1917. CONGRESSIONAL RECORD-SENATE. 6039
'-' osteopathic physicians for service in the Army and Navy; to the A bill (S. 2786) to authoriZe the President of the United Committee on :Military Affairs. States to-appoint Andrew JV. Jackman first lieutenant of Coast AJso, petition of the Interstate Sp9rtsmen's Protective Asso Artillery ; and ciation headq-uarters, Kansas ·city', Mo., opposing the "pending - A ·bnl (S. 2787) for' the ·relief of First Lieut: Sydney Smith, migratory-bird treaty act; to the Committee on Foreign Affairs. retired; to the Committee on 1\Iilitary Affairs. By Mr. GORDON: Petition of Kurt Schultz and 32 other citi By Mr. PHELAN: ' . zens of Cleveland, Ohio, protesting ·against the passage of the A bill (S. 2788) for the relief of Edward W. Terry; to the Sheppard prohibition resolution; tQ the Committee on the Judi- Committee on Military Affairs. . Ciary. · · · - · By l\1r. MYERS : By l\fr. RAKER: Petition of E. H. Cleveland, Long Beadi; A bill · ( S. 2789) · for the better safety and welfare" of tl1e l\fiss Irma li. Cahen, Sacramento;· Long . Beach' Chamber of United States, and the Government thereof, in time of war; Commerce, Long Beach; and James H. Garlick, Sacramento, all to the Committee on the Judiciary. in the State of California, favoring the passage of the purple By 1\fr. KNOX : cross bill; to the Committee on Military Affairs. A bill. ( S. 2790) granting an increase of pension to Lillian v. - By Mr. ROWLAND: Petition of ·Tribe No: 224, Improved l\Ianger (with accompanying papers) ; to the Committee on Order of Red Men, Berwindale ; Tribe No. 349, Improved Order Pensions. . of Red Men, Clarence; and Tribe No. 509, Improved Order of By 1\fr. CALDER: Red l\feri, Westover, all in the State of Pennsylvania, favoring A bill (S. 2791) for the relief of John l\1. Francis; to the Senate joint resolution No. 84; to the Committee on Military Committee on Claims. Affairs. · By Mr. SHIELDS : ~ By :Mr. SHERLEY: Petition of the members and friends of A bill ( S. 2792) to declare Nonconnah Creek, Shelby County, the Jefferson County campaign committee of the Socialist Tenn., navigable; to the Committee on Commerce. . Party, Louisville, Ky., urging the passage of the Susan B. By Mr. NELSON: Anthony amendment; to the Committee on the Judiciary. A bill (S. 2793)· granting an increase of pension to W. H. · By Mr. TEMPLETON: Petition of Heights Council. No. 861, Nichols; to the Committee on Pensions. Junior Order of United American Mechanics, Wilkes-Barre, and By Mr. STONE: ·the Col. H. B. Wright Council, No. 896, Junior Order of United A bill (S. 2794) granting a pension to Matilda J. Wilson; and American Mechanics, Slocum, all in the State of Pennsylvania, A bill (S. 2795) granting a pension to Mrs. Thomas Kelly; to favoring irpmigration restriction; to the Committee on Immigra- the Committee on Pensions. tion and Naturalization. · . By 1\Ir. LODGE: . AJso, petition of Forty Fort Council, No. 190, Sons and Daugh A bill (S. 2796) to permit American citizens to wear medals ters of Liberty, Kingston; Kiowas Tribe, No. 120, Improved or decoratiQns received from certain foreign countries on enter Order of Red 1\Ien, Hazleton; and Mahantango Tribe. . No. -156, ing the military or naval' service of tl:ie United States; to the Improved Order of Red Men, Nanticoke, all in the State of Committee on Military Affairs. Pennsylvania, favoring Senate joint resolution No. 84; to the Committee on Military Affairs. ' · PEACE BASES. 1\Ir. SHERMAN. Mr. President, I offer the following --resolu tion and ask that it be printed and go over under the rule. SENATE. · The resolution (S. Res. 115) was read, as follows: Senate resolution 115. WEDNESDAY, Augus't 15, 1917. ResoZ·vea, as an expression of the Senate, that the following purposes are the poJicy of the people of the United States of America, to be at The Chaplain, Rev. Forrest J. Prettyman, D. D., offered the tained by the war and embodied in any treaty of peace concluded : following prayer : . · First. Terms of peace agreeable to the United States which would be the basis of a permanent world peace are set forth by the President AJmighty God, we seek Thy guidance and blessing every day in his messages and public documents from time to time preceding the in the task that has been committed to our hands. We try to declaration of war, which teriiJS and principles declared by the same unite our hearts with the hearts of millions who are seeking Thy have been formally ratified and approved by Congress. Second. The Senate of the United States declares it to be its belll'f guidance and blessing upon our Nation in this critical time. that the solemn purposes of the American people in declaring war is 'Ve pray that here in this Senate we mny. be found in accord not to attempt the conquest or dismemberment of any enemy nation nor with the highest spiritual ·interests, and with soul~ that are the annexation of its territory, or exacting indemnities, or interference 'Yith such f
• Eiev~nth. Restoration and surrender shall be made of t~rrltory - taken read a few weeks ago before the Bar AJ3 oclation of Cincinnati, and occupied by military or naval force; the rehabilitation of Belgium and other like devastated territory shall be guaranteed and had at the as a tribute to the memory of the late Senator Joseph Benson joint expense of the nations concluding peace, the.. tenus thereof to be Foraker, who was for 12 ye{lrs a very capable and courageous settled by negotiatlons. ~ and helpful and honored Member.- of this body and one of the Twelfth It is hereby declared not to be the purpose of the American people to wage war, either severally nor jointly, for conquest or sub very distinguished statesmen of his time. jugation; nor is it their ~urpose to seize or annex the territory o! any . I should like permission · to embody this very appropriate enemy nation, nor to enforce the payment of indemnities therefrom, memorial in the REco.uD as q mark of the Senate's approval, nor to wage war merely to enable other nations so to do, nor is it the purpose of the American people to make themselves or any other nation and thereby preserve the tribute paid' to one who gave such the dominatinJ!: or controlling force in Europe or elsewhere. . notable service as a M~ber of this body. Thirteenth. It is declared that the American people are now waging · The PRESIDENT pro tempore.' Is there objection?. The war solely for the purpose of establishing bereafter a. permanent peace, freedom of the seas,· and the recognition of such humane principles as Chair hears none, and it is so ordered. are announced by the President. and to prevent in the future the The memorial referred to is as follows : aggression by stronger nations upon weaker ones o'r the conquest, dis- memberment, or destruction ol such weaker nations. • lniMORIAL. Fourteenth. The conclusion of a treaty of peace shall provide rea Joseph Benson Foraker was born on a farm in Highland sonable and just limitations upon armaments and for the joint action of the signatory nations and the employment of such limited arma County, Ohio, July 5, 1846. IDs militant patriotism took him, ment only in the necessary defense of such united nations against the at the age of 16, to the battle fields of the Civil War as a pri aggression of any nation o1· nations. . A.ll treaties made by such sig vate soldier. His rise to the rank of captain at the age of 20 natory nations shall be public to such nations, and no secret negotia tions, understanding, or treaty shall be entered into by or between was wholly due to a personality which must even then have such signatory nations nor with any other nations, and all such been unusual. treaties so concluded shall -be obligatory and binding upon such nations There can be no doubt that if the call to arms had not .come until the same shall be changed, modified, or abrogated by the joint consent of the nations so entering into such treaty or treaties. when it did his active spirit, animating high natural abilities, Fifteenth. Such powers as have now pledged themselves to free any would have pnshed him early to distinction, but it is· difficult people or peoples who were formerly an independent nation or n-ations to say what direction his career would have taken if he had· and recognize or create independent governments therefrom shall per form their pledge and the reb.abil1tation of smaller states or nations entered upon it through the ordinary portals of peaceful times. on the basis of independence and sovereignty within their own terri As it was, he first put on the gown of the college student tories shall be made and guaranteed by peaceable negotiations and when he put off his uniform, graduating at Cornell UniYersitY' their safety provided for in any treaty of peace concluded. Sixteenth. That the President be, and he is hereby, authorized to in 1869, after taking the earlier part of his course at the Ohio confer with the official representatives of the Enropean nations· called Wesleyan. , the "Allied Nations " to ascertain whether the principles herein enun He studied law with Judge James Sloan at Hillsboro, Ohio, ciated meet with the approbation of said powers with a view to the in issuance of a joint statement in more definite terms as to the aims of and commenced practice in Cincinnati 186.() as partner of the allied nations in prosecuting the war with the end in view that .Judge P. J. Donham, who was soon succeeded by L. C. Black. . peace agreements may be reached and to communicate to the Senate The eagerness of the people to show gratitude to the de the reply of said allied nations. Seventeenth. For the establishment and maintenance of the fore fenders of the Union made certain ·the early entry into public going principles the United States of America is willing to and is life of one with the glamor of heroism about him, who had waging war and will continue to do so in the most etrective-way with for that life both rare qualifications and strong inclinations. all it resources and powers until a just peace. shall be established in So we find him nominated for governor of Ohio when he was accordance with these declarations. only 37 years old and commencing the :first of his two suc The PRESIDE:r-.-"T pro tempore. The resolution will go over cessive terms in that office when he was only 39. under the rule. Five years after their expiration he was elected to the Sen W AB AN~ PEACE. ate of the United States, where he served two full terms. He took a l~ading part in the State and National conven l\Ir. LEWIS. l\Ir. Pre ident, I tender a resolution, which I tions of his party for almost 30 years. And always, in or ont ask may be read and lie on the table after being read. of office, he was active in the study and discussion of public The Secretary read the resolution ( S. Res. 116),. as follows : affairs. Whereas the United States is at war with the Imperial German ·&+ov The result was a national reputation as a public man. which ernment, caused. by acts of aggression upon the United States by the ' said Imperial German Government; and eame early and endured throughout his life. This naturally Whereas by the Constitution of the United States and the laws there outgrew and oYershadowed his ~bility and standing as a lawyer, I onder too President of the United St:ltes is the Commander in Chief though these played no small part in winning and maintaining of the Army and .Navy and during war is made the Director in Chlef of all movements of war or peace ; and his high rank among the statesmen of his time. Whereas it must be pr~umed that by virtue of the position of the His work and fame in these broader fields belong to the his Pt·esitlent of the United States and of his privileges and opportunities tory of Ohio and the Nation. It is for the bench· and bar to he has all reliable information upon which any practicable cour e for wa.r or peace could be undertaken when the time for such mo-ve was express and record their appreciation of his professional quali appropriate and profitable: Therefore be it ties and their esteem for his traits as a comrade in a calling Resolved, That the American people are assured by the Senate of the which, more than any other, thoroughly tests and fully reveals • United States that so soon as reliable conditions make po ible for peace the abilities and character of those who follow it. between the warring nations whicll the United States could direct or suggest consistent with the just purposes for which America entered Like that of many who came to the bar soon after the Civil upon the war the President of the United States can be depended on to \V a r, )us preparation was. scanty, judged by present standards. take action, and at such occasion, wherever a.r1sin~ will duly inform He was eonscious of this lack and worked diligently to supply ·the American people, as well as communicate with roe1 Congress of the Umted States upon the subject. it. He grasped legal principles quickly and wielded them with Resolved. further, That until such occasion so exists as hereby recited, sh-ill and precision. He had unusual ability to seize essential all acti{)n taken by Congress or any Members thereof, preceding the sug facts and make them dominant. ITI,s conclusions were reached gestion of the President of the United States, works confusion in the by disciplin~ of the naval and militat·y forces of the United States and clear and eomprehensiye reasoning and always-found forcible, embarrasses the E..'!ecutjve in the due perfo-rmance of the duty of con orderly, lucid, and persuasive expr~ssion. He was eminent in ducting the war with unity of action and -vigor of purpose, as now de all the qualities of the advocate. including firm belief in the vol_ves upon him. justice of the cause he espoused. Mr. LEWIS. This resolution is tendered as a substitute for He was by nature impetuous and high-spirited. He had the resolutions on a similar subject. true warrior temperament. He seemed to delight in the con-· The PRESIDENT pro tempore. The resolution .will Ue on flicts of the foru~ as he had done in b~ttle, doubtless because the table and be printed. he realized, con ciously or unconsciously, that there he shone most brightly. Yet he was never unfair or discourteous, and ADDRESS BY SENATOR GlCOR.GE E. CHA~LAIN (S. DOC. NO. 78). his thrusts, even under provocation, did not break the rules of Mr. FLETCHER. 1\Ir. President, I ask unanimous consent to honorable combat: bave printed as a public document an audress delivered by the After nine years of general practice, which took him wen senior Senator from Oregon [Mr. CHAMBERLAIN] before the along the road to eminence at a bar which then ranked unusually Florida State Bar Association at Jacksonville, Fla., August 11, high among the lawyers of the· entire country, be was elected 1917. at a convention to which the public were lnvited. judge of the Superior Court of Cincinnati when only 32 years · The PRESIDENT pro tempore. Is there objection? The old. His -associates were Judg~s Force and Harmon. He dis Chair hears none, and it is so ordered. played judicial qualities whieh led to general regret when his service ended. But his active temperament did not take kindly ME.l£0.BIAL ON JOSEPH BENSON FORAKER. to the confinement of the bench and his health became impaired, Mr; HARDING. Mr. President, I have here, forwarded to me ~eriously as was then feared. So he resigned at the end of by Bon. Judson Harmon, formerly Attorney General of the United two years. States and a former governor of Ohio, a very fitting and beauti After his recovery and several months spent in travel and ~,. ful memorial, prepared by a very distinguished committee, and cuperation, he resumed practice with L. C. Black. 1917. CONGRESSIONAL RECORD-SENATE. 6041
A few months later, on the recommendation of the bar, the 'if the hearts of tlle rulers of the world shall be thoroughly im- governor tendered him ·an appointment as judge of the supreme bued with the Spirit of Christ, this fearful war, which is an court. ~his he felt compelled to decline. impeachment of our civilization and gives the lie to our pre- HiS' firm soon had a large and successful practice, which was tended faith in the Prince of Peace, will come to an end. _ rapidly growing when he was elected governor in 1885~ After May the spirit of love which illuminated and glorified the four years in that office he formed a partnership with L. C. life of the Man of Galilee hasten the day when peace and good Black and Nathaniel Rockhold, the latter being rncceeded by fellowship shall exist throughout the nations of the earth. C. A. Bosworth. He practiced alone, however, for several years, with great success, until he took his seat in the Senate, March TREASURY DEPARTMENT BUILDING. 4, 1897. • The PRESIDENT pro tempore. The morning business is The 12 years he served in that body were crowded with closed. public business of the greatest importance. This related, among 1\Ir. SWANSON and Mr. SIMMONS addressed the Chair. other things, to finance, war, regulation of industry and com· The PRESIDENT pro tempore. The Senator from Virginia. merce, the ucquisition and government of di.sta.nt islands with Mr. SWANSON. I move that the Senate proceed to the con- inhabitants strang-e in race, language, and ideas, and the joining sideration of the bill (S. 2477) to authorize the construction of the Atlanti<' and Pacific Oceans by a great canal In discus of a building for the use of the Treasury Department. This is sion and legislation upon all these subjects he bore an active and the bill which the Senate discussed one whole day and on the useful part, bringing to bear, with his shining abilities, the passage of which the yeas and nays were ordered and taken. It outcome of deep study and bFoad research. • will require only a roll call ; there will be no discussion. In 1909 he returned to his home and practice in ,Cincinnati. .Mr. Sll\11\10NS. Is the Senator from Virginia satisfied that His partners at various times were Miller Outcalt, Walter L. the bill will not be discussed? GrangerJ Charles E. Prior, and hiB brother, James R. Foraker. Mr. SWANSON. There can not be any discussion an the bill. His firm had an extensive business, much of it of an important ~fr. SIMMONS. If that is the case, I shall not object. character. But after several years he again practiced alone, 1\Ir. SWANSON. A roll call is all tbat is requked on it. gradually reducing his activity until of late failing health led The PRESIDENT pro tempOre. The Senator from Virginia to almost complete retirement. moves to proceed to the -consideration of Senate bill 2477. He died at his home May 10, 1917. Mr. POMERENE. What is the calendar number of the bill, But for these l-ong and frequent interruptions {)f llis profes Mr. PreSident? sional career his industry and abilities would beyond doubt 'l'he PRESIDENT pro tempore. It is calendar No. 81. have placed him among the very few whose fame ha.~ extended Mr. SMOOT. Mr. President, as I understand the parliamen· beyond the ranks of the profession in which it was won. He, tary situation Qf the bill, as soon as it is before the Senate nevertheless, achieved a very high reputation as a lawyer. all the Senate will be ealled upon to do will be to vote upon the His friendships were true and la,sting, and forensic encounters, passage of the bilL however keen, bred-with him no personal animosities. To those The PRESIDENT pro tempore. To vote on the passage of the who knew him in professional and private life he will always bill. remain in memory a brilliant but gracious and wholesome figure, Mr. SMOOT. The yeas and nays having been ordered and generous, sympathetic, considerate, courteous. and loyal. once taken developed the lack of a quorum. Judson Harmon, L. C. Black, Miller Outcalt, M. L. The PRESIDENT pro tempore. The yeas and nays have been Buchwalter, Charles B. Wilby, Ferdinand Jelke, ordered. David Davis, Sherman T. McPherson. Ellis B. Mr. . POMERENE. 1\Ir. P1..-esident, before we vote upon the Kinkead, George H. Warrington, La'> .~:P..nce Max bill I want to move to strike out section 2. well, Geo1·ge Hoadly, committee. l\Ir. SWANSON. It is impossible to do that, because the. bill BffiLE :aEA.DING. has been read the third time, and the question is on its passage. Mr. POMERENE. I was temporarily called out of th.e Cham· Mr. V ARDAl\IAN. Mr. President, I noticed in the morning ber, arid had intended to make that motion before that stage was paper the following letter from the President of tlle United reached. States, and will ask the indulgence of the Senate while I read it into the RECORD : .1\.lr. HARDWICK. A parliamentary inquiry, Mr. President. 'l)le PRESIDENT pro tempore. The Senator from Geo-rgia THE WHITE HOUSE, will state it. WASHINGTON. The Bible is the word of life. I beg that you will rearl it and find Mr. HARDWICK. Is it not true, under the rules of the thi out for yourselves--read, not little snatche here and there but Senate, that .although .a demand has been made and sustained. long .passages that will really be the road to the heart o.t it. You' will for the yeas and nays until the roll call actually begins discus find It fuJI of real m-.m and women not only but also ~11'. SMOOT. l\Ir. ~resident, I want to say to the · Senator l\lr. SWANSON: l\11:. President, the Senu.tor is mistaken. from Georgia that that has been the universal practice of the The bill was made the unfinished business and it obtained a Senate ever since I have been a Member o= this body. certain status as the unfinished business, its consideration hav Mr. HARDWICK. Then it has been done simply as a matter ing been moved after 2 o'clock. As the unfinished business it of consent. had been amended, ordered to be engrossed for a thiru reading, Mr. SMOOT. No; I remember a number of cases similar to anu read a thiru time. The question then was on its passage, the present. one where a situation developed exactly as in this and the yeas and nays had been ordered. case. The yeas and nays were ordereu, the roll was called, Mr. HARDWICK. Now, let me submit this to the Senator: and it developed that there was no quorum present; an ad· Was it ever displaced as the unfinished business? journment was taken, and it was ruled at that time that after Mr.• SWANSON. It was displaced when the Senator from the roll call, having been begun upon the passage of a bill, North Carolina [Mr. SnrMoNs] moved that the Senate proceeu there could be no amendment offered to the bill and no d_iscus· to the consideration of the revenue bill. sion upon the bill; and I think that ruling was right. There is Mr. HARDWICK. That makes no difference. Of course, I nothing for the Senate to do under the rules but to vote on the would concede, . because I think it would be right, if it had re· bilL . mained the unfinished business until this nwment that there Mr. H~illDWICK. No. might be some merit in the contention; hut the proposal that a Mr. SMOOT. Mr. President, an adjournment of the Senate bill, even if it is the unfinished business, can be brought up in can ~ever change the legislative position of a bill. . this body during the morning hour and the roll can be called Mr. HARDWICK. Let me ask the Senator this question: on it, and because the roll call discloses the absence of a If that is true, why does not the bill come up automatically? quorum, and it is necessary to adjonm without passing the Suppose the motion of the Senator from Virginia were defeated bill-- this morning? . l\!r. SMOOT. Mr. President, I rise to make a point of order. Mr. SMOOT. The bill, under the rules, can not come up The PRESIDENT pro tempore. The Senator wlll state his automstically, l\Ir. President. · · point of order. Mr. HARDWICK. Therefore it has not any status. Mr. SMOO'l'. Rule X.,"{, under the heading " Questions of Mr. SMOOT. It comes up in its regular order the same as order," states: all other bills will do or by vote of the Senate as this bill did. When an appeal' is taken, any subsequent question of order which Mr. HARDWICK. Mr. President, if this motion prevails, may arise before the decision of such appeal shall be decided by the if the Senator will pardon me; when it prevails, and not till Presiding Offieer without debate; and· every appeal therefrom shall be then. That is the reason why the Senator is wrong, as a matter decided at once, and without debate. of logic. For the one instance which the Senator thinks he Mr. HARDWICK. That does not refer to this question, Mr. remembers, I think I could recite a hundred instances in the President. parliamentary history of this country where the exact opposite 1\'Ir. SMOOT. I think so. has been held, if I had the time to get them up. · Mr. HARD\VICK. No. Mr. SMOOT. This has been the universal practice of the Mr. SMOOT. In other words, l\lr. President, an appeal from Senate, and I think an examination of the precedents will sus· a decision of the Chair is be decided by the Senate without tain my statement. · to Mr. HARDWICK. I do not want to see any such practice deb~te. as that established, not with my consent, at least. l\1r. HARDWICK. The rule authorizes debatable an nppeal The PRESIDENT pro tempore. The question is on the mo· from the decision of the Chair, Mr. President, and is a novel tion of the Senator from Virginia [Mr. SwANSON]. · proposition to assert in any parliamentary body that an ap Mr. POMERENE. Do I understand that this matter is open peal from a decision of the Chair can not be debated. The for discussion? Rules of the Senate expressly provide otherwise. The PRESIDENT pro tempore. The Chair is informed that Mr. Sl\fOOT. I refer to Rule XX, I will say to the Senator. the universal ruling of this body has been that it is not. This 1\Ir. HARDWICK. Very well. Even that rule provides other· motion, however, is not debatab_le until 2 o'clock. The motion wise when it is carefully read. · before the Senate is that of the Senator from Virginia to take 1\Ir. LODGE. Mr. President-- up the bill for consideration. The question is on that motion. The PRESIDENT pro tempore. The Senator from l\Iassa· The motion was agreed to, and the Senate resumed the con chusetts. sideration of the bill ( S. 2477) to authorize the construction of 1\Ir. LODGE. I make the point of order that no debate on a building for the use of the Treasury Department. the appeal or anything else is now in order. The .only thing Mr. POMERENE. I move to amend the bill by striking out in order is the continuance of the call of the roll, which has section 2. once been begun, as I understand. Mr. SMOOT. Mr. President, I should like to vote for the The PRESIDENT pro tempore. The Chair has so decided. Senator's amendment, but I do not believe that in the present 1\Ir. LODGE. I so understand; but if appeals can be taken parliamentary position of this bill a motion of that kind can and debated the ruling is worthless. be entertained by the Chair. l\ir. HARDWICK. The Rules of the Senate provide that ap Mr. CURTIS. I make the point of order that no discussion peals from decisions of the Chair may be debated. Senatocs or amendment is in order on the bill and that tJ1e only thing will not gain anything as to any bill by any such course as they in order i to call the roll. are undertaking to pursue. The PRESIDEN'.r pro tempore. In accordance with. the Mr. SMOOT. I am only endeavoring to observe the rules. precedents of this body the Chair sustains the point of order. l\lr. HARDWICK. I want to observe the rules; but. certainly The Secretary will call the roll. the Senate has a right to deeide whether or not a decision is Mr. . HARDWICK. · From that decision of the Chair I desire correct, and Senators have a right, as old as this body itself, to to enter an n.ppeal. be heard on that question. The rule is clear, and the practice · The PRESIDENT pro tempore. The Senator from Georgia of '\he Senate has been uniform with respect to that matter. appeals from the decision of·the-Chair. The PRESIDENT pro tempore. The Chair thinks that as l\1r. HARDWICK. And on that appeal I wish to address the another point of order has been made, that had better be dis· Senate. posed of, so that we may proceed in regular 01-der. Mr. President, i.t must be parfectly obvious to every Senator Mr. HARDWICK. The . point of order pending now is present-that as a matter of }ogic, as a matter of reason, and as whether or not the appeal is debatable. a matter of common sense, no such parliamenta,ry status as The PRESIDENT pro tempore. The Senator from Utah made has been claimed for this bill can exist in this or any other body. a point of order which the Chair can not sustain, and o~er I challenge any Senator to point to an instance where such a rules. As to the point of order made by the Senator from procedure has been followed if the point was made and urged. Georgia, so far as Rule XXVIII is concerned, the appeal is cer I should be glad to see it. Of course, by common consent we tainly debatable in the judgment of .the Chair. might do that; and I want to say that, so far as this bill is l\fr. HARDWICK. I thought so; and I did n~t think anybody concerned, I would not object to it; I have no desire to discuss thought otherwise, except the Senator from Utah and possibly it; but I am unwilling to see the Senate, unless it wants to do the Senator from l\fassachusetts ; and the opinion of either one so after it understands the question, take any such stand as of them is of little concern to me on this question~ this, adopt any such precedent as this, or put itself in any such This is the proposition: The Senate had this bill under con· position as this. · sideration. It is true at that time it was the unfinished busi Now, ,what is the contention? That some d~s ago during ness of the Senate, but since then it has been displaced as the the morning hour the Senator from_Virginia was in charge of unfinished business, and whatever privilege or special status this bill-- it had as such _has been lost and destroyed. The roll is called ; 1917. CONGRESSIONAL RECORD-~ SENATE. 6043• tlie ron call discloses the abse~ree w· a quo-rum, and the Senate On motion by Mr. Hale, • Tht! Senate proceeded to consider, as in CQmmittee· of the Whole, the a~journs without aeting on the propositien one way or the bill (S. 2263r 1:o reqatre the employment of· vessels ot the United other ; it is left up in the air; it ean oniy be taken up again States fo:r public purposes; and the reported amendment having been and given. renewed vitality by other and affirmative action of agreed to, an ized, or existing under the laws of the United- States, or any State, The- Senator from Michigan ·[Mr. SMITH] with the Senator Territory, or District thereof, no matter how created or organized, from Missouri [Mr. REED] ; exrepting income derived from the business of llfe, health, and acci The Senator from Michigan [Mr. TowNsEND] with the Sena dent insurance combined in one policy issued on the weekly premium payment plan, a tax on the amount by which such net income exceeds tor from Arkansas [Mr. RoBINSON]; the sum of (a) $5,000 and (b) 8 per cent of the actual capital in The Senator from Wyoming [Mr. WARREN] with the Senator vested, as follows : from North Carolina [Mr. OVERMAN] ; "Not in excess of $25,000, 10 per cent. The Senator from Indiana [Mr. WATSoN] with the Senator " In excess of $25,000 and not in excess of $50,000, 11 per cent. "In excess of $50,000 and not in excess of $75.000. 12 per cent. from Delaware [Mr. \VoLcoTT]; and "In excess of $75.000 and not in excess of $100.000. 13 per cent. The Senator from Maine [Mr. FERNALD] with the Senator "In excess of $100,000 and not in excess of $125,000, 14 per cent. from South Dakota [Mr. JoHNSON]. " In excess of $125,000 and not in excess of $150,000, 15 per cent. "In excess of $150,000 and not in excess of $175.000. 16 per cent. The result was announced-yeas 45, nays 16, as follows : " In excess of $175,000 and not in excess / , ) . '6046 CONGRESSIONAL RECORD-SENATE. A-UGUST 15, Mr. BANKBEAD addressed th~ Senate. After having spoken fact, r think they :are acting in a patriotic manner. I know tot some time, he said : that in my State, which is a large industrial State with much . Mr. President, I have not concluded what I intended to say. wealth, I .hav-e not receiVed one protest against the income tax. At a Inter time I shall r·esume the remarks that I intend to Every right-minded citizen feels that he has to do his share make be'fore this question is digpo·sed of. .and is only too Willing to give his money when so many men wlll l\fr. GERRY. Mr. President, I do not think there is any more have to give their lives. important work that Congress has to deal with at this session The next item of the bill which will raise an enormous reve than the revenue bill. The successful termination of this great nue and_,. which is open to much more discussion because of its war is bound to :depend largely on the conntrles that have the novelty is th~ war excess profits tax. I find from my constitu greatest finnncial resources. HoW' we meet the present situa ents who write to me that many do not understand the provi· tion-how we are able to manag1:! our financial resources and sions of the bill as it is now before the Senate. This excess our policy of taxation and raising revenue-is going to be very profits tax is estimated to yield the Government $562,000.000 in ma:tel"ial in the ultimate result. This is proven by all history. revenue. It ·s based on the theory that the corporation, the It really was the economic conditions at the end of the Na copartnership, or the indi'V'idual that has received largely in poleonic wars that caused the defeat 'Of Ftance. · It was Napo creased profits because of the war should pay a higher prop01·· leon's· continental sy teru that finally was overcome by the :mng tion of the tax than the corporation, individual, or copartner· lish blockade and which defeated him. · · ship that has not so benefited. Of course this is a fundamental The Committee on Finance has thoroughly realized this 'Con proposition. Whether yo-u believe in t:Pat theory or not is dition. For 10 weeks we have been at work on the bill. We have another que~tion. considered it from all angles, and we have brought in a bill The House proposed last year, and it is now the law, that a that we believe is sound and just, and one that wlli raise 'the tax of 8 per cent should be imposed on. profits over 8 per cent; proper revenue on the most advantageous prin:eiples. and then this year they amended that statute by doubling the Mr. President, the theory upon which this bill is based has tax, mak~ng it, 16 per cent. Of course that would impose a tax been more or less of a new departure in taxation. We ha v.e im on all corporations, irrespective of any advantage they ha,ve re posed the bulk of the taxation on incomes and on excess profits. ceived from this war, and it also imposes a flat-rate tax. In 'Ve have done that because we believe that they were best able other words, the corporation that receives 9 per cent pays 16 to pay. · We have considered that the man who was best 'able per cent, and the corporation th.at is making 25 per cent pays t.o pay the tax and feel it least was the man that should properly 16 per cent. . bear the burden ; and on this theory we have placed more than This does not conform to the surtax theory of the income tax three-fifths of the total taxes on incomes and excess profits. and I do not believe that it is sound taxation. ' The income tax, it is estimated, will amount to $777,700,000; the But even leaving that qll~tion aside, there is a greater diffi war-profits tax will amount to $562,000,000, making a total -of culty to be met in the Bouse measure, and that is the 'imprac taxes on excess profits and incomes of something {)Ver $1,300,- ticability gf its enfor"Cernent. Under the House proviso they 000,000. If you add to that the taxes on spirits, fermented · have tried to define what was capitnl. They have tried to liquors, and wines, amounting to $207,000,000, and the $11,000,000 eliminate certain·values that are very often used in an endeavor ta~ on soft drinks, ytm will find that a very small proportion of to water stock. They have stricken out trade-marks, good will, the revenue is derived from general taxation. and other things of that sort. Mt. President, I believe that that is a sound principle. I be lieve that it is a principle that is going to be followed in the But, 1\fr. President, I do not believe that you can define, even future, and one that has been followeu by our allies across the according to the proviso of the House bill, what the capital of seas. The question to be considered is so to J)lace our taxa all the corporations in the United States is, and that is what tion that we will not only raise a great amount of revenue but is attempted to be done. It may be said that this is the law that we will not hamper busine . , but, rather, allow it to go now. It is, and pos ibly W'Ol'kable to a. certll.in extent when on and improve, and tl_len we shall get more and more revenue. the tax is not greater than 8 per cent, but as soon as you In doing that we will aid workingmen, industry,_and at the increase that tax, as soon .as you begin to double up your tax, there is an added greater and greater incentive for evasion same time assi~t the Government as well as our allies, for to-day America is practically the banker of the allied world, through improper capitalization. the country to Which all the other powers are now coming, after It is a well-known fact that after the bill pas ed the House three years of terl'ific warfare and financial strain. We have a great many large corporations throughout the country imme vast resourcest greatly augmented by the last three years .of diately took under consideration the question· of recapitaliza prospel·ity, ana these great resources arc noW' going to be used tion. That would be a very simple matter to do, especially if to carry on the war. a corporation was a successful one. Stock that possibly had The history of other countries shows that the great expendi been originally selling at par which had increased eight times, tures caused by- the war will necessarily increase the 'Volume of so it was now selling at eight hundred, could ea ily be turned busine s. There is bound to be a vast amount of capital put back to the corporation .and new stock given out to ref)lace it, into busi,ne s so as to increase it; and as that business increases, and in that way an actual increase of the capitalization of tho under the plan thut we now have on ha.nd our taxes will in corporati{)n be made. That is only one example of what could crease. There is going to be a heavy demand in this country be done and, in my opinion, of what would be done. for money. It will be necessary tQ sell a large quantity of The result would be, ~r. President, that under the House bill bonds. It is impossible to finance a war of this magnitude on there would be continual evaslons. There would be all sorts ta:!:es alone. We are compelled to raise a large proportion of of b"ookkeeping sChemes by people who were not patriotic but the money by a bond issue, just as in big private enterprises led on by . elf-interest, and there would also be, in many ca es, one bas to borrow money in order to float them. an honest difference of opinion as to what should be con inered Naturally this demand is likely to create A stringency in the ·as capital and what not. It would seem to me under the Hou e mon~y market. It is llliely to make the rates of interest go provision there Would be endless deln.y in col!ecting the tax, up unle we deal with it wisely. If we put our war.p:eofits tax endless causes of action, endless disruption of business condi too high the corporations and the in<;llviduals Who are engaged tions, and really a falling down in the Government plan of in busine Will not have proper opJ5ortnnity of increasino- that taxation. busine . They will have to borrow more money~ and the proba Now, your committee, in considering this matter, decided that bilities are that business will not go forward the way it should ; it was. not good business policy to rely on ~uch a principle of and while we may get more revenue the first year of the tax, we taxalion, and that the only practical thing to do was to try and will get le in the end. arrl-ve at a basis whel"e the excess profits could be collected 1\fr. President, in putting our tax on the incomes· of individ without having to determine the capital stock of practically tHtls we have' fried to put it on tho e that are best able to pay. every corporation in the United States. They took the income The able Senator from Utah [Mr. rSMQOT] showed yesterday return 'Of corporations that have been made t{) tbe Treasury · that over $106,000,000 would be raised on incomes of over since 1909, and then determined that the prewar period should $500,000. We have put the high surtaxes on ineomes above be the years 1911, ·1912, and 1913, in other words, the years just $15,000. From there up a cur ory examination of the bill befor~ the war. We could not go very much further back of ~hows that the taxes are continually increased on a greater and that time because the Treasury Department has no record of greater scale, until finally we reach 33 per cent surtax in addi corporation returns before 1909, when the first corporation-tax tion to the 4 per cEmt normal tax act was passed. Mr: President, I think the provtsions of the income tax a.re With that as the basis, we say that where a co1•poration has · ;Veil understood. Tbat question has been thrashed out in Con been making a certain average during those th:-ee years it can gress ever since 1913, when the first income-tax law was pa sed. deduct that · from what lt nJ.akes in the year 1917, and the • I I think the men of wealth are willing to pay their share. In remainder shall be taxed on a graded principle-12 per cent ' 1917., ., t CONGRESSIONAL RECORD-SENATE. .. 6047 on the first, 15 per cent, then 16 per sent, and so on, to the . under the House bill and $35,922,989 under the Senate Finance scale of 50 per cent.where the profit exceeds 250 per cent. Committee bill• . Under the House provision a very small propor Mr. LEWIS. Will it interrupt the Senator from Rhode Island tion of the railroads would pay a tax. Under the Senate bill for Ire, knowing as I do the amount of industry the Senator they will pay a fair proportion of the taxes of the country. has given to this bill in its preparation, as he is a member of .I forgot to state that there is ·a further exemption. A corpo the committee, and particularly as to him has been <'ommitted ration having made less than $5,000 would pay no tax; neither much of the labor in connection with the excess profits ta:J: and would ·partnerships nor individuals. the income tax-much of the bill shows his work in that respect The very learned and able Senator from New Mexico [Mr. ! wish to ask the Senator, can the Senator tell me, without JoNES] called the committee's attention to the fact that while taking too much time away and diverting him from his interest· copartnerships and individuals had to pay OD their surplUS, ing argument, what dUference there is, or the difference, between whether employed in their business or not, corporations did not. the House bill and the Sen·ate committee bill as to what we call He raised the question of the inequality of this and showed franchises and good will, as to how far franchise and good will that a great amount of surplus was going untaxed. The com are treated as capital for the purpose of reaching the calcula· mittee realized the justice of the Senator's claim and tried in tion of _profit? some way to remedy the inequality. But it was a very difficult Mr. GERRY. Yes; I will do so. thing to do, because in the case of the individual you tax him Mr. LEWIS. I should be very glad to have the Senator's whether or not he keeps his surplus; but in the case of the :view. It will interest me very much. corporation, it is only practical to tax the surplus if it is not 1\Ir. GERRY. I will say to the Senator from Illinois that expended. That raised the question as to whether it was sound under the House bill they define actual capital invested as business policy to put a punitive tax on the retention of a follows: surplus. SEc. a02. That for the pu-rpose of this title actual capital invested The committee finally decided that they would try and remedy means (1) actual cash paid in, (2) the actual1 cash value 6048 CONGRESSIONAL RECORD-SENATE. AUGUST 15· ' 1\Ir. GERRY. I yield to the Senator from North Carolina.. bea~ it. So we placed a graded tax. on automobiles accordlno- to · Mr; SIMMONS. If I understand· the inquiry of· the Senator their value. We-provided that the indiviual who.ow.ned an a~to ft'om Louisiana, it is,. What is the basis upon w,hlch tbe English ,JnObile not greaten than. $,500 in v.alue. should· pay $5, ti.Rd if. over ascertained the normal protl.ts for· the purpose of exemption1 $500 and. llDt ov.e:r $750 that be should pay $7.50,. and so on up Mr. BROUSSARD. 'Yes, sir. · o.n a graded scale. · Mr. SIMl\fONS: It was upon the basis of three years-the Tbe House bill based. the yacht ta%· on. the cost price, but it average profits of three year~-tbe taxpayer being- permitted to seemed. wise t-o yom: committee that the tax on yachts should be select any two of those three years. so adjusted tba.t i.n. the: future. it: would ~ wark to the ad.vantage Mr. BROUSSARD. I understo_od that there was a system of of' the Navy. We ha..ve tha-efore placed ·a _tax on yachts based selection. · on the over-an: measurement, so· that the lal!ger the yacllt the Mr. Sll\IMONS. That is tb·e German system. They make larger the amount of tax to be paid, unless the yacht is in the the earnings af" five years the basis, but they require that the senvice of the United' States Government, or unl.ess it is built highest yean and tbe lowest year-- aacor.ding to certain :Qlans. andl specifications of the Navy De hrr. McCUMBER. Mr. President, I rise to a point of order., partment, in which ev.ent it is. exempt from, the tax. This war and. that is tbat none_ of us on. tbis, side of the Chamber can has shown tile great need of yachts and other pleasure vessels hear what is going on in this colloquy. But assuming. that it which may be used in the protection, of our coast and' in sub is very interesting, I think. we ought to have a few more Sena,. marine warfare and makes such. an exemption· advisable. They tors to listen to it. I therefore suggest the absence of a have proven a very valuable adjunct to our defense. When you quorum. tak~ a yacht and put it into the Navy you ar.e not removing trotn The PRESIDING OFFTCER (Mr. JoNES of New Mexico in the commerce of the United States one of its carriers, while the chair). The Senator from North Dakota suggests the ab· that is what you are doing where a merchantman is. com sence of a quorum. The Seci:etary will call the- :coiL mandeered. Tfie Secretary called the roll, and the following Senators. an,. We also placed· a. gross. tax on. sportin~ goods,, on perfumes, swered to their names : · . on c~~ras; a:nd' articles of that sort that were not- necessitieS} Bankhead Harding McKellar. Sheppard ·and· wh1ch we· felt were able' to· bear the tax. We imposed a Roz•ah Hardwick McNary Simmons low tax., becaUBe, as I have already stated, gross-sales taxes are Brady · Hnst:lng Nelson. Smoot always· dangerous, and~ as-a matter of fact, some of the House Brandegee Jonest N: Mex. New Sterling. Broussard Tones, Wash. Qverman Sutherland, gross-sales taxes, 1 believe~ . would b:a:ve wor.ked havoc to, om· Cruder Kellog~ Page Thompson indnstr.ies. Culberson Kendrick Phelan Trammell · L bad ftom Curtis · King Pittman Undemvood a letter oo-dny· a constituent who· spok-e· of the tax Dillingham Kirby Poindexter Vardaman. that was laid on the jewelry industry, which is a very large France Knox Pomerene Wad"SWorth ind·ustry: in my State and one· tbat employs a great nnmlJer- of Geny La Foltette Ransdell Weeks men. lJhder· this gross-sales tax. I feel satisfied that great in.. Gore Lodge Saulsbury Williams Gronn.a McCumber ShatJ:oth. justice would have been done to that 1ndustry and to the men in U 1\Ir. SHAFROTH. L desire to announ~ the unavoidable who· are engaged it the industry, is making a great deal' absence of my colleague [M:r . . TnouiAs] on account of. sickness G:1i money· lt wifit pay- the excess-profits tax, whatever the corpor and to state that he is paired with the: senior Senator. from , ratiGn' or whoevel'· the- individual may be, and in that way I North Dakota LMr. McCUMBER]. I shall let this announcement feel that we· haye· met the situation· in a· very much w:iser way stand for the day. than by imposing a tax on gr.oss receipts; The PRESIDING OFFICER. Fift!-one Senato:rs have an we also struck out. the tax on light and heat. r believe, Mr. swered to their names. A quorum is present. President, that this tax would have· borne more heavily on the . Mr. BROUS.SARD. Mr. President, will the Senator from poor of· the land. than neal'ly any other tax in the bilL I do ru1t Rhode Island yield for a question? believe it was wise to impose it. I can not believe that it hu:ct l\11·. GERRY. With. pleasure. . been given proper consideration when it was · {)laced: in· the 1\!r. BROUSSARD. I understand the. Senator to say that House bill: the method. of determining the p:rofit an· which. this tax; is to be We imposed' a tax: on patent-. medieines because they are in imposed: is di:fferent from both the German and the British the nature o:f n monopoly and are given: certain privileges by system. of ascertaining the. same fact? the Gov.emment and are able to bea:r a fai:r share of the tax Mr., GERRY. It is_ burden. Mr. BROUSSARD. Will the Senator explain the reason why A tax- on admissions to· pla-ces of amusement, on cabaret' shows the- committee has seen fit to discard both the Ge-xm.an aud the and: on. ticket spee1.1lators was deemed wise. It· was! felt that Britislt methoq and to adopt an entirely new method in fixing the practice of selling tickets' for tremendously incr ased cost the. sum of money upon w.hicb the tax is to be imposed? above-the J;n•ice asked' at- the· box office was an evil' which could !fr. GERRY: Mr. President, the reason the committee be remedied, and! also that some revenue could be raised. adopted this new method was because they found. aftel· n car.e· We also placed a tax on opera boxes and a tax on perform ful n,nalysis of the figures, that it was fairer than the English ances admission. to which costs above 25 cents. This wm not metlwd, under which the average of two out of three years is afi'ect the moving-picture sllow where the poor go and wJ1ere taken; and fairer than the German method, under which five they will obtain. diversion· during these trying· times of war. years are considered and the. high and the low are exempt. It A stamp tax on bonds, capital-stock sales and transtc:>rs drafts wn.s found. that our method Gf taking the average of three years promisso11Y notes, warehouse receipts, and railroad: f'ickets anJ was :really a fairer method. That was the opinion o.f the experts sources .of that kind' has also been imposed. These things have and the committee. always -been considered pt'Oper· subjects of taxation. Mr. President, in addition to the enormous revenue that we .As t · the stamp tax on- checks, we originally· had' a $5 exemp.. are· proposing to raise on incomes and war profits, amounting to tiorr, but r am glad to say it was struck out, becau e I do nut think it would have been a· benefit to the poor man, fur the aver one billion and over three hnndred million. dollars, Wf> propose to rnise a revenue of $207,000,000 from spirits, fermented liquors age poor man does. not use checks. On the other ha.n In the case of sugar the tax was placed at a half a cent a Under this condition, th~ tendency is to curtail bequests to pound, which_ means that if a family nses 15 pounds ot sugar benevolf;lnt institutions of all kinds. I believe that at the present a month the tax for the year will amount to approximately 85 time, especially with the heavy income tax, the charitable and cents a year. even if the consumer has to pay. This tax, it Js religious organizations throughout the country are going to suf· estimated, will raise a very considerable amount of revenue. fer heavily, because it is an old. axiom that the first thing a man Mr. KING. Mr. President, will the Senator allow me to ' does when he cuts down his expenses is to eliminate part of ·his interrupt him? charitable gjving. That undoubtedly will follow now with in The PRESIDING OFFICER. Does the Senator from Rhode creased. taxation, and if it follows . to- any great extent it will Island yield to the Senator from Utah? put increased burdens on the different States and communi· Mr. GERRY. I yield. _ ties. Mr. KING. I listened to the explanation of the Senator of. I believe that the amendment suggested by the Senator from the reasons for the tmposttion of a tax upon the parcel post. 1\Iontana would gp at least a little way toward relieving the It occurs to me, if the Senator will pardon the suggestion, that situation, because, after all, Mr. President, the charitable and that is not a proper or a wise subject for taxation. It seems religious institutions of our country are very great institutions to me it strikes at a Government instl'umentality. If the Gov fqr good. Our hospitals and our different organizations for ernment improperly or irrationally goes into private busines::~, relieving the poor are doing work that the Government would as, for instance, that of hauling freight, it seems to me that it is have to do if they did not, and I believe they are doing it a great not provident or wise to tax that instrumentality of the Govern deal better than it could be done by the Government. I do not ment. In the first place, it is a bad precedent for the Govern think for one moment that any sensible man will dispute the ment to tax itself, to tax one of its own instrumentalities; and stateme:Bt that where persons are working purely from religious in fhe second place, as I view the matter, it results favorably and philanthropic motives of the highest kind-for example, like to the express companies or those who might be in competition the Sisters of Charity-they will perform the work with greater with the Government. If the Government wants to derive heart, with greater soul, and with greater ability than the mere revenue from that sonr·ce-that is, the carrying of parcel and Government employees. Mr. President, I think that they ought commodities-it ought to increase the rates which are imposed to be encouraged. I think church work of that sort ought to be upon the articles carried by the parcel post, but it ought not assisted, and I believe the people of the country are in favor of to resort to a ta:x upon its own efforts and upon its own instru such action. mentalities. To me it seems very illogical, and I was wondering The House bill also contained a 10 per cent tariff increase, a if the committee had considered the thought which I have proviso. that would have greatly affected my State and all the attempted to express. • industrial States. if not the entire country. I do not believe Mr. GERRY. l\1r. President, I think the committee felt as that way of amending the tariff is sound. It can not be defended I ba ve indicated, that if a tax were placed on the express com for one moment, because as soon as you start to amend the panies and a tax were not placed on the parcel post it would tariff yon must do it -scientifically and consider each individual commodity. A fiat raise of this sort of 10 per cent is nnscien work a hardship to the express companies; ·that the only way to tifi.e. It is not equitable. It would prove a hardship, and I be meet the situation was to treat them both alike. · lieve it would probably disrupt industrial conditions and in ; Mr. KING. I think probably the Senator has expressed the Cl'ease the cost of f'Jome of the necessities of life. reason which prompted the provision ; but bas it not occurred The postage rate on first-class mail was raised, and a small to the Senator that this proposed legislation will be a bad prece increa e was made in the rate on second-class mall, and· a tax dent and will simply mean that if there were any competition wus imposed on newspaper companies of 5 per cent of their between the Government and private parties the Government profits, with an exempti~n of $4.000. This was a very difficult would feel constrained, following thls example, to tax its own tax for the committee to handle, because many newspapers in instrumentalities, no matter what the business was; for the pur· the country had been built up on what is really a Government pose of aiding private enterprise? subsidy. Many periodicals are carried at a loss under tho Mr. GERRY. I do not trunk so. I think that this is an ex second-class mail rate. Large numbers of these periodieal3 ceptional case. We were seeking to raise revenue, and we thought are printed in one section. of the country and then widely dis that we could rai e revenue from the express companies with· tributed in another. If we bad adopted the zone system, as out nardsbip to the people of the country, and that when we was suggested in the House, we would have ruined countless did that it was only fair to equalize matters by placing a tax publications and newspapers, and I think we would have de also on the parcel post. • stroyed many valuable industries like the farm journals, the Mr. KING. Could not the same result have been obtained, if different kinds of publications that have to do with special the Senator will pardon me, by authorizing an increase in par trades-publications that went intensely into the business life cel-po t rates; so .that, instead of getting revenue by means of recause of the second-class rates. The rates have existed for a direct tax upon parcel-post transportation, it could be ob a long time, and if you change those rates so that these publica tained by means of an increase in the rates? - tions bear their proper proportion of the expense you are going l\1r. GERRY. Oh, yes; that could be done. to do great harm to many innocent people. 'l'o my mind, the Mr. KING. And thus obviate the bad precedent of taxing an rates as fixed never should have been placed on the basic; that instrumentality of the Government. they now are ; but the fact remains that a subsidy bas been 1\lr. GERRY. That could be done, or we could have taken the given, and under those circumstances I do not believe it would tax off the express companies; but in that event, of course, be wise to increase the rates suddenly, destroying these innus revenue would be lost. tries, and upset the entire conditions of that trade. Mr. KING. Yes. Mr. McKELLAR. Mr. President-- 1'.1r. SMOOT. Mr. President-- The PRESIDING OFFICER. Does the Senator from Rhode The PRESIDING OFFICER.- Does the Senator from Rhode Island yield to the Senator from Tennessee? Island yield to the Senator from Utah? l\.1r. GERRY. I yield to the Senator from Tennessee. 1\Ir. GERRY~ I yield to the Senator from Utah. Mr. McKELLAR Does not the Senator think that a subsidy Mr. SMOOT. In further answer to the question of my col of more than $80,000,000 to those who use the second-class mail league, I desire to say that the tax on the parcel post is so service is a very large subsidy to be giving the newspapers and small that the equivalent of it could hardly be placed upon the magazines-more especially the magazines, beeause there is rates charged for the carriage of parcel-post matter; in. oth r where the great cost comes-and does not the Senator think it words, it would not amount to a half a cent in ome zones and would be fairer at this time, when we are necessarily required in others it will not amount to a quarter of a cent. Therefore to raise a great deal of money, to take away a part of this the rates could hardly be advanced so that it could be easily enormous subsidy that we are giving those who use the second figured out jilst what charges should be made from zone to zone class mail service? As I recall, the provision of the Finance without il;1creasing the tax upon parcel-post packages more than Committee increases the cost about $3,000.000. Is that correct? we have done in the bill. Mr. GERRY. Yes. Mr. GERRY. Mr. President, the Senator from. 1\iontana Mr. McKELLAR. In other words, the Government now loses, [Mr. MYEBsJ has offered an amendment exempting charitable to be exact, about $87,000,000, and thls provision will reduce the and J:eligious organizations and also societies for the preven loss· to about $84,000,000. tion of cru~ty to children ·and cruelty to animals from the pro Mr. GERRY. Let me intenupt the Senator. It will reduce visions of the existing Federal inh&itance tax. I believe that the loss more than that. For besides the additional rate im such an amendment· should be adopted. Under the inheritance posed on second-cla.ss mall there is a newspaper tax of 5 per tax as now drafted the tax. is imposed on the transfer of the eent. estate of the decedent and not upon the indlvidwll who- receives Mr. McKELLAR. I will say to the Senator that I think there the legacy. Is quite a difference between most of our newspapers, at anY. / . 6050· .OONGRESSION AL RECORD-SENATE. A UG UST 15, rate; and oth'ers of those · who use second-class mail facilities. believe there is no niore patriotic State in the Union. She will The newspapers within a certain zone ·of two or three h\mdred not only furnish the men, but her brains, industrial wealth, and miles pay the cost of transportation now, whereas the gi•e'at abllity will be behind the Nation. Bearing our shnre of the magazines and the great trade journals, the great advertising taxes gladJy, we shall go forward to do all that is possible in journals of the country, pay only about one-sixth or one-eighth support of our 'flag, democracy, and America. of the cost of transportation. Does not the Senator think it is .Mr. PHELAN. Mr. President--- . · a good time now to cut off a part of this subsidy, when the c.ountiy The PRESIDING OFFICER. The Senator from California. needs the money as it does? Does the Senator think it is fair Mr. PHELAN. Yesterday afternoon I was interrupted by a to put an additional expense of $50.000,000 upon all those who parliamentary point which I have since learned was not well pay first-class postage and at the same time grant a subsidy of taken. I desire now to continue my remarks under my right $84,000,000 to the great periodicals and journals of the country1 to addres~ the. Senate on a . subject which is not unrelated to Mr. GERRY. ~will say to the Senator from Tennessee-that the peJ;lding measure, because the expenditure of the moneys I do not consider that the system adopted was equitable ; and, which ar~ provid.ed by the revenue bill is of as much concern as I have said before, if it were a new proposition. it would not to the Senate as the raising of the revenue itself; and po ·sibly receive my support; but at a time like this the newspapers and a better und~rstanding of the cost of maintaining the Army magazines of the country are performing a great work. They and naval and maritime establishments would uo much to en are circulating news; war news and news on general conditions, lighten the · Senate in determining exactly the amount of l:eve throughout the entire country. They are national in character, nue which should be raised. with the exception of the small journals, small newspapers, and Of course we derive our information from various sources. county newspapers, to which the Senator has referred. · If a The Senator from Utah [Mr. SMooT], on July 18. introduced in -zone system were adopted, as suggested by the 'House, I am the Senate a resolution calling upon the President for infot'ma afraid the result would be that each locality would have to tion concerning the operations of the Shipping Board. A full ·. publish its own newspaper, and the present publications would month bas elapsed since then, and I am not aware that the lose a great part of their national character. However, I am Senate has received the information for which it asked. not defending the logic of the. tax as contained in this bill. I am not here to revh:e in any way the diffPrences which Briefly, the first-class mail rates were increased in order to arose between the several me~bers of . the Shipping Board, raise revenue, and it was believed that that would not put a and which resulted in a change of the personnel of that board. great hardship on the people. It was a very general tax that In fact, . I am disposed to believe that under all the circum could be easily borne. A very slight increase was made in the' stances the · P.resident was justified in making what he called second-class mail rate, and then a -tax of 5 per cent was imposed "a clean slate," not repudiating ifl any seJlse the policy which upon the net income of newspapers, magazines, or periodicals. had been inaugurated by the Shipping Board, but in oruer to _That will in a way make up for the advantage they have in the get a better working membership. There seemed to be om~ use of the mails. •The tax will apply only to newspapers and friction, and yet the story has not been wholly told. I believe periodicals that are earning in excess of $4,000 annually, and it that the American people are always eager to get the facts really. is intended to apply only to the prosperous publications. and, furthermore, that the American public is fair mtnded and Mr. McKELLAR. Mr. President, will the Senator yield would be very glad to have a statement from either side of again? · . the controversy even now, when it is a settled question, and Mr. GERRY. I yield to the Senator from Tennessee. one which has passed into history; but the truth of history Mr. McKELLAR. I have introduced an amendment that is obliges us to give facilities to the gentlemen who have made somewhat different from the provision in the House bill-a zone history. amendment. The amendment which I have introduced provides OnJy yesterday there was introduced into the RECORD the that for the first 300 miles the rate shall remain exactly as it is celebrated treaty of Verona, a document which was negotinteu, now, 1 cent a pound, and then gradually increase until it goes I think, 100 years ago. If that was of sufficient importance up to 6 cents a· pound for the farthest zones. This, as the Sen to spread upon the ·RECORD of the Senate as a matter not of ·ator will see, is quite different from the first zone, as provided living or vital interest but of historical interest, certainly con for in the House bill. In the first three zones the House bill temporaneous history has a much greater claim upon our con provides for a rate of 2 cents, whereas the amendment which sideration. I propose leaves it at 1 cent, just as it is now. In other words, Of course, I was moved in the first instance, in bringing up the in the case of the newspapers, for the most part, with very few matter of the Shipping Board, by reason of the fact that one exceptions, the average distance for which they are sent by member of that board was a citizen of California, and asked mail is less .than 300 miles, and they would pay practically the this privilege. It in no way conilicted with the wishes of the same 1·ate that they are paying now. That is in a measure fair President, because when the President called upon him, in the for the reason that the newspapers are in a different situation interest of harmony, to seiid in his resignation, the President in from the great trade journals, or journals like the Saturday that very letter· stated that he must look for a verdict from the Evening Post and others. It seems to me that we could well people. It is a pleasant euphemism, perhaps, but still ac afford to fix a zone system, leaving the rate as it is on news ~epted by him seriously, that the verdict of the people will papers for the most part, and increasing it upon these great ultimately be the true verdict, and that there is no wny in journals, for instance, like the Saturday Evening ·post, to which· which the public may ba~e its judgl)lent except upon a presenta the Government nays more than $1,000,000, or I believe $3,000,000, tion of the facts. of subsidy every year. Mr. Denman was the former chairman of this board, and he Mr. GERRY. But the Senator will realize. that under this has delayed making this statement for reasons contained in his bill the Saturday Evening Post, for example, will pay a tax: of letter of August 16, a part of which was published in the daily 5' per cent on its net income. _ · press, in whi~h he states that he had been waiting for the new Mr. McKELLAR. I imagine that if the Government contrib board to adopt a policy so that the st~temehts would not lea not critic~ that. .I believe in publie discussion... and I run glad " It may be said further concerni.Dg this statement, that it is that the general inaugurated it; but tiie· blame must not be laid my own. Neither of my associates has assisted in its prepara upon th president of the board. tion nor has been asked to share in the responsibility for its In the interests of harmony Mr. Denman. has issued only su"cll publicatlon. statements as would free the board, in the publie estimation.. •• r. from the unfortunate implications which would necessarily " In the middle of M:ay the board and Gen. Goethals had arise from Gen. Goethals's statement. To refer Mr. Denman to agreed on a plan for commandeering .tor Government owner· the verdict of the public, and d~y him the right to make his ship all the ships in the shipyards which were under slow con· statement of the facts in the official RECOIID, r contend woul-d struction contracts and speeding them up under governmental be an injustice. . . pressure. We ha.d also: agreed on a plan, suggested by Secre I shall not do more now, unless the controversy is pressed tary Redfielq several years ago, for fabricated ships. This there should be no controversy; the only object was to have the contemplated\ the fabrication of a large number of duplicates of mntter spread in the REcoRD, and not to create discussion. 1 all the beams frames, plates, and other parts of the hull, and . shan do no more than to confine- myself to submitting a state ' the R.$Sembllng of these parts into completed vessels at various ment just as made by l\1r. Denman: yards. A great increase in speed and som~ economy in cost "The continued success of the submarines, and the recent de was expected. The existing yards, with tlleir going {)rganiza· velopment of affairs in Russia, seem to indicate that we have tions, could be largely utilized ro assemble the ships, and new entered upon a very long war "-- yards were to· be established. We have never lost our belief in Mr. SIMMONS. Mr. President-- tfle practicability and urgerlt necessity for this class of con. The PRESIDING OFFIG'ER. Does the Senator from Cali structiDn.. fornia yield to the Senator from North Carolina? "On June 15, 1917, an act of Congress became law, appropri· l\lr. PHELAN. I do. ating $750,000,()()(}. a sum 50 · per cent larger than the cost of Mr. SIMMONS. If the Senator will pard{)n me, I presume he the Panama Canal, for a great shipbuilding project along the ls thoroughly familiar with the contents of that long document. lines of the board's suggestions. The act gave the President the Tbe Senator knows that the revenue biU is now pending. He right to delegate the power to. invest this money. On July 11, knows how very import:mt it is to the C(}untry and to its business 26 days later, the President delegated this power to the Ship Interests that there should be speedy action upou this bill. In ping· Board. to be exercised thro11gh its Emergency Fleet Cor the interest of time, to facilitate the consideration and final dis- poration. In a letter he specifically stated the responsibility position of thiS' gt·eat measure, I was going to ask the Senator, and power both as to policies and the terms of the fabricating if he is fammar with the contents of that document, if he would contracts to be in the board. Until July 11 neither the Ship not be wiliing to content himself by stating to the Senate exactly ping Board nor Gen. Goethals had any legal power to com the substance of Mr. Denman's statement, instead of reading mandeer ships on the stocks or to contract for fabricated ships. that long document? "Realizing the necessity for the utmost ·expedition, both 1\lr. PHELAN. Mr. President, I am not sufficiently fmmllar Gen. Goethals and myself, during the period while the power lay with the contents, having read it but once, and that yesterday, with the President, continued to ma.ke. rontra.cts for many steel to make a statement that would do justice to the writer of it. I and wooden vesse1s of the ordinary standard types, feeling thought yesterday, and I still think, that as a ' matter of courtesy confident that the President would ultimately place the power to a Senator, in view of all the precedents, unanimous consent where one or the other could procure a ratification~ might be granted by which this document might be printed in the " It should be noted aw that during the entire time of Gen. RECORD, and so preserved for historical purposes. Objection has Goethals's employment I have signed. as soon as I have read been made, however. Therefore I will not ask the unanimou8 them, every contract sent to me by him save one. This was consent of tbe Senate, unless the Senator from North Carolina signed after four days' delay, during which time the tentative can give me some assurance that it will be granted. Therefore price of $95.20 a long ton for steel was changed to a tentative I must proceed in my right to re.ad the document. I have na dis priee of $.56. The lower amount was justified as a tentative position to do so, but there seems to -be a disposition somewhere figure by a careful expert study of steel prices. based on the even in the mind of a Senator who by resolution sought the in steel corporation's figures. Having in view the Government's formation. to object to spreading thiS' document upon the REcoRD. power to commandeer the ore products and scrap and the steel So I have no other recourse. and pig-iron plants, the price may well be lower. With but "CERTAIN ltJCIDEN~l'!i IN TRB FORMATION AND ADMINISTRATION 01!' Tinl $50.000,000 of capital, we obligated the Emergenc;9' Fleet Corpo~ PROGRAM FOR THE INVESTMElNT OF THE! $750,000,000 APPROPRIATED BY CONGRESS FOR TH!l CONSTRUCTIO"" ~ AN ]lMERGENCY FLJ:JCT OF ration. according to Gen. Goethals's summary, for 1,218,000 tollS WOODE!N AND STEEL SBlP& of wooden ships and 642.000 tons of steel ships (sta:Ildard; not "The continued success of the submarines and the recent fabricated) at a total cost of about $275,000,000. We had 100 development of affairs in Russia seem to indicate that we have more wooden ships under negotiation. which we would haye - entered upon a very. long war, in which Congress will find it contracted for even if the delegation of power had been further necessary to appropriate many billions of dollars. It may be of postponed. It is quite safe to say that no cm·porf!.te officers in value to the country a.t such a time to have a clear insight into the world have ever so far exceeded their authority. The sub· some of tho. e forces, public and private, wbich play upon and marine losses, constantly before me, made this action seem no shape the policies controlling these enormous expenditures when more than normal. the pressw·e of war need compels rapid decision and execution. " After our understanding in 1\lay, we expected Gen. Goethals " The consideration of the shipbuilding policy of the ma to prepare for our consideratiOJ~ a well-worked-out plan for jority of the Shipping Board divides itse),f into two main topics: fabricatina ships and for the speeding up of construction alreudy " 1. The events immediately leading up- to the eight days of begun. On July 13, Gen. Goethals announced, without consult so-called delay, during which we requested but did not receive ing the boaJ.-d, that on the foll{)wing ¥onday he would offer the ·basic figures upon which rested the vast program of ex certain contr.acts for fabricated ship~. amounting to $350.- penditures which our general manager aBked us blinilly to a~ 000,000~ and also would put into effect a plan to commandeer the cept; and · ships in the yards. The latter involved a hug.a lin estimated sum, " 2. The previous acts of' our general manager which, in our , and suggested a vital change regarding uur policy toward ships ()pinion, made necessary a rapid but thorough examination of which the yards had contracted to build for allens. any broad project of construction and expenditure to which be " As soon as we could we convened the board, of which two desired to commit the count:I:y. members were away. The meeting came on the afterntlOn of " The exposition of these matters should not involve a personal 1\Ionday, the 16th, but I had. previously asked for copies of the controversy. The disagreement as to the attitude of the Gov fabricating contracts Gen. Goethals was to offer, and ~ esti -ernment toward the great steel p1·oducers and their prices and , mate of the cost. of the commandeering and speeding-up plan. as to the creation of great wooden shipbuilding plants do not in " The information we requested should have been in our hanrls any way involve the integrity of our general manager. It would within two hours after the request if this program was really be an impertinen~e even to say this did nm Gen. Goethals him- , ready for serious consideration. To· our sw-prise we learned self, in authorized statements, seek to treat the matter as per- · Tuesday that the contracts to be offered on the previm1s day sonal and one involving his integrity? 8{) far as I am concerned had never been drawn up, and that in the two months since we there have been and will be mo personalities. Our direct con had agreed on the CQIIllllandeering plan, no careful calculation!S tact with Gen. Goethals has been pleasant.. and with the excep of its cost had been.· made nor had there- even been obtained tion of our Jnst meeting, when I pressed him vigorously fol"' the <(!()pies of the existing construction contracts of the ships he facts, there has been no friction in our discu-ssions. I trust he proposed to commandeer. .-ebtains his command in France. Nothing bas. occurred whieb . "We requested that the fabricating contracts sbould be drawn '5hould reflect on his military genius. up in at least the fol'J11 in which · Gen; Goethals had said·· he 6052 - CONGRESSIONA_L RECORD-SENATE. AUGUST 15, would offer them, and be submitted to us for ow· approval. A copy of the figures in the records of the Emergency Fleet Cor blank draft reached us Wednesday. A. copy follows. It tells poration, and that the only copy was with the American Inter its own .story: national Corporation, a powerful and efficitnt institution allied "At my requesth you have drawn plans subject to my approval, for through its directorate with the United States Steel Corpora the erection of as lpyard at ---,-on land which you now hold under tion. He said be would try to get them, but had not done so option. This land you are ready to rent to the United States Ship ping Board Emergency Fleet Corporation at G per cent of its cost for up to Tuesday, .July 24, eight days after the date he was to the period for which It is needed for the work covered by this order. offer the contracts, when the President accepted our resigna The plant (aside from the land) is to be paid for and owned by the tions. It should be Loted that Gen. Goethals's published pro corporatio_n. "You will undertake, as agents for the corporation, to the best of gram stated the Government was to offer the contracts, though your ablllty, to build such shipyard and to construct in it, within -- these basic figures were not in its records. months, approximately 200 --- deadweight ton steel fabricate<) "When we first asked Gen. Goethals for this necessary data, ships, in accordance with plans and specifications to be furnished to you by the corporation. It is our intention that you arc to have his office promptly gave out to the press that we were holding general charge of the work. up the building of ships, and both indirectly and in personal "We recognize that you will have to call on the corporation and, interviews he continued to give this impression to the many through the corporation, on the Government for cooperation 'in the purchase of materials and in transportation. For the work you are journalists with whom be talked." to furnish at your own e~ense the services of that portion of the Mr. PENROSE. Mr. President, I rise to a question of order. Organizaticn required which Is outlined in the attached schedule, and The PRESIDING OFFICER (Mr. KING in the chair). ~'he will ~i>e the experience and services, in a consulting and advisory capacity, of the corporate organizations of --- and the executive Senator will state it. · ol:ficcrs of their division of construction and engineering, and the execu Mr. PENROSE. My point of order is that I observe the tive officers and engineering statr of ---. stenographer bas not been continuously taking down the re "All obligations entered into by you are to be subject to our ap- proval and are to be paid for by the corporation. · marks of the Senator from California. I ask that these . "At the present cost of Jabot·, and with steel at $--- a short ton, .remarks be tal,en down as be delivers them. I do not want it is estimated that these boats will cost approximately $--- per a page skipped of this document nnd then have it surreptitiously deadweight ton. "As compensation for your services, you will be paiU. a fee equal to insertell in tile RECORD. I want the Senator to read every iine ~--- per deadweight ton construction, that fee to be increased of it, and then we will take proper action of the Senate, per ,____ cents for each dollar by which, exclusive or our fee, the cost haps, to have it expunged from the RECORD. I hope the Chau· of such tonnage construction falls below ---. The fee shall also .be increased for each ton of constl'Ucted ship $--- for each five will order the stenographer to take down the statement of the days that any ship is completed in 1!>18 in advance of the schedule Senator from Cnlifornia as he makes it. attached. If the cost goes above $--- per ton, such fee shall be The PRESIDING OFFICER. The stenographer will observe decreased to $--- per ton. If it goes above $--- per ton, such fee shall be decreased to $--- per ·ton. Such computation of the fi(lmonition of the Senator fr·om Pennsylvania. fees is to be based on the price of steel above stated and on present Mr. PENHOSE. I am justified iu making the point, because S<'ale of wnges for direct labot· on the work. I observe~! the stenographer was not taking it down. ·• Payments on account of the compensation equal to--- pet· cent of --- per cent of moneys expended sball be made ns the work The PRESIDING OFFICER. The Chair will suggest that progresses, with semiannual adjustments. Your share of the savings the sl:eno~rapher obserV"e the rule. under $--- will be computed on the average of all boats con Mr. PENHOSE. Then we will compare the steno~ra11hN's sh·ucted by you, and paid at the termination of the contract. The increased fee for completion in advance of schedule will be computed notes \Vith the c:locumeut at a later period. upon each individual ship. · Mr. PHELAN. ' I am sui·prised that the reading of a sober ·~What we are proposing to yon is a strai;;bt agency contract, so that tlocument should excite any hent on the pnrt of the Senator H at any time we should become dissatisfied with the ·services being rendel'ed or wish to discontinue the work we are at liberty to ter· from Pennsylvapia. minate your employment on --- days' notice in writing. In that 1\Ir. PENUOSE. I nm natumlly arousec:l, because when case the compensation for your set·vices to be pairt shall be in pro 10,000 men nre killetl every day antl a hundred million (lollars portion to the work performed; and iC net agreed upon, shall be determined by arbih·ation, one arbitrator to be appointed by you~ spent each c:lay the Senator shows little appreciation of tllC one by us, and a third to be selected by the President of the Uniteo flrenuful seriousness of the crisis when he fools away time States. "As a pnrt of this arrangement, you would have an option, executed with this idle performance. 'l'his is not a place for ohitum·y concut-rently herewith, to purchase the protwrty of tbe corporation nt a ceremonies. This mnn was haletl from obscurity, and he llas valuation to be determined by arbitration in the same manner. 'l'his returned to ofJscurity. and merely because he comes from option may be exercised after --- and shall continue for a period of --- months, whethe1· or not you remain the agents dming all California :tn ol!1 :m(l tedious story ought not to occupy the that period. time of the Senate. "In case yov do not exercise yom· option before - .-- you are to 'l'he only persons entHietl to obituary ceremonies in this hotly ~ive the corporation an option to extend until --- to take ovet· from you the land purchased by you and rented to the corporation at ure the :Members of this bo "bracing such a coi·poration, be moved to stigmatize this gentle "An able and fot·ceful representative of one of the corporations inan as unworthy of even a mild defense, expressed in his- own which was to build some" 200 of the fabricated sh,ips told us language, until I was provok'ed, against the machinations· of his people would withdraw from the project unless we agreed such powerful interests. . . · · - to accept Gen. Goethals's total figures. The loss of tinie neces That is the question before the Senate and before the country sary to find others to estimate upon and accept a contract for to-day, and I beg to assure the Senator from P~rin~y_lvania that such construction made this last coercive suggestion most diffi· it is not dead . . If there is to be a funeral, it shall not be for cult to· withstand. the interment of this gentleman who leaves public office with · "Gen. Goethals at no time procured the copies of the con his shield bright and his honor safe, after having _rendered sub tracts necessary to carry out the board's plan of commandeering stantial public service. It is only because he 'was harneSsed to all the vessels under construction. Admiral Capps, his suc a man who on account of his military training could not brook cessor, after anothei· week's delay, bas pow found that he must even the 1·estraint of the law imposed upon .him in the delegated proceed piecemeal with n much modif;ied commandeering plan, power to the corporation by the President, tpat it wa~ neces working out the ownership and cont.~actual relationsWps as sary as a practical question to clean the slate and begi~ an~w. ~ he goes along. He should have had in hand from Gen. Goethals think the President was justified, because, after all, if a co11;cern all these contracts when he entered on his work, and a reason is to be conducted by two men they must work in harmony, and ably close estimate of the cost. The board's demand for this it was clearly demonstrated that these two men did not work in data did not hold up the commimdeering. The demand would complete harmony. have hastened its execution had Gen. Goethals responded. But the president of the corporation had not e~erged from "Admiral Capps has now had double the time during which obscurity to return to obscurity, "to lie in cold obstruction. we were asking for this data to consider the fabricating con and to rot." He was for 20 years a leader of the bar of the tracts and has not yet executed them. He, too, requires the city of San Francisco. He conducted a business bearing upon essential figures. The retiring members of the Shipping Board admiralty. He was the only admiralty atto_rney in the are"not regretful that they did not yield to the eight days' pres· United States . who supported the shipping law which. pre sure of impatient clamor, stimulated in the impropet· ways vented the arrest of seamen like common criminals, and who a9ove described. . upheld Congress in the enactment of the law which gave, to the "·The President, on the eighth day of the public pressure. men who conduct our shipping upon the )+igh seas that decent accepted Gen. Goethals's resignation, which he had filed in treatment to which they were entitled, certainly a$ much as response to a previous letter and sent me the following Ie.tter the men upon the shore. He excited many animosities by his requesting mine: fearless and courageous public course. ! will not go into that " ' THE WHITE HousE. because it is hardly. relewnt, but I want to say that at a time · "'Washington, · J 'uly 24, 1911. when the city of San Francisco was beset by corruptionists, " 'l\ly DEAR l\1n. DENMAN: I hope and believe that I am inter great and powerful corporations who came out of the East and preting·your own best judgment as well as my own wh(m I say invatled our city and seized the railroad system antl precipi that our duty concerning the debates and misunderstandings tate<] an orgy of unspeakable civic debauchery, it was l\lr. Den that have arisen in connection with the sbipbuilc:ttng program man who was among the first to volunteer hi~ serv:ices to bring ought to be settled without regard to our personal preferences or order out of chaos antl to reestablish our community on the our personal feelings altogether and with the single ptil·pose of firm basis of pnblic good. He served only the public and ·never doing what will best serve the· public interest. No decision we servetl private interests, and because h~ is a man of. that ch:.}r can now arrive at could eliminate· the · elements of controversy ncter I do not think it becomes the Senator from Pennsylvania that have crept into almost every q·uestion connected· with the to assailliim. I shall, of course, read this verbatim et literatim, prog1·am, and I am convinced that the only wise course is to not that I take any pleasm·e in reading it, but it see~s to me begin afresh-not upon the program, for that is already in from the necessity of the case I am driven to read it. la·rge part in -process of execution, but upon the further execu It is the privilege of a Senator to exhaust the Senate, and the tion of it. Senate will be exhausted before I am exhausted. Wbe_ther girt " ' I have found both you and Gen. Goethals ready to . serve - .around by friends or foes, in the British Parliament a man may the public at a personal sacrifice. Realizing that the only -man· speak the thing be will, and in this Chamber.be has_the ide_ntlcal ner in· which the way can be completely cleared for harmonious privilege. I am sorry that it delays the public business, but I and effective action is to carry our shipbuilding plans forward am sincere in stating that the underlying lesson at tl}is tract -from this point through new agencies, Gen. Goethals has put bears upon the integrity of this Government, and that it is well his resignation in my hands; arid I have· adopted it in the for all men to know the machinations by which the Shipping same spirit in which it was tendered-not as deciding between Board was sought to be used for the purpose of wresting from two men whom I res:pect and admire, but in order to make the Treasury and from the taxpayers extortionate and excessive invidious decisions unnecessary and let the work be developed sums for the work required. If that is_not relevant and perti without further discussion of what is past. I am taking the nent to this discussion when we are conside:r:ing a revenue bill liberty of writing to tell you this in the confidence tpat you on its passage to enactment, then I can not undeFstnnd what is will be glad to take the same disinterested and self-forgetting relevant or what is pertinent. To continue the reading where L course that Gen. Goethals has taken. When you have .done as left off, on page 1o- he has done I am sure that you may count with the ~ utmost "\Vith his great reputation, Gen. Goethals's statement set the confidence upon the ultimate verdict of the people of the coun tone of newspaper criticism, and during the next eight days try with regard to your magnanimous and unselfish view of succeeding July 16 the storm of public impatience, which had public duty and upon winning in the -retrospect the same admi been gathering since June 15, when Congress ·passed the bill ration and confidence that I have learned to feel for you. authorizing the expenditure of the $750,00"0,000, burst on the ·~' With much regard and very great appreciation of the large Shipping Board, and particularly on its chairman. services you bave rendered. . - "Simultaneously witb this ·natural response of the· press to . _" ' Cordially and sincerely yours, Gen. Goethals's suggestion there :was fed into the newspapers by interested persons much false matter . tending to tliscredit 1 "'VVoooRo'v WILsoN. the board and to force the acceptance of the program with its "' Hon. WILLIAM DENMAN, fabricating contracts . antl. sugge~ted surrel)der of the _ships ·on "'United States Shipping Board.' our stocks to alien buyers. The pressure was heighte.ned by "Entirely apart from any interest Congt;ess may have in the the paid reproduction in the advertising .space of two.of Wash events surrounding the initiation"of its first great shipbuilding ington's most prominent dailies of a fu\1-p_age ·Hearst editorial, project, tliis courteous permission to seek a public verdict slurring the chairman of the board, the cabling from Lon<.lon might warrant this statement. From such a source such a sug to the press of erroneous figures grossly exaggerating the extern gel:ition removes the fear of any self-resp~cting man· that he of the submarine los~es, and the pub.li~at~on of letters. cleverly may permit his sense of participancy in a public event to exag written over the name of ~ disgruntled ex-member of the gerate its impo1:ta.Iice. However, vye· are at war. There is no board containi1,1g much abuse and II1isstatement of fact. Th~ time to be wasted on personal vindications. If the facts as first paragi.~P:tl . of oqe of these letters was so. drawn that i.t summarized here for the fu·st time will not be of helpful cause(]. a headline. in .a great .nurpper of t;_he largest newspape1:s ·guidance to other men in positions of public trust arid having .in ·the country stating the signer's demand for the cl}ail;man's the 1;esponsibility· for the rapid expenditure of public. moneys, removal. Much of the pu_blicity .was sugges_tive of .the journalisq~ tne SOOner they are forgotten the better, I .of the Hearst school, and the cumulative policy of Lord North· " The interested reader-of the President's letter must not cliffe's pap~rs .in thei.r vq.rious ~~tacks, often enough JQ..stificd condude from its kindiy personal tone that the disagi-eement - .frop} the :;;tandpoint of English interest, on. public m~n in. Great 'vas between Gen. Goethals and myself. Tbe disagreement was Britain. between· Gen. Go"ethais and a majoritY of the board.· One of 6054 CONGRESSIONAL RECORD-SENATE. AUGUST 15, these members, Commissioner White, though not in good health. losses exceed in. rate by at least 100 per cent the reproduction returned to the summer beat of Washington to cast his vote of steel ships in all the countries of the world which the most against 11 blind acceptance of the program, and the other, Com sanguine can hope for. If we can obtain wooden. shtps in any missioner Brent, in spite of my protest, has sent in his letter quantity. whether slow or fast in speed, there is an absolute of resignation, ·stating his continued full support of the ma need for them. • The slower ships will release the faster steel jOiity's position. The men1ory of an association with men of ships in the coastwise trade. and also relieve the railway con such courage and loyalty to a principle in the face of such gestion. Those of a higher speed will be used for trans-Atlantic unjust ~d pur,oseJy coercive criticism. is full compensation for service. The board's project for building these ships asked for many months of driving labor spent in deepening anxiety over the appointment of Gen. Goethals as its head, and expressed a the increasing destruction of the submarine. hope that we might construct 3,000,()()(' dead-weight tons of such " In so far as a partial. publicity has contributed to the con ships in 18 months. The project was approved by tile Council fusion in the public mind, or to the general's discomfiture, of National Defense after an independent investigati-on, and he has been its sole cause. IDs crltlctsin, which he allowed to then adopted by the President. Gen. Goethals accepted appoint· remain for weeks without correction or explanation, of the ment under the board to carry it forward. project of building wooden ships, made at a great public ban u Witbout any serious investigation he determined that the quet of the iron and steel men in New York; his announcement, project could not be a success, and, we have recently learned, contrary to a ditierent understanding with us. of a tentative actually instructed his agents sent out on M.ay 16, as we sup· $95.20 a long ton rate on steel at a public meeting of the ship posed to stimulate the construction. of a great fleet and enthuse builders ; his publication of his letter to me attacking Messrs. the possible builders of new ways, to discourage thei!" .building. Eustis and Clark, who had developed the wooden-ship scheme and He instructed them not to tet any contracts until after the ways given splendid and unpaid service to the country; his public an In new yards were down, though no sane man would invest the nouncement of the board's program as a finality without con- large amount necessary to develop a yard unless he knew before . sultation with the boardj and his recent suggestion to the jour hand on what contracts he eould count. Although needing aU nalists that we were blocking the building of Ships, when we we could obtain both of wood or steel, he said : ' I do not wnnt were asking for data which we should have received on tWo ro build too many wooden ships.' ' I do not want to build any hours' notice-all these involved matters. which, if he had more wooden ships than absolutely necessary.' 'Let us stop brought them to us, might have been quietly adjusted, but -once wood as soon as we can.' Referring to the question whether a placed before the public required a public explanation. builder should have any profit on his investment in ways. he " There were questions of broad policy upon which Gen. said to allow them 'just actual cost, to be authorizffi by the Goethals and the majority of the board disagreed. These are ships they build. But I would not encourage the construction the questions which the President-refers to the public for their of too many of those ways. I would rather hold them down to approval or disnpprovn:l. The public knows Gen. Goethals by his. what they have now and to have them utilize all the facilities world-wide and well-earned reputation in another field of en· that they have rather than to branch out on new work! deavor, and through his hosts of friends and admirers both in "Subsequently at a public dinner in New York, given by the Congress and out. The former chairman of the Shipping Board ~teeJ interests with the reporters of the 1\Ietropolitan dailies ·has been hitherto little lmown outside hls 20 years' association present, Gen. Goethals attacked the wooden shipbuilding project, with shipping activities on the Pacific Ocean, and the group of which had been adopted by ~e President, and its projectors, in men in the far Western States with whom he has been working, language which. to say the least, was very unhappily chosen. since he left college, for more effident democratic government. Instantly all of the contractors who had been gathering th.:>ir The public must disabuse its mind of these personal questions energies and forces and materials together for the cqnstruction if it would gain anything of value from the facts here narrated. of these ships slackened their etiQrts and -some of them gave up "II. entirely. Although the rep'orters of the many dallies in New " When Gen. Goethals was employed we promised him the Yory substantially agreed on Gen. Goethals's remarks, some of utmost freedom in th~ execution of any plan or policy we might his friends six weeks later insisted th-at he was misquoted. adopt. This promise applied to the execution, not the framing During this six week~ period, when the discouraging in:ftuence of the policy. Under the Presiaent's order of .July 11 we could of the remarks on the builders of the country bad bad full pLny, not have delegated the latter-responsibility even had we desired the general lll1lde no rontradlction or correction ·either to the to do so. Our signing without exception all the many contracts public or to Congress or to the members of the Shipping Board. he sent· us was the performance of our promise. Excepting the Whether misquoted or not, his silence had as depressing nn basic price of steel for all ships of this material, we felt that effect on the project he had been employed to carry out as if he the details of costs, which varied with different yard conditions, had ·spoken the words the papers unanimously attributed to him. were entirely within his province. " Gen. Goethals stated at this time that we could not build "Dn matters of policy regarding th~ building of an .:>mergency over 150 wooden ships in the 18 months succeeding. Since then, wooden fleet and aftecting the basic prices the Government under constant pressure from the public and from the board, he should pay for raw materials, and the methods of procuring a bas recently let, or liad under negotiation, contracts which, even. low price, we at fi.rst were, or thought we were, in accord. It With the slowly constructed and elaborate design he bas ·Chosen, was not until. the latter part -of May that we discovered our would give us .a mil1ion and a half tons of ships in 18 months, mistake. To the very last we hoped for an adjustment of the or a million dead-weight tons more than he a2id could be con ditierences. structed. · We stiH had offers for 400 more ships, whi(,'h would " Under the following titles we have briefly stated the facts give us another million dead-weight tons. The elaborate desi,.,on concerning the pertinent incidents in the deyelopmrnt of our -of hull referred to is estimated to cost considerably more fl.nd shipbuildiJig program. We believe they show that nny public to ·take a third longer time to construct and to require much official would bavebeen.derelict in his duty if ~e had yielded to more highly ski1led labor than other designs ayproved by .tJ:te the last eight days o:: impatient pressure and accepted a general American Bureau of Shipping, whose rules the gene.r-al _had manager's program of the character indicated without first made the standard of construction in many of his contracts. receiving and consid~ring his basic figures. , lj: calls for a most unust}al size and cut of ship timbers, which it " Here again we wish to emphasize the fact that we do not has bee difficult for the lu.mbP.r mills to supply. question that Gen. Goethals in all these matters Dcted with .. (2) TBII PRICJ!l OF STEJI!L. the fullest integrity, judging him from his own point of view. , " Befor~ th.e board embarked on its wooden-ship project Lt We dtsagreed with his acts, but have not questioned bis good endeavored· to get contracts for the construction of steel vessels, ·faith. but was informed by the shipyards that the steel could not be ct(t) WOODEN SHIPS. obtained. . After the wooden-ship project was unrlerway the 11 We have never believed in wooden ships as a commercial board quietly declared its intention to commandeer tbe. steel venture, or as a . measure for the permanent upbuilding of our producing plants, and almost lmmedU:ttely the president of the mercantile marine. We have felt from the beginning of our largest steel corporation sent word -that he desired to see the investigation of the subject, some seven weeks before the war. chairman of the Shipping Board. We requested Gen. Goethals and have stated in all our announcements that we desired to to take tb~ matter up with the steel president, and the general construct wooden ships only as a supplement to Rteel ships. , report-ed back that the -steel producers had agreed to furni b ~ Our purpose was to provide for -carriage of food and mun1- very large amount of ship steel,· and had shown him ngut-es ·tions to Great Britain and her allies during .the war. Our which satisfied him that 41 cents per pound, or $95.20 per long belief that we could not provide steel ships in sufficient quantity ton, for plates was -a fair price. Gen. Goethals based hi e.·ti to meet anything Uke the anticipated submarine loS..c;;es in the mates to Congress for the appropriation of the $750,000.000 on -year fr-om May 15, 1917, has been justified by the average vessels construeted of steel at $95.20 per long ton. In all his of· the five months' _losses from February 1 to July 1. These appearances before the -crmgressionaf .committees he hG.wetl .no 1917. CONGRESSIONAL RECORD-SENATE. 6055 dissatisfaction with this price. -We have since been offered the "(5) BJ:FJ:RENCil 011' PRICE TO FEDERAL TRADE COMMISSION. steel in quantities sufficient to take care of all our needs at $28 "We then announced, on June 20, that we desired to have the per ton -less than this figure. costs investigated by the Federal Trade Commission, and sug . " Until the bill reached the conference committee, I accepted gested that a price should be fixed by the -Government not only Gen. Goethals's assurance of the propriety of this price. I then for the steel for Government use but for all industries. This is learned of his error and advised a member of the committee along the line of the policy pursued by Great Britain, where there that they could expect the steel at a much lower figure. Gen. is a Government supervision of the distribution of steel to various Goethals finally agreed with us that 4-1 cents a pound was not consumers. My reason for suggesting that the Government a fair price. In spite of this, he later announced at a public should fix the price for all purchases of steel is that, in view meeting at which reporters were present that tpe contracts for of the great subtraction for Government use from the total sup the· construction of steel vessels should be based on a tentative ply, a grossly excessive price could be charged to the private price for steel plates of 41 cents a pound, or $95.20 per long ton. consumers whose demand .would be increasingly intense with Such a recognition, even tentative, gave a respectability to the the supply so diminished. price which would place us and every other department of the "The investigation of the cost has been referred to the Federal Government in an absurd position in any subsequent .bargaining. Trade Commission, with the approval of the President. Whether I "At about this time ship contracts were sent to us by the the broader policy will be followed has not yet been announced. general containing a ·basic te~.ttative price of 41 cent'3 per pound The terms of the act seem sufficiently large to warrant the Gov for plates, giving still further respectability to this entirely ernment commandeering the various plants to obtain its own unwarranted figure. I declined to sign such contracts, and supply, and the sale of the surplus to the public. As different they were revised to a base of 2! cents a pound, or $56 per long plants produce at different rates, and a stimulation of all the ton, the justification for which I have before described. In any producers seems necessary, it is apparent that either the most event, it set a better point for the Government in bargaining costly producers' price must be paid to all the producers, or that than the higher figure. the Government should buy all the steel at the varying cost "(3) COMMANDEERING OF STEEL PLANTS. prices plus a fair profit. It could then resell at a unit price "The Shipping- Board proposed a. bill placing in the United which averaged the cost, thus combining full production with States Government the power to commandeer the iron and steel a price which is at once uniform and a minimum. If the act producing plants. Gen. Goethals was strongly opposed to this. should not be deemed broad enough for this purpose, Congress For a time, I acquiesced in his assurance that he could rE>ly on wi'll, I trust, enlarge its provisions. his friend, President Farrell, of the Steel Corporation, to obtain " (6) .SIZlll 011' THil APPROPRIATION. fair treatment for the Government without its securing the "We agreed with Gen. Goethals in May that we would ask power to commandeer the ore and scrap steel and the pig iron Congress for $1,000,000,000 for the construction of ships, and and steel plants. Before the bill was out of the conferees' hands, two days. later a meeting was held at the White House, which however, I had discovered his mistake and advised one of the was attended by certain of the leaders of Congress, at which members of the conference committee. The bill as passed gave I developed. the board's program along the agreed lines. When the President the power. I do not believe that in any event I had finished my statement, one of the Congressmen arose and Congress would have accepted the general's assurance of his said that he had seen Gen. Goethals the night before, and that ability to control these steel men by a mere friendly relationship. the general had desired him to state that he needed but three ."(4) REFERENCE OJ' THE -PRICE OF STEEL. TO THE .ADVISORY COM1ollSSJON OF quarters of a billion dollars. This was the first that we had THE COUNCIL OF NATIONAL DEFENSE. heard of the general's change of mind. 'Vlth our then contem "Gen. Goethals, without consultation with the Shipping Board, plated expenditure for steel vessels, namely, about $450,000,000, after the disagreement on the $95.20 tentative rate, referred the and $250,000,000 for the taking over of vessels on the stocks, question of fixing the price of steel to the advisory board of the this left us with $50,000,000 of the appropriation for wooden Council of National Defense. The iron and steel committee of ships, to which could be added the $50,000,000 previously ap this board was made up of Judge Gary and Mr. Farrell, of the propriated for the Shipping Board. With this we could not United States Steel Corporation, and otb('r steel produce:::-s. A have constructed over 200 wooden ships. The general's sug meeting was held with members of the advisory body, which was gestion as to the smaller total was adopted by Congress, but attended by Mr. Farrell, Gen. Goethals, and myself, and one under the public pressure we have previously referred to we or two others, though no representatives of the Army or Navy have been able to persuade him to let contracts, very largely in were present. An attempt was made to have us agree on a price the last month of his incumbency, for 328 wooden ships, at a for plates for our ships. At this meeting Mr. Farrell assured cost of $120,000,000, and were about to close contracts for 100 us of his patriotism and said that ·be appeared at the meeting more such ships, at a cost of nearly $50,000,000 additional. The in the dual capacity of a member of the Government advisory board is now seeking $500,000,000 more from Congress, and 1f board and as a representative of the steel producers, who were the war continues another two years, will probably require trying to sell to the Government. In the course of the conversa another $500,000,000. tion, he stated that wages in the steel industry had risen 43 per " (7) ALIEN TONNAGII o-N oun sTocKs. cent since the year 1916. I asked ·him what percenta{!e the "In the period between February 10 and April 1 the British wages bore to the total cost of ship's plates, and he said that that Government, through the ngency of the Cunard Co., obtained was a matter of a technical character which he did not think contracts in . our steel shipbuilding yards for the · construction was a necessary part of the discussion. I replied that I did not of 1,000,000 dead-weight tQns of steel ships. This took up practi· see the relevancy of his suggestion that there bad been a 43 cally all our then available yard space. After we had entered per cent rise in wages over the last preceding year, unless we the war, 1 had various negotiations with Mr. Balfour,· as a re knew what percentagd labor figured in the total cost of the sult of which he graciously offered, in a letter addressed to me, product. He did not give me even an approximation of this to release these contracts to the United States. Most of the percentage. agreements were on a single shift slow construction basis. To " I then asked him what the steel ship plates had cost "the speed them up would involve the depletion of labor and material Steel Corporation to produce in the year 1916, including interest from other classes of construction, and a deep disturbance of on the investment and amoi-tization on its plant. This is a matter American enterprises for which the mere payment of extra which is figured to the fourth or fifth decimal in a well-conducted " speeding up " \vages to the labor on the ships could not com establishment. It is a figure which a person ·bargaining with the pensate. 'Ve felt that, in .any event, with the enormous de Government should have known definitely. He stated that be structivity of the submarine, these ships should be kept under did not know the cost in 1916. I then asked him whether the our own fiag for their almost certain use in carrying our troops cost was 3 cents or less per pou·nd. He said he did not know. and supplies to France. I then asked him whether the cost was 4 cents or less per pound. "Although fully cognizant of these negotiations, Gen. Goethals, He said he did not know. I then asked him whether the cost without consultation with the Shipping Board, on July 13 an was 5 cents or less per pound. He said he did not know. I did nounced that, after investigation, he was satisfied that these not have the temerity to ask him 'fhether it cost 6 cents or less alien contractors would pay the cost of expediting ships now per pound. I felt that negotiations conducted with one who was building for them and take them off our hands. I frankly at once an advisor to the Government and a merchant selling disagreed with Gen. Goethals in making such an announcement it goods, who had come for the specific. purpose of fixing the pur on such a delicate subject. He has since advised us that he chase1price and yet did not have even this general information had no information to the effect that the British or any foreign would be a fruitless endeavor. Gen. Goethals did not participat~ contractors will pay the cost or is desirous of doing so or of in this discussion. It may be interesting to note that within a taking the ships off our hands. fortnight after this interview another member of the same com u The Shipping Board could ill afford to spend the time re pany offered us all of the steel plate that the Government re quired in adjusting these matters. It had other constructive quired for its various programs at 8 cents a pound. policies, both to meet war need and for the upbuilding of our 6056 CONGRESSIONAL RECORD.__SEN ATE. AUGUST 15, mercantile marine, which it was fi.aniingt always acting un_der sponsible largely for the shipping bill, who 'was an experien<'ed the pressure of the consciousness of the submarine menace an~ man in. all relating to shipping. I think his life had been de. always under the necessity of creating a new branch ol its voted to it. In some of his views-1 speak wholly disinterest· organization as its functions were increased.. A brief review edly-as td the manner of. restoring the American merchant of these policies may not be amiss : · marine I did not agree, but no one could question his compe· u 1. The control and reduction of freight and charter rates. teney and his knowledge. He was set aside in order that 1\Ir. This required the coiD:ImlDdeering power, which was not dele Denman, who, so far as the world knew, had .never built a ship gated to us until July 11, and cooperation with the allies. in his life, might have his place. Having taken po ession of Negotiations had progressed to.. the point where the plan could this important position, I want to call attention in a few words have been put in operation in a very short time after granting to what happened, as a matter ot fact. I am not going into the the power to commandeer. Quick relief was essential. qu~rrel between Gen. Goethals and Mr. Denman. It is enough " 2. The commanneering of all our tonnage, with its continued that the quarrel was there. operation for Government account, but ln the bands of the pri· · Tbe fact was, he seems to have quarreled with pretty much vate owners and, ns far as possible, consistent with war need everybody. I never eros ed his path, so he never quarreled with in its former routes, carrying materials for our. basic war me. He quarreled with his colleagues. He held the majority of industries. the board only by his own casting vote. l\lr. Donald, the only "3. The carrying out of the agreement made in June between practical shipping man on the board, and Mr. Steven , who had the owners and seamen for a calling back to the sea of the been a Congressman from New Hampshire, and who was an able Jar~ body of seamen on shore and fixing wages and bonuses and energetic man, were both against him-so much so that I was during the war. ' told that he was endeavoring to force them off the board. The " 4. The chartering and control of neutral tonnage to serve two men who were with him were the two appointees whom the the common war need. President thoughtfully labeled " Republicans." They never had " 5. The inauguration of the building of a Diesel motor-driven been heard of in the Republican Party, but those were the two fieet of merchant ships of the Norwegian George Washington men who supported 1\lr. Denman and gave him his majority of type, which, with the great saving in fuel and cargo space, one. He had difficulties with the advisory commission. There wide sailing radius, and reduced labor cost, would free us from were reflections on the advisory commission which huve just been bunker control of other nations and give us a dominance . in read here to the Senate. They were men selected by the Presi maritime carriage after the war. dent. I was on none of the committees which had to deal with 41 WILLIAM DENMAN. Mr. Denman, but if anyone will take the trouble to inqui.J:e I "WASHINGTON, _.AUgU8t 11,:, 1911." think he will find that the impression that he made on the com Mr. LODGE. Mr. President-- mittees of the Hou e and of th~ Senate was not a pleasant m· a The PRESIDING OFFICER. 'noes the Senator from Cali soothing one. fornia yield to the Senator from Massachusetts? When a man quarrels with one pe1 on, it may be that he is in Mr. LODGE. I will not interrupt the Sena.tor. I thought .he the right and the other is in the wrong; but wben he quarrels WaS through. · with everybody, the pre umption is against him. Mr. PHELAN. I have concluded. I am not going into the vexed que tion of the wooden ship or Mr. LODGE. Mr. President-- the steel ship. Personally, I had little faith in the wooden The PRESIDING OFFICER. The Senator from Massachu· ship~ I could not see why it" was a good plan to l)ui:ld ship that setts is recognized in his own right. were both slow and quickly perishable and standardized with Mr. LODGE. Mr. President, that 1\Ir. Deiunan should desire difficulty, whereas the one thing we wanted wns ships that were to make an apologia pro vita sua I quite understand, but I do fast, enduring, and could be readily standardized ; but if they not see why the RECORD should be burdened with it. It seems had only given us ships I should have been content: to me very unfortunate to bring up a subject of discussion of To pass out beyond the que tion as between Gen. Goethals this character. The paper that has just been read by the and 1\lr. Denman, the Senator from Virginia [Mr. MARTIN] Senator from California [Mr. PHE:r.AN] is 1\Ir. Denman's demon· yesterday mentioned a case where in one yard there was one stratlon from his point of view that he ought not to have been ship and in another yard there were three ships on the eve of removed or driven from office. It therefore reflects upon the completion, practically completed, to go undPT a foreign neutral action of the President of the United States. . flag. We could have requisitioned them. Tiley all wrot to :ea The Pre ident of the United States accepted the resignation within a week under the foreign neutral flag. That had nothing of Gen. Goethals. He then requested and received the resigna to do with Gen. Goethals. He had no power to take them. tion of Mr. Denman. Since then he has bad, perhaps, what The German ships were turned over to the Shipping Boartl. may be called the good fortune to receive th~ resignation of The two interned ships, which were warships, were taken nt Mr. White. He has remodeled the Shipping Board; he has the same time by the Nav-Y. They were put in order. Tl1ey placed at the head of it Mr. Hurley, a man of great energy and carried some of the first units to France. A few others, if I am executive capacity, thoroughly loyal to the country, thoroughly correctly informed, four or five, were lent by u to some of the 1n sympathy with all that is being done, and, I am sure, cer· nations who are fighting in the same cause that we are. They tain to drive forward the great business of the construction of are all at sea, if I am correctly informed, but the re t of tllem· shipping. He bas put in charge of the shipbuilding Admiral were tw·ned over to the Shipping Board to 1·epair and put afloat. Capps, who has been Chief of the Bureau of Construction of There was no question of Gen. Goethals there. There was some the Navy, one of the ablest and most competent men. in the 500,000 tons oi shipping. That is a good deal at this momf'nt service, whether active or retired. With him is associated of stre s in the shippino- world. Time went on, time went on; Admiral Bowles, who also has been Chief of the Bureau of nothing was done; and finally the Secretary of War, re ·pon ·ible Construction, highly trained, and the head of a great shipping for the transportation of troops, greatly to hi credit, succeeded company. The President in this way has made a highly effec· in having those ships transferred from the Shipping Board to tlw tive and very strong board, which commands the confidence· of Navy, and-within a few days they were all bein"·moved. Some the country. I think his action in making this change, which I of them have been fitted already. '.Ole Navy has been ablE> to · know must have. been disagreeable to him, de erves the highest find the men to do it, and those ships will all be at work in a commendation, and I think it was entirely justified. very short time. I am going to say a few words at this moment, because when I think the President has done no better thing for the tulviuice- the appropriation blll was before the Senate I predicted, refer ment of the cause that we all have at heart, the great cau E:' of ring to a change that had beer made in the language, that the success in this war, than in reorganizing that board. I know, plan was to drive Gen. Goeth Is from office. That plan was as I repeat, that it must ha\e been a very di agreeable thing pursued, but I think Mr. Denman did not calculate that when for him to do. The country wanted ship . It wa.s ab olutely Gen. Goethals went from office he would take him with him. vital; and they were treated to quarrels between l\Ir. Denman I have no sort of personal feeling about Mr: Denman what· and Gen. Goethals! They wunted ships, and they want tl1em ever. Perhap it argues myself unknown to say that I never now; and they were told, ~n elaborate statements, that Mr. heard of him until his name came before the Senate. I should Denman was saving money! They wanted ships, and ull tbey think I might be open to that el"iticism were it not that I do not heard were these accounts of quarrels in the board, and quatTfl!s think anybody east of San Francisco had heard of him until his with Mr. Denman, and troubles in Congre s and no ships; uutl name came before the Senate. I hnd no particular prejudice three golden months have aone. They are irrecoverable. Tlult against him, one way ot· the other, but I was anxious, above is why the President changed: the board, and that is what everything in the worlp, to have the ships and the transports justified him in doing it. built as rapidly as pos ible. I neve:r should have th·)Ught of utterjng one word on the Mr. DeD.Illlln was made chairman of the Shipping Boal.·d, and subject. The thillg was over; it ha.d been well done, and I b.acl fhat resulted in the retirement of Mr. Baker; who had been re. no desire to say a single syllable about it. But when it is 1917. CONGRESSIONAL REOORD-SE.NATE. 6057 brought ' in here to demonstrate in indirect fasbion- that the cer.ned, that settled. th._e question in. dispute between those' two \ President ought to ha v.e kept tbat boar~ and kept MI.:. Denman, Government employees. We thought it had, but scarcely had with his long. wake of quarrels. behind. him, I fox one, although tl1e action been taken by the President than we found that Mr. J, am a minority Member~ want to take occasion to say that it Denman ente1·ed into a discussion of the injustice that had been. is one of. the best things that bas been done for. the advancement done·him and a.. defense of his position in. the leading newspapers o:t the cause of the United Sta.tesJ of the eountr_y. Nobody co-uld object to that. He had a per Mr. SMOOT. Mr. President, the Senator· trom California fect right tQ do so;· but w.hen he come.s into. the Senate and asks [Mr. PHELAN] seems to think that he has been. denied the ordl that his at:gument sustai.ning. his position be made a part 6058 .CONGRESSIONAL RECORD-SENATE. ' t ~ AUGUST 15, that'board: The Senator from California, in reading the state :Mr. SMOOT. 1\.Ir. President, I can not defend the price of ment of :Mr. Denman, laid special emphasis upon the statement $95 per ton for steel. I think that was altogether too high, and in that letter that Gen. Goethals bad agreed to pay $95 a ton so did Gen. Goethals think it was too high. As to lhe price of for steel entering into the construction of ships. The truth is, $153 per ton displacement for steel ships and $133 per ton dis· Mr. President, that Gen. Goethals wanted to get the construc placement for wooden ships, I will say that I am unable to tion under way. There was no agreed price for steel: The determine in my mind whether it is an extravagant price under price asked by the steel manufacturers was 4-1 cents per pound, conditions as they exist to-day. We all know that before the as stated in that letter. It never was accepted by Gen. Goethals; war and in ordinary times it cost to build steel ships in this but in order to get the construction of the ships under way he country about $48 per ton displacement. accepted ·conditionallY' the price named, and the price that the Mr. STONE. About that. Government of the United States should pay was to be deter Mr. SMOOT. We know now, Mr. President, that wages in mined later, after a full investigation of the cost of producing the shipping plants of the country have not only doubled but in the steel. · many cases trebled. We know that everything that goes into When Chairman Denman and Gen. Goethals appeared before the construction of a ship and all the parts that make up a ship the subcommittee of the Appropriations Committee of the have increased from 50 per cent to 500 per cent. I am not suffi Senate Gen. Goethals made the statement that the price named ciently well informed to state that the prices at which the for the construction of ships of $153 per ton was based upon contracts are being let are excessively high ; but I do know that steel costing 4i cents a pound. At the same time he stated to 1\Ir. Denman recommended and the Senate gave the President the committee that the cost of wooden ships would be $135 a the power to take over the British ships that were being built ton. Chairman Denman heard that statement made-to the com in this country and pay $185 per ton for them, plus whatever mittee. He never then stated that he objected to the price that it would cost per ton to hasten their construction. was estimated at $153 a ton, based upon steel at 4! cents. He Mr. STONE. Were those steel ships? never objected at that time. They were both there asking for Mr. SMOOT. They were all steel ships: appropriations just as large as they could get, and they based ·Mr. WEEKS. I think the Senator from Utah ought to take their requests upon statements made that the cost would be $153 into. consideration the fact that, based upon shipping rates a ton. In that connection, also, they made a request that power to-day, the Government or any person having ships constructed be given to the President to commandeer all the shipping yards could better afford. to pay $95 per ton for steel than to pay in the United States and take over every ship upon every way $45 per ton in ordinary times; and, moreover, if the cost to and in every yard in the United States. They also stated that manufacture the steel is not more than $45 or $50 a ton, the they had reached an agreement with the British Government Government is going to receive back in excess-profits tax sub that the 1,024,000 tons of shipping under construction in the stantially one-half th~ difference between the cost and the price yards of the United States for England would be transferred to which it pays for the steel. . the United States at a cost of $185 a ton. Now the Senator Mr. SMOOT. We must all recognize that, Mr. President, and from California says that Mr. Balfour graciously offered to when we begin to talk about prices and what commodities· sell transfer the English ships under construction in this country for to-day we must remember that these are not normal times. to the United States. All business principles applicable in ordinary times are set aside. · 1\fr. PHELAN. Excuse me, the Senator is quotipg 1\Ir. Den I do not want to take any more time of the Senate, but I man. express the hope now that the quarrel between Mr. Denman Mr. SMOOT. Mr. Denman, I should have said; excuse me. and Gen. Goethals, so far as bringing it to the Senate is CQP. Why, Mr. President, if. the Senator will remember, I called at cerned, will end to-day. There is no good that can come from it. tention to this very question on the floor of the Senate when Mr. STONE. They are both out. the appropriation bill was under discussion. I said that it Mr. SMOOT. Yes; they are both in private life, and out of could not be defended as a business proposition. I called the the positions to which they were appointed by the President of attention of the Senate to the fact that if England continued the United States. the construction of those ships and retained the ownership of EXECUTIVE SESSION. them they would go into the very same trade and take their 1\Ir. MARTIN. I move that the Senate proceed to_the consid chances of being sunk by a submarine the sam·e as they would eration of executive business. if the United States advanced $200,000,000 and had the ships The motion was agreed to,-and the Senate proceeded to the transferred to her. consideration of executive business. After five minutes spent in Mr. STONE. And took the responsibility ourselves. executive session the doors were reopened. 1\fr. SMOOT. And we take the responsibility ourselves. RECESS. Mr. STONFJ. I want to say that I do not object to the build ing of wooden ships if, in the judgment of the Government, it is Mr. SIMMONS. I move that the Senate take a recess until very important to build· them for temporary use; but I hope to-morrow morning at 11 o'clock. that as few of them will be built as possible and that the ships The motion was agreed to; and (at 5 o'clock and 15 minutes we build will be permanent ships. I want to ask my friend p. m.) the Senate took a recess until to-morrow, Thursday, from Utah if it is true that somebody-Gen. Goethals or some August 16, 1917, at 11 o'clock a. m. , one else in authority-proposed to pay to the manufacturers furnishing the steel one hundred and fifty-odd dollars per ton. NOl\IINATIONS. Is that true? Mr. Sl\100T. I understand that that :figure-- Executive nominations received by the Senate August 15, 1911. 1\!r. STONE. Tentatively it was agreed to? FEDERAL TRADE COMMISSION. 1\Ir. Sl\IOOT. It was tentatively agreed to, and I will also Victor Murdock, of Kansas, to be a member of the Federal say to the Senator that I understand, but I have no evidence Trade Commission for the term expiring September 25, 1918, to prove it, that the Shipping Board has contracted to pay $153 vice Will H. Parry, deceased. per ton for steel-constructed ships. 1\lr. STONE. Who has paid it? SECRET.A.lUES OF EMBASSIES OR LEGATIONS. 1\fr. Sl\IOOT. The Shipping Board has agreed to pay it and CLASS 2. have contracted to pay as high as $133 per ton for ships con Warren D. Robbins, of Massachusetts, now a secretary of em structed of wood. I say that I have not seen the contracts, bassy or. legation of class 3 to be a secretary of embassy or lega and I do not know that such is the case. tion of class 2 of the United States of America. Mr. STONE. I wish to get the judgment of my friend from Willing Spencer, of Pennsylvania, now a secretary of embassy Utnh, who is a very thoughtful investigator of facts, whether or legation of class 3, to be a secretary of embassy or legation of he thinks our Government ought to pay one hundred and fifty class 2 of the United States of America. odd dollars per ton for steel or $133 per ton for the construc CLASS 3. tion of a wooden vessel-that is per ton, I imagine he means ; that whatever the tonnage is, it is $133 per ton. Herbert S. Goold, of California, now a secretary of embassy Mr. SMOOT. Per ton displacement. or legation of class 4, to be a secretary of embassy or legation of Mr. STONE. Per ton displacement; yes. I would like the class 3 of the United States of America. Senator tQ say whether he thinks these prices are reasonable or R. Henry Norweb, of Ohio, now a secretary of embassy or whether they are exorbitant. If they are reasonable, that is legation of class 4, to be a secretary of embassy or legation of the end of it; but if they are exorbitant, what is the I'emedy? Class 3 of the United States of America. - I am laying as a basis the price the Navy Department is paying CLASS 4. for steel, $56 per ton, as against one hundred and fifty-odd dol T. Hart Anderson, jr., of New York City, to be a secretary of lars per ton. What does the Senator think about that? embassy or legation Qf class 4 of the United States of America. 1917 •. CONGB.ESSIONAL RECORD-.SENATE. 6059 · Ray Athe.rton, of Chicago, Il( to . be n secretar:t of embassy Col. Ira A. Haynes; Coast Artillery Corps1 detached officers' ()t legation of dass·4 of the United States of America. list. John W. Belt, of Louisville, Ky., to be a secretary of embassy Col. William C. Langfitt, Corps of Engineers. or legation. of class 4 of the United States of America. Col. Samson L. Faison, Forty-second Infantry. Philander L. Cable, of Rock tsland, Ill., to be a secretary of Col. ·li'rederick Perkins, Ihfantry, detached officers' list. embassy or legation of class 4 of the United States of America. · Col. George It. Cameron, Twenty~fifth Cavalry. Frederick C. Chabot, of San Antonio, Tex., to be a secretary Col. Robert D. WalSh, Cavalry, detached officers' list. of embassy or legation of class 4 of the United States of America. Col. George W. llead, Cavalry (Adjutant General). Charles B. Fennell, of Kansas City, Mo., to be a secretary of Col. William P. Burnham, Fifty-sixth Infantry. embassy or legation of class 4 of the United States of America. Col. William H. Johnston, Infantry (·General Staff Corps)1 Matthew E. Hanna, of.. Stamford, Conn., to be a secretary of Col. Joseph P. O'Neil, Twenty-first Infantry. embassy or legation of dass 4 of the United States of America. Ool. Stephen M. Foote, Coast Artillery Corps. - Arthur Bliss Lane, of New York City, to be a secretary of em Col. Wilds P. Richardson, Infantry, unassigned" bassy or legation of class 4 of the United States of America. Col. Everard E. Hatch, Fourth Infantry. ·casper Y. Offutt, of Omaha, Nebr., to be a secretary of em Col. Harry Taylor, Corps of Engineers. bassy or legation of class 4 of the United States of America. Col. Henry D. Styer, Fourteenth Infantry. : ~ J. Donald C. Rodgers, of Rheems, Pa., to be a secretary of Col. Benjamin C. Morse, Forty-fourth Infantry. embassy or legation of class 4 of the United States of America. Col.· Grote Hutcheson, Cavalry, unassigned. Charles H. Russell~ jr., of New York City, to be a secretary of Col. Carl Reichmann, Infantry, detached officers' list. embassy or l~gation of clnss 4 of the United States of America. Col. Andrt; W. Brewster, Infantr1 (Inspector General). APPOIN'J.'i:MENT IN THE NATIONAL AltMY. Col. John D. Barrette, Coast Artillery Corps (Adjutant Gen· .eral). GENERAL OFFICERS. Col. Chat·les II. Muir, Thirty-third Infantry. To be rn.ajor generals with rank trom Attgust 5, 1917. Col. Daniel B. Devore, Tenth Infantry. Brig. Gen. William A. Mann, United States Army. Col. Beaumont B. Buck, Infantry, unassigned. Brig. Gen. James Parker, United States Army. Col. William F. Martin, Infantry, unassigned. Brig. Gen. Eben Swift, United States Army. Col. Robert A. Brown, Twenty-third Cavalry. Brig. Gen. Edward H. Plummer, United States Army. Col. Willard A. Holbrook, Seventeenth Cavalry. Brig. Gen. Edwin F. Glenn, United States Army. Col. Robert E. L. Michie, Cavalry (General Staff Corps). Brig. Gen. Augustus P. Blocksom, United States Army. Col. Evan 1\f. J'ohnson, Fifth Infantry. Brig.. Gen. Henry A. Greene, United States Army. Col. Lucien G. Berry, Field Artillery, detached officers' list. Brig. Gen. Francis H. French, United States Army. Col. Mason M. Patrick, Corps of Engineers. Brig. Gen. Charles J. Bailey, United States Army. Col. John E. ?tfcMahon, Sixteenth Field Artillery. Brig. Gen. George Bell, jr., United States Army. Col. Charles T. Menoher, Fifth Field Artillery. Brig. Gen. Frederick S. Strong, United States Army. Col. Benjamin A. Poore, Eighth Infantry. Brig. Gen. Harry F. Hodges, United States Army. Col. James H. McRae, Infantry (Adjutant General)~ Brig. Gen. Clarence 1'. Townsley, United States Army. Col. Walter H. Gordon, Fifteenth Infantry. Brig. Gen. Edwin St. J. Greble, United States Army. Col. FrankL. Winn, Infantry, unassigned. Brig. Gen. Francis J. Kerllll.n, United States Army. Col. Peter E. Traub, Cavalry, detached officets' list. Brig. Gen. John F. Biddle, United States Army. Col. Charles C. Ballou, Infantry, unassigned. Brig. Gen. George T. Bartlett, United States Army. Col. George B. Duncan, Twenty-sixth Infantry. Brig. Gen. Henry C. Hodges, jr., United States Army. Col. Julius /1.. Penn, Forty-ninth Infantry. Brig. Gen. Joseph T. Dickman, United States Army. Col. Edw~d M. Lewis, Forty-fifth Infantry. Brig. Gen. Charles G. Treat, United States Army. Col. Richmond P. Davis, Coast Artillery Corps. Brig. Gen. Adelbert Cronkhite, United States Army. Col. Ernest IDnds, Field Artillery (General Staff Corps). Brig. Gen. Henry T. Allen, United States Army. Col. Charles H. Martin, Fifty-fifth Infantry. Brig. Gen. William H. Sage, United States Army. Col. William Weigel, First Infantry. Brig. Gen. Clarence R. Edwards, United States Army. Col. Thomas G. Hanson! Infantry (Quartermaster Corps) •. Brig. Gen. John W. Ruckman, United States Army. Col. Herman Hall, Forty-seventh Infantry. Brig. Gen. Chase W. Kennedy, United States Army. Col. Marcus D. Cronin, Forty-first Infantry. Brig. Gen. Omar Bundy, United States Army. Col. Charles S. Farnsworth, Fifty-seventh Infantry~ Brig. Gen. Harry C. Hale, United States Army. Col. James T. Dean, Infantry (Adjutant General). Brig. Gen. Richard M:. Blatchford, United States Army. Col. Edmund Wittenmyer, .Infantry, unassigned. Brig. Gen. Samuel D. Sturgis, United States Army. Col. Michael J. Lenihan, Sixtieth Infantry. Brig. Gen. David C. Shanks, United States Army. Col. Mark L. Hersey, Fifty-eighth Infantry. Brig. Gen. William M. Wright, United States Army. Col. Frank H. Albright, Twenty-fifth Infantry. Brig. Gen. Robert L. Bullard, United States Army. Col. Frederic D. Evans, Infantry (Adjutant Gene1·al)~ Brig. Gen. Joseph E. Kuhn, United States Army. Col. John L. Hayden, Coast Artillery Corps. Brig. Gen. Peyton C. March, United States Army. Col. Henry Jervey, Corps of Engineers. Maj. Gen. Charles M. Clement, Pennsylvania National Guard. Col. Charles H. McKinstry, Corps of EJnglneers. Maj. Gen. John F. O'Ryan, New York National Guard. Col. William V. Judson, Corps of Engineers. To be brigadiet· generals with rank from August 5, 1911. Col. James W. McAndrew, Eighteenth Infantry. Col. William J. Nicholson, Eleventh Cavalry. - Col. William G. Haan, Coast Artillery Corps. Col. Robert C. Van Vliet, Thirty-seventh Infantry. Col. William L. Kenly, Field Artillery, detached officers' list. Col. George K. Hunter, Cavalry (Inspector General). Col. Edward F. McGlachlin, jr., Field Artillery, detached Col. Wilber E. Wilder, Fifth Cavalry. officers' list. Col. Robert N. Getty, Infantry, detached officers' list. Col. William Lassiter, Field Artillery, unassigned. Col. .r ames A. Irons, Second Infantry. Col. George Le R. Irwin, Eighth Field Artillery~ Col. John S. Mallory, Twenty-ninth Infantry. Col. William S. McNair, Sixth Field Artillery. Col. 'Villiam D. Beach, Cavalry, detached officers' list. Col. William J. Snow, Fow·th Field ,Artillery. Col. Samuel W. 1\iiller, Infantry, detached officers' list. Col. Henry D. Todd, jr., Coast Artillery Corps, detached Col. Lloyd M. Brett, Cavalry, detached officers' list• . officers' list. . Col. Frederick S. Foltz, First Cavalry. Col. Clint C. Hearn, Coast Artillery Corps. Col. William C. Rafferty, Coast Artillery Corps. Col. Frank G. Mauldin, Coast Artillery Corps. Col. J'ames B. Erwin, Seventh Cavalry. Col. George G. Gatley, Fifteenth Field Artillery. Col. William S. Scott, Sixteenth Cavalry. Col. Andrew Hero, jr., Coast Artillery Corps. Col. Charles L. Phillips, Coast Artillery Corps. Col. LeRoy S. Lyon, Thirteenth Field Artillery. Col. Lyman W. V. Kennon, Ninth Infantry. Col. George Blakely, Coast Artillery Corps (Inspector G-en~ Col. Joseph A. Gaston, Sixth Cavalry. eral). Col. Charles H. Barth, Sixty-second Infantry~ Col. Frank W. Coe, COast .AJ.·tillery Corps (General Staff Col. Guy Carleton, Cavalry, unassigned. Corps). Col. Edward Burr, Corps of Engineers. Col. William R. Smith, Coast Artillery Corps. Col. George W. Mciver, Infantry detached ofikers' lb!t. CoL Charles P. Sutn.Jnerall, Field Artillery, unassigned. Col. William H. Allaire, Sixtemth. :rnfantry. Col. Behry H. ·Whitney, Coast Artillery Corps (Adjutant CcL Thomas B. Dugan, Ninth Cavalry, General}~ · · 6060 CONGRESSIONAL RECORD-SENATE. - AUGUST 16~ . Lieut. -