1936 CONGRESSIONAL RECORD-SENATE 3097 · 10354. By Mr. LORD: Petition of 75 residents of the city of Dickinson Hayden Murray Steiwer Dieterich Johnson Neely Thomas, Okla. Oneonta, N.Y., favoring the Townsend pension plan; to the Donahey Keyes Norbeck Thomas, Utah Committee· on Ways and Means. Duffy King Norris Townsend 10355. By Mr. McCORMACK: Resolution of Sergeant Fletcher Logan O'Mahoney Trammell Frazier Lonergan Overton Truman Jasper Post, No. 13, American Legion, Washington, D. C., George McAdoo Pittman Tydings Frank McCarthy, commander, 2308 Tunlaw Road NW., Gerry McGill Pope Vandenberg Gibson McKellar Radcliffe VanNuys Washington, D. C., unanimously approving Senate bill 2253 Gore McNary Reynolds Wagner and House bill 6427; to the Committee on the Judiciary. Guffey Maloney Robinson Walsh 10356. By Mr. MERRITT of New York: Petition signed by Hale Metcal! Russell Wheeler Harrison Minton Schwellenbach White 11 citizens of New York, urging that Congress restore to the Hastings Moore Sheppard District of Columbia its prohibition law by passing at the Hatch Murphy Smith earliest possible moment House bill 8739, introduced by Rep Mr. ROBINSON. I announce that the Senator from Ala resentative GUYER, of Kansas, during the first session of the bama [Mr. BANKHEAD] is absent because of illness, and that present Congress, since there is abundant proof at hand that the Senator from New Hampshire [Mr. BROWN], the Senator the return of the legalized sale of alcoholic beverages is not from West Virginia [Mr. HoLT], the Senator from Louisiana conducive to maintaining the high ideal of a model govern [Mrs. LoNG], and the Senator from Nevada [Mr. McCARRAN] ment presenting the highest American ideals, and that it is are unavoidably ·detained from the Senate. a real menace to the thousands of young sons and daughters Mr. DIETERICH. I announce that my colleague the residing in Washington in order to serve their Government; senior Senator from illinois [Mr. LEwis] is unavoidably to the Committee on the District of Columbia. absent. 10357. Also, resolution of the National Guard Association Mr. BYRD. I announce that my colleague the senior Sen of the State of New York, that the members of the National ator from Virginia [Mr. GLAss] is absent because of illness Guard Association of the State of New York, in convention in his family. assembled, most solemnly recommend that the Congress of Mr. AUSTIN. I announce that the Senator from Minne the United States be requested to enact legislation authoriz sota [Mr. SHIPSTEAD J is necessarily absent from the Senate. ing an allowance of $35 per month for quarters to each en The VICE PRESIDENT. Eighty-six Senators have an listed man of the United States Army detailed to duty with swered to their names. A quorum is present. the National Guard as sergeant-instructor while on such SOIL CONSERVATION AND THE SOUTHERN GREAT PLAINS WIND duty; that such payments and also any payments heretofore EROSION AREA made for rental of quarters for such noncommissioned of ficers shall be considered as an allowance to the individual; Mr. COSTIGAN. Mr. President, on February 27, during to the Committee on Military Affairs. the discussion of the conference report approved that day 10358. Also, petition signed by 26 members of the League by the Senate on the so-called farm relief bill (S. 3780), of Women Voters of New Rochelle, N.Y., urging support of otherwise known as the Soil Conservation and Domestic the pure food, drug, and cosmetic bill (S. 5) now under Allotment Act, the attention of the Senator from South consideration by the House of Representatives, and that Carolina [Mr. SMITH], who was in charge of the bill, was endeavor be made to restore it to the form in which it was drawn by the Senator from New Mexico [Mr. HATCH] to originally introduced in the Senate, in order that the health section 4 of the bill, carrying a $2,000,000 appropriation for and welfare of the citizens of the United States may be "allocation and payment to the States in the southern Great safeguarded; to the Committee on Interstate and Foreign Plains area." During subsequent discussion, as shown by Commerce. the CONGRESSIONAL RECORD Of February 27, no definite bound 10359. Also, resolution of the Lehigh Valley Railroad aries to that area were clearly specified. Veterans Association, endorsing and urging the passage of The Senator from New Mexico and others, including my the Wheeler bill (S. 1632), providing for regulation by the self, representing in part, as we respectively do, substantial Interstate Commerce Commission of carriers by water for sections of the southern Great Plains area, were closely hire in interstate commerce; to the Committee on Interstate associated with the Senator from Arizona [Mr. HAYDEN] and Foreign Commerce. in the legislative stages in the Senate of the Soil Erosion 10360. By the SPEAKER: Petition of the Washington Cen Act of 1935. We are, therefore, specially desirous that the tral Labor Union; to the Committee on the Judiciary. CONGRESSIONAL RECORD shOW more particularly the bound 10361. Also, petition of the National Association of Letter aries of that area in any discussion of it or in any statutory Carriers, Branch No. 4, Nashville, Tenn.; to the Committee reference to it in connection with the appropriation. on the Post Office and Post Roads. While. the debate on the conference report was in progress in the Senate on February 27, I informally requested the Soil Erosion Service to provide a more definite description SENATE of the region in which the expenditures provided for in TUESDAY, MARCH 3, 1936 section 4 are to be used. The information arrived too late to be included in the discussion before the Senate approved I have today introduced a bill (S. 4157) providing for the THE CHASE COUNTY NATIONAL FARM LoAN AsSOCIATION, refinancing of farm-mortgage debt at an interest rate of 3 Cottonwood Falls, Kans., January 25, 1938. To the National Farm Loan Associations of the State of Kansas: percent. In my opinion this is a fair rate. It is in line GENTLEMEN: Our attention has been called to the action of the with rates that industry and government are able to com stockholders of the Cowley County National Farm Loan Associa mand. We have an abundant credit in this country-much tion in their meeting which was held on January 20, 1936, asking that interest rates o-n all Federal land bank and land-bank com of which is not now being utilized. The farms of the United missioner loans be reduced to 3 percent. States are good security. Relieved of the burden of high We believe this to be an opportune time for concerted action in interest rates, aided by the maintenance of reasonable prices our State to bring about a permanent lower rate of interest. A for !arm products, protected against increases in land taxes, resolution will be presented at the annual meeting of the Chase County National Farm Loan Association which will be held on and given the benefit of a more intelligent and fair tax pro February 10, 1936, asking that the interest rate on Federal land• gram, as they should be, farms are as good an investment as bank loans and land-bank commissioner loans, to be made in the there is. The moral risk behind them is excellent. future, be written at a permanent contract rate of 3 percent. Also that all outstanding loans be rewritten at the permanent rate of Mr. President, there is a growing demand from farmers, 3 percent. bankers, merchants, and others well acquainted with the Under the present regulations by the Farm Credit Act of 1935 all farm situation for the setting up of facilities whereby the Federal land-bank loans are bearing interest at the rate of 3Y:z farm-mortgage debt may be refinanced at an interest rate percent from July 1, 1935, to July 1, 1936. These land-bank loans, regardless of their contract rates Will call for 4-percent inter of 3 percent or less. I have received many letters from est following July 1, 1936, to July 1, 1938. No reduction has been earnest citizens, many of them · not farmers, urging this made in the interest rate on the land-bank commissioner loans. course as one of the most effective steps in putting the agri Since the range of contract rates varies from 6 to 4 percent on cultural industry back on its feet. Such action will save loans now in force there will be a big discrepancy in charges after July 1, 1938, when these loans will revert back to their original thousands of farms from forced liquidation, enable the good contract rates. · folks operating them to overcome their difficulties, pay thefr We believe the interest rate should be equal for all loans and debts, and win through to prosperity. They are willing to that it is possible and logical to make a permanent rate of work hard and long to solve their difficulties. All they need 3 percent. We are confident that our stockholders will adopt such a resolution and authorize the presentation of copies of th~ same is the chance. Such legislation as I recommend will insure to the Members of Congress from this State; Gov. W. I. Myers, of them this chance. the Farm Credit Administration in Washington, D. C.; and the Refunding of the farm debt at 3-percent interest with officers of the Federal land bank at Wichita. We further believe that concerted action by the stockholders at their various annual loans spread out over a period of years, as proposed in the meetings throughout the State will be the most effective way o! Frazier-Lemke bill, would yield immediate relief to agricul presenting this matter. I! the annual meeting has already been ture and would do as much as any other one thing to place held, such a resolution by the directors of the association would be desirable. Please give this your consideration. it on a sound and stable basis. Respectfully yours, A solvent agriculture able to earn a reasonable income S. H. BAKER, guaranteeing an American standard of living is of vital con President, cern to this Nation. It cannot achieve prosperity without it. CARL PARK, It can become highly prosperous with it. Secretary-Treasurer. I ask unanimous consent to have printed in the RECORD NEOSHO CoUNTY NATIONAL FARM LOAN AssoCIATION, letters received from the Marshall County National Farm Erie, Kans., February 3, 1936. Han. ARTHUR CAPPER, Loan Association, the Chase County National Fami Loan United States Senatar, Washington, D. C. Association, the Neosho County National Farm Loan Asso DEAR Sm: At the annual meeting of the St. Paul and Neosho ciation, all of the State of Kansas; a resolution adopted by County National Farm Loan Associations there was a resolution the Morris County National Farm Loan Association, of presented and unanimously adopted asking that the interest rates on all Federal land bank and land-bank commissioner loans be Council Grove, Kans.; a resolution adopted by the Chase reduced to 3 percent; also that all new loans be written at a County National Farm Loan Association; a resolution permanent rate of 3 percent. adopted by the farm bureau members of Ness County; a Under the present regulations of the Farm Credit Act of 1935 all Federal land-bank loans are bearing interest at the rate of 3 !f2 letter from M. W. Peterson, of Johnson, Kans.; and a letter percent from July 1, 1935, to July 1, 1936. These land-bank loans, from F. L. Bigelow, president of the Farmers and Merchants regardless of their contract rates, will call for 4-percent interest State Bank, of Leonardville, Kans., all relating to the sub following July 1, 1936, to July 1, 1938. No reduction has been made ject which I have just been discussing. in the interest rate on the commissioner loans. Since the range o! contract varies from 6 percent to 4 percent on loans now in force There being no objection, the matters referred to were there will be a big discrepancy in charges after July 1, 1938, whezi ordered to be printed in the RECORD, as follows: these loans revert back to their original contract rates. We believe the interest rate should be equal for all loans and MARSHALL COUNTY NATIONAL FARM LOAN ASSOCIATION, that it is possible and logical to make a permanent rate of 3 Marysville, Kans., January 16, 1936. percent. We earnestly request that you, as our representative, do Hon. ARTHUR CAPPER, all that is possible to bring about this reduction in interest rates. United States Senate, Washington, D. C. Respectfully yours, DEAR Sm: I have been instructed to write you enclosing copy of LEWIS HATCLIFF, a resolution passed at the annual stockholders meeting of the Secretary-Treasurer, Neosho County and Marshall County National Farm Loan Association and to urge you St. Paul National Farm Loan Associations. to support any such legislation that might come before the Con gress. Resolution is as follows: "Resolved, That the Marshall County National Farm Loan Asso Resolution adopted by the Morris County National Farm Loan As· ciation, representing 242 members, go on record as being in favor sociatlon of Council Grove, Kans., No. 138, at its annual stock• of a reduced rate of interest, based on the Frazier-Lemke bill, or holders' meeting, held at Council. Grove, Kans., on February some similar bill providing for 1 lf2 -percent interest rate and 1 Y:z ~~~ . percent payment on principal, this to apply on all Federal loans, Whereas the farmers of this country are entitled to a national whether Federal land-bank loans or land-bank commissioner loans." credit and monetary system which will first provide credit to It was voted at this meeting that you be urged to support a agriculture at the lowest possible rate consistent with sound measure of this kind providing for a lower rate of interest than financing policies, and, second, will provide an honest and stable we have at present and a much lower rate of payment on prin currency to safeguard them against extreme fluctuations in mone cipal. At the present time all commissioner loans are based on a tary values; and 10-percent payment yearly on the principal and a a-percent pay Whereas this association recognizes the right of the American ment on Federal land-bank loans. This, together with interest fanner to receive for his products prices which will give him aver rate of 5 percent on commissioner loans and 4 percent on Federal age purchasing power equal to the purchasing power which he had land-bank loans, makes the payments entirely too high !or the from 1909 to 1914; and average farmer to pay except in unusually good years. Whereas this association recognizes the right of the American A temporary reduction, of course, would be of some benefit, but farmer to be given machinery by which he can adjust supply of what the American fanner now needs is some permanent relief, and demand for farm products by legal means with something and we trust that you will do everything in your power to bring like the sa.me effectiveness with which American industry adjusts about such legislation. supply of and demand for its products: Now, therefore, be it Thanking you for your consideration of this matter, I am Resolved, first, that this association highly commends the un Yours very truly, tiring efforts of these national leaders, particularly those Congress WM. M. GRIFFEE, men, Senators, administration offlcials, and national farm organi· Secretary-Treasurer, Marshall County N. F. L. A. zation officers who have labored for these fundamental principles. 1936. .CONGRESSIONAL RECORD-SENATE 3103 Second, that thts association urges the immediate enaction of everyone except the actual consumer, added more than the regular legislation approved by the leading farm organizations to make processing tax amounted to on each item, no matter how many these principles permanently effective throughout the United hands it passed through before the consumer finally got it. If States. ~here is anything that an individual can do that would assist you Third, that a certified copy of this resolution be prepared by the 1n any way in doing any o:t these things, please command me. secretary-treasurer of this association and sent to each of the I am, following: Senator ARTHUR CAPPER, Senator GEORGE McGILL, con Very truly yours, gressman RANDOLPH CARPENTER, M. W. PETERSON. Whereas the stockholders of the Chase County National Farm THE FARMERS & MERCHANTS STATE BANK, Loan Association, in annual meeting assembled on the lOth day Lecmardville, Kans., January 22, 1936. of February 1936, believe a permanent lower rate of interest on Hon. ARTHUR CAPPER, Federal land-bank and land-bank commissioner loans is logical United States Senate, Washington, D. C. and practical and that the present contract rates are high as DEAR SIR: Enclosed please find a. clipping which we cut out of compared to loans made to industrial concerns and political the Topeka Daily Capital of January 22, 1936. units, do hereby pass the following resolution: Now, therefore In the same paper we notice that most everyone in Washington be it has a different plan to help the farmer, and most of them are Resolved, 1. That we petition the President of the United advocating that the acreage-reduction payments for 1936 be paid, States, the Members of Congress, the Agricultural Committee in and most of them are also attempting to figure out some legis Congress, the authorities of the Federal land bank of Wichita, lation that will, by a. few changes in wording, change the law so and Gov. W. I. Myers, of the Farm Credit Administration, at as to enable them to go ahead With the A. A. A. Washington, D. C., to reduce the interest rate on future Federal It would seem to a. layman that the Supreme Cou:rt fully covered land-bank and land-bank commissioner loans to 3 percent per all points involved in this case, and that any new legislation annum and that the Federal land-bank and land-bank commis attempting to cover the same laws would only be another experi sioner loans now outstanding be rewritten at a rate of 3 percent ment and seriously delay actual recovery. per annum. Getting at this problem from a. business standpoint the first 2. That since a large number of land-bank commissioner loans part is to find the cause; and I fully believe that mbst people now in force in conjunction with the Federal land-bank loans know that the cause was that the average farmer was not able to are 13-year loans and wm be paid off after 1938 at the rate of meet interest and tax payments or overhead expenses; most farm 10 percent of the original principal amount per year, it will work ers can make a. living and pay reasonable amounts for interest and a hardship for borrowers to retire the loan on such a basis. We taxes. therefore petition that future land-bank commissioner loans, The budget law in Kansas has helped reduce the tax question, where they have been made as second loans following Federal and if the interest rate could be reduced to 3 percent I firml1 land-bank loans, be rewritten to run the same length of time as believe that the farm question would be solved, and in a business the Federal land-bank loans. way, without any need for an army of Government employees to 3. That a copy of this resolution be sent to the President of enforce it, as is the case in the A. A. A., and there is no reason the United States, Members of Congress from Kansas, the Agri why the Federal Farm Mortgage Corporation cannot reduce the cultural Committee in Congress, Gov. W. I. Myers, of the Farm interest rate to the 3-percent rate. We believe that if the farmer can be financed at a reasonable Credit Administration, in Washington, D. C., and the authorities rate of interest, and that State taxes be held at their present level, of the Federal land bank at Wichita. that one or two good crops would put the farmer back on his feet and would in the end result in the best plan that could be adopted COOPERATIVE EXTENSION WORK IN AGRICULTURE at this t1me. AND HOME ECONOMICS, STATE OF KANSAS, We realize that we are not helping the cause of a. bank by sug Ness City, Kans., January 20, 1936. gesting cheap interest rates, yet we do believe that it is now Mr. ARTHUR CAPPER, necessary that there must be some plan adopted that wm take Senator from Kansas, United States Senate, care of the present trouble, ~d are w1lling to see this plan tried Washington, D. C. out first, and hope that when the farm trouble has been cured DEAR SENATOR CAPPER: We, the Farm Bureau members of Ness that we can all get back to a reasonable business basis. County in session at our annual meeting January 17, 1936, resolve Yours truly, that our Congressmen and farm leaders should use their influence F. L. BIGELOW, to promote a.nd support a measure whereby adjustment payments President, Farmers &- Merchants State Bank. can be made where compliance has been met on all adjustment contracts now in force, including the wheat applications covering MESSAGES FROM THE PRESIDENT the year 1936. Messages in writing from the President of the United Also we urge that a new agricultural adjustment program be formulated which will be adequate and permanent. States were communicated to the Senate by Mr. Latta one PERCY L. CooK, of his secretaries. . ' Secretary-Treasurer, Ness County Farm Bureau. SUPREME COURT AND THE T.V. A.-ADDRESS BY SENATOR MINTON Mr. Mr. JoHNSON, KANs., January 20, 1936. VAN NUYS. President, Monday night, February Hon. ARTHUR CAPPER, 24, my colleague the junior Senator from Indiana [Mr. United States Senate, Washington, D. C. MINTON] delivered a very interesting and able radio address DEAR MR. CAPPER: I have hesitated to add to your already over on the Supreme Court and the T. V. A. I ask unanimous burdened correspondence staff since the deplorable decision of the Supreme Court in regard to the A. A. A., but I feel that unless a consent to have the address prfuted in the RECORD. great many who feel, as I do, that the A. A. A. was the only thing There being no objection, the address was ordered to be that has ever really been a real help to the general farming indus printed in the RECORD, as follows: try; I feel that you know everything that I could tell you, but you would really have to have lived right in this "dust bowl" to even I wish to discuss with you this evening the recent decision of get the slightest idea of what the A. A. A. has meant to the farmers the Supreme Court sustaining the constitutionality of the act of out here. We had a very light crop in 1930, and then in 1931 we Congress creating the. Tennessee Valley Authority, commonly got a bumper crop, and a fair crop in 1932, but you know that the called the T. V. A. price was so low that both crops ran the farmer in debt, for all our In 1916 the Congress authorized the construction of a dam on machinery, repairs, labor, and everything in connection with the the Tennessee River at Muscle Shoals, Ala., which was completed two crops was based on dollar wheat. Then in 1933 and 1934 and ln 1927, and is known as the Wilson Dam. The purpose of this 1935 we had almost complete failures; and there would have been construction was twofold: First, to establish a plant for the no such thing as 90 percent of the farmers staying on the job in a production of nitrates and other materials used in the manufac great vast territory out here had it not been for the A. A. A, ture of munitions of war; second, to improve the navigation of I feel that you will do it anyway, but I want to add my name to the Tennessee River, a navigable stream, which has its head the list of farmers that have and will write you asking that you use waters in West Virginia and North Carolina, and flows across sev everything at your command to get some farm program in force eral States, draining an area of some 40,000 square miles. At the that will pay the last payment of the 1935, also the 1936, contract dam were built hydroelectric units for the generation of elec and application agreement, as well as to go on with a sixnilar pro tricity, by allowing the water from its fall over the dam to pass gram for the future. over turbines which generated the electricity. The electricity so I also want to ask you to do all you possibly can to prevent the generated was used to operate the nitrate plants and other gov payment of the processing taxes that have been paid, and also that ernmental machinery at the dam. However, the volume of elec have been impounded by order of the Federal court, and all that tricity generated was in excess of the needs of the Government should have been paid prior to the adverse decision of the Supreme and a large surplus was available for sale to the public. As units Court, from being paid to any of the millers, bakers, packers, fac for the production of nitrates and materials for the manufacture tories, or anyone that will claim them, unless it be to the actual of munitions, the plants at Muscle Shoals were not commercially consumer; he is the real taxpayer and the only one in any way successful and in peacetime their operation is not attempted. entitled to it, and I do not see how it could ever be properly and With a large investment in Wilson Dam and the production of equitably distributed to them. Everyone in the United States that materials to be used in the manufacture of munitions of war and has bought a sack of flour, a loaf of bread, pork, clothing, or any for other commercial purposes not being feasible at the time, Con thing that has been affected bv the processing tax knows that the gress turned to the improvement of the navigability of the river consumer not only paid the extra cost of the processing tax but and the construction of other dams to be used in conjunction that the mills, bakers, packers, factories, wholesalers, and, in fact, with the Wilson Dam to produce a 9-foot stage of water from 3104 CONGRESSIONAL RECORD-SENATE MARCH 3 F"..noxv11le, Tenn., to Paducah, Ky., a distance of some 658 miles. ttons that are properly before us relate to the constitutional 'i'b.e authorization for this 9-foot stage was by an act of Congress authority for the construction of the Wilson Dam and for the dis under the Hoover administration in 1930. To carry out this ob position, as provided in the contract, of the electric energy there jective of Congress, the T. V. A. was created as a corporate body generated.'' by an act of Congress, May 18, 1933, pursuant to a reco~enda With this limitation of the issue, the Chief Justice takes up first tion of President Roosevelt, but Mr. Hoover, and Mr. Coolldge be the constitutional authority for the construction of the Wilson fore him, had vetoed such legislation. Now, in the construction Dam. The authority for the construction of the Wilson Dam is of this series of dams to effectuate navigation, large bodies of found in the war powers of the Congress and the power to regulate water are impounded, and as the water falls to the lower level interstate · and foreign commerce, both of which are powers ad~ tremendous power is created by the simple fall of the water, and mitted to be granted in the Constitution to the Federal Govern the power inherent in the fall is developed whether we want it ment. The Chief Justice points out in these words the two consti or not, and such power has been used by mankind throughout tutional powers under which Congress acted in building Wilson the ages to do his work. So, as the water goes over the dams this Dam: "We take judicial notice of the international situation at potential power, ever present, may be utilized or wasted. To the time the act of 1916 was passed, and it cannot be successfully utilize it, the water in all its force is directed over turbines, which disputed that the Wilson Dam and its auxiliary plants, including generate electricity and thus the power is converted into a spe the hydroelectric-power plant, are and were intended to be adapted cial property, namely, electric current, which may be transmitted to the purposes of national defense." many miles away for consumption. Rather than permit this "The act of 1916 also had in view 'improvements to navigation.' great power to go to waste, the Congress authorized the T. V. A. Commerce includes navigation. 'All America understands and has to conserve it by converting it into electric current, and then to uniformly understood', said Chief Justice Marshall in Gibbons sell the surplus current in the market in the surrounding terri against Ogden, 'the word commerce to comprehend navigation.' tory. The development of these projects is going forward now by The power to regulate interstate commerce embraces the power to T.V. A. keep the navigable rivers of the United States free from obstructions Wilson Dam being complete and capable of producing a surplus to navigation and to remove such, obstacles when they exist" • • •. of electric current, T. V. A., in accordance with the authority "The Tennessee River is a navigable stream, although there are vested in it by Congress, sought an outlet for this surplus current obstructions at various points because of shoals, reefs, and rapids. generated at Wilson Dam. The Alabama Power Co. is a private The improvement of navigation on this river has been a matter corporation, engaged in the generation, transmission, distribution, of national concern for over a century." • • • "When in its and sale of electricity in the territory near the Wilson Dam. On present condition the Tennessee River is not adequately improved January 4, 1934, the T. V. A. entered into a contract with the for commercial navigation and traffic is small, we are not at Alabama Power Co. for the purchase by the T. V. A. from the liberty to conclude either that the river is not susceptible of de power company of certain transmission llnes and substations and velopment as an important waterway or that Congress has not other property, for a million dollars; for the purchase of certain undertaken that development or that construction. of the Wilson real estate to be used in building the proposed Wheeler Dam; for Dam was not an appropriate means to accomplish a legitimate an interchange of energy and sale by T. V. A. to the power com end. The Wilson Dam and its power plant must be taken to pany of surplus power generated and available at Wilson Dam, have been constructed in the exercise of the constitutional func and for the mutual restrictions as to areas to be served in the tions of the Federal Government." The Court having determined sale of this power. All of the common stock of the Alabama the constitutional right to build the dam, next considered the Power Co. is owned by a holding company, but the power com right to dispose of the electric energy generated at the dam. The pany has outstanding some preferred stock. Some of the pre Court said: "The Government acquired full title to the dam' site, ferred-stock holders, professing to believe the contract to be in with all riparian rights. The power of the falling water was an valid and beyond the constitutional authority of the T. V. A., inevitable incident of the construction of the dam. That water and that it would work out injuriously to them, protested to the power came into the exclusive control of the Federal Government. directors of the power company, but without success. And upon The mechanical energy was convertible into electric energy, and refusal of the holding company to call a meeting of the stock the water power, the right to convert it into electric energy, and holders, a group of preferred-stock holders carried their grievance the electric energy this produced constitute property belonging to into a Federal district court in equity to enjoin an enforcement the United States." of the contract. At least that is what the record shows, but one Having determined that the electric energy was the property of who has practiced law for a while knows that things are not the United States, the Chief Justice pointed out a provision of always what they seem on the record. The district court en the Constitution which gave authority to Congress to dispose of joined the contract, and on appeal to the circuit court of ap the property of the United States and observed: "That the water peals, the circuit court overruled the district court and upheld power and the electric energy generated at the dam are suscep· the authority of the T.V. A. and the Alabama Power Co. to make tible of disposition as property belonging to the United States is the contract. Thereupon the stockholders, on a writ of certiorari, well established." had the case reviewed by the Supreme Court of the United States, But, said the stockholders, "even though it is Government prop· which handed down three separate opinions a week ago today. erty, the Congress has authority to dispose of this energy only In football parlance, a triple-threat player is one who can run, to the extent that it is a surplus, necessarily created in making pass, or kick; and when he is back for the ball, it is called a triple munitions of war, or operating the works for navigation purposes, threat play, because he may run, pass, or kick. and the balance must go to waste." And these are the gentlemen This opinion of the Supreme Court is a sort of triple-threat that shed crocodile tears over the slaughter of little pigs! opinion. You may run with the Chief Justice, pass with Mr. Jus The Chief Justice was not much impressed with the argument, tice Brandeis, or kick with Mr. Justice McReynolds. Mr. Justice and after saying: "We find nothing in the Constitution which Brandeis, supported by Justices Stone, Cardozo, and Roberts, while imposes such a limitation" he proceeded to reduce the argument agreeing that the act was constitutional, and for the reasons given to an absurdity by his own pointed argument in answer and the by Chief Justice Hughes, nevertheless were of the opinion that citation of ample authority. Finally, the stockholders, as a last the case could be disposed of on other grounds than the consti resort, argued that even though the Government may sell its sur tutional grounds involved. They were of the opinion that the plus, it can only do it at the dam, knowing, of course, that their stockholders had no standing to bring the suit, and therefore, on corporation, the Alabama Power Co., was the only customer capa· well-known rules laid down by the Court, if a case can be disposed ble of taking the power at this point. To this the Chief Justice of on grounds other than constitutional grounds, It is the Court's replied: "We know of no constitutional ground upon which the duty to do so. These four Justices proposed not to decide the con Federal Government can be denied the right to seek a wider stitutional question, because in their opinion the stockholders had market." And he sustained the power of the Government to no standing in Court, and that would dispose of the case. Mr. acquire the transmission lines for the transmission of the electric Justice McReynolds was of the opinion that the stockholders had current to the market. a standing in Court, and to that extent he agreed with the Chief In short, the opinion holds that under the war powers and Justice and his three associates, but he disagreed entirely with commerce clause of the Constitution Congress may build these Mr. Justice Brandeis and his three associates, and he disagreed great dams in the navigable streams of the country. That the with the Chief Justice on the constitutional law involved in the water power thus created may be converted into electricity, in· case. I think his judicial philosophy and the key to his dissent stead of permitting it to go to waste, and when the electricity are found in this one sentence: "Nor do I find serious difficulty is generated it is the property of the United States. That any with the notion that the United States, by proper means and for surplus energy thus generated may be sold by the Government legitimate ends, may dispose of water power or electricity hon and in order to enable the Government to market the surplus estly developed in connection with permissible improvement of the Government may acquire the transmission facilities for the navigable streams." He finds fault with the honesty of Congress' purpose of conveying the surplus to the market. This is ample purpose. This is hardly the function of a judge. authority to sustain all the power projects under construction So you see these constitutional questions are just as simple as at this time, although there are other constitutional powers that that, and the minds of the Justices go unerringly to the mark, might be called on in aid of the powers mentioned by the Court albeit not the same mark! So, With eight Justices agreeing as to the in the T. V. A. opinion. constitutionality of the T. V. A., although four of them thought The average citizen asks, "How does this affect me?" First, lt they ought not to say so, the judgment of the circuit court of ap will help bring down the cost of electricity to the consumer. peals was affirmed, and the Chief Justice delivered an opinion The average cost of the kilowatt-hour of electricity outside the upholding the right of the stockholders to sue but denying them T. v. A. area is 5.1 cents per kilowatt-hour, while it is only 3.1 relief on the ground that the action of the T.V. A. was authorized cents in the T.V. A. area. Second, fiood waters will be controlled by law and the law under which it acted was constitutional. and the devastating effect thereof lessened and the soil conserved. In delivering his opinion the Chief Justice confined it to the Third, transportation costs will be lowered and with lower trans validity of the contract of January 4, 1934, which involved the sale portation and cheaper power the whole economic life of the people of the transmission lines that ran only from the Wilson Dam and 1n that vast area will be benefited. Not only this area will be power there generated, and he stated in the opinion: "The ques- benefited, but under the exercise of this a ·.. 3118 CONGRESSIONAL RECORD-SENATE MARCH 3 Some of those who apparently oppose the enactment of this After the various objections that ha~e been raised against this bill by those who are opposed to it, I feel decidedly that the bur bill because of what seems to them a temporary advantage den upon me just now is, perhaps, to tell you more of what the should be active supporters of it for their own protection bill does not do that what it does do. The bill has been very and the protection of their stockholders in the future. The badly misunderstood, whether intentionally or innocently, I am trouble with businessmen, so it seems to me, is that they not to say. But I want to point out categorically first what the b111 does not suffer from a disease of short-sightedness, which ultimately do. The bill does not penalize efficiency. It has nothing what ruins them. It has not been so long ago that we saw them ever to do with any internal organization or conduct of chain pull the pillars of the temple down as the result of their own stores or any other kind of merchants. It has nothing whatever greed, and they perhaps suffered more in actual financial to do with the selection of one kind of merchandising as against another, as being the more or less economical of the two. loss than any other group of people. Many, however, are to Mr. Logan, Mr. Wood, Mr. Adams, all referred to the bill as be congratulated on their support of the principles announced penalizing or shackling efficiency. There 1s not a single economy by the provisions of this proposed act. or saving that the wit of man could devise in the process of dis tribution that could not, under the provisions of this bill, be Among the many statements I have received sent out by translated along the chain of distribution to the ultimate con those opposing the enactment of Senate bill 3154 is one the sumer. It has nothing to do with that whatever. title of which is "Twenty-eight Questions That Suggest a Mil The bill does not compel the observance of any differential be lion Others." The 28 questions submitted are ridiculous in tween various classes of buyers; that is, between the wholesalers, retailers, manufacturers, and so on. It does not compel the grant the extreme, and show that the organization that sent out ing of any quantity discounts. It does not prevent the granting the questions either does not know what the bill contains of all quantity discounts. or has no regard for truth. I wonder at times how long it I want to call the attention of the committee to a very re markable piece of juggling that has been done in the reading of will be until some organizations find that the people are this bill by those who are opposed to it, as they have presented it wiser than they ever thought them to be. One of the first to the committee. If the committee has the bill before them, 1! questions in the pamphlet I have mentioned undertakes to they will turn to the second page, line 12, after the general suggest that brokerage must be allowed to none or all. The prohibition of discriminations: "Provided, That nothing herein contained shall prevent differentials." bill has nothing to do with brokerage at all. The bill deals Those are the words. And then it states two categories of with schemes and shams used to bring about discriminations things that shall not be prevented. First, differentials between in prices. wholesalers, retailers, and manufacturers; second, differentials on the basis of some cost saving or differences between the parties to It is suggested in the first question submitted that a mine the discrimination. paying a broker $50 a car must charge every other consumer Now, here is what they do. Those same two words apply to $50. That is not true. A legitimate broker can charge what both. They not only read the blll wrong but they do not read ever his employer may be willing to pay without the violation it the same way twice. They first say that these words "shall prevent" read "shall compel" differentials as between wholesalers, of any provisions of the proposed act. retailers, and manufacturers. The next question is even more ridiculous, as it suggests that a clothier who has earned a payment from a manufac Mr. Teegarden states but the simple truth touching the turer for featuring his line may not sell a suit with two provisions of the bill, and, while I do not have the honor of pairs of pants made by a manufacturer at the same price a knowing the ability of Mr. Teegarden as a lawyer, I must competitor at retail sells a suit with one pair of pants. The confess · he states with great clarity what the bill does not provisions of the bill have nothing to do with a question of provide. that kind. Legitimate allowances for advertising to be used Further on, on page 207, he continues: for the purpose of advertising the particular line of goods Instead of reading it "that nothing herein contained shall pre vent differentials in prices", they say "this shall prevent differ which has been sold to the buyer by the seller is permitted entials on account of differences in cost", and they say, therefore, under this bill, and it takes a very ignorant man or set of that this bill does not permit quantity differentials based on cost men to deny it. differences and it penalizes efficiency. Another question suggests that cash discounts must dis Mr. Teegarden then continues his testimony: appear from business. That one is made up out of the whole The bill does not, therefore, prohibit any kind of quantity dis cloth. Cash discounts are allowed, and there is nothing to counts or differentials justified by differences in cost or savings interfere except where they are used for the purpose of in cost in the chain of distribution of food or merchandise or goods or wares of any kind. The bill does not compel or restrict favoring one group against another group. I do not have any form of distribution or merchandising, one as against another. the time to go through the list of 28 questions, but I should The blll has nothing to do with the fixation of prices. It says be very glad to have each individual Senator, if he had the nothing whatever as to the prices to be maintained or the price time, consider the 28 questions submitted. It is true they relationship to be maintained or the trading relationship to be maintained as between the seller and another. are submitted anonymously. Senate bill 3154 is printed in It governs only the relationship to be maintained by a seller the pamphlet, and is followed by the questions, but no one between his various customers. It requires him to treat them dared to sign anything so foolish. It is but one evidence of on an equal basis, subject only to those differentials which are justified by differences in cost involved in the differing methods the desire to mislead the public, and even the Congress of the or quantities in which the goods are sold or delivered. United States, and it is a cowardly, false, and fraudulent attempt. Some suggestions have been offered to the effect that the I will refer to one or two other questions in the pamphlet, bill is unconstitutional. I have given consideration to that "28 questions that suggest 1,000,000 others": question, and I have reached the conclusion that under the Suppose a manufacturer offers a free deal over the radio--must many decisions of the Supreme Court passing upon similar he ascertain that all in the field have heard? Or does an an questions the bill is clearly within the power of Congress. nouncement over a national radio hook-up satisfy the offering If there should be an effort on the part of some Senator to requirements set up in the proposed legislation? prove by decisions of the Supreme Court that the bill is not Here is another: constitutional, I shall be very glad to meet the argument, If a grocer gives a stick of candy to a customer's child on behalf but until that time I shall withhold any comments on the of a manufacturer asking him to pass out samples in return for constitutionality of the proposed bill. a free dozen, is he subject to damages if he does not give a stick I hardly think there is a Member of the Senate who, after of candy to every child who comes in the store? giving careful consideration to the provisions of the bill, As I have said, the pamphlet is circulated, although un will oppose it. He may object to the particular procedure signed by the Institute of Distribution Founded and Main for carrying into effect the principles established by the bill, tained by National Distributors, in New York. but there is little basis, if any at all, for reasonable opposi On page 206 of the hearing held before the Committee tion to the bill in principle. I am not as familiar with mer on the Judiciary, House of Representatives, in July 1935, I chandising and related businesses as some who are Mem find a statement in the testimony of Mr. H. B. Teegarden, bers of the Senate, and the suggestions that I have made counsel for the United States Wholesale Grocers' Associa touching the provisions of the bill are based upon informa tion, which calls attention very forcibly to some of the pro tion I have obtained after careful consideration of the im visions of the bill which those who oppose it seem to misun portant information that has been gathered during the past derstand. He there said: several years bearing upon the questions presented. 1936 CONGRESSIONAL ;RECORD-SENATE 3119 Mr. GORE. Mr. President, will the Senator yield? Smith Townsend Vandenberg Wheeler Steiwer Trammell Van Nuys White Mr. LOGAN. Certainly. Thomas, Okla. Truman Wagner Mr. GORE. The pending bill is based to some extent on Thomas, Utah Tydings Walsh section 2 of the Clayton Act and is related to methods of Mr. BYRD. My colleague the senior Senator from Virginia procedure and administration? [Mr. GLAss] is detained on account of illness in his family. Mr. LOGAN. The Senator is correct. The purpose of the Mr. DIETERICH. I desire to announce that my colleague bill is to stop up loopholes found in section 2 of the Clayton the senior Senator from Illinois [Mr. LEwrsJ is unavoidably Act. Section 2 of the Clayton Act has been abated. There detained. was a provision in it, as Senators will remember, allowing Mr. ROBINSON. I reannounce the absences of Senators the granting of price differentials to meet competition in a as announced on the previous roll call. particular community. That was perhaps unwise, although The PRESIDENT pro tempore. Eighty-six Senators hav at the time of the passage of the Clayton Act it was well . ing answered to their names, a quorum is present. designed to remedy the evils then in existence. However, The PRESIDENT pro tempore laid before the Senate a since then time has proved that there are ways to evade message from the President of the United States, which was the Clayton Act, and therefore it is necessary to strengthen read and referred to the Committee on Finance, as follows: its provisions; and the bill seeks to do nothing else. I may say in conclusion that the bill is not my bill. It To the Congress of the United States: was referred to me as chairman of the subcommittee to con On January 3, 1936, in my annual Budget message to the sider. This I did and reported to the full Judiciary Com Congress, I pointed out that without the item for relief the mittee, and by direction of that committee I reported the Budget was in balance. Since that time an important item of bill to the Senate. The bill was sponsored by the senior revenue has been eliminated through a decision of the Su Senator from Arkansas [Mr. RoBINSON]. The bill, as re preme Court, and an additional annual charge has been ported, although the report of the committee may not clearly placed on the Treasury through the enactment of the Ad so indicate, is the Robinson bill with perhaps two amend justed Compensation Payment Act. ments which I regard as important and two or three ·other I said in my Budget message: little amendments changing, perhaps, the language. • • • The many legislative acts creating the machinery for I have sought to explain the bill for the benefit of Sen- recovery were all predicated on two interdependent beliefs. First, 2.tors and others who are interested. It may be that I have the measures would immediately cause a great increase in the not clearly understood every provision in the bill. It may annual expenditures of the Government--many of these expendi tures, however, in the form of loans which would ultimately re be that the Senator from Arkansas will find that in dis turn to the Treasury. Second, as a result of the simultaneous cUssing his bill I have interpreted it wrongly, but that is attack on the many fronts I have indicated, the receipts of the my own interpretation after having considered all the in Government would rise definitely and sharply during the following few years, while greatly increased expenditures for the purposes formation I could gather on the subject. stated, coupled with rising values and the stopping of losses would, Mr. ROBINSON. Mr. President, will the Senator yield? over a period of years, diminish the need for work relief, and Mr. LOGAN. I am glad to yield. thereby reduce Federal expenditures. The increase in revenues Mr. ROBINSON. The last statement made by the Sena would ultimately meet and pass the declining cost of relief. This policy adopted in the spring of 1933 has been confirmed in tor from Kentucky prompts me to say in this connection actual practice by the Treasury figures of 1934, of 1935, and by the that I have listened to his remarks with great interest. I estimates for the fiscal years of 1936 and 1937. recognize the fact that he has studied the bill much more There is today no doubt of the fundamental soundness of the policy of 1933. If we proceed along the path we have followed, and carefully than I have been able to do. It is my opinion with the results attained up to the present time, we shall continue that his exposition, both of its· purposes and its provisions, our successful progress during the coming years. is accurate, reliable, and helpful. Mr. LOGAN. I appreciate the statement of the Senator If we are to maintain this clear-cut and sound policy, it is from Arkansas. I have given the bill the most careful con incumbent upon us to make good to the Federal Treasury sideration I could. I have no interest in it in the world both the loss of revenue caused by the Supreme Court de except as it may serve the public interest. The statements cision and the increase in expenses caused by the Adjusted I have made flow from my sincere conviction that the bill Compensation Payment Act. I emphasize that adherence to ought to be enacted into law. consistent policy calls for such action. Mr. GORE. Mr. President--. To be specific: The Supreme Court decision adversely The PRESIDENT pro tempore. Does the Senator from affected the Budget in an amount of $1,017,000,000 during the Kentucky yield to the Senator from Oklahoma? fiscal year 1936 and the fiscal year 1937. This figure is Mr. LOGAN. I yield. arrived at as follows: Mr. GORE. The principle underlying section 2 of the Deficit to date (expenditures chargeable to process ing taxes less processing taxes collected) in excess Clayton Act and section 2 itself have run the gauntlet of of that contemplated in the 1937 Budget______$281, 000, 000 the courts and have been sustained by them. Estimated expenditures to be made from supple- Mr. LOGAN. That is correct. mental appropriation approved in the Supple- mental Appropriation Act, 1936------296, 000, 000 ADDITIONAL REVENUE Estimated expenditures to be made under the Soil Mr. ROBINSON. Mr. President, I suggest the absence Conservation and Domestic Allotment Act______440,000,000 of a quorum. Total additional deficit, 1936 and 1937, due to The PRESIDENT pro tempore. The clerk will call the Supreme Court decision and adjusted farm roll. program ______1,017,000,000 The Chief Clerk called the roll, and the following Senators For the purposes of clarity, I divide the present total addi answered to their names: tional revenue needs of the Government into the permanent Adams Caraway Gibson Metcalf and the temporary ones. Ashurst Carey Gore Minton Austin Chavez Guffey Moore Permanent Treasury income of $500,000,000 is required to Bachman Clark Hale Murphy offset expenditures which will be made annually as a result Bailey Connally Harrison Murray Barbour Coolidge Hastings Neely of the Soil Conservation and Domestic Allotment Act recently Barkley Copeland Hatch Norbeck enacted by the Congress and approved by me; and an addi Benson Costigan Hayden Norris tional sum recurring annually for 9 years will be required to Bilbo Couzens Johnson O'Mahoney Black Davis Keyes Overton amortize the total cost of the Adjusted Compensation Pay Bone Dickinson King Pittman ment Act. Borah Dieterich Logan Pope The net effect of paying the veterans' bonus in 1936, in- Bulkley Donahey Lonergan Radcliffe Bulow Duffy McAdoo Reynolds stead of 1945, is to add an annual charge of $120,000,000 to Burke Fletcher McGill Robinson the $160,000,000 already in the Budget. Byrd Frazier McKellar Russell Byrnes George MeN aT¥ Schwellenbach We are called upon, therefore, to raise by some form of Capper Gerry Maloney Sheppard permanent taxation an annual amount of $620,000,000. It 3120 CONGRESSIONAL RECORD-SENATE MARCH 3 may be said, truthfully and correctly, that $500,000,000 of In this case also the formulation of taxes lies wholly in this amount represents substitute taxes in place of the old the discretion of the Congress. I venture, however, to call processing taxes, and that only $120,000,000 represents new your attention to two suggestions. taxes not hitherto levied. The first relates to the taxation of what may well be I leave, of course, to the discretion of the Congress the termed a "windfall" received by certain taxpayers who formulation of the appropriate taxes for the needed perma shifted to others the burden of processing taxes which were nent revenue. I invite your attention, however, to a form of impounded and returned to them or which otherwise have tax which would accomplish an important tax reform, re remained unpaid. In unequal position is that vast number move two major inequalities in our tax system, and stop of other taxpayers who did not resort to such court action "leaks" in present surtaxes. and have paid their taxes to the Government. By far the Extended study of methods of improving present taxes greater part of the processing taxes was in the main either on income from business warrants the consideration of passed on to consumers or taken out of the price paid pro changes to provide a fairer distribution of the tax load ducers. The Congress recognized this fact last August and among all the beneficial owners of business profits whether provided in section 21 (d) of the Agricultural Adjustment derived from unincorporated enterprises or from incorpo Act that, in the event of the invalidation of the processing rated businesses and whether distributed to the real own taxes, only those processors who had borne the burden of ers as earned or withheld from them. The existing di:ffer these taxes should be permitted to receive refunds. The ence between corporate taxes and those imposed on owners return of the impounded funds and failure to pay taxes that of unincorporated businesses renders incorporation of small were passed on result in unjust enrichment, contrary to the businesses difficult or impossible. spirit of that enactment. A tax on the beneficiaries un The accumulation of surplus in corporations controlled fairly enriched by the return or nonpayment of this Federal by taxpayers with large incomes is encouraged by the pres excise would take a major part of this windfall income for ent freedom of undistributed corporate income from sur the benefit of the public. Much of this revenue would taxes. Since stockholders are the beneficial owners of both accrue to the Treasury during the fiscal years 1936 and 1937. distributed and undistributed corporate income, the aim, as The other suggestion relates to a temporary- tax to yield a matter of fundamental equity, should be to seek equality the portion of $517,000,000 not covered by the windfall tax. of tax burden on all corporate income whether distributed Such a tax could be spread over 2 years or 3 years. An or withheld from the beneficial owners. As the law now excise on the processing of certain agricultural products is stands, our corporate taxes dip too deeply into the shares of worth considering. By increasing the number of commodi corporate earnings going to stockholders who need the dis ties so taxed, by greatly lowering the rates of the old proc bursement of dividends; while the shares of stockholders essing tax, and by spreading the tax over 2 or 3 years, only who can a:fford to leave earnings undistributed escapes cur a relatively light burden would be imposed on the producers, rent surtaxes altogether. consumers, or processors. This method of evading existing surtaxes constitutes a FRANKLIN D. ROOSEVELT. problem as old as the income tax law itself. Repeated at THE WHITE HOUSE, March 3, 1936. tempts by the Congress to prevent this form of evasion have LAWS OF FIRST NATIONAL PHILIPPINE ASSEMBLY (INAUGURAL not been successful. The evil has been a growing one. It SESSION) has now reached disturbing proportions from the stand The PRESIDENT pro tempore laid before the Senate a point of the inequality it represents and of its serious e:ffect message from the President of the United States, which was on the Federal revenue. Thus the Treasury estimates that, read, and, with the accompanying papers, referred to the during the calendar year 1936, over four and one-half bil Committee on Territories and Insular A:ffairs: lion dollars of corporate income will be withheld from stockholders. If this undistributed income were distrib To the Congress of the United States: uted, it would be added to the income of stockholders and As required by section 2 (a) (11) of the act of Congress there taxed as is other personal income. But,. as matters approved March 24, 1934, entitled "An act to provide for the now stand, it will be withheld from stockholders by those complete independence of the Philippine Islands, to provide in control of these corporations. In 1 year alone, the for the adoption of a constitution and a form of government Government will be deprived of revenues amounting to over for the Philippine Islands, and for other purposes", I trans $1,300,000,000. mit herewith copies of the laws enacted by the First Na A proper tax on corporate income (including dividends tional Assembly of the Philippines during its inaugural from other corporations), which is not distributed as session, from November 25, 1935, to December 21, 1935. earned, would correct the serious twofold inequality in our FRANKLIN D. RoOSEVELT. taxes on business profits if accompanied by a repeal of the THE WHITE HOUSE, March 3, 1936. present corporate income tax, the capital-stock tax, the re MESSAGE FROM THE HOUSE lated excess-profits tax, and the present exemption of divi A message from the House of Representatives, by Mr. Halti dends from the normal tax on individual incomes. The rate on undistributed corporate income should be graduated and gan, one of its reading clerks, announced that the House had so fixed as to yield approximately the same revenue as disagreed to the amendments of the Senate to the bill MEASUREMENT OF" VESSELS USmG THE PANAMA. CANAL You say this legislation "will eliminate Inequalities in charges between different vessels." It is my understanding that the ships The Senate resumed the consideration of the bill (8. 2288) whose tolls would be increased by this bill are now bearing more to provide for the measurement of vessels using the Panama than their share of the toll burden in proportion to their weight carrying capacities. The enactment of this legislation, instead of Canal, and for other purposes. eliminating this inequality, would aggravate it. Furthermore, if Mr. BARBOUR. Mr. President, referring to the bill now any substantial injustice that might be imposed on certain classes before the Senate, inasmuch as I Qnderstand a letter similar of ships· under the present system of levying tolls were corrected by the proposed legislation, the owners of these ships would cer to one received by me has been sent to a number of other tainly be advocating its enactment; and yet I know of no ship Senators, I should like to read the letter transmitted to me owner or operator who has endorsed this legislation in the 20 years by the Secretary of War under date of February 3, and I shall since the opening of the Canal. You say "it will eliminate an expensive indirect subsidy which take the liberty of reading my acknowledgment of the let up to now has accrued to foreign vessels in much ·greater propor ter, which I think may be of some usefulness and helpfulness tion than to United States vessels." In the interest of fairness, I at this time. think it is hardly accurate to characterize as an "expensive sub The letter of the Secretary of War is as follows: sidy" a system of levying tolls which during the last two fiscal years yielded a net return, after deducting all expense, of about 4~ per WAR. DEPARTMENT, cent per annum on the full capital investment in the Canal, both Washtngton, February 3', 1936. military and commercial (including adll,linistrative, civil, and busi Hon. W. WARREN BARBOUR, ness properties, public works, and working capital, but excluding United States Senate, Washington, D. C. accumttlations of interest), and an annual return of more than DEAR SENATOR- BARBOUR: I earnestly request your consideration of 6 percent on the commercial valuation of $275,000,000, as estimated legislation recommended by the President in his letter of January by the War Department. It should also be borne in mind that dur 6, 1936 (copy attached), which is deemed essential to the proper ing part of this period there was a substantial curtailment of the administration of the Panama Canal. Canal revenues due to the extended strike of longshoremen on the The purpose of this bill (S. 2288) is to cure inequities and abuses Pacific coast. Furthermore, it would seem incorrect and mislead inherent in the present system of assessing tolls. It failed of pas ing to say that this "subsidy" accrues "to foreign vessels in much sage recently because, it is believed, its real purpose and the justi greater proportion than to United States vessels" when the data fication therefor were not fully understood. submitted at the hearing by the Canal administration for the fiscal I am informed that the bill, which was recommitted to the year ending June 30, 1934 (the only period for which such data Committee on Interoceanic Canals, may again be reported shortly was submitted) shows the reverse to be the case. These data in a somewhat different form. It is desirable, therefore, that you (joint hearings, S. 2288, p. 106) may be summarized as follows: know that the section providing for the study of the Panama Canal Mr. President, I will digress for a moment to refer first to rules of measurement might well be omitted. A preliminary review of these rules has been recently completed. It shows that pnly increases and then to decreases, because otherwise the fig simple changes therein are justified by experience and by develop ures will not be as readily understood as they will be when ment in ship construction. These changes may be made readily read. and without further legislative authority. The further study which I will direct if the law is enacted will furnish full informa Passenger ships, United States registry increase, $471,762; tion to enable the President to promulgate the revision in the rules foreign registry increase, $375,171; or a total increase of and to fix the tolls rates within the limits set by this legislation. $846,933. The Panama Canal rules of measurement, the exclusive use of which is the purpose of this legislation, were most scientifically The percentage of increase in the case of United States prepared after a thorough study of the subject by competent ex· registry is 22; in the case of foreign registry it is 10; or a perts, with due consideration of the interests of the Government total average increase of 15 percent. and the shipowners alike. The increase per transit in the case of United States reg The passage of this legislation will make no material change in isVry is $1,371; foreign registry, $471. Canal revenue~ it will eliminate inequalities in charges between different vessels; it will require the measurement of vessels transit It is difficult to state· the table so it can readily be under ing the Canal under one set of rules especially adapted to the stood. by Senators, but it will be clearly understood when purpose, such rules being similar to. though an improvement upon, read in the RECORD. As found in my reply to the letter of those in use at Suez; it will eliminate an expensive indirect subsidy which up to now has accrued to foreign vessels in much greater the Secretary of War, the table is as follows: proportion than to United States vessels; it wm stop the apparently endless reduction in tolls paid by certain vessels brought about by ·evasive structural changes and questionable interpretations, and it Type and nationality or ship Increase r:~rC:~~: oi~!~~se )!Vill make. possible the control of Panama Canal income. or decrease decrease pertransit Every administration since the Canal was completed has favored the enactment of legislation to accomplish this result. In my it Passenger ships: opinion. is in the public interest. United States registry______$471,762 22 $1,371 Sincerely yours, Foreign registry------375, 171 HI 471 GEO. H. DERN, 1------1------1------Secretary of War. To-taL __ ------·-·---·----··--·---- 846, 933 15 742 1======~1======1======My reply to the letter. under date of February 15, on which Shelter-deck cargo ships (usually 3-deck ships): United States registry---·------147, 229 7 349 I will co·mment late-r, was as follows: Foreign registry·------·------101, 488 2 95 FEBRUARY 15, 1936. 1------1------1------TotaL______248,717 4 167 The Honorable GEORGE H. DERN, 1======1======1======Secretary of .War, Washington, D. C. Other dry-cargo ships (usually 2 or less decks): DEAR MR. SECRETARY: I wish to acknowledge receipt of your United States registry______1 92,950 13 1109 letter ot February 3, 1936, ln connection with S. 2288. I shall Foreign registrY------1 285,794 19 1364 gladly give careful consideration to any revision of the bill that 1------1------1------16 I 231 may be suggested, but I wish to say quite frankly that I believe TotaL •• ·------·------·------1======1======1======1 378, 7« it unwise to eliminate the section authorizing· an independent Oil-tank ships: and impartial study of the method of assessing tolls on vessels United States registrY------·------1 577,910 117 1913 transiting the Pana-ma. Canal, and to enact legislation prescribing Foreign registrY------1342,195 119 11,107 a particular method without awaiting the result of such an in 1------1------1------vestigation. Moreover, I believe it would be presumptuous on the TotaL __ ------____ ------______----___ _ 1920,105 118 1977 part of the committee to report such a bill as your letter says may be reported shortly, in View of the overwhelming· vote of the I Decrease. Senate last month indicating its des.ire for an independent study of this kind before changing the present method of assessing tolls. My reply to the Secretary continues: The purpose of section 2 was to bring about a thorough and im These data show conclusively that the increases in tolls under partial review of what constitutes a fair and equitable system of the proposed bill would be proportionately heavier on the Amer levying tolls by an independent committee that would not be ican ships and the reductions proportionately less.- wholly within the control of the Canal administration and the Your letter continues: "It (the enactment of the legislation) Will War Department. Your letter gi-ves me the impression that you stop the apparently endless reduction in tolls paid by certain ves are opposed to any study of this matter not directed by your sels brought about by evasive structural changes and questionable Department, and indicates that your Department already has de interpretations.'' termined very largely just what changes in the rules it will recom mend to the President. It seems to me that this attitude empha Mr. DUFFY. Mr. President-- sizes more than ever the advisability of an independent review The PRESIDING OFFICER (Mr. ADAMs in the chair). such as the Senate so strongly favored. The penultimate paragraph of your letter recites your reanons Does the Senator from New Jersey yield to the Senator from for advocating enactment of this 1!egfslation. I t-hink some of Wisconsin? them require comment: Mr. BARBOUR. I yield. 3122 CONGRESSIONAL RECORD-SENATE MARCH 3 Mr. DUFFY. Before the Senator leaves the other point In the latter part of my reply to the Secretary of War, I which he mentions in his letter, I will say that the report made reference to the Secretary's letter to me, wherein he of the Bureau of Efficiency, which made a study of the tolls said: question in 1932, shows that in the 17 years of operation up "It will stop the apparently endless reduction in tolls paid by to that time United States vessels had been relieved of ap certain vessels brought about by evasive structural changes and proximately $27,000,000, while foreign vessels had been re questionable interpretations." · Is it accurate to characterize these reductions as "endless"? lieved of $32,000,000. In other words, for each dollar of toll charges the United States vessels have been relieved by This is the question, put to the Secretary in my letter to changes in structure, and so forth, more than a dollar has him: been saved to the foreign vessels. I think that is what the Is it accurate to characterize these reductions as "endless"? For Secretary means by the indirect subsidy to the foreign ships. example, do you mean that the modern American passenger ship or the open-shelter deck freighter can reduce present tolls indefi Mr. STEIWER.' Mr. President, will the Senator yield? nitely? Furthermore, is it not misleading to describe the struc Mr. BARBOUR. I yield. tural changes to cargo ships as "evasive", when their weight Mr. STEIWER. Does the report disclose what proportion carrying capacity is reduced indefinitely and legally by such changes. Moreover, "questionable interpretations" (if any exist) of the vessels were United States vessels and what propor is already vested in the administrative officers . .tion of the vessels were under foreign flags? In my judgment, such advocacy of this legislation offers further Mr. DUFFY. In answer to the question of the Senator evidence of the wisdom and desirability of a thorough investiga from Oregon, I will say that the report shows that all vessels tion by a tribunal other than the Canal administration before enacting substantive legislation. ·under the United States flag in the 17 years which the study Sincerely yours-- of the tolls covered had been relieved of $27,000,000 in tolls. Mr. STEIWER. I understood that perfectly; but I did Signed by me. not understand the Senator to state what part of the ton Mr. DUFFY. Mr. President, will the Senator yield? nage was foreign and what part of the tonnage was under Mr. BARBOUR. I yield. the American flag. Mr. DUFFY. It has been the contention of the War De Mr. DUFFY. Does the Senator mean of the total which partment· and the Canal authorities that the so-called ton went through the Canal during that time? nage openings which have been cut in the decks of vessels Mr. STEIWER. Yes. serve no useful purpose except for the reduction of toll Mr. DUFFY. I think the report does cover that point, but charges. Does not the Senator agree with the statement I have not the figures here. However, I will say I have that there is no other purpose at all for cutting such open received from the Canal authorities the statement that the ings except to accomplish a reduction in toll charges? figures have continued in the same proportions, because up Mr. BARBOUR. Mr. President, that question was dis to date vessels have been relieved of a total charge of cussed repeatedly and at length when the original edition $84,000,000, of which $37,250,000 has been saved by United of the bill was before the Senate previously, and I will come States vessels, while $46,750,000 in legitimate revenue has to it again in my remarks. If my explanation now shall been forfeited to foreign vessels. At the moment I have not not be adequate, I will be very glad to have the Senator the exact total amount of tonnage, but it is in very direct repeat his question. proportion, except that Japanese vessels up to the last year Mr. President, the bill S. 2288, as reported to the Senate in had not taken advantage of the devices of which they have May 1935, authorized, in section 2, an independent and im now begun to avail themselves in order to get the benefit of partial study of the method of levying tolls on vessels transit lower toll rates. I can get those figures for the previous ing the Panama Canal. Recognizing the inconsistency of period. enacting legislation prescribing a particular method of toll Mr. STEIWER. If the tonnage was comparable, the con assessment in advance of the investigation, the Senate, by an ·Clusion would be sound that foreign vessels have profited overwhelming majority, voted to follow the more orderly more from the so-called relief than the American vessels. procedure of awaiting the result of the study before legislat Mr. DUFFY. That is correct. ing on this highly technical and complicated subject. This Mr. STEIWER. If the foreign tonnage was three times as decision was amply justified by the fact that the present sys large as the American tonnage, of course, the figures which tem had been in e1Iect for more than 20 years without a the Senator just read would not be so revealing. demand for this proposed legislation from a single shipowner, Mr. DUFFY. That is true. I will try to get those figures and, as the present Canal revenues are admittedly adequate, for the Senator. As I recall, the tonnage figures are com there was no sound reason for the Congress to compel by parable, and the point which was made, both in the report law a redistribution of tolls among the different classes of of the Bureau of Efficiency and in the report of the Panama ships in advance of an independent and impartial review. Canal authorities, is that for each dollar of relief given to The bill now reported back to the Senate differs from the American vessels more than a dollar of relief has been given bill reported last May in three important particulars: to foreign vessels. First. All possibility of an independent study of this sub Mr. WHITE. Will the Senator state again the years cov ject-that is, one not controlled and directed solely by the ered by the statement? War Department--is removed by the elimination of section 2. Mr. DUFFY. Yes; the investigation was made in the year Second. Virtually unlimited authority is vested in the Pres 1932, and the report was made, as I recall, in the latter part ident in determining the unit upon which tolls are to be of that year; and the statement there made is that in the assessed, and, therefore, in the amount of the tolls. This is 17 years of operation up to the time the report was made brought about by the elimination of certain restrictive lan the relief which had come to United States vessels was guage heretofore incorporated in the bill. By reason of the approximately $27,000,000, and that which had come to very nature of the problems involved, these amplified powers foreign vessels was approximately $32,000,000. (in many respects unlimited) would, as a matter of fact, be Mr. BARBOUR. Mr. President, I welcome the inter- exercised by the War Department. ruptions. · Third. Certain departures from the principle that ships Mr. DUFFY. I did not mean to interrupt the Senator. should pay in proportion to their earning capacity-the Mr. BARBOUR. The Senator did not interrupt me at all. adoption of which principle has been the primary objective of The colloquy is a perfectly proper one at this time. I think the proponents of this legislation-are made mandatory in I have some figures which I will come to in a moment which the revised bill, in the hope they may facilitate its enactment may in a measure clear up the situation. by Congress. In any event, Mr. President, the colloquy shows the great INDEPENDENT STUDY MADE IMPOSSmLE and perfectly honest differences of opinion which exist; and As to a possible revision of the rules, the majority report by the same token, as was argued in the Senate a month ago, says that a- it proves the necessity for an impartial and properly con Further study of a technical nature will be made administratively ducted investigation of the whole subject by trained investi under the direction of the Secretary of War. The proposed revision gatG\l'S. of the rules contemplates such changes as Will be fair to shipping 1936 CONGRESSIONAL RECORD-SENATE 3123 as well as to the GOvernment. They· ·wm then be submitted to the tern. If the Panama Canal rules of measurement to which Department of Commerce and to parties in interest for stu~y and suggestions. In regular course, an opportunity would be g1ven to every ship is subjected in going through the Canal were the those who have legitimate interests at stake and those who have only consideration, that would be one thing; but under the practical knowledge of shipping to present their views and submit Attorney General's opinion there is a limiting factor, it being ·recommendations with reference to all types of vessels which are in necessary to consider the United States rules of measure use or in contemplation. ment. I was wondering if the Senator thought the Canal I think it should be po·inted out that no such revision is re administration had that power now without legislation? quired or suggested in the bill. Moreover-and this, in my Mr. BARBOUR. I think they have the power which I judgment, is of the utmost importance- mentioned during the course of my remarks, though the Further study • • • will be made administratively under point made by the Senator is a good one. the direction of the Secretary of War. EXECUTIVE AUTHORITY VIRTUALLY UNLIMITED In other words, there will be no study except that directed Mr. President, the virtually unrestricted authority given in and controlled by the War Department and the Canal ad the bill to amend the rules from time to time without fur ministration, which for 20 years have made every effort to ther legislative action, combined with the significant elimi compel the adoption of the Panama Canal rules of measure nation from the bill of the language heretofore employed to ment as the sole basis for levying tolls, n<>twithstanding the define the unit of measurement upon which tolls are to be unanimous protest of the American shipowners, and no rec assessed, that is, "vessel tons of 100 cubic feet each of actual ommendations for changes in the rules will b€ made to the earning capacity", not only removes the statutory protection President except through the Secretary of War. which the shipowner now has against the levying of exces Furthermore, one cannot escape the conclusion that the sive tolls but also represents a delegation so broad in scope War Department has already decided in advance just what as to be of doubtful validity. The rate of tolls has no prac changes it will make in the rules of measurement. In a tical significance unless applied to a unit defined by statute. recent letter to Members of the Senate, myself among Under the proposed bill, administrative discretion in modify others, the Secretary of War says: ing the rules of measurement is, in most respects, unre A preliminary review of these rules has been recently completed. stricted, and as a result the possibility of manipulation of the It shows that only simple changes therein are justified by experi rules, and consequently of the amount of tolls, is unlimited. ence and by development in ship construction. These change.s may be made readily and without further legislative authority. The determination of toll charges for the Panama Canal The further study which I will direct if the law is enacted will is a legislative function which can be delegated by Congress furnish full information to enable the President to promulgate the to an administrative agency if Congress definitely limits the revision in the rules and to fix the toll rates within the limits area within which administrative discretion may be exer set by this legislation. cised and pres.cribes- the principles to which that agency Moreover-and this is most significant-the Canal author must conform in determining such charges. A statute which ities have time and again supported their advocacy of this permits the administrative branch of the Government to legislation with statistical data based upon the rules as they assess such .toll charges on the basis of ·unit of measurement propose to modify them. Such a tabulation appears on to be determined by the administrative branch and which page 10 of the majority report, and others were used by the does not lay down definite principles to which the adminis proponents of this legislation in the course of the Senate trative branch must conform in determining such unit of debate. Clearly, such data can have no significance unless measurement but leaves the determination to its uncon based upon rules which actually go into effect, and certainly trolled and arbitrary discretion, violates this fundamental the Canal Administration would not submit such data unless principle of constitutional law. the results shown conformed exactly to the rules which they PRINCIPLE OF EARNING CAPACITY SACRIFICED TO POLITICAL EXPEDIENCY have reason to believe will go into effect. The refusal of the The enactment of this legislation is urged so as to estab War Department to permit any investigation not directed lish the principle that ships should pay tolls according to and controlled by an organization already irrevocably com their earning capacity. Nevertheless, the only mandatory mitted to the Panama Canal system of measurements, and provisions of the bill as now reported-that is, the exemp its frank prediction of the toll charges that will result from tion of deck loads and the assessment of a higher rate the rules after such review, is compelling evidence that the against tankers-are those that prescribe departures from passage of the bill as now reported would effectively pre this principle, while the application of this principle in clude the disinterested review, free from preconceptions, other respects may b€ entirely voided by amending the which the Senate so strongly favored. rules of measurement. In connection with possible future revision of the Panama Clearly, if the Panama Canal rules of measurement afford Canal rules of measurement, it should be made clear that an equitable basis for toll assessment, as is contended by the ever since the promulgation of the present rules on Novem proponents of the bill, then the mandatory provision levy ber 21, 1913, it has been the right and duty of the Canal ing a higher rate of tolls on tankers than on other vessels Administration to recommend to the President such changes constitutes a gross and unwarranted discriminat~on against in those rules as in their judgment would tend to make this highly useful type of ship. If, on the other hand, them a more suitable basis for assessment of tolls; that these rules do not afford a fair basis for toll assessment, notwithstanding their admission that the rules require modi as is maintained by those who oppose the bill, then admit fication, they refuse not only to revise the rules but even to tedly such inequities are not corrected by the arbitrary specify the changes they propose to make until after such assessment of an additional 10 cents per ton on this class . rules have been prescribed by Congress as the sole basis for of bulk carrier. assessment of tolls. Certainly it would be fairer, both to I should like to interject here that I cannot tell how that Congress and to the shipowner, if th€ changes which they figure was reached; and when the distinguished chairman propose to make, the results of which are refiected in the of the committee, the Senator from Oklahoma [Mr. GoRE] statements they have submitted, were specifically set forth so suggests that this new measure will mean an increase in as to permit an examination into their fairness b€fore such cost of only one-half cent per bale of foreign shipments of rules are made the exclusive basis for calculating the ton cotton through the Panama Canal, I am at a loss to under nage upon which tolls are based. stand how that computation was arrived at. The point I Mr. DUFFY. Mr. PresidentJ will the Senator yield? am trying to make is that I believe no one of us knows Mr. BARBOUR. I yield. whether the one-half cent a bale should not have b€en 10 Mr. DUFFY. Does the Senator contend if the Panama cents a bale less. It may be it should have been even more Canal authorities followed the interpretation of the law as than one-half cent per bale less, but we do not know which set forth by the Attorney General in 1914, that they them is correct, and we should find out. selves could make any change without coming to Congress Mr. DUFFY. Mr. President, will the Senator yield? for authority? In other words, we now have the dual sys- Mr. BARBOUR. Certainly. 3124 ·coNGRESSIONAL RECORD-SENATE MARCH 3 Mr. DUFFY. With reference to the suggestion as to tank inequities in the Panama Canal rules, but is rather to obtain ers, I quite agree perhaps that it is a discrimination against congressional support for the bill by requiring a higher rate tankers which go through the Canal, but I recall a number of tolls on ships owned by the large American oil companies of other Senators made the argument at the time the bill because of their supposed political unpopularity, and the pro was before the Senate previously that tankers would get the ponents of the bill hope by these means to secure the passage greatest advantage if the bill were enacted into law, and 10 of legislation even though this provision violates the principle cents was fixed as the charge, which would keep the tolls for which they have been fighting for 20 years. at approximately what they are now. It would result in a Of course, I cannot speak with any justification for the little more income to the Canal. proponents of the bill; but I do know, as the Senator from Mr. WHITE. Mr. President, will the Senator yield? Wisconsin pointed out, that reference was made repeatedly Mr. BARBOUR. Certainly. in the last debate on this bill to the fact that the new rates Mr. WHITE. Was there any evidence taken before the would impose a greater load on the passenger ships and committee as to the percentage increase necessary in order to freight carriers than would be true in the case of the ore equalize the tolls for the different classes of ships, or is it vessels and tankers; and I think that argument did have just an arbitrary figure which has been adopted without quite an appeal. By the same token, my own judgment is study and without hearings on the question? that the 10 cents per ton arbitrarily interjected into this new Mr. BARBOUR. I cannot answer the Senator's question. edition of the bill was inserted to create a favorable attitude Mr. WHITE. As a matter of fact, I was addressing the in respect to the tankers which were so much discussed question to the Senator from Wisconsin. before. Mr. BARBOUR. I yield to the Senator from Wisconsin I should like to say at this time, too, if I may, that there to answer the question. has been a great deal of reference to the pressure which Mr. DUFFY. I did not understand the Senator was ad has been brought to bear upon Senators, and the iniqui dressing me, although he was looking directly at me. There tous interest of shipping concerns in various quarters. I have been no additional hearings on that matter since the wish to point out that there are not any larger oil com hearings on the previous bill. panies on earth than those in my State. The Standard Oil Mr. WHITE. Then how was the 10-cent increase deter Co. of New Jersey certainly is one of the largest there is. mined? Was that arbitrarily set, or is it based upon infor I have not been importuned or bothered or badgered by mation developed before the committee? anyone; and I resent the implication that because I take one side or the other of this controversy, it must be for some Mr. DUFFY. I understood it was fixed both from in sinister motive that I do it. Most certainly, I do not accuse formation developed previously . and from advice given by the chairman of the committee of any such reaction as the Panama Canal authorities. that, nor, of course, the Senator from Wisconsin [Mr. Mr. WIDTE. There was no testimony from those who DUFFY]. would pay the bills? In other words, the modifications made in the bill by the Mr. DUFFY. I do not recall that there was. I know there committee not only ignore the Senate's emphatically ex have been no hearings since the previous public hearing. pressed desire for an independent and impartial study, but, Mr. WHITE. That is one trouble with the whole matter on the other hand, so greatly increase the authority of those the Ehipping interests who in the first instance pay the bills now administering the Canal as virtually to remove the ship and then the public who ultimately bear the charges are dis owner's protection against excessive tolls and possibly in regarded in .the entire discussion, and in this effort to change validate the delegation of power. To obtain such legisla the rules we are asked to rely exclusively on the military tion the principle of earning capacity is compromised for authorities. the sake of political expediency. Mr. DUFFY. If the Senator will indulge me further- The principal arguments advanced in support of this bill, Mr. BARBOUR. Certainly. as I see them, may be summarized as follows: Mr. DUFFY. The question about the shipping public being First. The dual system is unsatisfactory and should there concerned in any such change as is here involved, I think, is fore be supplanted by reestablishment of a single system. a very good argument on the face of it; but not very sound, To digress for a moment, that is the subject to which my because today vessels carrying cotton through the Canal do able friend the Senator from Wisconsin referred. not pay the same rates. Some have taken advantage of the Second. The Panama Canal rules of measurement pro situation and put openings in their decks while others have vide a fair and just method of determining the tonnage upon not, and still the conference provides that they are all to be which tolls should be paid. charged the same rate. In other words, the ones benefiting Third. Tonnage determined under the United States rules by it have not passed the saving on to the shippers at all. I of measurement does not afford a suitable basis for toll do not think that question is really involved. assessment. Mr. BARBOUR. Mr. President, as the Senator from Wis Fourth. The present system of assessing tolls represents consin has said, there were no hearings before the committee an expensive subsidy to shipping, from which foreign ship between the first and second editions of the bill. Personally ping benefits to a larger extent than our own. I think that is a distinction without a difference. To be fair Those, as I have said, as I see the matter, are the four to the chairman of the committee, I think that is something principal arguments advanced in support of this bill by those to which I, as the only Republican member of the committee, who are in favor of the proposed legislation. could not take exception. The Senator from Oklahoma made I think it important that these arguments be examined in reference to a great deal of data that had been gathered in some detail. the past. DUAL SYSTEM SHOULD NOT BE SUPPLANTED BY ONE LESS SUITABLE When the bill was reported from the committee-and I am To refer first to the dual system, and the claim that it glad to take this opportunity to say this because it is only fair should be supplanted by one which in my opinion is less to the Senator from Oklahoma that I should do so-he suitable, let me say that no system of assessing tolls is in brought it to me and asked if it would be acceptable to me as equitable solely because it is based on two different sets of the minority member of the committee, and if not, whether measurement rules. During the 20 years the present system I would submit a minority report. I told him that I would has been in effect, no shipowner has protested against it. either submit a minority report, or, if I concluded my There could be no stronger evidence than this of its fairness. thoughts would be more effective expressed at some other Even the War Department admits the adequacy of existing time in some other way, I should give my views then. That Canal revenues, and disclaims any intention of increasing is what I am attempting now to do. them. I think it must be obvious to those who have followed this Mr. DUFFY. Mr. President, will the Senator yield at that legislation that the real purpose of this surprising departure point? from the principle of earning capacity is not to correct the Mr. BARBOUR. Yes. 1936 ·coNGRESSIONAL RECORD-SENATE 3125 Mr. DUFFY. Of course, the fact that no shipping concern First. The tolls assessed under this methoa on the passen has complained is very good evidence that the companies ger spaces of modern passenger liners are so excessive have been, year by year, g-etting some benefits from the as to make the carriage of passengers in some cases pos present situation. The figures show that the percentage of sible only at virtually prohibitive expense. The War De earning space on which it has been possible to collect tolls partment has been compelled to recognize this vital defect, has been reduced from 84 percent in 1919 to 70 percent in and now promises to amend the rules in this respect not 1935. In other words, in 16 years the shipping concerns withstanding the fact that these spaces are clearly part have been able, through these changes, to have their tolls of the ship's earning capacity, and their exemption is reduced 14 percent; and apparently there is no end to it, a violation of this cardinal principle. Nevertheless, the because the ships that cannot be changed will be replaced War Department refuses to divulge to what extent and in by new construction. It is to try to stop this decrease year what respects it will exempt this space until its.. rules have by year that the present legislation is proposed. first been prescribed as the sole basis for toll assessment. Of course, I do not blame the shipowners for not protest The owners of these ships very properly protest against ing, because every year by this device-which was not the giving the War Department this blanket authority without intention of Congress at all-they are able to get out cheaper assurance in the law that this injustice will be corrected. than they did the year before. It has kept on in that way. Second. The most important defect in the Panama Canal Mr. BARBOUR. That goes back to the old argument which rules is that they ignore the one factor which controls to a we pursued at such length and so often in the last debate. larger extent than any other the earning power of the I shall come back to that again before I conclude my re ships that transit it; that is, the weight with which they marks; but in reply to what the Senator has said, I will say may be safely loaded. that I, for one, see no reason why the shipping interests of Here we come back to our old point ·of contention in re the United States should not benefit by the Panama Canal. spect to measurement, and so-called subterfuge and misin Mr. DUFFY. Mr. President, if the Senator will yield terpretation, and all the rest of it. further-- With respect to a majority of the cargo passing through Mr. BARBOUR. Certainly. the Canal, its weight is the factor that limits the capacity of Mr. DUFFY. If the American shipping interests need help, the ship that carries it, and not the cubic capacity that the does not the Senator think that instead of having more than cargo occupies. a dollar benefit go to foreign ships for every dollar domestic Mr. President, I think that is something which few of us ships have been able to save by this device, it would be better have understood as clearly as we should; and, in my judg- to give it directly to our ships, and not let the foreign ships ment, it was not brought out as specifically as it might have come in and have this indirect subsidy right along? been in the earlier debates. Nevertheless, the Panama Canal rules are based solely on If that is necessary to help our shipping interests, I should the usable space within the ship and give no consideration to be willing to do that; but by this device, for every dollar of help our people receive, we are helping foreign shipping more its weight-carrying capacity. than a dollar. THE UNITED STATES RULES OF MEASUREMENT ARE NOT SUBJECT '1'0 THESE DEFECTS AND DO AFFORD A SUITABLE BASIS FOR LIMITING TOLL Mr. BARBOUR. There the distinguished Senator from PAYMENTS Wisconsin is getting into an essentially difierent field. Ex The United States rules of . measurements are not subject pressing my own view on snap judgment, I should be inclined to these defects, as they permit the exemption of certain to think I would go further than the Senator would in that passenger spaces--and here again we come to this contro respect as far as American shipping is concerned, and per versial elimination of space, and also of cargo spaces which haps let them use the Canal free without charge. I am not do not contribute to the buoyancy of the ship and therefore at all sure that would not be the fair and proper thing to do; to her weight-carrying capacity. In other words, the ex but I am not sufficiently sure about my ground and foreign emption of cargo space under the United States rules reduces relations and treaties and many other things to bring that the weight which the ship is permitted to carry, and conse view into this particular phase of the problem. quently these rules give consideration to both the weight Mr. DUFFY. I was about to suggest to the Senator that in carrying capacity and usable space. view of existing treaties I do not thi.nk it would be possible Prior to the enactment of the Load Line Act of 1935 ships for us to do that. in domestic trade were not required by law to limit their Mr. BARBOUR. The Senator from Wisconsin spoke very cargoes to the reduced weight-carrying capacity resulting fairly about his anxiety to help American shipping in rela from exemption of spaces under the United states rules. tion to this American Canal, and I am sure he and I are of Consequently American shipowners in some instances con one mind in that respect. tinued to load vessels in excess of their weight-carrying ca Clearly, under these circumstances, there is no justifica pacity while enjoying these exemptions and by this practice tion for abandoning the present system until one can be de gave substance to the complaint that tolls were reduced with vised which, in the judgment of those who pay the bills, is at out effecting corresponding reductions in earning capacity. least as equitable as that now in effect. Certainly, such That, I think, is exactly where the proponents and those change should not be made solely at the urging of those col opposed to the bill meet eye to eye, because undoubtedly in lecting the tolls, who, while admitting the adequacy of ex the past there has been an attempt to reduce the tolls with isting revenues, wish to compel a redistribution of the toll out effecting a reduction in earning capacity. This cannot burden so as to give substance to a theoretical system of be done now, however, under the law as we know. .measurement devised by them more than 20 years ago. The majority report condemns the United States rules as In other words, I do differ with the Senator from Wis resulting in a "steady and continuous reduction in pay ton consin in this respect: I am more interested in the ship nage" until this "has been reduced to less than 70 percent of owners and operators and those whom they employ than in the earning space." As proof of this contention there is the management per se of the Panama Canal; and I do not inserted a tabulation showing the "percentage of earning say this in any disrespectful sense so far as the War Depart capacity on which tolls were paid" for the years 1917 to ment is concerned. These are all adjuncts of the Nation 1935, inclusive. and the undertakings of the Nation. Shipping is one of the I think that probably refers to the figures which the dis greatest of these. tinguished Senator from Wisconsin mentioned, as they ap THE PANAMA CANAL RULES OF MEASUREMENT DO NOT AFFORD' AN pear, as I have said, in the majority report. EQUITABLE BASIS FOR ASSESSMENT O_F TOLLS These data are not an accurate. reflection of the tolls The majority report mistakenly alleges that the Panama paid under the United States rules for several reasons. Canal rules have never been attacked on the ground that Now I come to my explanation, such as it is, which to me is they do not afford a proper basis for toll charges. The two the explanation. major inequities resulting from these rules have been re The percentages shown in the table reflect variations in peatedly pointed out. These are:. the character of the Canal tratnc as well as the exeml}tion 3126 CONGRESSIONAL RECORD-SENATE MARCH 3 .of additional space under the Unit~d States. rul~s. F'or Our national-registry rules are the result of our maritime example, the reduction in the percentage for ).935 to 69 ..87 ~xperienc~ ~nd that of other nations. They are . designed to percent from 71.22 percent for 1934 results principally from afford a fair basis for the assessment of . dues and other the proportionately sm~ller tanker traffic in 1935 as com charges made against ships for the use of· :publicly improved pared with 1934. During 1935 tankers paid 18 percent of and maintained waterways. . . the total tolls as against 21.5 percent in 1934, and, as the Mr. DUFFY. Mr. President-- United States tonnage of these ships does not differ so The PRESIDING OFFICER (Mr. MOORE in the chair). greatly from the Panama . tonnage, this shift in . traffic re Does the Senator from New Jersey yield to the Senator from duces the "Percentage of earning capacity on which tolls Wisconsin? · were paid." Mr. BARBOUR. I yield. Second. In a tabulation of this kind no allowance is made Mr. DUFFY. I assume the Senator knows that there was for the reduction in cargo carryings resulting from the ex an attempt at Suez some years ago, near the beginning of emption of space under the United states rules. It is clear the transiting of vessels through that canal, to use such a that where load-line laws are in effect, these exemptions re system, and it was discarded as unsuitable. I . think it is duce the weight-carrying capacity, and, therefore, while re generally understood that the purpose was to obtain as ·low ducing the tolls per transit, they do not necessarily reduce port fees and other charges as possible against our vessels. the tolls for the same volume of cargo, as more transits are That system of charges in transitmg the canal rests on an then required to transport the same movement. entirely. different basis from the earning capacity of the Third. The data submitted do not reflect the effect of the vessel. Coastwise Load Line Act, whose provisions just recently be Mr. BARBOUR~ I cannot say that I really know very ·came effective. The conclusion would seem justified that much concerning the question the Senator has. mentioned; tolls on intercoastal traffic must be increased under this but I know that the Suez Canal is a privately owned institu law, either through the closing of tonnage openings to ob .tion, operated at an enormous profit, and, ·of course, I can tain larger carrying capacity, or by more frequent transits perfectly well understand that its owners might resist, be in order to carry the same volume of traffic . . cause they are in a position to resist, any move to do.anything In view of the brief . period during which this act has except to soak as hard as they can those who have to use been effective, and as data to accurately gage its effect are the canal. not yet available, it would seem -more reasonable to await As I previously said, our national registry rules are the the results of this important legislation before predicting result of our maritime_experience and that of other nations. with assurance that "If this legislation-S. 2288-is not en They are designed to afford a fair basis for the assessment acted there will result a further reduction in revenue un of dues and other charges made against ships for the use of warranted and unauthorized." publicly improved and maintained waterways. They are Striking evidence that the "percentage of earning capac almost universally accepted for this purpose, and there is no ity on which tolls were paid" does not accurately sum.:. reason to assume that tonnage deterniined thereunder does marize the result of assessing tolls on the basis of the United not furnish an equally suitable basis for assessing tolls at States rules, is to be found in the fact that the tolls per ton the Panama Canal. This is particularly true since their use of cargo transported through the Canal were greater in by the shipowner to reduce tolls without reducing carrying 1935 than· in 1923, notwithstanding the "steady and contin capacity has been prohibited by the extension of the load uous reduction in pay tonnage" during this period com line law to coastwise shipping. ·plained of in the majority report. I desire to emphasize the question of the load-line law, The following tabulation shows the tolls per ton of cargo which I think is very largely lost sight of. We are constantly for the years 1923 to 1935, inclusive, and it seems particu hearing our friends on the other side of the Chamber saying ·larly significant that, outside of the depression·yearS-1931- that certain benefits, and benefits alone, accrue by doing '1934-during which, of course, the ships carried consid these certain things. They have to take the sour with 'the .erably less freight, there has not been much change in the sweet, and they cannot reduce tolls without reducing carrying · ~oils collected per cargo-ton: capacity. THE PRESENT SYSTEM OF ASSESSING TOLLS IS NOT A SUBSIDY TO SHIP PING, NOR DOES FOREIGN SHIPPING BENEFIT FROM IT IN GREATER Tolls per Fiscal year ending June 3o- Total tolls Total tons of ton of PROPORTION THAN AMERICAN SHIPPING cargo cargo Mr. President, in advocating the enactment of this bill, the Secretary of War says that "it will eliminate an expen .1923 ______1924 ______$17,504,027. 19 19,566,429 $0.89 sive indirect subsidy which up to now has accrued to for 24, 284, 659. 92 26,993,167 .90 eign vessels in much greater proportion than to United ·11925926 ______------_ 21, 393, 718. 01 23,956,549 .89 22, 919, 931. 89 26,030,016 .88 States vessels"; and the majotity ·report repeats that "it- ·19281927- ______------_ 24, 212, 250. 61 27,733,555 .87 26, 922, 21)(), 75 29,615,651 the present dual system-constitutes one of the most costly 1929 ______. 91 27, 111, 125. 47 30.647,768 .88 forms of indirect subsidy that could well be devised." 1930_------27. 059, 998. 94 30,018,429 .90 1931.------24, 624, 599. 76 25, 065,283 .98 Notwithstanding these statements, both the Secretary of 1932_------20,694,704. 61 19,798,986 1. 05 War and the majority report concede the adequacy of 1933_ ------ 19, 601.077. 17 18,161, 165 1. 08 ·19341935 --______------_ 24,047,183. 44 24,704,009 .97 existing revenues, and disclaim all intention to increase 23,307,062. 93 25,309,527 .92 them. It would hardly seem accurate to characterize a sys tem as an "expensive * • • subsidy", which, during the Complaint is also made that the so-called tonnage open past 2 fiscal years, has earned a net profit, over and above all ings "have no purpose except to reduce the tonnage of the operating expenses, of almost $34,000,000. Furthermore, it vessel" and are made "for the sole purpose of reducing tolls should be borne in mind that the Canal revenues were sub charges." The prompt enactment of the bill is urged prin stantially curtailed during these. two fiscal periods by the cipally to put a stop to this practice. Yet no reason is cited prolonged strike .of longshoremen on the Pacific coast. why a shipowner should not be permitted to make changes Moreover, the operating expenses charged against the Canal in his ship which definitely and legally reduce its weight revenues include all the cost of the civil government of the carrying capacity and correspondingly reduce the tonnage Canal Zone, as, for instance, civil affairs, customs service, upon which the collection of tolls is based. The two go to school system, fire and police protection, magistrates and gether. However, they are constantly being separated in the di~rict courts, and so forth. They also include deprecia discussion. Moreover, there are well-defined limits within tion on fixed property, $1,006,625.28 as well as fixed capital which such changes can be made; and to permit such re charge against business operations of $773,700.57. Neither ductions in toll payments to the shipowner who cannot ad do these results include any charge against our Army or vantageously utilize his full weight-carrying capacity is Navy for their war vessels transiting the Canal. prompted by the same considerations that justify the lower These results represent an annual return of between 4 7'2 rate for vessels transiting the Canal in ballast. and 5 percent on the entir-e cost of the Canal and its equip- 1936• CONGRESSIONAL RECORD-SE-NATE 3127 ment, includii!g both its military and commercial value, tolls collected for each ton of cargo carried through the and a return of more than 6 percent per annum on the Canal, has increased rather than decreased during the past commercial valuation of $275;000,000, as once estimated by 12 or 13 years. the War Department. I doubt whether any other commer Eighth. The present Canal revenues are returning a very cial activity of the Government is operated so profitably; substantial profit to the Government over all operating ex and to characterize the tolls that produce these results as penses, and their adequacy is conceded by the proponents of a subsidy to shipping represents an effort to obtain support this legislation. Accordingly, to prescribe another method for the bill that otherwise would be denied it. for assessment of tolls which no American shipowner has Furthermore, it is misleading and incorrect to imply that favored, is clearly unwarranted and could only be justified this alleged "subsidy" accrues "to foreign vessels in much if such action were taken as the result of an independent greater proportion than to United States vessels." The and impartial review, not directed or controlled by the· majority report attempts to support this statement by sub War· Department which, for more than 20 years, has been mitting data which do not represent ·the present situation, committed to the method of assessment which they are because they reiate largely to the period prior to the placing now attempting to prescribe by law. in operation of some of the newer American passenger ships INTERIOR DEPARTMENT APPROPRIATIONs-MOTION TO RECONSIDER and prior to the making of the alterations to 38 American Mr. BORAH. Mr. President, in behalf of my colleague ships in 1933 which were referred to in the majority report the junior Senator from Idaho [Mr. PoPE] and myself I on this bill at the last session. Moreover, these data; are desire to enter a motion to reconsider the vote by which based, not on the Panama Canal Rules of Measurement as the Senate yesterday passed the bill (H. R. 10630) making now constituted, but rather on the rules as the War Depart appropriations for the Department of the Interior for the ment proposes to revise them. On the other hand, the fiscal year ending June 30, 1937, and for other purposes. I comprehensive data furnished by_ the Canal authorities at understand the papers are still in the possession of the the Senate hearings for the fiscal year 1934 show beyond Senate. doubt that if the 90-cent rate suggested by the Secretary of The PRESIDING OFFICER (Mr. MooRE in the chair). War had been applied to this period, the increases in tolls The Chair is informed that the papers are now in possession of American ships would have been proportionately greater of the Senate. The motion to reconsider will be entered. than the increases in the tolls of similar foreign ships; and, MEASUREMENT OF VESSELS USING THE PANAMA CANAL conversely, the reduction in tolls of American bulk carriers would have been proportionately less than the reductions The Senate resumed the consideration of the bill (S. 2288) enjoyed by similar ships of foreign registry. This informa to provide for the measurement of vessels using the Panama tion was accurately summarized in the minority report filed Canal, and for other purposes. on this bill during the last session. Similar data have not Mr. DUFFY. Mr. President, I had not intended to make been furnished by the War Department for the fiscal year any remarks at this time, but inasmuch as the chairman of 1935, but doubtless they would confirm the results indicated the committee is temporarily absent, I wish to mention one for 1934. or two points brought out by the Senator from New Jersey SUMMARY [Mr. BARBOUR]. The Senator objects to the inclusion of the 10-cent dif The opposition to the bill now before the Senate may be ferential or additional toll upon tankers. As Senators will concisely summarized as follows; and with this summary I remember, when this bill was previously before the Senate desire to conclude my very sincere effort to oppose the enact there was much argument over that point. In some way ment of this second edition of the bill, which I am convinced it was claimed the oil interests were behind this change in is a far worse edition than was the first: the bill; that the oil interests were going to benefit and the First. It eliminates the possibility of an independent re other interests were going to get the worst of it. So while view, free from preconceptions, which the Senate, by an technically the Senator may be right that there should not overwhelming vote, requested. be any exceptions, in order to make it very clear that the Second. It so increases the power of the Executive as to oil interests would not get any benefit out of it the differ impair the protection against the levying of excessive tolls. ential was put in the bill. The Senator from New Jersey Third. The delegation of power is so broad in scope as and other Senators who opposed the bill did not like it to throw doubt on its validity. before because the tankers got the benefit of it, and now That, Mr. President, is an objection from the constitu they do not like it when the bill is so framed that they will tional viewpoint which I mentioned earlier in my remarks. not get the benefit of it. In other words, it does not make Fourth. Departures from the principle of "earning ca a great deal of difference to those who are opposing the pro pacity" are made mandatory in an effort to obtain support posed legislation what proposals are in the bill. They would for the bill, while all other factors may be modified or al like to have continued the dual system which is now in tered by Executive action. existence, and which has been in existence since the time I think the weakest thing done by the proponents of this of the opinion of the Attorney General. measure was to hold out the decoy of 10 cents a ton in rela The dual system is really ridiculous, because it was never tion to the tankers, because it is in direct opposition to the intended by the Congress that it should be put into effect philosophy back of their point of view in relation to this bill. at all. The point which should be brought out, I think, is Fifth. The bill increases very substantially the tolls on the that every vessel which passes through the Panama Canal general cargo and passenger ships, which conduct most of now is measured under the Panama Canal rules. It has a the common-carrier operations, both in foreign and inter certificate under the Panama Canal rules. So there will state commerce, and such increases are heavier, propor not be any difference in the procedure that will have to be tionately, on the American-flag ships of these classes than gone through; the procedure will be the same as it now is; on those of other nationalities. but at the present time there is a limiting factor, because, Sixth. The bill eliminates as a basis for toll assessment under the United States rules, the Panama Canal rules do the United States Rules of Measurement, which are gen not take effect, especially where, by means of deck openings erally accepted as affording a fair and equitable method of and other devices the structure of ships is changed, in order assessing dues and charges against shipping and it attempts that they may secure the benefit of lower tolls. to substitute therefor a system of measurement which no Of course, it is true that there is not going to be much shipowner has advocated. additional income coming into the Treasury of the United Seventh. The possibility of reducing tolls without effect States if this bill becomes a law and the 90-cent rate is ing corresponding reductions in the weight-carrying capac fixed, as the Secretary of War has stated it would be. But ity of ships, has been eliminated through the enactment of the point--and I think I brought it out in my questioning the Coastwise Load Line Act of 1935. Furthermore, even of the Senator from New Jersey-is that there has been a without this safeguard which we now have, the amount of constant decrease year after year; there has been a decrease LXXX--198 3128 CONGRESSIONAL RECORD-SENATE MARCH 3 of 15 percent because of these devices during the last 16 years, Mr. DUFFY. Yes; the pending bill or the previous bill, and the decrease is going to continue. The purpose of this for in general effect they would be the ~arne. bill is to stop now the decline in receipts and not have a Mr. WHITE. Would there be any difference between the continuing decline, and while our ships get some benefit, yet, return based on the registered tonnage as provided in this for every dollar of benefit they get, foreign ships get more bill and the return which would result from a rate applied than a dollar of benefit. to the earning capacity of the vessel, which was the base Mr. WHITE. Mr. President-- provided for in the previous bill? The PRESIDING OFFICER. Does the Senator from Wis Mr. DUFFY. I think not. consin yield to the Senator from Maine? Mr. WHITE. The results work out the same? Mr. DUFFY. I am glad to yield to the Senator from Mr. DUFFY. I think the same result would be worked Maine. out. In other words, we are trying to get away from one Mr. WHITE. The previous bill imposed tolls based on system and adopt a system which both the previous bill and earning capacity of the ship, and there were figures in the the pending bill would establish. report indicating the effect of the proposed method of charge Mr. WHITE. Then, may I ask, if the result works out on the earnings of the Canal. Is there anywhere in the the same, why has the bill departed from the basis of the report or in the hearings testimony or evidence as to what earning capacity of the ship and gone to the basis of net would be the result of the maximum of 90 cents and the registered tonnage? · minimum of 60 cents applied to the method now suggested Mr. GORE. Mr. President-- · of tolls based on net registered tonnage? What would be Mr. DUFFY. The chairman of the committee desires to the result on the revenue? answer the question, and I yield to him. Mr. DUFFY. I think that on the previous occasion when Mr. GORE. Mr. President, there is no difference between the bill was discussed there were tables submitted-- the provisions in the bill as recommitted some time ago, the Mr. WHITE. If I may interrupt again, were not those bill to which the Senator now refers, and the pending bill. tables a result of the application of the new rates to the If the Senator will read the phrase following that which method then under consideration; that is •. the method of he has quoted, he will find that it reads: charge based on the earning capacity of the vessel? Tolls for vessels of commerce shall be based on net registered Mr. DUFFY. The Senator makes use of the term "net tonnage determined under the "Rules for the Measurement of registered tonnage." . Vessels for the Panama Canal"- Mr. WIDTE. That is the term used in the new bill. That is the point. "Net registered tonnage", under the Mr. DUFFY. Yes. But, if I understand the Senator cor old law, meant net registered tonnage ascertained under rectly, I wish to point out again that vessels now have a rate the United States rules of measurement. based on the Panama Canal measurement; but it does not Mr. WHITE. That is just the point I want to get at. go into effect so often because of the limitation under the I think this means net registered tonnage as determined United States net registered tonnage provision. by the Panama Canal rules as modified from time to time Mr. WmTE. My question simply is, What will be there by the President. sult, if there has been a determination as to that, of the Mr. GORE. Yes, sir. application of the 90-cent maxinium and 60-cent minimum Mr. WHITE. The preceding bill and the old law re rate on ships passing through the Panama Canal when the ferred to '·'net registered tonnage", and the opinion of the rate is based on net registered tonnage? Attorney General was that that meant net registered ton Mr. DUFFY. I do not understand the Senator's reference nage as determined by the United States law. to "net registered tonnage." That is what we are trying to Mr. GORE. By the United states rules of measure get away from, if he is referring to United States net regis- ment-- tered tonnage. · Mr. WHITE. By the rules of measurement worked out Mr. wmTE. If the Senator will permit me the bili reads by the Department of Commerce. that- Mr. GORE. As distinguished from the Panama Canal rules of measurement. Tolls for vessels of commerce shall be based on net registered tonnage. Mr. WHITE. So that in the one ease-l hope I am stat ing this correctly, and I believe I am-there was a rule That is in the bill before the Senate. of net registered tonnage fixed under a statute of the Mr. DUFFY. Yes. United States· by the Department of Commerce. Mr. WHITE. What I am asking is, What will the 90-cent Mr. GORE. No; by the Attorney General. rate maximum and 60-cent minimum based on net registered Mr. WHITE. Well, by the Attorney General, then. Here tonnage bring in by way of revenue? it is proposed to have net registered tonnage fixed by the Mr. GORE. Mr. President-- Panama Canal rules as those rules may be changed from Mr. DUFFY. If the Senator from Oklahoma will bear time to time by the President. with me for a moment, I presented a table showing that the Mr. GORE. This bill proposes to do what we think the revenue that would accrue to the Canal would, on the 90- original Panama Canal Act passed back in 1913 intended to cent basis under the provisions of this bill, be between the do; but that intention was not realized because of a different amount received in the years 1934 and 1935; that it would interpretation placed upon it by the Attorney General. be slightly above the 1935 receipts and slightly below the The pending bill provides net registered tonnage as ascer receipts under the 1934 rates. tained under the Panama Canal rules of measurement. Mr. WmTE. Can the Senator indicate readily what the That is what the original act was intended to mean and amount would be? I did not see the table. It is not in the intended to do. This bill restores that original meaning report, as I understand. and purpose. The language of the pending bill is identical Mr. DUFFY. No; it is not in the report, as I recall, but to all intents and purposes with the language contained in I will find it in a few moments for the Senator. I read it the bill that was recommitted a short time since, and the into the RECORD from a chart which was prepared, and which revenue derived under this bill, it is estimated, will approxi I showed to a number of Senators present at the time. It mate the receipts under the existing law, rules of measure showed that the decrease in revenue would be stopped and ment, and tolls. It is not intended to raise th~ aggregate the net receipts of the Canal would be at a point between receipts from the Canal but merely to redistribute those those of 1934 and those of 1935. receipts so that those who are now paying more than they Mr. WHITE. Was the computation based on net regis ought to pay will pay less and those who are paying less tered tonnage? than they ought to pay will pay what they ought to pay. Mr. DUFFY. It was based upon the system which would That is the objective toward which we are driving. be in effect if this bill should become a law. Mr. DUFFY. Mr. President, I wish to point out again that Mr. WHITE. The bill as it is now before the Senate? vessels of both the United States and foreign countries have 1936 CONGRESSIONAL RECORD-SENATE 3129 been able to reduce their net tonnage through technicalities which seems, in the minds of those who make reference to it, under the United States rules by the installation of tonnage to be something to be complained of, to be something to be openings, and have thus evaded the payment of a consider avoided. able amount of tolls which by right they should have paid. Mr. President, in my view, any tendency to reduce tolls It was never the intention of Congress that any such devices upon carriers, any tendency to reduce the burdens upon the should be used as a means of reducing tolls. commerce of the United States is altogether desirable and I think it cannot be gainsaid that the so-called tonnage should be encouraged and not condemned. That is par openings are for no other purpose whatsoever than the ticularly true with respect to an undertaking which does not reduction of toll charges. If that be so, it is very anomalous need, for an adequate return upon the investment, any such that that should be the basis of the measure by which various large amounts of money as have from time to time been col vessels should pay tolls when going through the Canal. It is lected at Panama, and as we may rightfully assume will be totally illogical and contrary to what the Congress intended. collected at Panama when there shall have come again a As I said previously, for every dollar we save the United normal flow of trade between the parts of this country and . States by permitting this anomalous situation to continue, between the nations of the world. foreign vessels get an indirect subsidy of over a dollar. The figures show that the cost of the Canal, or that part Since we started, while $37,250,000 has gone to United States of the cost of the Canal properly chargeable to its commer vessels, there has been $46,750,000 in legitimate revenue for cial uses, is somewhere in the neighborhood of $240,000,000 feited to foreign vessels. or $250,000,000 to $270,000,000; and all through the years As I pointed out sometime ago, every Secretary of War, we have been receiving from the Panama Canal a revenue of Republican and Democrat, we have had since the time of from $25,000,000 to $27,000,000, a 10-percent return all the Woodrow Wilson administration has advocated such a through the years upon that part of the cost of the Canal change; President Wilson advocated it; President Roosevelt which the Army authorities themselves have determined is advocated it; the Canal authorities have unanimously advo the amount properly to be charged to the commercial inter cated it. The responsible authorities have no selfish motives ests of the United States. in the matter. A ridiculous situation prevails, and we wan.t So long as that condition exists, so long as that amount of to stop this endless reduction in receipts at this point. If return continues to come in, I have no concern whatsoever we keep on at the rate we have been going, it will not be with the reduction of tolls. very long before the amount received from the Canal will The report of the committee says--and I quote from the be an insufficient return upon the investment under the rules top of page 7: which have been laid down heretofore in the law establishing The substantive provisions of the b111 are modified in only one the Canal. ·I am hopeful we may have a vote upon the essential respect. This provides for charging a higher rate of tolls measure and vote it either up or down. on laden tankers than the rate fixed for other laden vessels of I should say, too, that I think the opinion of the Attorney commerce. General in 1914 was incorrect. If I were in charge of the That, in the opinion and in the statement of the committee, Panama Canal, I believe I should ask for another opinion at is the one essential change from the previous legislation this time. It seems that opinion was entirely contrary to pending before the Senate. what the Senate and the House intended. This ruling hav I am sorry to say that I must dissent completely from that ing been acquiesced in for some 20 years, the Attorney Gen view of the matter. It seems to me that, the outstanding eral might be reluctant to change his predecessor's ruling. change made, the change worthy of the most serious con I believe that rule should be changed at this time. sideration by the Senate, is in the complete elimination of Mr. BAILEY. Mr. President, I send to the desk an amend the provision for an independent and an impartial investiga ment in the nature of a substitute, which I offer for the pend tion of this whole subject matter. I think we may say with ing bill, and ask that it be read. entire truth that every investigation heretofore made, except The PRESIDING OFFICER. The amendment in the na the investigation made by this cominittee-which could not, ture of a substitute will be read. I take it, by any stretch of the imagination, be termed an The LEGISLATIVE CLERK. In lieu of the language proposed expert committee upon navigational matters--every other re to be inserted by the committee, it is proposed to insert the port over a score of years has been a report coming from the following: interested party, the Panama Canal Authority itself, or the That the President is authorized to appoint a neutral committee Secretary of War, who, we may assume, is in the same rela of three members for the purpose of making an independent study tion to the Canal as the Panama Canal Authority. and investigation of the rules for the measurement of vessels using the Panama Canal and the tolls that should be charged therefor, It is interesting to have in mind, and I pointed this out and hold hearings thereon at which interested parties shall have full briefly yesterday, that over 20 years of time, while this au opportunity to present their views. Such committee shall report thority-the Secretary of War and the Panama Canal to the President upon said matters prior to January 1, 1937, and Authority-have always been insisting upon some change in shall make such advisory recommendations of changes and modifi cations of the "rules for the measurement of vessels for the Panama the situation down there, from Congress to Congress they Canal" and the determination of tolls as it finds necessary or de have never twice submitted the same proposals to us for our· sirable to provide a practical, just, and equitable system of measur consideration. Change after change has been made in their ing such vessels and levying such tolls. Members of such com suggestions; change after change has been made in the mittee shall be paid compensation at the rate of $825 per month, except that a member who is an officer or employee of the United recommendations made to us as desirable to cure the in States shall receive no compensation in addition to his compensa equalities of which they complain. I said yesterday, and I tion as such officer or employee. Such committee is authorized to repeat now, that if we may judge the future by what has appoint such employees as may be necessary for the execution of its functions under this act, the total expense thereof not to exceed taken place in the past, we may look forward to constantly $10,000. changing recommendations if we are to look to the body which has been advising us in the years which have gone by. The PRESIDING OFFICER. The question . is on the amendment in the nature of a substitute offered by the Sena Mr. President, just a word now on the report of the com tor from North Carolina. mittee. Just a word on the statement that there is but one Mr. WHITE. Mr. President, I did not see this bill or at substantive change made. tempt any study of it until this morning, which perhaps The bill of the last month, or the previous bill we con is a sufficient reason ior my not attempting to say anything sidered, provided that tolls on merchant vessels shall be at this time; but I am unwilling to permit the measure to based-and now I quote from the bill- come to a vote without expressing myself briefty concern on net vessel-tons of 100 cubic feet each of actual earning ing some of its provisions. capacity. I have noted with interest the references made by pro We were told in the report accompanying the previous bill, ponents of the measure to the tendency of Panama Canal and we were told over and over again by proponentS> of the tolls to diminish in amount during the years-a tendency legislation, that that was a change of the utmost significance 3130 ~ONGRESSIONAL RECORD-SENATE from the old rule. We were told that the old rule was arbi The bill of a few weeks ago carried that language, ·and it trary, that it was illogical, that it was bringing about results also, adding to that language, gave express authority to the which could not be justified, and all of that was to be cured President to prescribe these rates. by the application of a rule basing tolls "on net vessel-tons ·That definite, specific authority to the President to pre of 100 cubic feet each of actual earning capacity." scribe the rates of tolls on other than vessels of commerce Mr. President, the bill went back to the committee with carried in the bill previously considered by the Senate is that language in it; and it comes out, not with that lan omitted from this bill and it does not appear here at all. guage, but with substantially the language of the old law, What conclusion we are to come to as to how these rates are the law which the bill considered by the Senate a few weeks to be fixed, as to whether there is to be any limit upon them ago aimed to change; and the bill now proposes that tolls is left to conjecture. ' shall be based on net registered tonnage determined under The bill previously before us provided that "tolls shall not the rules of measurement of vessels for the Panama Canal be levied on a deck load except on tonnage of such deck prescribed by the President. load • • • which is in excess of 20 percent of the net We are told this afternoon by the chairman of the com tonnage of a vessel so determined." mittee-! think I quote him correctly, in substance at least There was that 20-percent limitation in the bill previously that there is no difference between the present language and considered by the Congress. In the pending bill all reference the language of the bill previously considered by the Senate whatsoever to that 20-percent limitation has been eliminated, at this session. and the bill provides that "tolls shall not be levied on a deck Mr. President, I think there is a substantial difference. load, which is defined, for the purposes of this act", and so I desire to point out just what this language does, in my forth. view. It says that the kill for vessels of commerce shall be It is an all-inclusive declaration that tolls shall not be based on net registered tonnage- levied on deck loads. That, of course, is an invitation to load Determined under the "Rules for the Measurement of Vessels for decks, that is an invitation to ship operators to put onto the the Panama Canal" prescribed by proclamation of the President, decks of their ships all the cargo they can possibly get on the November 21, 1913, and as may be amended from time to time by decks rather than to carry the cargo below decks. proclamation of the Presldent. As I said once before, I appreciate perfectly that up to now Mr. President, if that means anything, it means an utterly there has been comparatively a small percentage of the total unstable rule. It means that we are writing into law the cargo carried on decks. That, to me, is absolutely as it should authority to the President of the United States to prescribe, be, and I am against any provision which holds out an induce within limits which afterward appear, the rate of toll under ment, which gives an encouragement, to ship operators to rules which he may change every 6 weeks or every 6 months. load vessels on decks rather than down below, where the cal· I say that under that provision and under that authority of goes should be carried in the interest of stability of the ship. the President to change and modify the rules under which That, as I see it, is another important change from the these rates are to be determined and the revenue is to be previous bill. determined, from month to month, from year to year, no Mr. GORE. Mr. President, will the Senator yield? vessel owner of the United. States, no shipper of the United Mr. WIDTE. I yield. States, may know what to expect with respect to the tolls to Mr. GORE. As the Senator knows, the Suez Canal ru1es which he is to be subjected. of measurement and of tolls do not impose any charge on Mr. GORE. Mr. President- deckloads. The evil of which the Senator seems to com The PRESIDING OFFICER. Does the Senator from plain is practiced now. Under the dual system of measure Maine yield to the Senator from Oklahoma? ment and ·tolls, deckloads are carried on the weather decks Mr. WHITE. I do. of these ships and are not subject to any charge at all. The Mr. GORE. Obviously, the Senator forgets that that is owners manipulate the structure· of their vessels so as to now the law. That is the law passed in 1913. It author escape the payment of tolls on their deckloads. ized the President to do exactly what the pending bill I agree with the Senator in this one point, and the limi authorizes him to do-no more and no less. tation of the 20 percent was included in the bill recently That act fixed a maximum at $1.25. It fixed a minimum recommitted to prevent the construction of freak ships so as at 75 cents. The President was authorized to issue rules to enable them to carry an overload on the decks. But those and regulations in between those figures every time the sun who are opposed to this measure concentrated their fire on rises and sets. He issued one proclamation, and he has the 20-percent limitation, and as a further concession to the never modified it. shipping interests, in order to prevail upon them to permit The pending bill :fixes the maximum at $1 instead of $1.25. us to abolish this dual system and accomplish our primary It fixes the minimum at 60 cents instead of 75 cents. It object, another tub was thrown to the whale, another con reduces the rates, as the Senator suggested at the begin cession was made to the shipping interests. ning of his remarks ought to be the tendency, and gives I do not know whether the Senator intends to complain the President power to fix the actual rate between the maxi of that or not, but that is why the 20-percent limitation mum and the minimum under this measure exactly as it has does not appear in the pending proposition, because the existed for 22 years, as it was contained in the original shipping interests objected to it. Their objection was so act; and the rates fixed by the President never have been strenuous that we knew that we could not pass a bill with changed. So, referring ·to the· Senator's apprehension tkat out making some concession, and since they are enjoying the rate might be changed from month to month, there is that privilege now, and abusing that privilege now, and no reason to entertain that fear as to the future that would since the Suez Canal imposes no charge for deckloads, we not have applied when the original act was passed. The made that further concession to the shipping interests. authority never has been abused. It never has been done. When we make a concession to them they complain, and Mr. WHITE. I think the Senator from Oklahoma has when we do not they complain. It is impossible to please correctly stated the fact, but that does not in any degree them, because these objections are, I might almost say, change my view with respect to the matter. I am not in subterfuges. favor of vesting in anyone the right to change these rules What they object to is the requirement that they pay the from time to time. I desire to have a provision worked out, tolls which they ought to pay. They have not been paying if it may be worked out, under which there shall be assurance the tolls they ought to pay. They are not willing to pay the in the law of stability of rule and stability of condition under tolls they ought to pay. If this measure be defeated, they which persons carry on their commerce. will continue in the future, as they have in the past, to That is all I wish to say about that subject. evade the payment of the tolls which they ought to pay. In the next place, the bill provides that the tolls for all That is the source and animus of the opposition to the bill. vessels other than vessels of commerce may be based on Mr. WHITE. Mr. President, I was not speaking either displacement tonnage or otherwise. tor or against the shipping interests. I was considering the 1936 CONGRESSIONAL RECORD-SENATE 3131 bill upon what I conceived to be its merits, discussing what vantage of the American ship. I hold in my hand data con I conceived to be its infirmities. cerning the transfer charges exacted of American ships at I still insist that any rule, whether it is now in force or the Canal. whether it is proposed to be put in force, which would place The Panama Railroad Committee charges there for trans a premium upon loading vessels upon decks, is a thing which ferring a ton of cargo $1.80. At New York, cargo is trans ought not to be countenanced or encouraged by the Congress ferred from pier to pier at a rate of a dollar a ton. The cost of the United States. of lighterage in New York, where the cargo is sufficient to Mr. GORE. Mr. President, will the Senator yield again? warrant the employment of a lighter, is $1.30 a ton. Mr. WHITE. I yield. On the Pacific coast the uniform charge for transfer from Mr. GORE. If the Senator will offer an amendment to pier to pier is $1 a ton at Los Angeles, Seattle, Oakland, and take care of that, I as chairman of the committee will be other points along the Pacific coast. The transfer charge at glad to accept it. I agree with him that it ought to be in Oakland and at Alameda and at Richmond for canned goods the bill. So that ends that discussion. and for dried fruit is $1 a ton, $1.10, and $1.25 in varying Mr. WHITE. Mr. President, something has been said conditions, into which I will not go. about vessels of the United States paying less tolls than they It is difficult to match the charges imposed at the Panama ought to pay. I deny that to be 8i fact. I say that vessels Canal at any modern port in all the world. American ves of the United States are now paying for the use of the Canal sels transiting that Canal are obliged to meet these charges. all they ought to be required to pay, and more. If I had I am against making the use of this great waterway any ;my way a vessel of the United States using a canal in which more burdensome to the vessels of the United States than it the people of the United States have invested $500,000,000 now is. If ships can reduce tolls by conforming their vessels would pay no tolls whatsoever. Any toll exacted of these to rules and regulations prescribed by the maritime author vessels is a toll, in the last analysis, upon the people of the ities of the United States, I enter no objection, but I laud United States. the effort. Mr. GORE. Mr. President-- Mr. President, I might talk somewhat longer, but the chair Mr. WHITE. The Panama Canal, if things keep on as man of the Committee on Commerce, the Senator from New they are, may become not a benefit to the shipping of the York [Mr. CoPELAND], is present, and I feel that I might be United States but may become a thing of harm to the ship trespassing upon his time if I detained the Senate longer, and ping of the United States. There is hardly a place in all I therefore take my seat. the world where the charges upon vessels and upon ship Mr. COPELAND. Mr. President, I came into the Senate operators for the movement of freight from vessel to vessel Chamber from a meeting of the subcommittee of the Appro or from vessel to dock equal the charges made in the Panama priations Committee which is considering the War Depart Canal. ment appropriations just as the substitute amendment offered Mr. GORE. Mr. President, will the Senator yield? by the Senator from North Carolina [Mr. BAILEY] was being Mr. WHITE. I will yieid briefly, and then I wish to con read. I wonder if perhaps the chairman of the Committee clude. on Interoceanic Canals may not be prevailed upon to accept Mr. GORE. The Senator made the point that he was the proposal made by the Senator from North Carolina. opposed to the collection of any tolls, and would like to see Mr. GORE. Mr. President, I will accept it as an amend the ships pass through the Canal toll-free. ment to the pending committee amendment. I intended to Mr. WHITE. I understand why it cannot be done, how make that motion, and I do intend to make it. ever. Mr. President, with the consent of all concerned, I accept Mr. GORE. There is an argument in favor of that, the pending amendment as an amendment to the committee because in ·that case all vessels would be treated alike. amendment, giving notice, of course, that I shall be obliged Under the existing system vessels having the same earning to change some of the dates in the pending committee capacity are not treated alike, and I think the Senator ought amendment so as to conform it to this additional amendment. to agree that if we are to collect tolls they ought to be based Mr. COPELAND. Would the Senator prefer to have the on some uniform rule, so that ships having exactly the same measure recommitted to his committee so that he may make earning capacity would pay exactly the same tolls. That is the changes? Mr. GORE. Let us follow this procedure now, Mr. Presi the objective toward which we are driving, and that is ~Jl. That is not done under existing law. I will give the Senator dent, and if it proves too difficult I will take the suggested an illustration. course. I do not think it would require very much time. I Mr. WHITE. Before the Senator gives me something, should lay the bill aside, if this were done, until the changes may I respectfully decline it at the moment? could be prepared for submission. Mr. GORE. I wanted to use the example of a ship to Mr. COPELAND. Does the Senator mean that if this illustrate the discrimination, which is a different principle amendment should be accepted by him he would then be altogether from free passage through the Canal. Let us willing to have the bill laid aside until further study could take a vessel having a tonnage of 5,000 tons. be made to correct it? Mr. GORE. It would not require much study. It would Mr. WHITE. Is not that the same case covered in the Senator's report? simply be necessary that changes of dates be made to make it a workable plan. . Mr. GORE. I do not recall. Mr. COPELAND. I suggest to the Senator from North Mr. ·wHITE. I think it is. Carolina that that would be the wise course; that the Sen Mr. GORE. Let us assume a vessel having a tonnage of ator from Oklahoma accept his amendment, and then that 5,000 tons measured by the Panama Canal rules. The rate the whole measure go back to the committee, where the fixed by the President's proclamation is $1.20 a ton. Under dates may be corrected. that measurement the ship would pay $6,000 in tolls for Mr. GORE. I do not know that I shall have the bill passing through the Canal. But under these trick rules of recommitted. I shall consider the bill and see whether or the United States measurement, that ship will measure only not the machinery can be easily worked out. I shall give 4,000 tons, and at $1.25, the maximum rate, it will pay $5,000. notice later if I deem it necessary to have the bill recom So the ship passes through the Canal paying $5,000 under mitted. that measurement, whereas it ought t{) pay $6,000. There is Mr. BAILEY. Mr. President, I do not think that would that discrimination. be very difficult. I wish to inquire, with the permission of A ship which did not avail itself of these various devices the Senator who has the fioor-- would pay $6,000. A ship which did avail itself of the Mr. COPELAND. The Senator has my permission. devices would get through for $5,000. That is the thing Mr. BAILEY. As to just what he has in his mind as to of which we are complaining. the effect of accepting the substitute which I offered as an Mr. WHITE. Mr. President, I started to say that not all amendment, which, as I understand, would postpone the conditions existing at the Panama Canal make for the ad- effective date of the bill introduced "!JY the chairman of the 3132 CONGRESSIONAL RECORD-SENATE MARCH 3 Committee on Interoceanic Canals until January 1, or until and undoubtedly was the intent of Congress. But I do not know what your attitude is toward these various subventions and aids the report comes in from the committee named to investi we have given shipping. Of course, we are pretty enthusiastic gate. with that in this committee. Speaking now for myself, I would Mr. GORE. Mr. President, there is that one point of dif be quite unwilling, in view of what we are trying to do by mail ference, as I started to announce a minute ago. I am willing subventions and by loans at low rates of interest, and all that sort of thing, on the ·one hand to do that with shipping and to work the proposed amendment into the framework of then, on the other hand, take away by these added tolls some the bill somewhat in accordance with the original pattern. money we are giving them. If I make this concession, or if I am obliged to accept the That is all. It is simply a matter of fairness and justice to the ship interests. That is what we have in Inind. I am sure you Senator's suggestion as a substitute, I desire to get into this do not have to convert us to the idea that we should have rules measure, if and when it shall be possible-and if it is not that apply to everybody, and I think, if times were normal, there there I do not want the bill to pass-that this dual system would not be any hesitation about that. But the only thing I shall be done away with. That is the main objective. have in mind, let us not do something now that is going to im pose new burdens on the already staggering shipping industry. I will say to the Senator from North Carolina that every (Subcommittee hearings of the Committee on Commerce, 71st body agrees upon that point; and I ask to have read at the Cong., 3d sess., pt. 2, May 21 and 22, 1930, p. 94.) this desk at point three or four authorities, one of which Mr. GORE. The present dual system does allow individ I am sure will command the respect of the Senator from ual ships an·d shipowners to avail themselves of a subsidy New York, in regard to the desirability of getting rid of the not granted and made uniform by the laws of the United dual system. On that point everybody agrees-shipping States, not measured by the earning capacity of the ship, concerns and everybody else, as well as the Senator from but by the capacity of the shipowner to alter the structure New York. If we can get that objective in this bill I am of his ship and thus secure for his ship a reduction in ton perfectly willing to have the investigation, although it is nage. But under the dual system, foreign vessels equally unnecessary. All these reports and books lying on the desk a vail themselves of this special subsidy by changing the before me are reports and hearings in an effort to shed structure of their vessels. During the past 16 years they light on this subject and to illuminate the darkness in order to guide the feet of Senators through the wildering ways have availed themselves of a saving of 47,000,000 tons, of this legislation. As Milton said, "It is dark with excessive whereas the United States vessels have only saved 37,000,000 bright." tons. So, under the existing system, we are granting a greater subsidy to fore.ign ships than to American ships. If the clerk will read those three statements, I think all Senators present will be convinced that there is no deviation The passage of this bill will adopt one rule of measure of view as to the desirability of getting rid of this dual sys ment for all ships, foreign and domestic, and will fix a given tem of measurement. There cannot be any justification for rate per ton, requiring all vessels to pay the same rate on that scheme from any quarter or under any circumstances. their tonnage as ascertained by these uniform rules, getting It is undesirable from everybody's point of view. rid of the dual system which is subject to the manipulation I ask the clerk to begin reading with Mr. Peterson. so often described here in the Senate. The PRESIDING OFFICER. Without objection, the clerk I will say to the Senator from North Carolina [Mr. will read, as requested. BAILEY] that I desire to have this measure, if and when The legislative clerk read as follows: passed, abrogate the dual system, provide for the substitu tion of a single system, and then I am for the investigation Mr. PETERSON. Mr. Chairman, I would like to say on behalf of the Pacific coast interests that I have represented them here for to be had and the report to be made, the President to avail about 4 years now, and that we are in hearty accord with the sug himself of the information contained in the report. gestions of the Governor of the Canal that there should be a· Mr. COPELAND. Mr. President, I take it from what the single system of measurement. We have been on record on that, time after time. And while we appreciate his bookkeeping diffi Senator has said that he is quite willing to accept the sub culties and the unfairness of this dual system of measurement, stitute offered by the Senator from North Carolina. while we are in accord with him that the system should be Mr. GORE. Not as a substitute but as an amendment changed to a single system of measurement, we have always been to the committee amendment. on record. inspired by the hope that the rates would be reduced, that the Panama Canal should not be a money-making institution. Mr. COPELAND. So I understood. The idea would be, So that we are all in favor of the single system of measuremen~ then, that the Senator would have a few days' more time to and have been for a long time. (Senate subcommittee hearings reconcile the inconsistencies that might be found in the of the Committee on Commerce, 71st Cong., 3d sess., on H. R. 10583, pt. 3, Dec. 13, 1930, p. 129.) original provisions of the bill, or in the first section. Is that true? Mr. GORE. The maximum rates are reduced in this bill Mr. GORE. According to the view I have, only one change from $1.25 to a dollar; the minimum from 75 cents to 60 would be required: Provide that the uniform system shaU cents. become the law when this bill is approved by the President, The legislative clerk continued to read as follows: if ever it is approved; but, before the President is authorized Mr. DUFF. Mr. Chairman, I merely ·would say in conclusion that to impose any new rates under the bill, permit and require in reply to what Congressman Denison stated, I do not believe it the investigation to be had, and the report to be submitted. quite correct to say that steamship companies would never agree to a plan for a single system of measurement. On the contrary, I will say the shipowner would get lower rates at an earlier a single system of measurement is considered desirable. But we date if that provision were not in the bill; but I am willing do protest strongly against any toll assessment under a new sys to go further than that. Let the new rates, maximum and tem that will increase the present total tolls assessed on American ships. (Hearings, Senate subcommittee of the Committee on Com minimum, go into effect, and the permanent rates to be pro merce, 71st Cong., 3d sess., on H. R. 10583, pt. 3, p. 127.) [Mr. mulgated by the President as between the maximuni and Duff was associated with the American Steamship Owners' Associ minimum, be postponed until this report is made available. ation.) Mr. COPELAND. I think that might be possible. If the Mr. GORE. That is the point they are insistent about. Senator .would accept this amendment as an amendment to Some are afraid they will have to pay more tolls, and some section 2 and then take the matter back and reconcile sec of them will have to pay more tolls, but only those who are tion 1 with it, it might well be that those of us who have now paying less tolls than they ought to pay. been opposing it would be quite in accord with it then. The legislative clerk continued to read as follows: Mr. GORE. If we desire to get rid of the dual system, Representative DENISON. • •. The point I would like to every Senator should favor some action immediately. Invite your attention to is just this: That it was the intention of Mr. COPELAND. I hold in my hand the amendment in Congress to have the Panama Canal rules and to collect tolls under them, and since the decision of the Attorney General we the nature of a substitute offered by the Senator from North have not been carrying out the original intention of Congress at Carolina. As I understand, the Senator from Oklahoma is all. willing to accept it as an amendment, and then give us time Mr. GORE. That is the single system of measurement. to see what the completed bill looks like when it comes back The legislative clerk proceeded to read as follows: to us. Senator CoPELAND. Congressman, in that connection, I do not Mr. GORE. Of course, I shall be disposed to give every think there should be any dispute at all that that 1s !air and just Senator every opportunity to see what the bill is as reformed 1936 . CONGRESSIONAL RECORD-SENATE 3133 and whether it conforms to this amendment. I shall bel view. I am not even concerned about the rivalries between governed by the desire of the Senate, of course. shipping interests. I know nothing about them. The PRESIDING OFFICER. The amendment has been The matter presents itself to my mind as one of real offered by the Senator from North Carolina in the nature of intricacy, requiring expert knowledge, and it is for that rea a substitute for the committee amendment. The question son, and that only, that I am asking that the Congress of is, therefore, whether it shall be accepted as a substitute for the United States shall defer action until the 1st of January the committee amendment. in the coming year. This is the 3d of March. That would Mr. GORE. No, Mr. President; I have agreed to accept involve a delay of only 10 months. I think no one in the the proposed substitute amendment as an amendment to the Senate will contend that any serious damage will be done committee amendment-not as a substitute for the com- to anybody or any interest by a delay of 10 months in a mittee amendment, but as an amendment to the committee matter which confessedly has been pending some 20 years amendment. or more, since the first term of the late President Wilson. Mr. BAILEY. But I have not agreed to offer it as an Mr. DUFFY. Mr. President, will the Senator yield? amendment, so I take it that my amendment is before the Mr. BAILEY. Certainly. Senate as a substitute for the committee amendment. Mr. DUFFY. At that point I invite the Senator•s atten- The PRESIDING OFFICER. That is the pending ques- tion as a matter of dollars and cents, to the fact that the tion. report of the Bureau of Efficiency, which made a study in Mr. GORE. I desire to move as a substitute for the motion 1932, showed that in 1931, through the operation of the of the Senator from North Carolina that his amendment be dual system, tolls were reduced $7,000,000, of which $4,000, adopted as an amendment to the· committee amendment. ·I 000 was· on foreign vessels. understand that would take precedence over the Senator's Mr. BAILEY. The answer to that is perfectly clear. The motion to adopt it as a substitute for the committee amend- report of the committee to the Senate in connection with ment. this measure declares that the Panama Canal is paying, so The PRESIDING OFFICER. That motion would take we are not losing any money. There is no point in that precedence, and the question now is whether or not the mat- suggestion. ter proposed by the Senator from North Carolina [Mr. Mr. GORE. Mr. President-- BAILEY] shall be adopted as an amendment to the committee The PRESIDING OFFICER. Does the Senator from North amendment. Carolina yield to the Senator from Oklahoma? Mr. JOHNSON. Mr. President, I want to understand the Mr. BAILEY. I yield. parliamentary situation correctly. As I understand, the Sen- Mr. GORE. I believe the Senator from Wisconsin was ator from North Carolina offered a substitute for the pending interrupted before he quite finished his point. The point bill. The Senator from Oklahoma now has moved to attach was that in 1931 the tonnage which went through the Canal it as an amendment to his bill. From a parliamentary without paying tolls was 7,000,000 tons, and 3,000,000 of that standpoint I do not think he can offer his motion as a sub- was American tonnage and 4,000,000 was foreign tonnage. stitute for the motion of the Senator from North Carolina Mr. BAILEY. I am not disturbed about that at this point, to adopt a substitute for the bill. either. The point was on the question of whether we should Mr. ROBINSON. The amendment would take precedence be losing some money in the next 10 months; and the an over the substitute. The Senator from Oklahoma offers it swer to that is that under the present system we are losing as section 2 of the committee amendment. That would no money. The Panama Canal is a paying institution; and take precedence over the substitute because it would be in that is the report of the committee. the nature of a perfecting amendment. Mr. ADAMS. Mr. President-- The PRESIDING OFFICER. The parliamentary situa- The PRESIDING OFFICER. Does the Senator from tion is that those in favor of the amendment of the Senator North Carolina yield to the Senator from Colorado? from North Carolina in the nature of a substitute would Mr. BAILEY. I do. vote "nay" on this motion. The question is, Shall the Mr. ADAMS. I point out to the Senator that if those amendment be accepted as an amendment to the commit- who are advocating the bill were so solicitous in reference tee amendment? to revenue, why should they put a maximum upon tolls? Mr. BAILEY. Mr. President, I desire to be heard on that They have provided a maximum, not a minimum. It seems question. to me that if they really wanted to provide revenue, they The PRESIDING OFFICER. The Senator from North would change that from a maximum to a minimum. Carolina is recognized. Mr. BAILEY. I thank the Senator. Mr. ROBINSON. Has the Senator from North Carolina Mr. GORE. Mr. President-- indicated his readiness for a vote? The PRESIDING OFFICER. Does the Senator from Mr. BAILEY. No. I am ready to proceed to discuss the North Carolina yield to the Senator from Oklahoma? pending question unless the Senator from Arkansas desires Mr. BAILEY. I do. to move a recess. Mr. GORE. The existing law, enacted in 1913, imposed a Mr. ROBINSON. No; I do not desire to interfere with maximum of $1.25 and a minimum of 75 cents. The pend- the arrangement which was in contemplation. ing proposal imposes a maximum of $1 and a minimum of Mr. BAILEY. I do not object to recessing at this time. 60 cents. Between the maximum and the minimum the Mr. ROBINSON. I understand; but I do not desire to President is authorized to ascertain and fix the actual rate- make a motion to recess at this time. between those two points. Mr. BAILEY. Mr. President, the chairman of the com- Mr. BAILEY. I take it that it is perfectly clear that, if mittee in charge of the bill has, at any rate, paid my substi- under the present system we have lost no money, it is not tute the compliment of offering it as an amendment to his likely that we shall, under the present system, lose money bill. I am very much gratified by that recognition of the in the next 10 months; so I think that answers that objec value of my substitute. However, as an amendment it would tion. I may be wrong about that. not have the effect that it would have as a substitute. Mr. DUFFY. Does the Senator mean, by not losing, that The chairman of the committee in charge of the bill has the United States Treasury will not receive less money than also taken the view that the only thing he will insist upon it has received? in the bill as reported is the abolition or abandonment of Mr. BAILEY. No; I do not say that. I do not know what is described as the dual system of measurement and whether it will receive more or less. I am speaking from of ascertaining tolls. I have no special interest in the dual memory; but I think it may be confirmed by reference to system, and, fortunately for myself, in view of intima- the report-! read it when the debate was going on here 2 tions made here, I do not know of anyone else who is espe- or 3 weeks ago-that the income was about $25,000,000 a cially interested in what is described as the dual system. I year. and that was considered a sufficient yield upon the am looking at the matter from quite a different point of total investment. Am I not right about that? 3134 .CONGRESSIONAL RECORD-. SENATE MARCH 3 Mr. DUFFY. If it :Is clear that the Senator means that, my desk are all hearings and reports upon the bill-that the and not that the United States Treasury will not receive less American shipping co:p.ceOlS have opposed this measure and money, which in 10 months probably will be five or six resisted it for years. They are now resisting it, and they will million dollars. resist it for years and forever. Notwithstanding they are Mr. BAILEY. That point is beside the mark, and I think now paying less tolls than they should, they will never vol I should be safe in saying, very respectfully, that it is im untarily consent to pay as much tolls as they should, and matelial. The treaty underlying the Panama Canal ex that is not peculiar to shipowners. . cludes the conception of profits, and, of course, we are going Mr. BAn..EY. On that point I think we have it clear that to stand on the treaty underlying the canal. I did not there is really no discrimination under the existing law as think it would be argued here that we might lose some between our shipping and foreign shipping; that we can profits. We are not entitled to profits. As I recall the lan raise no prejudice against the present law on the ground guage of Mr. Roo~enator, Secretary of State, Secretatry of that Japan has an advantage which other shipping interests War, and a most eminent man-he took the view that we do not enjoy. held the Canal impressed with a trust. He took the broader Mr. GORE. Oh, no; none at all. Any country, by con view that the trust was a trust for the shipping of all the forming to the United States rules, may take advantage of world, and that the Canal was impressed with that trust in those rules and reduce its tonnage. the sense that we could not use it for our own profit, for Mr. BAILEY. Nobody in the Senate is being called upon our own advantage; so now the question of profits is out to vote for the new bill on the ground that it will protect of the picture. American shipping as against Japanese shipping, I wish to Mr. GORE. Mr. President-- have that clear. The PRESIDING OFFICER. Does the Senator from Mr. GORE. No; not so far as the Japanese are concerned. North Carolina yield to the Senator from Oklahoma? I mean nothing invidious by my reference to Japan. Mr. BAILEY. I do. Mr. BAILEY. I am glad that is clear now. Mr. GORE. I do not think that point is involved; and this Mr. GORE. I have no purpose of that sort; but the pres will make it clear, I think, to the Senator. ent system does permit all foreign shipping to take advantage Japan has had, for a number of years, 20 vessels transiting of it. The Senator may have heard this: During the past the Canal. She has been paying more nearly the tolls she 16 years foreigners have profited by it by cutting down their ought to pay, up until 1 year ago, than any other foreign tonnage subject to tolls 47,000,000 tons, whereas American nation whose ships ply the Canal. Her 20 vessels, measured vessels have cut down their tonnage subject to tolls only by the United States rules, amounted to about 90 percent of 37,000,000 tons. what they measured under the Panama Canal rules. So she Mr. BAILEY. However the figures may be, that is re paid approximately what she ought to have paid. viving the argument which was made here 3 weeks ago, and Within the past few months, however, Japan ha..c:; changed made for the space of 3 days. I gathered the impression in the structure of four of those vessels and has reduced their that argument-and I listened to it rather attentively-that tonnage, and has correspondingly reduced the tolls she pays the object of the new legislation was to prevent American the United States down to something like 70 percent. Last and Japanese and British and other ships from cutting holes year Japan put four new ships in commission, and she prof in their decks. I think that also has passed out of the ited by the example of other maritime countries; and her new picture. ships, taking advantage of these devices, measure under the Mr. GORE. No; the Senator is mistaken. United States rules of measurement only 68 percent of what Mr. BAILEY. I believe that placed the advocates of the they measure under the Panama Canal rules of measure legislation in a position which they themselves were unwill ment. So she is paying about 68 percent of the tolls she ing to occupy. ought to pay to the United States, and she has cut down her Mr. GORE. Oh, no, Mr. President! That is the way they tonnage and toll so low that the four new ships pay no more take advantage of the dual system of rules. We wish to do tolls when they go through the Canal loaded than they pay away with the dual system of rules so that they may not when they go through in ballast. resort to that device. It is abuses like this that we are trying to stop. I ought not Mr. BAILEY. That expression, "cutting holes in the decks to reflect either on a country or on a shipowner, because the of their ships", related wholly to changes in the structure dual system permits them to do that-I might say invites with a view to adapting the structure to the rules as laid them to do it, and they accept the invitation. We wish to down by the Government of the United States. withdraw the invitation. Mr. GORE. Yes, sir. Mr. BAILEY. Mr. President, I think the chairman of the Mr. BAILEY. I understood the argument as to the defect committee h~s negotiated himself into a rather unusual posi in the rules, or the way by means of which this was brought tion. He now says that the argument for the bill is to put an about, to be due altogether to a ruling of the Attorney Gen end to advantages being taken unjustly and unduly by the eral of the United States some years back. shipping interests of Japan. Mr. President, we are now negotiated into this position: Mr. GORE. No, Mr. President; I do not desire to make The Congress of the United States is called upon to act any invidious re:fiection on Japan. I do not wish to stop the because an Attorney General construed a law in a certain practice with respect to Japan any more than I do with way. respect to the United States or England or Germany or any Mr. DUFFY. Mr. President, will the Senator yield? other country. I do not want any shipowner to be allowed Mr. BAILEY. One moment. Of course, that is untenable. to reduce his tolls by changing the structure of his ship and The Attorney General does not make the laws, nor does he cutting a hole in the deck or resorting to the devices here interpret them; and if that is the only dimculty in this case, tofore described. That is the point. there is no need for this legislation. All we have to do is to Mr. BAILEY. Now the Senator has taken the broader re-refer it to the Attorney General. A ruling of the Attorney view that he was using Japan simply as an illustration. General 15 years ago is not binding upon the present Attor Mr. GORE. Yes, sir. ney General, nor binding upon any court, nor binding upon Mr. BAILEY. Very well, then. It was not more than 2 any legislative body. hours ago when the chairman of the committee· was saying I now yield to the Senator from Wisconsin. that the opposition to this bill was due to the resistance of Mr. DUFFY. Mr. President, I will say to the Senator that American shipping interests. That is a very strange thing. earlier this afternoon I made the suggestion that I thought Mr. GORE. Mr. President, I may not understand the the ruling of the Attorney General was absolutely wrong; Senator. I did say that 2 hours ago, and I say that now. that he did not interpret what the United States Congress If Japan is intervening here, or using any influence in this meant; but that that ruling having been acquiesced in over connection, I am not aware of it. If any other foreign this long period of years, nearly 20 years, it was thought country is, I am not aware of that. The Senator well knows, advisable by the Panama Canal authorities, by the Secretary however. if he will read the hearings-and these volumes on of War, and by the President that there should be substantive 1936. CONGRESSIONAL-RECORD-- SENATE. 3135 legislation ui:>on the subject,' so that there would be no ques Mr. BAILEY.· No, Mr. President; my friend, the distin tion about it. I think if the ruling were a very recent mat guished Senator, I think was absent from the Chamber when ter, and had not been of long standing, that would be the way this phase of the matter arose. The Senator from Wisconsin to do it. is now absent from the Chamber, and I dislike to undertake Mr. BAILEY. I think it is time to make the remark that to state his position in his absence, but I will do so, subjec~ acquiescence by the Congress or the American people in a to any correction. As I understood him, he was taking the regulation of a bureau or a ruling of an Attorney General view that this ruling had been acquiesced in over many years, does not establish the law. We all know that. and I think arguing that that gave it the force of law, at least Mr. GORE. Mr. President, may I interrupt the Senator? to the extent of requiring action by the Congress. I was Mr. BAILEY. I think the Senator's position in that re undertaking to refute that. I simply undertook to state that spect is utterly without foundation, and if that is the motive an erroneous ruling by an Attorney General, though ac for the legislation, then the legislation has no place here. quiesced in over a period of years, did not constitute law. Mr. DUFFY. Mr. President, would the Senator suggest Mr. CLARK. Mr. President, if the Senator will yield, I do that the Panama Canal authorities should have ignored the not wish to interrupt him unduly, and I agree with him en ruling of the Attorney General and have paid no attention tirely in the proposition he has just stated; .but I do suggest to it? that if the executive department of the Government makes Mr. BAILEY. They can ask for a new ruling tomorrow an erroneous construction of a law passed by Congress, the morning, if they wish to. There is no question about that. only remedy Congress has is, not to appeal to a subsequent They could have asked for a new ruling from any Attorney Attorney General or a subsequent member of any executive General since this ruling was first made, and I will assume department, but to make the law so clear that no executive it was made during the Wilson administration. officer can misunderstand it. Mr. DUFFY. It was, and all the Secretaries of War ever Mr. BAILEY. I am glad to hear the expression of the since that time have advocated this kind of legislation. Senator's view, and I do not know that I especially differ Mr. BAILEY. All they have to do is to make a ruling. with it. That was not the contention and that was not the Both the Senators are lawyers and distinguished Senators point of depart\ll'e. and learned men, and they will not controvert my state To proceed with the remainder of my argument, I am ment. offering at this time as a substitute precisely the section pro Mr. GORE. Mr. President, if I may interrupt again, I posed here by the committee and its chairman 3 weeks ago, do not think the Senator's conclusion quite follows from and precisely the language that was adopted by the Senate his premise and reasoning, that is, that there is no reason by a vote of 62 to 17. So I have, to reenforce my substitute for this legislation. It certainly would put an end to the on this occasion, the judgment of the committee today which difficulty once and for all, and obviate litigation, if the is opposing it, and the judgment of the Senate by. an over course suggested by him should be pursued. The Secretary whelming vote. of War asked the Attorney General for a ruling, and he Mr. President, on what ground has the committee aban received a ruling that the phrase "net registered tonnage" doned its own section 2? Frankly, I cannot answer that in the original act, meant net registered tonnage as ascer question. They have not come here and told us why. They tained under the United States Rules of Measurement. held the bill up to the Senate in the former debate as having President Wilson immediately took steps to secure legisla been considered at great length and having been perfected, tion in order to remedy the situation which resulted from and they asked for the support of it as a whole. It was re that opinion of the Attorney General. I will say to the committed, and only that part of the bill which the Senate Senator that if this proposed legislation be defeated, I hope approved has been left out of the bill. I do not quite under the Secretary of War will ask for another ruling upon this stand it. It was certain that section 2 was approved by the point, and if the ruling be adverse to our contention here, Senate; it was certain that section 1 was disapproved; the and to the original intent of the law, then I hope the bill was recommitted, and that portion which the Semite ap Panama Canal authorities will lay and collect the tolls proved is left in the committee and that portion which the imposed under the President's proclamation, and let the Senate disapproved is brought forward again, and that not shipping concerns go to court and test the thing out, because withstanding the vote of 62 to 17. I think that every resource available ought to be made use Mr. President, those are the facts. Let them be the facts. of to get rid of this dual system. What is the explanation? I confess I cannot explain. I Mr. BAILEY. Very well, Mr. President. I think ·it is agreed that the ruling by· the Attorney General of the United also state, notwithstanding I have not been here every mo ment today, that I have heard no explanation. It is possible States cannot, under any circumstances, become law. The Congress makes the law. So far as I know, no one else does. one was made; but if so, I did not hear it, and I do not know I will consider this portion of the debate concluded. of anyone else who has heard an explanation. Mr. CLARK. Mr. President, will the Senator yield? Mr. President, that is the status with regard to this matter. Mr. BAILEY. I yield. My substitute is approved by the chairman of the committee Mr. CLARK. Of course, I agree that no administrative as an amendment. It has been approved by the Senate and officer can make law, but in the absence of specific action by it has all the support any man could wish for it. Yet we are Congress the construction of law by a department amounts met now with the argument that it will not be considered to law. unless we first agree that the dual system shall be abolished Mr. BAILEY. Absolutely; I agree to that. The regula in advance. tions of the bureaus are prima facie law, but they are not Mr. President, I do not profess to know anything about law. I remind my friend the Senator from Missouri, that the dual system or the singular system. All in the world the argument here is that this is an erroneous ruling. The that I ask is that the thing be investigated. Give me the cure for an erroneous ruling is a correct one by a successor facts. I hold no brief for either side. That is all that my in office. That is my point. substitute calls for-a committee appointed by the Presi Mr. CLARK. Mr. President, will the Senator yield fur dent to investigate for 10 months a great question and in ther? form the Senate what are the facts, in order that we may Mr. BAILEY. I yield. enact legislation that may be of permanent value, in order Mr. CLARK. If there be an erroneous ruling by an Attor that we may avoid a mistake that might have adverse con ney General or by any other administrative officer, as I see sequences either to some little fellow or some great fellow, it, the only remedy Congress has is to make the law so clear or even to the United States. and specific that no adrilinistrative officer can misconstrue it. So I say I think that my proposition is reasonable. It As I understand the argument of the Senator from North has the approval of the chairman of the committee as an Carolina, it is that ~here is only one appeal, which is from an amendment, and it has the approval of the Senate by a erroneous ruling of one Attorney General to another Attorney formal vote. So I ask for its passage on its standing in the General. Senate. I do not know that I have seen one here since I 3136 CONGRESSIONAL RECORD-SENATE MARCH 3 have been here these 5 years which came before the Senate Mr. B.An.EY. l beg the Senatdr's pardon, but I am will with that amount of approval. ing to give the evidence to justify my statement without But, Mr. President, that is not the whole question here. giving a thorough analysis of the Seamen's Act. That is The United States of America has a very great stake in its the difference. merchant marine. I do not care anything about any ship I mentioned one. Here is another. Japan can build her ping company on earth, but I do care, and I have always ships for one-third of what it costs us to build ours, and that cared, that my country should be properly defended in time also includes battleships. If she can build them for less. of peace and of war. We will agree that the Army is needed, of course she can operate them for less. The capital in.. we will agree that the Navy is needed, and no one will deny vested is less. That might be right, too. I am not arguing that the great auxiliary of Army and Navy is the merchant about what is right, but I am arguing what the facts are marine. Neither the Army nor the Navy can get along and what the policies are. without the merchant marine. That, Mr. President, is not all. The cost of a ship built This country in the first 50 years of the nineteenth cen in Great Britain is only 60 percent of what it is here. That tury gave the greatest attention to the development of its may be right also. I am not arguing against that. I am merchant marine, but for the last 30 years it has pursued not saying that that is wrong. I am saying that is a fact. a policy which h3.s made it almost impossible for the Ameri I am saying that the consequence of that fact is that can merchant to run an American ship. When the World whereas old England has a great merchant marine of in War came on-we have no difficulty recalling what hap comparable and inestimable value to her Army and her pened-we had to spend a billion dollars to buy merchant Navy, and whereas Japan has a merchant marine of incal ships. We have harbors full of their wrecks today. We even culable value to her Army and her Navy and her Empire, tried to build ships and tried to build them fast and under America, rated in all other respects at least amongst the take to mold concrete ships. We found they would not set in three greatest powers, rates in that respect near the bottom. the water. They came down in my State and started a And remember my proposition: Your merchant marine as concrete-shipbuilding affair. I think if Senators go up to an aUXiliary of Army and Navy is indispensable to your Hog Island they will see a great graveyard of shipping failures national defense. brought about by the haste of the United States in trying to Now, Mr. President, I come to another matter in this con supply what she would have had if she had played a reason nection. ably sensible part in the matter of building up the merchant marine. Mr. CLARK. Mr. President, before the Senator passes that point I wish to ask him another question. Of course. Mr. CLARK. Mr. President, will the Senator yield? I do not agree with the Senator in his views on ship subsidy. Mr. BAILEY. I yield. Mr. CLARK. Will the Senator expound a little bit further Mr. BAILEY. I beg the Senator's pardon, but I have what he means by "a reasonably sensible" policy? expressed no views whatever on ship subsidy. Mr. BAILEY. Yes. I am going into that and I am going Mr. CLARK. Putting it baldly, that is what the Senator into it with reference to this particular legislation of the has been advocating. Panama Canal. Mr. BAILEY. Again I beg the Senator's pardon, but I Mr. CLARK. I will be very much interested to have the am not advocating that. Senator do that. Mr. CLARK. That is the construction I have put on the Mr. BAILEY. This Congress passed laws making it almost Senator's remarks. impossible for an American merchant to operate a ship. I Mr. BAILEY. I am sorry he puts it on, but I am going to take it that the Senator knows about the laws. take it off. Mr. CLARK. Will the Senator further yield? Mr. CLARK. Irrespective of that, may I ask the Senator Mr. BAILEY. I yield. whether the question of the utility of the merchant marine Mr. CLARK. I should be very glad to have the Senator as an aUXiliary to the Navy for the defense of the Nation explain that in detail. in case of war is involved in this bill?-and if so, I would be Mr. BAILEY. I shall be very glad to do that, I think, in glad to have him explain. sufficient detail. I will not undertake to go into all the Mr. BAILEY. Absolutely. I am going to answer the Sen laws. ator in the affirmative. We have here, Mr. President, in We have our act under which if an American ship is going this matter of the Panama Canal tolls, one of the few op around the world she may have to get new sailors at every portunities we have had to do something for the American port. They can go on shore leave and never come back merchant marine. That is just precisely the point I was again. They go from port to port. driving at. We have our seamen's bill fixing the cost of operation by Mr. CLARK. I do not wish to interrupt the Senator's which we suffer by reason of competitive conditions of other chain of thought, nor will I do it again at this point. ships. The consequence is the loss of shipping. Mr. BAILEY. I welcome the Senator's interruptions, Mr. CLARK. Will the Senator further yield? and receive them in a most friendly way. Mr. BAILEY. I yield. Mr. CLARK. Is there anything in the bill that could pos Mr. CLARK. Is the legislation to which the Senator refers sibly impose a burden on the American merchant marine the seamen's bill? that would not also be imposed on the merchant-marine Mr. BAILEY. In part; yes. service of every foreign nation? Is there anything that can Mr. CLARK. I would be very much interested to hear possibly be found in the bill-if so, I should like to have it the Senator expound the rest of the inhibitions on American pointed out because I am a member of the committee which ships. reported it-which could possibly react adversely to the Mr. BAILEY. I should say, Mr. President, I have no merchant marine of the United States and to the advantage capacity at this time and no inclination, although I should of the merchant marine of every other nation? like to gratify my dear friend here, to undertake to expound Mr. BAILEY. I thank the Senator for giving my proposal that law, and I may very well make the honest confession the emphasis I wish. There is nothing in the bill that looks that I would not be equal to the task. If my friend wishes to the interests of the American merchant marine, and that to do so at this point, I shall be glad to give him the oppor is one of my complaints against it. I ask for a committee tunity. to be appointed which will treat this matter with a view to Mr. CLARK. If the Senator will further yield to me, I the building up of the American merchant marine. That is will say that I am not able to do that either. But the Sena my complaint against the bill. I agree there is nothing in tor is making a very broad statement as to the condition of it looking to that end and am glad the Senator made the American shipping based on a statement which he makes point clear. himself. I have asked the Senator to itemize that state Mr. DUFFY. Mr. President, will the Senator yield? ment, and I find that the Senator is not willing to do so. Mr. BAILEY. I yield. 1936. CONGRESSIONAL RECORD-SENATE 3137' Mr. DUFFY. Does the Senator agree that under the sys the treaty, it was never intended that the Canal should be a tem now in vogue the merchant marine of foreign countries means of making money. Once it pays for itself and amor gets more advantage than our own merchant marine? tizes the investment, that is all we can ask. But I wish to Mr. BAILEY. I have heard that contended on the :floor make it all clear so far as I am concerned. I have not read of the Senate both ways. I heard the Senator from New the testimony of the shipping interests. I have no brief from Jersey [Mr. BARBOUR] say the foreigners would get the ad them. I have not heard them. I hope the Senator under vantage under the proposed legislation. I heard Senators stands that, and that I need not refer to it any more. on this occasion, but not on any former occasion, say we Mr. President, when I was interrupted some moments ago would get the benefit of it. I do not know, and I have no I was about to develop the argument that my interest in way of knowing. That is the point. Let us have an inves the matter is in the appointment of a committee to investi tigation so we may know and have an end to this debate gate the whole subject of tolls and shipping through the Canal about the facts. and thus give us an opportunity to find a constructive method Mr. DUFFY. If such an impartial committee or commis of doing something to upbuild the merchant marine of the sion, or whatever it may be called, would find the facts to United States. be as I have stated, does the Senator assume or believe Mr. CLARK. Mr. President, will the Senator yield? that there would be any further opposition from the ship The PRESIDING OFFICER. Does the Senator from ping interests to having the dual system of measurement North Carolina yield to the Senator from Missouri? abolished? Mr. BAILEY. I yield. Mr. BAILEY. That is the most unfortunate phase of the Mr. CLARK. Does not the Senator consider that his sug discussion and I am glad the Senator brought it out. There gestion is a direct reflection on a standing committee of the seems to be an assumption on the part of at least two mem Senate, the Committee on Interoceanic Canals? bers of the committee that those of us who differ with them Mr. BAILEY. I do not, and I am glad the Senator gives are interested in some shipping interests or that we have me the opportunity of discussing that point. been told something by them. Mr. CLARK. I shall be very glad to have the Senator Mr. DUFFY. Mr. President, will the Senator yield explain that, because, it seems to me, in view of the fact further? that a standing committee of the Senate has direct juris Mr. BAILEY. I am not through yet. I am going to finish diction of the subject matter and has reported the bill, that this statement and then the Senator may say what he may to appoint a special committee to take cognizance of the wish to say. I say that very courteously and with a great sole jurisdiction of a standing committee of the Senate deal of patience. I do not reflect upon my fellow Senators would be a direct reflection on every member of the com and I do not assume that all the virtue is with me when men mittee, and I certainly would so feel. May I say further differ with me. I understood when I came to the Senate that so far as I am concerned if the proposal of the Senator that I was not, within my soul or ever with my voice, to from North Carolina, who is my very dear friend. should make an intimation or a suggestion or an insinuation prevail, I would feel it incumbent upon me as a matter of against a fellow Senator. self-respect to resign from the Committee on Interoceanic Mr. DUFFY. Mr. President, will the Senator yield? Canals. · Mr. BAILEY. I do not think the Senator from Wisconsin Mr. BAILEY. I wish to disavow anything like disrespect means to do that sort of thing, but what is the effect of the for anybody in the Senate or any committee of the Senate. statement? I yield now to the Senator from Wisconsin. I hope Senators realize that I am incapable of that; and Mr. DUFFY. If the Senator has read the testimony I should like to say to my good and honored friend the before the committee he would know that it is the shipping junior Senator from Missouri that if he lives until I willingly groups of the country who are making opposition to the manifest the slightest disrespect for him, he will live a bill. That is what I referred to. I made and intended no very long time. reflection on the Senator from North Carolina. Mr. President, I take it that that argument is worthy, to Mr. BAILEY. I have not read the testimony of the ship be sure, of my consideration. I would not wound the feel ping interests. I do not care what they say. I have not ings of any member of the committee. I do not like to speak been in the Senate these years for nothing. I never hear personally in the Senate, but I think I may be forgiven for anybody here who has a fee in his pocket or a special interest saying that I could not ever forgive myself if I ever uttered in his heart. When such a man comes to my office I tell him a word or entertained a thought that would wound the feel I do not want to hear him. I believe the people of North ings of the jtmior Senator from Oklahoma [Mr. GoREJ. I Carolina sent me here because they felt I was competent to think he is one of the noblest, one of the ablest, one of the study these questions for myself. I do not read what the finest characters I have ever known in my life, and I am special interests have to say. The first time I heard any glad to have the opportunity to say so in the Senate. thing here today about a shipping interest view was when I think he knows how I feel about him. I have always felt the junior Senator from Oklahoma [Mr. GoRE] had read at that a man might be allowed to differ with his fellow men, the desk something that some shipping man had said. a man might be allowed to dissent from a motion by a fellow I should like to have the Senator from Wisconsin know, Senator, and a Senator might be allowed to argue ear and to have everybody else know, that when I undertake to nestly-of course, respectfully-against the report of a com study a question I at least have enough sense to avoid those mittee without offense. I hope that is always to be un who have some ulterior motive or some special interest in derstood about me; so I assure my friend that nothing I mind. I will not permit them to affect my viewpoint at all. shall say and nothing I shall do will relate remotely to any Mr. DUFFY. Mr. President, will the Senator yield? possible reflection or anything that will tend to impair his Mr. BAILEY. I yield. sense of my high regard. Mr. DUFFY. The point I tried to bring out by the ques Mr. CLARK. Mr. President, will the Senator yield? tion was not any reflection upon the Senator from North The PRESIDING OFFICER. Does the Senator from Carolina, but that no matter what the committee or commis North Carolina yield to the Senator from Missouri? sion might find, in my opinion, the opposition from these Mr. BAILEY. To be sure. particular interests which appeared before the committee Mr. CLARK. Of course I have no misapprehension as to would remain just the same. In other words, I do not think . the feeling of the Senator from North Carolina toward my it makes a bit of difference in their viewpoint, because year self or toward the Senator from Oklahoma. I say only that after year by these artificial devices they have been able to if the Senate should see fit to rape the Committee on Inter whittle down the tolls they have paid, and, of course, they oceanic Canals of its jurisdiction, and take practically every are all selfishly interested in getting their vessels through the vestige of its jurisdiction away from it by the appointment Canal as cheaply as possible. of a special committee, I personally should not be willing Mr. BAILEY. I think the tolls have been whittled down ! am not speaking for anybody but myself-to serve on a because we hold the Panama Canal in trust. As I understo9d committee which had no jurisdiction whatever. 3138 CONGRESSIONAL RECORD-SENATE MARCH 3 Mr. BAILEY. I hope my friend will reconsider that atti As to the · proposal that exetnption - shall be given to vessels tude; but, if he should feel that he could not, I . want him to engaged in the coastwise trade, a more difficult question arises. If the trade should be so regulated as to make it certain that acquit me of any intent-- only bona-fide coastwise traffic which is reserved for United States Mr. CLARK. Mr. President, if the Senator 'will yield vessels would be benefited by this exemption, it may be that no further, I should never entertain the thought of anything objection could be taken. except the kindliest feelings on the part of the Senator from That is from Great Britain. North Carolina toward either myself or the Senator from EXECUTIVE SESSION Oklahoma; but I do feel it incumbent on me again to make the statement as a member of the Committee on Inter Mr. ROBINSON. I move that the Senate proceed to the oceanic Canals. consideration of executive business. The motion was agreed to; and the Senate proceeded to Mr. BAILEY. If I may address myself to that for just a the consideration of executive business. moment, this is, after all, a technical matter; and it is a rate-making matter. We have a Committee on Interstate EXECUTIVE REPORTS OF A COMMITTEE Commerce in the Senate, but the Committee on Interstate Mr. McKELLAR, from the Committee on Post Offices and Commerce does not undertake to make the rates for the Post Roads, reported favorably the nominations of sundry railroads. It is no reflection upon that committee that the postmasters. rate-making power is transferred. We have a Committee on The PRESIDING OFFICER (Mr. MooRE in the chair). Finance, of which my distinguished friend from Missouri is a The reports will be placed on the Executive Calendar. member. We committed certain taxes to the Department of If there be no further reports of committees, the calendar Agriculture. I did not think I should resign. I did not take is in order. that as a reflection upon me. We do not do things in the POSTMASTERS Senate, I feel sure, with any sense of wounding the feelings The legislative clerk read the nomination of Earl D. Cline of any fellow Senator. I know that obtains among all Sen to be postmaster at North Los Angeles, Calif. ators. So, now, let that go. Let us just come to this phase of the matter: Mr. McKELLAR. Mr. President, I ask that this nomina tion be recommitted to the Committee on Post Offices and The Panama Canal, Mr. President, is our Canal. We Post Roads. built the Panama Canal. We · paid for the Panama Canal. The PRESIDING OFFICER. Without objection, it is so We began going about building the Panama Canal in the ordered. second decade of the nineteenth century, in the time of Henry Clay; and that matter has been the subject of con THE JUDICIARY sideration in the Senate now for something better than 115 The legislative clerk read the nomination of Arthur F. years. I think our mother country is a very wise country Lederle to be United States district judge, eastern district and always skillfully managed. I greatly admire it. I do of Michigan. not intend ever, while I am a Senator, to say ·anything that The PRESIDING OFFICER. Without objection, the nomi~ would tend to irritate the ·feelings of the people in other nation is confirmed. nations; but when England saw that we were interested in The legislative clerk read the nomination of George E. that matter, she undertook to find an interest over here Miller to be United States marshal, southern district of whereby she could have a hand in it. To me it is a singular Iowa. fact that she asserted that she had some sort of jurisdiction The PRESIDING OFFICER. Without objection, the over the Mosquito Indians in Central America; and on the nomination is confirmed. basis of a theoretical jurisdiction of the Mosquito Indians in Central America she negotiated her way through with the FOREIGN SERVICE Clayton-Bulwer Treaty and the Hay-Pauncefote Treaty until The legislative clerk read the nomination of Benjamin she stood. in the position of demanding of us, in the name Reath Riggs, . of Pennsylvania, to be consul of the United of our honor and our generosity, that we, having built the States of America. Canal, should give her the benefit of it. The PRESIDING OFFICER. Without objection, the A long debate ensued, in which former President Theodore nomination is confirmed. Roosevelt took the view that we did not have to respect the PUBLIC WORKS ADMINISTRATION demand of England, and in which President Taft took the The legislative clerk read the nomination of Henry H. same view that Theodore Roosevelt took, and in which view Ferguson, of Oklahoma, to be State engineer inspector for each of them was supported by so eminent a lawyer as the Public Works Administration in Oklahoma. Philander C. Knox, known to the Senate as one of its ablest The PRESIDING OFFICER. Without objection, the Members in his time, who took the view that this country nomination is confirmed. did not have to give, under the Clayton-Bulwer Treaty or the Hay-Pauncefote Treaty, equality in the matter of rates, POSTMASTERS to which England said she had a right. The legislative clerk proceeded to read sundry nomina~ Mr. CLARK. Mr. President, will the Senator yield? tions of postmasters. Mr. BAILEY. Surely. Mr. McKELLAR. Mr. President, I ask that the nomina Mr. CLARK. I should like to add to what the Senator tions of postmasters be confirmed en bloc, except the nomi~ has said, since he has brought up the subject, that this view nation of Sadie L. Brunner to be postmaster at Worces~ also was supported in toto and in verbiage by the Demo ter, Pa. cratic national platform of 1912, adopted at Baltimore. The PRESIDING OFFICER. Without objection, the Mr. BAILEY. I thank the Senator. That is the view nominations of postmasters are confirmed en bloc, with the which President Taft took, and the view which President exception of the nomination of Sadie L. Brunner to be post Theodore Roosevelt took. master at Worcester, Pa. Mr. CLARK. Yes, sir. Mr. McKELLAR. Mr. President, I ask that the nomina~ Mr. BAILEY. I am not bringing that up now for any tion of Sadie L. Brunner to be postmaster at Worcester, Pa., matters of criticism or any matters of regret. It just struck be recommitted to the Committee on Post Offices and Post me as being a proper background for what I was going to Roads. say about this matter; and here it is: The PRESIDING OFFICER. Without objection, it is so England did not take the view that we did not have the ordered. right to favor our coastwise shipping. She took the view, IN THE ARMY when it came to the world shipping, that there should be The legislative clerk proceeded to read sundry nomina~ equality; but in the protest tiled with the Secretary of State tions in the Army. by Great Britain on February 8, 1912, the Foreign Office of Mr. SHEPPARD. I ask .that the Arl:ny nominations be Great Britain stated: confirmed en bloc. 1936 CONGRESSIONAL RECORD-ROUSE 3139 The PRESIDING OFFICER. Without objection, the of all the world. 0 God of our fathers, hear us; the su nominations are confirmed en bloc. That completes the preme need of the wide earth is peace. In its humbler calendar. estate, humanity is striving for a release from the greatest RECESS of tyrannies, which is cruel and intolerant warfare. It The Senate resumed legislative session. fails to reach the goal of its prayers and the fruition of its Mr. ROBINSON. I move that the Senate take a recess heart yearnings. Almighty God, do Thou interfere in the until 12 o'clock noon tomorrow. ambitions of men. May the rulers and leaders be brought The motion was agreed to; and (at 5 o'clock p. m.) the low and made to surrender to the complete law and rule Senate took a recess until tomorrow, Wednesday, March 4, of the Teacher of Nazareth, the Lord of glory. Let deliv 1936, at 12 o'clock meridian. erance come that the world may not dig the graves of hate and garnish the lands with human blood. Arouse all hu manity to claim Thee, the only true God and everlasting CONFIRMATIONS Father. Through Christ. Amen. Executive nominations confirmed by the Senate March 3 The Journal of the proceedings of yesterday was read and
Congressional Record-Senate Senate
