanl!e Mr. NELSON. Mr. President-- ! referred to and that he refeiTed to was made in the special 'l'he PRESIDING OFFICER (Mr. CHILTON in the chair). act that was passeu in 1914, and not in the re::::erve law? Does the Senator from Georgia yield to the Senator from Min- Mr. SMITH of Georgia. A part of the changes were mnrle nesota '! in the reserve Jaw. 'l'he chang(> reducing the rate of the tux 1\fr. Rl\riTH of Georgia. I yield. was put In the reserve la\v. Th~:> l'(>St>rve law carried the re- Mr. NELSON. I agree with the Senator in this respect. I ouction of the tax, which was exorbitant and oppressive as I suppose the Senator from Georgia is so enthusiastic about this have df>scribed. law because the commercial interests of the South,_ New Or- Mr. NELSON. Will the Senator yield to me? I think we Jeans ami Baltimore, were ignored and his own city got a re· both want to get at the truth. serve bank. . Mr. SMITH of Georgia. I am sure I gave it, and stated 1\fr. SMITH of Gem·gia. I ani not talldng about reserve nothing else. banks; I am talking about the horrible pretense of a plan Mr. NELSON. The Aldrich-Vreeland law provirled for two passed by the RepubHcan atlministration as a professed relief methods of issuing emergency currency. One was directly that could do nothing until we amended it and gave it life. I through currency associations. The other permitteu national had not intended to refer to it, but the f'enator from :Massa­ banlrs on their own book to secure additional circulation untler cbusetts [1\lr. WEEKS] brought it up. The Senator from Massa· that law, provided they had exhausted their circulation privilege chusetts claimed that it was the Aldrich-Vreeland Act of the under .their charter; in other worus, provided they had taken Republican Party which carried us over the troublesome times out such circulation as they could under the Jaw. The change of August and September, 1914, precipitated by the war. maue in the law in that respect \Vas to change that condition, Mr. ·NELSON. And was it· ·not? because you adopted a new system, and the restriction that was Mr. SMITH of Georgia. No. put in the law that they must have circulation equal to the The PRESIDING OFFICER. Does the Senator from Georgia requirements of the original banking law was no long~r neces- yield to the Senator from Minnesota? ·.13508 CONGRESSIONAL RECORD-SENATE. AUGUST 31,

1\Ir. NELSON. Did you not build on the skeleton of the . The PRESIDING OFFICER. The Senator from Georgia de­ Aldrich-Vreeland Act your own reserve act? You took the clines to yield. skeleton of t he Aldrich-Vreeland Act, and you utilized it and Mr. NELSON. If the "Senator does not care to yield all macle use of it. right; I will hav~ another opportunity. · Mr. SMITH of Georgia. The Senator names U properly. It Mr. Sl\fiTH of Georgia. Certainly; and I win not interrupt was the olcl skeleton, without life, without flesh, without muscle. the Senator. He can take his opportunity by himself ancl Ray Yes; we took the old skeleton, which was on the statute books, anything hf> wishes, and I will not disturb him at all. and gave it life. · Mr. NELSON. I have never resorted to partisan debate in Mr. NELSON. 1\Ir. I' ~sident-- this Chamber. It remains for the Senator from Georgia to tom The PRESIDING OFFICER. Does the Senator from Georgia everything intu a partisan debate. · Old Senators who have yield to the Senator from Minnesota? served with me know that I have been as ftee from parti.·un 1\Ir. NELSON. Does not the Senator know that they were debate as any Member of this body; but if the Senator from afraid to put the Feorgia. There were so f~w that they did yield to th~ Senatm· from MiqneRota? Mr. NELSON. What are the blesSings? not attruct my attPntwn. The currency relief was in conse­ - l\lr. Sl\IITH of Georgia. I wiU tell the Senator. quence of the amendments which we made to the Aldrich-Vree­ Mr. NELSOK The banks have not received any dividends land Act. Mr. NELSON. Will the Senator from Georgia allow me one and they have lo~t the Interest they U!';erl to get on their reserves. word further'! The system ~o far hn~ heen a bur·den to the member uankti. Mr. Sl\liTH of Georgia. Yes. Now, in what other direc-tion have the bJe ~sings come? I shoul ueen lt>ft broaden theil ll•tttlS, thert>by relieving financial distress and pre­ in the same <'Onuition we were (luring the Cleveland adminis­ serving a pro perous condition in the business of the country tration. when all our gold went to Eru·ope. gener~ly. - Mr. THOMAS. l\1r. Presitl husiness hou....;;es conduct their business, unll Mr. NELSON. I apologize to the Chair. Perhaps I hn¥e they have facilitaretl a prosperous banking condition through- been a little out of order, but the exuberance of the ~enntor out thE> t:>ntire land. - _ from Georgia [Mr. SAnTH] was such that I coulcl not restrain 1\lr. NELSON Will the Senator yield? I know the Senator myself. [Laughter.] doe not care n1Jout-- Mr. Sil\lMONS. I hope Senators will now 1et us go on with l\1r. SMITH of Georgia. :r can not·yield further. the bill. Mr. NELSON. 1 am ready to stand by the Republican guns. Mr. THOMAS. 1\Ir. President-- 1916 .. CO :N G-R ESSI 0 N r\.L REOO RD-.--SEN 1\. TE. l ~)~)o,-o9- -

Mr. SMITH of Georgia. I will yield to a question from the Senator from l\Iinn~ota [Mr. NEL so~ ] that I think this is the Senator from Colorado. second time I have ever made anything like a partisan -speech Mr. THOMAS. I merely wish to ask the Senator from in the Senate. I do not like it; I do not believe in it. I think Georgia if it would not be possible to complete the munitions we ought to join together to try to do something for the wel­ section of the bill this evening? . fare of the whole people and think a goou· deal less about the Mr. SMITH o'f Georgia. I shall close what I have to say in results to parties. I rea1ly feel that way. a very few minutes. I should have closed long ago if I had not­ Mr. NELSON. And avoid caucus legislation. been so often interrupted. Mr. SMITH of Georgia. I am not in favor of -binding cau­ I shall not discuss the loss of our gold during the Cleveland cuses; but it can not be denied that a Democratic caucus gave administration. But that loss was clearly due to the act known the country the reserve banking system. as the Sherman Silver Purchasing Act, by which quantities of Mr. VAHDAl\IAN. Mr. President, we have· spent the entire silver were purchasetl and coined into depreciated dollars. I afternoon discussing ancient history, whicJ'l, to my mind, was an will adhere to the tinanclal troubles in August, 1914. unwarrantetl prodigality of precious time. I think-that some On August 4, 1914, we passed an amendment to the Aldrich­ of us are unable to apprehend the wise philosophy in the lines Vreelan

per cent for 60 mber a little history iri reference to the umler the Alc1rich- Vreeland bill in circulation when the rate Aldrich-Vreeland Act. The morn in~ that that bill ,,·as passE>d­ of interest was 6 pt3r cent per annum for the first month. an<.l it was passed by the House in the morning and C'ame to the There wa.<: no necessity i'or its circulation. 'Vhy, Mr. President, Senate and was signed by the President all in one .r of 1 per cent per month · !Of niR State who '\\--ere crying for help. The banks could not rather than one-half of 1 per cent pe.r month. That is all there give it to them under the rconditions that existed. Their reserves is in tl!P whole qu('stion. were below normal. · 1\fr. UNDERWOOD. I want to say to the Senatm·, if he will Mr. .8'1'01\l"E. That was under Republican rule. allow me, that I am not very familiar with this hanking bill, as 1\lr. SMOOT. No; it was under Democratic rule, "I will I did not ser-ve on the committee. I was only <'onnected with it -say to the Senator. It was in 1914. · that one day when they wanted immeuiate action by the Hou e. ir. RTONE. -I doubt it. 11fy recollection, however, is that that was not the only amencl­ Mr. SMOOT. The Senator may doubt it, but that is the ment of that act which they wanted to make it operative; t hat truth, just the same. I wanted to assist the cotton grower of there were other amendments which tl1ey regare its eretllt and save the institution it.."elf. I do not believt3 1\Ir. O'GORl\IAN. Mr. Presiuent-- that anybody will dispute that proposition. It is a sensible lVIr. SHAFROTH. 1.1r. President, will the Senatot· yiel

Mr. SMOOT. But I want to say, in conclusian, that if the of it ts to limit the tax to rifles which are manufactm·ed and Vreelund-Aldrich bill bad not been upon the statute books in its used for military purposes. amended form ·Or in its original form the Federal reserve act Mr. PENROSE. Yes; but that does not cover sporting pur- . never would have assisted this -country during the trying times ·poses. of August and September, 1914. I say now that it was that act l\fr. THOMAS. They are excepted .from the operation of the which Cl:lrried this country through. It was $400,000,000 of the act by that language. Vreeland-Aldrich ;lon -of that act? 'The amendment ·as amended ·was agreed to. Mr. SHAFROTH. Wby, the very fact that yo, ·people voted The ne:rt .amendment was, on page 79, after line 23, to insert : 'h'Ec. 42. Every corporation manufacturing or -selling in the United against the Federal reserve act was -a vote not to exteml that States ,any of the articles mentioned in ·section 201 -shall, on or before act. because the Federal reserve act extencleC. the Alclrich­ i\larch 1 of -e-ach -yeu-, make a return under oatb to the collector ot VIto.--.eland Ac.t. internal revenne of the district wherein the principal office _or place of business in the United States is locat<>d, ii!ta:tlng th~ amount of capital Mr. SMDOT. The Aldrich-VTeeland Act had been -extended jnvested in ·such business and the amount of net profits from the sale before it was passed. and di position ot such articles during the preceding taxable -year, the Mr. SBAFROTli I want to get through, and I just want names and locations of the corporations. and the amounts, ch.aracter, and -values of the materials obtained from each such corporation for to sav this: The Senato1· from Alabama [Mr. UNDERwooD] is use in manufacturing the articles mentioned in paragraph (1) of this cor-rect when he says that it was not only at that tirue, August section. Where ·the corporation has separate capital invested in the manufacture of such a.rt1cles its return shall be ma1le on the -same form 4, ~914, that the ~A..ldrich-Vreelan\'1 Act was objected to by the as --that used ior income-tax returns, and its net profit for the year shall .bankers. They woul·d not take ·out any emergency currency be the gains or the p1·ofits assessed and taxed by the income-tax authori­ because of the fact that this currency was limited by the ter~ ties: Provided, That iL case such corporation hae undivided capital in­ -vested in the manufaeture ·Of the article.s specified in section 201 and of the Aliliich--Vreeland Act so that a bank that had heen issued of other articles. the return herein provided for shall be in such form 40 per cent of its capital-stock and surplus eoultl not get uny and shall set forth such particulars as the Commissioner of Internal money whatever. The result was that in the FeUeral reser:ve Rev:enuP, with the approval of the Se<'retary of the Treasury., may re­ quire. and the tax herein provillPd for shall bP imposed only on the net act we increased the r.ight to issue to 125 per -cent, and it was _profits resulting from tbe manufacture and sale of the articles specified that which the bankers insisted they must have in order t(:) take m -se<.~tiqn :.:lOl. anli the p-rotits shall be determined from the books and out any currency willltever. -accounts of su\'r co-rporatiOn : Provided, howe-t er, That if the amount invested in tbe manma<.,ure ot, and tbe net profits rPsulting from the Why, Mr. President, if you will notice, the act was passed on sale or disposition of, th.. articles so specifiPd can not be determined, the 4th day o! August, 1914, and the first money issue(} by the the amount lnvestPrl In the manuia<'ture of these artlciPs, and the net Treasurer was .on August 1914. 'rhe bankers were in nego­ profit therefrom, shall be considered as in the same ratio to the total -4. amount in'llestefl and the total :aPt pro-tits as the gross receipts from the tiation, and they would not take out a single. dollar of it untii sale and disposition of such a.J:ticles bt>ar to rthe total gross receipts iJlat act was signed; and that gave vitality to the Aldrich­ from the salr and disposivon of all a:rticles .manufactured. Vreeland Act. 1\lr. THOMAS. Mr. President, in lieu of the word "two," .on The PRESIDING .OFFICER. The. question is upon the Hne 25, page 79, and the words "hundred 'find one." on line~. amendment of the Senator from Arizona [:M.r. AsHURsT] to page 80, I a k to have inserted the words "forty-one." strike out subsection 2, page 79. The PRESIDING OFFICER. The amendment to :the amen.Cl­ The amendmeut to the amendment was agreed to. ment will be stated to, I a~k that, on line 20. page and one,'' on line 25, page 79, nnd 1ine 1, page 8Q, and insert 7~. the figure u '3,'~ in parentheses, be aJtered to "2." ""forty-one.~' The PHESIDING OFFICER. Without objection, that wilt The PRESIDING OFFICER. Without objection, the amend­ be clone. ment will be made. Mr. PENROSE. Mr. President, I should like to call the at­ l\1r. THO~IAS. The same correction shonld he made on lines tention of the Senator from Colorado to the top of page 79, ·line 18 and 25, page 80. 1, " firearms." Ought there _not to be a similar amendment The SECRETARY. ln 1ine 18, on the same page. it 'is proposed strike ·forty~one,'' there? to out "two hundred and one" and insert .. tmd on lines 24 a·na 25 it is proposed to strike out"' two htmd1·ed Mr. THOMAS. T:t,e Senator from Massachusetts is about to ttnd one-" and ins~1·t "-forty-one.... . offer that. . The PRESIDING OFFICER. Without objectio-n, :those correc· Mr. PENROSE. Ob, I did not know that. tions 'Will be made. 1'111·. WEEKK Mr. President, I offer the amendment which Yr. THOMAS. 1\fr. Presi<'lent, tthe clm:rs:e b.e:ginning :::tfter I sE>-.nd to the desk. tbe word "-yeur," on IJine 7, page 80, down_to and including the 'Jhe PllESIDING OFFICER Tl1e SPnator from Massachn­ word "-section,'' ·on line 11.. .wal'l 'designed to cover the rettn·ns the sett!' offers an :amendment to the .amendment, which Sec.Te­ made necessary by the provisions of subsection 2. That sub­ tan will state. section having been strieken from the bill, I move thrrt all 'be­ The S.Ecr~ErARY. 0:~; page 19, line 2, after the wm•d "arms." it tween tbe word ':v~ar,"' on 'line 7. -and the wor.d '"section,'' on is pr·oposr.·d to add •• manufactured and used for military pur- line 11, inclusive, he strie.ken out. poses." · The PRERiDING

for u c in manufacturing the articles mentioned in paragraph- {1) of Mr. Sll\Il\IONS. Before it is read I wish to state to the thi~ section. Senator that there bas not been the slightest suggestion in the The amendment to the amendment was agreed to. committee that any additional force would be necessary in con­ l\1r. THOMAS. At the end of section 42 the committee offers nection with the wine schedule. the amendment which I send to the desk. 1\ir. PENROSE. Then, if that is correct, it is just us well Tlle PRESIDING OFFICER. The amendment will be stated. to call the attention of the Senator to it and have him state the The SEcRETARY. On page 81, after line 10, it is proposed to cOntrary to be the fact. I should like to bave it read. insert the following as u r:eparate paragraph: · 1\ir. THOMAS. Of course the San Francisco Chronicle would A r easonabie allowanC'e, aC'cording to the conditions peculiar to. each be authority and know all about the purposes of the revenue concern for amortization of the values of buildings and machmery, department in Washington in regard to the wine schedule. account' being tak~.>n of the exceptional depreeiatlqn of special plants, The PRESIDING OFFICER. The Secretary will read ns shall be tleducted from the amount of net profits as he1·ein defined. requested. The PRESIDING OFF.ICER. The question is on agreeing to The Secretary read as follows : the amendment to the amendment. LFrom the San Francisco Chronicle.] ~rhe amendment to tlw amendment was agreed to. The amendment as amended .was agreed to. TO CREATE 1\IORE POSITIONS li'OR DESERVING DEMOCRATS-COLL"ECTOR Oli' INTERNAT, ltE\ENUl!l J. J. SCOTI.' ANNOU!\CES THE REORGANIZATION OF The next amendment was, on page 81, after line 10, to insert: HIS DISl'UICT, PROVIDING 100 NEW JOBS FOR THE FAITHFUL. SEc. 43. .All such-returns shall be transmitted forthwith by thl' col­ As a result of the strong pressure of business on the local internnl­ lector t o the Commissioner of Internal Revenue, who l'hall, .as soon. as revPnue office, caused by the income, war, and wine tax measures, Col­ practiC'able, asse~>s the tax found due and notify the corporahoD; makmg lector of Internal Revenue J. J. Scott yesterday announced that an such r eturn of the amount of tax for which such corporation IS liable; entire reorganization of his district.will take place. and such corporation shall pay the tax to t he collector on or before The plans for the reorganization. were placed before Secretary of the 30 days from the date of such notice. Treasury McAdoo on Scott's recent visit to Washington and were ap­ proYecl by the Cabi.net officer. Tlle amendment was agreed to. TO CREATE NEW POSITIOXS. The next amendment was, on page 81, after line 17, to insert: In San Francisco, Oakland, Sacramento. nnd Fresno the office forces ~EC 44. If the S~creta.ry of the Treasury or the Commissioner of and s taffs will be reorganized. Heads will be appointed for· the various Internal R~.>venue shall have reason to be dissatisfied with the rP.tnrn branches of the local office and a new position of chief clerk is to be as made, or if nv return Is made, the commissioner is authorized to createtl. make au investigation and to determine the amount Invested in such Preparations will be made in the reorganization for the handling of business and the amount of net profits, and may assess the proper tax the inC'reased business caused by the passage of the new revenue bill. acconllngly. He shall notify the corporation making such retu!n, UI!d More than 100 men will have to be appointed on the passage of the shall proceed to rollect the tax in the same manner as provtded m bill to check up t he wine manufacturers, said Scott. this title, uniP~>S tht> .::orporatlon so notified shall file a writtPn request ColleC'tor Scott also said that the re>enue on wine in San Francisco for a hearing with thP <:Ommlssioner within 30 days after the date of alone would be increased more than $400 000 a year by the bUl. such notice ; and on such hearing the burden of establishing to the "'l'ht>rt> is no political significance in. the reorganization," said Scott. sntisfat:t.ion of the commissioner that the amount invested .and the "It is pnrt>ly to put the district on a more efficient basis and prepare amount of n~.>t profits aR determined by the commissioner is mcorrect for tile rush of business 'vhich the new revenue bill will cause." shall devolvE' upon. such corp_oration, and the decision of the Commis­ By the new arrangement, which wlll be completed by September 1, sioner .:>f Internal Revenue, if approved by the Secretary of the Treas­ the State of Nevada will be given liberal political patronage by the creating of five internal-reYenue offic~.>s and a number of good ·aiari"ed ury, shall be conclusive. positions. For the first time the banks of Nevada will be made the The amendment wa.o; agree

The next amendment was, on page 82, after line 10, to insert : FIYE OFFICES I~ NEYADA. 8Ec. 45. ThE' tax may be a ssl'ssecl on any corporation for the time The new plan. as outlined by Collector Scott, is to e tablish a branch being owning or carrying on the busin~.> ss, or any person acting as office and four field offices in ~evada. The brnnC'h office will be at agent for that corporation in carrying on the buRin~.>ss, or .where a Reno and the fi eld offices at 'l'onopah, Carson, Winnemucca, and Ely. husiness has eeased on the corporation which owned or carried on the William A. Kelley, who is at pre ent field officer in Nevada, will be business or act~.>d as al!tnt in C'arrying on the business Immediately placed in C'harge of the Reno office and w!Il direct internal-re¥enuo before the time at which the business ·ceased. m:-.tters fo1· thf' l'ntire State. The appointments for the new positions Tlte umemlment was agreed to. will be matle by Scott. Af present the money receinments all collection· made in Nevada. and in California t h e Commissioner of InternaJ Revenue is authorized, personally or by east of the Sierra will be banked at Reno. - his agent, to examine the books, accounts, and recorus of any corpora­ tion subject to this tax. l\fr. P.a.~ROSE. This seen.1s to be an official interview from Scott, and if it is incorrect I think his superior officers in ThP. amendment wa.c:: agree(] to. 'Vasllington should call him to account. The next amendment was, on page 8~, afi:er line 21, to insert: Mr. THOMAS. The wine schedule as amenueu by the Senate SEC. 47. For the expense connectPd wHh the assessment and collection of the tax~.>s provided by this act there is hereby appropriated $100,000, differ: not Yery materially from the present bill. '£here is a or so much thereof as may be required, out of any money in the •rreas• radical difference between it and the bill which passed the ury not othPrwise 2.ppropriated, nnd the Commissioner of Internal Rev­ House and which \Yas sent here. I am unable to state what ·enu~ is authorizt>d to •tppoint and fix the comp£-nsation of such'officers, clerks, messE>ngPrs. janitors, and other necessary entployees in the en­ chan~e or addition would be required by the bill as passed by forcement of the ·provisions of thls act for duty in the District of the House, but I am satisfied that if the bill as it is now before Columbia, or in any collection district_of the Gnited States or any of . the Sepate becomes the law the article which has just been rea

1\Ir_ PENROSE. It was sent to me> by a highly reputnble t~i~ ~~~:r necessary employees- in the enforcement of the provisions of citizen who is outraged by the way the present administration is undermining the merit system. l\1r ..PI:esident~ that is a pretty wide discretion given to the 1\Ir. 'l'HOMAS~ It was probably sent by the Republican nom- Commtsswner of Internal Revenue. He can appoint as muny inee for the Presidency. · employees as. be pleases anage 83', line 7, after the word •• thereof," interview with the Recretury .of the Trerumry, goes home ami it is proposed tO: amend the amendment of the committee by he says it will require 100 a.dclitionat clerks. I call the atten- inserting: tion of the· Senator from Missouri to- the- fact that in the- de- All appointments of offic~rs, clerks, messengecs janitors and other ficiency bill, which wilt soon be before this body, there is an nece~sar~ emp_lo~ees shal). be ma:<1e from the eligible lists of the Civil item of $340,000. f01~ ju t such tleficiencies as will ari«e unrter Serv:Ice Comnus!:lwn anti. m accordan.ee with th€: provisions_ of the civil· this bill. One· hundred thousand dollal"s wilE curry tb·ese de- serVJee law.. serving 'Democrats along very nicely for a couple of months aud l\Ir. STONE.. IT ask that the amendment be read again. another d~ficiency bill will come in with an item of a million uol- The PRESIDING OFFICER. The ~cretary · will again state- Jars to carry them on for another three or four months. the amendment to. the amendment~ Mr. THOl\IAS. I think this is a sort of political play which The Sec.retar~ again read the amendinent to the· amendment. tile Senator from Pennsylvania has been carrying on ever since l\lr. Sll\1MO~S. Mr~ Presid-ent.- I call tbe attention of the he has returned to the fold'. The Senator· was away almost ~enator from New Hampshire: to the fact that the eollectm'S of entirely during the se.<;sion until the last few days. I intimatert mtern-a.l revenue are not now under the civil service~ and I 'iUg­ some clays ago what I thought to be the cam;e of thiR remark- gest to the Senator that lie except eoHec1:ors of internal revenue. nble transformation. \Ve- an rememher that the Senator had Mr. GALLINGER. The amendment will not affect the-- col­ been away so· long that when he fir.:;t 1·eturne<1 it became neces- lectm·s. sary for him to ask the Sect·etm·y to read the roll call in order Mr. Sil\11\fONS. What provision is there in: the amendment that he might refa.miliarize himself with the names of his that wo~ld relieve them from its apP'lication? as5;ociates, and! he actually thought some outsider ba' Chronicle, which ·was. arrrl fix tbe- compensation of such offi~rs. clerks, messPngPrs.. janitors.. and ?ther necessary employe-e~ i:J? the enfor<'e!flent of the provisionS: read from th~ Secretary's stion is on the- adop- • Scott, internal-revenue colleetor in the San Francisco and Ne- tion of the nmeruiment offered by the Senator from New Hamp­ vada district.. was in Washington a few weeks ago; ami cer- shire to the amendment re-ported by the committee. tninly I would have been informeti if there was any such in- Mr-. GALLINGER. I ask for- the- yeas ana nays on the amend- crease of places. ment. I had a letter from San Francisco stating that there was 1\Ir. PF~NROSE I suggest the absence of a qum·um. such a publication, but I bad rmt read it until now; that my The- PRES1DL~G OB'FICER. Tlw absence of a quorum is . office was besieged by applicants for places- which ha