9582· CONGRESSIONAL RECORD-HOUSE JUNE· 3(} We have·Iistened here on the floor of Mr. DOUGLAS. Mr. President, I ask Servicemen's Readjustment Act (Public Law this body for long hours at this session unanimous consent that the order for a 346, 78th Cong., June 22, 1944); and of the Congress to charges and counter S. 3571. An act to continue the au t hority quorum call be rescinded, and that fur of the Maritime Commission under the charges, explanations, and alibis con ther proceedings under the call be sus Merchant Ship Sales Act of 1946, and for cerning what has been done in this cotm pended. other purposes. try at home by this same godless force The PRESIDING OFFICER. Without of communism ehdeavoring to work its objection, it is so ordered. MESSAGES FROM THE PRESIDENT agents into our Government-the same ADJOURNMENT Sundry messages in writing from the conspiracy which has caused us to. take President of the United States were com these highly unusual and unprecedented Mr. LUCAS. Mr. President, I move municated to the House by Mr. Miller, steps this week to meet it abroad. We that the Senate adjourn until f2 o'cloclc one of his secretaries, who also informed have heard much, but we have taken no. noon tomorrow. · · · · the House that on the follO\ving dates the action. We have had a special investi- . . The motion \vas agreed to; and Puerto Rico: The SPEAKER. ". Is there objection to his remarks. · · . The motion was agreed to. the request of the gentleman from Mis Mr: LARCADE asked and was given Accordingly . the House resolved itself sissippi? perqiission to extend his remarks in into the Committee of the Whole House There was no objection. three instances, in each to include ex on the State of the Union for the con... [Mr. RANKIN addressed the House. His traneous matter. sideration of the bill s·.. 3336, with Mr. remarks appear in the Appendix.] Mr. RAINS Governor of Puerto Rico, elected on sage from this Congress to the people of of Congress. S. 3336 would make it pos-· the same party ticket as I was, has ap Puerto Rico which this bill implies. That sible for them to organize themselves in peared both before Senate and House is, the Fourth of July means government accordance with a Constitution of their committees to uphold the bill. The by the people, of the people, and for the own adoption, while the present exercise Legislature of Puerto Rico, by unanimous people wherever it is celebrated under the of United States authority, ali matters vote, has endorsed the bill. All mem American flag. It ·means government by of a Federal nature, would continue un bers of the insular senate, except one the consent of the governed in the United disturbed. Such a step is in line with the who abstained, voted for the bill. All States including Puerto Rico. fundamental tenents of the American members of the insular house of repre Mr. CRAWFORD. Mr. Chairman, I way of life. sentatives, except one, who abstained, yield 5 minutes to the gentleman from According to S. 3336 the present provi voted for -the bill. The five justices of New York [Mr. JAVITS]. sions of the Organic Act of Puerto Rico, our Supreme Court of Puerto Rico have Mr. JAVITS. Mr. Chairman, this is a concerning the operation of Federal au endorsed the bill. Seventy-six mayors, very ·serious issue for us in the United thority, the application of Federal laws out of seventy-seven-there are 77 mu States, especially today, because this is a to Puerto Rico, the - operation· of the nicipalities- in the island-endorsed the possession of tne United . States. The United States district court and the con bill. The American Federation of Labor charge has been made by the gentleman duct of Federal services, would be con in Puerto Rico and the CIO in Puerto from New York [Mr. MARCANTONIO], who tinued as heretofore. Insofar as local Rico, -have endorsec the bill. The introduced a great amount of material government · is concerned, insofar as Chamber of · Commerce of Puerto Rico in the CONGRESSIONAL RECORD which I power of government which Congress has endorsed the bill. read, and I hope other Members will has heretofore considered to be local in In spite of the unmistakable fact that read;in great detail, saying that we were nature, it would be based on a constitu- - I, who was elected on such platform, by our·conduct and in respect to this bill tion adopted by the people of Puer-to Rico represent the people of Puerto Rico in using our power with respect to Puerto instead of on provisions of congressional Congress; ·in spite of the evident support Rico in a way that we should not. I law. I have had· in sponsoring this measure, reiterate, at a time when we are fighting In order for this to take place-S. 3336 I wish again to call attention to the for the rights of free people with the establishes certain conditions and re fact, that in accordance with its terms, lives of Americans in Korea, and when quirements. The Constitution of Puerto this act would not become effective until we are trying to. hold up the hand of the Rico shall _be i:epub~ican in form. It approved by a majority of voters in a United Nations which is seeking to have shall contain a bill of rights. It shall not referendum on this bill, to be held in a new rule of justice in all relationships be inconsistent with the Constitution of Puerto F.ico. between administering powers and their the United States. It shall not be incon The bill will not be imposed upon the possessions or colonies, this is an ex sistent with such provisions of the pres people of Puerto Rico by the Congress. tremely important issue. ent organic act as would continue in The people may approve and accept it or I have tried to analyze this issue in effect. It shall be submitted for final disapprove and reject it. deference to my own conscience and in approval, to the Congress. It must be The bill will be an answer to those who deference to the 10,000 or more of our approved by the Congress before it be-. would accuse the United States of main citizens of Puerto Rican extraction who comes effective. taining Puerto Rico in a colonial status. live in my district and in respect to the These -conditions must be accepted by It will be another instance where facts · · best interests of the country, and I have the people of Puerto Rico, in a referen show that we not only believe in, but come to some conclusions with Jwhich I dum, before the biJI, if enacted, goes into practice, democracy. Under S. 3336 and would like to acquaint the House. effect. The people of Puerto Rico will in accordance with its terms, Puerto Rico This bill does restrict, and let us have decide by themselves in a free vote if with its own constitution and with a type that very clear, the people of Puerto Rico they want or do not want to enjoy self of relationship with the United States to . to a constitution which is within the government on this basis. which it would have freely agreed to, limitations.of the Organic Act for Puerto On the other hand, upon the condi would be taking, within this great Fed Rico. Their fundamental status is un tions and requirements established by eral system, the station of a f r~e people, changed. S. 3336 being fulfilled by the people of united with the great people of the main · They undoubtedly will get more powers Puerto Rico and upon the Congress so land f.or the common good, in the jnterest by a constitution under this act and they finding, and approving the Constitution of peace, prosper~ty, and security, in get them by their own designation, but of Puerto Rico, such Constitution shall . common loyalty to the great institution their fundamental status is unchanged. become operative, and such provisions of of this federation. Our union with the The fundamental difference which has the present organic act as refer to local United States is expressed _and sym-· occurred between this bill and the drafts government shall stand repealed. This bolized by our common citizenship. which were available before the Senate will create government -by consent in I think it would be of great significance acted, is twofold: First, the people of Puerto Rico both at the Federal and at that this bill be passed here today on the Puerto Rico are given two votes under the local level, a government. to which last session to be held before the Fourth this act, and instead of its being left in all concerned will have agreed to. of July. -i'he Fourth of July signifies in uncertain language as to whatever laws This is not statehood. Puerto Rico the history of the new world the affirma Puerto Rico might have about voting, it is will continue to be represented in Con tion of the principle that· just govern now said specifically, and I refer to sec gress by its Resident Commissioner. ment derives its authority from the con tion 2, "This act shall be submitted to the This is not independence. Puerto Ric sent of the governed. This bill estab qualified voters of Puerto Rico for accept ans will continue proudly to be Amer lishes in Puerto Rico government by· ance or rejection through an island-wide ican citizens, in a common loyalty to the consent of the governed. The 21st referendum". Also at least one more o-:ir common institutions. of May last marked the fiftieth anniver vote by the people is provided for in sec Mr. Chairman, I confidently say that sary of civil government in Puerto Rico tion 3 "upon adoptfon of the constitu the present political aspirations of the under the authority of the United States. tion by the people of Puerto Rico." people of Puerto Rico are embodied in Since the year 1900 we have been cele Now, let us see where that leaves us. I this bill. brating the Fourth of July in Puerto Rico believe that if the people of Puerto Rico At the last elections, I ran on a plat under civil government and under the are ready to make a constitution, then form calling for this form of self-gov United States flag. This coming Fourth they are ready to decide their own fate ernment. I explained my views on this of July will be therefore the fiftieth whether they wish to be independent, subject and advocated such self-govern- Fourth of July which we celebrate under whether they wish to have statehood, or 9586 CONGRESSIONAL RECORD-HOUSE JUNE 30 to continue within this organic act which I am rising this morning to urge a and Formosa to date, and which then .the United States has given to them.· If united front with respect to Korea: · We .:...states the policy and limits for ·fUrther they are ready for one, I think they are have to have a United States policy, and action under the·United Nations Charter ready for either of the others. · But, the at· this· time we should back the Presi and Security Council. question is, Does this act cut them off? dent's statement. I am sorr~ that some Mr. ASPINALL. Mr. Chairman, I Does this act foreclose them, and there, people have seen fit to make political is yield 10 minutes to the gentleman from I think, is very grave· ground for doubt, sues -of it, because we cannot have a New York [Mr. MARCANTONIO ]. for I believe the act inhibits the Puerto political foray in Korea; it must be ac Mr. MARCANTONIO. Mr. Chairman, Rican people by giving Congress' consent tion on a bipartisan policy under United at the very outset I should like to refer ·in advance to only the one alternative, Nations authority. · to the statement of the distinguished that of the present status within the or At this· critical time, we should forget gentleman from New York [Mr. JAVITsJ. ganic act only with a constitution, of these past recriminations among · each He seeks to justify, if I understand him course. other, and the unfortunate events that correctly, the passage of this bill with The constitutional convention duly have occurred through our previous pol an apology. called by the people for Puerto Rico icy in the Far East which many of us op Mr. JAVITS. Unfortunately, I was could be a run-away convention. In 1787 posed, and unite on a constructive for-· unable to finish my remarks, so t he gen we had a run-away constitutional con ward policy. I am one of the members of tleman cannot assume what I would vention. Our run-away constitutional the Committee on Foreign Affairs who have said if I had finished. convention was called for the purpose of as a member of the opposition at times Mr. MARCANTONIO. May I ask the confirming the Articles of C0nfederation, has criticized the State Department. I gentleman whether his argument is and instead of that they came up with a h ave criticized various of Dean Ache made for the purpose of supporting the new Constitution, for a new Government . son's actions as Secretary of State to bill? which, for the first time, made a coun obtain the best bipartisan policy. But Mr. JAVITS. If the gentleman de try that was successful, and there is no I must say that I have confidence in sires my views on this matter, first, I reason under this particular law why, if Dean Acheson's loyalty and competence believe this-- the people of Puerto Rico will it, they in doing his duties, and I feel he should Mr. MARCANTONIO. No; I am ask cannot have a run-away constitutional be continued as Secretary of State in ing the gentleman, is he for the bill or conventiori-·wfiich will give -them state stead of asking for his resignation. We against the bill? hood or independence. · must remember that the President is the Mr. JAVITS. I will answer the ques How does the Congress inhibit them in ·one under the Constitution designated tion. I believe the bill should be recom this particular statute? It says that the to handle our foreign policy. The Sec mitted to the committee but for the pur only thing we agree to now is that you retary of State and the Department of pose of striking ·out sections 4 and 5 shall have a constitution within the or State are merely the arms of the Presi which may have the effect of inhibiting ganic act. If you have a run-away con dent to carry out those policies, so that tl_e freedom of chofce of the Puerto stitutional convention, you -have not ac when Senator TAFT spoke of a policy as Rican people. cepted that in advance; there is nothing possibly being Acheson's policy-- Mr. MARCANTONIO. All right. The which can ·prevent this Congress, when it .Mr. MURRAY of Wisconsin. Mr. gentleman has : ·.. ated that he will vote gets this constitution back, from accept Chairman, the gentleman is out of order for recommittal. I note he has not qual ing it, because the Congress controls the and I move that his words be taken ified· his· assurance that he will vote for organic act whether· it passes this bill or· down. He has no authority to use the recommittal and I trust he will do so, not, and it will control it when that con name of Senator TAFT. He has been a so that the RECORD will remain with his stitution is returned to it. . Member of the House long enough to unqualified statement to vote to recom There is another change, and that is know the rules. mit. that the bill now does not just provide Mr. FULTON.. I will. be glad to with I, too, believe that this bill should ·be that the constitution shall lay on the . draw the name of Senator TAFT as it was recemmitted; As I stated yesterday, this .only a casual reference. .- So that when . table for 90 days, which the original draft ~ bill is merely a snare and a delusion and provided, but it says that the Congress we speak of a .policy as·. being Acheson's ·a fraud p'efpetrated on the people of · shall approve affirmatively. We can ap policy, we .really mean a policy of the Puerto "Rico to· make·them believe we are prove, we cari also eliminate or amend the President's which Mr. Acheson and .the giving them something. We are .giving organic act if we are satisfied approve Department of State are implementing to and administering. them nothing. This bill is a scheme a constitution ·which gives statehood or to deprive the people of Puerto Rico to independence. When it is said that Secretary Ache son should resign, we are then getting pass on their own future status. Mr. EBERHARTER. Mr. Chairman, into the position that the foreign gov- We cannot ·abdicate our powers to leg will the gentleman yield? . emments use when somebody makes a islate on the Territories or possessions. Mr. JAVITS. I yield to the gentleman mistake; we immediately call for their That power is vested in Congress. We from Pennsylvania. · political scalps. This makes for unstable cannot turn it over to anybody else.· So Mr. EBERHARTER. Does the gentle go.vernments and many shifts in policy when we say to the people of Puerto Rico, man have any fear that this constitu personnel. In our system, we hope by "We are with this bill, going to let you tional convention, if called, would try to constructive criticism in Congress and in legislate for yourselves," we are not tell separate its ties with the United States the country to have the Government offi ing them the truth. We are misleading Government? cials change their minds and adopt the them, and we· are aiding the present Mr. JAVITS. I do not see that that is policies we others suggest. It is a happy ruling clique of Puerto Rico t J dodge a proper fear and I do not have any fear occasion for those who have struggled the responsibility' they assumed at the on that subject; I believe only that it for an affirmative bipartisan policy in time they won their election to bring would be better to give the people of the Pacific as well as the Atlantic, that about an end to the colonial status. Puerto Rico an uninhibited right to this change of policy has now been made. Despite the statement made by the adopt a constitution of their choice. We United States citizens should rejoice · Resident Commissioner of Puerto Rico, The CHAffiMAN. The time of the that we are now able to go forward on a · I think the election literature of 1948 gentleman from New York has expired. united bipartisan American foreign pol · will demonstrate conclusively that the Mr. CRAWFORD. Mr. Chairman, I icy both in the Pacific and the Atlantic, Resident Commissioner himself and his yield 2 minutes to the gentleman. from and there is now the high duty to reach a party and his Governor advocated the Pennsylvania [Mr. FULTON]. · fair and just policy. In our country, following: Mr. FULTON. Mr. Chairman, I wish however, we still maintain the right to be First, they would seek from Congress to state to the House that I will vote for wrong, to criticize our policies, and to the complete elimination of any restric this bill. I believe this legislation is unite behind our officials to carry out the tion on the refining of sugar that is progress for Puerto Rico. I should like decisions, once the issues have been produced in Puerto Rico. to see these possessions of ours come of resolved. Second, it was said by the Governor age and look forward to the time when We should have introduced a biparti · and by. the platform of that party that they can· join us by standing shoulder to san resolution by which Congress ratifies when the· Legislature· of Puerto Rico shoulder as a State. the actions of the President as to Korea felt it was wise it would request of the 1950 CONGRESSIONAL RECORD-HOUSE - 9587 Congress the right to conduct a refer is called the Puerto Rican Industrial De The mere fact that this bill was introduced endum on three questions-colonial velopment Company, which is supposed is a confession on the part of the present status, statehood, and independence to produce jobs and is supposed to bring rulers of Puerto Rico -that the Puerto Rican people are restive under the present colonial and would request Congress to agree in industries to Puerto Rico. In 6 years status, and that they no longer want any advance to abide by the decision of the all that has been produced is a total of part of it. people of Puerto Rico. 7,233 jobs. Of this number 3,440 are The question of colonialism in Puerto Rico, That· was the platform and those are homework jobs. There is an additional however, will not be solved by H. R. 7674. the speeches which were made by the labor force for the past 3 years of 22,000. This bill is an evasion of the real question. It Governor of Puerto Rico as well as the Out of 2,200,000 population in Puerto .dodges the issue and is a form of escapism, an Resident Commissioner of Puerto Rico. Rico you have an average of 300,000 un attempt to put to sleep the aspirations of the Puerto Rican people for democracy and in It is significant here that the Resident employed. dependence. It is a snare and a delusion and Commissioner of Puerto Rico · ·.ntil just There must be some reason for it, and is intended to perpetuate the present system a few years ago, and our colleague js the reason is that Puerto Rico is a colony of imperialism imposed on the Puerto Rican here present, and I am sure will not and has no sovereignty. Because of its people by selfish interests in these United deny this statement, was an ardent ad lack of sovereignty it cannot control that States.. . vocate of independence. In fact he was economic relationship which is necessary What this bill actually is can be found in one of the most eloquent advocates of the words of Mr. FERN6s-ISERN in a state to its own well-being. It cannot develop ment he inserted in the CONGRESSIONAL REC independence. You see, you advocate its own industries because it cannot pro ORD on Tuesday, March 14, 1950: certain things when you are out, and tect those industries from competition . "The Congress of the United States since then when you are in, a change takes from the States. It is choked within the 1900 has provided for the opera~ion of Fed· place. A change took place in both the circle of our own tariff laws. It is sub eral laws in Puerto Rico. It has determined Resident Commissioner and the leader ject to our coastwise shipping monopoly. the economic relationships to exist between of his party, Mr. Mufi.oz Marin, who Absentee ownership is turning Puerto Puerto Rico and the mainland. It has de originally split up the Liberal Party of termined that the people of Puerto Rico are Rico into a diabetic economy. Its ag United States citizens. Such legal and eco Puerto Rico because he felt the lead.ers riculture is mainly sugar. The result is nomic provisions of our organic act the peo of the Liberal Party in Puerto Rico were that the people of Puerto Rico are faced ple of Puerto Rico a.re not aiming to disturb. not advocating independence.. He es with the most dire poverty. This opera Rather, they wish to reaffirm them and ex tablished the present political party on tion of bootstrap, about which we hear so pressly register their consent to their ~ppli· the idea of independence. much, and which the present Governor cation." So far as the statement that 38 mayors of Puerto Rico has been advertising so This is an admission on the part of the support this bill let us bear in mind that author of the bill that its purpose is to per much, particularly in the New York petuate the present system of colonialism the .mayors in Puerto Rico are not Herald-Tribune, giving it terrific sums under which the people of Puerto Rico are elected. They are appointed, or at least of money; and that explains one of the now suffering. in many of the cities they are, and nat reasons why the Herald-Tribune is sup Then, again, in the same statement in urally being appointed by the· Governor porting this bill, advertising this opera serted in the RECORD, Tuesday, March 14, they are going to sustain the Governor's tion bootstrap, it has nothing for the 1950, the gentleman from Puerto Rico [Mr. position on any question. people of Puerto Rico except big salaries FERN6s-ISERN] again says: "The Federal provisions of the present or This bill is proposed by the Governor, for the.politicians. Only the politicians ganic act would be reaffirmed under my bill. and it is proposed by his representa are living well while doing nothing for They are needful regulations for the estab tive the Resident Commissioner. It is the people of Puerto Rico. lishment and maintenance of proper r~la contrary to public opinion in Puerto Puerto Rico's problem can only be tions between the island and the mainland Rico. I say that because I maintain not solved in one manner, and that is to by the Federal Government." only the other political parties, not only give it sovereignty. This bill does not In the light of this language of the au the statehood people and not only the give Puerto Rico any sovereignty. It thor, and in the light of the language of independence people are opposed to this the bill, the conclusion is inescapable that restricts Puerto Rico's existence within the bill is a. meaningless gesture submitted bill, but the leading newspapers of the framework of the colonial status. for the sole purpose of negating the desire Puerto Rico are opposed to this bill. El And that is why the leading newspapers of the people of Puerto Rico for democracy Mundo and El Imparcial are opposed to El Mundo and El Imparcial have written and independence; it seeks to divert the this bill. editorials, which I placed in the RECORD attention of -the people from the issue of The labor groups are split, that is yesterday, which are in complete oppo indepj:!ndence. Here is a bill that does not the leadership is split wide open on this sition to this program. Oh, it is said, even ask for statehood. It is a supine re question, but the rank and file has in affirmation of the status quo in Puerto Rico we give the people a chance to pass on under the guise of a meaningless self-gov telegrams and messages time and time whether they want this or not. This ernment. again demonstrated its opposition to this implies great faith in the judgment of This proposal of the Mufi.oz Marin admin bill. It is significant that many, many the people of Puerto Rico. It is just the istration cannot be accepted as having been representative Puerto Ricans who have opposite. It shows a lack of faith. The offered in good faith. Mr. Mufi.oz Marin requested to be· heard were told to submit fact that the present Governor of Puerto knows better than to expect the establish statements, but were not given an op Rico deprived the people of Puerto Rico ment of a commonwealth which cannot be portunity to be heard in opposition to of what he has promised them, an oppor establish'ed under the provisions of our the bill. tunity to choose independence, state Constitution. There is something fundamental in hood, or a continuance of the present Operation desperation volved here, much more fundamental status. I submit that this bill is not in This last proposal of Mufi.oz M~rin can than these fringe arguments as to what be described as operation desperation on the interest of the people of Puerto Rico the part of those who in the past have side who takes. In Puerto Rico we and it is in violation of our own Consti lead the people to believe that they sup witnessed another tragedy just a coupie tution. It betrays the people of .Puerto ported independence, when they were out of weeks ago when a plane fell into Rico to the interests of colonialism. of power, and now when confronted with the ocean and 28 Puerto Ricans on responsib111ty of office employ this artifice that plane were killed. We might say, I include here a speech l made on this to renege on past promises and declarations "Well, that is just an ordinary disaster, subject last March: for independence. an airplane disaster." . But that is a PuERTO RICAN INDEPENDENCE As against this empty gesture, I today symptom of the fundamental evils which (A speech by Congressman VITO MARCAN• have reintroduced my independence bill. TONIO) Mr. Speaker, 1n order to pass honest judg this bill perpetuates in Puerto Rico. ment on this last empty proposal of the This bill perpetuates the colonial sys PUERTO RICAN INDEPENDENCE VERSUS THE NERO Mufi.oz Marin administration, in contrast tem in Puerto Rico. Those workers who OF FORTALEZA-HIS SATURNALIA OF CORRUP• with my proposal for genuine independence, died in that plane crash were victims of TION AND HIS OPERATION BOOBY TRAP I submit that it is of utmost importance the colonial system this bill would per Mr. MARCANTONIO. Mr. Speaker, the Resi that we must first examine our relations petuate. dent Commissioner of Puerto Rico, the Hon with Puerto Rico, that we examine its pres orable FERN6s-IsERN, introduced the other ent government, and that we seek a solution Let me give you some figures which I day H. R. 7674. The bill is described as a. of its most pressing problems. placed in the RECORD, but which I want blll to provide for the organization of a con Puerto Rico was taken over by us by force to repeat because they are so vitally im stitutional government by the people of of arms. This action was subsequently rati portant. In Puerto Rico they have what Puerto Rico. fied by the Treaty of Paris in 1898. As .I\ 9588 CONGRESSIONAL RECORD-HOUSE JUNE -30 result Puerto Rico is a colony of the United of Puerto Rico had representation in the Rican sugar quota will continue to be. de Stat es. Spanish Cortes or Parliament. They had pendent on the will of the Congress of the When we took over this country, which representation in the senate and 16 repre- United States. was discovered by Columbus in 1492, and sentatives in the Spanish house at Madrid. Under our rule the people . of Puerto Rico which was under the jurisdict ion· of Spain We can tax the Puert o Rican people besides have · seen the destruction of their coffee until 1898, the Puerto Rican people had. won having the power to send them to war. Thus trade. That has been so because we offer over from Spain, through centuries of strug we do not only impose upon the Puerto no tariff protection to coffee. We do that gle, an autonomous charter which guaran .Ricans taxation without representation, but because we produce no coffee in the United teed the people subst antial sovereignty. we also impose UP.On them a tax on the blood Sta..tes . . Our tariff is draft ed . to proJ;ect our Under that charter the people of Puerto. Rico of their people. crops. If we protect s'l}gar w.hich is_a Puerto had complete home rule, and, besides, had . This, too, Mufi.oz Marin would perpetuate Rican product, it is because we .produce the power of making their own tariff laws through ·the enactment of H. R. 7674. 2,000,000 tons of sugar right here in the and of entering. into commercial tra de agree During the 51 years that Puerto Rico has United States. If we buy Puerto Rican sugar. · ments with other countries. The autono been under our jurisdiction we have used it ls because we have a normal consumption mous charter could not be revoked or that island and its people to our advantage. of 7.000,000 tons a year. · Coffee was one .of . amended but on the pet ition of the Puer.to .we have established, as I have said before, the· most important cash products to Puerto Rican Parliament. air, naval, military, and submarine bases in Rico in 1898 when Puerto Rico had a market We substituted for the autonomous gov Puerto ~ican territory. yve have conscripted for its well-kno.wn· product in 17 nations. ernment which the ·Puerto· Ricans had won Puerto . Ricans in two wars and have sent Today Puerto Rico not only is not a coffee- over from Spain; a colon ial form of govern therri to fight for us in two wars. In the last exporting country, but it imports coffee from ment. Under our present relationship, which ·war over ·500,000 Puerto Ricans were drafted, .the United States, which is n:ot a coffee-pro- · the 'Fern6s-Isern bill would not change, · and BO ;OUO were ·actually under-arms. Many ducing nat ion.. We buy coffee from Brazil Puert o Rico, according to·our Supreme Court, -Of them were in action and many died. for . and·other countries and sell it' to the people -"belongs to b}lt does not forin part o~ the the catj.se of democracy. As a · result of the of Puerto Rico. Toqay, when the price .of United St ates." The government of Puerto workings of the ta.rif;f _laws, and the imposi- coffee has gone up, the Puerto Rica~ t people Rico is organized· ·under an organic act passed tion up9~ the.Puerto Ricaps of the coastwise have been unable 'to. take advantage. of the by this Congress, the Jones Act, which can sh.ipping laws, ·and the denial to them of . world.. situation because the· c'offee growers ·be amended or annulled by us without con · pow.er to .negotiate for recl.prcical trade agree- are ·ruined. It is important to point out 'that sulting the p'eople of Puerto· Rico. The laws ments, we have excluded them from world over 15 percent of the Puerto Rican people passed by the Legislature· of ·Puerto Rico can ·markets. They buy 98 percent of their ·im- Hve on -the production of ~he coffee-produc- be amended, suspended, or revoked by Con ports. in the United Stat es. -In 1948. Puerto ing regiqn. gress. Every law approved by the legislature Rico bought $a37 ,000,POO in. goods from -the· Furthermore we . afford. n9 .i,:eal w .otec;:tio:q niust be sent to this Congress whicb, can .e:i;rer- . . United States and sold us $199,000,000 -worth - . t.o. the _P~ertq ~lean tc;:ib,acco . . We ,.fix the else it s veto power over them. The Supreme of goqds. The balance of trade thus favors ' .price of the art ! cl~s 'Jle sell t~e Pl,.lert.o Ric~ris . Court of the United States can declare uri us by $138,000,000. The shipping companies · . a:r:id of t~e articles w~ich they sell ~s. In constitutional the law!) passed by the' Legis w_hich hold a monopoly in Puerto Rico. have short, we have a . stra~gle hold upon the lature of Puerto Rico . . The. President .of the made huge profits in the·island during the Puer'to Rican economy and have re_duced that United States. holds a veto power over the last half century. This can· be said also of country· to a state of misery and abysmal Puert o Rico Legislature. The President of our banks whicp.· are ·doing business in the PQVerty .. · the . United States appoints ·the , judges . of ·island; of the · insurance- companies, . of the . :Neither P':1erto .Ric.an- coffee nor . Puert.o ... the. supreme- court, the ;mditor for Puert9 Wall Stree_t financial interests, -and of several Ric.an ·tobacco can . be. pr.otected, with the. Rico, and all Federal officials in the. island, . other big American concerns. we have· found enactment of -:tt .. R. 7674: . T.hese. prod.ucts including _the judg~ of . tp.e Federal coµrt(. -in Puert.o ·Rico· an outl~t for our rice, our will remain the victims 9f our strangle holq Appeals are taken from the Supreme Cpurt of be_!tns, qur codfish, 'our shoes, clothes, ·manu- upon tlie economy of Puerto Rico. So that Puert o Rico to the circuit court of appeals for 'factured products, antl · many other items H. R. 7674 is definitely an- empty gesture. the first circuit in Boston. We have .exclusive which number over 1,000. , · ~ It fails to deal with the fundamental prob- jurisdict ion in such vital matters as bank Again!.. all thi~ is not changed one iota by lems of ·~uerto Rico. It fail.s to. pro~ect ruptcy, navigation, air law, radio, immigra the ·Munoz Mann. proposal. In fact, H. R. ·Puerto Rican ·economy. It fails ·to relleve tion, conscription~in time of peace and. of 7674 accepts this forrp of exploitatiqn. Puerto . Rico from the yoke of imperialism war-and other matters. The structure Facts abo;,t sugar · and colonial exploitation under which it is . within which the Puerto .Rican government suffering. It fails _to establish democracy operates cannot be altereq·, annulled, or in RiBesides, Congress does. not allow Puerto - . for Puerto Rico·, and therefore fails _.to give any way modified by the people of Puerto co to refine b_ut 15 percent_of its total pro- PuertG> Rico self-government in the real sense Rico. duction of sugar. The other 85 percent is of the word. . We have encircled Puerto Rico within our · refined in the United States by · our refiners · ~ . • at a loss to PUcrio Rico of -Over $30 OOO OOO • . . Aga'in. I rep~at the .M\mOZ J\4arin prO£OSal, 'tariff walls. We have imposed upon that This is an outright d ' · i t· • · • perpetuates one o_f the w9rst forms of colo- country the coastwise shipping laws. ·We . . i~cnm na 10n excerc1 sed nial ex loitation. . . bind the ·puertG Ricans with the treaties. we , by, th.is ,congress .against the· Puerto Rican · P. ~ · · · ·1 · · people, which exemplifies the colonial status . '!!!lder the colonial s~~ te~ of ~xp 01tation negotiated without their participation in of the island. . . . ·which I have .Just de.scnbt:(c;t . .we have now in such negotiations. _ We can force Puerto Rico, as we have done twice through- the past 50 .. ·!Jere again. the last Munoz Marin -~nipty Puer ~o Rico over 300,000 unempl_byed but of . gesture, H. R. 7674, ·does not attempt to a tc:>tal population ·of _2,200,000 inhabitants. years, into a war without consulting. th~m in advance, and we can take over their. terd reme,dy this situation, nor provide any m·eans That wquld amount, more ~r less, to 21,000,- for remedying it. · 000 unemployed in the Umted States. tory, as. we have done on numerous occasions in spite of the-great need that th~y have for Furthermore, under the sugar Act ·passed .O.ne o~ ti;ie _vicious results of .this system .. land, for air, naval, military, and submarine ·by. th,is Congress., the Federal Department o'f of explo1tat10n is that ~e have _right now in needs· of ours. Agriculture has•. fixed for Puerto Rico an Pµerto Rico 30 .9,0?~ ~h1ldren of ~chool age All this the Mufi.oz Marin empty proposal annual export quota of 91.0 000 tons of· sug ·;: without school fac1llt1es out of .a school pqp for alleged self-government would perpe and an annual dom~stic 'quota of lOO , O~O . u.lat~Qn of 688,000 children . . TJ;le rest. do ~ot _ tuate. All thi~ t:q.~ Mujio?" Marin governmen~ tons. P.uerto Rico produced 1,277,482 tons receive adequ!J.te equcati<;m. They Just go acceots. All this .would be continued, 'this in 1949. Ninety-six thousand tons of excess to.. schooJ for h l;l-lf a day. Fr~m 6 to 7 persons stat us quo would be made ·permanent under are in the hands of Puerto Rican producers out of 100 graduate .from high school under H. R. 7674. Not one iota of this colonialism today. It is estimated that at the end of the half-a-day training program in force. that I have described would be changed by i950 there will be an excess of 250,000 ·tons in ~e average p~rson in the rura~ areas .re- the recent Fern6s-Isern-Muiioz Marin. pro- the hand.s of Puerto Rican producers . . Even · ce1ves the_ equivalent of 2 years schoolmg posal. · though the annual consumption of sugar in in_the Umt~d States, for the average person Let me remind you that the Puerto Rican the -United states has· gone up to 7,800,000 in Puerto R1~0 goes to school for 4 years on a people have no representation in this Con.: tons, the basic quota of Puerto Rico has half-day basis. The people of Puerto Rico greES. The Puerto Rican people are allowed not been inereased substantially. This has · do not have the educational facilities offered only to send here a Resident Commissioner been· so.beca'l!se the Sugar Act passed by this to ~-he citizen~ of the poorest State in the . who has a voice in matters affecting Puerto Congress provides that the normal Puerto United States. Rico, but who has no vote. Ric"an quota of 910,000 tons a year can be The conclu~ions stated above are not my _ This, t oo, would be perpetuated under Mr. reduced if the normal consumption, as fixed own. They are the conclusions arrived at FERN6s-IsERN's bill. It is shameful and / by the United States Department of Agricul- recently by a. committee of experts of Co- tragic that Mr. Mufi.oz Marin has ·tried to lead . ture, is less than 7,000,000 tons, while no!pro- . lumbia ·University hired by the government people here in Washington to believe that · vision is made for an increase when the ·of Puerto Rico to make a survey of the edu- the Puerto Ricans give their blessing to this annual consumptiori goes over 7,000,000 "tons cational facilities of the people of the island ~ system of colonialism which I am describing, a year. We have in Puerto Rico the worst slums of and that they· want this system continued Here again let me remind the people' of the Western Hemisphere. T.he tourist going through the enactment of H. R. 7674. Puerto Rico that with the adoption of H. R. to the islands is greeted by the. slum called La Under t he Spanish regime at the time we 7674 this situation with respect to sugar Perla-the Pearl. When he dep·arts· he is took over Puerto Rico from Spain the people will not ·be changed, and that the Puerto bade farewell by El Fangrito-Little Mud. 1950 CONGRESSIONAL RECORD-HOUSE 9589 La Perla and El Fangrito are two of the typi developed ln Puerto Rico since 1898 into the established in the island an era of the most cal slums of the island. Last December saw economy of a free and independ_ent nation. extravagant and expensive government that , destruction and misery in some of the slums The trend in our time is toward the liq the people of Puerto Rico have ever seen. He of the island when an unusually high tide uidation of colonialism everywhere and the has used public money for his own personal of the Atlantic wiped away many of the granting of recognition to new and inde propaganda. He pays the publicity agent, houses in La Perla, San Juan, Palo Seco in pendent nations, to work together under the Hamilton Wright, $140,000 a year. Inciden Toa Baja and Palmarito and other places in framework of the United Nations. The tally, some of the newspapers in the United the city of Arecibo. trend is also toward international coopera States are beneficiaries of this propaganda There exists a municipal hospital system tion and toward the offering of help to small slush fund. One of the chief apologist s for in Puerto Rico which has been character nations, so that they can better develop their Muiioz Marin is the New York Herald Trib ized by the health commissioner of the economies, and so that they can better help une. An examination of the advertising in island, Dr. Juan A. Pons, as one which of in the building of a better world. the New York Herald Tribune will expose it fers the people a service worse than the one The Muiioz Marin-Fern6s-Isern proposal as one of the chief beneficiaries of this huge given its dogs in a hospital for animals. runs counter to this trend, and it is there propaganda fund which is squeezed out of · Atout three-quarters of the total popula fore reactionary and imbedded in the de the bloodless veins of the people of Puerto tion of Puerto Rico is at present ill-clothed cayed structure of colonialism. Rico. Of course the propaganda slush fund and ill-housed. The people of Puerto Rico can only solve is clothed under the guise of propaganda for To help the people of Puerto Rico this Con their economic problem through industri Puerto Rican products, but it is actually gress has made no appropriation for educa alization. In order to develop a wide pro ~arsenal propaganda for Luis Muiioz Marin, tional facilities. We have not extended to gram of industrialization they must have and for the colonial system. Most of the the island the total benefits of the Social Se power to make their own tariff laws, to ne propaganda from Puerto Rico which we read curity Act. We have done nothing to correct gotiate reciprocal trade agreements, to make centers around Muiioz Marin to promote him the transportation conditions in the island. their own coastwise shipping laws, and to personally, and to alibi the present system We have limited, as I said before, the pro have complete jurisdiction over their ter of colonial exploitation. Besides the money duction and refining of sugar. We have done ritory and land, their waters, their air, and paid as a retainer, theusands and thousands nothing to protect coffee and tobacco pro their people. They cannot have these pow of dollars are spent in publicity in American duction, while we have directed obstacles in ers under colonialism. They cannot have _magazines and periodicals to promote Munoz the path of the development of the needle these powers under H. R. 7674. They can Marin personally, and to cover up inde trade industry, which ls undergoing right not have these powers under statehood. cent exploitation of the Puerto Rican people now a crisis. They can only have these powers under their under the present colonial status. Program own sovereignty in a free and independent This man uses public money for his per To take care of the immediate needs of the nation, a nation able to enter into negotia sonal propaganda without account:ng to the Puerto Rican people it is imperative that we tion with other countries on a basis of people of Puerto Rico. His inauguration enact a program which wlll help these people equalit:v and of justice. last year was the most grandiose, Roman to face the impending crisis. Among the im What Puerto Rico needs to solve its prob circus, carnival-like festivity which anyone mediate measures which should be adopted lems is sovereignty-full sovereignty. The bas ever seen. Four hundred people from are the following: Muiioz Marin proposal denies even limited all over Latin America and the United States First. Allow Puerto Rico to refine its sugar sovereignty to the people of Puerto Rico. were invited to the ceremonies, and all the production. The people and Government of the United expenses were paid by the people of Puerto Second. Increase the Puerto Rican sugar States are bound to help the people of Puerto Rico, from air transportation, hotel accom quota to absorb present and estimated ex Rico. It is our responsibUty because we • modations, taxis, and for all kinds of extra cess. This requires an amendment to the have exploited them for over half a century. entertainment. Up to this time nobody is Sugar Act which would provide "that i~ the It our responsibil1ty because we have knows exactly the amount of money which event that the sugar consumption of the cut them off from world markets. It is was expended during this inauguration, but United States is considered by the United our responsib1lity because we have made them it 1s known that an enormous amount of States Department of Agriculture to be in dependent on our own economy. It is our money was expended and that the fees far excess of 7,000,000 tons a year, the basic responsibilty because they have helped fight exceeded the appropriation for the expenses quota of Puerto Rico of 910,000 tons be raised two of our wars . . ~ It is our responsibility of the· inauguration for the President of the accordingly." because they are a hard-working and pro United States. The legislature did not make Another solution would be to permit the gressive people, with a noble tradition of any appropriation in advance for these cere Puerto Rican producers to sell their excess solidarity in the Western Hemisphere, and monies. After they had taken place b1lls of in the world market at 1 cent less than the with a noble cultural heritage. • deficiency were sent to the legislature with price and have Congress appropriate $6,000,- The people and Government of the United out any 1!3pecific accounting being given, and 000 to compensate the Puerto. Rican pro- _ States cannot and will not deny help to they were approved by the legislature with- ducers for their loss. a · free Republic of Puerto Rico. I am con . out discussion of the specific items and Third. Extend to Puerto Rico all the bene fident that Americans will assist the people amounts, and in the midst of a standing ap fits of the Social Security Act. of Puerto Rico in their struggle for inde plause of the stooges of Mufioz Marin in the Fourth. Extend to Puerto Rico Federal aid pendence when they are given a true pic legislature. to an amount not less than $10,000,000 to ex ture of our relations with Puerto Rico. With t_his inauguration there was inaugu tend its educational facilities. We have a :raise picture in Congress and rated in Puerto Rico one of the worst satur Fifth. Legislate to help in a program of in the United States of what has been going nalias of corruption in the history of govern- coffee and tobacco rehabllitatlon. on in Puerto Rico, because the colonial gov ments. • Sixth. Take measures to end discrimina ernment there is headed by a governor who Mr. Speaker, I wish to state right here, 1s working hand in hand with imperialistic tion against Puerto Rican workers in the however, ~hat neither Mr. Mufioz Marin nor United States. Enact a genuine FEPC bill. interests, and whose job it is to give the his administration are the product of Puerto Seventh. Give back to the people . of impression to the people of the United States Rico. They are the product of colonial ex Vieques the land which has been taken away and to the world that Puerto Rico is not a ploitation. They are the minions of our from them by the United States Navy. This colony, but a country of free and contented colonial status imposed on the people of land ls not used at the present time by the people to whom we have extended a fair Puerto Rico. Their actions do not reflect on Navy, and the people of Vleques have been deal. either the integrity or the honor of the peo displaced en masse from their homes and The name of that man is Luis Muiioz ple of Puerto Rico. They merely prove again they are undergoing a terrible plight. During Marin. Under his government we have seen that puppets of imperialism never serve the last Christmas the mayor of Vieques sent ·a floundering the most extravagant, luxurious, best interests of their people. message to the Governor of Puerto Rico tell pompous, and irresponsible bureaucratic Here is some more on Mr. Muiioz Marin. ing him that the people of Vieques were so government that anyone can imagine. Every week different persons from various desperate that they were asking only for a This eharacter Muiioz Marin may be ac places are invited to stay with Muiioz Marin Christ mas dinner. curately described as the Nero of La For at the Governor's palace known as La Forta Eighth. Appropriate money for the estab taleza-the Governor's palace. While his leza. There again the sole purpose is that of lishment. of a Federal Public Works program people starve, and at their expense, he has obtaining personal publicity and to cover up on a large scale to relieve the unemployed. built for himself a false reputation here in for colonialism. No account for the parties To solve the problem of Puerto Rico on the United Statei:1 as a champion of the jiba nor for the expenses ls given to the people. a permanent basis it is imperative that ros-peasants--of Puerto Rico, when as a The entertainment is most extravagant. colonialism be ended in the island, and matter of fact, like Nero, he ignores their Members of the House who have been enter that the people of Puerto Rico be allowed suffering and lives well at their expense. tained at La Fortaleza will bear me out. to draft their own constitution as a free This man came to power as a champion of ·However, I doubt if the visiting Congressmen an independent nation, and not as a independence, as a champion of the under knew that the entertainment ·came out of the colony as provided in H. R. 76\4. · Pro dog, as a champion of simple, austere life in pockets of the suffering people of Puerto visons should be taken at the adoption of my public service. And now he is a renegade of Rico. This type of entertainment is shock independence bill to insure the transforma independence, he is working hand in hand ing because Puerto Rico is poor and its peo tion of the colonial economy which we have with the Wall Street crowd, and he has ple are poor. All this despite the preelection 9590 CONGRESSIONAL RECORD-HOUSE JUNE 30 promises of Munoz Marin to institute a pro were sold in Wall Street for $50,000,000 at a the metropolitan zone--that is, San Juan gram of austerity and simplicity in the pub very high interest rate. It is negotiating and surroundings, including Rio Piedras lic life of that country. an additional loan for this agency, the Water gives nothing but inefficient service and it Nero of Fortaleza Resources Authority. To guarantee these has been operating at a deficit of over bonds they pledge the property of the Water $1,000,000. This Nero of Fortaleza has at at his dis Resources Authority. It also issued bonds Fundamentally, all these agencies and posal large numbers of automobiles. His which it sold in Wall Street in the .amount especially the land authority are used for personal bodyguard is unprecedented in of $22,700,000, also at a high interest rate political purposes. Of course, I am in favor size. The number of attendants and for the Aqueduct and Sewage Service of of the principle involved in the establishing retainers at Fortaleza have been abnormally Puerto Rico. It negotiated this loan for and functioning of all these authorities. I increased, and so has the number of political $22,700,000 even though they are expending have ·defended the land authority . ~ I have parasites on the governmental structure rap the ntoney at the rate of about $4,000,000 a defended also the ·land policies of the gov idly multiplied. year-the balance is deposited in private ernment .of Puerto Rico, up to and including Again, Mr. Speaker, I say that all this banks and draws no interest, while the peo the establishment of the land authority. I is a byproduct of our colonial status and not ple of Puerto Rico are paying an interest rate have favored the proportional benefit fund. the product of the people of Puerto Rico. on the total amount of the bonds. Let me call the attention of the Members I have also favored the water resources au It should be pointed out that Mr. Bonni thority a.nd other~. But I ·am against the of this House who are so critical of large well, the financial adviser of the Government Government expenditures here to the follow use of the land authority as a political of Puerto Rico, was related to the bond firm agency, and I " am against the mortgage ·of ing salaries paid to the favorites of this of Wall Street, B. J. Van Ingen & Co. That colonial emperor of ours in Puerto Rico. the properties of the water resources au firm negotiated. the first $20,000,000 bonds thority and of the aqueducts to the Wall Here is a list of salaries which would make for the. Water Resources Authority when Mr. even our local grafters gasp: Street crowd. The water resources were Bonniwell was connected with the firm. fm;merly in .the h~nds of the Puerto Rican Antonio Luchetti, head of the Water' After that he went to work with the gov Railway Light & Power Co. Now they are Resources Authority_·______$30, 000 ernment of Puerto Rico and that firm par in the hands of the b-ondholders of' Wall (This man also gets expenses, auto- ticipated in the negotiation of the $22,700,- Street. The same can be said of ·the aque mobile, chauffeur, and a residence 000 ·in bonds negotiated by the Aqueduct ducts of Puerto Rico. As a result of that which is a palace.) and Sewage Service. The commission which the water rates and the electric light rates Rafael Buscaglia, president, Develop- negotiated the bonds is fixed. by the govern-· have gone up to the extent that protest ment Bank______30, 000 ment bank of which Mr. Bonniwell is finan demo~strations. !lave been organized by .con• Esteban Bird, vfoe president, Devel- cial adviser. sumers in Puerto Rico. opment Bank ______.;.______28, 000 While the people's finance is being squan Munoz Marin has changed the whole phi E. R. Bonniwell, finance director, De dered and the people's financial ability is be losophy under which the authorities were velopment Bank (plus expenses). 22, 000 ing exploited~ let us see how the local govern created, and has used them to his political J. R. Hanson, manager, Glass Factory ment itself op·erates, ang again here I re advantage. To do this he has allied him of the Puerto ·Rico Industrial I;>e peat, this is not the product of the people self with Wall Stree·t vested interests and yelopment CO------~------20,,000 of P.uerto Rico but the product of colonialism - he is today .their stooge and servant. He has Teodoro Moscoso, president, Puerto in lts worst form. ·mortgaged these authorities te- Wall ·Street Rico Development Co ______18, 000 7 Mr. Munoz Marin has tried. to centralize interests. Sergio Cuevas Bustamante, director, in his own hands all the government of Operation booby trap · Puerto Rico Aqueduct Service_ .:. __ 15, 000 • Puerta Rico. - Now he is planning to elimi~ . Thomas A. Fennell, manager, Agri- nate the municipal assemblies and usurp the We have heard through the fancy, high cultural co. of Puerto Rico (plus powers of the municipal officers-to be con paid advertising, a ' great deal about Opera- . expenses)------12,000 trolled by the Governor. tion Boot Strap, but to the people of Puerto (Mr. Fennell was dropped as man The most important decisions of the _legis Rico the Mufi.oz Marin administration can be ager after terrific public protest, lature are made at dinners which are given called Operation Booby Trap. The follow but was retained as an absentee at La Fortaleza to the legislators by Mr. ing story of the Ca1·ibe Hilton Hotel demon- expert at a salary, according to my Munoz Marin. The legislatqrs will not pass . strates what I mean when t say the Mufi.oz information, of $5,000.) · bil~s which have not the previous approval ·Marin administration is Operation· Booby Jose Acosta Velarde, director, Land of Mu·noz. Actually every bill is written com Trap for the people of Puerto Rico. Authority ______·______12, 000 pletely at La Fortaleza. The story on the Caribe Hilton Hotel ls Mariano Ramirez, vice president, be- velopment co ______12,000 Now, as to the fundamental economy of an example of the Government's policies to Puerto Rico itself, let us examine the follow attract industries. The Government of David Ramirez, vice president, De ing: Puerto Rico built the hotel at a cost of velopment Co. (th~s officer was ;Because of t he special war conditions, huge $7,000,000. The hotel has 300 rooms. Then, dropped later on)------12,000 . amounts of·mC?neys entered the government after it :was built, the Government leased the Rafael Fernandez Garcia, vice presi- of Puerto Rico. According to a report which hotel to the Hilton Hotel· Corp. on a 20.-year dent, Development Co..:______12, 000 was filed by the governor of Puerto Rico be lease. Homer J. Miller, manager, Paper Fac f Qr.e the United Nations, from June 30 1 1940 Munoz Marin has not even revealed the tory of Development Co. (this fac to J'\lne 30, 1949, $713,000,000 went to the amount for which the hotel was leased, even tory closed because of huge deficit · tr~asury of Puerto Rico. Frpm this $144,000,- though the people have · asked for this in and lack of market)------12,000 000 were appropriated for the insular agencies formation. This is part of the policy of The information that I am herewith re- and authorities. Besides, these agencies re secrecy in the ·government-the people are vealing was dug up by an economist, Eliezer ceived $72,000,000 from the sale of bonds. , In never given inrormation about the way the Curet Cuevas, while working for a .Puerto spite of these bonds, Mufi.oz Marin has done money is expended. Everything that was Rican newspaper, El Mundo, a,.nd the infor not'l~ing to promote in a fu~damental way ~he used, inJ:luding furniture, was fl.own from mation was published in that pap~r on J an Puerto Rican economy. This has been partly the United States. Even the sugar came uary 23, 1949. He pointed out th::.t 17 execu so because of the inner inequities of the co from the United States to Puerto Rico, and tives of the Puerto Rican government and lonial structure and partly so because of the also most of the-employees were taken from the various government corporations and au incompetenM of Mufi.oz Marin, and because the United States to Puerto Rico. The ex thorities are receiving salaries amounting to of this extravagant and expensive govern penses for propaganda, as announced by the approximately $300,000 a year. ment, and his extravagant and expensive way management, went over $150,000, and the On the other hand, Mr. Cuevas pointed of living. Government of Puerto Rico pays half of that out that the salaries received by the small Out of the money received, he appropriated amount. Up to this time they have paid government employees had been reduced $15,000,000 for the Agriculture Development $75,000. from 1940 to 1948. That is so because the Co. which was a flop. The money, under the The government policy to attract indus cost of living in Puerto Rico has increased direction of Mr. Thomas Fennell, a totally tries to Puerto Rico is based on the principle in the island so much faster than the sal incompetent person, w~s squandered. of constructing the plans for the firms to go aries of the small employees. Eleven million dollars were appropriated into Puerto Rico and to equip them. Then There are other salaries, the exact amounts for five government plants-cement, paper, the firms are tax-exempt for a period of 12 of which I do not have. I understand that glass, shoe, and ceramics. All of these plants years. These firms, like Textron, want a many of the salaries I have recited, as well except the cement plant have operated at a guaranty that the minimum salary will not as others, have been raised since Mr. Cuevas deficit. The glass plant ·ceased its operation be raised, so that these firms expect to do published his article on January 23, 1949. last August because of lack of market. The business on the basis of paying starvation Accompanying this extravaganza of fancy other 4 employ only 820 workers. wages to the workers of Puerto Rico. Tex salaries, let us see what the Munoz Mariu This ls. the story of the industrialization tron recently said that if the minimum wage government has done with respect to govern program of Munoz Marin which has proven is increased from the 25 cents an hour which ment finances. to be a complete failure. they are paying now they will move from Under the leadership of Munoz Marin, the Another agency of the government, the Puerto Rico. government has embarked on a loan program transportation authority, which is a gov The Caribe Hilton Hotel was alw ex from Wall Street. It has issued bonds which ernment monopoly of transportation within empted from paying taxes. 1950 CONGRESSIONAL RECORD-HOUSE 9591 All these industries which may go to Puerto their lives because of the lack of safety meas for this legislation. I am not going to Rico can leave the island whenever they ures and the complete negligence of the try to discuss the technical phases of this choose and leave the Puerto Ricans with all Government. · proposed constitution for the island, but the expenses already incurred. So we can Mr. Speaker, I could go on and recount see that all this industrialization program of many more incidents of the neglect of the I would like to give the Members my own Mufi.oz Marin is just hooey. It is, I repeat, people of Puerto Rico by its present rulers. personal opinions, derived from my visit not Operation Boot Strap, but Operation I could go on and recite many more phases to Puerto Rico. Booby Trap for the people of Puerto Rico .. of the exploitation of the people of Puerto I think that the strides that have been While Mufi.oz Marin is engaged in Opera Rico. I shall from time to time recite more made under Governor Marin and under tion Booby Trap for the people of Puerto chapters from the story of the sordid satur the worthy representation in this House Rico, let us see what is happening to the nalia of corruption and graft which now by Dr. FERN6s-ISERN has certainly told people themselves. exists under our "Nero of Fortaleza," the pup its worth throughout the populace there. The cost of living in Puerto Rico has gone pet of our colonialism. up about 300 percent since 1940, while sal My purpose in this speech, however, is to I feel that the people of Puerto Rico need aries and wages have had only a slight in ectablish, which I believe I have done: some kind of a charter, in this con crease and now are going down. The huge First. That H. R. 7674 is an empty gesture stitution, to enable them to arrive at amounts of money which entered the Puerto and a device to cover up, and to perpetuate better government in the island. I Rican treasury were because of the revenue the colonialism and exploitation imposed on think it would help their senate and their on rum and the high taxes collected from the people of Puerto Rico by selfish inter- house. It would integrate their prob the people of Puerto Rico. I would like to ests in the United States. · lems of government on the island. At here note that in Congress I protected the Second. That the graft and corruption income from rum for the treasury of Puerto by the present rulers of Puerto Rico ls not the present time I think probably both Rico. the product of the people of Puerto Rico, but houses flounder, and are not sure what There was in general· an artificial a tmos the byprod-..1ct of the system of colonialism approaches should be made in certain phere of prosperity because 80,000 Puerto and exploitation under which the people of types of legislation. In any event, this Ricans were under arms and their relatives Puerto Rico are suffering. does not take away the authority of the were receiving benefits; war construction was Third. That the suggestions which I have United States Congress over what dis going on and there were war Government made for imm£:diate solution of Puerto positions shall be made for the island, jobs. Mufi.oz Marin squandered the huge Rico's immediate problems are of immedi· but simply sets them up in a position amounts of money received. No permanent ate character and must be enacted immedi whereby they can better approach mat works were built by him. No substantial ately to save the Puerto Rican people from reserve was established. Mufi.oz Marin re further suffering. ters in behalf of the island ill a better ceived from 1940 to 1948 in his government Fourth. That the only real solution for way. more money than the total amount of money Puerto Rico and its problems is to grant to I did not merely go to certain places received by the successive governments of the people of Puerto Rico full sovereignty; that I was supposed to while visiting the island from Juan Ponce de Leon, the first the only g.uaranty which the people of there. I went up the highways and by governor under Spain, to 1940. Puerto Rico can have to solve their prob ways. I talked to men in the shops, to During the war the price of sugar was lems-yes, the full sovereignty of a free and frozen to prewar prices, 1939. On the independent nation, and this, I submit, can men in the streets, to men in the stores, other hand no control was put on the items be achieved by the enactment of my bill. to legislators, and to doctors and school imported from the United States. The re Mr. EBERHARTER. Mr. Speaker, will the teachers. I visited the schools. I can sult was that while the price of sugar was gentleman yield? see a very, very strong trend toward in kept low the price of rice, beans, codfish, Mr. MARCANTONIO. I yield. dividualism there that is most worth lard, meat, butter, bacon, machinery, and Mr. EBERHARTER. I, together · with some while. so forth, went up to a fantastic level. It has other Members of the House, was down in I feel that the present system of gov bee:r figured out by economists of great pres Puerto Rico a couple of months ago. None tige in the island, that because of this the of the members of our subcommittee agree ernment under the leadership of Gover people of Puerto Rico lost an average of at all with the statements made by the gen nor Mufi.oz Marin is making wonderful $80,000,000 a year since 1940, or about $540,- tleman from New York. There was an elec strides, and I am greatly pleased with 000,000 during the war years. tion in Puerto Rico and the present party the results of the industry committee And again let me repeat, the number of got over 60 percent of the votes. there, because that committee, composed unemployed in Puerto Rico totals 300,000 Mr. MARCANTONIO. Of course, the gentle of management and labor, work over out of a population of 2,200,000 inhabi man spent his time at Fortaleza, the Gov their problems and they have unity of tants. ernor's palace, where he was extri:.vagantly Yes, the Munoz Marin rule is indeed Op entertained and grossly misled by Mufi.oz thought. Once those meetings are eration Booby Trap for the people of Puerto Marin. over-and that board consists of laymen, Rico. Mr. EBERHARTER. I want to say that we went labor, and management-I am surprised While the government of Puerto Rico has through the country. at how well they are able to arrive at ·a been so diligent in its extravagant and ex Mr. MARCANTONIO. Just a moment. What solution of their problems. We here in pensive propaganda, it has taken no measures ever traveling he did in Puerto" Rico was done the United States frequently have pro to insure the safety of the people of Puerto under the Governor's auspices. I doubt if longed strikes before results and agree Rico. Last year-1949-we saw the worst the gentleman was permitted to see much of ments can be reached. Let me say at disaster in the history of Puerto Rico. There the havoc caused b)' colonialism in Puerto was an air crash in Puntas Arenas where over Rico. I also doubt whether the gentleman this time that I feel that every Member 50 persons were killed. The lack of super knew that that entertainment was paid for of this House when he votes for this vision at the airport was responsible and out of the empty pockets of the people of charter of government for this island we must blame the government of Puerto Puerto Rico. These entertainments at For is doing a very good turn for a people Rico for this. taleza by the present Governor of Puerto who are trying in every way possible to There was a fire in San Juan last March- Rico are very fine. They afford the Members do the best they can for their own island. 1949-where eight people were burned to a goort time, but at the same'iime the enter I also would like to· report that I feel death. They were unable to escape because tainment helps cover up the real picture of there is no effort being made in any way th~re are no fire escapes in any of the build what exists in Puerto Rico. The gentleman ings in San Juan and because the entrance from Pennsylvania referred to the election for statehood; that the people of Puerto halls were blocked by the wares ·and boxes of 1948. I shall discuss even that in another Rico are not interested in· statehood; of small merchants who rent space in these speech soon. However, that is neither here they are loyal Americans and want to be halls. nor there. I challenge the gentleman to always an integral part of the mainland Last June there was a typical extrava refute the facts that I have mentioned in my and are in no way planning to set up any gant fiesta which was organized by Felisa speech. These facts are uncontrovertible movement for statehood. Rincon, the appointed city administrator. and no amount of hocus-pocus and good Because of the big crowd in a structure which times extended by Munoz Marin to House Let me also say that the development was built for dancing, the structure collapsed Members will explain these facts away. company in Puerto Rico has built indus and two persons were killed and others in tries and supplied jobs. It has done a jured. This accident was due to the negli The CHAIRMAN. The time of the wonderful ·piece of work. I have talked gence of the authorities. It occurred at gentleman from New York [Mr. MARC· with all of the members of that com night. The morning after the accident the ANTONIO] has expired. pany. They take their money, build whole structure had disappeared, so that the Mr. CRAWFORD. Mr. Chairman, I plants, train employees, then turn it people have never been able to determine what really happened and who was respon yield 5 minutes to the gentleman from over to private management, take that sible for the accident. Pennsylvania [Mr. KEARNS]. capital and reinvest it in some other in There liave been several explosions in Mr. KEARNS. Mr. Chairman, I am dustry. The average Puerto Rican is in Government works belonging to the water very happy to stand in the well of the dustrious, and I believe this Congress r.es.ources authority and workers have lost House this morning and speak favorably would make a very, very good beginning XCVI--604 9592 CONGRESSIONAL RECORD-HO.USE JUNE 30 in helping those people feel that they are In the past 15 to 18 months new indus Now that is what they can do. Here important and that they .are making a tries like chinaware, shoes, clothing, ra it ·is ~everal months since we passed great contribution to the United States dios, gloves, men's low-priced sweaters the Fair Labor Standards Act, and that of America. and short jackets, men's clothing, tex bad thing has not happened yet, and Mr. CRAWFORD. Mr. Chairman, I tiles, men's high-priced dress shirts that I hope it will not happen. yield myself 8 minutes. sell for $8 to $10 a shirt in these very Reference was made to the terrible Mr. Chairman, I .am wholeheartedly in classy stores, such as Garfinckel, Wood accident that happened in the Atlantic favor of the bill, S. 3336. ward & Lothrop, Macy of San Francisco off of Florida the other day where a I wish categorically to deny the state and Fifth Avenue stores in New Yorlc plane went down and the lives of several ment that has been made to the effect They are selling the products of the brain Puerto Ricans were lost. Here is my that this bill is a snare, a delusion, and a and the handiwork of young Puerto complete fik on that situation. And, fraud. I wish to say to the gentleman Rican men and women who have come I do not mind saying to the House and into these new industries in these recent from New York [Mr. MARCANTONIO] that stating the fact that up in my district that is not true; and he is sufficiently in months and many of whom never be I have been charged with being responsi telligent to know that he cannot make fore saw a production line. They are ble for that accident. I am not proud that statement stand up before the public today demonstrating what they can do of the charge, but I think you should of this country. under our supervision. I have visited have the facts on it. Why, a lot of peo many of these shops and manufacturing ple up there have been told that I am · We are not offering the people of plants I am talking about in Puerto Puerto Rico anything except the right to one of those people who advocate the Rico. I have seen the labels being put on feeding of sharks with human flesh, i:f vote on a constitution to be submitted to the goods. I have seen the labels being the President of the United States who, . you can imagine anything more. asinine put on the packages shipped to these than that. For more than 15 years -I in turn is to submit it to the Congress stores I am talking about. Their learners of the United States for approval. have been attempting to get the people and apprentices down there are as activ~. of the United States and the people of We have lived with these Puerto Ricans as keen, and as adept as they are in the Puerto Rico to let Puerto Ricans, citi for approximately 50 years. They are United States, and I do not know but zens of the United States, come tci this acquainted with our customs; they h~ve what they are going to show up much country and enjoy some of our good jobs lived for several decades under an or better than some of ours here at the . and g_ood wages. During this last spring ganic act which Congress approved and present time because the young Puerto the good farm people of Michigan and sent down to them; they know what a Ricans are not yet fully indoctrinated Ohio made a contract with the Depart constitutional representative form of with some of the slow-down operations ment of Labor of Puerto Rico; which was government is; they are citizens of the that we have here in the United States. approved by the Governor of Puerto Rico, United States, and they have sufficient Puerto Rico has no substantial natu to move about 5,000 agricultural worl{ sense and intelligence, and loyalty, and ral resources, such as metals, oil, forest ers into the United States during the idle patriotism to design a constitution and products, and so on down the line. agricultural season in Puerto Rico so return it to us which will square with the They do have a lot of resources in the that they could work here and return Constitution of the United States. If form of good intelligent labor. It so to their cane fields this coming Novem they are i ot able to do that at the present h appens that we . have a Fair Labor ber. A contract was made with one of time after 50 years under the American Standards Act in· the United States the airplane charter companies, not :flag,' the good Lord certainly knows that which extends to Puerto Rico; it so hap scheduled fliers; to move those people. it is time for us to find out, first, what pens that Puerto Rico has a good labor ·The firm who moved those people has kind of guardians we are and, second, department of its own; it so happens been moving people from Puerto Rico by what kind of people we have under the that the wisdom of the House and Sen chartered service for some years. They American flag. I am, therefore, in favor ate put in the Fair Labor Standards Act have moved thousands· of them into the of giving them a chance further to dem provisions which call for flexibility so truck-farming areas of the Atlantic sea onstrate, as they have heretofore demon that the people of Puerto Rico can build board, New Jersey, and Maryland; thou strated, that they are still good American up these industries and supervise wages, sands of them. The officials of that citizens, and that they are still willing to thus protecting the people against the company, Westair Transport, were in my do the right and square thing for th~m exploitation that has been referred to. office the other day and I inquired cate selves and the other people there. This ·Those labor laws are in operation and gorically, "Did you ever before have an bill will give them another chance to so they are working out fairly well. _ accident of this nature?" The reply was demonstrate. Only a few weeks ago when I ad "No." There was another accident off What was said in the 1948 election and dressed a joint session of the Puerto San Juan Harbor, but not to this com what appear~d in the 1948 election litera Rican Legislature, which, was attended pany. So, the farmers out in Michigan ture I would assume was about what ap by Members of the Senate and House, and Ohio made a contract with this char peared in the Democratic and Republican the Supreme Court, the mayor of San ter ·company to move these people into literature and campaign.promises here in Juan, _and the Governor's. staff, I said the States. But this is not a bill to settle the Tri-cities Airport, which serves my this to them and almost in these exact home town, and Bay City, Mich., the that argument. Let those who run for words: "If the Labor. Department of the office down there promise what they United States with the Congress and home of the Honorable ROY WOODRUFF, please anf you who serve in this leg-islative body · ·erto Rico who want independence, who . wealth. Puerto Rieo has made and is know that that is one of the fairest ways want stateb,ood. There are' groups wno making great strides in its endeavor to to express democratic approval of legis..: want to proceed in an OI'.derly way. They solve its economic problems. Every .ef lation. I will cive you the exact wording elect their 'governor; they send their fort is being · made to industrialize the . of the bill: · commissioner here. · They can enlarge island, and it is the common ·belief that Upon the approval of this act by a majority their responsibility and self".'gpvernment only -through such industrialization will of the voters participating in such refer by ·adopting -theif own· constitutlon. sufficient employment be had for the ·-- endum, the legislature of Puerto Rico is au 2,200,000 people of Puerto Rico. thorized to call a constitutional convention That is what a great majority of the Pu erto Ricans seem to want'to do. It was· I found the people of Puerto Rico in to draw· the constitution for the said island tensely loyal Americans, proud of their of Puerto Rico. represented to us that 76 of the 77 ma yors were in favor of this; but, regard citizenship and equally proud in their They do not have a constitutional con less of that, this does not preclude ulti belief that they were worthy of that vention until the people of Puerto Rico mate statehood, nor does it hold out any citizenship. I believe that we can best have spoken affirmatively in an island hopes of ultimate statehood. · It is a pro show our faith in them by passing this wide referendum approving this act. gressive step until destiny finally deter.:. bill and granting to them a constitution Mr. MARCANTONIO. Mr. Chairman, mines what the people, they themselves, of their own making. · I shall vote for the will the gentleman yield? · shall determine what they want to do bill. Mr. PETERSON. I yield for a ques- and the Congress approves. It does not Mr. ASPINALL. Mr. Chairman, I tion. · preclude independence. '·. yield such time as he may desire to the . Mr. MARCANTONIO. Just for the So, I hope that you may pass this in gentleman from California [Mr. ENGLE]. sake of the record showing the history of its present form, without any amend · Mr. ENGLE of California. Mr. Chair this legislation, originally when this bill ment. man, the proposition presented by this was introduced, that provision was not in The CHAIRMAN. The time of the bill is very simple. Two years ago the the bill; is that correct? gentleman from Florida [Mr. PETERSON] Congress authorized Puerto Rico to elect Mr. PETERSON. But it is in the bill has expired. · a President. Puerto Rico elected its own now and it is in the bill reported by the Mr. ASPiNALL. Mr. Chairman, I ·President, Who took office last year. As' committee. · yield such .time as he may desire to the ' the elected President of the people of Mr. MARCANTONIO. I am not ask gentleman from New York [Mr. LYNCHJ. · Puerto Rico he has asked for this bill ing that. It was not ·in the original bill; Mr. LYNCH. Mr. Chairman, · 1 am ·granting a constitution·a1 form of gov was it? · thoroughly in favor of this pill.' I believe etilment to 'the _people of Puerto Rico". Mr. PETERSON. It is in the bill which that the people of Puerto Rico.shqulQ. pe This request· fs ·also concurred in by the· the House ·considered. We are consid: granted the authority to organize a con Commissioner ·from Puerto Rico, Dr. ering the Senate bill. By reason of that-, stitutional government of their ovrn . Fern6s, who is the elected representative it is in the bill. We felt it was the fair choosing and of their own making, with of the people of Puerto Rico under thei·r and democratic way. What was con in the certain, well-defined boundaries Organic Act in the House of Representa sidered in the other body, or what was and limitations specified by Congress. tives. There are certain elements in originally in the other body, is not be Although Puerto Rico has been under ·Puerto Rico ·which oppose this bill and fore us. the American flag for over 50 years, we advocate instead statehood or- inde Mr. MARCANTONIO. But as a mat have been extremely slow in fulfilling · · pendence. The question is whether or ter of record, it was not in the original our treaty obligations to decide the po not the Congress is going to be ' in.:. bill. litical status of Puerto Rico. ftuenced by those factions or ac.cept the Mr. PETERSON.· The record will speak In 1900 Congress created a temporary ·judgment. and recommendation of the for itself. This di.d gain us strength be• civil government for Puerto Rico under elected representatives of the people. It cause we felt it is a fair method. what is known as the Foraker Act, and is plain to me that we should do the Mr. FERNOS-ISERN. Mr. Chairman, 17 years later a permanent civil gov latter, and that it would not be in har wilf the gentleman 'yield? · ernment was established under the Jones mony with our democratic principles to Mr. PETERSON. I yield to the dis Act. Under this latter act most of the do otherwise than to follow the recom tinguished Commissioner. provisions of law granted under the Fo mendations of the people elected to rep;. Mr. FERN6S-ISERN. It is a matter raker Act were retained and new provi resent the people of Puerto Rico. We of record that the bill which I intro sions 'were included. It was not, how have provided an additional safeguard. duced in the House and the bill as origi ever, until the past few years that we This bill has to be submitted to a ref nally introduced in the other body carried have made any substantial addition to erendum of the people of Puerto Rico ·language with reference to th~ accept- the form of government of Puerto Rico, before a constitutional convention can ance of this act by the people of Puerto and during these last few years we have be called. In short, we have taken the Rico. The change has been to make it granted to the people of Puerto Rico the recommendation of the President and of clear and plain that that means a ref right to elect their own Governor and the Commissioner and provided that the erendum. Therefore, the only change name most of their own public officials. people can exercise a veto on it if they has been as to the phraseology. Last November I visited Puerto Rico .want to. The bill is satisfactory to the Mr. PETERSON. Yes, the distin as a member of the subcommittee of the President and the interested agencies of guished Delegate is correct the referen House Committee on Ways and Means our Government. It should be favorably dum is provided because we feel it is the for the purpose of ascertaining the im acted on by the House. fair and proper way. pact of the extension of social security Mr. ASPINALL. Mr. Chairman, I ask Now, when they have a constitutional on the economy of the island. We held unanimous consent that the delegate convention and the constitution comes hearings and we went out and studied from Alaska [Mr. BARTLETT] may extend back, it has to provide a republican form the living conditions of the people of his remarks at this point in the RECORD. of government and a bill of rights. Puerto Rico. We learned what the Gov The CHAIRMAN. Is there objection When it comes back he:r:e it goes to the ernment of Puerto Rico is . doing in its to the request of the gentleman from President of the United States, and he endeavor to advance the best interests of Colorado? is authorized to transmit such constitu its people. There was no objection. tion to the Congress, if, he finds that that I came away confident that the people Mr. BARTLETT. Mr. Chairman, as constitution complies with the applicable of Puerto Rico under the American flag a citizen of the nol.·thernmost Territory 1950 CONGRESSIONAL RECORD-HOUSE 9595 under the Stars and Stripes, and as one living up to its promises to the people I want him to know, as I stated to him who has spent a lifetime living under living in the three Territories. when we bath appeared before the Com Territorial g-0vernment, I hope I may be Mr. ASPINALL. Mr. Chairman, I yield mittee on Rules, that the Puerto Rican permitted to express the opinion that such time as he may desire to the gentle citizens in New York are good citizens. completion of congressional action on man from Pennsylvania [Mr. EBER They are no different than any"1ody else. S. 3336 by this House and signing by HARTER]. l'heir contribution to the welfare of the the President of the act into law would Mr. EBERHARTER. Mr. Chairman, I community is .something that is deeply be a distinct contribution to the process am in favor of this measure and hope it appreciated by all the people of New York of self-government in the Territory of will pass as reported by the committee. City. Puerto Rico. It is difficult for me to understand why So that that snide remark, which is a No one need have any apprehensions any Member of this legislative body part of the smear that is being conducted about a grant of undue powers under this should oppose the measure now before by "wise-alecky" magazines and other act to the people of Puerto Rico. Con us. It can in no respect whatsoever do dishonest writers in this country, is not gress retains all essential powers set any harm to any individual either in in keeping with the dignity of the House forth under our constitutional system, the United States or in the Island of of Representatives. and it will be Congress and Congress Puerto Rico. Mr. EBERHARTER. Mr. Chairman, alone which ultimately will determine I know that the people of Puerto Rico will the gentleman yield? the changes, if any, in the political status have enough· intelligence to pass judg Mr. MARCANTONIO. I am not going of the island. ment upon what they believe is in their to yield at this time; I am sorry. I want The concept embraced in this act is own best interests, and this measure to make a statement in regard to the as praiseworthy as it is new. The prop would allow them to pass judgment on airplane crash of the other week. osition that the .people of any area ought that question. The gentleman from Michigan tries to be allowed to do things government I also am positive that the people of to convey the impression that the crash ally for themselves instead of having Puerto Rico are patriotic in the utmost was just another one of those things. things done for them finds ideal expres degree, and in saying this I mean not I think the House should know the facts: sion in S. 3336. American citizens do only that they are patriotic as citizens Fixty-six people -were packed in that not like forever to be governed from of the United States, but they love their plane. An airplane of that sort has afar with no voice whatsoever in the island and their homeland. They are what is supposed to be a placard weight; making of those laws which apply to a moral people. They are industrious, the weight it can safely carry is marked them. I know that.from.long and per and if a constitution of their own making on a placard somewhere on that plane. sonal experience . a~ an Alaskan. Al will be of benefit to them, it would not be The investigation which was held only though I have made only one brief trip right for this Congress to fail to give the other day in Puerto Rico revealed to Puerto Rico, I was struck then by them the opportunity to so decide. that the plane was overweighted to the the devotion of Puerto Ricans to our The philosophy of the democratic way extent of 2,335 pounds-a 2,335-pound American form o~ government. The ad of life which is espoused in our own Con overweight. That airline was an airline ditional grant of pawer contained in this stitution should sway each and every against which there existed complaints measure is timely; it acknowledges the Member of this House to vote affirma at the time the contract was entered Political growth of the people of Puerto tively on this measure. into with this airline to transport these Rico. Mr. ASPINALL. Mr. Chairman, I yield workers. The Governor of Puerto Rico Nothing is imposed upon them by such time as he may desire to the gentle now hypocritically asks for an investi man from California [Mr. HOLIFIELD]. S. 3336. The act specifically provides / gation to find out who made this con that a referendum shall be held and that Mr. HOLIFIELD. Mr. Chairman, I tract. Whom is he trying to fool? The all qualified electors shall have oppor am in favor of this bill. I want to com culpability rests with the Governor and tunity to approve or reject S. · 3336. pliment the chairman of the Committee the government of Puerto Rico as well Further provision is made that if the on Public Lands in bringing out this bill. as with the CAB. You do not permit decision is to accept the act that Puerto It is a step in the right direction. I any airline, chartered or unchartered, Ricans will again have an opportunity heartily support its passage in the form to squeeze 56 people into · an airplane to pass judgment upon the constitution in which it was reported by the com and thereby cause the plane to be 2,335 to be drawn up. mittee. pounds over the weight limit. The gov In these dangerous times when totali Mr. ASPINALL. Mr. Chairman, I ernment of Puerto Rico was remiss and tarian philosophies are being exploited yield myself such time as I may desire, criminally negligent in permitting a con to the utmost, nothing could be more simply to express myself in favor of this tract to transport Puerto Rican work heartening to the uncertain hundreds of bill, feeling that it is another step in ers to be entered into with this partic millions of people in the world than to line with the intelligent, enlightened, ular airline when its Governor knew have the United States extend demo and magnanimous policy that the United that there were charges pending against cratic ·government everywhere within its States of America has followed in taking this airline, charges pending as to un borders and to the fullest possible degree. care of the territories which have come safe conditions; yet the government of Dr. A. FERN6s-IsERN, our very able col:. under its jurisdiction, either by purchase Puerto Rico, the agents of the Govern league, is to be congratulated upon his or conquest. · or's own administration permitted that highly effective work in connection with The CHAffiMAN. All time has ex contract to be entered into with that air this measure. The reputation he has pired. The Clerk will read. line. Further, if it had been on the job, made for himself as Resident Commis The Clerk read as follows: it would have inspected the loading of sioner of Puerto Rico, a reputation based . Be it ena.ctea, etc., That, fully recognizing this plane as it should have; it owed upon ability, integrity, and devotion, has the principle of government by consent, this a duty to these men who were being sent found its rewarcl in the quick response act is now adopted in the nature of a com out of Puerto Rico, a duty to protect of the other body to his plea that the pact so that the people of Puerto Rico may them against the overloading of that organize a government pursuant to a con people who he represents be given the stitution of their own adoption. plane. added grant of democratic power pro This reveals the attitude that has de vided for in S. 3336. I am sure affirma Mr. MARCANTONIO. Mr. Chairman, veloped toward these men who are sent tive action here will be equally swift. I move to strike out the last word. out like cattle loaded on these planes And I am sure that there was not a Mr. Chairman, I take this time because yes, to be exploited-no protection single member of the House Committee I cannot permit some of the remarks against exploitation after they are on Public Lands who had any substantial made by the gentleman from Michigan brought into the various places of em doubts remaining after the convincing [Mr. CRAWFORD] to go unchallenged. ployment. The representative of the testimony pr.esente1 by Gov. Luis Mufi.oz First of all, I deeply resent, and I am Puerto Rican government in New York Marin. sure all Representatives from the city City, Mr. Cabrares does not lift a finger When this act shall have become law of New York will agree with me that we to protect these workers. He has never and when statehood has been granted all deeply resent the remark that he done so. So, when we deal with this to Alaska and Hawaii, this Government made in stating that there are altogether air tragedy, as I said in my earlier state will have moved effeetively and far in too many Puerto Ricans in New York. ment, we must view it as a symptom, 9596 CONGRESSIONAL RECORD-HOUSE JUNE 30 : a symptom of the colonial system which Mr. JAVITS. I, too, am Jn the gen main as a possession or whether it should · causes 300,000 unemployed. If you did . tleman;s position with respect to resi be an independent country on its feet. I not have this colonial system which this dents in my district. Will the gentleman happen :to have decided opinions along bill perpetuates, Puerto Rico could de- join me in expressing the view, and I that line myself . . velop an agriculture of its own, not an _ hope the gentleman will join me, that I do not believe that Puerto Rico i,s agriculture which is economically dia- this is not a snare and delusion. There ready for tndependence. I would like betic, a total-sugar agriculture. It is no bad faith here. We have a right to to see all of the so-called colonial :Posses could develop an industry of its own differ. Some of us may think one thing sions of the world stand on their own and protect that industry if it had s.ov- and some of us may think another. But feet. I voted for tl;le independence of ereignty. This bill gives it no sover- I would not want to be put in the posi the Philippines, but I wonder if I did not _ eignty. Because of the lack of sover- · tion of subscribing to the idea that this · make a.. mistake because after that vote eignty it cannot develop those industries, . bill is a snare and a delusion so far as · I visited the Philippines and I saw the· cannot develop a real agriculture of its the people of Puerto Rico are concerned. people in action over there and I have own, and because of that lack of sover- Mr. DOLLINGER. The gentleman is : watched them very closely since then. I eignty you have lack of employment and correct. I do not agree with that state- saw by the declaration of -the President" you have a system which subjects them ment at all. . just the other· day that we are going to to- the exploitation and the neglect of - Mr. ASPINALL. Mr.- _Chairman, I ask have to go into the Philippines and take their safety they are now subjected to. unanimous consent that the further· over power which. is an independent na . This bill is a .device to deprive Puerto . , reading of the bill be dispensed with and tion they should be able to take care of Ricans of the right to obtain for them- that it .be printed in the RECORD at this themselves if they were able to do the selves the sovereignty they need to pro- point and open for amendment at any· Job with independence. To be part of a tect themselves ag~inst these c_onditions. . place in the bill. · . democratic form of government and to. Mr. DOLLINGER. Mr. Chair~an, I The .CHAffiMAN. · Is there objection participate and maintain a democratic move to strike out the last two words. to the request of the. gentleman from form of government is, in my opinion, Mr. Chairman, I rise at this point to Colorado? one of the harde~t Jobs in tlie world. it _ take exception likewise to the remarks The:i;e was no objection. _ _requires participation .of. a high order in . of the gentleman from MiChigan -.[.Mr. : The balance· of the bill follows: 1/-he pr~ctice of gov~rnment. ·Some peo-· CRAWFORD] r€lat'ive to the PUerto Ricans · SEc ~ 2. This act shall be submitted to the ple _ ar~ just simply- not trained to -cio it.' in New· York. I represent quite many· . qualfried voters of Puerto Rico for accept-. You 9an declai:e them independent,- you Puerto Ricans in the city of New York, ance or rejectiQn through an island-wide can -give them their: independenc~. ·but - I have found them to be upstanding :t:eferen.dum to be held in acco:i;danpe with . aft~r they h~ve it tl:iey cannot handle. A_merican citizens . for whom we have •_ the laws of Puerto Rico. Up.on the approv.a1 their .independence."-. .Then· some nation -· of thi.S act, by ~ - maJority of the' voters' par- the highest regard. -ticipating in such · ,referend~m ; the L~gfs,a- has to-go in and handle it for.them. we In my district recently we had a poll ture of Puerto Rico is authorized to call a ~re ~aving to do that very· thing in the· with regard- to independe_nce or state- constitutional convention tO draft a consti Philippine. Islands today. hood for Puerto ·Rico.· I . wish to _an- tution for the said island of. Puerto Rico. You can blame th~t'on many diffetent. nounce at thi·s· time that the indications · The said constitution .shall provide ~ re . things . . I say that_the people of Puerto were overwhelmingly in favor of · state- . publican form o~ _government and shall ln- Rico as a whole, regardless of their as..;. · elude a blll of rights. . . . , h ood. I think the gentleman · from SEc. 3. Upon adoption of tlie constitution -pirations,. are not .yet to the point where Michigan was wrong When he said that. by the people of Puerto Rico,' the President they can sustain themselves as an inde they are not ready for statehood. If we - "cif the United States is authorized to trans pendent state. . However, they have had a 'statehood bill before us I would be mit such constitution· to the congress of the exercised a form of self.:government. happy to vote for it. · United States if -he finds ·that such constitu- We can say for the credit of the .United Mr. Chairman, I .should like to ·make· tion:conforms with. the applicable provisions .States that .we ha.ve .fostered. in. Puerto · an observation regarding the statem·ent: of · this act and of the Constitution of the Rico a .form -of self-government. and ·as · United States. _ that form of self .. go~errim.eht develops made by the gentleman fro'm New York . Upon approval by the.Congress the c.onsti.: to the -point of complete and adequate [Mr. MARCANTONIO} when he stated that tutibn' shall become effective iii accordance there are certain abuses in Puerto Rfoo . with -its terms. - : . responsibility, they-will learn to function with respect to labor conditions and liv- ·· sE:c. 4. Except · as provi.cled in section 5 of as. a·n independent nation, if they so de-- .. ing conditions and -for· those reasons as this -act, the act entitled. "AI). act to pi:ovide · sire- by. plebiscite. I say ·at that ·time · well as others opposes the- bill. He ·a civil government for Porto Rico, and for the United States will not 'stand in the might be correct as to the abuses, but 1 other purposes," approved March 2, 1917, _as way of Pue·rto . Rican· ind~penc;lence any. · -do not· thi'nk those statements_are·· ge· :t·- ame~ded ,. is hereby continued in forc.e a·nd more _th_an we did so far_as the Philippine effect_. and may hereafter .. be cited . as : the mane to the issue before· us today. ·We · "Puerto Rican Federal Rel~tions Act." ·. people were concern~d when they clam- · - are to ascertain whether we are to vote SEc: 5: At such time as-the constitution of ored and finally obtained their independ- upon a bill before us to give Puerto Rico Puerto Rico b·ec6mes effective, the · following · ence. . a constitution. I think in democratic provisions of such act of March 2, 1917, as Mr. ENGLE of California. Mr. Chair· fashion and in.the democratic processes amended, shall be doomed repealed: man, will the gentleman yield? , . (1) Section 2, except tbe paragraph added Mr. HOLIFIELD. I yield to my col t hat we have to follow, the bill ·ade-· t~ereto by Public Law 362, _Eightieth con-. league from .California. quately protects those people. It gives gress, first session, approved August 5, 1947. them all Qf tne safeguards necessary to - (2) sections 4, 12, 12a, 13, 14, ·15, 16, 17, 18, Mr. ENGLE of California. As a mat determine for themselves whether they 18a, 19, 20, 21, 22, 23; 24, 25, 26, 27, 28, 29, 30; · ter of fact, even though there are people want a constitution and the kind of · 31, .32, 33, 34, 35, 39; 40, 49, 49b, 50, 51, 52; 58, down there_who advocate independence, constitution. Before we go into the· is- 56, arid 57. th~y have not elected anybody yet, have sue any further we should ascertain .(3) The.last paragraph. in.section 37 • . they_? . - · whether they want a constitution. If (4) Section. 3.8, ~xcept the second para- Mr. HOLIFIELD. That is right. graph ther.eof which begins with the words Mr. ENGLE of California. And the they vote it down they can come before "The 'interstate commej:ce Act" and ends governor, who is elected by the people, us and put the question; do they want with the words "shall nqt apply in Puerto and the Commissioner, -who is elected by independence or statehood, and we will Rico:" then determine the issue, but for the SEc. 6. All laws or parts of laws inconsist- the people, are . asking for this bill; is time being I am satisfied to go along ent with this act are hereby repealed. that not correct? · ·Mr. HOLIFIELD. That is correct. . with the bill because· it is a step in the Mr. HOLIFIELD. Mr. Chairman, I Mr. ENGLE of California. And then right direction. For that reason I will move to strike out the last word. we turn around and give them a pleb vote for the bill and allow the people of Mr. Chairman, I rise in sup,Port of this iscite on it afterward. Puerto Rico,'not we in America, to' decide bill, S. 3336, because I believe it is a step Mr. HOLIFIELD. That is right. whether they want a constitution. in the right direction. As has been said The people who advocate independ Mr. JAVITS.·, Mr. Chairman, will the in this House, there are people in Puerto ence for Puerto Rico, as you can see by gentleman yield? · Rico and people in this.country who have the figures put in the RECORD by the gen-:- Mr. DOLLINGER. I yield to the gen- ·decided ideas as to whether Puerto Rico tleman from New York, are a very small tleman from New York. should. be·a· State, whether it should re- amount of the total vote. I had occasion 1950 . CONGRESSIONAL RECORD-HOUSE 9597 to speak to Representative Ramos An Mr. JAVITS. Mr. Chairman, reserving ment of inhibition in this bill, and that tonini, speaker of the house of rep the right to object, may I explain that I do not like. resentatives, arid Senator Guitierez there are a number of Members stand As to my amendment, you will note Franquie, the majority leader in the ing who do not have amendments and that there are two tests that the Presi senate for the administration of Gov who desire time, so that we get into the dent must make before he submits the ernor Munoz M~rin. I talked over many usual jam. May I suggest a half hour? constitution which the people of Puerto of these problems with them and I came Mr. ASPINALL. May I say to the Rico vote out, and these tests appear in to the conclusion from my observation gentleman from New York that I have section 3. . The tests are, first, that the there, and also in the Philippines and spoken to the gentleman, who has an applicable provisions of this particular other places, that these people are taking amendment, and he has requested 5 bill have been met, and second, that the a step which they can take at this time. minutes. constitution submitted by the- people of And, as far as us having the constitu Mr. JAVITS. But here is a gentleman Puerto Rico is consonant with the Con tional authority to grant them this privi who has no amendment. I point out stitution of the United States. lege, I say that we do have. Puerto Rico that there are other Members who do In view of the charges aired here that at the present time, under the Treaty of not have amendments. elections down there are influenced and. Paris signed in 1898, is a possession of the Mr. ASPINALL. Make it 20. that mayors are appointed and that United States. This status was estab Mr. CRAWFORD. I hope my good there has not been full testimony before lished in the treaty between the Spanish friend from Colorado will not insist on this committee, and those charges have Government and the United States. this. · This is not the only question we been made, I write in by my amendment Congress is the final governing body. We have on Puerto Rico. The House is the additional test-that is all it is-that have amended the Organic Act several learning something about Puerto Rico to the President shall find not only that the times, and only in 1947 we gave them the day and its problems. . I do not think it act has been complied with and that right to elect their own governor, and is going to-wreck the Nation if we spend consonance with 'the United States Con now we are saying to the people of Puerto 25 or 30 minutes on this, if the Mem stitution has been complied with but that Rico that as far as the Congress of the bers want to talk on it. I hope my friend the will of the people of Puerto Rico has United States is concerned, it is all right from Colorado will modify his request. been· complied with. That enables the for their legislature to convene and to Mr. ASPINALL. Mr. Chairman, I · . President to pass on corrupt practices, vote on whether you shall ha_ve a con modify my request and ask that debate on buying elections, on unfair influence, stitutional convention! or not-and if close in 25 minutes. or on anything that he finds might in they do not want it they can vote it The CHAIRMAN. Is. there o.bjection validate the action which is submitted down, but if a constitutional convention to the request of the· gentleman ·from to him, ·and anything which he feels is called, we ask the Puerto Rican people Colorado? interfers with the free expression of the to form your constitution along · the There was no objection. will of the people of Puerto Rico. lines of our own Constitution-not ex . Th~ Gii(\IRMAN. The Chair recog I sympathize with Dr. FERN6s-IsERN's actly the same, but in such a manner s9 nizes th.e gentleman from New York [Mr. desire to get this act passed by July 1, that it will not be in con:tlict with the JAVITS]. . but I know he will be the first to agree Constitution of the United States. Once Mr. JAVITS. Mr. Chairman, I offer that if any of us feel in deep conscience that constitution is formed by these free an amendment. that something should be done ·to cor.:. ly elected delegates in Puerto Rico, that The Clerk read as follows: rect the bill we certainly have a right to constitution comes to the · President of Amendment offered by Mr. JAVITS: On page propose it. I hope he will understand the United States and the President sub 2, line 14, strike out the period and insert that when I push this amendment I do mits it to the Congress, and there we ex "and expresses the will of the people of it out of a sincere conviction that this ercise our ultimate authority of approval Puerto Rico." additional test as to the will of the people or disapproval of this constitution, so we Mr. JAVITS. Mr. Chairman, during of Puerto Rico should be added to this are still operating under the constitu my time in general debate I did not bill. tional power of the United States which finish my argument, and I should like Mr. ENGLE of California. Mr. Chair does have control of toese possessions. to finish it now. I said that I favored man, will the gentleman yield? I believe that rather than giv_e them. recommittal -0f the bill to the committee Mr. JA VITS. I yield. something ·that . is unattainabl~, and but for the purpose of reconsidering and · Mr. ENGLE of California. Does the which in my opinion the people are not striking out section 4 and 5 which I fear gentleman believe the President -of the yet quite r~ady for in Puerto Rico, that may · have a tendency to inhibit the · United States would send up to this.Con we sho:uld .reach for the. attainable goal people of Puerto Rico in the free choice of gress a constitution which was brought and give these people that next step a constitution and form of government. about by corrupt practices? which rests between territory and state I also said that I do not believe the bill Mr. JAVITS. I do not believe that at hood. As far as self-government is con is a. snare and a delusion, or that there all, but we are legislating, we are giving cerned, let them have a little more ex is any . bad faith involved in it. My the President a mandate; hence I be perience, a little broader element of self reasons tie into the amendment I have lieve we must tell the President what we government, and . then later on these offered. want. Also, and mOit important, we other steps in due time. can be taken. Where the bill should have stopped must assure the people of Puerto Rico Mr. MARCANTONIO. Mr. Chaifman, is at section 3. There is no reason why that that is the way we feel. The only will the gentleman yield? the Congress in advance should have way they can get that assurance before Mr. HOLIFIELD. I yield to the gen inhibited the people of Puerto Rico with they vote on a constitution in advance is tleman from New York. respect to what we would or would not by this bill. We say in this bill that we Mr. MARCANTONIO. I simply want accept, when we are saying that they are wish them to express their will. · That is to point out that the people of Puerto mature and adult enough to bring in a an assurance which the people of Puerto Rico have had just as much experience constitution. If they are mature and Rico in my view will treasure and treas at self-government as we have. As a adult enough to bring in a constitution ure very much. matter of fact, when we took over that then, reserving to ourselves~ which the I emphasize what I said before. There island by military force they had prac- · bill would do in section 3, the right to is no charge or question of snare or de tically been given self-government by reject or accept it, we should have in lusion involved. As . far as I am con the Spanish Government. .They cer hibited them no further, whereas the bill cerned, I am honestly trying to get this tainly can govern themselves, and I do may inhibit them because it says we will bill amended to recognize that the self not think it is fair to say that they lack accept only a constitution which fits in respect of the people of Puerto Rico re- · experience, because they have had just with the Organic Act. quires that they freely express their will as much experience as we have. I said before that though we state that in respect to a constitution. The CHAIRMAN. The time of the in this bill we can always draw it back. Mr. ASPINALL. Mr. Chairman, I gentleman from California has expired. If there is a runaway constitutional con ask unanimous consent tha.t I may pro Mr. ASPINALL. Mr. Chairman, I ask vention,.we may still decide that we want ceed for 1 minute, to be taken out of the unanimous consent that all debate on to give the people of Puerto Rico state time allotted to me, in opposition to the the bill and all amendments thereto close hood or, indeed. independence if they amendment offered by the gentleman in 15 minutes. want it. Nevertheless, there is an ele- from New York [Mr. JAVITS]. 9598 CONGRESSIONAL RECORD-HOUSE JUNE 30 The CHAffiMAN. Is there objection 000 a year and the vice president of the · In the second place, no member of the to the request of the gentleman from Development Bank gets $28,000 a year. committee who has heard the hearings Colorado? I have a list here which I included in the ·-relative to this i:natter has had any· in- · There was no objection. RECORD in a speech I delivered here last dication of corruption or malfeasance Ur. ASPINALL. Mr. Chairman, the March. taking place in Puerto Rico in regard committee is in opposition to this amend Let me show you what is going on in to the enforcement of the laws, let alone ment because the powers which the gen San Juan itself and how-they are play the election laws. tleman from New York speaks of are in ing around with the money that belongs Therefore, I believe the amendment is herent in the Office of the Chief Execu to the poor people. The mayor of the unnecessary, and the committee opposes tive at the present time. The Chief Ex city of San Juan, Felisa Rincon, who the the amendment. ecutive exercises the ·same powers over other day increased her salary from Mr. CRAWFORD. Mr. Chairman, I Puerto Rico as over all of the cauntry $6,000 to $10;000. She also increased her rise in opposition to the amendment. which we call the United States of sister's salary from $4,50-0 to $6·,ooo. I As I stated a while ago, I have great America. am· now reading from 11 Diario of New faith in the Puerto Rican people. They Mr. JAVITS. Mr. Chairman, will the York, the leading Spanish paper in New have done a good job up to date. In my gentleman yield for a question? - · York, which incidentally is also ·opposed 'opinion, this is a slap in their face, saying Mr. ASPINALL. Certainly. to this bill, said in last 'Sunday's issue: that we have no confidence in their elec Mr. JAVITS. Will the gentleman-tell THE LADY MAYOR OF SAN JUAN AND AN AUDITOR tion procedure, and that we would have the committee that it is the intention of ARE ORDERED TO ' RETURN PUBLIC · M-ONEY the Federal Government -reach out and the committee in proposing this bill, as TAKEN IN 'VIOLATION OF EXISTING LAW say to-them haw they shall run their elec he reads this bill, that it is the intention The mayor of the city of San Juan, Felisa tions after we provide the organic act of the committee and the intention of Rincon, and the municipal auditor, Luis for them. To me, this is really slapping the House if it passes the bill, that that Munoz Rivera, were ordered to return to the the Puerto Rican people. · I am, there is what we want to say, even if my city treasury over $1,000 spent in violation of article No. 20 of the organic- act. The fore, against the amendment, and I hope amendment is not agreed to? it will be voted down. Mr.· insular auditor, Dr. Rafael J. Cordero, has ASPINALL. Certainly. issued a statement as a result of the in · If I employ a person on a job I let him The CHAIRMAN. The question is on vestigation of the irregularit~es of the gov go ahead and work on the job until he the amendment-offered by the gentleman ·erriing body· of the municipality of San Juan. has 'proved that he is incapable of hand- from New York, EMr. JAVITSJ. Among the several irregularities we have the 1ing it. · · The amendment was rejected. payment of $1,000 to Johnny Rodriguez with Mr. MARCANTONIO. Mr. Chairman, out specifying the activity for which the Why would I be guilty of praising the I off er an amendment. money was paid; an entry of $6,000 as·a dona Puerto Rican people and seeking their The Clerk read as fallows: t-ion to Club Civico de Damas;· the paym_ent company .and their employment in my of $19,874.60 as relief to the p9or without :State, not by me personally but by the Amendment offered by Mr. MARCANTONIO: 'indicating the persons who received the good citizens of the State of Michigan, On page 2, line 3, after the period insert money in question. ."Provided, That such island-wide· referendum ·and at the same time speak as though the· As indicated in the report there is an entry Puerto Ricans were bad people and had shall be held Jn .accordance with the provi characterized as "unexpected" and under sions of the Federal ·· corrupt Practices Act such entry money was paid out to people and :no character, and so forth. OI course, of 1925, as amended." to commercial firms for flowers, banquets, the gentleman from Michigan is not Mr. MARCANTONIO. Mr. Chairman, etc. These expenses as stated by Dr. Cordero guilty of any such thing. When I said this amendment is very simple and ·I do are prohibiteq by Circ'Qlar No. 11 of Janua.ry .there were too· many Puerto Ricans in 16, 1937, as issued by the office of the insular New York City, I meant exactly what I not see why there should be any opposi auditor. The total sum of this unauthorized tion to it at all. said. By that I meant to say that we expense which is $932.70 must be replaced in should not conQentrate our off-shore All it provides is that the referendum the city treasury as ordered by Dr. Cordero. be held.in -a manner which is in keeping. - The insular auditor stated that the ex citi.z~ns in_ small ar.eas in. the -' big cities. with our own form of government here penses in question were extravagant and· ex .We should diffuse them out through the and in order to. see that an -honest· elec cessive, and he also ordered the return ·of .States of tne Nation; where they can tion and -an honest ·referendum is held $76.05 paid to a firm known as "Clarima." _thoroughly comprehend our customs ~nd there should be no corruption or intimi This establishment belongs to . the wife. of .Ieurn. our language and .where our people dation in connection with the referen the. president of the senate, Counselor Sam .can understand them and learn to love dum. I cannot see how anybody -could uel R. Quinonez, and the said lady is also re .them. That is what I meant when I ·said ceiving a $500 monthly salary as an employee .there were too many Pu-erto . Ricans in have any objection to that. of the San Juan City Hall. Of course.I know what is going on here. New York City: Of course, I do not The leadership -wants to get this bill This shows you how rotten matters are blame Members. of the House for stand through without any amendments, and in Puerto Rico under the·present admin ing up · here and defending the people we are told the reason they want this bill istration. So that government money who vote for them. We expect that, but is because they need it for the Fourth of will definitely be used to promote this the two gentleman from New York· can July celebration. It seems to me that they scheme of the governor and to influence not stand up here and tell me that I am have had Fourth of July celebrations .this referendum. Graft·and corruption condemning the Puerto Ricans in New down in Puerto Rico for many, many · is the order of the day. The people's ,York City. . I do.no such.thing, and I will years without this bill, and they can money is being squandered. The money stand on the record exactly as the re have another one without this bill. This intended for the poor is being stolen. .porter has reported it. is part of the scheme to rush the bill .All' I ask is that the Congress of the Mr. HUBER. .Mr. Chairman, will the through here for fear that Congress , United States simply declare this -ref- . gentleman yield? might learn the truth with respect to erendum be held pursuant to our Corrupt Mr. CRAWFORD. :i: yield. Puerto Rico. If the Congress is going to Practices Act. Is that asking too much, Mr. HUBER. I am interested in what vote a referendum, then certainly we in light of the politically immoral situa- . the gentleman said about learning our should guarantee the referendum be held . tion that exists in Puerto Rico today . language and customs. I understand pursuant to the provisions of our Cor under its governor and his administra ·they have recently made Spanish the rupt Practices Act. I will tell you why. tion in Puerto Rico? official language that will be taught. I ·It is not just an academic proposition; The CHAIRMAN. The time of . the wonder if that is not some disadvantage it is a serious matter. Puerto Rico today gentleman from New York [Mr. MARC . to those Puerto Ricans who do come to is just rife with graft and corruption~ ANTONIO] has expired. the United States, in that they are un It is a saturnalia of corruption. I want Mr. ASPINALL. Mr. Chairman, I rise .able to be assimilated as readily as if to read to you some of the salaries being in opposition to the amendment. they could speak English. handed out down there to some of the In the first place, Mr. Chairman, may Mr. CRAWFORD. That question has favorites. For instance, the head of the I state that there are election laws in been under debate in Puerto Rico for Water Resources Authority gets $30,000 a Puerto Rico that secure satisfactory and .many years. The University of Puerto year, and he gets a chauffeur and an legal elections. The amendment pro . Rico, which has officials that I have vio automobi~e and a residence. The ·presi posed by the gentleman from New ·York lently disagreed. with, substantially write dent of the Development Bank gets $30,-. .is not necessaryt the ticket with respect to educational 1950· CONGRESSIONAL .RECORD-HOUSE 9599 procedure in the island. That is -a long, the Eightieth Congress or any other h.ave the right to delegate legisla_tive technical question which we cannot set black Republican legislation when yo·u power to the Territories and has done so tle here. Personally, I would like to see fix a 25-cent and a 29-cent wage. for time and time again. the English language as the basic lang sugar labor. ·You keep your own door In the second place, Puerto Rico is not uage in Puerto Rico; but that is a matter step swept and correct this injustice and a Territory and never ha~ been. So there that is beyond our control, unless the I will keep mine swept. is nothing to that argument. Congress wants to override legislation Then there is this one other situation. But the gentleman from New York passed by the Legislature of Puerto Rico. I cannot rule for the Supreme· Court, does admit-this .bill does something. It The CHAIRMAN. The time of the but I would just like to know by what gives them partial sovereignty. gentleman from Michigan has expired. stretch of the imagination anyone can Mr. MARCANTONIO. Mr. Chairman, The question is on the amendment of say that the people of Puerto Rico have will the gentleman yield? fered by ihe gentleman from New York to let a certain percentage of their sugar Mr. FERNANDEZ. I yield to the.gen CMr. MARCANTONIO]. come into this country raw and a cer tleman from New York. The apiendment was rejectE>d. tain percentage refined. The first thing Mr. MARCANTONIO. I think the The CH4IRMAN. The gentleman I -know you Fair Dealers will be up there gentleman has distorted my.position,_and from Wisconsin [Mr. MURRAY] is recog in Wisconsin telling us we can ship only I thank him for yielding. My positi9n is nized. a certain part of our milk out of the State that you are holding out to the Puerto Mr. MURRAY of Wisconsin. Mr. in the form of raw milk and a certain· Ricans a false idea that you are g~ving Chairman, so far as this Jegislation is other part in the form of cheese or but them sovere_ignty when you cannot give · concerned I am surely willing' to follow ter. You tell the people -of Puerto Rico it_to th~m by virtlJe of this bill. the leadership-of this distingui-shed com that they can ship only so many tons of Mr. FERNANDEZ. It is not a false mittee for whose members I have the their sugar refined. Let us not make idea. They understand exactly wh~t we highest regard. Its chairman, the gen progress backwards; let us go forward. are offering them, and that is partial tleman from Florida [Mr. PETERSON] has Let us not continue to discriminate sovereignty. · We are not giving them a long record as a constructive legisla against the Puerto Rico sugar economy full sovereignty. In fact, the Puerto tor. I cannot, however, let this discus and discriminate against Puerto Rico Ricans do not wish full sovereignty all sion on Puerto Rico pass without calling labor industry. at once. They are not a~king for it, and attention to two facts. One of ·them I : Mr. PETERSON. ·Mr. Chairman, will they know it is not attainable all at once. have worked on for several months and the -gentleman from Wisconsin yield? There is a ·lot of responsibility to full have not accomplished very much as · Mr. MURRAY of Wisconsin. I yield. sovereil1tty. There are financial bur yet. · Either the Fair Deal is wrong in Mr. PETERSON. The gentleman dens and economic burdens that _they the approach or I am. does not take the position, however, that themselves understand they cannot un We have a minimum wage law that our coz:nmittee has jurisdiction of that dertake all at once at the present time. applies · to ev'ocyone except agriculture. feature, does he? The Sugar Act was But they are willing to go along and get The orily agricultural minimum wage under the jurisdiction of the Committee sovereignty a little at a time, and we are . law we have is under the Sugar Act. on Agriculture. Wages is now under willing to give them that sovereignty. a , Under the Sugar Act the minimum wage the jurisdiction of the Committee on little at a time. in Puerto Rico is 29 cents an hour; it is· Labor. · · · Mr. :MARCANTONIO. Does the gen 25 cents ·in the Virgin Islands. If any Mr. MURRAY of Wisconsin. I realize tleman disagree with the statement of ; one is interested they can look in the the facts incident to the Sugar Act. The the proponents of this bill that the bill is 1 RECORD. of last Monday in which I pub fact still remains that the Fair Deal ad neither a 'step in the direction of inde lished all the correspondence I have had ministration fixed the minimum wage at pendence nor a step in the direction of . with the Department of Agriculture in 25 cents per hour when they have the statehood? ·relation to it. A member of the Presi- power and authority to do it. The fact Mr. FERNANDEZ. I wish the gentle 1 dent's Cabinet, the Secretary of Agri- remains that the Fair Deal discriminates man would _not put words in my mouth. culture, has the power and the authority against labor-Puerto Rico labor-by in . Mr. .MARCANTONIO. I said the pro 1 to fix this minimum wage. Would you sisting that a certain percentage of their ponents. l believe' that the Fair Deal would fix a exports must be in the form of · Mr. FERNANDEZ. I said this bill i 25-cent minimum wage after all ·their raw sugar. If and when you Fair Deal gives them partial sovereignty, which the tallt about their interest in labor? This ers wish to be fair you will correct these gentleman admits. minimum wage was not so much out of injustices, and I am sure that the Puerto Mr. MARCANTONIO. I have not ; line when we had a 40-cent national Ricans will appreciate your efforts as made any such .admission. · minimum wage, but since we have a 75- will all Americans that are interested . Mr. JUDD.. Mr. Chairman, will the , cent national minimum wJ.ge we are way in fairness, equity, and justice. gentleman yield? ' out of line to have a 29-cent minimum The . CHAIRMAN. The gentleman - Mr. FERNANDEZ. I yield to the . ; wage so far as Puerto Rico is concerned. from New· Mexico [Mr. FERNANDEZ] is gentleman from Minnesota. 1 I think that our :i.·elationship with pE>ople recognized. ·Mr. JUDD. Is it not true that. this ; like Puerto Ricans-and I base my ob · Mr. FERNANDEZ. Mr. Chairman, on bill merely recognizes the fact which . servations purely upon my contact with yesterday when the gentleman from New everybody knows in his daily experience, the Indian people in my district-is that York [Mr. MARCANTONIO] was speaking, I namely, that you cannot expect to take a we should make progress gradually and thought he was somewhat confused child in the third or sixth grade and ' go along with them instead of holding about a statement he was making, and I • move him up to the twelfth grade or into them back year after year. Now, to me, asked him to yield. I had not said half . college or into a postgraduate school if we have dominated, if we have had a dozen words wheL he rudely inter without going through the various control of that country for 50 years I rupted me and refused to yield further. grades between? do not know any reason why there should Unable to help him then, I shall try to Mr. FERNANDEZ. Yes. . be any person in that country unable to help him now . Mr. JUDD. Do not the Puerto Ricans ; speak English. If the contrary is the - The gentleman from New York says in realize they have to do it step by step, in 1case then we have fallen down on the the first place that this bill is just a their own interests? j job badly, at least in the case of those farce and gives nothing to the Puerto Mr. FERNANDEZ . . The thinking· peo who are under 40 years of age. That is Ricans; then he turns right around and ple of Puerto Rico, particularly the young N:o. 1. An adequate minimum wage does admits that this bill is designed to give people; understand and realize that. not need legislation. All that is needed them a larger share of legislative power; They waht to go a step at a time. We is a desire to act in justice and fairness then he says that that is unconstitu have been liberal. In the first place, we to this agricultural labor. tional because under the Constitution have permitted them to elect their of I repeat that it does not' require any the · Congress alone has the exclusive ficials, their own Governor and they have legislation, either. The Secretary of Ag right to legislate for the Territories, and a good governor. They have done the riculture can change that minimum if he that we cannot delegate any of it to Job with what has so far been granted wants to. I do not want you Fair Deal Puerto Rico. to them. ers shedding any crocodile tears to me In the first place he is entirely mis Mr. JUDD. Has not America demon l\bout slave labor or any legislation of taken about the law. · Congress does strated beyond question these last few 9600 CONGRESSIONAL RECORD-HOUSE JUNE 30 years that wherever she has been a The telegram is from San Juan, ad- you yourself admit that this bill ·does trustee in charge of peoples who were dressed to me. · no such thing. This bill merely amends just emerging into self-government, she Hon. JOHN W. McCORMACK, the organic act and it grants them no has moved ahead steadily, in an orderly Majority Leader, House of Representa- · sovereignty and nobody can honestly way and as fast as it was possible to tives: make any contention to the contrary. move, and given them a greater and Would be deeply grateful for your aid to The authors of this bill, in order to have greater share in the control of their own the effect that b111 granting Puerto Rico the the committee report it out and get the right to make its own constitution be con destinies? sidered by House before July 4 so that Puerto Congress to subscribe to it, have said - Mr. FERNANDEZ. Yes. This is an Ricans can add that significance to national time and time again that this is neither other step in that direction. celebration. a first step in· the direction of independ Mr. JUDD. Precisely. It is to our ad- · ence nor is it a first step in the direction vantage not to depart from that orderly That shows that they are Americans of statehood. It is a device to dodge process of development through which . in mind and that they love America, and a real resolution of the colonial states. they have gone from the time we took they want to remain within the sphere So, the majority leader, as usual, comes over a half century ago. of the American Government and the to us with high-sounding words-and I Mr. FERNANDEZ. The gentleman is American Constitution. use the term "high-sounding" advised correct. Continuing, the cablegram says: ly-to cover up a betrayal of election Mr. MARTIN of Iowa. Mr. Chairman, Bill was aproved unanimously by Senate promises. · As far as this Congress ls con will the gentleman yield? and reported unanimously by House commit cerned, what is happening with respect Mr. FERNANDEZ. I yield to the tee and the petition for rule is now pending to this bill, in the light of what was gentleman from Iowa. before Rules Committee. Greetings. promised to the Puerto Ricans in the · Mr. MARTIN of Iowa. I would like to That cablegram was sent to me by Luis campaign of 1948 that the people of add my opinion at this point. I. had the Mufi.oz Marin, Governor of Puerto-Rico, Puerto Rico-would be given a right to . pleasure of visiting Puerto Rico last This cablegram shows clearly the im choose-not a restricted choice such November at considerable length. My portance of this bill insofar as the Gov as you are giving them now, for they observation of the work of -the Governor - ernor and the people of Puerto Rico are either take this or nothing. else, but you of Puerto Rico, Governor Luis Mufi.oz concerned, and how longingly they are promised them the right to choose be Marin and the responsible officials of the looking to the Congress of the United tween independence and statehood and island government and of the Puerto States to pass this bill and have it be the colonial states-this Congress again . Rican Resident Commissioner, Dr. come. law, and they urgently request, is going back on its election oratory and ANTONIO FERNOS-ISERN, is that they have through the Governor, that, if possible, . doing so with the high-sounding lan tremendous determination, ability, and we do it by July 4. guage of the gentleman from Massa capacity to build a system of government · Mr. ASPINALL. Mr. Chairman, . I chusetts [Mr. McCORMACK]. No prom- for Puerto Rico that will be very success move that the Committee do now rise. . ise is being kept. . I say that this broken ful, provided we give them the oppor · Mr. MARCANTONIO. Mr. Chairman, promise is in line with the other broken · tunity and provided we cooperate with I offer a preferential motion. promises, the broken promise on peace, them fully and fairly. The Clerk read as follows: on civil rights, and the broken promise Mr. FERNANDEZ. I have had -the· Mr. MARCANTONIO moves that the Commit on repeal of Taft-Hartley. same impression when I have been in tee do now rise and report the bill, S. 3336, Now, let the gentleman talk all he Puerto Rico. back to the House with the recommendation wants about freedom, but this record Mr. MARTIN of Iowa. I commend · that the bill be stricken. of today is one against the freedom of Puerto Rico. the Committee on Public Lands on its Mr. PRI~ST. Mr. Chairman, I make good work in bringing so promptly this the point of order against the motion on Mr. McCORMACK. · Mr. Chairman, I bill S. 3336 before the House of Repre the ground that it is not preferential. rise in opposition to the motion. sentatives for action thereon. The CHAffiMAN. The Chair sustains Mr. Chairman, the gentleman from I support and will vote for the passage the point of order. New York has seen fit to refer to the of the bill and I extend my best wishes gentleman .from Massachusetts who is to the people of Puerto Rico for every · Mr. MARCANTONIO. Mr. Chairman, now addressing the Committee of the success. I now offer the same motion that the en Whole as ''using high-sounding words." The CHAIRMAN. The Chair recog actihg clause be stricken. Coming from the gentleman from New nizes the gentleman from Colorado [Mr. The Clerk read as follows: York, I consider that a distinct compli- · ASPINALL]. Mr. MARCANTONIO moves that the Commit ment, although not intended as such. tee do now rise and report the bill, S. 3336, Mr. McCORMACK. Mr. Chairman, back to the House with the recommendation Sometimes the intention is one way and will the gentleman yield? that the enacting clause be stricken. the result is another: Unconsciously and Mr. ASPINALL. I yield to the gen unintentionally. the gentleman from New tleman from Massachusetts. Mr. MARCANTONIO. Does the gen York, as far as results are concerned, has·' Mr. McCORMACK. Mr. Chairman, tleman from Tennessee desire to make a paid me a most unusual compliment. I the bill now before the House which will point of order against the motion now? repeat, he did not intend to do so. pass very shortly as it should, is a very Mr. PRIEST. The gentleman from May I ·say to the gentleman from New important one. It comes at a time in Tennessee recognizes that the present York that I am just a human being. I the world's history when it conveys more motion is in order. have my weaknesses and I try to have probably than words could the fact that Mr. MARCANTONIO. I thank the my strengths. I try as hard as I can to our great country has no imperialistic gentleman. overcome my weaknesses or to control designs. It is not seeking territory. We Mr. Chairman, I had not intended to them, and to retain and increase the seek to build, not to destroy; we seek to take the floor again except that the strengths I possess. preserve liberty, not to make men and words of the majority leader, in my There is one thing I h:i.ve fundamen women slaves. We stand for a principle mind, should not remain unchallenged. tally in mind. I want my freedom and that will enable the people of other lands · As usual we have had high sounding I want other persons to have their free-· also to establish within themselves a gov words from him to cover up what, in dom. If I have ever made any high ernment of law and not of men. my opinion, is a betrayal of the interest sounding expressions, I have iived up to Mr. Chairman, I want to insert in the of the Puerto Rican people and a denial what I have said. I have had the courage CONGRESSIONAL RECORD a telegram I re of campaign pledges made to them by to vote as I speak. I can remember being. ceived a few days ago, which I shall read, their leaders. You are pretending to in the well of this chamber 3 months showing the importance attached to the give them something when you are giv before Pearl Harbor :fight~ng for the pas- · passage of this legislation at this partic ing them nothing and by giving them sage of the extension of the Selective ular time and the reason why as leader nothing you are depriving them of any Service Act,. when my friend from New of the House after the rule was reported opportunity to obtain real sovereignty.· York [Mr. MARCANTONIO] was vigorously out on Wednesday I assigned this bill for . You are pretending to give them self opposing it. .I had the courage then to consideration of the House yesterday. government over their own atiairs when take my position, and to take my position 1950 CONG~ESS~9~AL RECORD_- _H_OUSE 9601 on all matters of that kind in those days, of both bills the other day by the appro- sent Members, and the Clerk will call as I am t.aking my position now. priate committee of the other body of the. the roll. I I am not questioning at all the patriot- bills granting statehood to Hawaii and . The .question was taken; and there ism or the motives of anyone of my col- Alaska. It i-s only a matter of time when were-yeas 1, nays 260, not voting 169, leagues, but I can seriously disagree with both Territories will become States, if as follows: their judgment on matters concerning they are not admitted officially and [Roll No. 193} the national defense of America and the formally into .the Union of the United YEAS-1 future of a decent world. I seriously States during this session of the Con .question the judgment of the gentleman gress. Marean tonio from New York, in no way impugning This bill is a decided step forward to- NAY.S-260 bis motives. His votes and my votes are ward human liberty and the possession Addonlzio Ford Morrison· directly opposite to one another. I think of human liberty and the right of a peo Albert Fulton Moulder Allen, Calif. Furcolo Murdock the high-~ounding and deceptive thoughts ple to develop . within themselves that Allen, Ill. Garmatz Murphy - have been expressed by the gentleman . responsibility which means freedom un Anderson, Calif.Gary Murray, Tenn. from New York [Mr. MARCANTONIO] and . der the law anq not slavery under vicious, Andresen, Gathings . Murray, W-is. August H. Gavin Nelson not by the g·entleman from Massachu- contemptible dictatorship. Andrews Goodwin Nixon setts [Mr. McCORMACK]. The CHAIRMAN. The question is on Aspinall Gordon Norblad · You talk about sovereignty.. No State the preferential motion offer·ed by the Barden Gore Norrell of the Union is completely sovereign. gentleman from New York [Mr: MARC- Baring Gcrskl O'Brien, Ill. Bates, Mass. Graham ~ O'Brien, -Mich. There are two attributes ·Of sovereignty. ANTONIO], · . Battle' Granger O'Hara, Ill. In order to tall:: about sovereignty you .The motion was rejected. Beall Grant O'Hara, Minn. Beckworth Gregory O'Konski must remember that there are. two at- The CHAIRMAN. Under the rule, .the Bennett, Fla. Gross O'Neill tributes, the external attribute of sov- Committee r ises. Bennett, Mich. Guill O'Sullivan ereignty and the internal attribute. Accordingly the Committee rose; and Bentsen Gwinn Patten Both of those attributes make up com- t.he Speaker having resumed the .chair, Biemiller Hagen Peterson Bishop Hale Pfeifer, plete sovereignty. . Mr. BONNER, Chairman of the Committee . Blackney ·Hand - Joseph L. Mr. MARCANTONIO. Mr. Chairman, · of the Wbole" House ·on the State of the ·Blatni"k -Hardy Philbill will the gentleman yield? Union, reported that that Committee, Boggs, Del. Hare P~illips, Calif. Bogg_s; La. . llart· · . -Polk . Mr. McCORMACK. I yi-eld to the gen- having had under consideration the bill ··Bolton, Md. · Havenner .. Potter tleman·.from New York. . (S. 3336) to provide for the organization Bonner ' Hays, Arlt; ·· Pr.iest Mr. MARCANTONIO. Th.at is just t}].e of a constitutional government by the .. Basone Hedrick· Rabaut .. point. Yott are not giving. Puerto Rico people of .Puerto Rico, pursuant to House Boykin . Herlong Ramsay Brehm Herter ~nkin · a choice, such as was promised to them, Resolution 678 he -reported the bill back Brown, Ga. Hese.lton Reed, Ill. of getting the attribute of State sover- to the House. Brown, Ohio . Hill Reed, N. Y. - eignty such as is given to:a ·state, or th.e The SPEAKER. Under the rule; the Buchanan Hoffman, Mich. Rees Buckley, m: HoUfi~ld · Rhodes · attribute of complete sovereignty such. previous. question is ordered . . -Burlecon Holmes . Ribico·tr as. is given to an independent nation. The question is on the third reading Burnside · Hope Richards Byrnes, Wis. . Horan Robeson Either case is the only way. by which, un~ . of the bill. · Camp Howen Rodino der our Constitution, we can confer any · The bill-was ordered to :be read a third . Canfield Huber ~agers, F!a. · form of sovereignty on either a posses- time, and-was r~act the third time. · Cannon Hull Rogers, Ma o: s. · Car1yle ~acobs . Rooney sion or Territory of the United States. The SPEAKER.· The question is on Carnahan Javits Saba th This bill grants not -even the slightest the passage of the bill. Case, N. J. · Jennings Saylor show of sovereignty to Puerto Rico. · · Mr. MARCANTONIO. Mr. ·Speaker, · case,.S. Dak. · .Jensen Scott, · . Geller . Johnson , Hugh D., Jr. . Mr. McCORMACK. This bill is a de- I offer a motion to recommit. Chelf Jones, N. c. . Scrivner . cided step -in the right tj.irectio!i.: The_ . The SPEAKER. . Is the gentleman. Chiperfield Judd f;)cudder . · great majority of the people of .Pl,lerto . opposed to the bill? Cole, ~ans. · · ~ Kar-st Secrest · . Colmer Karsten Shafer · · Rico want the passage of this bill. . · Mr. MARCANTONIO. · I · am, . Mr. Combs Kearns Shelley · It is only a few weeks ago that. we Speaker. · · · Cooper Keating -short . passed through this body two .bills which The SPEAKER. The gentleman quali- Cotton - · Kee • Simpson-, Ill. Cox . Kelly, N. Y. Smith, Kans . . are now in the other,body, to admit to fies. The Clerk will report the motion to Crawford . Kilday .Smith, Va. : · statehood in our Union Hawaii and Alas- recommit. · · · Crook .King · ·Smith, Wis. ka. Both of these Territories have been The Clerk read as follows: Crosser Kruse · Staggers Cunnmgha.m Kunkel Stefan · Territorial· possessions. ·Of our Govern-. Mr ~ MARCANTONIO. moves to recommit . Gurtis ·. ·. · ·- Lane · ' Stockltl.an~ ment for many, many years. They have s. 3336 to tpe committee on Public Lands, · Dague . Lanham Sullivan had to go through the. journey .that :s with instructions to report the bin back ·Davenport · Larcade Talle Da'lies, N. Y. Lecompte ..., Tauriello necessary before statehood could be con- . forthwith with the following amendment: Davis,.Ga. Lind Teague siderec. for t;hem. Page 2, line 3, after the period insert "Pro- Davis, Ten~. Lodge Thomas ! am not saying when statehood might v i ded, That such islandwide referendum shall Davis, Wis. Lovre Thornberry . B .be held in accordance with the provisions f R Dawson · Lu9as Tollefson be considered or Puerto - J.Co. ut cer- of the Federal Corrupt Practices Act of J9~5, ·Deane Lynch Trimble tainly for anyone to think that this bill as amended.''. DeGraffeuried McConnell Van Zandt is not a decided step in the direction of Delaney McCormack · Vorys . statehood for Puerto ·Rico sometime in ~/Ir. ASPINALL.· ·Mr. Speaker, I move Denton · McCulloch Wadsworth the future is to take a positiop and make the previous question. · D'Ewart· McDonough Walter The previous question was.ordered. Dollinger McGuire Weichel an expression which is contrary to logic Dolliver McKinnon Welch . and to common sense. The SPEAKER. The question is on . Donohue McMillan, S. C. Whitaker This bill enables the. people of Puerto the motion to recommit. · · Douglas Mcsweeney White, Calif. R ico to have a form of government of The question was taken and . the Doyle · Mack, Ill. · _, White, :t:dapo Speaker announced -that the noes ap Durham Mack, Wash. Whitten · their own within the framework of the _ Eaton Madden Whittington American Government. It gives them peared to have it. Eberharter Mahon ·Widnall ·.' the widest latitude at this time, which Mr: MA,RCANTONIO. Mr. Speake.r, '. Elliott Mansfield · · Wigglesworth they want, and which they could rea I object to the vote on the ground that a · Ellsworth Marsalis Wilson, Tex. sonably expect-and which the great ma quorum is not present, and make the Elston Marshall Winstead Engle, Calif. Martin, Iowa Withrow jority of the people of Puerto Rico do point of order that a quorum is riot Feighan Merro\V Wolverton expect. Some day in the future their present. Fellows Meyer. Woodhouse case will be devebped to the point of The SPEAKER. Evidently a quorum· Fenton Michener Woodruff is not present. · Fernandez Miller, Calif. Yates Hawaii and Alaska, as evidenced this . Fisher Miller, Md. Young year by the passage through the House The Doorteeper will close the doors, Flood ·. Miller, Nebr. Zablocki of Representatives and the reporting out · the, Sergeant · at Arms will -notify ab:.. . Forand . , Mills 9602 .CQNGRESSIONAL RECORP.-;HQ:USE JUNE 30 NOT VOTING-169 Mr. Fallon with Mr. Sanborn. contracts when "such action would facili Abbitt Harris Perkins Mi:. Dingell with Mr. Kilburn. tate the prdsecution of the war." Its Abernethy Harrison Pfeiffer, Mr. Abbitt with Mr. McGregor. purpose was not to relieve contractors Allen, La. Harvey William L. Mr. Abernethy with Mr. Harvey, because of losses, or to insure them Andersen, Hays, Ohio Phillips, Tenn. Mr. Bates of Kentucky with Mr. Werdel. H. Carl Hebert Pickett Mr. Bolling with Mr. Wilson ·Of. Indiana.. against losses. Its purpose was to obtain Angell Heffernan Plumley Mr. Burke with Mr. Mason. . needed war production. Arends Heller Poage Mr. Walsh with Mr. Martin of Massachu- When hostilities ended on August 14, Auchincloss Hinshaw Poulson Bailey Hobbs Powell setts. 1945, a number of Government agencies Barrett, Pa. Hoeven Preston Mr. Sims with Mr. Wolcott. felt, quite logically, that they could no Barrett, Wyo. Hoffman, Ill. Price Mr. Wagner with Mr. LeFevre. longer make contract adjustments on the Bates, Ky. Irving Quinn Mr. Sasscer with Mr. Taber. Bolling Jackson, Calif. Rains Mr. Sheppard with Mr. Taylor. ground that relief so provided "would Bolton, Ohio Jackson,'wash. Redden Mr. Tackett with Mr. Velde. facilitate prosecution of the war." Bramblett James Regan Accordingly, pending requests for relief Breen Jenison Rich Mr. Hays of Ohio with Mr. Morton. Brooks Jenkins Riehlman Mr. McGrath with Mr. Cole of New York. were denied even ·though the facts in Bryson Jonas Rivers Mr. Magee with Mrs. Harden. particular c3.ses would have justified Buckley, N. Y. Jones, Ala. Roosevelt Mr. Noland with Mr. Golden. favorable action if they had been· dis Bulwinkle Jones, Mo. Sadlak Mr. Bailey with Mr.: Barrett of Wyoming. posed of prior to surrender of the Japa Burdick Kean Sadowski Mr. Jackson of Washington with Mr. Burke Kearney St. George nese Government. Burton Keefe Sanborn Bramblett. I cannot accept the contention that the Byrne, N. Y. Kelley, Pa. Sasscer Mr. Klein with Mr. Burdick. Carroll Kennedy Scott, Hardie Mr. Keogh with Mr. Patterson. purpose of the War Contractors Relief Cavalcante Keogh Sheppard Mr. Heffernan with Mr. Keefe. Act, which H. R. 3436 would amend, was Chatham Kerr Sikes Mr. O'Toole with Mr. Hinshaw. other than to provide a basis for relief Chesney Kilburn Simpson, Pa. Mr. Heller with Mr. Jenison. to those contractors whose cases would Christopher Kirwan Sims Mr. Clemente with Mr. Jonas. Chudoff Klein Smathers have been handled under the First War Clemente Latham Smith, Ohio Mr. Thompson with Mr. Vursell. Powers Act if war had not ended. Had I Clevenger LeFevre Spence Mr. Redden with Mr. McMillen of Illinois. Cole, N.·Y. Lichtenwalter Stanley Mr. Regan with Mr. Phillips of Tennessee. believed there was a broader purpose, I Cooley Linehan Steed Mr. Sutton with Mr. R ich. would not have issued the kind of regula Corbet t Lyle Stigler Mr. Multer with Mr. James. · tions which were promulgated in Execu Coudert McCarthy Sutton tive Order 9786. These regulations were Dingell McGrath Taber The result of the vote was announced Dondero McGregor Tackett a faithful attempt to interpret the lan Doughton McMillen, Ill. Taylor as above recorded. guage of the act as affording nothing Engel, Mich. Macy Thompson The doors were opened. more than a statutory basis for the con Evins Magee Towe The SPEAKER. The question is on tinued processing of Written applications Fallon Martin, Mass. Underwood the passage of the bill. Fogarty M~son Velde for relief under the First War Powers Frazier Miles Vinson The bill was passed. Act which were pending and undisposed Fugate Mitchell Vursell A motion to reconsider was laid on of on August 14, 1945. In accordance Gamble Monroney Wagner the table. Gillette Morgan Walsh with the terms of the act, claims relating Gilmer Morris WerdeJ Mr. ASPINALL. Mr. Speaker, I ask to these applications were permitted to Golden Morton Wheeler unanimous consent that all Members be filed until February 7, 1947. Gossett Multer Wickersham have five legislative days within which to Granahan Nicholson Wier H. R. 3436, and the reports recom Green Noland Williams extend their remarks on the bill just mending its enactment, would radically Hall, Norton Willis passed. change the basic purpose of the original Edwin Arthur O'Toole Wilson, Ind. The SPEAKER. Is there objection to Hall, Pace Wilson, Okla. War Contractors Relief Act. I believe Leonard W. Passman Wolcott the request of the gentleman from Colo that in spite of any administrative in Halleck Patman Wood rado? terpretation which might be made to Harden Patterson There was no objection. limit the effects of the bill, its provisions So the motion to recommit. was COMMITTEE TO INVESTIGATE CAMPAIGN not only require reconsideration of all rejected. EXPENDITURES claims originally filed, but might also be The Clerk announced the following The SPEAKER. Pursuant to the pro construed to permit reopening of an un pairs: visions of House Resolution 635, EightY known number of cases settled under the Mr. Irving with Mr. Arends. first Congress, the Chair appoints as First War Powers Act and the· Contract Mr. Christopher with Mr. Nicholson. members of the Special Committee To Settlement Act. This belief is based upon Mr. Hebert with Mr. Clevenger. Investigate Campaign Expenditures of the fact that the bill greatly relaxes the Mr. Willis with Mr. William L. Pfeiffer. requirements for filing notice, and upon Mr. Passman with Mr. Dondero. the various candidates for the House of Mr. Sikes with Mr. Riehlman. Representatives, and for other purposes, the further fact that the bill permits two Mr. Stigler with Mr. Gillette. Mr. MANSFIELD, Mr. CHELF, Mr. DEANE, new elements of cost which wer·e not Mr. Wilson of Oklahoma with Mr. Simpson Mr. FELLOWS, and Mr. JENNINGS. . authorized under the 1946 act to be al of Pennsylvania. lowed as costs of performance of the con Mr. Barrett of Pennsylvania with Mr. Ed· AMENDMENT OF WAR CONTRACTORS RE- tracts and subcontracts. To quote the win Arthur Hall. LIEF ACT-VETO MESSAGE FROM THE bill, these elements are "(1) all, or the Mr. Cavalcante with Mr. Smith of Ohio. PRESIDENT OF THE UNITED STATES properly allocable portion, of the sum Mr. Granahan with Mr. Gamble. (H. DOC. NO. 629) Mr. Linehan with Mr. Macy. paid or allowable by the claimant as rea Mr. Chesney with Mr. Leonard W. Hall. The SPEAKER laid before the House sonable compensation for services, dur Mr. Roosevelt with Mr. Auchincloss. the following veto message from the ing the period of performance of the con Mr. Breen with Mr. Sadlak. President of the United States: tracts and subcontracts, to its working Mr. Carroll with Mr. Plumley. partners or working sole proprietor, and Mr. Harris with Mr. Engel of. Michigan. To the House of Representatives: <2) interest at reasonable rates paid by Mr. Harrison with Mr. Angell. I return herewith, without my ap the claimant to the date of determina Mr. Stanley witn Mr. Lichtenwalter. proval, H. R. 3436, an act "to amend tion of the claim on sums borrowed by Mr. Hobbs with Mr. Latham. the War Contractors Relief Act, as Mr. Rains with Mrs. Bolton of Ohio. him or if for the purpose of providing Mr. Gilmer with Mr. Coudert. amended." necessary working capital for the per Mr. Mitchell with Mr. Jackson of California.. In taking this action, I wish to make formance of the contracts and subcon Mr. Williams with Mr. Corbett. it clear to the Congress that I am not tracts." Mr. Wickersham with Mr. Hoeven. opposed to legislation which.would insure I do not object to the language which Mr. Rivers with Mrs. St. George. an equitable settlement of the claims filed clarifies the intent of the. Congress with Mr. Fugate with Mr. Towe. under the original War Contractors Re respect to sums paid as a reasonable Mr. Preston with Mr. Hoffman of Illinois, lief Act. If the Congress will take prompt Mr. Fogarty with l\41'. Jenkins. compensation for services, but I do find Mr. Price with Mr. Kean. action on such a measure, I shall be glad objectionable the inclusion of interest on Mr. Frazier with Mr. Kearney. to approve it. working capital as a basis for allowing Mr. Evins with Mr. Hardie Scott. The First War Powers Act authorized relief. In the first place, it would dis Mr. Perkins with Mr. Poulson. the Government to provide relief on wa:( criminate unjustly against those coo.- 1950 CONGRESSIONAL RE_CORD-HOUSE 9603 tractors who financed their own opera It is unfortunate, and I deeply regret message be referred to the Committee tions. Secondly, I find nothing in the that there has been uncertainty and,.in on the Judiciary and ordered to be legislative history to indicate that it was the opinion of the supporters of this printed. ever intended to authorize the inclusion· measure, controversy between the Con The SPEAKER. Is there objection to of such interest as a basis for computing gress and executive agencies as to the the request of the gentleman from New losses and making claims for relief as a intent of the War Contractors Relief Act. York? result of such losses. In fact, it was cer It is likewise a matter of deep concern There was no objection. tainly upon this point which led to the to me that I find myself unable to agree exclusion in Executive Order 9786 of in with the committees' reports upon H. R. AMENDING HATCH ACT-VETO MESSAGE terest on invested capital as an item of 3436. The language of' the bill standing FROM THE. PRESIDENT OF THE UNITED cost upon which losses might be · com alone, or when read in the light of the STATES (H. DOC. NO. 630) puted. cominit'tees' statemel).ts, does not provide The SPEAKER laid before· the House When this element of interest, relaxa an acceptable clarification of the original the fallowing· veto ·message "from the tion of requirements for filing notice, act. Therefore, I see no w~y to approve President of the United States: -· · liberalization of relief beyond that af the act and depend upon its legislative forded by the First War Powers Act, and history to provide an enforceable state- To the House of Representatives:· the specific exclusion of finalty of settle ment of its limitations. _ · I return herewith, without my ·ap ment under the First War Powers Act In spi_te of my objections to the scope proval, H. R. 1243, a bill "to amend the and the Contract Settlement Act are all of H. R. 3436 and the principles which I Hatch Act." added together, I believe that the net ef believe it would write into law, I am con This bill would make two major re fect of this bill for all practicable pur vinced that agreement can be reached visions in the act which· imposes restric poses, would be to write into law the upon what the Government has a clear- tions on the political activities of Federal principle of Government insurance . cut obligation to do. To that end, I wish employees. First, the bill gives the CiVil against all wartime net losses incurred to repeat that I shall be glad to approve Service Commission a limited amount of by contractors providing goods and serv a bill which limits its amendment and discretion to provide a · lesser penalty ices to the Government.- · interpretation of the War Contractors than removal from office for those em In my veto message on H. R. 834, · Relief Act as suggested in this message. ployees found to violate the political ac Eighty-first Congress, a bill "To amend I believe· that a bill-incorporating the tivities restrictions of· the Hatch ·Act. the Contract Settlement Act of 1944," I following seven provisions would-be fajr. Second, the bill requires that, in those stated that the implications of accept and would permit equitable settlem1mt political subdivisions where Federal em ance of such a principle "are profound, of those claims, unsettled at the end of ployees are allowed to take part in non both with respect to our finances and the war, which the Congress feels have partisan election activities restricted to with respect to our free-enterprise sys been rejected on the basis of "flimsy a local or community level, they shall tem." I stated further, "In my opinion, technicalities." also be allowed to take part in such ac it would be a serious error to introduce 1. Authorize reconsideration of the tivities on a partisan basis. · at this time a new principle-insurance claims filed in accordance with the pro The bill makes other changes in the against war-caused .losses. This would visions of the ·original War Contractors Hatch Act. One of these 'would require involve reopening the entire program of Relief Act. · - that every year the Civil Service Com financing the war, with incalculable ef 2. Remove the basis for technical re mission shall send to the President for fects upon our finances.'' These quota jection by permitting either a request in transmittal to the Congress a · report tions are equally applicable in the case writing for relief under the First War listing all persons against whom action of this bill. If this principle should ever Powers Act, or a written demarid for pay-· has been taken by the ·Commission, be accepted for those who had contracts ment of loss'es, or a written notice o{ . along with a statement of the facts of· with the Government, I would see no sustained or impending loss, if timely each case and the penalty imposed. basis for withholding its extension to filed, to be accepted as a basis for clairiL, Another change would confer a statutory thousands upon thousands of other per 3. Authorize consideration and rr.ttle right upon committees of the Congress sons who suffered in producing-for the ment of the claims of subcontractors on to obtain records containing testimony war effort without contracts. . the same basis as the prime contractol'S if or other evidence relevan~ to charges and In- addition to this major objection-to the same kind of written request, de allegations of violatfon of the political H. R. 3436, I should like to elaborate an-. mand, or notice was flled with a Govern activity restrictions of the Hatch Act. other point to which I have already re ment agency, a prime contractor, or an A final change would impose a criminal fe.rred. There can be no doubt that the other subcontractor prior to August 14, penalty for the failure to disclose parties bill relaxes the requirement of the 1945. . . sponsoring political literature trans original War Contractors Relief Act that · 4. Permit reasonable compensation ported in interstate commerce. requests for relief must be in writing. with respect to partners and proprietors, The last sentence of section (b) of the thus affording them the same treatment I have no objection to three provisions bill states, "The form of the request for accorded c0:.·porations. of this bill: that giving a limited discre relief hereunder shall be immaterial, pro 5. Preserve jurisdiction of the courts tion to the Civil Service Commission in vided it inform the Government or the over suits now pending and not require the imposition of penalties for violations dominant contractor·that a loss was be any claimant to start over again in the of the Hatch Act; that requiring annual ing suffer.ed, was anticipated, or had been presentation of his claim. · reports to the Congress of cases involving suffered by the contractor, subcontractor, 6. Permit a reasonable time, perhaps violations by Federal personnel of the or subcontractor in connection with the . 60 days, for amendment or revival of any political restrictions of the Hatch Act; work in question." To authorize the claim. and that with respect to distribution of founding of a claim upon any kind of 7. Include the clarifying definitions of political literature. Particularly, I am notice and regardless of whether the no- ' section 7 of H. R. 3436. wholeheartedly in accord with the de tice was filed with the Government, Prompt enactment of such legislation sirability of vesting in the Civil S~rvice would in itself place the Government in will make it possible for the executive Commission the authority to impose a most unfavorable position to protect agencies and the courts to discharge the lesser penalties than removal from the. itself against favoritism and collusion or responsibilities which I am convinced . Federal service for violations of the polit fraud. they cannot equitably discharge under ical activities p:;:ovisions of the Hatch When taken together with the provi the measure that I am returning without Act. Under present law, this stern pen sions of section 1 of the original act which my approval. alty must be imposed even in cases in authorizes settlement for losses in HARRY S. TRUMAN. volving a minor or inadvertent violation. curred "without fault or negligence," it THE WHITE HOUSE, June 30, 1950. would place upon the Governm,mt the Clearly there is a need to temper this requirement of having to prove fault or The SPEAKER. The objections of the drastic provision in order to assure full negligence in order to deny claims for President will be spread at large upon and effective enforcement of the law. I work which may have been performed as the Journal. feel that the new section 9 (b) provided long ago as the fall of 1940. Such a re Mr. CELLER. Mr. Speaker, I ask in section 1 of this bill would adequately quirement would be wholly indefensible. unanimous consent that the bill and meet this need. CONGRESSIONAL RECORD-HOUSE JUNE 30 Unfortunately, 'there are two other The SPEAKER. The objections of tion. It took certain loaning powers provisions of the bill to which I cannot the President will be spread at large .from the Reconstruction Finance Cor subscribe. upon the Journal, and without objection poration and transferred them to the One of these provisions extends addi the bill and message will be referred to Housing and Home .Finance Agency. tional privileges ·to Federal workers in the Committee on House Administra This had to do with loans for housing certain areas by enabling their partici tion and ordered to be printed. and with loans for building and con pation in partisan political activity re There was no objection. structing prefabricated housing. Those stricted to a local or community level. REORGANIZATION PLAN NO. 24 OF 1950 ·functions of the Reconstruction Finance If, as the measure intends, the political Corporation have already been trans privileges of the Federal employees are Mr. DAWSON. Mr. Speaker, I move ferred. No disapproving resolutions now to be extended to the field Of local that the House resolve itself into the have been filed to them and they will partisan politics, there is no valid rea Committee of the Whole House on the become the law as far as this body · is son to confine the extension to. geo State of the Union for the consideration concerned. That leaves in the Recon graphic locations or to areas where the of the resolution gether with all of its functions, agencies, head of the Reconstruction Finance Cor branch should be held confidential. This property, assets, funds, contracts, loans, lia poration; I think his name was Mr. is entirely consistent with the separation bilities, commitments, authorizations, allo Jones, of Texas. They differed on some of powers provided by our Constitution. cations, personnel, and records, is hereby important details. Mr. Jones won, and transferred to the Department of Commerce, I cannot accept or give my approval to the Reconstruction Finance Corporation and shall be administered, subject to the su was taken out of the Department of any act of the Congress which would pervision, coordination, and policy guidance threaten or diminish so preeminently of the Secretary of Commerce, by the Board Commerce and has been out of it ever necessary a right of the Chief Executive. of Direct ors and officers of the Corporation: since. In view of the foregoing considera Provi ded, That the agency, personnel, prop On one thing the Hoover Commission tions, I have felt obliged to withhold my erty, functions, and all other matters and af was in accord, that this corporation fairs t ransferred by, and all reorganizations should no longer be left as a separate approval of this enactment in its present effected by, Reorganization Plan No. 22 of agency but that it should be in one of form: I-shall be quite-willing to approve 1950 and by Reorganizat ion Plan No. 23 of the major departments of the execu a bill which does not contain these two 1950 are excluded from the scope and effect tive branch, and the President has taken objectionable features, and I urge that of this Reorganization Plan No. 24 of 1950 steps to carry out that recommendation. upon the taking effect, respectively, of such the Congress take such action before the As I said, he has taken the lending fea close of the present session. Reorganization Plans Nos. 22 and 23. tures relative to housing away nom Re HARRY S. TRUMAN. Plans Nos. 22 and 23 had to do with construction Finance Corporation and . THE WHITE HOUSE, June 30, 1950. the Reconstruction Finance Corpora- put them into the Housing Administra- 1950 : CONGRESSIONAL RECORD-HOUSE 9605 tion in 0rder that·that agency .that han- tion Finance Corporation. · It is -my views·;the President of the United States dled major housing details should take recollection that was created under Pres believed in light of present circumstances care of that function of government that ident Hoover's administration and that that it ought to be put into the Depart-· deals with housing. The ability to make the first directors were appointed by · ment of Commerce and that the minority loans there was put into the Home and President Hoover. · If the gentleman ini views should be sustained. That is what Housing Agency where it should be. tiated the legislation on behalf of a Re we in our judgment will have to decide Some of the other corporations under publican ;?resident he should be con today, -whether the remaining functions the control of the Reconstruction Fi- gratulated. should go in the Treasury Department or nance Corporation were put in the De- Mr. SABATH. I introduced the first in the Department of Commerce. partment ·of Agriculture because those resolution in 1931 creating a lending Mr. STEFAN. Will the gentleman loans came within the general purpose agency to aid business that was in de answer my question on economy? Will of the Department of Agriculture; and so spair. The House passed the bill, but un it result in economy? it is that the remaining part that has fortunately President Hoover vetoed it Mr. DAWSON. Efficiency means econ..; to do with business and industry should because he desired an amendment to be omy. When a function is efficiently ad be placed in that department of the Na- inserted whereby the municipalities ministered h cannot be less economical tion charged with the responsibility of could not obtain loans unless they were than a function inefficiently adminis encouraging and promoting business- for self-sustaining projects. The bill tered. It is the opinion of the Hoover that is their major purpose-and we originally was presented by me and Commission that the functions of tne take the remaining features of the Re- urged by me early in 1931. I had the Reconstruction Finance Corporation at construction Finance .Corporation that matter up with Mr. Mellon and Mr. present existing in Government is both have to do with lending to business, en- Mills and finally it was passed in 1932 inefficient and not economical. We be couraging business, and put them in the when Hoover was President. But had lieve economy will res.ult. department whose major objective is to the bill been passed in 1931 the crash Mr. HUGH D. SCOTT, JR. Mr. Chair deal with business. That carries out the would not have been as great· as it .finally man, will the. gentleman yield? same program that was set up in plans was. Mr. DAWSON. Certainly. and was adopted by this House. . Mr. HERTER. The gentleman is talk- Mr. HUGH D. SCOTT; JR. I would There was some difference of opinion ing about an amendment to the Recon like to say that I have great respect for with regard to placing it in the Treasury struction Finance Corporation Act but the work done by the gentleman's com or the Department of Commerce, and the RFC was already in existence prior mittee and by the gentleman himself, such differences of opinion are an en- to that time. but I would like to ask the gentleman tirely normal thing, but it must be re- Mr. SABATH. The gentleman is mis whether he would agree that if a farme r, membered that the Treasury does not taken. The first one was when i intro for example, were to direct me to put the lend money to business or to individuals; duced my bill. There was no Recon turl{eys in the hen house and I put them the Treasury does not lend. money to struction Finance Corporation. . But I in the pig pen, would that be a compli private corporations. This would be a will say this, I did not call it the Recon ance with the directive? new feature set up in a department none struction Finance Corporation. · I called Mr. DAWSON. I would like to sug of whose major purposes constituted the it in my bill the Federal Finance Relief gest this answer. I think if you were purpose for which the Reconstruction Corporation because I did not want to the President of the United States that Finance Corporation exists. So the log- leave any insinuation as to the recon you, when any problem or recommenda ical thing to do is to put it in the De- struction that the Republicans might in tion came to you, would deal with that partment of Commerce and that is what dulge in and that there would be any re recommendation in the light of eXist this plan does; it puts it in the Depart- construction, so I called it the Federal ing circumstances, and particularly so · ment of Commerce instead of in the Finance Relief Corporation Act. when there was such a close· division as ~reasury Department. . . Mr. DAWSON. Upon this we are to whether it go gne place or not. Then, That is the only questiop mvolved, agreed, that it was passed in 1932. if in your judgment you believe that it and I submit that good legislative prac- Mr. STEFAN. . Mr. Chairman, will the should go where the minority said, you · tice would put _it into that department gentleman yield? _ would to that extent follow the recom- · whose main objectives are to carry out Mr. DAWSON. I yield to the gentle- . mendation of the Commission at that the functions that now remain in, the man from Nebraska. . time and you would deal with it, whether Reconstruction Finance Corporation. Mr. STEFAN. ·I would like to ask.two it would be better to put in the hen The issues .are clear. questions. First, will the change result house or the turkey house,· in the light Mr. SABATH. · Mr. Chairman, will in some economy? Second, has this of existing circumstances. the gentleman yield? . . been recommended by the Hoover Com- Mr. HUGH D. SCOTT, JR. Would Mr. DAWSON. I yield to my distm- "mission? , the gentleman be correct, however, in guished friend from Illinois. Mr. DAWSON. It has been recom- saying it is in compliance with the di Mr. SABATH. I wish to say that the · mended by the Hoover Commission . . , rective of the Hoover Commission, if the statement of my colleague and the chair- .Mr. STEFAN. . It has been? . . . Hoover Commission recommended it go man of that great committee is correct, Mr. DAWSON. Will the gentleman · to the. Department of the Treasury and because when I first introduced the Re- permit me to finish? the gentleman's committee recommend construction Finance Corporation bill . Mr. STEFAN. Yes. ing it go to the Commerce Department? creating that organization it was the in- Mr. DAWSON. It was recommended tention that it should go to the Depart- by the Hoover Commission that the Re Mr. DAWSON. I will say this, that ment of Commerce because the aim was construction Finance Corporation be the former President of the United to help small business that suffered so placed in some department of the Gov states would not expect the present much during the crash of 1929, and the ernment. The President placed certain President of the United States to follow years that followed, 1930, 1931, and 1932; activities of the Reconstruction Finance every recommendation, dot every "i" consequently, the resolution and the rec- Corporation in those departments and and cross every "t." He would expect for ommendation of the committee is in agencies, the chief business of which was him to assume the responsibility that the right direction; it belongs to the De- to carry out the purposes embodied in had been on his shoulders·to do the thing partment of Commerce. portions of the Reconstruction Finance now that will be for the best interest of· Mr. DAWSON. I thank the gentle- Corporation Act. It also recommended the country. man. that the remainder be put in the Treas- Mr. HUGH D. SCOTT, JR. I thank Mr. HERTER. Mr. Chairman, will the ury Department. I tried to explain that. the gentleman; he answered my ques gentleman yield? That was·by a division vote. Five mem- tion. The recommendation of the Mr. DAWSON. I yield to the gentle- bers of that 12-man commission believed Hoover Commission has not been com man from Massachusetts. it ought to go into the Department of plied with, but an alternative recom Mr. HERTER. As a matter of historic. Commerce, but the majority believed it mendation has been offered. record, I think the gentleman from Illi- ~hould go to the Treasury Department. Mr. KUNKEL. Mr. Chairman, will nois is incorrect in regard to the original In sending his plan down here and in the gentleman yield? legislation dealing with tbe Reconstruc- studying both the ma;iority and minority· Mr. DAWSON. I yield. 9606 CONGRESSIONAL RECORD-HOUSE JUNE 30 Mr. KUNKEL .. There is one question · one, out of step with those recommenda of the Hoover Commission. We quote I would like to ask. The gentleman has tions. from that report. Both the Hoover been talking about the transference of The gentleman can talk all he wants Commission and the citizens committee the remaining functions of the Recon to about the minority on the Hoover for the Hoover Report have given great struction Finance Corporation. Do Commission. There were minority er emphasis to the Commission's rec these functions go to the Department of views. I doubt if there is any one ques ommendations for a review by Congress Commerce, or is the Reconstruction Fi tion that ever came before that Com of the operations and policies of the Re nance Corporation kept intact and the · mission, unless perhaps it was the issue construction Finance Corporation than Corporation transferred over into the of increasing the salaries of Federal om to the question of its location. control of the Department of Commerce? cials and employees, upon which there The minority of the committee and Mr. DAWSON. The functions are was not a dissenting opinion of some the Member of the other body wants the kept under the Board of Directors, sir, kind, and there was on this. Congress first, before it places this or but they work under the guidance of The Hoover Commission recommended ganization any place except where it is the Secretary of Commerce, in dealing that if there was to be a change in the now to make a study of what the RFC with business. Since it is his duty to housing of the RFC the functions of the · is doing and to determine the future promote business it is essential to have Reconstruction Finance Corporati9n policy of the RFC. it within his Department where he can should be transferred to the Department Mr. KUNKEL. Mr. Chairman, will confer with them, and it seems to me it of the Treasury. That is what they the gentleman yield? is much bet.ter than putting it into a recommended. You cannot get away Mr. HOFFMAN of Michigan. I yield. department which does not have those from the record. That was the recom Mr. KUNKEL. There was the bill functions. mendation. All you need to do is read which drastically curtailed the powers Mr. KUNKEL. I agree that it should the recommendations and the report of of the RFC which was passed by the go · to the Department of Commerce, the task force. Eightieth Congress. Does this plan, but the corporation is kept intact? But the Hoover Commission was pri which the House passed then, and which Mr. DAWSON. That is right. marily concerned with delaying any was reported out by the Committee on Mr. KUNKEL. What really happens change until the Congress should deter Banking and Currency, which we thought is that it goes back to the same system mine the future of the Reconstruction did a pretty good job in cutting the RFC that existed prior to the change, except Finance Corporation. We will assume back, change that bill? that certain functions in ReorganiZa the Reconstruction Finance Corporation Mr. HOFFMAN of Michigan. · It cer tion Plans 22 and 23 have been trans was all right when it came into existence tainly does. I will read to you from the ferred to the home and housing agency. but, like. every other Federal ag~ncy, it report on page 16: Mr. DAWSON. That is right. has grown and expanded. Instead of The Reconstruction Finance Corporation, Mr. KUNKEL. I thank the gentle being a sort of throw out a life line or at least until a recent period, has main man. ganization it has developed into a lend tained, in general, a reputation for conserv The CHAIRMAN. The time of the ing organization. It is now proposed by atism. Excessive liberalization- gentleman from Illinois has expired. the President to liberalize the lending program. ! think this answers the gentleman's Mr. HOFFMAN of Michigan. Mr. question- · Chairman, I yield myself 10 minutes. Those who have studied governmental operations will reach the conclusion, I of its policies would tend to weaken the Mr. Chairman, the situation which believe, that lending is to be construed financial foundation upon which rests not confronts the House today demonstrates so that after a while a loan will mean a only the Government but the whole economy the unsoundness of the original reorgani gift, somewhat similar to our foreign as well. zation act. Here we have ::i. plan, No. 24, policy. We lent, but after a time y;e just Here at least in my judgment is what which changes the existing law sent down dropped the term "loan"-for the money they are trying to do. First, they are to the Congress. It becomes the law of we advanced turned out to be a gift. trying to take advantage of the Hoover the land unless within 60 days one House This is one thing the committee had to Commission's recommendation but ig or the other, by a constitutional major say, and we quote from our r.eport: nore the recommendation that a study ity, rejects the plan. Probably there are A subcommittee of the Senate Commit should first be made. But they want to now not more than 150 Members of the tee on Banking and Currency, headed by take advantage of the recommendations It House in the city of Washington. Senator F'uLBRIGHT- that if a change is made it should go to would require 218 to reject this plan. the Treasury Department, but they in You see the situation? Anything that A Democrat-- already is engaged in a review of the policies stead want to switch it over to the Com the President wants to send down, and merce Department. Why? Well, you do the leadership wants to keep from com and operations of the Reconstruction Fi nance Corporation as recommended by the not need to be a prophet nor the son of a ing up for a vote until it just happens that Hoover Commission. prophet to understand that. The RFC many of the Members are out of the city, has had and it undoubtedly will have may become a law because a lack of at The Commission recommended a study control of billions, of dollars. The RFC tendance prevents a veto by the House. of the Reconstruction Finance Corpora has placed some restrictions upon the The reorganization act changes our whole tion and a determination by the Con loaning of that money. We all know the legislative system. But there is no use gress of what policy that organization RFC has been fairly liberal with Lustron talking about that because that is the should follow. and with Kaiser and some more bor law today. Mr. MILLER of Nebraska. Mr. Chair rowers. They have lost some money. In Then there is another little thing that man, will the gentleman yield? one case they lost $37,000,000 in one illustrates how we can be led astray. Mr. HOFFMAN of Michigan. I yield. chunk. They made some loans which, There is no question but that the coun Mr. MILLER of Nebraska. May I ask to say the least, are peculiar. It occurs try see the need for efi:lciency and econ if there was any testimony before the to me it might be· well to have a little omy in the operations of the Federal committee relative to the citizens' com Government. The Hoover Commission mittee that followed the Hoover Com more conservatism in the operations of made its report, and the country is sold mission, as to their recommendations that organization when it is dealing with on those two ideas that by the adoption upon the transfer of this agency either the taxpayers' dollars; especially if we of its recommendations we will get efi:l to the Department of Commerce of the are to get into a war and we are to have ciency and economy. The President, Treasury Department? I am referring to finance the war. clever politician that he is, has taken ad to the citizens committee that is set up, :1.\4r. HUBER. Mr. Chairman, will the vantage of the situation, and he is just I think, in all the States now, that is gentleman yield? pinning the Hoover laibel on every nice making recommendations to Members of Mr. HOFFMAN of Michigan. I yield. little political scheme he has in mind and Congress relative to this plan. Mr. HUBER. Did I hear the gentle is sending them down here. I think we Mr. HOFFMAN of Michigan. Yes: man say Gabrielson? have had 27 of them, some of them in the -Citizens committee sent up a witness, Mr. HOFFMAN of Michigan. No, I accord with the Hoover Commission's· Mr. McCormick, and his testimony fol was not aware until it came up in com recommendations and some, like this lowed very closely the recommendations mittee that any Republican-I do not 1950 CONGRESSIONAL RECORD-. HOUSE 9607 kno:w how many Republicans there are Mr. HOFFMAN of Michigan. Well, records, shall be transferred to the Depart can you tell me how· many voted in the they showed good sense, because they got ment of Commerce. last election ?-there were not quite all their money back and with interest. The Corporation would continue to be administered by its Board of Directors but enough-has borrowed any large sum of In the Lustron loan you lost something "subject to the supervision, coordination, RFC. like $37,000,000. Does anyone contend and policy guidance of the Secretary of Com- Mr. HUBER. No, not quite enough. for a moment that you have not used 1nerce." Mr. HOFFMAN of Michigan. I do every power within your control to force Excluded from the scope and effect of the not know. But there were not quite people into accepting your political plan are functions relating to housing which enough-not quite. I hear some ap philosophy? Attempted recently to si are to be transferred to the Housing and plause-from the left again. I acknowl lence Congressmen who were critical of Home Finance Agency under Reorganization edge it. I am thankful for it. I appre the administration? Oh, I know you Plans Nos. 22 and 23, also pending. ciate the fact that apparently you ap were educated in the Chicago school of ATTITUDE OF HOOVER CITIZENS. .COMMITTEE prove of something I said because I can politics. Mr. Robert L. L. McCormick, research di only assume you are honest and sincere The CHAIRMAN. The time of the rector for the Citizens Committee for the in applauding and encouraging my gentleman from Michigan has again ex Hoover Report, testified that his group could remarks. pired. not support Reorganization Plan No. 24 be:.. What they propose to do, Mr. Chair I cause of its divergence from the recommen Mr. HOFFMAN of Michigan. yield dations of the Hoover Commission. man, is this: The RFC has shown a little I myself two additional mi:nutes until The attitude of this group, which is widely independence. If they can just move tell him about Chicago, and ·how they representative of a very strong public senti over that lending agency and liberalize operate over there. They operate on a ment favoring adoption of the reorganiza it, and lend the money-and I do not cash basis. I know some precinct com tion program of the Hoover Commission; is assume they will lend very much .of it mitteemen that you got over by favors. that plan No. 24 should not be allowed to be to Republicans-but lend the money to . That is all riight with me, but what· I ob come effecti.ve until there is a complete con individuals or corporations which. will ject to your doing now is .taking this gressional revi.ew of the policies. and opera support the so-called Fair Deal; that money of the taxpayers and, under the tions of the Corporation. will be a wonderful, fine thing for the guise of helping businessmen, shall I say RECOMMENDATIONS OF THE HOOVER COMMISSION . party in power. If you can just get the seduce them into going along in support The Hoover Commission-in.its report, Gen control of the Department headed by of your party? What you are trying to eral Managenient ·of the Executive Branch, .. a gentleman-and I am not talking do here is what you have done in other held that there are an excessive number of· about the present holder of that posi instances, purchase votes by the distri departments, administrations, agencies, tion-but if you can just get control of boards, and commissions engaged in execu bution of taxpayers' money. .If yeu want tive work: which report directly to the Presi the lending of these billions of dollars . to get political on it, l call your atten dent, if they report to anyone. In· its recom- and get that into the political channel tion to the report of a committee of the - mendation No. 17 in this report, the Cominis you see what it means? In addition to other ·body, where they reported that in . sion proposed that 65 present departments· all the special favors.granted to·labor and Texas Federal money appropriated Jor - and agencies be consolidated into about one to others-first to this group and. then relief was used to purchase votes, and third that number-. to that-now, if you can get the business that the same thing occurred in Ken Recommendation No. 12 in the same repoJ.'.t man and make them dependent for their tucky. Now that is the record, if you was that "the numerous agenci.~s . of the existence upor. the administration, be executive branch must be grouped into de want it. I realize that we do not have· par.tments as _nea_rly as possible by .major cause the holder of a mortgage always enough here to put this through, but I purposes in order to give a coherent mission has quite a little control over the bor~ do not propose to let the plan become to each department." The Commission added rower-you have almost insured, have law without voicing protest ag:ainst. us that "by placing functions cheek-by-jowl almost m~de certain the return of a ing again Federal funds to assure· a con the overlaps can be eliminated·, and, of even Democratic Congress. I would not men tinuance of your party in power. greater impoz:tance, coordinated policies can tion Members of the other body who may But now back to plan 24, .permit me. be developed." be ·able to go to the source and apply for to read the report of the· minority. It The Hoover. Commissipn in its report· on and advise as to loans to be made to . the Treas~ry . De.partment . pointed out .that is signed by all Republican members of · the Reconstruction Finance .Corporation, the influential people who take an interest the committee: in politics in their own districts. · Export-Import Bank, and the Federal. De Reorganization Plan No. 24 of 195Q, trans posit Insurance Corporation are independent Mr. SABATH. Will the gentleman ferring the now independent Reconstruction agencies reporting directly to the President, yield? Finance Corporation to the Department of that the President cannot give the time nec Mr. HOFFMAN of Michigan. I yield. Commerce, is in conflict with a recommenda essary for their supervision, and that, prac Mr. SABATH. The gentleman stated tion of the Commission on Organization of tically, they are accountable to nobody. · -· that only loans will be made to Demo the Executive Branch of the Government, The Commi-ssion in its recommendation crats. Does not the gentleman know the which proposed to place it in the Treasury No. 3 in that report proposed that super"vision biggest loan was made to a Republican, Department. . of the operatJons of these agencies be vested The plan raises issues broader than those in the Secretary, of the Treasury. former Vice President of the United relating to efficient organization. It is . part States, Mr. Dawes, amounting. to $9Q,.- Wit~ respect to the Reconstruction Finance of the administration program for what may Corporation, the Commission expressed its . 000,000, and I at that time, as on~, ap prove to be a dangerous relaxation of credit belief that "the operations of this Corpora- · proved the foan because I thought it policies. tion, on which we m ake recommendations in might save many of the banks. Decision on the proper location of the our report on Federal business enterprises, Mr. HOFFMAN of Michigan. That RFC in the Government structure should be should be placed in 'the Treasury Depart loan did.save many banks. And the gen-. deferred until there is opportunity for more. ment with general responsibility for its tleman showed good judgment, because, complete consideration of pending legisla supervision vested in the Secretary." as I understand, every dollar was paid tive measures before other committees. Time The major recommendations of the Com back and paid back with interest. What also should be given for a comprehensive re m ission with respect to the RFC appear in view by the Congress of policies and opera- . the report on Federal business enterprises. fs the matter with that? Did not Dawes tions of this Corporation, which was the · change his political opinion? Are you Recommendation No. 18 of that rep01·t was major recommendation of the Hoover Com that the Congress review the Reconstruction quarreling with him about that? Do you mission with respect to it. Finance Corporation in accord with recom think he did not deserve the loan because The plan should be rejected by approval by mendation No. 8 in the same report relating · he did not change his political views? the House .of Representatives of House Res- . to lending policies of all corporations. What are you squawking about? olution 648. Recommendation No. 8 was as follows: TZRMS OF PLAN Mr. SABATH. I tal~e exception to the "We recommend (a) that -:-.he Congress re- · statement that the gentleman said that Reorganization Plan No. 24 consists of a view the power to make loans * * * t ak loans were made only to Democrats. The single paragraph, the implications of which ing into account the problems of economy, greatest loans were made to Republicans are far reaching. efficiency, and integrity; (b) that in non It provides that the Reconstruction Fi- · emergency periods the Congress place re and the record will bear me out, and the nance Corporation,· together with all of its strictions on direct loans in order to insure largest one was to Dawes, $90,000,000, functions, agencies, property, assets, funds, that the normal channels of credit are uti and it took 14 ye.ars before it was paid contracts, loans, liabilities, com~itments, lized to the maximum extent possible or, back. authorizations,. allocations, personnel, and alternatively, provide for the gua1·anty of . XCVI--605 9608 CONGRESSIONAL RECORD-HOUSE JUNE 30 . Joans made by private or other established those of the Reconstruction Finance Cor which is a worthy credit risk but does not agencies." poration and the Export-Import Bank in have adequate collateral, either directly or DIRECT LOAN ISSUE the Treasury Department. in cooperation with banks or other lending The Hoover Commission in recommending The Reconstruction Finance Corporation, institutions through agreements to partici that the Reconstruction Finance Corporation the Export-Import Bank, and the Federal pate or by the purchase of participations, or be placed in the Treasury Department ap Deposit Insurance Corporation were as otherwise, for the purpose of meeting the pears to have been influenced by its belief signeq to the Treasury Department under credit requirements of sucL business enter that further direct lending by the Govern a listing of that Department's responsibili prise: Provided, That management abilities, ment should be curtailed rather than ex ties which include the maintenance of the potential earnings, and other factors deemed panded as proposed in the administration's public credit, advice in the conduct of credit pertinent by the Corporation afford a reason present program. institutions, and supervision of certain able expectation that the loan will be repaid." The Commission had this to say on direct others; and the periodic inspection of lend Section 603, referred to in the proposed lending: ing and other agencies in process of liquida amendment, authorizes the Secretary of "Direct lending by the Government to tion. Commerce to establish such classifications of persons or enterprises opens up dangerous PURPOSE OF REORGANIZATION PLAN NO. 24 business enterprises as he deems appropri possibilities of waste and favoritism to in ate. The criteria t.J be considered in estab dividuals or enterprises. It invites political The President, in his message accompany lishing such classifications include the rela and private pressure, or even corruption. ing Reorganization Plan No. 24, asserted that tive size and importance of businesses in an Emergencies may arise in depression, war, the activities of the Reconstruction Finance industry, the competitive circumstances and national defense, or disaster which must be Corporation are designed primarily to aid degree of independence, and such other· fac met in thl.s way. But direct lending should business, which is the basic mission of the tors as may be appropriate. be absolutely avoided except for emer Department of Commerce. He pointed out The proposed legislation is very broad and gencies." that a minority of the Hoover Commission raises many highly controversial issues. The Commission held that no guaranties favored assignment of the Reconstruction Members of Congress should realize that ap of loans should be made on terms more Finance Corporation to the Department of proval of Reorganization Plan No. 24 is in liberal than those made on direct loans and Commerce, the statutory function of which tended as a part of a movement for liberaliza that the Government should not engage in is "to foster, promote, and develop the for tion of the credit policies of the Reconstruc direct lending where loans can be obtained eign .and domestic commerce." tion Finance Corporation in a manner con from private sources on reasonable terms. The President referred to his special mes trary to its traditions. sage of May 5 on the subject of coordination The Commission did not go as far as its If the entire legislative program is ap task force on lending agencies, which recom of Government aids to small and independ proved, we may expect scandals in RFC lend mended the liquidation of the RFC. ent business. ing which would cause the cases which have The Commission expressed its own view on The real significance of the reorganization been subjects of recent public discussion to this Corporation as follows: plan becomes apparent upon study of the pale into insignificance. "The Reconstruction Finance Corporation President's message of May 5 and legislation performed a useful and necessary function introduced to effectuate the recommenda Liberalization of RFC credit policies .would in the days of the depression and the war. tions of that message. mean a reversal of the policies laid down by the Congress in the acts of 1947 and 1948 Its life W8$ extended by the Congress on It is important that the Congress should May 25, 1948. The manifest major purpose understand fully the implications of that Which provided for reorganization of the war of that extension was to maintain it as a message in acting upon Reorganization Plan time Corporation on a peacetime basis. In stand-by agency in case of emergencies. No. 24. both of those laws the Congress declared its But it still has 31 branch offices and over purpose to curtail rather than expand the ac The President in his May 5 message rec tivities of the Corporation. 3,000 employees. ommended a five point program including, "This agency is engaged in making direct first, insurance of bank loans up to $25,000; DIVERGENT VIEWS IN JOINT COMMITTEE ON loans to persons and enterprises, frequently second, the chartering of national invest ECONOMIC REPORT without the participation of private agencies ment companies; third, broadening of lend While a subcommittee on investment of the in its risks. ing powers of the Reconstruction Finance Joint Committee on the Economic Report "Our task force strongly recommends the Corporation; fourth, strengthening and im issued a report in March recommending Gov liquidation of this Corporation and the sub provement of the technical and managerial ernment action to provide capital loans and stitution of guaranties by the Government, aids ·now provided by the Department of equity capital to small enterprise, a minority operating through the Federal Reserve Commerce; and, fifth, placing of responsi of that committee challenged both its state banks, of loans to be made by commercial bility for these new programs in the Secre ment of facts and conclusions. banks. tary of Commerce, including transfer of the "The Commission believes it preferable The minority was skep~ical of proposals that the Corporation be reorganized to guar RFC to his supervision. for a liberalization of credi't and held that antee loans by commercial banks. With respect to the broadening of the the majority had placed too little emphasis "There may arise cases of needed loans lending powers of the RFC, the President on adverse effects of heavy taxation upon which are not available frOJll private insti said: all kinds of bu.siness. tutions. However, this unavailability, ex "The Corporation should be permitted to The minority report, signed by Senator cept in the case of emergency or where the relax its collateral requirements on loans TAFT and Representative HERTER, said: national defense is involved, arises from the to small businesses, if management abilities "In addition to .the shortage of equity cap fact that more than normal · risk usually and potential earnings of the borrower af ital, the small companies have difficulty in is involved. It may be in the public in ford reasonable expectation of . repayment. borrowing money on any long-term basis. terest to provide such credit. This amendment will merely give the Cor The testimony is conflicting as to whether "However, the credit of the Government poration the same discrEltion which many money is available on a short-time basis from should not be used to obtain lower rates of bankers already successfully exercise. The the banks. We are inclined to think that it interest and easier terms than those which Corporation should also be authorized to is available to the extent that the loans are private institutions can properly provide." increase its participation with private banks sound, and we question the desirability of the Government stimulating short-term COORDINATION OF CREDIT AGENCms on such loans. In addition, I again recom mend that the present 10-year maximum loans which are not sound." Under the Hoover Commission program, maturity on all types of business loans be These minority party members held that the policies of domestic credit agencies increased to at least 15 years." the principal causes of the disinclination of would be coordinated by a National Mone PENDING LEGISLATION private investors to invest in common stocks tary and Credit Council to be appointed by and other forms of equity capital are high the President. The Council would be lo The President's recommendations are be tax rates on middle and higher incomes, dis cated in the Treasury Department and its fore the Congress in S. 3625, which is in the crimination against investors in common chairman would be the Secretary of the hands of the Senate Committee on Banking stocks because of double taxation, and tax Treasury. The various credit and related and Currency, and H. R. 8565 and H. R. 8566, difficulties confronted by all business enter agencies would be represented on the Coun in the House Committee on Banking and prises. Currency. The bill is designated as the cil. Its functions in the domestic field INVESTIGATION BY FULBRIGHT SUBCOMMITTEE would corresponu to those of the National Small Business Act of 1950. Advisory Council on International Monetary Title III of this measure relates to amend A subcommittee of the Senate Committee and Financial Problems in the foreign field. ments to the Reconstruction Finance Cor on Banking and Currency, headed by Senator By means of the coordinating activities poration Act. FULBRIGHT, already is engaged in a review of the proposed National Monetary and Credit One of the principal proposed amendments of the policies and operations of the Recon Council, the Commission proposed to bring would insert the following among present struction Finance Corporation as recom policies of housing credit agencies, which statu.tory lending powers of the Reconstruc mended by the Hoover Commission. were to be grouped under the Housing and tion Finance Corporation: Senator FULBRIGHT in testimony before the ~ome Finance Agency, and those of farm "To make loans to any small-business en Senate Committee on Expenditures in the credit agencies, which were to remain in terprise (as determined pursuant to section Executive Departments on Reorganization the Farm Credit Administration within the 603 of the Small Business Act of 1950, and Plan No. 24 asked for its rejection. He stated Department of Agriculture, into line with the classifications established thereunder) that his subcommittee could not complete 1950. CONGRESSIONAL RE.CORD-HQUSE 9609 its work before the effective date o! the re- bly be deferred in its taking effect and . No nation can be . greater than its organization plan. · - operation until present congressionai in- families. A nation with weak family ties It w_as Senator FULBRIGHT'S opinion that a quiries have been completed. It would is a weak nation; a nation with poor decision by the Congress on the future policies of the RFC should precede any action be well to point out that this plan goes families, families with little hope, or dis- as to its place in the Government structure. to the structural and programming ac- integrated family life is easy prey to the . Disclosures before ·the Fulbright subcom- tivities of this Corporation, and the find- fals.e promises of communism. The best mittee have been of such a disturbing char- ings of any congressional group now or bulwark against communism is a nation . acter as to provide a warning against further later can be carried out as well with .the with strong and health;r family ties. liberalization of lending policies of the Re- Corporation-within the framework of the American family life must be kept stable construction Finance Corporation as pro- Department of Commerce as · under its and healthy. We must accent our eco posed to accompany its transfer to the De- . present circumstances. Such scrutiny nomic and political activities in this di- partment of Commerce. by the Congress from. time to time is rection. National Family Day will serve INTEGRIT~ oF covERNMENT CREDIT highly productive and performs a most each famly as a yardstick _each year to Main"tenance of the integrity of the Gov- valuable service, but any examination of measure the degree of kinship and· joy ernment's credit is of fundamental impor- the feasibility of continuing corporate in such relationships; tance to the entire American economy. 1 ct• · · · 1 f d . It is essential that the lending agencies o:t en mg powers . or appra1sa s o jU g- If. everything is right with the Ameri- the Government should mairi.tain ·standards ment in 'regard to specific loans fs not at cah. 'tamily, we need have little ·concern ·an a par with those of ·privi:vte banking. issue here. ' These matters will apper- .w'ith . the fqture welfare of this .'great · J.,,ooEe methods could lead to Qovernment · tain during the. authorized .lifetime of Nation. The family ·is the social eel}; .bankruptcy in the sam~ way that lax finan- · any goverm~ental corporation. Each of the.family is the teacher; the fami_ly ;pro cial policies undermine private banking and these inquiries by the Congress has pro- duces the citizen. Virtue is the basis of business. · duced one abiding conclusion: This Cor-. . · good ·citizenship and where is virtue de- Heretofore, agencies with vei;y liberal . poratiqn _is l~ft singularly.to operate too veloped? Only in a good home. policies to meet depression or other emer- much on, its owl). . · None of us is a creature of the State. , ·gencies have been kept apart from those whicli have kept their practices on a sound The Hoover Commission, while ac- The State is our ·Servant. · We are born- basis. knowledging. that the President has into .a family and we spend ·our forma- The Reconstru~tion Finance Corporation, over-all direction of the executive tive years· in-its bosom. The child's en-. at least until a recent period, has maintained branch, realized immediately that his . tire world .is -his family .and even when in general, a reputation for conservatism. .attention and ·control cannot be of the he is moving through adolescence~ he re- Excessive liberalization of its po,licies would intensive_ -interest necessary; therefore,- turns to the family as. the fulcrum of tend to weaken the financial foundation upon which rests not _only the Government they conclude that "pract-ically the RFC his·- extstenc·e. Who would question that .but the whole economy as well. - is acco~nt~b~e to nobody." .. the· family is most responsible in. mold- coNcLusioN The result of-Reorganization Plan No. . ing · the youth as he stands on .. the . T!J.e issues which_are in the b!l-ckground of - 24 would -be to-make the· RFC responsible · threshold-- of maturity·? -Who- -would· Reorganization Plan No. 24 are clearly of such -to somebody -and would; "in effect: seek to - question that·he is essentially a product · .a nature as to call for Ca)ltion. . . place its functions U'nder .-·a major- ~ de- ·Of his family. ·All his 'tastes; attitudes, . It is neither necessary nor des~rable to take · partment relate-ct.by goal, ·aims, and p·ur- temperaments and personalities" ·are snap hCtion on this plan without fl.lll con- pose. · shaped by family life. The better· the s.ideration .of related legislative que:;;tip~s. Today we have the opportunity; to set · family life, the . loftier the indiv.idu_al other committees than those on Exp~n~i- in uotion the legislation which will ·ac- · ~ind, the more exalted the nation, the tures in the Executive Departments in the . com; ,lish this laudable ~mrpose, by re- better our future. two Houses of Congress are concerned with . . . these related matters. The stat-µs of pending jectii...g House Resolution 648, and there- · We honor our mothers on a speeial - legislation and investigations is· such .as _to by,. support Reorganization Plan No. 24· · day, aS' we should. Yet u-ls family life preclude any possibility of action on relat~d of 1950'. · which gives her the bai?iC peace, dfuni- issues prior to .the effective date of Reorgan- . Mr. DAWSON. Mr. Chairman, I -. ty and security which ~re her character- ization Plan No. 24. ·yield such time as he 'may desire to the istic lot throughout our land. On an- The Hoover Commission and the Citizens gentleman from Pe'rinsylvania · [Mr. _ other· special day we ,hen:ior our fathers. Committse for the Hoover Report have made DAVENPORTL · Yet it is their family ties which ennoble a convincing showing for the transfer•of the , · • · • " · d id " ' t d · · · fl ' Reconstruction Finance cor-poration to the, . Mr. DAVENPORT . . Mr. Chairman, I . ~m prov e ~ _s ea yi~g m Uel).ce upon Treasury Department rather tllan to tb,e D~- ~sk unanimous consent to extend my re- ou~ · ~1en_. . For ,.both mether· and father, partment of Commerce, assuming a decision . marks at. tbJs point in ·.the dECRr . family life_ es.ta:blishe~ . and develops a of Congress to chart the porporatiqn's course The CHAIRMAN. Is -there o·bjection deep sense of re.sponsi_bility and, pr.omotes along sound lines. . to the request of the.· gentleman: from .their g:owth m sel~ess_ness, sa_c_rific_e, · Both the Hoover ·Commission and the Citi- Pennsylvania? ·. and·patience._ · _ zens Committee r'or the Hoover Report have w given greater emphasis to the Commission's . Thei·e was"no objection. e· s~ruggle within the JI?.OSt complex recommendation for· a revi~w by Congress of . Mr. -DAVENPORT. · Mr. Chairman, . econo~ic .mark~t. place ever ~i:owp. to - operations and policies of the Reconstruction .in testimonial to the greatness ,of the mh.;:inK:md ~':> proy~de pur familles . with Finance corporation than to the question of Ame:rlcan family, I have- introduced a t. e esser:it1als of hf~'. :"'nd we are. hap its location. _ . resolution calling for , the establishment . p.iest when our familles :=tr.e content, se- Such a review should clarify _the issues in of National Family, Day to be honored cure, an~ h~althy . . .It- is. t.herefore ~Y a manner to facilitate a: decision as to purpose m mtroducmg this 1 t Whether the corporation should be placed in ·. on the third· · Sunday.d in September· each- · · .establlshmg. . Nat.10nal. Family . resoDay uthat IOU the Department of commerce or the Treas·- year.. We set as1 e a day each ~ear to we take tiine out each year to appreciate ury Department. pay ?Ur respects to the mothers .of this wonderful institution and to think Reorganization Plan No. 24 should be re- Amenca and another day to. honor our of ways to make it even more extraordi· _ jected by approval by the House of Repre- f th T 1 t th 1 f sentatives of House Resolution 648. Nothing · a ers. · 0 comp.~ e · e c1:rc e. o _en- nary. · · · will be lost by such rejection. The question d~~rmeD:t, I have mtro~uced . t.his reso- - ·Mr. DAWSON. Mr. Chairman, I ;yield can be reopened at a later date after ques- lut10n so th.at we ~ay take tnne each such time as he may desire to the gep tions of legislative policy have been decided. year to consider ~he i~portance and the tleman from Ohio [Mr: HUBER]. The CHAIRMAN. . The time of. the wonders of f~mily life. ~n the years Mr. HUBER. Mr. Chairman; it·might gentleman from Michigan has expired. .ai:iead, th~ third S~nday m. Sept~mber be well for the better under~tanding of Mr. DAWSON. Mr. Chairman, I yield will take its place m A~encan llfe ~ . s the circumstances surrounding this leg such time as he may desire to the gentle- one of our most treasl!red days. islation to restate briefly the n.ature and man from Missouri [Mr. KARSTEN]. At a time when th.e forces of commu- . purpose of the agency most a.ffeeted. Mr. KARSTEN. Mr. Chairman, I rise nism test .our very national existence, it January 22, 1932, saw the establishment in support of the President's· Reorgani- is the family to whfoh we must turn to. of the Reconstruction Finance Corpora zation Plan No. 24. I believe we should preserve the sanctity of our way of life tion. It performed a great service dur adopt this plan now. . and to . show the beleaguered outside· ing a severe and dark depression era, The statement has been made in some world that i~ the end: evil will Qe van- and W9rld War_ II, · of recent ~ymory. quarters that this plan might conceiva- quished~ . From ·time to time its }?asic legislation 9610 CONGRESSIONAL RECORD-HOUSE JUNE 30 has been altered within the orginal act If we are to succeed in reducing the until the chairman mentioned Mr. and upon occasion separate statutes have size of our executive structure for the Gabrielson. emphasized some phase or other of the promotion of simpler government; a plan Mr. HOLIFIELD. I am sure the gen Reconstruction Finance Corporation of this nature for these functions and tleman had rio intention ·of referring to program. This Corporation has proved .many more like them throughout the politics. to be a valuable contribution to the sta..; length and breadth of the executive In the consideration of the Hoover bilization of our national economy. It branch must be evolved, presented to the Commission recommendations we just has provided the vehicle for the safe House and successfully enacted. cannot pick out one recommendation guarding of our Nation's banking, insur Mr. DAWSON. Mr. Chairman, I yield and eliminate or ignore the other recom ance and industrial enterprises. such time as he may desire to the gen mendations. There is bound to be a G~nerally, the present Reconstruction . tleman from West Virginia [Mr. BURN diversity of opinion as to just how closely Finance Corporation is permitted to SIDE]. any piece of legislation, whether it be make loans on adequate security to busi- . Mr. BURNSIDE. Mr. Chairman, I rise substantive legislation or a Presidential ness enterprises including railroads and in support of this reorganization plan. plan, conforms to the all-over Hoover other carriers, to banking and financial Mr. Chairman, this transfer, which recommendations when you consider institutions and public agencies engaged proposes to place the Reconstruction In financing or developing public works them together: Finance Corporation in the Department Let me say at the outset that this plan or projects, where in such cases credit of Commerce, would result in the, Secre elsewhere cannot be obtained on reason 24 does not conform 100 percent to the tary of Commerce having a realm of in Hoover Commission recommendation, able terms. The total Reconstruction terest in its supervision, coordination, Finance Corporation authorization now because one of the recommendations of · and policy guidance. It would be inter the Hoover Commission was that the aggregates $3,880,000,000-with $825,- esting 'for the membership to know the 000,000 to be employed for business loans; RFC should go into the, Treasury. I testimony of the Honorable Charles Saw want to show, however, where it does $200,000,000 for public agency loans; yer, Secretary of Commerce, in this re $40,000,000 for catastrophe loans; $15,- conform to other recommendations of ·gard. In his unequivocal endorsement the Hoover Commission which are more 000 000 for insurance loans; the greater of this transfer he had this to say: sha're of the total, $2, 750,000,000 goes to important than the final location of the the Federal National Mortgage Associa You may wish me to indicate for you how RFC itself. In the first place, one of the I, as Secretary of Commerce, would approach major purposes of the Hoover Commis tion and there is $50,000,000 for prefab my new responsibility of guiding the Recon ricated-housing loa~s. These two latter sion was to eliminate as many independ struction Finance Corporation in matters of 1 functions and funds are transferred out policy. ent burea1s and agencies as possible, and of Reconstruction Finance Corporation The Reconstruction Finance Corporation there were about 67 of them, which re- . by Reorganization Plans No. 22 and 23 Act of 1948 authorizes the Corporation to ported directly to the President, and con of 1950, respectively. make loans and punhase obligations in order solidate them in the executive depart An evaluation of the mission of this "to aid in financing agriculture, commerce, ments, give them departmental status, and industry, to encourage small business, put them where they should be in rela organization gives the membership an to help in maintaining the economic stability opportunity to bring new policy guidance of the country, and to assist in promoting tion to the functions of the particular program and direction to the .Recon-: maximum employment and production." executive department. So in the plac struction Finance Corporation. Reor The intent of this language seems clear to ing of this particular independent cor ganization Plan No. 24 is a sincere legis me. For it to be translated into practical poration, the RFC, the President and his lative vehicle which will result in proving policy, however, requires that the Corpora advisers had to consider that; and they in its field a most effective element in our tion's board know the facts concerning a very also had to consider the placing of the business life. wide range of business and economic activ Corporation in a department according ity. It must know where its aid in financing to major purpose. Mr. DAWSON. Mr. Chairman, I yield commerce and industry is most needed. It such time as he may desire to the gen must know what is to be regarded as small Plan 22 of the President's plans trans tleman from New York [Mr. TAURIELLoJ. business. It must know in what areas or ferred 75 percent of the RFC functions, Mr. TAURIELLO. Mr. Chairman, as a industries small business is in need of aid. in terms of statutory authorization, over former examiner with the RFC in the It must have some solid basis for judging how to the Housing and Home Finance Buffalo district, I rise to support this loans can be made most effective in promot Agency. About $2,750,000,000 of the reorganization plan. ing maximum production and employment. $3,880,000,000 was transferred to the Mr. Chairman, one of the basic rec Secretary Sawyer added: Housing and Home Finance Agency. For ommendations of the Hoover Commis I am convinced • • • that such guid what purpose? For the major purpose sion in their examination of the execu ance is most appropriately furnished by the of implementing the housing program. tive branch of our Government took the · official who is charged with precisely this ~he Reconstruction Finance Corpora form that the total of our executive agen general area of public policy in all its as tion, therefore, was not looked upon as cies should be reduced to approximately pects, nonfinancial as well as financial, and a major purpose; it was looked upon as one-third of their present number. In statistical and analytical as well as operating. an enabling corporation to enable other order to effectively carry this out, it be- In these words we have the proposition major departments and major projects . comes necessary to consider the grouping presented that the interchange of infor to function better in the Government. and fusion of related agencies, and the mation and coordination of program So the part that had to do with imple various missions which have been cre ing can lend better direction, improved mentation of the housing program was ated for the major departments. Reor service, and economy. sent over to the Housing and Home ganization Plan No. 24 is an important ·Mr. DAWSON. Mr. Chairman, I yield Finance Agency. step in this direction. It seeks to place 15 minutes to the. gentleman from Cali Plan No. 23 sent over the prefabrica a function important in our economy, fornia [Mr. HOLIFIELD]. tion financing also to the Housing and that is, the lending function or power to loan money to our business world when Mr. HOLIFIELD. Mr. Chairman, I Home Finance Agency, because it funds from private credit sources are not may not need to use the 15 minutes, and had to be there to do the job of housing. available at reasonable terms. Com I want to approach this question entirely This left approximately 25 percent of the merce Department concerns itself with frankly without indulging in partisan original Reconstruction Finance Corpo our business life; the Reconstruction ship, Democrats v~rsus Republicans. I· ration, and in that category was em Finance Corporation concerns itself with am not criticizing anything that hap braced about $800,000,000 of loans to lending for the fostering and develop pened before; I just want to make a few business. That was the second large ment of our business life. The purpose remarks about the President's plan. piece of the RFC. of both these organizations are inextric Mr. HOFFMAN of Michigan. Mr. Where should that go? Should it go ably interwoven. Lending is a concom Chairman, will the gentleman yield? to Treasury just because dollars are in itant of our business life; it is the blood Mr. HOLIFIELD. I yield. volved? No, it should not go to Treas of our business veins. SuccessfUl adop Mr. HOFFMAN of Michigan. In reply ury; it should go to the place where it tion of this plan will be a recognition of to what the gentleman said about not could be used for the major purpose for the joint role played by these two im getting politics into it, if the gentleman which it has already been used, which is portant forces. will recall, I never mentioned politics loans to business. 1950 CONGRESSIONAL RECORD-HOUSE ·9611 Where is . the executive department . Mr. HOLIFIELD. That is a question · did not recommend that the agencies be whose major function is the promotion which it is impossible to determine. .The . -~abolished. : of business? We know that is the De· same answer is applicaple to every piece .¥r. CPRTif?. Have you created any .partment' of Commerce. Therefore, this of legislation which we pass~d in relation new agencies? . second large piece of the RFC was trans to the Hoover Commission recommenda- Mr. HOLIFlELD. No. . ferred to Commerce, and there it is to tions, whether it be in_the f orni of sub- Mr. CURTIS. The _ general service perform part of the major function stantive legislation or in the form of agency was not a new one? which is to promote and cause business a Presidential plan. The President is Mr. HOLlFIELD. No . . It was a con to prosper. required by the Reorganization Act to . solidation.of existing agencies. Let me A few other items, such as authoriza say that it will save money, but he is be very. fair. My friend, the gentleman tion of $75,000,000, loans to insurance not required to say how _much. I do not .. frc;>m Michiga:n, says that it is a new , companies, were also put there, as well .think the President o;r any of. us can agency. If he considers putting seven as about $40,000,000 in so-called catas judge until it is put into effect. how much or eig·ht agencies together into one trophe loans to different areas where it will save .. Bu.t .this plan is following group and calling it a new agency, that ·flood damage and other great ·damage the grouping according . to ,major pur- .is a new agency. had occurred. Those also went to Com .pose, it is eliminating the small, inde- Mr. CURTIS. · What happened to the merce. That was the tail end, you might pendent corporations -and putting -them personnel in t:qat move? Do you have say, of RFC. _int 'J executive departments. It is plac- more or less than whe,n you started? So in the sending of the .$800,000,000 ing the Reconstruction Finance Corpo- .Mr. HOLIFIELD. I cannot answer part of the RFC and the $75,00.0,000 and ration in an executive departm~mt, al- .that question . . Being :very frank, I the $40,000,000 you were sending it to though it is . put in a different depart- think we have more at the ·present time the place where it should be sent accord ment. I hope the gentleman remem- in the General Services. Administration ing to the major purpose of the Hoover _bers that conditions have changed since than we had before, because the Hoover Commission, because you had to make the original Hoover Commission made Commission put :upon the General Serv the decision as to whether lending is a its recommendation. Conditions have ices Administration additional duties. major purpose ot Government or wheth changed, and '?5 percent of the RFC is Mr. HOFFMAN of Michigan. Mr. er financing is a tool for the departments . being transferred to the Housing and Chairman, will the gentleman yield? of Government to. use to accomplish · Home Finanr,e Agency by plans 22 ... and Mr. HQLIFIELD._ I yield to the gen- their maJor purpose. That in a nutshell 2J, so what is left is .being transferred tleman from Michigan. · is the reason why Commerce was chosen to the place where it will do its duty as .. Mr. HOFFMAN of Michigan. While in place of Treasury. an. enabling· tool to the Department of I was ·out of the Chamber answering a Mr. HAND. Mr. Chairman, will the Commerce, -whose purpose is to foster telephone call I was advised that the ·gentleman yield? and promote business. gentleman . from California made the Mr. HOLIFIELD. I yield to the gen Mr. CURTIS. Was there any evidence st~tement that I was opposed to the tleman from New Jersey. · offered on the subject as .to how much original reorganization bill giving the Mr. HAND. Would the gentleman it might save?. · President authority to send down plans. inform the committee who the members . Mr. HOLIFIELD. In terms_of actual The .gentlem~n is correct in that; I was of the Hoover Commission were who dollars, no; there has been no definite opposed, because I did not want to make voted on this subject? testimony offered on any of the bills. it possible for the President to get legis Mr. HOLIFIELD. Severt members of There have _been. rough estimates, but lation through unless one House or the the Hoover Commission, a majority, I assure you they are rough, because in other exercised its veto power. I also voted to send it to Treasury. the administration of legislation and understand the gentleman made the Mr. HAND. The gentleman from Il 'plans based on the Hoover commission statement that I had oppo'sed the linois told us that. I. mean the person- recommendation, the administration it- Hoover Commission recommendations. nel. ... self_will have to .develop those sa¥ings. I am sure the gentleman does not mean Mr. HOLIFIELD. I do no.t think I Wo have been given ,a rough estimate · that befajlse· he ·inust know·, sitting on hnve that, but I will place it in the REC that there will be approximately $3,. the committee: that' r do not oppose all ORD with my remarks. 000,000,000 saved, and I am talking about those. . · :. want to point out something which all the recommendations. ·Mr. HOLIFIELD . .I said that ·as· far ~ 1.> very important, and that is that the Mr. CURTIS. How much have they as ·r knew, the gentleman liact opposed gentleman from Michigan [Mr. HOFF saved to date? all of the Presidential plans. · MAN] is opposed to all of these plans. Mr. HOLIFIELD. Well, we have not Mr. HOFFMAN of Michigan. Oh, no. H~ . undoubtedly would have been opposed had a fiscal year as yet under even part Mr. HOLIFIELD. 'If am ·aong, will to this plan had it been given to Treas of the plan. . the gentleman . tell me which plan he ury because he is against the Reorgan Mr. CURTIS. How many employees supported? - ization Act. have been let out by reason of what has Mr. HOFFMAN of Michigan. All those Another thing I want to point out is been adopted? that have gone through without objec- that the function of RFC is not changed. Mr. HOLIFIELD. I cannot answer tion. I did not oppose those. How RFC still is to be administered by the that. ma,ny have gone through? A dozen or board of the RFC and not by the Secre Mr. CURTIS. Any? more. t :,ry -of Commerce. It still has to be Mr. HOLIFIELD. I have no knowl- Mr. HOLIFIELD. The gentleman administered according to the policies edge. spoke against every one of them. set forth by the Congress during the ]v.Ir. CURTIS. Have any? Mr. HOFFMAN of Michigan. No. Eightieth Congress because that was the Mr. HOLIFIELD. I think some :have We have not even had a vote on some of last time· the RFC Act was amended. So been let out and· some have been hired. them. that is not changed. The Eightieth Mr. CURTIS. Well, do we have more Mr. HOLIFIELD . . Any Presidential Congress made certain limitations on or less? plan that has been brought to the floor the RFC and extended its life to 1954 ·. Mr. HOLIFIELD. I could not give of this House I say that the gentleman so far as lending purposes were con the gentleman that answer. from Michigan has spoken against, and cerned. Had the Congress at that time Mr. CURTIS. Well, do we have any I believe the RECORD will bear me out. wanted to do away with RFC it would more agencies now? Mr. HOFFMAN of Michigan. That have done away with RFC; but it rec.og Mr. HOLIFIELD. We have inany might be, but the g'entleman says noth· nizeC: that RFC had a legitimate func less. Let me put it this way: We have ing about the plans that I am not op tion to perform. So the Congress ex grouped the agencies together accord- posed to. The gentleman only has a tended the life of that agency. ing to major purposes, _and there are half truth in there. Mr. CURTIS. Mr. Chairman, will the less independent agencies reporting to · Mr. HOLIFIELD. I apologize if I said gentleman yield? the President. · ''half truth,." because I believe the gen- Mr. HOLIFIELD. I yield to the gen . Mr. CURTIS. The agencies are still tleman is sincere and I do not want to tleman from Nebraska. there? put him in the wrong light. Mr. CURTIS. How much money will ' Mr. HOLIFIELD. The agencies are Mr. HOFFMAN of Michigan. There b- saved by this proposal? still there, and the Hoover Commission are several of these plans, and maybe 9612 CONGRESSIONAL RECORD-HOUSE JUNE 30 what I should have done is to have in to his present relationship to the Patent the employees in their division and elim troduced a resolution, which I did not Office, the Bureau of Standards, the inate the duplications in the RFC? do. I am sure the gentleman knows me Weather Bureau, the Bureau of the Cen Mr. HOLIFIELD. Certainly the major well enough to know that, being here sus, and so on? purpose of the Hoover Commission's practically all the time and seldom miss Mr. HOLIFIELD. It would not be recommendations is to place these func ing a roll call, as the gentleman is fully identical, because the plan itself pro tions together so that one man will be aware, I would have introduced a reso vides that the Secretary of Commerce responsible for seeing where they over lution to disapprove of the plan if I had shall have guidance, and that the Board lap and duplicate and he is required to been against it. of Directors shall execute the policy ex eliminate that duplication and overlap Mr. HOLIFIELD. The gentleman's pressed by Congress in the Reconstruc ping of function. logic is unanswerable and his service to tion Finance Corporation Act. Mr. STEFAN. Is that not the answer his people in their opinion no doubt is Mr. DAWSON. Mr. Chairman, will to the possibility of efficiency and econ unparalleled. the gentleman yield? omy in order to eliminate that duplica So, Mr. Chairman, I believe the argu Mr. HOLIFIELD. I yield to the gen tion? So there would be some separation ment as to where this agency should go tleman from Illinois. from the payrolls of employees who are has been determined by the change of Mr. DAWSON: I think the words of operating in duplication activities? events and by the logic of dividing up the Secretary will answer- the gentle Mr. HOLIFIELD. Yes, sir; I think the this facility and placing it where it will man's question. He testified before our President brought out in his message accomplish the major purposes of the committee: that would be one of the fields where different departments where it is being You may wish me to indicate for you how savings could be made. However, he sent. I, as Secretary of Commerce, would ap was unable to say how much. As to the policy of the Reconstruction proach my new responsibility of guiding the Mr. STEFAN. Yes, but the Secretary Finance Corporation, as to whether it . Reconstruction Finance Corporation in mat has no control under a veto power of th.e makes loans to Democratic or -Republi ters of policy. action· of the Governors in making loans. The Reconstruction Finance Corporation cans or whether it makes loans on pre- Act of 1_948 _authorizes the Corporation to Mr. HOLIFIELD. No, sir; absolutely ·fabricated housing or loans to .insurance make loans and purchase obligations in or none, and he so testified. · · companies, or makes catastrophe loans der "to aid in financing agriculture, com Mr. BROWN of Gaorgia. Mr. Chair or housing loans, that has not been merce, and industry, to encourage amall man, will the gentleman yield? changed and will not be changed by the business, to help in maintaining the eco Mr. HOLIFIELD. I yield. . transfer that is contemplated llere . .If nomic stability of the country, and to assist Mr. BROWN of G_eorgia. We have an that has to be changed, it will be the job . in promoting maximum employment and agency known as Fannie May, which is production." The intent of this language part of the Reconstruction Finance Cor of the Congress to change it. The func seems clear to me. For it to be translated tions of the Reconstruction Finance into practical policy, however, requires that poration, which is officered by people who corporation still remain under its Board. the Corporation's Board know the facts con work with the RFC. What becomes of of Directors and will continue as the law cerning a very wide range of business and the jurisdiction of Fannie May to buy which is now written requires. economic activity. It must know where its and sell GI securities? Mr. STEFAN. Mr. Chairman, will the aids in financing commerce and· industry is Fannie May is ort?;anized for the pur most needed. It must know what is to °l:'e pose of creating a secondary market for gentleman yield? regarded as small business. It must know Mr. HOLIFIELD. I yield to the gen in what areas or industries small business the GI loans. What becomes of Fannie tleman from Nebraska. is in need of aid. It must have some solid May? Mr.. STEFAN. The gentleman says it basis for judging how loans can be made Mr. HOLIFIELD. I am glad the gen will be under the Board of Governors. most effective in promoting maximum pro:. tleman asked that question, because I Will they be responsible to the Secretary duction and employment. know how int~rested he is in secondary of Commerce? Secrek,ry Sawyer. added: ·mortgages financing questtons in the Mr. HOLIFIELD. They will be re Committee on Banking and Currency of I am convinced • • • that such guid sponsible to the Secretary of Commerce ance is most appropriately furnished by which he is a distinguished member. . as far as guidance· and as far as reports the official who is charged with precisely this Under plan No. 22, $2,750,000,000 of au are concerned, but as far as carrying out general area of public policy in all its as thorizations which is in the Federal Na the basic function of the Reconstruction·· pects, nonfinancial as well as financial, and tionai Mortgage Association at this time, -Act is concerned they will not. For in- · statistical and analytical as well as operating. goes over to the Housing and Home stance, the Congress in the last amend-· Mr. STEFAN. Does that statement by Finance Agency. That was the point I ment, I believe it was -the 1948 amend Mr. Sawyer mean putting the RFC in the made, tnat 75 percent of RFC has been ment, put in a clause which said that . Department of Commerce as a division transferred to the agency by plan No. the Reconstruction Finance Corporation of that Department and that it will inte 22, but the functions of FNMA are not should foster loans to small business.- It grate the RFC with the operations of for changed and will be changed only by would 1- ~. in my opinion, within the cate-. elgn' and domestic commerce and the De action of tP.e gentleman's committee. gory of the power of the Secretary of partment of Commerce field offices ·and Mr. BROWN of Georgia. But you are Commerce to advise the acting Board other divisions of the Departrrierit? undertaking to ·make a banking institu that he wanted small-business loans, he Mr. HOLIFIELD. I! I may answer the tion of the Housing Administration wanted that particular 'expressed will· of gentleman, it will be grouping together when it is not supposed to be a bank. Congress carried out if the Reconstruc the aids to business. One of the aids is The purpose of · Fannie May is to buy tion Finance Corporation Board was not financing. Other aids are advice and and sell securities. carrying it out, but he would not- say to statistics which the Department of Com Mr. HOLIFIELD. That is true. the Board, "You shall loan to A, B, C, or merce gives to business. Those would be Mr. BROWN of Georgia. For that D." grouped together into one major execu reason it ought to be in the RFC, because Mr. STEFAN. Would the Secretary tive department. that is a financial institution working have veto power over any decision of the Mr. STEFAN. Will it then result in with the banks. Therefore, it ought not Board of Governors? some reorganization of the various divi to be separated. One agency builds Mr. HOLIFIELD. No, in my opinion sions of the Department of Commerce? homes, and all they do -is to market the he would not have any veto power. The Mr. DAWSON. No. , loans. They do not make the loans. basic Reconstruction Finance Corpora Mr. HOLIFIELD. I would not think You are transferring the banking activi tion law gives that to its Board of Di so. I think it woUid merely place the ties of the · RFC · over into General rectors. tool which they need to function that Housing. Mr. STEFAN. It would be really much closer in a closer interrelationship. Mr. HOLIFIELD. But we are not now another divi_sion in the Department of Mr. STEFAN. Should there be some discussing that particular· plan. Commerce, would it not? duplication on the part ·ot the RFC con Mr. BROWN of Georgia. I under Mr. HOLJFIELD. Yes, in effect it cerning research in small business, which stand that. would be one of ·the subdepartments of they get through the field offices of the Mr. . HOLIFIELD. . Tha~ plan would the Department of Commerce. Department of Commerce and through have to rest on its own merits. Prob Mr. STEFAN. Would the relationship the Census, and other divisions, would it ably that plan will come before the Con of the Secretary of Commerce be similar - be · possible fc'>r them to secure some of gress. However, I will give the gentle..: 1950 CONGRESSIONAL RECORD_-_HOVSE 9613 man the reasoning on that transfer, agencies or subject to the supervision of Thus, the Federal National Mortgage As without taking any position on it my- department heads. sociation, an RFC subsidiary which pro self. The reasoning was that the major The Attorney General has rendered a vides additional sources of credit by purpose of housing .was to be focated in legal opinion to the effect that plan No. maintaining a secondary market for the Housing and Home Finance Agency. 24, as a later enactment,. cannut be al- home mortgages through its authority The CHAIRMAN. The time of the tered by prior authority of plan 5. to purchase mortgages on homes and gentleman from California has again The justification for Reorganization rental housing projects insured by FHA expired. Plan No. 24 lies in the fact that the pri- or .guaranteed by VA, is to be transferred Mr. DAWSON. Mr. Chairman, I yield mary purpose of the RFC, as defined to the Housing and Home Finance the gentleman two additional minutes. · by Congress, is to . engage in ·lending Ag.ency .by Reorganization Plan No. 22 of Mr. HOLIFIELD. And that the fi- activities in aid of business. This is part 1950. nancing of these .houses was not the of the larger purpose conferred upon the Also, the authority of the RFC under major purpose of government, but was Department of Commerce by its organic the Housing Act· of 1948 to make loans an incidental purpose to the r.ccomplish- law. Consequently, in line with the · or to purchase the · obligations of busi ment of building the houses. Therefore, Hoover Commission's·basic recommenda . ness· enterprises engaged in the • pre it was put in the agency which the Con- ti on for grouping similar· activities ·under fabricated housing industry and in large gress· said had the major purpose of · unified and responsible administrative scale modernized site construction, is to creating housing. · That is·the reasoning, leadership, the RFC should be placed be· transferred to the Housing and Home · Mr. BROWN'c)f .Georgia. I know that within the Department of Commerce. Finance Agency by Reorganization Plan is-the reasoning, but at' the same time I emphasize again that Reorganization No. 23 of 1950. · you have transferred a ·financial institu- Plan No. 24 would not authorize the-Sec It may be noted that by.far the greater - tion· over to an agency that is supposed retary of Commerce to transfer the func part ·of the RFC's statutoi·y authoriza to know nothing about financing or tions of RFC .to other ofticers and agen tions refate to the Federal National banking. You are putting· them in the cies of the · Department;- nor wiil the Mortgage Association, which is . to .be. banking business. Secretary have a legal rigl:it to adrilin)s- shifted to the· central ·housing agency. Mr. HOLIFIELD . ..It will ·still func- ter the.Corporation or to compel the RFC RFC · authorizations now total · $3,880,- ·tion according to the FNMA Act; Board to take ·a speCific action. The 000,-000 of which $2, 750,000,000 or· about This resolution before the House is a function of the Secretary of Commerce 70: pei'cent are assigned ·by law ·to the resolUtidn-of .dl.saP,provaL There·! ore, if · will be to. supervise, coordinate, and give FNMA. ._ ~ .. yo·u want Plari No. 24 you must V:ote "'No" · policy . gu~dance. The Secretary would -In considering the. appropriatenes's of .. on the· resolution of · disapprovat' In- · p:rcescribe, - for example, ·. a .policy that the prop·osed:- transfer of the RFC. to the · · other words, a "no" .vote on the resolµ- loans. must.· be .made to small business, Def>artnieri~ o_f coinin~r9et tJ:ie menib~rs tion to disapprove is a "·yes" vote for plan but he would not and. could not direct may recall that the RFC was once before No. 24. I ur~e . you to vote "No._ ~_.' · that particular firm A, 13,· C, or D should in' the Depa1;tme11t of Commerce as a part get tl)e -1o~m.. · ' 24 1950 of. -the . Federal· . Lo~n Agency . . It: was REORGANIZATION PLAN ' No. oF _The supervision whiCh the Secretary taken out of that Oepartment later·for- '• Reorg~ni~ation Plaii l~o. 24 . of 1950 would exercise over -RFC through· this , re'.asons completely unrelated to matters proposes to transfet the Reconstruction plan would mean the.right to have some of organization. . - - . Finance Corporation. to the Department .thing to say about general procedures, of Commerc.e. This is a simpie transfer their legality, and so .forth. Internal Opponents ·of this plan· have tried to ·rest their case on the Hoover Comm!s- plan. The change merely places the management of the RFC.would -stay with . ston ·recommendation that the - direct RFC under the supervision, coordina- .its Board and ofticers. lending ·operations of the RFC 'be re- - . tion, and policy guidance · of.· the Secre.__ -The Hoover Commiss1on recommended viewed by the Congres·s. · They wartt this tary of Commerce. The ~dJjl.inisti'atio,n that. the . RFC be brought· w.ithin-- the plan· held ut> or shelved· until . congress · of .the Corp.oration's ·affairs.. as such, is . structure -of the executive departments. decides what to do with RFC. · To this'! not affected. The corporate en~ity of -'rhere.was a -difference of opinioI). among say that transfer of 'the RFC -to the De- · the RFC' is preserved lhtact. The plan the Commission meml:>ers a,s to w:Q.at r;>e· partment -of · Commerce by plan No. 24 ' states that the RFC ''shall be ,admi:ilis-. pa,z:,tment wa:s Il].OS.t appr_opriate to can does· not preclude' any subsequent deci tered, .subject to the supervision, coordl .. , tafo tb,_e -_RFC. A majority· preferre.d th~ sion of the .Congress as . to . its . location : nation, and policy guidance of the Secre- .. Treasury; a . minority . pref.erred Com and ·:proper ·scope of duties. · Pi::i:te:tlc~l!Y . tary of Commerce, by the Board o(Df- merce.· The. President- has taken. th,e every Congress investigates the RFC, and · rectors and ofticers o(.the Corporatio~." position, after careful · study,· that -the if· we wait for a final expression of. con . I emphasize the words "s:P,all be ad- purpose of the RFC is clearly. to aid _gressiona,l policy,_we will nevel· be able to • ministered by the B'oard of Directors and domestic ·business and therefore should effect any reorganization in- this field . . officers of the Corporation." Opponents be placed within th.e Department of Com The Eightieth Congress made a compre- . of this plan have contended-and con- ·merce. The Treasury does.not ·engage in hensive investigation of RFC and passed tended wrongly-that the Secretary of lending oper~tions · to prciva;te -indjviduals laws· in 1947 and !948 regarding its basic Commerce might assign RFC functions or corporations. Nor is lending,· in the - functions. The 1948 law, after extensive to other ofticers or units ln the.Depart- :financial sense, a major purpose of gov- · investigation by the Senate Banking ·and ment of Commerce and break up the cor- ernment. Loans to business are made perate structure of the RFC . . These OP- . · for the broader purpose ..of promoting the Currency Committee pursuant to Senate ponents-cite Reorganization Plan No. 5 development, and. stability of business. ' Resolutions 132 and 208 of the Eightieth of.1950 which, as you will recall, centered .The Department_ of Commerce now ex.- · Congress, extended the· Corporation for ' authority and responsibility in the Secr!i- tends various ·technical and managerial 8' years, ·so presumably the future of RFc· tary of Commerce to qrganize a.nd 'aa·- ·a:1as_'to business. Lending_should , be co is· determined -to ·that extent a·t ·1east. minister -the affairs of his Department. . ordinated with these other services under · · It 'is plainly e'Vident, fr'otn a -reading of · The legal relationship between _the ear- the supervis.ion. of tl_le ~ecretary of. Com-· ·the Hoover commfa;sion r~ports, that the . lier plan-:-No. 5-and the'present plan- m.erce. . ·. majority of the.Cdmniission was·opposed No. 24-should be· dearly understood. Analogous relationships are to be to dtrect lending as a Gov.ernment policy. The later plan qualifies and limi'ts the : found in the Department of Agriculture Whatever the grounds of their 'opposi earlier cine. where we have combined financial and tion, these Commissfon members were . The functions of RFC and its ofticers nonfinancial activities to serve the . takirig a stand on policy matters not are being transfefred not to the Secre- broader purposes of agricultural develop within their proper sphere of jurisdic tary but to the Department of Com- ment. Similarly we have brought to tion. Whether direct lending is good or merce. The Corporation is being trans- gether financial and nonfinancial activ bad policy, it has nothing to do with mat ferred as an entity, and the functions re- · ities in the Housing and Home Finance ters of organization. Mr. Robert :Mc main within it. Its status within the De- Agency to promote the building of homes. Cormick, executive secretary of the Citi partment under Reorganiz·ation Pla~ -No. . In. fact, by ·several other pending reor- . zen's Committee for the Hpover report, . 24 -will -be generally analogous to that of ganization plans, we -will transfer RFC acknowledged as much in his testimony 35 other wholly owned Government cor- . activities in the housing . field to .the on plan No. 24 before the Senate Com- . porations now within departments or Housing and Home Finance Agency. mittee on Expenditures .. 9614 CONGRESSIONAL RECORD-HOUSE 'JUNE 30 In any event, I call to your attention tion and resPonsibility put into the De direct. I do not think there is a single the fact that the Congress has many partment of Commerce, and, obviously, ec(momist who disagrees with that. times reviewed the lending and other the old existing personnel will have to The CHAffiMAN. The time of the activities of the RFC. The committee be kept on. I see no possibility for any gentleman has expired. of the Eightieth Congress which re saving of money. Mr. HOFFMAN of ·Michigan. Mr. ported out the bill to renew and extend The ·second question involved is Chairman, I yield 10 additional minutes the life of RFC said that "there are whether or not the transfer of ·respon to the gentleman from Massachusetts. sound reasons which justify the contin sibility to a new chief is a desired thing. Mr. HERTER. Mr. Chairman, I shall uation of RFC on a permanent basis" The Hoover Commission report made it not take all of that time, but I do want to Eightieth Congress, second session, Sen clear that there were too many inde recapitulate. There is absolutely no ate Report No. 974, page 5. The com pendent agencies, all of which had to hurr y insofar as this matter is concerned. mittee also declared: report to the President of the United Let us be frank about it. This is a meas The comm~ttee believes that the public States, thereby overburdening him with ure that we have here before us that has interest will be served by the presence of too many responsibilities, and that those got to be examined by both bodies. The a Government len ding agency to which an independent agencies ought to be other body under the Reorganization Act applicant who has been declined credit grouped logically and in accordance h as before it a disapproving resolution on among private sources of credit may go for with their functions, under a Cabinet which it must act within a 60-day period a reconsideration of his proposal (ibid., p. officer, whenever possible, or under new which expires next week . .7). agency heads. In this particular case · Mr. HOLIFIELD. Mr. Chairman, will And furthermore, that committee of the regrouping that is perfarmed is en the gentle yield? the Eightieth Congress, in reporting out tirely contrary to the .Hoover Commis Mr. HERTER. I yield. the RFC legislation, emphasized that sion report. The Hoover Commission Mr. HOLIFIELD. In the Eightieth RFC lending powers should not be · reported that three independent agen Congress, in Public Law 548 the following . hedged in with statutory qualifications cies of Government-the RFC, the Ex language was added to the function of and conditions. · port-Import Bank, and the Federal De the RFC: "To encourage small business." The Congress; in 1948, added small · posit Insurance Corporation-should all Mr. HERTER. I am familiar with business to the lending objectives of three be put under the Secretary of the that. RFC and extended the life of that Treasury. Here we have one taken out Mr: HOLIFIELD. That was placed in agency until 1956. At any time the Con of the three and put under the Secre the RFC Act at the insistence of the gress can decide to shorten or lengthen tary of Commerce. In other words, the Eightieth Congress. I heartily approved that period of RFC life. It can decide to two primary reasons for any reorgani it. . As to the policy involved, that is not liberalize or to curtail RFC lending op zation biil are, first, the saving of money, changed by the plan, as the gentleman erations. Bills are now pending to ex and, second, better organization. It knows. pand its lending powers. But whatever seems to me there is still another reason Mr. HERTER. Not a bit. the Congress may decide to do about why we should not act at this time, that Mr. HOLIFIELD. As to the merit of RFC's duration or lending policies is not this reorganization plan is entirely pre the policy, that was something that was . affected in any way by this reorganiza mature. The Reconstrudion Finance decided in the Eightieth Congress and tion plan. Corporation was created as an emer has not been changed. The only matter-an organization gency organization. It served, in my Mr. HERTER. I know that is true; matter-which we are asked to settle by opinion, an extremely useful function in nevertheless, I disagree with it, whether this plan is a coordination of financial emergencies~ during the depression pe it was done by the Eightieth Congress or aids to business with other aids to busi riod and then during the war period. It any preceding Congress. ness rendered by the Department of took unto itself a lot of subsidiary cor Mr. lIOLIFIELD. It is not at issue Commerce. porations, a lot of subsidiary banking here and I agree with the gentleman I urge the Members to reject this dis and lending operations that were ex that in the making of loans whether it approving resolution and to support Re tremely valuable in time of stress. What be to small business ·or to large business, organization Plan No. 24 as a sensible is intended now, though, is that the Re there is always danger of loss, and par step in the grouping of major Govern construction Finance Corporation should ticularly in ·connection with RFC opera ment activities relating to business with- become a permanent body, as a money tions, because they only lend after the . in the Department of Commerce. lending agency to private industry in the regular priv:ate lending institutions have Mr. LOVRE. Mr. Chairman, I yield 5 hands of the Department of Commerce. refused to lend, because possibly of the minutes to the gentleman from Massa It seems to me that it is premature to long time needed to amortize the loan, or chusetts [Mr. HERTER]. make any such decision .as that today. the rate of interest is too high, or for Mr. HERTER. Mr. Chairman, I real I happen to be a member of the Com some other reason that makes it un ize the hour is late and that the Mem mittee on the Econoinic Report that has profitaQle fo~ a private bank to lend. bers are perhaps tired of having . this . been studying the .question of small busi That has been accepted as one of the ne matter discussed. However, I do want to nesses' need for capital tod:;:ty. There has cessities for RFC operation. say a few words in regard to this disap not been a suggestion before that com Mr. HERTER. With the RFC opera proval resolution, which I favor, and I mittee that the Reconstruction Finance tibn, taking into consideration times of hope the Members will vote "yes" when Corporation is the agency to help small SJi"ious depression or times of emer it comes to a vote. business. There have been such sugges-· gency such as we have been through, I The purpose of any reorganization is tions, but all of them have been predi fully approve of its being used as a . either to save money or to shift respon cated on what to my mind is a great means of financing certain operations. - sibility to an agency or a person where misapprehension as to the proper way to· Mr. HOLIFIELD. Did the gentleman the responsibility properly belongs. This help small business. approve of it in the Eightieth Congress reorganization plan can, under no cir- · There is no sense in talking partisan · which was not a time of depression? cumstances, be said to save money. politics here, but there is no greater Mr. HERTER. I cannot recall voting There was a colloquy a few moments ago temptation in the world to the playing for it at that time. If I did, I am sorry wllich indicated that possibly under tlw of partisan politics than to allow the I did insofar as that is the only thing Secretary of Commerce it would be pos government to make small direct loans to which concerns, I think, all of us who sible to save some money in the RFC. business concerns. That I think has been have a natural sypipathy and who want That seems to me absolutely absurd. shown over and over again in the experi to help small business. I think we are The very function of the RFC, as the ence of other countries. It is clearly likely to do very foolish things because gentleman from Georgia [Mr. BROWN] something that in peacetime we should be of trying to satisfy that particular de has just brought out, · is essentially a getting away from in this country. If sire, though. It is a matter, however, banking function. There is nothing in small business needs aid it is infinitely that should be thought through much the Department of Commerce today that better that it be given by guaranteeing a more carefully. Certainly the implica has anything to do with banking or p'art of the IOan which has already been tions· in this bill, whether the law is credit or the determination of credit made by a private institution than it is c'langed or not, are that the minute you facilities. That is an entirely new func- to make the loan from the Government put it in the Department of Commerce 195-0 CONGRESSIONAL RECORD-HOUSE 9615 that is the place to .go to if you are in Mr. HERTER. I yield to the gentle to take exception to and correct his re business in order to get a hand-out or a , man from Georgia. marks, because, . as one who introduced loan without. any cooperation with pri Mr. BROWN of Georgia. It is my un the first bill creating the Reconstruction vate concerns. . derstanding that the RFC has made a lot ·Finance Corporation I have been vitally Mr. HAND. Mr. Chairman, will the of .money. Is that true? interested in its . operations, and I must gentleman yield? Mr. HERTER. Under certain forms state that the . largest loans that have Mr. HERTER. I yield to the gentle of bookkeeping I think it has. been made have gone to Republicans man from New Jersey, Mr. BROWN of Georgia I have been not Democrats. I call your attention to Mr. HAND. I have been trying to reliably informed of that fact. In this . the loan made to ex-Vi.ce President find out how the Hoover .commission day and time when we have an agency. Dawes, who was president.of the Central voted on this question of whether or not . .that makes some money I think we bet Trust Co. of Chicago, and the first Chair .. RFC should go to Commerce or to ter not disturb it by shifting it around to man of the Reconstruction Finance Cor-. Treasury. The chairman of the com some place else. poration. Conditions were so serious at mittee, the gentleman f:i;om Illinois, said .Mr. HERTER. I think so, too. that time that when I \Vas called .relative it was a very close vote and he thought Mr.. BROWN 0f Georgia. We ha.ve a to this application, I consented, but with 7 out of the 12 members of the Commis grand RFC building that was paid for the understanding that the smaller banks sion voted for Commerce. out of the funds they made. What is as well would be aided-to enable them to Mr. HERTER. No. . It. is the other going to become of these people in the . weather the .storm. But unfortunately way around. RFC Building? - Are they going to be .after the Dawes loan was made, the as Mr. HAND. Voted for Treasury. The taken down to the Commerce Building? surances and .promises to. take care of the gentleman from California was not able Mr. HERTER. I do not think the gen smaller banks were forgotten, witll .the, to enlighten me on that particular point. tleman is going to see anything happen result that in Chicagq al'Jne some forty The committee report on page 4 states under this bal. This is a paper opera outlying small ban~s were forced to close . with reference to the subject of trans tion and nothing bu~ a paper operation. their doors. . , . fEr to ·the Commerce Department that Mr. BROWN of Georgia. I take the Not only that-most of the loans.made Commissioners Aiken, Pollock, and Rowe position that the RFC has served the peo at that time were ·made to the large voted for that transfer; that is, trans ple well,. it has made money, and I am banks, railroads, and insurance com fer to Commerce. Can anyone inform · against disturbing the .. RFC at this time; panies wbich: were controlled by Reptib' us or can the chairman advise us how I want to go on record to that effect. licaiis, .and most of them were actually the Hoover. Commission voted on this Mr. HERTER I am glad to hear the insolvent. · subject? · gent.leman say that. It seems to me this My. aim and purpose in introducing Mr. DAWSON. My best information · particular reorganization accomplishes legislation early in 1931 was to help small is 5 out of 12 voted for ·commerce. The exactly nothing and if it were to go business; big business could take care majority was for Treasury. through, .what it might accomplish is in of. itself. I followed the act that . we Mr. BROWN of Ohio. Mr. Chairman, -the reverse direction of what has been passed during the First World War-the will the gentleman yield? recommehded by the Hoover Co.mmission. Federal Finance Corporation Act-: Mr. HERTER. I yield to the gentle Mr. HOFFMAN of Michigan. Mr. which actually aided s'mall business, but man from Ohio. Chairman, will the gentler.ian yield?. during the Hoover a16 'CONGRESSIONAL RECORD-HOUSE 'JUNE 30 What effect putting the RFC under the disapproving resolution he will see · in curred in. In other words, the vote is Department of Commerce will make, I there a quotation from the task force. actually on the merits of this resolution, am not in position to state, but I know its Mr. DAWSON. I am reading from the not the question "of whether we i;.se. functions would not be affected and the · Hoover Commission recommendation. The CHAIRMAN. It is on the Com Secretary would have no jurisdiction in Mr. HERTER. But if the gentleman mittee's rising and reporting the matter passing on loans. This authority would will read elsewhere, he will find that the to the House. still be vested in the Corporation. It has Hoover Commission very definitely rec .. Mr. HERTER., Reporting the matter, been explained that the RFC . formerly ommended a complete study of all the but disapproving. was under the Department of commerce, functions of that agency. Th·e CHAIRMAN. That is correct. but at that time the all-powerful Chair Mr. DAWSON. That has nothing to Mr. HERTER. Disapproving a dis i;_i.an, Mr. Jesse Jones, did not like the do with the matter before us. Congress approving resolution? then Secretary of commerce, Mr. Henry can still study it. Congress is now · in.. Mr. McCORMACK. Exactly. It is a Wallace, and had it taken out of the vestigating it. No action that we take double negative. Department. All this resolution aims to here today can stop any investigation The CHAIRMAN. Reporting the reso do is to put it back where it originally or can keep Congress from studying it or lution back to the House with the recom was and where it properly belongs. doing anything about it. But we should mendation that it be not agreed to. Mr. HOFFMAN of Michigan. Mr. place it under some responsible head Mr. HERTER. That the disapproving Chairman, I yield such time as he may with a direct channel to the President. resolution be not agreed to? desire to the gentleman from Tennessee We have done it in other instances and The CHAIRMAN. That is right. .[Mr. JENNINGS]. we ought to do it now. Mr. SHORT. Mr. Chairman, a par Mr. JENNINGS. Mr. Chairman, I Mr. HERTER. Will the gentleman liamentary inquiry. simply wish to say that in my opinion tell me why the committee refused to The CHAIRMAN. The gentleman will this resolution is in accord with the take the three independent agencies that state it. Hoover Commission recommendations were recommended be taken in bloc and Mr. SHORT. What is the motion? and that I shall vote for thts resolution put under the Treasury Department, and The CHAIRMAN. The motion of the of disapproval of this proposed plan to merely singled out one and put that gentleman from Illinois is that the Com shift the Reconstruction Finance Cor.. under Commerce? mittee do now rise and report the reso .. poration to the Department of Commerce Mr. DAWSON. I do not know what lution back to the House with the recom.. where it should not be. The proposal the gentleman refers to by taking three mendation that it be not agreed to. is contrary to the letter and spirit of the agencies and placing them there, but if The question is on the motion. Hoover Commission's recommendations. that was the recommendation the Presi.. The question was taken; and on a di Mr. DAWSON. Mr. Chairman, I yield dent could still do it by plan. There is vision ostmas~~r qenei:al has Jiaq th~~ . ·counting Office; and expressing on thefr face tion and procedures. This subs'ecticin fur latter authority for many years under sue":' tlie appropriation to which they should ' be ther provides that the settlement and ad cessive- appropi:ia'tion acts. · ' charged. justment and adjustment of accounts of -ac- · With respect to the authority in this sec- . (10) Section 4 of the act'of March 3, 1875 countable officers of ·the Departll}ent i:;hall .be tion· concerning leases, tlie Postmaster Gen- (31 tJ. s. C. 113), requiring the ~ureau -of Ac- . based upo_n_the audit m a:de thereun<;ier . . eral is ,autp.oi:ize..d. tq enter_intQ leas~'s of real counts of the· Post Office Department to keep It is the view of the .committee - that property necessary in' t he· conduct pf_ the- -the a:ccc:iunt_$ r·elatinifto· tne· Post 'c)ffice De.:. through cooperation betwe!m the Comptroller 'I)ep_artment'.s. affa~rs' , withouf re'gard to tpe ·.. partment· 'so ·as' to show the expenditures Gener al and the Postmaster General and the provisions of laws other ·tban those speci- under each -lt_ein ·of appropriat'ion. : · - · establishment of· an efficient and adequate fically applicable to the Department. Gen- ( 11) Section 4 of the act of -July 12, 1876 system of ·accounting together with ·a st rong 'eral provisions of law regulating. the rent . (31 P'. S .. C. 114), requiring .. annual reports syst em of internal _controls, much- of the de payable under , Oovernment leases, general c;>f the Bur.eaµ ,of Accounts of. t:l;le Post Office _tailed post-audit of individual transactions· '.provisions reguiri!lg , adverti!'ing, , etc,:, will D~p.artm~nt to be incorporated i:p. the Post- , can be eliminated. · - - · not apply to such transactions. It is recog- ·master General's annual report to show the 'nizeu that post ··offices· must be . locat ed to 'financial" conditibri 'of the Post . Office De-· SECTION 6 . REPORTS OF PENALTY -AND -FRANKED ' meet the needs of the public, the handling ,. 'partment. · (This function, and the · func- _MAIL, ETC._ of the mail matter, and~ tb. permit eccmomicat · 'tions ·referred to iii (7)'; (8), and (·10}, while -. - ·. · · _It is the purpose of this section to include . oper<3.tions. of ·the Department, and that -the·. codified as ·duties ·of-the -Bureau of. Accounts ': · :. · . .in-the-Post Office Depar.tI_Ilent.reports poten 'statutes waived give rise. to frequent diflicul- . -in the ~ost Office: Depa-rtr;nent, have, neces- · _; ' tial- revenues which woui'd have. been : re .. -ties in this· respect. · sa !-' ily ' been -perf9rmed - u~der-. existing.law .. by . . cei v~d as distinguishec;:i from rev,enµes ac SECTION 9 • EFFECrivE DATE .. :the . Ge~eral Accounting Office.) , _ ~ · , . _, . tually received for certain types .of _mail mat . . . · -_ · (.12) Sectiqn 4055, Revised ·Statutes (39 ter. In the case of air mail, the estimated This section provides ~hat the Mt s~all _ u.- ~· 'C. 787), requiring· an ·:t>a'ymei:its ori ac.:. .excess of cost of aircraft-service over ·postage take effect on ·the ninetieth- day followi:gg count of the no-stal service· to be inade to tlle -revenues will be shown-. For this ,purpose .the day_on which enacted. -_However1 in~ vie\\'. . persons 'to whom· ·certified 'to be due ·by thcr ·the . Postmaster General will set ·.out -in -ap . of th~ ~exte.nsi-ve _ ~hanges _. ai:icl tr ~ns~e.r. s ?f ·· General: Accc:mnting Office; except that cer.:· • •. p:·opriate reports the following: ·' functions that this legislation _wi!l · ent~il, - tain a_d.vanceir ma'Y .be-. made by the . Post- (1) The estimated amoun-t which .would ~dqit_ional _ ti~e may be ~xtended : f~r all or mast~r <;xener_al to-post·office i;ns'pl:)ctors tJ? be . have been collected.at regular rates .o'f pos'j;;, part. of tl:ie :PFovision~ of the act by the charged to them'.by the General Accounting age_ on matter m~iled 'dur ing the ." j ear.. .bi. · .President · t~r?'\-lgl} an _executive order, su~h- Oflfoe artd accouJ.1ted for in tbe settlement of officers of the Government (other-than those postponement may not exceed 2 years.- their accounts. · of the Post Office Department) - under the · · -SECTION -10. REPEAL- PR-ov1s10Ns · · (b) -AU ·other laws or parts of laws incon~ penalt y privilege, including registry :fees; · (a) Thl~ subse;{ticin ;epeal~ -the · foilowing · sistent. with '-this ·act 'are ·repealed to fhe ex ... (2) ~he estimated amount which would' speCific statutes .or sections· of statutes': tent of such incon·sisterlcy. · have been collected at regular rates ·of post · (1) ·section 405, Revise<;l Statutes (5 u. s.: · :Mr. ·REES. Mr. Speaker,'I ani pleased-- age on matter mailed -dur-ing the· year- by c. 378), requiring orders and r.egulatimis of to support H . .R. . 8923 and to urge my Members _of Congress ·and oth~rs uhder· the tne Postrnas-ter General which may originate· L.., franking privilege; · · · ·. _ - a claim _or_ affect the. accoi,int"s o~ the_p _ostal colleagues to approve· ·-_this legislation: (3) The estimated amount which would service_ to ·be certified to the General Ac- - I' introduced an .identical hill, H. -- ~. 8926, · have been collected during· the year at ·reg- . co.unting office. _ · and also, earlier in the session, I illtro- ular rates of postage on- publicaticins going· . (2) secti.c:ili 406, Re.vised st.atutes (5 u: s. duced a · bill dealing: with this subject, free in the .county; · c. 379), relating .to the issuii.nce of .warrants· H. R. 6395. _ . . - · . · (4) The estimated amount which would ' by the. Postmaster General upon ~he · qu~r- ·. This bill deals with a very complex . have be·en collected at regular rates oi post terly-statement by. the - Genera~ Accounting problem -related to the a-cCm.in'fiiig' -- and age on matter mailed free to the blind dur- Office of payments by postmasters. · - · , ing the year: · . - .. ·· · · _(3) Sectlon ·407.- Revis.ed.. Statutes .(5 u. s. . auditing of. ·one of our· biggest ·aov.eth- (5 ) The estimated difference between the c. 380), relative -to payment _qf ·posta_l ~rev- _ ment departments' and has been the sub" postage revenues collected during tlie ·year - enues and· debts ~ue the Po.st· Office D_epa-rt- .. ject of detailed ·study.' · In my jUagmerit; on m ailings of newspapers· and periodicals ment. intq.'the Treasury of the.United States. t~e adoption Of this bill W~ll bring about published by and Jn the interest of religious, (4) Sectiqn 408, Revised Statutes (5 U. S. _· much needed teform J n . .the accountlIJ,g educational, scientific, philan~hropic, agri':' cultural, labor, and fraternal organ_izations, c. 381), requiring deflosits .on account of the . and aud_iting processes · Qf our postal and that which would have been collected at postal serv.ice to be brought into. the. Treas-· ·service . . When compared with the bill zone r ates Of postage; and . ury by warrants of the Postmaster, General which I originally introduced, this pres (6) The estimated excess during- the. y_ear countersigned by the Comptroller General of· .ent legislation has eliminated the budg- · of the cost of aircraft service over the postage the United ·States. · et provisions since the ~ouse has afre::i;¢iy revenues derived fr.om air m ail. · (5) Section 277, Revi§ed Statutes (31 u. s : app'r9ved a performance· budget for the ' SECTION 7. TRANSFERS AND- CON.TINUATION OF · b. 73), · requirl ng the Geheral Accounting. Post Office Department· and cut· down POLICIES _ Office to k:eep ·and preserve all accounts aris- the number of, appropriations from 58 - (a) This subsection transfers to the Post 'h1g in the ·. Post Office Department and to 4.. · Office Department from the General Account vouchers after settlement, _and to. 'close the I m~gl}t add in this regard thaf in the ing Office such records, property, personnel, acco.unt of th!J Dep a:r~ment qu ~rter1 y · and- Eightieth Congress-a study made by ·the appropriations, and other funds of the Gen .furnish various reports to the Secretary of - . . eral Accounting Office as the Postmaster Gen"'. the Treasu~ y and the. Po.stmaster .General. Post Office and Civil Service Committee eral, the Comptroller General, and the Di This section also requites the Comptroller o:: ·the House pointed out weaknesses of rector of the Bureau . of the Budget shall General° to countersign all lawful warrants the· budget system. In House Report ·No: jointly determine in connection with the . upon the Treasury for receipts or payments 1242 of the Eighteith · Congre·ss, we transfer of functions to the Postmaster. Gen issued by the Postmaster General. · · pointed out. that each bureau had its own · eral under section 2 (a) of this bill. Tra:nsfer · · t6) Sec~ion 29:2, Re.vis.ed Statutes (31 budget-and, in many instances; econo of personnel under this . subsection _is sub u . S. C. 109), requidng the Qeneral Account- mies in the service were h ot effected be- ject to section 12 of th.e Veterans' Preference . ing Office .. to supedritE!nd the collection of all. cause the expenditures· would have to Act which' provides th.at in the case of vet':' debts, pef!alties, and forfeitures due the Post be made from one bureau's budget while erans they will ·be offered an opportunity for Offiee Department. employment with the .agency to which the (7) Section . 293, · Revised Statutes (31 the savings would accrue to the budget function is transferred before new personnel U. S. C. ill), requiring the Bureau of Ac- of another bureau. The riew -budget may be employed by that agency._ · · COlJnts of t:l:~e Post Offic'e Depart~ent to keep procedure permits a flexibility and free ('b) This subsection provides that all poli ·the accounts of the money-order business dom' of actiori which will eliminate the cies, procedures, and- directives which are separately and by offices. resti;ictions pointed out in our findings, 9622 CONGRESSIONAL '1tECORD-HOUSE JUNE 30
I might state with respect to the Sixth. Authorizes the Postmaster Gen STATEMENT Hoover Commission recommendations eral to designate the places where ad The managers on the part of the House at that the Po~t Office and Civil Service ministrative examination of accounts the conference on the disagreeing votes of Committee in the Eightieth Congress, in will be made; the two Houses on the amendment of the its study, made many recommendations Senate to the bill (H. R. 1169)' for the relief Seventh. Authorizes and directs the of Mrs. Marion T. Schwartz, submit the fol- which later also appeared in the Hoover Comptroller General to audit the finan 11..wing statement in explanation of the effect Commission report and its task force re cial transactions of the Post omce De of the action agreed upon and recommended port. Many of these recommendations partment; in the accompanying conference report: have been placed into effect and econ Eighth. Provides for separately set The bill as passed the House appropriated omies are being made in the postal serv ting out in appropriate reports of the the sum of $4,000 to Mrs. Marion T. ice as a result of them. Post Office Department amounts repre Schwartz for damages on account of the per R. sonal injuries sustained by her late husband, The administration's bill, H. 5775, senting certain services which the De Leo Schwartz, as the result of an accident which was sent to the Congress on this partment performs free or at special involving an Army vehicle at the Oakland same subject, is a good example of what rates; Army Base, Oakland, Calif., on September 1, has occurred in many legislative pro Ninth. Transfers to the Post Office 1944. posals purporting to carry out the Hoover Department such records, property, per The Senate reduced the sum to $1,671 and Commission report. The bill was sonnel, appropriations, and so forth, pri at the conference a compromise of $3,000 was weighed down with many provisions marily connected with functions t~ans agreed upon. which were not related to the financial ferred under the bill; · WILLIAM T. BYRNE, WINFIELD K. DENTON, control of the postal service. For ex Tenth. Removes certain restrictions JOHN JENNINGS, Jr., ample, under the administration pro with regard to leases of real property; Managers on the Part of the House. posal, there would have been an unlim and ited authority for the Postmaster Gen Eleventh. Repeals certain laws relat The conference report was agreed to. eral to appoint specialists without regard ing to financial control of the Post Office A motion to reconsider was laid on the to the Classification Act or to n.ny other Department which are no longer neces table. governmental ceilings and without any sary if this bill is enacted. restrictions on the number that might PERSONNEL AND COMPOSITION OF THE The bill will take effect 90 days after ARMY AND AIR FORCE be appointed. The Postmaster General enactment unless postponed in whole or would .have had practically unlimited in part by the President, but such post Mr. KILDAY. Mr. Speaker, I call up authority with regard to contracts, ponement may not exceed 2 years. the conference report on the bill In lieu of the matter proposed to be inserted "LIMITATION OF AUTHORITY missioned officers of the Women's Army by the Senate amendment insert the fol "SEC. 304. Nothing contained in this Act Corps and added to the exclusions proposed lowing: "Army (exclusive of the numbers shall be construed to authorize the .Depart ip. the Hot!se bill ( 1) professors of t~e United. authorized by law for the Army Nurse Corps,. ment of Defense to expend any money ap~ States Military Ac~demy, and (2) any num the Women's Medical Specialist Corps, pro propriated pursuant to authority conferred bers authorized by special provisions of law fessors of the United Stat.es Military Acad by this Act for the design or development providing for officers in designated categories emy, and any ~umbers authorized by special of any prototype aircraft intended primarily as additional numbers. The conference provisions of law providl.ng for , officers in for commercial use." agreement authorizes 30,600 active-list com designated categories as additional num And the Senate.agree to the same. missioned officers in the Regular ~rmy, de-. bers)"; and the. Senate agree to the same. CARL VINSON, let es the Senate reference to the Women's' Amendment numbered 15: That the House· OVERTON BROOKS, Army Corps, and accepts the additional Sen-· recede from its disagreement to the amend PAUL J. KILDAY, ate exclusions of professors of the United ment of the Senate numbered 15, and agree DEWEY SHORT, States Military Academy and additional num to the same with an amendment as follows: LESLIE C. ARENDS, bers officers. In lieu of the matter proposed to be stricken. Managers on the Part of the House. NATIONAL GUARD AUTHORIZED PERSONNEL out by the Senate amendment insert the STRENGTH· following: VIRGIL M. CHAPMAN, HARRY FLOOD BYRD, The House bill authorized a personnel "(b) Effective on the date of enactment LYNDON B. JOHNSON, strength of 750,000 for the National Guard of this Act, and subject to the limita CHAN GURNEY, and National Guard ·of the United States. tions imposed by· sections 202 and 203 of LEVERETT SALTONSTALL, The Senate amendment reduced the House ·this Act, the Air Force of the United States Managers O?J. the Part of the Senate. figure to 600,000. The conference agreement shall have an authorized strength of not to accepts the Senate amendment. exceed seventy United States Air Force STATEMENT groups and such separate United States Air ORGANIZED RESERVE CORPS A-qTHORIZ~ Force squadrons, reserve groups, arid sup The managers on the part of the House PERSONNEL STRENGTH porting and auxiliary United States Air Force at the conference on the disagreeing votes The House bill authorized. a personnel and reserve units as may be required." of the two Houses on the amendments of the strength of 980,000 for the Army Organized And the Senate agree to the same. Senate to the bill (H. R. 1437) to authorize Reserve Corps. The Senate amendment au Amendment numbered 18: That the House the composition. of the Army of the United thorized such personnel strength as is nec recede from its disagreement to the amend States and the Air Force of the United States, essary to form the basis for complete and _ ment of the Senate numbered 18, and agree and for other purposes, submit the following immediate mobilization for the national de r..tatement in explanation of the action fense in the event of a national emergency to the same with ·an amendment as follows: figreed upon by the conferees and recom In lieu of the matter proposed to be inserted and removed the House numerical limit. by the Senate amendment insert the fol-· mended in the accompanying conference re The conference agreement accepts the House lowing: "twenty-seven thousand five hun port: language. · LEGISLATION IN CONFERENCE dred, exclusive of any numbers authorized by ARMY MATERIALS AND PROCUREMENT special provision of law providing for officers On Mai-ch 22, 1949, the House passed H. R. AUTHORIZATION 1437, which was designed to create a stat in designated categories as additional num The House bill specifically authorized the bers,"; and the Senate agree to the same. utory charter for ·Army and Air Force size and composition. The purpose of the legis Army to procure guided missiles. The Sen Amendment numbered 23: That the House ate amendment deleted the House reference recede from its disagreement to the amend lation was to create a legal framework for these two armed services as regards their to guided missileE;. The conference agree ment of the Senate numbered 23, and agree ment accepts the House language. to the same with an amendment as follows: . military strengths, the composition of the In lieu of the matter proposed to be striken. military forces, their procurement authority, _ AUTHORIZED COMPOSITION OF THE AIR FORCE otit by the Senate amendment insert the their re~earch and develop.ment authority, The House bill authorized an Air Force following: "(1) "; and ·the Senate ' agree to and their appropriation authority. On Au strength of 70 Regular Air Force groups, 22 · the same. gust 27, 1949, the Senate passed H. R. 1437 separate Regular Air Force squadrons, and 61 · but with numerous amendments which, to Amendment numbered 25: That the House Air Force Reserve groups, together with sup- · gether with the action of the conferees in porting auxiliary Regular Air Force and Re recede from its disagreement to the amend-· respect thereto, are explained below. ment of the Senate numbered 25, and agree serve units. The Senate amendment deleted to the same with an amendment as follows: SHORT TITLE these provisions of the House b1U. The con In lieu of the matter proposed to be Jnserted The House bill prescribed a short title for ference agreement provides that the Air Force by the Senate amendment insert the follow t:tie legislation, as follows: "Army and Air of the United States shall have an authorized ing: "guided missiles, and (3) "; and the· Force Act of 1949.'' The Senate amendment strength of not to exceed 70 Regular Air Force Senate agree to the same. · modified the short title to read "Army and · groups and such separate Regular and Re- . Amendment numbered 34: That the House Air Force Authorization Act of 1949.'' The serve squadrons and units1 and Reserve recede from its disagreement to the amend conference agreement accepts the Senate groups as may be required. ment of the Senate numbered 34, and agree amendment. AUTHORIZED ACTIVE DUTY PERSONNEL STRENGTH to the same with an amendment as follows: AUTHORIZED ACTIVE DUTY PERSONNEL STRENGTH OF THE AIR FORCE In lieu of the matter proposed to be inserted OF THE ARMY The House bill authorized an active duty by the Senate amendment insert the fol The House bill authorized an active duty strength of 502,000 officers, warrant officers, lowing: personnel strength of 837,000 officers, warrant a.nd enlisted persons in the Air Force. This "APPROPRIATIONS officers, and enlisted persons for the Army of was exclusive of (1) ·1-year enlistees, (2) "SEC. 303. (a) There are hereby authorized the United States. This total figure was ex officer candidates, (3) aviation cadets, (4) to be appropriated, out of any moneys in clusive of (1) 1-year enlistees, (2) officer · personnel of the Reserve components on ac the Treasury of the United States not other candidates, (3) personnel of the Reserve tive duty for training purposes only, (5) per wise appropriated, such sums as may be x: ec components on active duty for training pur-· sons paid under the appropriations for the essary to carry out the purposes of this Act. poses only, ( 4) persons paid under the ap- . Air National Guard and the United States . "(b) Moneys appropriated to the Depart propriations for the National Guard and Or Air Force Reserve, and ( 6) personnel and ments of the Army, Navy, or Air Force for ganized Reserve Corps, and ( 5) personnel and units of the Reserve components ordered to · procurement of technical military equipment units of the Reserve components ordered to active duty in an emergency. The Senate and supplies, the construction of public active duty in an emergency hereafter de amendment deleted exclusion (5) above and works, and for research and development, clared. The Senate amendment deleted ex also the words "and units" in exclusion (6) · including moneys appropriated to the De-. clusion (4) above, and also deleted the words above. The conference agreement accepts partment of the Navy for the procurement, "and units" in exclusion (5) above. The . the deletion of the words "and units" but construction, and research and development conference agreement restores exclusion (4) r~tains the House exclusion ( 5) a'Qove. of guided missiles, which are hereby au above, which had been deleted by the Senate, AUTHORIZED AIR FORCE REGULAR OFFICER thorized for the Department of the Navy, and accepts the deletion of the words "and S~ENGTH shall remain available until expended unless units" in exclusion ( 5) above. The House bill authorized an Air Force otherwise provided in the appropriation Act AUTHORIZED REGULAR . ARMY OFFICER STRENGTH . Regular officer strength of 27,500. The Sen concerned." The House blll authqrized 33,500 active-list ate amendment reduced the House figure to And the Senate agre·e to the same. commissioned officers in the Regular Army, _ 22,400 and excluded from that figure (1) . · Amendment numbered 35:' That the House from wliich total figure there were excluded numbers authorized for the Air Force Nurse recede from its disagreement to the amend numbers authorized by law for (1) the Army Corps, (2) numbers authorized for the Air ment of the Sen·ate numbered 35, and agree Nurse Corps and (2) the Women's Medical Force Women's. Medicar Specialist Corps, and to the same with an amendment as follows: Specialist Corps. The Senate amendment re- . (3) any numbers authorized by special pro In lieu of the matter proposed to be in duced the authorization trom 33,500 to 30,600. visions of law providing for officers in desig• · serted by the Senate amendment insert the The Senate amendment also specifically in nated categories as additional numbers. The following: cluded in the Regular office1· strength com- conference agreement accepts the HoUflO XCVI-606 9624 CONGRESSIONAL RECORD-HOUSE JUNE . 30 Regular officer .figure of 27,500 and deletes agreement substitutes for the Senate amend ferred fo anci known as target s'ite number exclusions (1) and (2) above. ment language providing that nothing con twelve and located approximately one mile Am NATIONAL GUARD AUTHORIZED PERSONNEL tained in the proposed act shall be con north of Duck, North Carolina, and 'to accept STRENGTH ~trued to authorize the Department of De in exchange therefor from Ray T. Adams, the fense to expend money appropriated pur conveyance of a leasehold interest in one · The House b111 authorized a person nel suant to the proposed act for the design or hundred seventy-four acres of land which strength of 100,000 for the Ail' Nat ional Guard development of any prototype transport or is a part of a larger parcel of land located and t h e Air National Guard of the United cargo aircraft intended primarily for com at Corolla, North Carolina, and owned by States. The Senate amendment increased mercial use. the said Ray T. Adams, at such location upon the House figure to 150,000. The conference CARL VINSON, said larger parcel of land and under such agreement accepts the Senate amendment. OVERTON BROOKS, terms and conditions as may be determined UNITED STATES AIR FORCE RESERVE AUTHORIZED PAUL J . KILDAY, and agreed upon by the Secretary of the PERSONNEL STRENGTH ..J)EWEY SHORT, Navy and the said Ray T. Adams: Provided, The House bill authorized a personnel LESLIE C. ARENDS, That the said Ray T. Adams shall erect, or strength of 500,000 for the United States Managers on the Part of the House. shall have erected, at the option of the Sec Air Force Reserve. The Senate amendment retary of the Navy, adequate substitute facil deleted the House numerical limit and au The SPEAKER pro tempore. The ities without cost to the United States on thorized the United States Air Force Re question is on agreeing to the conference such leasehold site as may be determined and serve to have such personnel strength as is report. approved by the Secretary of the Navy." necessary to form the basis for complete mo The conference report was agreed to. And the Senate agree to the same. biiization . for the national defense in the CARL VINSON, event of a national emergency. The confer A motion to reconsider was laid on the PAUL J. KILDAY, ence agreement accepts the provisions of table. DEWEY SHORT, the House bill. NATIONAL MILITARY ESTABLISHMENT LESLIE ARENDS, Managers on the Part of the House. AIR FORCE PROCUREMENT AUTHORIZATION LANDS ACT OF 1949 HARRY F. BYRD, The House bill authorized the Alr Force Mr. KILDAY. Mr. Speaker, I call up RICHARD B. RUSSELL, to procure 5,200 aircraft or 42,500 airframe up the conference report on the bill lina corporation. This pro- judgment and a temperate tone. The preparing and equipping troops to move posed transfer would have given the Navy entire Nation-except only a small col from the tropics into a rugged climate. fee simple title to another plot of 174 acres of 1and of equal value and equally desirable lection at the extreme left and the far The wonder is not that it took so long to the Navy for an aerial gunnery range, and right-has responded with overwhelm but that it was done so quickly. would have given Ray T. Adams fee simple ing support to the President's wise and What was not then foreseen, and no title to the present gunnery range of the courageous action in stopping aggression one here did foresee it, was that the Navy, thereby enabling the said Ray T. Adams in Korea. This demonstrates, as nothing Russians who entered Korea to accept a to convey a 100-foot right-of-way across the else could, the underlying vigor and Japanese surrender would stay on as property and making it possible to construct sound sense of direction of our people. overlords. The military administ:rative a toll road. It must come as a rude surprise to those The House committee is aware of the fact limit became a boundary of totalitarian that the area to be traversed by the proposed at home and abroad who have counted ism. The iron curtain was rung down toll road is presently isolated, very sparsely upon a schism within the American across Korea. settled, and of little value in its present nation to further their own advantages. The second point I want to malte is condition. The committee ls further aware The importance of this situation in that the United States' stay in Korea of the fact that the development of this area Korea rises over all partisan considera was prolonged because of a principle. for tourists and recreational purposes, the tions-as it should. We had pledged that country's inde revenue . from which source· constitutes 95 It is timely for us to look back and to pendence. Russia obduracy could not be percent of the business realized in Dare look ahead to find the essential truths of County, N. C., in which the greater portion . niade the excuse for defaulting on that of this road is to be located, wm be highly the developments in Korea and their re pledge. Had we abandoned the South beneficial to both the State of North Carolina lation to our national policy. Koreans to Communist conquest from and the Commonwealth of Virginia. The The first thing I want to emphasize, the north, every people everywhere committee wishes to expedite the develop is that we got into Korea purely by the would have been made aware that the ment of this area; however, the committee accident of wartime circumstances. In United States would not honor its word. likewise feels that it is mandatory that in the past few days I have read statements Our potential allies throughout th~ doing so it adequately protect the interests and have heard comments attempting to world would have been alienated and of the Government. In this connection, it link our position in Korea with some al is a foregone conclusion that the 174 acres discouraged. In that indirect way our of land which comprise the present aerial leged design conceived in .the wartime security was involved in Korea. So, not gunnery range will be greatly enhanced in conferences between ourselves and our withstanding that Korea was to us a value as a result of the construction of the. wartime allies. No facts support these militazy liability, we were obliged to re toll r.o~d by the two State authorities. It ls allegations. The story was laid before main there~- to carry out our responsi the intent of the committee that any in the Committee on Foreign Affairs a year bilities. crease in value of this property now owned ago in its hearing on the Korean aid bill When arrangements between the local by the Government be recovered to the Gov and has been published in a committee ernment. report on that legislation; commanders proved futile as a means With the foregoing premises in mind and of getting the Russians out of North acting under Instructions of the House Com Let us review the essential facts. Korea in keeping with their pledge, we mittee on Armed ·services, the House con Korea had been a protectorate of · sought the same end through diplomatic ferees offered substitute language for that Japan in 1905. It became a puppet of action. Starting in December, 1945, we presently contained in section 305. The new Japan in 1907. It was formally annexed sought vainly for two years to bring language would authorize the Secretary of by Japan in 1910. It was one of the con about agreement between Washington the Navy to convey a perpetual easement quered areas of the Japanese Empire and Moscow to redeem the pledges made 100 feet wide across the present Navy aerial awaiting liberation in World War II. gunnery range, retaining the fee In the Korea's independence was pledged at the at Cairo and reaffirmed at Potsdam. United States. This conveyance will neces Cairo Conference on December 1, 1943. Finally, on September 17, 1947, the sarily make the land unusable as a Navy United States laid the problem before aerial gunnery range. Therefore, the au China, Great Britain, and the United States were parties to the pledge. The the General Assembly of the United Na thorization further provides that Ray T. tions. Actually, under article 107 of the Adams shall lease to the Navy, under such pledge was later underwritten by Russia conditions as he and the Secretary of the at the Potsdam Conference on July 26, Charter, the matter might have been Navy shall agree to, a tract of 174 acres ap 1945. kept as an issue of contention between proximately 6 mlles north of the present Immediately after the Japanese ended the two major victor powers. Such a gunnery range, which tract can be used hostilities, Korea was occupied by forces thing was completely beyond the inten equally well by the Navy as its aerial tion of this Government. We sought in gunnery range. In addition, the said Ray of the United States and of the Soviet Union. That occupation was understood stead the interposition of the United T. Adams agrees to erect adequate substitute Nations because, in Secretary Marshall's facllities, on the leasehold site to be selected, to be solely for the purpose of receiving phrase- without cost · to the United States. The and administering the capitulation of Senate agrees to same. Japanese forces. We do not wish to have the lnabllity of CARL VINSON, To meet the immediate problem of co two powers to reach agreement delay any PAUL J. KILDAY, further the urgent and rightful claims of ordinating the acceptance of the Jap the Korean people to Independence. DEWEY SHORT, anese surrender in Korea, military au LESLIE ARENDS, thorities had agreed on August 11, 1945, ·That development brings me to the Managers on the Part of the House. on the thirty-eighth parallel as the. ad.. third point.I wish to emphasize. For· 3 The SPEAKER pro tempore. The ministrative line between the two forces. years the United States has acted in question is on agreeing to the conference It approximately divided the country. Korea as the servant of the United Na report. · It was a clear line on the map. That is tions. The conference report was agreed to. the simple explanation for the ·line In November, 1947, the United Nations A motion to reconsider was laid on the drawn along the thirty-eighth parallel. General Assembly called for a free elec The Russians entered first. That was tion in Korea under observance of a table. · . c _ • .. .. The SPEAKER pro tempore. Under on August 12, 1945. They were already United Nations Commission. This elec previous order of the House, the gentle just over the border in eastern Siberia. tion was to choose a constituent assem woman from California [Mrs. DOUGLAS] Our nearest forces were in Okinawa. bly to draft a constitution and establish is recognized for 30 minutes. AIJlerican troops had to be brought from a national government. that point and from the farther dis The Soviet government turned its KOREA AND WORLD PEACE tant Philippines. They got to Korea on back on this undertaking. It refused Mrs. DOUGLAS-. Mr. Speaker, at this September 8, almost 4 weeks after the the commission access to its zone. It critical juncture when so much affecting Russians. withheld cooperation in the electoral 9626 CONGRESSIONAL RECORD-HOUSE JUNE 30 procedures. Only Koreans in the Amer prize they are seeking in their present the Far East and in Europe, and per ican zone were allowed a voice in this invasion. Our position in the Far East, haps some large ones too, would today effort to bring about a new state and a our reputation in the whole world, would be sending notes of appeasement to the new government under the principles of have been undermined. Russian Government. freedom expressed in the UN Charter. Besides economic aid, the Congress had If the President had not taken the This new government, exercising au enacted legislation for · limited military needed action in Korea, the United Na thority in the southern portion, was assistance to the Republic of Korea. tions would have become a thing of the established formally on August 15, 1948. Though our forces were withdrawn, a past and any hope of outlawing aggres This did not bring an end to our re small staff of advisers and instructors sion and maintaining peace in the world sponsibilities. This new government had remained there to help the small would have vanished with it. had to be given a chance for economic native defense force in developing its skill But the President has acted. The survival as well as juridical independ at arms. The Mutual Defense Assistance power of this Nation and of the entire ence. Act passed last fall authorized a small United Nations, with the overwhelming Under our military government and, amount of weapons for defense. support of free people everywhere, has after January 1, 1949, under the Eco The policies worked. Though beset by been placed behind the right of one nomic Cooperation Administration, we inflationary pressures last year and the small nation to live independently and planned in concert with the government earlier part of this year, the economy of without fear. of the young republic to bring about a the Republic began to respond satisfac Freedom and security must be based replenishment of its economy, develop torily to the assistance program. The on strength. But they must be the right ing new sources of materials at home and small Korean force, designed and not only of the strong. They must be new markets abroad, and restoring and equipped only for limited defense, showed the right of the weakest as well. With modernizing its productive resources. increasingly good morale. out that, there can be no real peace and Gradually, as talent was developed That measure of success achieved by freedom in the world. It is the same in among the Koreans and as their own gov the Republic may have been a large fac the world as within our own Nation, ernmental agencies were set up; our au tor in the decision to launch the invasion where the rights of the weakest are as thorities transferred functions to them. from the North. sacred as the rights of the strongest. Finally, a year ago, the last of our We had helped set up the Korean Re The rule of law can tolerate no other military units were withdrawn. The oc public in pursuance of a policy sponsored basis. cupation was over. The Republic of by the United Nations. We had nur Finally, let us take note of an old Korea stood on its own legs-still de tured that republic from our own re American habit of linking the words ·pending, however, on the United States sources as part of our obligation to un "peace" and "freedom." I trust that for assistance in making its way for its derwrite its independence in keeping with Americans will always insist on thinking first few years of independence. the principles of the Charter. of them as inseparable and speaking of There have been mariy false analogies From the moment of the invasion, them in the same breath. between the Russian position in Korea however, another facet of the ·charter The contention between the totali and our own up to this point. Soviet became involved. Not simply the right to tarian forces and the forces on our side forces were formally withdrawn from freedom and independence as a passive is not over the issue of peace alone. Northern Korea· before ours were with thing, but the security of a people against The Communists, too, want peace-but drawn from the Republic of Korea. How wanton aggression was now at issue. for them it must be peace according to ever, we should permit no one to lead us The situation was laid immediately be Communist specifications, with commu to false conclusions on this point, for fore the United Nations. The Security nism in the saddle and freedom put to the Northern Korean regime remained Council immediately called upon the par rout. In that respect they are precisely in every sense a satellite of Russia. ties concerned to cease fire. When this like the Nazis and Fascists, who also It is pointless to attempt to equate the call was disregarded, the Security Coun wanted peace in their fashion. actions of the two great powers, one striv cil then called for appropriate action by By its very nature, communism denies ing to establish freedom and the other the member nations which were in a po freedom to the individual human being trying to blot out freedom in Korea. sition to give assistance. and to the human spirit. Freedom is At the same time that the withdrawal That meant us. But it did not mean what we can off er and the Communists of our forces was being completed, the us exclusively. The British and the can never- offer. Congress faced the task of legislating a Dutch, also having forc_es in that general We must conceive of freedom not as a basis for our policy to make a going area, joined with the United States in negative thing-not as simply an absence nation out of the Republic of Korea. Up carrying out the principles of the Char of restraint. In Matthew Arnold's to that time policy making in Korea had ter. Offers of assistance were also made phrase-"freedom is a goode horse, but been exclusively in executive hands. TVer for services rendered the Army of tP.e and Civil Service. Report pursuant to House Mr. WALTER: Committee on the Judiciary. United Stat.es; with amendment (Rept. No. Resolution 114, Eighty-first Congress. Reso S. 1792. An act for the relief of Thomas Ni 2·451). Referred to the Committee of tp.e lution authorizing and directing the Com cholas Epiphaniades and Wanda Julia Epi Whole House. · mittee on Post Office and Civil Service to con phaniades; with amendment (Rept. No. Mr. FRAZIER: Committee on the Judici duct thorough studies and investigations re 2440). Referred to the Committee of the ary. H. R. 5981. A bill for the relief of lating to matters coming within the juris Whole House. Clayborne V. Wagley; without amendment diction of such committee under rule XI (1) Mr. WALTER: Committee on the Judiciary, (Rept. No. 2462). Referred to the Commit (e) of the ~ules of the House of Representa S. 1869. An act for the relief of Marcantonio tee of the Whole House. tives; without amendment (Rept. No. 2457). Doria d'Angri and his wife, Sonia Stampa. Mr. LANE: Committee ·on the Judiciary. Referred to the Committee of the Whole Doria d'Angri; without amendment (Rept. H. R. 6095. A bill for the relief of Univer House on the State of the Union. No. 2441). Referred to the Committee of sal Corp., James Stewart Corp., ·and James Mr. ENGLE of California: Committee on the Whole House. Stewart & Co., Ine.; w.ith amendment (Rept. Public Lands. H. R. 7059. A bill to create a. Mr. WALTER: Committee on the Judiciary. No. 2463) . Referred to the Committee of National Cemetery Commission for the con S. 2231. An act for the relief of Marco the Whole House. solidation of national cemetery activities Murolo, and his wife, Romana Pellis Murolo; Mr. KEATING: Committee on the Judici within one civilian commission, and for other without amendment (Rept. No. 2442) . Re ary. H. R. 7921. A bill for the relief of purposes; with amendment (Rept. No. 2458). ferred to the Committee of the Whole House. Eva T. Ross; without amendment (Rept. No. Referred to the Committee of the Whole Mr. WALTER: Committee on the Judiciary. 2.464). Referred to the Committee of the House on the State of the Union. S. 2243. An act for the relief of Tevfik Kami! Whole House. Mr. HART: Committee on Merchant Ma Kutay; with amendment (Rept, No. 2443). Mr. BYRNE of New York: Committee on rine and Fisheries. H. R. 7954. ·A bill to Referred to the Committee of the Whole the Judiciary. H. R. 8929. A bill for the authorize the commercial operation of cer House. relief of Vincent F. Leslie; with amendment tain vessels on the Great Lakes; with amend Mr. WALTER: Committee on the Judiciary. · (Rept. No. 2465). Referred to the Commit ment (Rept. No. 2459). Referred to the Com S. 2349. An act for the relief of Ho Paak tee of the Whole House. mittee of the Whole House on the State of Sui; witho·ut amendment (Rept. No. 2444). the Union. Referred to the Committee of the Whole Mr. BYRNE of New York: Committee on House. PUBLIC BILLS AND RESOLUTIONS the Judiciary. H. R. 6606. A bill to provide Mr. WALTER: Committee on the Judiciary. Under clause 3 of rule XXII, public that the district judge for the eastern,· mid S. 2462. An act for the relief of Ruzina bills and resolutions were introduced and dle, and western districts of Pennsylvania Skalova; without amendment (Rept. No. severally referred as follows: shall become a district judge for the middle 2445) . Referred to the Committee of the district of Pennsylvania alone when the first Whole House. By Mrs. BOSONE: vacancy occurs in that district ; without Mr. WALTER: Committee on the Judiciary. H. R. 9014. A bill to authorize the construc amendment (Rept. No. 2466). Referred to S. 2575. An act for the relief of 'Yayoko tion, operation, and maintenance of.the Colo the Committee of the Whole House on the Kobayashi and June Kobayashi, and for other rado River storage project and of certain State of t h e Union. purposes; without amendment (Rept. No. other reclamation projects, and for other Mr. CELLER: Committee on the Judiciary. purposes; to the Committee on Public Lands. H. R. 8763. A bill to amend the Clayton Act 2446). Referred to the Committee of the By Mr. COMBS: wit h respect to the recovery of triple dam :Whole House. H. R. 9015. A bill granting the consent of ages under the antitrust laws, and for other Mr. WALTER: Committee on the Judiciary. the Congress to the negotiat ion of a compact purposes; with amendment (Rept. No. 2467). S. 2662. An act for the relief of Evzen relating to the waters of the Sabine River Referred to the Committee of the Whole Syrovatka and his wife; without amendment by the States of------· Texas, and Louisiana; House on the State of the Union. (Rept. No. 2447). Referred to the Committee to the Committee on Public Lands. Mr. JONES of Alabama: Committee on the of the Whole House. By Mr. DENTON: District of Columbia. H. R. 7670. A bill to Mr. WALTER: Committee on the Judiciary. H. R. 9016. A bill to provide for the elim regulate the height, exter1or design, and con S. 2682. An act for the relief of Naum ination of the erosion of the banks of the structjon of private and semipublic build Ionescu and his wife; without amendment Ohio River in the vicinity of Mount ·vernon, ings in the Georgetown area of the National (Rept. No. 2448). Referred to the Committee Ind.; to the Committee on Public Works. Capital; with amendment (Rept. No. 2468). of the Whole House. ~ By Mr. HAGEN: Referred to the Committee of the Whole Mr. WALTER: Committee on the Judiciary. H. R..9017. A bill to promote the rehab111- House on the State of the Union. B. 2735. An act for the relief of Mrs. Vernon tation of the bands of Chippewa Indians in Mr . McMILLAN of South Carolina: Com B. Rasmussen; without amendment (Rept. the State of Minnesota, located on the Red mittee on t he District of Columbia. H. R. No. 2449). Referred to the Committee of the Lake, White Earth, Greater Leech Lake, Bois 8909. A bill to authorize the District of :Whole House. Fort or Nett Lake, Mille Lac, Fon du Lac, 1950 CONGRESSIONAL RECORD-SENATE 9629
Grand Portage, and Vermillion Lake Indian By Mr. O'KONSKI: DESIGNATION OF ACTING P~ESIDENT ~eservations, and for other purposes; to the H. R. 9034. A bill for tlie relief of Ryma. PRO TEMPORE - Committee on Public Lands. Adele Zilinskaite; to the Committee on the By Mr. VINSON: Judiciary. The legislative clerk read the follow· H. R. 9018. A bill to provide that personnel ing letter: of the Reserve components of the Army of PETITIONS, ETC. UNITED STATES f:iENATE, the United States· and the Air Force of the PRESIDENT PRO TEMPORE, United States shall have common Federal ap Under clause 1 of rule XXII, petitions Washington, D. C., July 1, 1950. pointments or enlistments as reserves in their and papers were laid on the Clerk's desk To the Senate: respective services, to equalize disability and referred as follows: I appoint Hon. CARL HAYDEN, a Senator benefits applicable to such personnel, and from the State of Arizona, to perform the du. for other purposes; to the Committee on 2237. By Mr. GOODWIN: Resolutions me ties of the Chair. Armed Services. morializing Congress to take immediate ac KENNETH MCKELLAR, H. R. 9019. A bill to provide for a Reserve tion to prevent the complete liquidation of President pro tempore. omcers' Training Corps, and for other pur the shipbuilding industry in Massachusetts; poses; to the Committee on Armed Services. to the Committee on Merchant Marine and Thereupon Mr. HAYDEN took the chair By Mr. BIEMILLER: · Fisheries. as Acting President pro tempore. H. R. 9020. A bill to amend the Hatch Act; 2238. By Mr. MILLER of Maryland: Reso to the Committee on House Administration. lution of Dorchester Unit, No. 91, American THE JOURNAL By Mr. CELLER: Legion Auxiliary, Cambridge, Md., opposing On request of Mr. LUCAS, and by unani H. R. 9021. A b111 to provide for the ap any form of compulsory health insurance or pointment and compensation of an Assistant any system of political medicine designed mous consent, the reading of the Journal Solicitor General and two assistants to the for national bureaucratic control; to the of the proceedings of Friday, June 30, Solicitor General; to the Committee on the Committee on Interstate and Foreign Com · 1950, was dispensed with. Judiciary. merce. MESSAGE FROM THE HOUSE By Mr. JOHNSON: 2239. By Mr. RICH: Resolution of Lycoming H. R. 9022. A bill to provide for the es County Medical Society, Williamsport, Pa., A message from the House of Repre tablishment of summer training installations in opposition to Reorganization Plan No. 27 to offer basic mllita.ry training for certain sentatives, by Mr. Swanson, one of its of 1950; to the Committee on Expenditures reading clerks, announced that the civilian volunteers, and for other purposes; in the Executive Departments. to the Committee on Armed Services. 2240. By the SPEAKER: Petition of Carlton House had agreed to the report of the By Mr. McCORMACK: Skinner, Governor, Guam, Marianas Islands, committee of conference on the disa H. R. 9023. A bill to amend the Hatch Act; greeing votes of the two Houses on the to the Committee on House Administration. transmitting Guam Congress Resolution 5, By Mrs. WOODHOUSE: relative to expressing its deep grief and sor amendment of the Senate to the bill H. R. 9024. A bill to amend the Hatch Act; row at the untimely death of Representa to authorize the composi MEMORIALS the complete liquidation of the shipbuilding tion of the Army of the United States Under clause 3 of rule XXII, memorials industry in Massachusetts; to the Committee and the Air Force of the United States, were presented and ref erred as follows: on Merchant Marine and Fisheries. and for other purposes. By the SPEAKER: Memorial of the Legls- . The message further announced that lature ot the State of Massachusetts, request the House had agreed to the report of ing immediate action to prevent the com the committee of conference on the dis· plete liquidation of the shipbuilding indus SENATE agreeing votes of the two Houses on the try in Massachusetts; to the Committee on amendments of the Senate to the bill Merchant Marine and Fisheries. SATURDAY, JULY 1, 1950