.1934 CONGRESSIONAL ~ECORD-SENATE 4877 hundred million appropriation in Public Works bill for con 3082. By the SPEAKER: Petition of the municipal gov struction of public highways; to the Committee on Appro ernment of Balayan, Bantagas, P .I., regarding Philippine .priations. independence; to the Committee on Insular Affairs. 3007. Also, petition of Dr. J.M. Howe, of Austin; Dr. S. A. 3083. Also, petition of the municipal government of Laboe, Woodward, of Fort Worth; Dr. J. S. McCelvey, of Temple; Province of Bohol, P.I., regarding Philippine independence; Dr. Joe S. Wooten, of Austin; Dr. J. M. Frazier, of Belton; to the Committee on Insular Affairs. Dr. John W. Brown, State health officer, of Austin; Dr. 3084. Also, petition of the city of Cleveland, Ohio, urging Henry F. Hein, of San Antonio; and Dr. E. W. Wright, of passage of Senate bill 752; to the Committee on the Bowie, all of the State of Texas, all members of the State Judiciary. board of health, urging appropriation in the first deficiency 3085. Also, petition of J. Neilson Barry, opposing the joint bill for 1934 for the United States Public Health Service to resolution for a 3-cent postage stamp to commemorate Rev. use in its cooperative county health unit work in the several Jason Lee; to the Committee on the Post Office and Post States; to the Committee on Appropriations. Roads. 3068. Also, petition of Hubert M. Harrison, general man 3086. Also, petition of the American Institute of Mining ager, East Texas Chamber of Commerce, Longview, Tex., and Metallurgical Engineers; to the Committee on Mines urging inclusion of four hundred million appropriation in and Mining. Public Works bill for construction of public highways; to 3087. Also, petition of the municipal government of Boli the Committee on Appropriations. nao, Province of Pangasinan, P .I., urging passage of the 3069. By Mr. LINDSAY: Petition of Steel & Tubes, Inc., King bill; to the Committee on Insular Affairs. Brooklyn, N.Y., urging defeat of Senate bill 2926 and House bill 8423; to the Committe AMENDMENT TO TAX BILL-ESTATE-TAX RATES "Th.at not less than 10 percent of the aircraft, includ Mr. LA FOLLETTE submitted an amendment intended to ing the engines therefor, the procurement of which is au be proposed by him to the bill (H.R. 7835) to provide rev thorized by this act and hereafter undertaken, shall be enue, equalize taxation, and for other purposes, which was constructed and/or manufactured in Government aircraft referred to the Committee on Fmance and ordered to be factories and/or other plants or factories owned and operated printed. by the United States Government. HOARDERS OF SILVER "The foregoing paragraph is subject to the following con ditions: Mr. ROBINSON of Indiana. Mr. President, I send to the "(1) That if it shall be determined by the President that desk a resolution and ask that it be read, and, when that present plants, factories, and equipment owned by the Gov shall have been done, I will ask unanimous consent for its ernment are not such as to permit the construction and/or immediate consideration. manufacture of the said aircraft and/or engines in such The VICE PRESIDENT. The clerk will read the resolu Government plants and factories, in the proportions herein tion. specified and required, then and in that event such require The Chief Clerk read the resolution ELECTRIFICATION OF STEAM RAILROADS IN THE DISTRICT hatchery, station, or laboratory shall be suspended whenever the State ceases to accord such right, or whenever in the judgment The Senate proceeded to consider the bill (S. 2950) to of the Secretary of Commerce, State laws and regulations affecting authorize steam railroads to electrify their lines within the fish propagated are allowed to remain so inadequate as to impair District of Columbia, and for other purposes. the efficiency of such hatchery, station, or laboratory. Mr. McKELLAR. Mr. President, will the Senator from RUSSIAN RAILWAY SERVICE CORPS Utah explain this bill? The question I wish to ask him is whether the bill provides that the Government shall bear The Senate proceeded to consider the bill (S. 2320) for any of the expense involved. the relief of the officers of the Russian Railway Service Mr. KING. Mr. President, the bill is really to relieve one Corps organized by the War Department under authority of of the nuisances of which complaint is made, namely, large the President of the United States for service during the war quantities of smoke being emitted from engines engaged in with Germany, which had been reported from the Commit railroad operations within the District. One of the rail tee on Military Affairs with amendments. roads has planned to electrify its line between here and Mr. KING. Mr. President, I should like an explanation of Baltimore, and this bill merely gives it authority to put elec this measure. tric poles upon its own land within the District. The District Mr. THOMAS of utah. Mr. President, this bill has once Commissioners approve the bill. before been passed by the Senate. It is a bill for the relief The VICE PRESIDENT. The amendment reported by of 288 men who were organized, brought into the service of the committee will be stated. the United States, and given the title of the Russian Rail The amendment was, on page 1, line 3, after the word way Service Corps during the last years of the World War. "companies", to insert "now operating within the District The men were made part of the military forces of the United of Columbia", so as to make the bill read: States by order of the President, were enlisted in the ordi nary way, were issued uniforms, wore uniforms with insignia Be it enacted, etc., That steam-railroad companies now operating within the District of Columbia are hereby authorized, after on them, and carried on in the normal way in which ordinary approval of their detailed plans and issuance of a permit by the officers do for a given special task. The same type of men Commissioners of the District of Columbia, to electrify their lines who were brought into the service for duty in France were within the District of Columbia and across the Anacostia and Potomac Rivers with an alternating cm.Tent overhead catenary or given regular military service, and were allowed all of the other type of electrification system, with all necessary transmis honors and privileges of the military department. sion, signal and communication conductors and equipment, poles, This bill is more sentimental than anything else. It conduits, underground and overhead construction, substations, merely gives to these men the right to consider themselves and any other structures necessary in such electrification, the pro visions of any law or laws to the contrary notwithstanding. ex-members of the military department of the United States. SEc. 2. Submarine cables may be used at drawbridge openings, Mr. KING. Mr. President, I may say to my colleague that provided previous approval shall have been obtained from the War I am familiar now with the terms of the bill, and I have no Department. SEC. 3. Where necessary for such electrification, the Commis objection to it. sioners of the District of Columbia may issue permits to construct The VICE PRESIDENT. The amendments of the com conduit systems through or under the surfaces of public streets mittee will be stated. or other District of Columbia or United States property: Provided, however, Th at three ducts therein shall be reserved for the use of The amendments were, on page 2, line 1, after the words the United States and the District of C::ilumbia. "United States", to insert "Army", and in the same line, SEC. 4. Nothing herein contained shall be construed as limiting after the word "War", to insert "Provided, That no back or abridging the aut hority of the War Department, the Commis pay, compensation, benefit, or allowance shall be held to sioners of the District of Columbia, or of the Interstate Commerce Commissio!l. have accrued prior to the passage of this act ", so as to make SEC. 5. Th e said railroad companies shall be liable for any acci the bill read: dent to. or injuries sustained by, any person by reason of any act Be it enacted, etc., That the officers appointed by the President, or omission of the railroad companies or by their agents or ser and who served honorably during the war with Germany on and vants during the construction, installation, maintenance, or oper after April 6, 1917, in the Russian Railway Service Corps organ ation of the electrical equipment and apparatus of the railroad ized by the War Department under authority of the President of trains. the United States shall be deemed to have the same legal status The amendment was agreed to. as if they had received a full and honorable discharge as emer gency officers of the United States Army in the World War: Pro 4 The bill was ordered to be engrossed for a third reading, vided, That no back pay, compensation, benefit, or allowance shall read the third time, and passed. be held to have accrued prior to the passage of this act. PROPAGATION OF SALMON IN COLUMBIA RIVER DISTRICT The amendments were agreed to. The bill (S. 2629) establishing a fund for the propaga 4 The bill was ordered to be engrossed for a third reading, tion of salmon in the Columbia River district was consid read the third time, and passed. ered, ordered to be engrossed for a third reading, read the GOVERNMENT OF ALASKA third time, and passed, as follows: N. W. CARRINGTON AND J. E. MITCHELL The amendment was agreed to. The Senate proceeded to consider the bill CS. 2620) for The bill was ordered to be engrossed for a third reading, the relief of N. W. Carrington and J.E. Mitchell, which had read the third time, and passed. been reported from the Committee on Claims with an RECORDS OF FIVE CIVILIZED TRIBES amendment, on page 1, line 5, after the word "Virginia", The bill CH.R. 5631) to authorize the Secretary of the In to insert " out of any money in the Treasury not otherwise terior to place with the Oklahoma Historical Society, at appropriated", so as to make the bill read: Oklahoma City, Okla., as custodian for the United States, B~ it enacted, etc., That the Secretary of the Treasury be, and certain records of the Five Civilized Tribes, and of other he is hereby, authorized and directed to pay to N. w. Carrington, Dumbarton, Va., and to J. E. Mitchell, Richmond, Va., out of Indian tribes in the State of Oklahoma, under rules and reg any money 1n the Treasury not otherwise appropriated, the sums ulations to be prescribed by him, was considered, ordered to of $1,020 and $1,260, respectively, in full settlement of Federal a third reading, read the third time, and passed, as follows: indemnity for the destruction of their cattle in 1925 and 1926 Be it enacted, etc., That the Secretary of the Interior is author which were found to be afi'ected with tuberculosis. ized, under rules and regulations to be prescribed by him, to place The amendment was agreed to. with the Oklahoma Historical Society of the State of Oklahoma any records of the Five Civilized Tribes, including the Cherokees, The bill was ordered to be engrossed for a third reading, Creeks, Choctaws, Chickasaws, and Seminoles, which may be in read the third time, and passed. the custody or control of the Secretary of the Interior and the Superintendent for the Five Civilized Tribes; also of the Wichita, JOINT RESOLUTION PASSED OVER Kiowa., Comanche, Caddo, and Apache Indians that may be within his custody or control or of the agent at Anadarko, Okla.; also The joint resolution CS.J.Res. 31) consenting that certain of the Arapaho and Cheyenne Indians that may be within his cus States may sue the United States and providing for trial on tody Ot' control or of the agent at Concho, Okla.; also of the Sac the merits in any suit brought hereunder by a State to re and Fox, Pottawatomie, Kickapoo, and Iowa Indians that ma.y be within his custody or control or of the agent at Shawnee, Okla.; cover direct taxes alleged to have been illegally collected by also of the Wyandotte, Seneca, Quapaw, Peoria, Modoc, and Miami the United States during the fiscal years ending June 30, Indians that may be within his custody or control or of the agent 4890 CONGRESSIONAL RECORD-SENATE MARCH 20 at Miami, Okla.; also of the Tonkawa, Ponca, Pawnee, Otoe, and SEC. 2. That the Territory of Alaska shall never sell or otherwise Kaw Indians that may be within his custody or control or of the dispose of any part of said property; and if the same shall ever be agent at Pawnee, Oltla., and of the Osage Indians that may abandoned for the uses herein declared the said premises shall be within his custody or control or of the agent at Pawhuska, revert to the United States. Okla. The Oklahoma Historical Society in receiving the custody of sueh papers, records, and matters of historical interest to receive COMMEMORATION OF THREE HUNDREDTH ANNIVERSARY OF same as custodian for the United States of America and the Sec FOUNDING OF MARYLAND retary of the Interior, and to hold same under rules and regula The bill 2966) to authorize the coinage of 50-cent tions as may be prescribed by him: Provided, That copies of any cs .. documents, records, books, or papers in the omce of and custody pieces in commemoration of the three hundredth anniver of the Oklahoma Historical Society when certified by the secretary sary of the founding of the Province of Maryland was con or chief clerk of said society under it s seal, or when such office sidered, ordered to be engrossed for a third reading, read or position is vacant by the omcer or person acting as secretary or chief clerk for the time, shall be evidence equally with the original, the third time, and passed, as follows: and in making such certified copies such secretary or acting sec Be it enacted, etc., That, in commemoration of the three hun retary and such chief clerk or acting chief clerk shall be acting dredth anniversary of the founding of the Province of Maryland, as a Federal agent, and such certified copies shall have the same there shall be coined by the Director of the Mint ten thousand force and effect as if made by the Secretary of the Interior when 50-cent pieces of standard size, weight, and silver fineness and of such documents, records, books, or papers were in his office as a spacial appropriate design to be fixed by the Director of the Secretary of the Interior and certified by him under seal of his .Mint, with the approval of the Secretary of the Treasury, to be office: Provided further, That wherever such certified copies are legal tender in all payments at face value. desired by the Government to be used for the benefit of the Gov SEC. 2. That the coins herein authorized shall be issued at par ernment they shall be furnished without cost: Provided further, and only upon the request of the chairman or secretary of the That any of the records placed with the Historical Society shall Ma1·yland Tercentenary Commission. be promptly returned to the Government official designated by the SEC. 3 .. Such coins may be disposed of at par or at a premium by said Secretary upon his request therefor. said Commission and all proceeds shall be used in furtherance of the Maryland Tercentenary Commission projects. BILLS PASSED OVER SEC. 4. That all laws now in force relating to the subsidiary silver coins of the United States and the coining or striking of The bill (S. 2788) to amend section 5219 of the Revised the same; regulating and guarding the process of coinage; pro Statutes as amended EDWARD F. GRUVER sixth floors of the Flynn Building, Des Moines, Iowa, which were vacated on September 30, 1929, by the United States Veterans' The bill CS. 336) for the relief of Edward F. Gruver was Bureau, at the expiration of its lease. considered, ordered to be engrossed for a third reading, read The amendment was agreed to. the third time, and passed, as follows: Mr. ROBINSON of Arkansas. Mr. President, this appears Be it enacted, etc., That the Comptroller General of the United to be an unusual bill. I suggest that some Senator who is States ls authorized to adjust and settle the claim of the Edward F. Gruver Co. in an amount not to exceed $200 for leather labels familiar with it should explain it. furnished the Federal Radio Commission. notwithstanding any Mr. GIBSON. Mr. President, this is a bill for the relief of provision of law requiring such supplies to be obtained from the the estate of Martin Flynn. It calls for the payment of Government Printing Office. $4,000 in full satisfaction of a claim against the United ROBERT V. RENSCH States for expenses incurred in restoring to its original con The bill CS. 2338) for the relief of Robert V. Rensch was dition two floors of the Flynn Building in Des Moines, Iowa, considered, ordered to be engrossed for a third reading, read which was used by the Veterans' Bureau. the third time, and passed, as follows: Paragraph 8 of the original lease provided that if the lessor claimed restoration, he should file written demands for Be it enacted, etc., That the Secretary of the Treasury be, and he hereby is, authorized and directed to pay, out of any money in restoration 90 days before the termination of the lease. At the Treasury of the United States not otherwise appropriated, the the time Government occupancy terminated the original sum of $136.50 to Robert V. Rensch, of St. Paul, Minn., to reim long-term lease had been modified by a clause giving the burse him for expenses in said sum incurred and paid by him as assistant United States attorney for the district of Minnesota, on Government the privilege of renewal by successive 3-month behalf of the United States of America, with the approval of the periods. Having arrived at the end of the lease term, the Attorney General of the United States of America, in the trial Government took the building on a 3-month-term basis, so of the case of United States of America v. Wilbur B. Foshay et al., that it was not possible for the claimant to give the 3 months' in the city of Minneapolis, in said district, between August 31, 1931, and September 30, 1931, which said sum was duly paid notice of claim for restoration. to said Robert V. Rensch by the United States marshal for said The claim was referred to the General Accounting Office, district, and subsequently and on the 20th day of October 1933 re and denied, but the Veterans' Administration is of the opin funded by said Robert V. Rensch, under protest, to said United States marshal, by reason of the fact that on the 3d day of March ion that the claim has merit, and recommended that the bill 1933 the Comptroller General of the United States of America be amended so as to include only two items. It appears, refused to allow credit to the said United States marshal for vouch however, that there was a third item which was contracted ers covering said sum for said expense. for at the time the other two items were contracted for; TRIFUNE KORAC and if the two items are to be paid, the third one ought to The bill CS. 2709) for the relief of Trifune Korac was con be paid. So the committee felt that the claim was a just one, sidered, ordered to be engrossed for a third reading, read and that it should be allowed in full. the third time, and passed, as follows: Mr. McKELLAR. Mr. President, I note that the Veterans' Administration fixes the amount at $3,025, and would not Be it enacted, etc., That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay to Trifune Korac, out include any interest. of any money in the Treasury not otherwise appropriated, the Mr. GIBSON. It does not include any interest. sum of $2,000, representing the a.mount reimbursed by him to the Mr. McKELLAR. Why increase the amount over what American Employers Insurance Co. upon the forfeiture of two the Veterans' Administration recommended? immigration bonds executed by said company upon security fur nished by said Trifune Korac, conditioned upon the appearance Mr. GIBSON. There was one item left out of considera before the immigration authorities of Kirsto Temelkovlch and tion by the Veterans' Administration, namely, the expense . Kosta Simonvich, aliens, who, after the forfeiture of said bonds of the replacement of lavatories. Bids were invited for that and the payment of the amount thereof by the bonding com pany, were apprehended through the efforts o! said Trifune Kora.c work and the amount of the bid for the restorntion of the and subsequently deported. lavatories represents the difference between the amount the Veterans' Administration recommended and the amount the WILLIAM A. DELANEY , committee recommends. The Senate proceeded to consider the bill CS. 1901) for Mr. McKELLAR. Mr. President, I think the recom the relief of William A. Delaney, which had been reported mendation of the Veterans' Administration ought to be fol from the Committee on Claims with an amendment, on page lowed. If the Senator is willing to have an amendment to l, line 6, after the sum "$133.53 ", to strike out the words thait effect agreed to, I will not object to the consideration " with interest at 6 percent per annum from May 15, 1919 " of the bill. I move that in line 6, page l, of the bill, so as to make the bill read: " U ,000 " be stricken out and " $3,025 " inserted. Be it enacted., etc., That the Secretary of the Treasury 1s au Mr. GIBSON. Mr. President, the senior Senator from thorized and directed to pay, out of any money in the Treasury Iowa [Mr. DICKINSON] is greatly interested in this bill. He not otherwise appropriated, to William A. Delaney, former cap him tain, Medical Corps, United States Army, the sum of $133.53, in explained to me last evening that it was necessary for full satisfaction of his claim against the United States arising to be absent today, so I suggest that the bill go over until out of a payment made by the Quartermaster Corps, United he can be here. States Army, to Daniel E. Anthony, a soldier who fraudulently Mr. McKELLAR. Mr. President, that will be entirely represented himself to be a second lieutenant entitled to such payment, and for which payment the said William A. Delaney satisfactory. was held accountable. The VICE PRESIDENT. The bill will be passed over. The amendment was agreed to. UNIFORM SYSTEM OF BANKRUPTCY The bill was ordered to be engrossed for a third reading, The bill JAMES TULLEY HAZEL The title was amended so as to read: "A bill providing for The Senate proceeded to consider the bill CS. 896) for the payment of $25 to each enrolled Chippewa Indian of Min relief of Jam es Tulley Hazel. nesota from the funds standing to their credit in the Mr. McKELLAR. Mr. President, I should like to have an Treasury of the United States.'' explanation of that bill. The Secretary of War recommends BILL PASSED OVER against its enactment. The bill CS. 2800) to prevent the manufacture, shipment, Mr. THOMAS of utah. Mr. President, this bill presents and sale of adulterated or misbranded food, drink, drugs, a case which turns on a single day. and cosmetics, and to regulate traffic therein; to prevent the James Tulley Hazel, a captain in the Medical Corps, was false advertisement of food, drink, drugs, and cosmetics; and brought into the service on a given day, September 3. His for other purpases, was announced as next in order. acceptance of his detail was received in Washington on Mr. McKELLAR. Over. September 4. He claims to have telegraphed his acceptance The PRESIDING OFFICER. The bill will be passed over. on September 3; and if what he says is true-and he has ANN ENGLE two affidavits to evidence that what he says is true-he would have served 90 days during the World War. He was The Senate proceeded to consider the bill CS. 1526) for the relieved of duty on the eighty-ninth day, however, if his relief of Ann Engle, which had been reported from the Com enlistment is considered as beginning on September 4. mittee on Claims, with amendments on page 1, line 6, after "$1,500 ", to strike out "as compensation" and insert "in Mr. McKELLAR. Mr. President, will the Senator yield? full settlement of all claims against the Government "; and Mr. THOMAS of utah. I yield. on page 1, line 9, after the date "1930 ", to insert: Mr. McKELLAR. I note the following in the letter of Provided, That no part of the amount appropriated in this act the Secretary of War dated April 5, 1933: in excess of 10 percent thereof shall be paid or delivered to or There are numerous cases in which former officers and enlisted received by any agent or agents, attorney or attorneys, on account men have claimed a longer period of service than that shown by of services rendered in connect ion with said claim. It shall be the ofiicial records. I know of no peculiar merits in the case of unlawful for any agent or agents, attorney or attorneys, to exact, Captain Hazel which should single him out for relief that is not collect, withhold, or receive any sum of the amount appropriated extended to all others in the same category, and it is recom in this act in excess of 10 percent thereof on account of services mended that favorable action be not taken in this case. rendered in connection with said claim, any contract to the con Sincerely yours, trary notwithstanding. Any person violating the provisions of this GEO. H. DERN, Secretary of War. act shall be deemed guilty of a misdemeanor and upon conviction thereof shall be fined in any sum not exceeding $1,000. It seems to me that if that is true-and I have no reason So as to make the bill read: to doubt the statement i;nade by the Secretary of War in Be it enacted, etc., That the Secretary of the Treasury be, and regard to his records-it would not be fair to others in a he is hereby, authorized and directed to pay to Ann Engle, out of like situation to single Mr. Hazel out and give him consider any money in the Treasury not otherwise appropriated, the sum of ation that is not given to the others. $1,500 1n full settlement of all claims against the Government for personal injuries caused as a result of an accident involving an Mr. THOMAS of Utah. Mr. President, I doubt very much Army vehicle near Garden City, Long Island, N.Y., on October l, whether one could find another case exactly like this. The 1930: Provided, That no part of the amount appropriated 1n this case turns upon the decision of this question: When does a act in excess of 10 percent thereof shall be paid or delivered to person's service start, at the time of his acceptance or at or received by any agent or agents, attorney or attorneys, on account of services rendered 1n connection with said claim. It the time of the arrival of a message saying that he has shall be unlawful for any agent or agents, attorney or attorneys, accepted? In the civil law the question has not been de to exact, collect, withhold, or receive any sum of the amount cided. It seemed to the Committee on Military Affairs that appropriated in this act in excess of 10 percent thereof on account of services rendered in connection with said claim, any· contract a case of this type would seldom come up; and that if to the contrary notwithstanding. Any person violating the provi such a case did come up again, it should be decided upon sions of this act shall be deemed guilty of a misdemeanor and it.s individual merits, as this case was decided. upon conviction thereof shall be fined 1n any sum not exceeding Mr. McKELLAR. Mr. President, it may be that this is $1,000. a proper case, but I ask that the bill go over until we can The amendments were agreed to. examine it. The bill was ordered to be engrossed for a third reading, The PRESIDING OFFICER (Mr. DUFFY in the chair). read the third time, and passed. The bill will be passed over. BILL PASSED OVER CHIPPEWA INDIANS OF MINNESOTA The bill CS. 2850) to amend section 13 of the Federal The Senate proceeded to consider the bill CS. 2026) pro Reserve Act was announced as next in order. viding for payment of $50 to each enrolled Chippewa In Mr. REED. Over. dian of Minnesota from the funds standing to their credit The PRESIDING OFFICER. The bill will be passed over. in the Treasury of the United States, which had been re ONE HUNDREDTH ANNIVERSARY OF ADMISSION OF ARKANSAS ported from the Committee on Indian Affairs with an The bill CS. 2901> to authorize the coinage of 50 .. cent amendment, on page l, line 10, after the words "payment pieces in commemoration of the one hundredth anniversary of", to strike out "$50" and insert "$25 ", so as to make of the admission of the State of Arkansas into the Union the bill read: was considered, ordered to be engrossed for a third reading, Be it enacted, etc., That the Secretary of the Interior is author read the third time, and passed, as follows: ized and directed to withdraw from the Treasury so much as may be necessary of the principal fund on deposit to the credit of the Be it enacted, etc., That in commemoration of the one hun Chippewa Indians in the State of Minnesota, under section 7 of dredth anniversary of the admission of the State of Arkansas into the act entitled "An act for the relief and civilization of the the Union there shall be coined at the mints of the United States Chippewa Indians in the State of Minnesota", approved Jan 500,000 silver 50-cent pieces of such design as the Director of the uary 14, 1889, as amended, and to make therefrom payment of $25 Mint, with the approval of the Secretary of the Treasury, may to each enrolled Chippewa Indian of Minnesota, under such regu select; but the United States shall not be subject to the expense lations as such Secretary shall prescribe. No payment shall be of ma.king the models or master dies or other preparations for made under this act until the Chippewa Indians of Minnesota this coinage. shall, in such manner as such Secretary shall prescribe, have SEC. 2. All laws now 1n force relating to the subsidiary silver accepted such payments and ratified the provisions of this act. coins of the United States and the coining or striking of the same, The money paid to the Indians under this act shall not be subject regulating and guarding the process of coinage, providing for the purchase of material, for the transportation, distribution, and to any lien or claim of whatever nature against any of said redemption of ·the coins, for the prevention of debasement or Indians. · counterfeiting, for security of the coin, or for any other purposes, The amendment was agreed to. whether said laws are penal or otherwise, shall, so far as applica ble, apply to the coinage authorized by this act. The bill was ordered to be engrossed for a third reading, SEC. 3. The coins authorized by this act shall be issued only to read the third time, and passed. the Arkansas Honorar1 Centennial Celebration Commission, or its 1934 CONGRESSIONAL RECORD-SENATE 4895 duly authorized agent, in such numbers, and at such times as they the suggested operation at Johns Hopkins, which resulted shall be requested by such commission or any such agent, ~nd in recovery. This measure is to pay the bill for the last upon payment to the United States of the face value of such cams. named operation. Technically it cannot be paid out of BILL PASSED OVER War Department funds because he was operated on in a The bill (S. 3022) to amend an act entitled "An act to private hospital. This officer is now on active duty. amend sections 3 and 4 of an act of Congress entitled 'An The amendments were agreed to. act for the protection and regulation of the fisheries of The bill was ordered to a third reading, read the third Alaska', approved June 26, 19.()6, as amended by the act ~! time, and passed. Congress approved June 6, 1924-, and for other purposes , CUMBERLAND RIVER BRIDGE, TENNESSEE. was announced as next in order. Mr. KING. Mr. President, I should like an explanation The bill (S. 2953) granting the consent of Congress to of the bill. the Highway Department of the State of Tennessee to con The PRESIDING OFFICER. The Senator from Missis struct, maintain, and operate a free highway bridge across ~ippi [Mr. STEPHENS], who introduced and reported the bill, the Cumberland River at or near Carthage, Smith County, is not present. Tenn., was considered, ordered to be engrossed for a third Mr. KING. Let the bill go over. reading, read the third time, and passed, as follows: The PRESIDING OFFICER. The bill will be passed over. Be it enacted, etc., That the consent of Congress is hereby granted to the Highway Department of the State of ~ennessee SETH B. SIMMONS to construct, maintain, and operate a. free highway bridge and The bill R. W. Robbins reported on the air-mail situation in Wash and it is going to be pretty much our own fault if the laws gov ington, stated that Western Air Express and Transcontinental Air erning our business and the appropriations fall short of our Transportation, Inc., had bid 97¥2 percent of the maximum total desires. allowed on the new mid-transcontinental lines, and that another company called the " United Avigation Corporation " had bid 64 May I interrupt the reading of the letter to state that percent of the maximum total allowance. In this connection, he the declaration last read not only shows that the Pittsburgh stated, that due to irregularities in the bid of the United Avigation Aviation Industries Corporation, its agents and representa Corporation it was expected that Western Air Express and Trans continental Air Transportation, Inc., would be awarded the tives, were designedly reaching out to influence and control contract. legislation in Washington and in Harrisburg, but that they These proceedings were had and minutes of the executive were boastful, saying that if the laws enacted and the appro priations authorized fell short of their desires, it would be committee of Pittsburgh Aviation Industries Corporation entered of record subsequent the report of D. M. Sheaffer, thell: own fault. Yet, with all these facts in evidence, Mr. to Mellon calls me down for the very modest statement that the chairman of the executive committee of Transcontinental Pittsburgh Aviation Industries Corporation was a strong Air Transportation under date of July 15, 1930, 40 days political influence in Pennsylvania, when its officers and before the bids were opened, in which report Mr. Sheaffer agents were boasting that they could control the legislature, said: and secure whatever appropriations they desired from it. The Postmaster General having indicated that he could and I resume now the reading of the letter: would arrange so that an air-mail-contract award would be prop erly made to the central transcontinental, provided the two com I believe our present progress with the State legislature sub panies organized for the operation of the service, T.A.T. got to stantiates the position taken by Dick and me 5 or 6 months ago, gether with the Western Air Express on a plan to form an oper when we strongly urged that T. & W. A. should work out its ating company. intrastate problems without antagonizing any of our Harris burg friends. ·Thus it appears clearly from the records of the company One other matter I cannot refrain from calling to your attention, itself that 40 days before the bids were opened the officers and that is, the operation in and out of Bettis Field. I believe that it is only a matter of time before T. & W. A. is going to have and agents of the company were assured that this contract an accident as the result of using this inadequate field. I am would be let, as it was let, without regard to competitive quite certain that if you check up with your operating people, bidding, and with little regard to the fact that a competitor and particularly your pilots, you will find that I am stating the had bid 64 percent of the maximum which could be allowed, situation correctly. .I appreciate that the traffic department has its problems which whereas the Pittsburgh Aviation Industries Corporation bid must be consi~red. In my opinion, the matter of safety is first, 97 % percent. last, and always the most vital factor. Every dollar of traffic ob Mr. President, I know it is true that subsequently Mr. tained out of Pittsburgh during the next 5 years would not com pensate for an accident at this time. MacCracken secured adoption of a rule under which it was You will recall that I advised 4 or 5 months ago giving serious held that the lower bidder was not eligible to bid, but I sub consideration to taking the Pittsburgh Airways group out of the mit that this record warrants the conclusion that there was picture. I appreciate that under all the circumstances it was a distasteful t hing to contemplate. These boys are still on the a deliberate purpose to evade the provisions of the law and job, and continue to constitute a threat. I bielieve their present to secure a very liberal, if not an extortionate, arrangement program is to make a big splurge and try to either get in some in the matter of the payment for transportation. more money or to persuade some other group to buy them out. As a nucleus the Pittsburgh Airways outfit might well be of value The plan referred to included the following: to some outsiders who are anxious to get into this air-transport That a third party, namely, the Pittsburgh Aviation Industries game. It is my prophecy that, if no new mo~y is available by Corporation, which organization had done a great deal of valuable next fall and that, if some other outfit has not taken over Pitts work in developing a new air line across the State of Pennsyl burgh Airways, the organization will find it difficult, if not im vania, should have an equitable interest. possible, to continue operations throughout next winter. The threatening situat ion, however, promises to continue for the next -As a matter of fact, the record shows that Pittsburgh 4 or 5 months. Aviation Industries Corporation had no line and had never With all best wishes, very sincerely yours, operated a ship on any schedule. GEORGE E. HANN. · The minutes of the second meeting of the executive com A most remarkable communication. Let me bring atten mittee, of which Mr. R. K. Mellon was a member, show that tion also to a very long letter addressed to Mr. Scheaffer, by a policy for the corporation was adopted, which policy con Mr. Hann, under date of July 15, 1930. I shall not read the templated efforts to influence legislat1on both in Washing entire letter .but will place the same in the RECORD, and will ton and in Harrisburg. The minutes of the meeting of April call especial attention to certain paragraphs. 17, 1929, show: First, there is the paragraph that I already quoted, The officers of our company have established cordial relations namely: with Army and Navy officials in Washington and with Post Office I spent 2 hours yesterday with Mr. Humphrey, our executive Department through Postmaster General Brown and Second As chairman, and at least another hour with each lVIr. Braun and sistant Postmaster General, Mr. Glover, for the purpose of arousing Mr. Mellon. These are three of our most interested associates, all interest in the Pittsburgh situation. serving on the executive committee. I told you in New York that I did not think this deal as proposed would be acceptable to our Mr. President, attention now is called to a letter which, in people, and I find that I had not misappraised the situation in my opinion, is very significant. Many of the expressions the slightest. I fieel quite certain that at our executive committee meeting tomorrow the other members are going to take the same contained in this letter are, as any lawyer will say, and as position as those to whom I have talked individually yesterday almost any citizen will say, inconsistent with a policy of and today. square dealing. It is written on the stationery of the Pitts burgh Aviation Industries Corporation, Henry W. Oliver And then omitting some paragraphs, I quote further: Building, Pittsburgh, Atlantic 0816, dated May 2, 1931, and The· only reason that P.A.I.C.- is as follows: That is, the Pittsburgh Aviation Industries, Inc.- Mr. D. M. SHEAFFER, . has not been conducting scheduled transportation on these two Broad Street Station, P.R.R., Philadelphia, Pa. lines during the past year was because the conditions were not DEAR DAN: I am sorry that the " breaks " have not come . so that such as to permit an air-mail contract, and as to passenger serv you and I could s1t down sometime and have a little chat about ice, it has been our conviction that until the Harrisburg Airport T. & W. A. matters, but Dick tells me that he keeps you constimtly was available and ground facilities installed throughout these advised of any matters relating to this Pennsylvania bailiwick. two aerial highways, it was contrary to sound aviation pi:ogress Dick has been hopping over to Harrisburg very frequently re to fiy passengers over the Alleghenies with the existing lack ot garding aviation legislation, and my reports from him indicate safety precautions. pretty good progress. House bill 991 involving a $200,000 appro priation from the motor-gas fund has been meeting some oppo Omitting a portion of the paragraph: s~tion, and Dick is going to Harrisburg on Monday for a conference It is therefore, not from choice, but from necessity, that P.A.I.C. with General Martin. This has kindly been arranged for him by has not been engaged in scheduled service. Mr. W. L. Mellon. Now is the time to bring all possible influence to bear upon get Another paragraph to which attention is asked: ting legislative matters passed. When this legislature goes out, We approve heartily of this proposal, and we like the idea of it is going to be a long 2 years before we have another opportunity, this partnership, as well as believing in the soundness of one 1934 CONGRESSIONAL RECORD-SENATE 4907 major line as contrasted with several ownerships. We balk when a New York to Pittsburgh or New York to Columbus mail orily upon the terms. If P .A.LC. is not responsible for the air contract was advertised. We felt the same way regarding the ports in Pittsburgh, for the present construction of airways in Pittsburgh to Washington contract. Pennsylvania, for the Harrisburg airport, for the aviation legis The only reason that P.A.I.C. has not been conducting schlild lation now on the statute books, as well as for Pennsylvania's uled transportation on these two lines during the past year \Vas handsome appropriation of $250,000 for aviation advancement because the conditions were not such as to permit an air-mail con at least, we c2n claim to have done more than any other organi tract, and as to passenger service, it has been our conviction that zation. T.A.T. and W .A.E. cannot, in our estimation, have the until the Harrisburg Airport was available and ground facilities slightest claim to any credit. installed throughout these two aerial highways, it was contrary to sound aviation progress to fiy passengers over the Alleghenies Omitting a further portion of the letter, I quote: with the existing lack of safety precautions. I am sure that T.A.T. Therefore, is it not a fact that because of the Watres bill and has felt the same way. That our attitude has been correct is because of the Post Office Department's determination upon one clearly substantiated by the recently promulgated regulations of cross-country air line, as opposed to separate air-mail operators, the D~partment of Commerce requiring a certificate for passenger over which developments neither T.A.T., W.A.E., or P.A.I.C. had any operations; one of the requisites to obtaining such a certificate option, have served to place some additional value behind the being that the operation must be carried on over an approved otherwise sickly dollars which were valiantly struggling only 3 airway. It is, therefore, not from choice but from necessity that months ago to reduce tremendous losses on the two passenger P.A.I.C. has not been engaged in scheduled service. services of these companies. Conversely, has not the Watres bill And so, upon analysis this Pittsburgh company has done the and the resultant developments served to depreciate the pioneering only constructive businesslike thing, to wit: Devoting its efforts assets of the P.A.I.C., provided W.A.E. and T.A.T. are permitted to to developing conditions within Pennsylvania which would even capitalize the results of our hard-earned accomplishments, with tually lead both to air-mail and passenger operation. In view of our only recompense being the questionable privilege of supplying these conditions rapidly being developed-and I repeat, chiefly the new company with cash and matching our new dollars against because of our efforts-this Pittsburgh company adopted a defi your equipment dollars, which latter have only been brought back nite policy, which was to entrench itself in the strongest possible to life because of the Government's stepping in with Federal aid? position with trained personnel, both office and field to utilize these facilities. Until the Watres bill, we considered that our One further paragraph: efforts had been wisely directed and that our policy was dictated The Postmaster General is the final authority on this transac by sound business judgment. We were asking no favors but only tion, and unless T.A.T. and W.A.E. are agreeable to more nearly an opportunity to develop this Pennsylvania territory on the strict meeting the ideas of this Pittsburgh group, it was agreed at our merits of our business ability and in opposition to any outsiders, mee'ting this noon (Wednesday) that several of our executive com and again this would include T.A.T. and W.A.E. mittee would go to Washington and present our position to Mr. Now, through no fault or mistake of ours, the entire situation Brown and request his acting as arbitrator. takes a change. Contrary to the previous developments of air mail, the Post Ofilce Department has determined to coordinate I ask unanimous consent to have the entire letter printed this air-transportation business, mail, passenger, and express, in RECORD. at a time when it is possible to do so and not to permit another the situation like the railroads to develop which has defied the best The PRESIDING OFFICER. Without objection, it is so of minds as regards its unscrambling. ordered. In our opinion-and I am expressing the sentiments of the is several associates with whom I have talked-this new policy of the The letter as follows: Post Office Department is not only sound to the nth degree but [Pittsburgh Aviation Industries Corporation, control11ng Penn constitutes the most constructive step yet taken in aviation. School of Aviation, Pittsburgh Aerial Surveys, Pittsburgh-Butler Instead of a straw, it promises to be a life preserver. Under these Airport, Pittsburgh Aviation Management Corporation, Pitts new conditions, T.A.T. and Western Air Express (as regards pas burgh Aviation Securities Corporation, Pittsburgh Aircraft senger service) have received a merited reward for pioneering Agency Corporation, Pittsburgh Air Transport Corporation, Pitts passenger operations on a major scale. On the other hand, how burgh Metal Airplane Co., Pittsburgh River Airport) ever, P.A.I.C. has had its fond hopes blasted overnight, and 1n PrrrsBURGH, July 15, 1930. exchange for what we considered at least a 50-50 chance to control Mr. DANIEL SCHEAFFER, this Pennsylvania territory, it is suggested that we join forces with Transcontinental Air Transport, T.A.T. and W.A.E. in one mid-transcontinental line. Broad Street Station, Philadelphia, Pa. We approve heartily of this proposal and we like the idea of this DEAR DAN: I found yesterday that practically all of our execu partnership as well as believing in the soundness of one major tive committee were out of town and several of them on their vaca line as contrasted with several ownerships. We balk only upon tions. Two of the committee return to Pittsburgh tomorrow and the terms. If P.A.I.C. is not responsible for the airports in Pitts we are having them all together at luncheon to submit the pro burgh, for the present construction of airways in Pennsylvania, for posal which was discussed on Saturday in New York. the Harrisburg airport, for the aviation legislation now on the I spent 2 hours yesterday with :Mr. Humphrey, our executive statute books as well as for Pennsylvania's handsome appropriation chairman, and at least another hour each with Mr. Braun and Mr. of $250,000 for aviation advancement-at least we can claim to Mellon. These are three of our most interested associates, all serv have done more than any other organization. T.A.T. and W.A.E. ing on the executive committee. I told you in New York that I cannot, in our estimation, have the slightest claim to any credit. did not think this deal as proposed would be acceptable to our You may ask, "What has it cost you?" "Are we not contribut people, and I find that I had not misappraised the situation in the ing our intangible or organization expenses and our losses?" slightest. I feel quite certain that at our executive committee That is quite correct, but neither T.A.T. or W.A.E. are contributina meeting tomorrow the other members are going to take the same their entire assets as is being proposed in our case. Both of thes~ position as those to whom I have talked individually yesterday and companies are putting in airport facilities, trimotored equipment, today. large powerful engines, radio, etc., at depreciated value. These assets were necessary to W.A.E. and to T.A.T. in order that these As we view it, the Watres bill was primarily for the purpose of companies might develop the western and central territories over readjusting air-mail contracts on an equitable basis. Some con which they operated, and in regard to which they each claim tractors were receiving $1 or more per mile and others below 25 preferential right. It is actually a fact that P.A.I.C. has needed cents. Of course, this was unjust and had resulted only from the its tangible assets, an airport, smaller airplanes, shop equipment, wild hysteria during the days of aviation inflation. This readjust etc., to develop this eastern section of the proposed transconti ment was the principal object of the Watres bill. Because some of nental line. Our contribution might just as well have been a few the air-mail contractors were also developing passenger operations leased airport privileges had there been any airports available, and within their particular territories or spheres of influence, and be trimotored equipment, powerful engines, radio, etc., had circum cause of the Post Office Department appreciating the quandary of stances in Pennsy~vania not precluded the use of such assets in these unsubsidized passenger lines and the necessity of assisting any economical manner. Therefore, is it not a fact that because this important form of tr!\nsportation development, both :from the of the Watres bill and because of the Post Office Department's economic and military standpoints, it was finally determined to determination upon one cross-country air line, as opposed to sepa include in this bill a provision for assisting these passenger op rate air-mail operators, over which developments neither T .A.T., erators. It should not be forgotten, however, that the funda W.A.E., or P.A.I.C. had any option, have served to place some addi mental purpose of the bill was not to salvage passenger operations tional value behind the otherwise sickly dollars which were val but, rather, to utilize judiciously whatever additional post-office iantly struggling only 3 months ago to reduce tremendous losses air-mail funds might be available after granting rates sufficient to on the two passenger services of these companies. Conversely, has cover operating expem:es of the present mail contractors and after not the Watres bill and the resultant developments served to de taking care of such few additional new air-mail lines or extensions preciate the pioneering assets of P .A.LC., provided W .A.E. and as might seem economically sound. T.A.T. are permitted to capitalize the results of our hard-earned We, here in Pittsburgh, started 2 years ago to correct certain accomplishments, with our only recompense being the question deficiencies, both as regards our local community as well as the able privilege of supplying the new company with cash and match State of Pennsylvania. No one else had been the sliO'htest0 bit ing our new dollars against your equipment dollars, which latter interested until the Watres bill. We had put close to $1,000 000 have only been brought back to life because of the Government's in aviation in this section. We honestly feel that our company stepping in with Federal aid. has contributed, in a large measure, to the greatly improved con P .A.I.C. has devoted some $650,000 of tangible assets to develop ditions in this section and it has been our expectation, that due this Pennsylvania territory. In addition, some $200,000 has gone to our earned position we could afford to underbid other com into intangible efforts and losses. We are quite a.greeable to throw panies, including, iI you wish, T .A.T. and Western Air Express, our organization expenses and our pioneering losses into the pot 4908 CONGRESSIONAL RECORD-SENATE MARCH 20 with those of T.A.T. and W.A.E. We are strongly of the opinion, excessive multi.motored equipment. which is in eXistence today however, that an unbiased appraisal of the controvers! between only because of competition between the two companies over much us will generally establish that our $650,000 of tangible assets of the same territory, should not likewise be Wiped out on the were just as essential in developing this eastern section of the ground of noncontributing to the proposed new company's opera proposed line as were the $2,000,000 of flying equipment and other tions. The present figures, subject to minor adjustments, would assets which are being contributed by each T.A.T. and W.A.E. result in setting up a company of approximately $4,500,000 capital, It strikes us as eminently unfair if the Federal Government which would have roughly the following assets: should step in and by its action make T.A.T.'s dollar assets and Los Angeles Airport ______$1, 100, 000 W.A.E.'s dollar assets worth appreciably more, and at the same Multimotored passenger planes (figured approximately time depreciate P.A.I.C.'s dollar assets, which is unquestionably 40 in number>------1,450,000 the case if the present proposal is justified. This would clearly High-powered motors for these passenger planes not be equity to P.A.I.C., in that all three sets of dollars were de (figured approximately 120 in number)------ 950,000 voted exactly to the same purpo~xcept in dllferent sections of Airways, radio, operating equipment, ground facilities, the country-to wit, aviation advancement and development. etc ______We feel that P .A.I.C. is actually entitled to more consideration Cash subscribed by T.A.T ______500,000 from the Post Office Department than either T.A.T. or W.A.E. Cash subscribed by P .A.I.c ______150,000 on the real merits of past history. Both of these latter com 350,000 panies went into the business of carrying passengers as a means of paying dividends to their stockholders. It was a chosen ac Total------4,500,000 tivity; and had competition between them not arisen, and h8:d These figures are, of course, only tentative and yet they are the it been possible to charge the fares and get the pay loads origi only ones presented to us for consideration. It is proposed that nally contemplated, it would have become a profi~able lll:1de~ T.A.T. and W.A.E. each receive 46~ percent of the total stock and taking without Government assistance. Both T.A.T. s air-rail-arr P.A.I.C. 7~ percent. line and W .A.E.'s Los Angeles-to-Kansas City line were inaugu Despite the expressed desire of P.A.I.C. to sit in, at least as an rated without any thought or anticipation of Government assist observer, during the discussions between T.A.T. and W.A.E., in ance. Furthermore, these two passenger services tapped con which we felt we were vitally interested, it was not apparently siderable territory, or at least joined together major populated agreeable. We are now in the position of learning for the first centers where air activities were already in progress and on the time your mutual arrangements and P .A.1.C. is in vited to the road to development. On the other hand,_ P .A.I.C. was org~nized table, at the last moment, not as a minority partner, but more very largely because of a civic movement in a territory which at like a rank outsider, who W.A.E. and T.A.T. unfortunately regard the time was barren, to say the least. Our efforts have not been as having a possible nUisance value. It is quite a step down for all primarily directed toward money making, except insof~r as our of these men out here in Pittsburgh to suddenly realize that company might develop this barren section to the pomt where their financial backing and their efforts over 2 years of what tbey air-mail contracts would be awarded and, if we were the success deemed most constructive work, has now apparently resulted only ful bidders, our profitable compensation received. in their company having a nuisance value. We are not overly impressed with the idea of matching our new To get right down to the meat of this matter, P.A.I.C. very dollars against a Los Angeles airport costing t~e new company candidly states to W.A.E. and T.A.T. that just as these two com more than a million dollars. Such an expensive terminal will panies take the position that our $650,000 of tangible assets are constitute about 20 percent of the total assets. This new airport not deemed "earning assets" for the proposed transcontinental certainly is not justified for the sole operations of this trans company, just so P.A.I.C. cannot agree that a $1,100,000 terminal continental line and will not be for many years to come, and the in Los Angeles (the only airport to be owned on the entire line) and nearly $2,500,000 of purely passenger equipment are properly question arises, from a purely earning stan~po~nt, as t~ the better business policy of lea.sing the necessary facilities of this port. to be considered as "earning assets" for this proposed company. Neither are we impressed with $883,000 of F-32s, F-10-As, To the best of our knowledge, this new company is to conduct a Wasps and Hornets of W .A.E. and $1,510,000 of Fords and Wasps mail-carrying operation and is not to have passenger service as the of T.A.T.-Maddux. Here is about $2,350,000 of large, multi predominating factor. The Government is to pay us for carrying the mail, and certainly were we organizing this company de novo, motored passenger equipment, which c;ioes n~t ha~oni~e with t~e idea of this transcontinental operat1on bemg primarily a _mail we would not be permitted to utilize our total $2,500,000 for equip service. T.A.T. and W .A.E. are in the passenger-carrying busmess ment in the purchase exclusively the big passenger planes. and are set up with equipment and personnel for this purpose. We believe eventually that air transportation will develop to the Because of proposed Federal air mail, it is the apparent purpose point where passengers, mail, and express will be carried together. on the part of both of these companies to transfer over any of as on the railroads, on one large plane particularly designed and constructed for this combined service. We believe that these these passenger-carrying planes to . some form ~f mail. se:vice. combination planes will depart on hourly schedule, day and This is certainly expediency, but lS it econom.Ically Justrfied? night. We have the faith that this is to be the eventual solution Although conceding that these multimotored planes may be use of air transportation, but this is not in our judgment the picture ful to the post-office service in the general schem~ of preempting of tomorrow. and a company being organized today to serve the a certain space for mail on scheduled passenger trips, at the same best interests of the Post omce Department, which means the time the entire air-mall system developed over many years must company's best interests, cannot possibly use economically the type be discarded if this new proposed company ts not going to utilize and the excessive number of multimotored equipment with which the present type of mail ships for any operations. Or is it pro it is proposed to start this company. posed that our new dollars should be utilized for the purch~e We believe that our $350,000 cash subscription will be utilized of these single motored mail ships. It rather_ looks ~hat way. Wlll these single motored mail ships :flying at rught with the greater for the purchase of single-motored specially designed mail planes such as are today in use, and the equipping of these mail planes mail loads at greater speeds and with more economy bring in the with radio, etc. This $350,000 will be approximately one seventh greater revenue to the proposed company, or will the combined of the amount of equipment for which T.A.T. and W.A.E. are mail and passenger ships, even with some preempted space reve receiving capital stock. We contend that unless your $2,500,000 nue, constitute the company's greatest service to the Post Office of multimotored passenger equipment can earn in mail operations, Department? exclusive of passengers, seven times the amount which the $350,000 Unless it ts the intention of the Post Office Department to of mail equipment will earn, that our contribution in cash to the revamp the present mail system and to eliminate the use, as at new company is entirely disproportioned, because after all is present, of single motored mail ships and concentrate ~pon the said and done, this transcontinental line is being set up by development of combining loads of passengers and mail we are T.A.T., W.A.E., and P.A.I.C. only to take advantage of the Post strongly of the belief that for a number of years the present single Office Department's contribution by subsidizing to the advance motor method will remain in vogue. This would mean that all of ment of air transportation. T .A.T.'s and W .A.E.'s $2,350,000 of multimotored equipment, or at The Postmaster General is the final authority on this transac least a goodly portion, would not produce as much mail revenue tion and unless T.A.T. and W.A.E. are agreeable to more nearly as would the single motor mail ships to be purchased with the meeting the ideas of this Pittsburgh group, it was agreed at our dollars supplied by our Pittsburgh company. This in turn would meeting this noon (Wednesday) that several of our executive simply mean that indirectly P .A.I.C. was joining with the Post committee would go to Washington and present our position to omce Department in subsidizing the passenger operations of Mr. Brown and request his acting as arbitrator. If our position T.A.T. and W.A.E. is untenable or we are asking more than that to which we are In the proposal to combine the efforts and assets of T.A.T, justly entitled, we feel that in justice to ourselves and our stock w .A.E., and P .A.I.C. on some basis equitable to each company in holders that this information should come to us from head the working out of a midtranscontinental mail line, it is ap quarters in Washinaton. At our meeting today (Wednesday) we parent that T.A.T. and W.A.E. have each questioned some of the had not only a q'li'orum of our executive commit tee, but also assets of the other as not constituting a contribution to this New about 15 members of our board of directors, and several of our York to west-coast project. After several weeks of negotiations, largest stockholders. I was instructed to adyise both T.A.T. and T.A.T. and W.A.E .. without in any way consulting P.A.I.C. during W .A.E. that P.A.I.C. is going to insist, up to the court of last re their discussions, have finally gotten together. These two com sort, upon a 10-percent interest in this company, 5 perc~nt of panies both finding themselves in the passenger-carrying business, which we will contribute in cash, but not to exceed $250,000 m the with approximately $2,500,000 of equipment suitable for this initial organization (on the basis of a $5,000,000 corporati?n being passenger type of operaticn and seeing only one way out, and formed) and the remaining 5 percent to be in stock dellvered to only one way to turn losing passenger operations into revenue P.A.I.C. for our 2 years of pioneering effort and as some measure producing through a Government subsidy, both T.A.T: and W .A.E. of compensation for these tangible and .intangible_ assets upon have faced the inevitable, and each of these comparues has con which we place considerable value and without which we would ceded to wash out its mutually agreed upon noncont1·ibuting not now be negotiating for a position in this new company. The assets. It is quite a question as to whether or not some of ~his only other alternative discussed at this meeting today was to trade 1934 CONGRESSIONAL RECORD-SENATE 4909 out of the new company some of the $2,500,000 passenger equip I resume now the reading of the letter of the president of ment, which we consider very excessive for a mere transcontinental P.A.I.C. to Mr. Scheaffer: air-mall operation, as we understand such an operation to be. The Los Angeles airport situation is also a matter which we would ex.: You have no idea of the amount of work that has been involved pect to discuss with Mr. Brown if T.A.T. and W.A.E. continue to in accomplishing this result. As far as T.A.T. is concerned, it feel that none of our tangible or intangible assets or our efforts in stopped at Columbus and until very recently has had no interest pioneering this Pennsylvania section, and our rather sizable east of that terminal. From Columbus to the West coast T.A.T .. losses are not considered as any contribution to this air line, and at its own cost, has put in a lot cf expensive facilities, some of to this air-mall contract, other than a privilege to purchase stock which will and others of which undoubtedly will not contribute for cash. to a businesslike operation of the midtranscontinental mail and Some of the other transportation stocks are today selling at passenger line. In the rearrangement of the initial conception of low prices and in some cases, considerably below real value. As a air-rail-air transcontinental service to a new program of all-air purely business risk, our Pittsburgh funds might more advan service, including air mail, we here in Pittsburgh do not feel, tageom:.ly be speculated in some of these stocks. as one of the three parties in the new transcontinental company, Personally, I shall be pleased for you and Harris to come out we should be left out of the discussions and just how this re here on Friday and meet our executive committee and hear from vamping should occur, because the determination of the usable them first-hand what I have endeavored to explain in this letter. assets of Western Air Express, T.A.T., and P.A.I.C. must eventually Very sincerely yours, determine the stock interests of these three companies. GEORGE R. HANN. I pause in the reading to give emphasis to the next sen Mr. ROBINSON of Arkansas. Some two or three of the tence, the significance of which cannot fail to impress itself paragraphs of this letter I have already submitted in part. on anyone who hears it. Emphasis is given to them because of their significance and It must also be kept in mind that airports and other fac1lities the peculiarity of some of the declarations which they constructed with public funds may very well have a comparable contain. value to like facilities privately owned and developed. I wish now to bring the attention of the Senate to a letter There is an assertion, as I interpret it, that the Pitts from Mr. George R. Hann, president of the Pittsburgh Avia burgh Aviation Industries Corporation, having lobbied and tion Industries Corporation to Mr. Daniel Scheaffer, Trans worked through the legislation appropriating the funds re continental Air Transport, dated July 5, 1930. This was f erred to, was entitled to be reimbursed for the amount of more than 40 days, or approximately 40 days, before the the funds which the people of Pennsylvania had paid; and bids were opened. I quote: yet they tell us, and Mr. Mellon says, that it is wrong to Conditions have changed somewhat, which makes our partner say that the Pittsburgh Aviation Industries Corporation was ship arrangement, as you say, probably unworkable. However, a strong political influence, and it is wrong to imply that, there appears to be another partnership transaction in the making, with regard to which I gathered from your conversation on Thurs as among the larger stockholders of this company, there was day, you were undertaking to act for and protect the interests of any other motive than that of performing "a civic duty." P.A.I.C. As I very forcefully told you and Mr. Cuthell in Wash I am perfectly willing to leave the issue on this state of ington one afternoon, this Pittsburgh company is not a stepchild, the record. Anyone who reads of the manipulations and and we must insist upon working out our own problems, which means that in any final determination of this transcontinental the maneuverings and combinations, and of the pressure line, T.A.T., Western Air Express, and ourselves have got to sit that was exerted by these representatives of the company, around the table and work it out. and boasted of, is at liberty to say, if he chooses to do so, We have been at work out here in PittsbU!'gh for 2 long years, that the inspiration was solely civic pride and civic duty, doing a job which was either too difficult or not of sufficient inter est for anybody else to tackle. The airport situation in Pittsburgh but under it, and through it, and as inspiring it, I read received its momentum from the work of our company and the the motive, the design, to take advantage not only of com backing of our business associates. It required over a year of hard petitors but of the Government itself. "A strong political work to bring about the splendid Harrisburg Airport, which is influence in Pennsylvania!" I might have said "in Wash going to prove the key to crossing these Allegheny Mountains. It took us many months and continuous trips to Harrisburg and ington as well as in Harrisburg." Washington to bring about the original survey of the New York That it may not be said that this claim of the right to Columbus Airway. Very largely through Dick Robbins' efforts, we are responsible not only for the State of Pennsylvania appropriat reimbursement on the part of a private corporation for a ing $250,000 for aviation advancement within the State but also fund appropriated by the legislature at Harrisburg was a for the coordination of efforts between the State aeronautics com careless expression on the part of the writer, I quote further mission and the Department of Commerce in the actual building, from his letter: which is now going on, of the intermediate fields and other ground aids which constitute a real aerial highway between New York and This letter is written after a discussion with members of my Columbus. executive committee and is for the purpose of bringing to your You will readily appreciate that after working 2 years--days, attention the necessity of representatives of these three companies nights, holidays, and Sundays--developing situations and facili getting together and knowing where each company stands, and ties which would permit a transcontinental mail and passenger that the final agreement should be presented to Mr. Brown by all line through Harrisburg and Pittsburgh to St. Louis, we are not three representatives in a conference with him at the same time. going to be content to sit back and accept whatever may be handed to us. The matter has been clearly presented on two I suspend reading again for a brief comment: This letter occasions to our executive committee, and I am but voicing our shows that there was an organized e:ff ort upon the part of unanimous opinion when I say that we consider that P.A.I.C. has representatives of certain of these companies to disregard preempted more than anyone else the territory between Columbus the law regulating the letting of air-mail contracts and to and New York, and we are going to make every effort to protect our interests in this territory. Also we have kept the Post O.:fice enter into a scramble among themselves for advantage, an Department advised of our work since the very beginning, looking advantage which proved expensive to the Government. Is to the very situation which now exists. there anyone who hears that evidence who is in doubt for Furthermore, P.A.I.C. is not going to be penalized for having been keen enough and on the job to the extent of getting the a moment that before the contracts were let there was an State of Pennsylvania and the State Aeronautics Commission to arrangement that this territory should be parceled out, pre pay out of public funds for building the aerial highway connecting empted, if you please, and that the contract should not be New York with Columbus. let in accordance with the law requiring it to be let to the I suspend reading for a moment to point out the fact in lowest bidder? I resume the quotation: reply to Mr. Mellon's letter expressing resentment at my The necessity of T .A.T. and Western Air Express getting together statement that the P .A.I.C. was a strong political influence involved the territory from Columbus west and has nothing what soever to do with the section from Columbus to New York. in Pennsylvania, that in this letter the head of the cor When that latter section is brought into the picture, it immedi poration boasted that it had secured public funds for the ately becomes necessary to bring P .A.LC. into the conferences as a building of an aerial highway connecting New York with partner. It is unnecessary for us to get into another jam, but we. Columbus; that it had worked 2 years in the face of very here in Pittsburgh, have too much at stake to permit this mid transcontinental line to be finally set up without our actively great and almost insurmountable difficulties, and that it participating. would not be content with accepting merely what was Both Dick and I are holding ourselves in readiness for any handed it. Does that look like it regarded itself as a strong conferences which you and Mr. Hanshue may desire to hold with political influence in Pennsylvania? Is there any valid us, and have so advised Mr. Hanshue. Yours very truly, ground for resenting the declaration that P.A.I.C. was a GEORGE. strong political infiuence in Pennsylvania? (George R. Hann.) 4910 CONGRESSIONAL RECORD-SENATE MARCH 20 I read now from a report or statement signed by Mr. pany, called the United Avigation Corporation, had bid 64 percent of the maximum total allowed. In this connection he stated D. M. Scheaffer, chairman of the executive committee of that, due to irregularities in the bid of the United Avigation T.A.T., under date of July 15, 1930, still a long time Corporation, it was expected that Western Air Express & Transcon before- tinental Air Transport, Inc., would be awarded the contract. Mr. BLACK. Forty days before. I do not digress to comment at length on that statement, Mr. ROBINSON of Arkansas. Forty days, as suggested and yet it is said there was no political infiuence, yet it is by the Senator from Alabama, before the contracts were let. said by Mr. Mellon that the subscriptions to the stock in Now listen to this: that corporation to the amount of $24,000 by members of The Postmaster General having indicated that he could and his family were made merely in the performance of a civic would arrange so that an air-mail contract award would be prop erly made to the Central Transcontinental providing the two duty and were inconsequential. companies organized for the operation of the service, T .A.T. got Mr. President, this record shows clearly and conclusively together with the Western Air Express on a plan to form an that there was a combination among the agents and repre operating company on the following basis, namely: That our physical property on the line or route should be put sentatives of these certain companies, including the Pitts into a new company at its depreciated value, and any difference burgh Aviation Industries Corporation, for the express pur in these property accounts should be made up by dollars on the pose of securing mail contracts in disregard of the provision basis of both companies having a. like interest in the new trans of law which requires their letter to be to the lowest bidder. continental company; that a third party, namely, the Pittsburgh Aviation Industries Corporation, which organization had done a It shows that they quarreled among themselves as to what great deal of valuable work in developing a new air line across the their respective rights were. They parceled out the teui State of Pennsylvania, should have an equitable i'llterest. tory of the lines running from one coastline on the conti Now I read an excerpt from the minutes of the twenty nent to a remote coastline on the other side of the continent. second meeting of the executive committee held on July 16, They finally reached an agreement, long before the contracts 1930. May I point out the fact, Mr. President, that the were let, that they would divide up the territory and give executive committee was very busy. It held, according to each other mutual arrangements and benefits, in violation of the notes I have here, something more than 26 meetings the law, in violation of the practices of common honesty. during the pe1iod when arrangements were being made to The record shows beyond a shadow of doubt that master secure these contracts. I quote: ful forces were organized in Pittsburgh, Pa., and members of JULY 16, 1930. the Cabinet gave their services to a combination which was The president then outlined the proposition as follows: unlawful, to a collusion which was fraudulent. Tell me that That a new company, with approximately $5,000,000 in cash the Postmaster General had any right to assure these people and physical assets, was to be formed for the carrying of mail, that they should have a contract at approximately $1, or express, and passengers over the proposed New York-Pittsburgh 97:Y2 Los Angeles air line by Western Air Express, Inc., Transcontinental percent of the maximum total allowable, that they and Air Transport, Inc., and Pittsburgh Aviation Industries Corpora no others should have the contract, and I tell you then that tion, P.A.I.C. to have an interest of from 5 to 10 percent or the your conception of law and righteousness and fair dealing is amount equivalent to the distance from New York to Columbus. so different from mine that I cannot ai·gue the matter any Pausing for a moment to comment, P.A.I.C. won its con further. tention. It claimed that it was entitled to have parceled PHILIPPINE INDEPEl'IDENCE out to it the distance between New York and Columbus, During the delivery of the speech of Mr. ROBINSON of and that was taken into consideration in working out the Arkansas, arrangement of the alleged partners. I continue the The PRESIDING OFFICER. The hour of 2 o'clock hav quotation- ing arrived the Chair lays before the Senate the unfinished That this new company would be granted an air-mail contract business. by the Post Office Department of the entire route of 3,600 miles, The Senate resumed the consideration of the bill (S. 3055) the rate to be approximately $1 per mile; that operations would start in the early fall, with a daily mileage of approximately to provide for the complete independence of the Philippine 7,200. Islands, to provide for the adoption of a constitution and a farm of government for the Philippine Islands, and for other I ask now-and I want someone who knows to answer purposes. how did this executive committee, how did Mr. Scheaffer, the chairman of the executive committee of T.A.T., Inc., TEMPORARY RELIEF OF WATER USERS ON IRRIGATION PROJECTS know 40 days before the bids for the contract were to be The PRESIDING OFFICER (Mr. O'MAHONEY in the chair) opened that the Post Office Department would grant a con laid before the Senate the amendment of the House of tract to this new company at approximately $1 a mile and Representatives to the bill CS. 2534) to further extend the that the daily mileage would be approximately 7 ,200 miles? operation of the act entitled "An act for the temporary Such a statement made by an intelligent business man is relief of water users on irrigation projects constructed and inconsistent with any other theory than that the arrange operated under the reclamation law", approved April 1, ment had been worked out with the Postmaster General. 1932, which was, on page 2, line 2, to strike out all after the They knew that he would go through with the deal which date " 1934." down to and including " 1934 " in line 8, and to they were seeking to arrange. If any Senator has another insert: theory in explanation of how the head of this corporation The Secretary of the Interior is further authorized, upon the was able to advise his executive committee and others that acceptance by the Uncompahgre Valley Water Users Association o! a contract would be made to that particular company at a the Moratorium Act of April 1, 1932, and its amendments, includ ing this act, to enter into a contract with the association deferring certain price without regard to other bidders, I should like the initiation of its drainage construction program until January to have him rise now and give his answer. No one answers. 1, 1936, and permitting the completion of said drainage program No one can answer. during the years 1936 to 1941, both inclusive, under the conditions set out in the act of January 31, 1931 (47 Stat. 1947), as herein I read now from the minutes of the twenty-fifth meeting modified. of the executive committee, August 29, 1930: Mr. ADAMS. I move that the Senate concur in the Upon motion duly made and seconded, it was unanimously Resolved, That the agreement signed by the President with amendment of the House. Western Air Express & Transcontinental Air Transport, Inc., call The motion was agreed to. ing for a 5-percent interest ($250,000) in the new corporation to be capitalized at $5,000,000, and to be organized for the purpose CANCELATION OF AIR-MAIL CONTRACTS of carrying mail, express, and passengers from New York to Los Angeles and San Francisco via Pittsburgh and other intermediat.e Mr. FESS. Mr. President, I shall go no further in the points in exchange for a half interest in the Pittsburgh-Butler discussion today than to deal with what the Senator from Airport, be approved. Arkansas [Mr. ROBINSON] has read at his desk, similar to the R. w. Robbins then reported on the air-mail situation in Wash performance last Thursday, in presenting the best defense ington, stating that Western Air Express & Transcontinental Air Transport, Inc., had bid 97V2 percent of the maximum total al of the action in canceling the air-mail contracts that the lowed on the new mid-transcontinental lines and that another com- Post Office Department can send here. 1934 CONGRESSIONAL RECORD-SENATE 4911 Mr. ROBINSON of Arkansas. Mr. President, will the been assailing the Mellons on the ground that they want to Senator yield? control do not realize that when the Mellons want to con The PRESIDING OFFICER (Mr. POPE in the chair). trol they do not limit themselves to 5 percent of a corpora Does the Senator from Ohio yield to the Senator from tion's stock. They do not deal in that sort of thing if they Arkansas? desire control. Mr. FESS. I yield. All the Mellons combined owned less than 2,500 shares in Mr. ROBINSON of Arkansas. That statement is without a corporation that issued 26,000 shares for the purpose of any authority either in fact or reason. building an airport costing somewhere between three and Mr. FESS. Then, I withdraw it. five million dollars in a city of a million and a half people; Mr. ROBINSON of Arkansas. The Post Office Department and yet because these public-spirited men, responding to has not communicated with me. I asked the clerk of the the local pride of that city, attempted to give it air facilities, Black investigating committee to supply me with certain they are impugned and assailed on the ground of so1·did documents which I was informed were in the files of the and corrupt purposes. committee. They were supplied to me and I have read I cannot conceive of a great enterprise of any general them. If the Senator thinks he is going to make progress value to the people of Pittsburgh that would not include the by that kind of insinuation, I tell him now that, in my judg name of one or more of the Mellons, and yet it seems to be ment, he is very seriously mistaken. assumed in ·some quarters that their interest means some~ Mr. FESS. Very well. We will proceed in our own way thing corrupt. To me it is pitiable to see how far men will in this discussion. I shall not ask the approval of the go to impugn the motives of others who may differ from Senator from Arkansas as to how I shall proceed. I propose them on questions of public policy. to present the testimony and take my own time to do it so Now, we are told by the Senator from Arkansas that there that the country may understand the purpose of this effort. was a corrupt deal in that the lowest bidder was discrimi I propose, also, to submit the testimony in refutation of all nated against and did not get the contract, and the law was the allegations which have been made against the legality violated. of the contracts. In the first place, the law did not require competitive bid- · As to the Pittsburgh Aviation Industries Corporation, I ding. There were competitive bids, but there did not have have never made any very careful examination of the per to be competitive bids. All the transcontinental routes for sonnel of the officers or board or the efforts they have put which contracts were made were let by competitive bids, forth to facilitate the Air Mail Service from the center of including this one. Now the charge is made that the re Pittsburgh. It is obvious that any plan to build an airport quirement for competitive bids was violated because the con in such a difficult terrain as that surrounding Pittsburgh tract did not go to the lowest bidder, meaning that the would require an enormous amount of money, first because lowest bidder was the Avigation Co. of the congested condition of the population in that center. Mr. President, Mr. CLYDE KELLY, the distinguished Repre While Pittsburgh proper has a population of only a little sentative in Congress from Pittsburgh, having, I think, with over 500,000, greater Pittsburgh, including the entire dis out interruption served his district since 1913, came here trict, will run considerably over 1,500,00-0 in population. originally as a Progressive Republican, and maintains his Anyone who is acquainted with the physical contour of the progressiveness down to this day. He was strongly opposed area surrounding Pittsburgh in which this vast population to the views of Postmaster General Brown, who told him is congregated will understand the great difficulty in finding that where there was only one line competitive bidding was in that hilly locality a convenient, level place adapted to merely a myth. Mr. KELLY did not agree with Mr. Brown meet the requirements of the people of that State, and at the on that particular question. There were a number of points same time, under the regulations of the Department of of difference between Mr. Brown and Mr. Kelly. I men Commerce, affording a sufficiently large field to answer the tion that to indicate the kind of witness Mr. KELLY would purposes of an airport. make. He has discussed this particular Avigation Co. bid, When it came to furnishing the equipment, it was evi and he did it only last month. Let me read what Mr. dent that money would have to be provided. Mr. President, KELLY said on February 24 on the identical item to which I hold in my hand a list of the directors of the Pittsburgh attention is called by the Senator from Arkansas, the Aviga Aviation Industries Corporation. It has on it 41 names. tion Co. bid that was not accepted. These names read like the Blue Book. The list represents Mr. KELLY says: the brains and financial ability of that section. On this list This ruling- are the names of the men of greatest influence-financially, Meaning the Postmaster General's ruling- politically, and socially-in that great center. It was essen was accepted by everybody concerned. The United already bad tial for them to be there. There was one man who was a contract for the northern transcontinental from New York to prominently identified with an effort to establish an air San Francisco. The midtranscontinental and the southern trans continental were advertised for bids. The route from New York passenger service and to get a mail contract for ai route hav to Los Angeles was awarded to the Transcontinental & Western ing access to Pittsburgh, but he alone could not passibly give Air, and the route between Atlanta and Los Angeles was awarded the service. In the first place, he could not secure the to American Airways. Neither was an extension. Now, the letter of Postmaster General Farley, which contains physical equipment. It was humanly impossible for him to his basis for cancelation, raises another charge against the Trans do it, and he could not induce these influential men to back continental & Western Air, from the directly opposite point con him up with sufficient financial resources to enable him to tained in his first charge. He states that this route was adver carry on the work successfully; and yet the community in tised for bids, but that T.W .A. was the highest bidder. Then he quotes the amount that would have been saved during the entire terest of that great center was sufficient to enlist the finan period if the low bid had been accepted. cial assistance of this group of men. On this list are the names of some of the Mellons. There Mr. KELLY proceeds: is W. L. Mellon. There is Richard K.. Mellon. The secretary I knew something of that procedure while it was happening. The route was advertised, and there were two bids. United Aviga of this corporation was before the Post Office Committee tion and T.W .A. this forenoon, and he gave some information which the Senator from Arkansas ought to have, and which he will U'1ited Avigation is the one to which the Senator referred. get by tomorrow. That information is that of the 26,000 United Avigatlon was the lowest bid, and I was interested in seeing that there be fair competition with success to the lowest shares issued by this corporation, 2,400 are owned by the responsible bidder a.s required by the law. Mellons mentioned, and one of the Mellons resigned from the directorate before a contract was secured. If, in a group This is Mr. KELLY speaking: of men such as is here represented, a Mellon owning 5 per These two bids were placed before the Comptroller General, cent of the shares would be regarded as having a control.ling and he made an exhaustive investigation. In all my experience with this omcer he has fought firmly and against every pressure interest in the corporation, then I do not know what "con for the principle that the lowest bidder, who 1s responsible for trolling interest" means. I am amazed that those who have carrying out the contract, shall be given the contract. · 4912 CONGRESSIONAL RECORD-SENATE MARCH 20 And I can testify to that characteristic of General McCarl. There is a line going east and west, another one going However, after his thorough examination of all the facts he north and south. The line from Washington to Cleveland ruled that the T.W.A. was the lowest responsible bidder. He felt goes by way· of Pittsburgh, then by way of Toledo, although that it was his duty to make such a ruling, and it was made a it misses Toledo 15 miles to the south, over South Bend to part of the public record. Even then I suggested to United Aviga tion that they attempt to prove their rasponsibility in court, Chicago, landing at the famous Chicago airport. That was but this was not done. Under all the facts no blame can be such an important route that Mr. Brown insisted upon its attached to T.W .A. for this particular procedure. being under not only the control but the actual operation of So much for the indictment that the Avigation Co., the a company which was not only financially responsible but assumed lowest bidder, had not gotten a contract, and that which could be depended upon to make the advances neces it had been given to T.W.A., which was not in pursuance sary in a rapidly growing and new service. A man with no either of law or of justice, as was said by the Senator from means could not build a plane costing $250,000, as the late Arkansas. The highest authority we have on the question of Boeing planes cost. A line flying planes with single motors whether a payment can be made in accordance with law and open cockpits could not long be maintained. Not only approves what was done, and states that it was in accord were financial resources necessary but also experience and ance with law. That ought to be sufficient, without anything the labor of research workers. Mr. Brown was anxious to further being said, as to the legality of the rejection of the get behind the aviation service the assistance of General aviation bids. Motors. Mr. President, we are told by the Senator that Mr. Ball Mr. President, I regret that when the Postmaster General did not have his rights respected, and that he had the sought the assistance of the greatest scientific and research pioneer rights in Pittsburgh. I want to give some facts in ability in the world, immediately he was charged with a relation to that contention. desire to discriminate against someone and in favor of As is well known to the Presiding Officer who now honors someone else. Mr. Brown had one concern, and that was the Senate by presiding CMr. O'MAHONEY in the chair), to build up the aviation industry, and in order to accomplish Postmaster General Brown took pride in seeing a fine service that purpose certain things had to be done. One necessity established in the Capital City of the United States. I naturally was money, and another a willingness to expend knew about that, because he frequently spoke of it. that money, and another a venturesomeness that would lead Mr. President, some of us have the hope that Washington people to say, "We will try this new thing." It was only is to be the model city, not only of the United States but upon such a basis that a new industry, hazardous as this of all the world. It ought to be. Ever since I have been one is, could ever be built. in Congress I have voted for such improvements as looked I do not deny that a group of men such as are on the toward making this city the one place to which any citizen directorate of the Pittsburgh Aviation Co. were influential. of the United State would come if he desired to find a Of course they were, and if it were charged that they were model for the cities back home. In other words, we want influential politically, I would not deny the allegation. I the finest streets to be found anywhere in the world, and should think they would be. But I do resent not only the we ought to have them. We want the finest parks to be inference but the allegation that these men were actuated found in any of the cities of the world, and we ought to by sordid motives in their efforts to get a contract and that have them. We want the finest police force, and the best some competitor was being discriminated against when they fire protection. We would like to have the best sanitary sought the contract. conditions in the world. Having been a school teacher in I resent the suggestion that in building a modern air line, other days I want to see established here a school system Pennsylvania, with her 9,000,000 people, industrially one of of such a type that it will serve as a model for every city in the richest communities of all the world, could have been the United States, not only in the matter of buildings but animated by a corrupt impulse. It is not reasonable to in the physical equipment with which the pupils work. I think so. I do not think anybody would make such a charge have always had that feeling, and just at this moment I except to back up some unfortunate allegation that was am concerned about our facilities in connection with the made before the facts were known. air service, because we do not have proper facilities. Our This company being as well equipped as it was, with large airport is inadequate. There is an interest in establishing ability financially, could be safely dealt with, with the as a good airport here, but there is conflict of opinion as to surance that the requirements written into the contract how it is to be obtained, where the airport is to be located, would be complied with or a penalty would result. Unfor when it is to be established, and how much it is to cost. tunately Mr. Ball was told that he could not have the con I happen to know that the Postmaster General in the last tract. He was the one who wanted it. He thought he had administration was more concerned about building up the pioneer rights and that there was no justification for his aviation industry than in any other one thing that fell being denied the contract. under his jurisdiction. He did not want any inconsequen Mr. President, the chairman of the investigating commit tial or irresponsible factor to have control, one on which we tee went into this very item quite fully, and I am going to could not rely. He wanted such an organization as would read some of the testimony leading up to it: insure the best facilities in the air at the Capital City of The CHAIRMAN. Now let us look at the next one, Albany to the Nation. Boston, Aviation Corporation. I understood that one person who was flying the route between Washington and Pittsburgh was a very good aviator, He was here breaking up the lines, showing the various and it was said he ought to be given considerable recogni lengths of the lines. For example, one line operates from tion. But Mr. Brown told him frankly that it was not Washington to New York, from New York \_'J Chicago, from possible to give him that route. He wanted to fly the route Chicago on west to Omaha or Kansas City, thence to Salt from Washington to Pittsburgh and to Cleveland. Lake City, then on to San Francisco. He was indicating Pittsburgh happens to be a crossroad between the East how the Aviation Co. had taken over short disjointed lines and the West, through a heavily populated section of our and built a system out of them. That company could do country. Some of the lines operating from · New York to that because they had the money to do it. They were Chicago would go north of Pittsburgh. Until Colonel Lind responsible in every way, and had at their command the bergh demonstrated that flying over the Allegheny Moun modern methods of aviation, with all the special require tains was safe, Pittsburgh was somewhat avoided; but when ments in the matter of better planes and better equipment which might be forthcoming. ·In pursuing this the chair- it was determined by actual expefi~nce that planes.. could fly man said: - · over the mountains with more Qr less safety, then Pittsburgh Has there ever been any line extended or contract let from immediately became one of -the most imPortant points for Albany to Boston since that date? air service, including the carriage of the mail, in the eastern Mr. BROWN. Oh, yes. section of the country. The CHAIRMAN. When? 1934 CONGRESSIONAL RECORD-SENATE 4913 Mr. BROWN. Well, it was as soon as the Department of Com Mr. BROWN. Because I wanted Mr. Le~n to have it. merce got the lights in. They were very slow in getting it lighted, The CHAmMAN. Did you consider him to be a good operator? and that mail had to move from Boston west, at night, to Albany, Mr. BROWN. I considered him to be a pretty fair flat-country, and t hen on to Buffalo and the far West. I think it was done daylight operator, and a very honest old fellow, who did not want ! can look it up-I have the data here if you are interested to sell out to any stock promoter. early in 1933. The CHAIRMAN. And you considered him capable of operating The CHAIRMAN. Who got it? the 11~. didn't you, or you would not have asked that it be sublet Mr. BROWN. Aviation Corporation, the only people that were to him? in New England. Mr. BROWN. I considered him capable of operating that kind of The CHAIRMAN. Aviation Corporation? operation, limited to the fl.at country. Mr. BROWN. Yes. The CHAIRMAN. Flat country, between Kansas City and Denver? The CHAIRMAN. All right, let's look at the next one, Denver to Mr. BROWN. Oh, there are some hills at the west end, as you Kansas City, United States Air Lines now flying the route. come into Denver. Mr. BROWN. They were the pioneers and had been flying it. The CHAmMAN. But there are hills there? · Nobody else ever flew it or wanted to fly it. Mr. BROWN. I have ft.own it; I know about as much about it as The CHAmMAN. Nobody else wanted to? you do. The CHAIRMAN. Therie are some hills there? Mr. BROWN. No. Mr. BROWN. There are some hills as you come into Denver, but The CHAIRMAN. All right; who got it? there are none on most of the routes. Most of the routes it is a Mr. BROWN. United States Air Lines did. They got it by sub fl.at country. letting from Aviation Corporation. They were the pioneers. The CHAmMAN. It was contemplated he should carry passengers, The CHAIRMAN. Why did it have to be sublet from the Aviation was it not? Corpora tion? Mr. BROWN. He was carrying passengers, carried them all the Mr. BROWN. Well, that was the best way to do it, 1! we were time. · going to protect the Government's interest. The CHAIRMAN. It was a question of protecting those passen The CHAmMAN. It was sublet, and you agreed for it to be gers; you wanted it in the hands of a company that could pro sublet to this company, didn't you? tect them by not caus1ng them to lose their lives? Mr. BROWN. Yes; by having it sublet we had it under the cer Mr. BROWN. I had quite a good deal of confidence in Letson as tificate plan from the start, in which we had control of the a careful operator. amount of money that we paid, we had control of the service; The CHAmMAN. Let's see the next one-Pueblo to Fort Worth we had complete control under the certificate plan, which we and Dallas. Who got that line? would not have had if we had not had it under the certificate Mr. BROWN. Well, Western Air Express were the pioneers on it, plan. and they had the equities under the theory of the Watres Act. I Mr. President, while that statement is perfectly clear on think they got about half of it, and the other half, my recollec tion is, it was divided. Let's see, Pueblo to Forth Worth, I think, its face, many persons would overlook its significance. The was divided at Amarillo. I would have to look at the map to be law provided that a contract could be surrendered and a sure, but I think it was divided at Amarillo. The northern half certificate accepted in lieu of it. That is the law; and the went to Western Air Express and the southern half to Aviation Corporation. Postmaster General preferred to have a certificate instead of The CHAIRMAN. Do you know what agreement was made between a contract, because under a certificate he could modify the them as to payments before the Western Air Express surrendered rights and require different services, which he could not have a part of that line? done under a contract; and while his motive is impugned Mr. BROWN. No; I don't. The CHAIRMAN. Did they ever talk to you about it? and it is asserted that he wanted a certificate in order that Mr. BROWN. I have no recollection of it. he might be more dictatorial, the fact is that he wanted the The CHAIRMAN. All right; the next one-Pueblo to EI Paso. Is certificate in order to be able to enforce the doing of what that the one that went to Aviation Corporation? he thought ought to be done so as to reduce the cost of Mr. BROWN. Well, the operators stated, in their opinion, that Western Air Express had the equities there because they had been carrying the mail to the Government, which could not have flying the route. My recollection is that that was divided at been done under a contract. That is why he said that-- Albuquerque, and that the northern half went to Western Air By having it sublet we had it under the certificate plan from the Express and the southern half to Aviation Corporation. start, in which we had control of the amount of money that we The CHAIRMAN. By extensions? paid; we had control of the service; we had complete control under Mr. BROWN. Yes. the certificate plan, which we would not have had if we had not The CHAIRMAN. The next one; Great Falls to Lethridge-Na had it under the certificate plan. tional Park Airways-they kept that, of course, did they not? The CHAIRMAN. Why not? Mr. BROWN. This memorandum shows they were the only party Mr. BROWN. Because there wasn't any way of getting that com- in interest. plete control until they were under the certificate. . Mr. President, I am taking the time to read this testimony This shows precisely why provision was made in the law because it all refers to the Aviation Co. of Pittsburgh, which originally for certificates, and the chairman would note that was the subject of discussion by the Senator from Arkansas. instantly, because the contract would run for 10 years, and That is why I am confining myself at this time along this under a contract one would be paid for 10 years on the particular line. poundage basis at $3 a pound, unless it could be modified; The CHAIRMAN. That company has never had an extension? and the way to provide for opportunity for modification was Mr. BROWN. I don't recall that anything was ever done about it. to have the contract surrendered for a route certificate. Yet The CHAIRMAN. They insisted very strenuously to you, did they not, that they ought to have it because it was in the under the former Postmaster General is charged with a sordid pur standing? pose and a corrupt motive because he made that demand, and used the power he had under the law to build a complete Please note the effort of the chairman to induce an an air map in America. swer about understanding. Let me· read that again: The CHAIRMAN. As a matter of fact, isn't it true that consider The CHAIRMAN. They insisted very strenuously to you, did they able controversy came up because of the fact that Mr. Letson got not, that they ought to have it because it was in the under the idea that the Aviation Corporation was not going to take care standing? of him and took it up with you in an effort to get you to have the Mr. BROWN. It was not in any understanding. Aviation Corporation take carie of him? The CHAIRMAN. Didn't they insist that to you? Mr. BROWN. Oh, I have known Letson for a long time. He is a Mr. BROWN. No. :fine old fellow-- The CHAIRMAN. They never have? The CHAIRMAN (interposing). Read the question. please, Mr. BROWN. No; they never mentioned Lethridge. Mr. The CHAIRMAN. Now, the next one-- Reporter. Mr. BROWN (interposing). Just let me finish. Mr. Frank was (The last preceding question was read by the reporter.) constantly urging extensions ea.St through Montana. He wanted Mr. BROWN. Aviation Corporation, so far as I know, never had to go to Billlngs and was very anxious to get into that northeast any idea of taking care of Letson. and west line, but I don't recall his ever speaklng to me ·about The CHAIRMAN. Was Mr. Coburn the president of the company Lethridge. at that time? The CHAIRMAN. The next one; Seattle to Vancouver-that was Mr. BROWN. Yes. never · granted, was it? The CHAIRMAN. He would know about that, wouldn't he, whether Mr. BROWN. I have no recollection of its being granted. there was any require~nt? The CHAIRMAN. Now, routes which are still the subject of nego Mr. BROWN. I asked Mr. Coburn to sublet that operation to Mr. tiations, no. 5, Pittsburgh to Norfolk and Washington, final terms ~tson. not yet arranged. Who did get that? The C.H.AIRMAN. Why? Mr. B&oWN. After a great deal of pulling and hauling Ball- 4914 CONGRESSIONAL RECORD-SENATE MARCH 20 He is the man about whom there had been complaint, and This is a conversation over the telephone evidently be most of the criticism directed against the Aviation Co. has tween Mr. Brown and the lawyer of Mr. Ball, who, by the evidently emanated from him- way, is a good friend not only of mine but of Mr. Brown. I sold out to the Pittsburgh Aviation Industries, and no service ~as continue: ever authorized from Washington to Norfolk, but an extension Mr. BROWN. I don't recall that conversation. I know this, that was made from Pittsburgh to Washington. Mr. Orgill had two or three set-ups for the Ball transaction, for The CHAIRMAN. For whom? Ball to sell out, and they either looked like stock-}obblng opera Mr. BROWN. Well, I can't remember whether it was made to tions or they looked as though Ball would ultimately get control Ball or whether it was made to Pittsburgh Aviation Corporation. of the stock, and we would be back right where we were before The CHAIRMAN. As a matter of fact, to refresh your recollection, with Ball in charge of the company, and I was unwilling to be wasn't it made to the Pennsylvania Air Lines, after it had been hoodwinked in any such way if I could help it and I insisted that reported to you in writing that all of the stock of the Pe~~.;1- we would not give a certificate to Ball until we knew the property vania Air Lines had been sold by Ball to the Pittsburgh Aviation was going to pass into the hands of people who were responsible, Industries, Inc.? . who were not stock jobbers, and who would do a fairly decent job Mr. BRowN. Well, I know I was unwilling to issue a certificate to out of the National Capital, where I wanted the finest operation in Ball. the whole country if I could get it. The CHAIRMAN. Why? First, before we get to that, it was issued The CHAIRMAN. Then, as I understand it, one of the prerequisites to the Penmylvania Air Lines, controlled by the Pittsburgh Avia to getting contracts was that there should be no stock jobbing? tion Industries, wasn't it? Mr. BROWN. That was the view I always entertained. Mr. BROWN. The certificate? The CHAIRMAN. I find in Mr. Coburn's evidence which he gave The CHAIRMAN. Yes. under oath- Mr. BaowN. Oh, I think the certificate was issued to Ball after we had assurance that he was not going to operate the line. I And so forth. I do not care to go any further in the mat think the extension down to Washington was probably made to ter of evidence on the question of the aviation company. Pennsylvania Air Lines, but I could look it up in a moment and be sure. I want to repeat what I stated, that the complaint that the The CHAmMAN. Now, you would not do that, would you, until Avigation Co. did not get the contract, which was dwelt upon you had assurance, as you state, that Mr. Ball would not oper by the Senator from Arkansas [Mr. ROBINSON], is without ate it? foundation, because under the ruling of the Comptroller Mr. BROWN. Not until I was assured that Mr. Ball would not control it. General, to whom this matter was submitted, the Avigation The CHAIRMAN. Did you know or didn't you know and wasn't it Co. was not the lowest bidder and the contract went to the reported to you that Mr. Ball was appointed by this company after proper party, according to his ruling, which was final in they forced him to sell out as the managing operator of the entire this case. line? Mr. BROWN. No; I don't think he was. Coming to the letters which were read by the Senator The CHAmMAN. You don't think that? from Arkansas to create suspicion that the intense anxiety, Mr. BROWN. I don't think he was the managing operator. if not determination, of the people of Pittsburgh to have The CHAmMAN. Didn't you understand he was retained as man this service, which they were doing everything in their ager by the contract of sale itself? Mr. BROWN. I never saw the contract of sale. I know he was power to get, was fraudulent. Presenting their case in the retained by the company, because I fiew there very often and strongest possible terms to the Postmaster General, if he found him always on the field at Pittsburgh going out and helping yielded to their representations, not only is it intimated they to look after the servicing of the planes. The CHAIRMAN. As a matter of fact, Mr. Brown, may I ask you were corrupt but that Postmaster General Brown was cor if it is not true that you went over the papers completely with rupt, when his clear purpose was to have established a line Ball and told him you were not going to give him the contract from Washington that would do credit to Washington. unless he would agree to transfer it to the Pittsburgh interests? Whatever the purpose of the people of Pittsburgh was, I Mr. BROWN. No; I never told him that, but I told him I would not give him a certificate because he had not complied with the assume they wanted a modern aviation industry in that city. law in respect that he had not satisfactorily operated his lines. It would be very unnatural if they did not, first, in view He had sent all sorts of heavy material over his line. He was of their position financially and in every other way, and, being paid $3 a pound by the Government. He paid the postage himself on a lot of stuff that was sent over. His postage was 80 secondly, in view of their geographical location. Pitts cents, substantially, and we had to pay him $3, and_ that was burgh would seem to be a pivotal point, and they should done over and over again until we could not tolerate it, and we not be criticized because they were going to the limit of their fined him $5,000 and told him he could not have a certificate. I influence to obtain the best service they could find. did not want to break the fellow-- The CHAIRMAN (interposing). You fined him $5,000? In one of the letters written by George Hann, who is the Mr. BROWN. Yes. I did not want to break him. leading figure in this aviation company's earliest history, The CHAml\.1:AN. Do .YOU know who his lawyer was that acted for it was stated that they would "have to wait a long time him in connection with that fine? Mr. BROWN. I don't recall much in connection with the fine, unless we get in now." That was immediately interpreted but he was represented by Mr. Orgill, of Cleveland. by the reader of the statement to mean that there was something illegal about it, meaning " if we do not grasp the Mr. President, there is the answer to the accusation that situation quickly we are lost." How could any such interpre Mr. Ball was discriminated against, that he was not given tation as that be put upon the statement in the light of the a contract, and that he had certain claims to pioneer rights. law? The contracts were to run for 10 years. If they did Mr. Brown stated to him that he did not want to break not get a contract then in the form of a certificate or by him, but he could not have a certificate; that if he could negotiation, they would have to wait 10 years, because make arrangements with the aviation company by which he that is the tenure of the contracts. When he said, " if we could get some value for his property, it would be perfectly do not now get a contract through negotiation it will be a agreeable to :rv.cr. Brown, and that he would even go to the long time we will have to wait", his statement is interpreted extent of subletting or having the aviation company sublet by the suspicious mind to mean something that is wicked, it to him, but he would not allow Mr. Ball to hold the con and that he meant the contract must be gotten quickly or tract; he wanted to hold some responsible party for the the opportunity would be lost. I should dislike to have a carrying on of the contract with the Government. Post condition of mind such as that. If perfectly legal conduct master General Brown had finally, because of unethical is to be impugned by thinking people, what is the use ever conduct, to penalize this man to the amount of $5,000 for to enter into any kind of business? an act which he ought never to have allowed himself to It was stated that this company was not actually carrying commit. I do not think anyone can justify a criticism for passengers and mail. The company had branches that were a refusal to enter into a contract with a man who had thus carrying passengers. This was, in a way, a holding company. been guilty of certain improper practices, and especially in Let me say just a word on that point. the case of an air route from the Capital City across the Holding companies have come to be-and I think rather Alleghenies through Pittsburgh and on to Cleveland. unjustly so--the subject of very severe criticism because of The Chairman proceeded: certain practices in recent years. For example, we have the Did you call up Mr. Orgill over the long-distance telephone and railroad problem. Transportation by rail is under control tell him that he could tell Mr. Ball he had just as well give the option to the Pittsburgh Aviation Corporation, because you were of the Interstate Commerce Commission. If a holding com· not going to give him a contract:] pany is organized for many purposes and one of its ancillary 1934 CONGRESSIONAL RECORD-SENATE 4915 purposes was to deal in transportation, under the present On no. 2 there were three bids, and only one bidder law it would be exempt from the supervision of the Interstate qualified. Commerce Commission. I say that is wrong. If a holding On no. 3 there were two bids, and only one bidder quali company is organized in order to do through that company fied. what could not be done regularly, that is not legitimate and I On no. 4 there were three bids, and only one bidder would vote at any time to bring within the provisions of the qualified. law the holding company that deals in transportation, at On no. 6 there was one bid, and the bidder qualified. least to the extent that it is dealing in transportation, for the On no. 7 there was one bid, and the bidder qualified. reason that they have made what appear to be efforts to On no. 8 there were three bids, and one bidder qualified. escape certain regulatory functions. They have been subject On no. 9 there were three bids, and only one bidder to bitter criticism, and, as I said, in many ways rightly so. qualified. But when we talk about a holding company in aviation, On no. 10 there were three bids, and one bidder qualified. see how different the situation is. Here is an air map. On no. 11 there was one bid, and the bidder qualified. There may be a route from Buffalo to Cleveland, another The first 11 contracts were let by bids. There were 20 from Buffalo east to Rochester, another from Rochester bids in the aggregate, and in the case of every single con southward to Elmira, another one from Elmira over to Bing tract there was only one qualified bidder. In other words, hamton, another one from Binghamton down to Scranton, there were 11 contracts, and there were 11 bidders qualified Pa., another one from Scranton to Wilkes-Barre or on to to bid. Those were the first 11. Harrisburg-disjointed, broken links, all the result of local The twelfth contract was the one in the Midwest, where pride and the desire to have an airport and to be on an there were lines running in different directions, like the one airway. What those places lack in many instances is, first, at Cheyenne. There were 9 bids on that route, and 9 bid financial ability. None of their air lines can succeed. The ders qualified, which was rather a remarkable record. traffic is not there to enable them to succeed. The traffic On no. 13 there was only one bid, and one bidder qualified. will not justify their maintenance. Any number of such air On no. 14 there were two bids, and only one bidder lines are brought into being that ought never to have been qualified. brought to life and will have to be discontinued. On no. 15 there was one bid, and the bidder qualified. Hern is the problem: What is needed is, first, financial On no. 16 there were three bids, and only one bidder ability to connect these links; secondly, such financial ability qualified. as not only to pay the first cost, but to furnish modern On no. 17 there were four bids, and only one bidder planes, especially if the passenger service will justify it. qualified. There are a hundred things called for that not one of those On no. 18 there were 4 bids, and only 1 bidder qualified. companies could supply, and all of them combined could not On no. 19 there was one bid, and the bidder qualified. supply them. On no. 20 there were four bids, and all the bidders I do not think it was illegitimate for a group of financial qualified. men, believing in aviation, to form a holding company and On no. 22 there were 3 bids, and 3 bidders qualified. take over the physical properties of these disjointed links, It will be noted that these later ones were . when the then sublet each of them to the actual operator to maintain aviation industry was advancing very rapidly, and there were his own equities in it, and then operate them as one system far more bidders who qualified than in the early time when instead of as a broken system. I cannot see any crime or bids were first offered. even anything wrong in a holding company organized for So it will be observed that on the twenty-third contract that purpose and performing that service. there were 6 bids and 4 of the bidders qualified. The bill that has been introduced to amend the law On the twenty-fourth there happened to be 2 bids, and eliminates holding companies. It may be that the aviation only 1 bidder qualified. has been sufficiently developed so that holding companies On the twenty-fifth there were 3 bids, and 3 bidders may be eliminated without breaking up the routes. I have qualified. not gone into that question. If so, I see no particular ob On the twenty-sixth there were 3 bids, and 3 bidders jection to their elimination, and especially would I agree to qualified. eliminate them if they are trying to escape any law, as hold On the twenty-seventh there were 3 bids, and 3 bidders ing companies sometimes do in other fields; but for the life qualified. of me I do not see any legitimate objection to a holding On the twenty-eighth there were 4 bids, and 4 bidders company in the inception of the building of a great route. qualified. Mr. President, in further reference to this particular line, On the twenty-ninth there were 6 bids, and 6 bidders a great deal has been said against Mr. Brown because he did qualified. not believe that the competitive system was the best. It This indicates the rapid improvement in facilities and must be remembered, however, no matter how earnestly he otherwise to meet the requirements of the Commerce De thought that competition on a line where there was only partment in aviation. I think this is rather a splendid one bidder was a myth, that the contracts for all the trans testimony to the improvement of air-navigation facilities. continental lines made under Mr. Brown were let by com On no. 30 there were 6 bids, and 5 of the bidders qualified. petitive bidding; so that matter can be brushed aside. I On no. 31 there was only one bid, and the bidder qualified. know he thought that competitive bidding was not neces No. 31 was the first contract that was let by Postmaster sarily the best way to proceed in first building the air map. General Brown. I am aware of that; but at the same time Mr. Brown used No. 32 was the second contract let by Postmaster General the competitive method in the case of all the transconti Brown. There were 4 bids, and 4 bidders qualified. nental lines. No. 33 was the third contract let by Postmaster General The reason why he said the competitive-bidding system Brown. There was one bid, and the bidder qualified. was a myth was because there were so few bidders who No. 34 was the last contract let by Postmaster General could qualify. The chairman of the committee the other Brown. There were 2 bids, and only 1 bidder qualified. day went into the question as to who could qualify, and All these contracts that were let by Mr. Brown were let brought out the fact that in the case of various contracts under competitive bidding in obedience to the first section heretofore made there were several bids, meaning that there of the law. He did not use the other section, which per was more than one bidder, and in reading the record on mitted him to make a contract by negotiation. which is not that point one would be led to believe that there were a bidding, as everyone knows; and he did not employ in con great number of bids on all the lines. nection with these routes section 6 of the law, which per I happen to have the record of the bids that were made mitted him to make extensions. The contracts for trans on all the lines, including the 34 contracts in force up to the continental routes were all let under the first section requir time of the cancelation. ing competitive bidding. Yet every time anyone speaks, we LXXVIII--311 4916 CONGRESSIONAL RECORD-SENATE MARCH 20 listen to the charge that these people were in a conspiracy to an appaintment if she wanted to, because she would be dis avoid bidding. If they were, I am the last man who would qualified by age. Yet it was stated that he secured a posi undertake to protect them or defend them. If any men tion for his sister. made any agreement among themselves, or with anybody It was also said that he secured an appointment for a else, to get a contract by agreeing not to bid one against nephew, Lloyd Glover. The fact is that there is no such another, I want the law to be applied to them; but for God's person as Lloyd Glover, the nephew of Mr. Glover. It is on sake, let us not find them guilty without giving them some a par with the effort to bring Walter Brown's brother into trial. the testimony, until it was found that a. man of the same That is why I feel intensely upon this subject. I know name was referred to, a man who was no relative of the that I am very unfortunate in that anything I say is at Postmaster General. It is on a par with bringing Charles tributed to partisanship. It is useless for anyone to under Francis Adams into the testimony. in another body at this take to defend himself against charges of that kind. It time, when the reference was to another Adams of the same simply was unfortunate, that is all. name. When I became a Member of the House of Representa Mr. President, where are these insinuations leading us? tives I went upon the congressional committee. I ought not When an effort is made to convict a public servant of a to have done it. In 3 years I became chairman of the crime, it cannot be done by innuendo; it cannot be done by congressional committee, which I should not have done. In merely submitting circumstantial evidence that is not even the conduct of the congressional campaigns of 1918 and 1920 an inference. Loose testimony and loose statements are not my friends on the other side of the aisle in the House came conclusive proof, and America will not stand for the effort to the conclusion, farthest possible from the truth, that I to prove a case by such means. thought only in partisan terms. Mr. President, I was not stirred in this matter until a I know that whenever I say anything good about a Demo poor miserable weakling on the witness stand testified that crat, the statement is made, "Oh, he is dead!" That is not Mr. Brown had destroyed records-files of the Post Office fair. I do not mind saying that there is in this body the Department. When I read that I was tremendously dis son of a great statesman who was a candidate for re turbed. All around me Senators, including Democratic Sen election when I had charge of the campaign on behalf of ators, spoke to me about it. I said: "There cannot be any the Republicans. The order went out from me that Re truth in it. Keep your minds open. Do not make up your publicans in that district should not oppose Mr. Clark, for minds as yet." we would rather have a man like Champ Clark in the House I had hoped that the first thing the committee would do of Representatives than any Republican who could be named. would be to call Mr. Brown, but they had started on a certain· The present presiding officer [Mr. REYNOLDS in the chair] program, and that program was to bring forward adverse will be pleased to know that I gave the same order exactly testimony. Any testimony that was favorable they did not on behalf of my beloved, saintly friend, Major Stedman, of want. Investigators went to different people, and when an the Fifth District of North Carolina. That was my order. investigator was told that a man could not testify to some But having been identified with the machinery of my party, thing that man was not wanted. I will prove that, before we I have put the label of partisanship upon myself, and I get through here, and give names. When a witness went on must expect that everything I say will be interpreted as a the stand and testified to something, and then later wrote a partisan statement. letter saying that the testimony was not correct, and that I have stood for certain proposals which the present he desired to correct it, opportunity was not given for the President has advanced. I have stood against some of the correction until someone else who received a copy of the things he has advocated. I think, in his opinion, I have not letter saw that it was made a matter of record. supported the most important measures he has proposed, be The plan is not for an investigation; the plan is for a cause I think they are radical and revolutionary, and that prosecution, and in order to carry it forward, thousands is why I have not favored them. I feel absolutely certain upon thousands of dollars are expended, investigators are that time will prove my position to be correct. I will stand sent all over the country, taken from the Treasury, Post any day for anything the President wants if it commends Office, and Justice Departments, and at the table where the itself to my best judgment, without regard to political testimony is given the witnesses are flanked on every side affiliations. by such investigators, some from the Post Office Depart It was a splendid statement for the President to make when ment, some from the Treasury Department, some from the in recommending some of the radical measures, he said that if Justice Department. The purpose is perfectly obvious. they -did not prove successful, he would be the first to admit it. I had hoped that he would take the same position about I finally spoke to the Democratic leader in this body and the air-mail contracts, for I know that the President would told him about my concern regarding Mr. Brown's being not have given the order he issued had he known all the called. He said to me," There is no doubt about Mr. Brown's facts. It is not conceivable that a great American, in the being called if he wants to be called." I spoke of the matter responsibility of the Presidency, would ever permit himself here on the floor of the Senate and was told that Mr. Brown to deny to any group a chance to be heard in its own defense would be given an opportunity to testify any time he wanted if it was charged with fraud. He is not that type of man. to, provided he would waive immunity. Every self-respect He has been misled, and now the effort on this floor is to ing man would resent that statement about a man such as cushion the offense, and we bear every day something from Mr. Brown if he knew him. the other side tending to prove that the President acted The Senate and the country know what was done in order knowingly, in the way he wanted to act, and that there was to get Mr. Brown here. He came on the 19th of February. no other way he could act. No one can ever make me Mr. Brown said: believe that to be so. I do not believe it. When the time Mr. Chairman, may I say that I have prepared a statement which I should like very much to present to the committee at comes-and it will not be so long delayed-when I can this time? present the arguments on the contracts, we will see whether such papers as that read today can have any weight. They After the statement was read, the chairman said: are founded on inference, every item is inference, drawing Before asking any questions, a letter was read from you to conclusions from statements. Senator FESS in the CONGRESSIONAL RECORD. In order that the record may be clear on this point, may I ask if you wrote that For example, a witness went on the stand in the com letter? mittee and testified under oath that he had secured a posi Mr. BROWN. I did. tion for the sister of Mr. Glover, and that he had secured The CHAIRMAN. And you appear here, after having written that an · appointment for Mr. Glover's nephew, Lloyd Glover, letter, in accordance with the terms of the letter which you wrote to Senator FESs? when the truth about the matter is that the only sister Mr. Mr. BROWN. Yes, Mr. Chairman. Glover bas is 65 years of age, never was a candidate for The CHAIRMAN. And you are willing to answer any questions office, never solicited an appointment, and could not accept concerning the matters that the committee desires to ask you? 1934 CONGRESSIONAL RECORD-SENATE_ 4917 Mr. BROWN. Certainly; anything 1n the world that ts pertinent mall pay on the construction of new vessels. A magnlflcent fleet to the inquiry. of nearly a hundred modem ships is being completed in American The CHAIRMAN. May I ask you, first, when you first came to shipyards, of American materials, by American labor, at an aggre Washington? gate outlay of approXimately $300,000,000. This :fleet under the United States fiag is today carrying our commerce to every port in The letter to which the Senator from Alabama [Mr. the world and stands ready at all times to serve as a naval auxil BLACK] refen-ed was the letter of date February 10, 1934, iary in time of national emergency. addreesed to me, in which the Postmaster General had re During my term as Postmaster General 3 domestic air-mail con tracts were awarded out of 34 in all let by the Post Office Depart quested that I lay before the committee a request for him ment: One contract covering service from Pasco, Wash., to Seattle to appear. In that letter Mr. Brown makes this statement: via Portland, before the passage of the McNary-Watres Act; two I had ventured to hope that because of the high position tn contracts, covering service from Atlanta to Los Angeles via Fort the Postal Service which I had the honor to hold for 4 years a Worth and El Paso; and the service from New York to Los Angeles majority of the Senate special committee might deem it fitting via Pittsburgh, St. Louis, and Kansas City, after the passage of to invite me to testify concerning the postal matters pertinent the McNary-Watres Act. to the committee's inquiry that were peculiarly within my own In other words, 3 contracts were let-1 before the act was knowledge, without imposing conditions reflecting on my integrity. However, my desire to prevent, if possible, trreparable injury to passed and 2 after the act was passed. an industry the uninterrupted development of which in my judg In the letting of these contracts every requirement of law ment is vital to our national security and well-being, transcends was observed, and no evidence whatever of collusion between the any personal consideration. bidders thereon or the holders of any other air-mail contracts ap Will you be good enough, therefore, to convey to the members peared or was ever suggested by anyone. of the Senate special committee authorized to investigate air The two meetings of air-passenger operators and air-mail opera man and ocean-mall contraets, my urgent request to be heard at tors, held at the Post Office Department May 19 and June 4, 1930, the earliest date convenient? In so doing you will please state to which attention has been directed, were called and held for a for me that I will appear voluntarily, that my testimony will be purpose entirely legal and proper, to wit: To find, if possible, some given without compulsion, and that anything I may say may be method under the provisions of the McNary-Watres Act of aiding used against me in any court in the land. the passenger-transport operators who had no mail contracts and whose losses were compelling them to abandon their pa.5senger Mr. President, I cannot understand why the usual and operations. There was nothing clandestine or secret about these proper course is not pursued. If there is any charge meetings. Minutes of the proceedings were made by the superin against these companies, or against Mr. Brown, there is an tendent of air mall and preserved in the files of the Second Assist ant Postmaster General. A formal statement concerning these open way to pursue the charge, and that is the regular way. meetings was given to the press. The courts are open for the purpose. If these men are No suggestion of dividing air-mail operations among the com guilty of any crime, they ought to be punished; but there panies represented at these meetings was ever made or contem plated, and no agreement or understanding with respect to bidding is a way to find whether they are guilty, and then to punish on air-mail contracts or refraining to bid on air-mail contracts by them accordingly. any of the operators present was made at either of those meetings Our Bill of Rights, the first 10 amendments of the Con or at any other time. stitution, protects any man from being found guilty with The tentative suggestion for the relief of passenger air-transport operators who had no mail contracts, advanced and discussed at out first being indicted, and then he is entitled to a trial these meetings, was rejected by me as impracticable and unsound, by his peers, and not only shall have witnesses for him if and many of the exclusively passenger operations were soon there he wants them but he has the force of American law to after abandoned. From time to time after the passage of the McNary-Watres Act compel them to attend. The meanest culprit that ever dis various extensions of existing routes demanded by Senators, Repre graced America, if brought to the bar of justice, will be sentatives, and local civic organizations were authorized under the given not only a hearing, but the courts, under the law, provisions of section 6 of that act, which reads as follows-- will appoint counsel to def end him. That section of the act reads: In contrast with that look at what has taken place in The Postmaster General, in establishing air-mail routes under connection with the air-mail contracts, Mr. President, Mr. this act, may, when 1n his judgment the public interest will be Brown made this statement: promoted thereby- The major purpose of the legislation authorizing the Postmaster General to award air-mail and ocean-mail contracts was not to Mr. President, mark these words-- transport the mails at the lowest possible cost to the Government, make any extensions or consolidations of routes which are now or but to foster the maritime and aeronautical industries. may hereafter be established. On any other basis subsidy never would be tolerated. Mr. President, that is the law. The Postmaster General The title of the present ocean-mail subvention law, known as may make any extensions and consolidations of any route the "Jones-White Act'', states its purpose to be "to further de now existing or which may hereafter be established. Yet velop an American merchant marine ", etc.; and the title of the Mr. Brown, when he authorizes extensions, is charged with present air-mail law, known as the "McNary-Watres Act", states its purpose to be "further to encourage commercial aviation", etc. being corrupt and committing an illegal act though the Congress declared and is solely responsible for both of these language authorizing him to do that very thing could not be national policies. Upon the Post omce Department rests merely made broader. the responsibility of administering them. The ultimate goal of the merchant-marine policy ls to main Now we come to the contention of those who are disturbed tain under the United States flag a merchant :fleet capable of for some reason about their illegitimate procedure that the carrying our foreign commerce, by paying to operators of that fleet, difficulty was that the Postmaster General took a short through the medium of mail subventions, the excess due to the air line and added a longer line to it, as if that were a higher standard of living in the United States of building and operating costs over similar costs in foreign countries. crime. Let us see how he did it. There is, let us say, an air line from New York to Chicago, The Postmaster General has made mention of the ocean traversing probably the most profitable area in all aviation mail because the investigating committee investigated both because of the two great cities at the termini and the thickly ocean mail and air mail. populated territory in between, having a tremendously po The ultimate goal of the commercial aviation policy ts to create tential passenger and express business; and if the line could an economically independent aeronautical industry by enabling air-transport operators to recoup in the form of mail pay their secure a mail contract that would represent so much more out-of-pocket losses while they are building up adequate passenger profit. It is desired to have a line from Chicago to Salt and express revenues from the public and are developing trans Lake City. port airplanes capable under competitive conditions of earning their costs of operation. The distance from Chicago to Salt Lake City may be During my term as Postmaster General 20 ocean-mall contracts double the distance from Chicago to New York, but the line were awarded by open competitive bidding, with the formal ap running from Chicago to Salt Lake City is a weak one; proval of an interdepartmental committee created by President there is not much traffic there; the line carries no mail; Hoover, consisting of the Secretary of Commerce, the Secretary of the Navy, the Chairman of the Shipping Board, and the Post there is little passenger and express business and the ques master General. All but one of these contracts were let to the tion is whether it can operate without a mail contract. Mr. lowest responsible bidder whose proposal met the specifications. Brown said, " I do not want to continue these air lines in The one contract which was awarded to the high bidder was so broken links.'~ The reason is obvious. In the case of a line awarded at the request of Congress set forth 1n a joint resolution duly adopted. By the terms of these contracts the ocean-mail starting at Washington and going to New York, the rate for contractors were compelled to expend substantian, all at their carrying the mail is $3 a pound, while the rate by air from 4918 CONGRESSIONAL RECORD-SENATE MARCH 20 New York to Chicago is 86 cents a pound, the lower rate company owned it all, and sublet it to other companies, that being due to the tremendous volume of business. On an would be all right, but there bad to be responsibility to the airline from Chicago to the West the rate is $3 a pound, Government on the part of one unit. That was the demand. then going clear to the Pacific coast the rate in that case Now, Mr. President, let me ask where is the basis in com also is $3 a pound; so that when the rates are summed up mon sense for the claim that Mr. Brown was guilty of a it is found that the cost to the Government for carrying wrongful act when he permitted a base route from New a pound of mail over a route broken into four links owned by York to Chicago to be extended from Chicago to Salt Lake four different companies is $9.86 a pound. Mr. Brown said, City, although the second link was longer than the first? "I will not stand for that." Where is the man outside of the insane asylum who will There was another reason why he would not stand for Sa.y that that was wrong? it. Here is an air route from the East to Chicago; there i~ Take the specific case mentioned the other day by the another operating from Chicago, the two being separate in Senator from Arkansas, the case of an extension from ownership. The route to Chicago has to meet some very Minneapolis westward to Mandan. At the request not only dangerous atmospheric conditions and its planes frequently of the senior Senator from North Dakota [Mr. FRAZIER], are late. The line operating west from Chicago, loaded with who had spoken to the Postmaster General at different passengers, anxious to get on the wing, so as not to be times about it, but also at the request of the junior Senator caught at night, will insist upon the plane from the East from North Dakota [Mr. NYE] and of the Senator from arriving on schedule time, for when the planes from the Minnesota [Mr. SHIPSTEAD], as well as at the request of the East are delayed the mail is broken, not having reached late lamented and much beloved and most distinguished Chicago before the plane for the West must depart. Senator from Montana, Mr. Walsh, that route was estab Mr. President, people unaccusomed to flying do not realize lished. I know the argument the Senator from North the conditions an airplane is apt to encounter. If the Dakota [Mr. FRAZIER J used. He stated to Mr. Brown, " This recital of a personal experience may be permitted, I should territory is traversed by the Great Northern Railroad, by like to state that on one occasion, while flying from my the Northern Pacific, and by the Chicago, Milwaukee & St. home to Washington, with one of the most skillful Army Paul, three great trunk lines running from east to west, a viators in the Service, we lost our way four times, due to a with not an air-mail line in that area." It was a convincing storm. Before we started from home at Wright Field the statement, and Mr. Brown said he would establish the line. atmospheTic conditions were reported to us. They indi What did he propose to do? He proposed to take the line cated that there were some slight storms in the mountains between Chicago and Minneapolis, 664 miles, and extend it but it was thought they would not be severe. So we started west to Mandan through a territory not thickly populated as on the way. The first storm struck us before we got to is the territory through which the base line goes. Is Mr. Wheeling. The pilot told me he had three choices: He could Brown to be condemned because, yielding not only to the go through the storm, which would be a rather dangerous wish of Senators but yielding in response to his own judg proceeding, because his plane was not equipped for such ment, he extended a base line although the extension was contingencies as planes are now equipped; another choice longer than the original line? was to go over the storm, but that, too, was dangerous for we That is a concrete example used by the Senator from were in a mountainous region, and if the pilot pushed his Arkansas for the purpose of condemning Mr. Brown for the engine too heavily it might stop. The other choice was to use of his power in the extension of airlines, which power go around the storm. The pilot chose the last course. was given him under the law. It is that character of criti We were flying the National Highway, which is exceedingly cism which I cannot understand. Certainly no sensible well marked. I have been over it in an automobile dozens person would have said that they should use the line west and dozens of times and am very familiar with it. I have as a base and use the pioneer line as the extension. Cer also flown over it by air a few times. The pilot veered to tainly if he had in mind service to the Government he would the left to go around the storm, lost his way, and it was not break it into two lines with two companies when it quite a little wliile before we got back on the trail. Before could be handled under one management. The difficulty is we were out of the mountains we struck another fugitive that we are proceeding on the theory that in what is being storm cloud. The pilot did not want to go through it, so done we should not take into consideration the welfare of again he went around it. We met· four of those storm clouds the Government or the welfare of the public, but that we in the mountains and lost our way each time. Finally the ought to respond to some complaint of somebody who could pilot found himself over some location about which he not get a contract because he should not have it. knew nothing. The rain was then falling in a drizzling This is the authority under which the Postmaster General shower and he was a little concerned.. The plane flew over operated: and around a little town. The pilot asked me whether I The Postmaster General in establishing air-mall routes under knew what the name of the town was, and I shook my head. this act may, when in his judgment the public interest will be I did not know where he was going; I was completely turned promoted thereby, make any extension or consolidation of routes around. After he had proceeded for about 2 minutes be which are now or may hereafter be established. reversed his course and flew back over the town again The Postmaster General proceeded in his statement to the almost frightening the life out of me by flying just over committee: the tops of the houses. All of the extensions and consolidations authorized by me were When we reached Washington, I said to him, " What on in the public interest. Every such action resulted in improved public service and ultimately in lower flying costs which were earth were you doing at that town?" He said, "I had lost passed on to the Government in the form of reduced mail pay. my way; I did not know the name of the town. I saw that Payment for service on the extensions authorized were in every a railroad. ran through it, and I knew there was a depot; instance approved by the Comptroller General then and now in so I went back there and hunted the depot, and flew low office, and the validity of such extensions was repeatedly recognized in appropriations for the air mall voted by Congress. enough so as to read the name of the town on the depot; With the passage of the McNary-Watres Act giving the Post Office that is the only way I found where I was." He said he had Department the requisite authority, it exerted pressure on the air been flying for 11 years and that was the worst trip he had mail carriers, who with minor exceptions had theretofore been ever made. confining their operations exclusively to carrying the mail, to transport passengers and ex.press in order to build up revenues That is one of my experiences in the air. When one starts from the public and thus lighten the burden on the Post Office out, even when the reports indicate that everything is all Department; and it exerted every proper influence to consolidate right, he cannot be absolutely sure about the weather, for it the short, detached, and failing lines into well-financed and well managed systems, providing three independent transcontinental is a very uncertain element; consequently it has to be taken operations with appropriate north and south intersecting services, into consideration and an effort made to provide for it. believing that the pressure of competition would 1n time attract Mr. Brown took the view that he would not allow a con public patronage, reduce opera.ting costs, and develop, if possible. a transport airpiane capable, under the competitive conditions in tract for a route that was made up of several links which the passenger and express transportation industry, of ea.ming were operated and owned by different companies. If one enough to pay its way without any subsidy. 1934 CONGRESSIONAL RECORD-SENATE 4919 Mr. President, the P~tmaster General may have been Durln~0 my term as Postmaster General no mail contract was not believe there is a scintilla of evidence to establish that awarded to the International Mercantile Marine Co. or to any charge. If it is said the allocation was to companies upon other ocean carrier in which the International Mercantile Marine Co. held a financial interest. Five ocean-mail contracts were the basis of equities, of rights, in all probability there is awarded by me to competitors of the International Mercantile some basis for that, because Mr. Brown believed in that Marine Co., 3 in the North Atlantic and 2 in the Caribbean. No course. Mr. Brown took the view that if there were two mail contract was awarded to the Pennroad Co., which I am in companies, one of them a pioneer company and one a com formed has never held any interest in any ocean-mail or air mail operations. pany which could not secure through the courts what it During my term as Postmaster Genera.I no contract for carry considered its rights, there were certain equities which any ing the mail was awarded to the Pennsylvania Railroad Co., of court of chancery would respect, and what he wanted was whose stock I own 225 shares. One hundred of these shares were acquired in the open market to insure that any contract made under the law should 1n 1915; 100 were acquired in the open market in 1928, about a respect these equities. I speak of equities advisedly in the year before I became Postmaster General; and 25 shares were legal signification of the term, as distinguished from ordi acquired in 1929 by the exercise of subscription rights accruing nary rights. Mr. Brown wanted to accomplish that end. to the 200 shares previously owned. Sometime in 1930 Transcontinental & Western Air was lncor To the limit of his ability he tried to do so. That was hon porated and acquired the contract to operate the air-.mail and orable. It sounded in justice. passenger service from New York to Los Angeles via Pittsburgh, Let me illustrate what this administration can do without St. Louis, and Kansas City. Forty-seven and one half percent of Transcontinental & Western Air stock was acquired by Transcon being indicted: Mr. Farley called a meeting of the same con tinental Air Transport, a corporation in which the Pennsylvania tractors in order to allocate the $14,000,000 available, when Railroad Co., I am advised, owned 50,000 shares, or 6.7 percent of the contracts called for an expenditure of $19,000,000. Who its capitalization. No dividends have ever been earned or paid is it who will charge that that was an error, or that M:r. by Transcontinental & Western Air or by Transcontinental Air Transport, and therefore no such dividends have ever been re Farley should not have done it? He may have to take a ceived by the Pennsylvania Railroad Co. If the stock in Trans whole city off an air-mail route and damage some interest, continental & Western Air owned by Transcontinental Air Trans but who will criticize him for it? He will have to take the port should be distributed to the latter corporation's stockholders and the Pennsylvania Railroad Co. should distribute the Trans amount of money available and prorate it to the contractors continental & western Air stock coming to it by reason of such in accordance with the rates fixed in the contracts, and distribution among its stocltholders, the 225 shares of Pennsyl nobody should charge that there was anything wrong. vania Railroad st ock which I own would be allocated 0.3382, or Information came to me only yesterday that a great com slightly over one third of a single share. mittee of the Congress, in dealing with the printing question, Mr. President, I have been reading from the statement is doing the very thing for which Mr. Brown has been criti made by former Postmaster General Brown before the com cized. Let me read a release given to the·press by the Sena mittee at the initial meeting, where he appeared, including tor from Florida [Mr. FLETCHER], the Chairman of the Joint the last part of his statement in reference to the stocks. I Committee on Printing: shall not take the time of the Senate to go into some of The action taken by the committee today is not to be considered the testimony where I think the committee should not as a precedent for future awards. The awards have been made on have entered the particular field. the following basis: 1. No consideration has been given to proposals declared irregu I know why the committee went into the Bagley account. lar by the committee for noncompliance with provisions of law. That was a case of the association of two friends which 2. No consideration has been given to bids for individual lots cost the Postmaster General nearly a half million dollars which, according to the National Recovery Act Administrator, do a very sad performance, but without guilt, without a sem not comply with the provisions of the respective codes for the paper industry. blance of anything wrong, unless it may be said that a man 3. No awards have been made for bidders whose designated m1lls should never purchase any security of any kind. have not furnished part of any related group of paper on annual Of course, the purpose of the committee was to attempt contracts for either of the 3 years, 1931, 1932, and 1933. to establish that Mr. Brown, as Postmaster General, was May I read that again?- engaged in illegal transactions, or unethical actions, in his No awards have been made !or bidders whose designated mills association with Mr. Bagley, because Mr. Bagley had had have not furnished part of any related group of paper on annual some dealings with someone connected with the Govern contracts for either of the 3 years 1931, 1932, and 1933. ment. When all the testimony shall be brought out, there The only exceptions to this requirement are in the few will be nothing except pity for anyone who would, unfortu lots upon which only one bid, or low bids, have been sub nately, in any venture of the kind, suffer such terrific losses. mitted in conformity with the N.R.A. code. When the committee wants the facts about the Bagley Mr. President, in this case 18 companies bid identically will it need only subpena the trust officer of the company the same figure, not only to the dollar but to the cent; and which is the coexecutor of the will, who has charge of all not having enough money to go around, they allocate the the details of the will. Certainly Mr. Brown, who had never money. To whom? Only to those who had contracts in seen the will until the committee's investigation, and who other years; and yet, while the committee has done that, knew nothing of the details and has nothing whatever to farmer Postmaster General Brown is held up as a criminal do with the administration of the will, could not carry in for respecting what he claimed to be the equitable rights in his ·mind details of matters with which he was not familiar. the air-mail contracts. When the committee is anxious to get all the facts, there Continuing the statement released through the press by will be one way to get them so that there will be no question the chairman of the committee: about them-that is, it can subpena the officer of the trust In all cases where the bids were equal or tied, the awards made company that is the executor of the will, associated with are based on the respective percentages of the total quantity of Mr. Brown. each related group of paper contracted for a designated mill during 1934 CONGRESSIONAL RECORD-SENATE 4921 the last 3 years. The percentages were applied to the respective Mr. KING. The substitute which I shall offer consists of mills instead of the bidders to avoid possible excessive awards to any one mill represented by several bidders in the same group of the bill which I have heretofore introduced, and which is paper. now, I think, in the hands of the committee. If it may be treated as a substitute, to save a reprint, I shall not formally The percentages were applied to the respective mills in off er it as a substitute now in order that it may be printed, stead of to the respective bidders. I am not indicting the but shall offer the original bill as a substitute tomorrow committee, and I see no particular objection to what it did; when the measure shall be taken up. but in the name of honor, of ordinary, common decency, why Mr. TYDINGS. I see no objection to that being done. should a committee of the Senate do precisely what an in Mr. KING. May I ask if there is any parliamentary ob vestigating committee, speaking through the leader of the jection to that course? Senate, indicts Mr. Brown for doing? Mr. ROBINSON of Arkansas. There is no objection to I suspend fmther discussion of this subject and will resume it, if the Senator in charge of the bill does not object. it at a very early time. Mr. TYDINGS. I do not object. I will say to the Senator PHILIPPINE INDEPENDENCE from Arkansas that the proponents of the bill are now ready The Senate resumed consideration of the bill CS. 3055) to vote on any substitutes, and we have asked those who to provide for the complete independence of the Philippine have substitutes to have them ready tomorrow. Islands, to provide for the adoption of a constitution and The bill now pending, Mr. President, has already been a form of government for the Philippine Islands, and for referred to all the outstanding leaders of both factions in other purposes. the Philippines. The old commission which was here and Mr. TYDINGS. Mr. President, there is now pending be negotiated the first bill, headed by Speaker Roxas and floor fore the Senate the bill dealing with Philippine independ leader Osme:fia, and the new commission headed by Senator ence. Since the bill was reported by the Senate Committee Quezon, which is now in Washington, have given their asse'nt on Territories and Insular Affairs the House has acted on an to this bill. identical bill,' has passed it, and that bill has been laid I have a telegram from the majority leader of the Philip down by the Chair. pine Senate and the speaker of the house of representatives, I ask unanimous consent, therefore-the two bills being which reads as follows: the same-that the House bill House of Representatives, and upon which all elements of THE CALENDAR the Philippine people are united, I think we ought to stick by this measure, and make an end to the talk of Philippine The PRESIDING OFFICER. If there are no further re independence by actually putting into effect the machinery ports of committees, the calendar is in order. The clerk which will carry out the 33-year-old promise of several will report the first nomination on the calendar. Presidents and of Congress itself. THE JUDICIARY Mr. President, I ask unanimous consent to have printed The legislative clerk read the nomination of Frank J. in the RECORD a telegram from Senator Osmefia and Speaker McDonnell to be United States attorney for the middle Roxas to Commissioner Guevara, a further telegram from district of Pennsylvania. Senator Osmefia, and a letter addressed to me from the The PRESIDING OFFICER. Without objection, the nomi War Department. nation is confirmed. The PRESIDING OFFICER. Without objection, it is so ordered. POSTMASTERS The telegrams and letter are as follows: The legislative clerk proceeded to read sundry nominations MARCH 16, 1934. of postmasters. Commissioner GUEVARA, l\fr. McKELLAR. Mr. President, I ask unanimous consent Washington, D.C.: that nominations of postmasters may be confirmed en bloc . . Kindly transmit immediately TYDINGS, McDUFFIE, and advise HAWES: "Reenactment Hawes-cutting law highly satisfactory all The PRESIDING OFFICER. Without objection, it is so groups that favored acceptance said law. We request early passage ordered; and the nominations are confirmed en bloc. Tydings-McDufil.e bill embodying President Roosevelt's recom mendations. F111p1no people deeply grateful to America and fully IN THE ARMY appreciate your unselfish labors in behalf their independence and welfare. " The legislative clerk read the nomination of Lucius Roy OsMENA. Holbrook to be major general. ROXAS. The PRESIDING OFFICER. Without objection, the nomi nation is confirmed. MANILA, March 16, 1934. The legislative clerk read the nomination of Frank Sher Senator TYDINGS, Washington, D.C.: wooo Cocheu to be major general. Mass meeting today people Cebu ask me convey you and mem The PRESIDING OFFICER. Without objection, the nomi bers Committee Territories with their greetings, their gratitude nation is confirmed. favorable action your bill extending Hawes-Cutting law until The legislative clerk read the nomination of Guy Vernor October to allow F111pino people pass on acceptance at June elec tions. They deeply appreciate your generous response our peti Henry to be brigadier general. tions for extension, thus reafil.rming your position favorable Ph111p The PRESIDING OFFICER. Without objection, the nomi pine aspirations and interest taken during consideration last nation is confirmed. Congress Hawes-Cutting bill. They also appreciate your plan extending law with m111tary and naval reservations amendment to The legislative clerk read the nomination of John Lesesne clarify Hawes-Cutting law and make it acceptable to practically De Witt to be brigadier general. all Ph111ppine groups. People Cebu respectfully request Senate The PRESIDING OFFICER. Without objection, the early approval extension bill nomination is confirmed. OsMENA. The legislative clerk read the nomination of John Wiley Gulick to be brigadier general. WAR DEPARTMENT, BUREAU OF INSULAR AFFAIRS, The PRESIDING OFFICER. Without objection, the Washington, March 3, 1934. nomination is confirmed. Hon. MILLARD E. TYDINGS, The legislative clerk read the nomination of Harry Ed Chairman Committee on Territories and Insular Affairs, United States Senate, Washington, D.C. ward Knight to be brigadier general. MY DEAR SENATOR TYDINGS: The following message for you 1s The PRESIDING OFFICER. Without objection, the contained in a radiogram, dated March 3, 1934, received in this nomination is confirmed. Bureau today from the Governor General of the Phlllpplne Islands: The legislative clerk read the nomination of Charles " Senator TYDINGS: President's message very satisfactory. We Michael Bunde! to be brigadier general. are deeply grateful to you and other friends for continued un selfish support cause our independence. We congratulate you The PRESIDING OFFICER. Without objection, the success your efforts revive Hawes-Cutting law. nomination is confirmed. "OSMENA. The legislative clerk read the nomination of Charles "ROXAS." Very sincerely yours, Douglas Herron to be brigadier general. CREED F. Cox, Ch1e/ of Bureau. The PRESIDING OFFICER. Without objection, the EXECUTIVE SESSION . nomination is confirmed. The legislative clerk read the nomination of Percy Poe Mr. ROBINSON of Arkansas. Mr. President, I move that Bishop to be brigadier general. the Senate proceed to the consideration of executive busi ness. The PRESIDING OFFICER. Without objection, the The motion was agreed to; and the Senate proceeded to nomination is confirmed. the consideration of executive business. The legislative clerk read the nomination of Col. Louis Hermann Bash to be Quartermaster General with the rank EXECUTIVE MESSAGES REFERRED of major general. The PRESIDING OFFICER (Mr. OVERTON in the chair) The PRESIDING OFFICER. Without objection, the laid before the Senate messages from the President of the nomination is confirmed. United States submitting nominations, which were referred Mr. ROBINSON of Arkansas. Mr. President, I ask unani to the appropriate committees. mous consent that the remaining nominations in the Army
CONGRESSIONAL ~ECORD-SENATE 4877 Hundred Million Appropriation in Public Works Bill for Con 3082
