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).93~ CONGRESSIONAL RECORD-SENATE 8527 PETITIONS, ETC. North Carolina [Mr. REYNOLDS], the Senator from Utah Under clause 1 of ru1e XXII, petitions and papers were [Mr. THoMAs I, the Senator from Missouri [Mr. TRUMAN], laid on the Clerk's. desk and referred as follows: and the Senator from Montana [Mr. WHEELER] are absent 4161. By Mr. KEOGH: Petition of William J. Thompkins, on important public business. recorder of deeds, District of Columbia, concerning House bill The VICE PRESIDENT. Eighty-three Senators have 3950 and House bill 4241; to the Committee on the District of answered to their names. A quorum is present. Columbia. · Mr. AUSTIN. Mr. President-- 4162. Also, petition of New York State Industrial Union The VICE PRESIDENT. Today's session follows an ad­ Council, , concerning the Wagner-Rogers bill; journment, and so this is the morning hour. The pres­ to the Committee on Labor. entations of petitions and memorials is in order. · 4163. Also, petition of United Marine Division, Local 333, STABILIZATION FUND AND ALTERATION OF WEIGHT OF THE DOLLAR- New York City, concerning the Wheeler and Lea bills; to the CONFERENCE REPORT Committee on Interstate and Foreign Commerce. Mr. BARKLEY. Mr. President, I ask unanimous consent 4164. By the SPEAKER: Petition of Delta Council, Stone­ that the routine morning business be dispensed with, in ville, Miss., petitioning consideration of their resolution with view of the agreement which was entered into about debate reference to the life work of General Ferguson; to the Com­ and the vote today. mittee on Military Affairs. The VICE PRESIDENT. Is there objection? The Chair hears none. The Senate resumed the consideration of the report of SENATE the committee of conference on the disagreeing votes of the WEDNESDAY, JULY 5, 1939 two Houses on the amendments of the Senate to the bill

1 Subject to revision. Mexico_------Canada ______------_ 68, 101,062 77,463,901 14 During the 4 fiscal years 1934-37 the Treasury spent ne~rly three­ New South Wales ______15,187,063 18,231,419 20 8, 221,271 9, 150, ()()() 11 quarters of a billion dollars for its total purchases of s1lver. The Peru._------­ 6, 760, 534 19,901, 309 194 average cost on a yearly basis ranged from 53 to 64.8 cents an ounce. Japan._------5, 958,842 9, 606,432 61 Bolivia ______------__ ------___ ------___ _ This was considerably in excess of the open market price, except 5,469,069 10,723,333 96 for the year 1935, when heavy purchases by speculators temporarily advanced prices to a level the Treasury declined to meet, and the For the last 4 years the United States has purchased more Government average price was 4.6 cents lower. The prices paid silver each year than the world produced each year. In 1935 it American producers, as shown by the following table, averaged from acquired two and one-half times what the world produced that 14.2 to 32.2 cents an ounce over the open market price. 8542 CONGRESSIONAL RECORD-. SENATE JULY 5 Silver prices paid by United States Treasury blessing, however, as Senator PITTMAN of the silver-producing state [From U.S. Treasury reports] of Nevada succeeded in having it replaced in the Treasury vaults -a.t a buying price of not less than $1 an ounce. · The world depression gave the silver interests an excuse for a Average- renewed demand for the rehabilitation of silver. Arguing that the supply of hard money was insufficient to meet the requirements of Cost of all Cost per P aid modern domestic and foreign commerce and that the limit of the acquired ounce United Open Domestic world's gold supplies had been reached, they suggested in 1930 that States market price price excess I the hard money of the world should be replenished with silver. producers - One of the arguments of these enthusiasts was that if the price ) ------ll------l·------~------1------of silver could be raised to $1.29 an ounce, the former United States l Year ended June 3o- Cent8 Cents Cents Cents .coinage rate, the purchasing power of China, the only important 1934______$17, 715, 096 54.3 64.0 42.5 21.5 country then on a silver standard, would be increased, American 1935______232, 435, 879 53.0 71.8 57. 6 14. 2 exports to China could expand, bimetallism would be established, 1936______395, 313, 736 64.8 77.5 55.3 22.2 and the world depression halted. 1937------126, 609, 299 55.8 77.5 45.3 32.2 WISDOM FROM CHINA ~------1------1·------1------Total cost.______772,074,010 The fallacy of this theory was pointed out in the August 1938 bulletin of the National City Bank in an article· entitled "The 1 In relation to open-market price. World's Greatest Silver Hoard," when it quoted the following ex­ The effect of the purchase act on the American silver mining cerpt from a statement by LiMing, chairman of the Bank of China, industry was to double the production of domestic silver and quad­ made when he was in New York in 1934: ruple its money value in the short space of 2 years. The produc­ "The theory that by raising the price of silver China would be tion of 1934 was 42 percent greater than 1933; the 19~5 production able to buy more in America, or America would be able to sell increased 99 percent over 1933 and the 1936 production 177 percent more to China. is not economically sound. America's purchasing over 1933, according to the Treasury figures. The official production power is not measured by the gold you possess, but is measured by for 1937 has not yet been made public by the Treasury Department. the productivity of your national wealth. . China, like every other Handy & Harman estimate it at 68,400,000 ounces, which would be country, pays for her imports chiefiy by her exports. The silver in an increase of 197 percent over 1933. her possession, no matter how big that amount may be, does not help much in her purchases abroad. She will have to depend upon Silver production in the United States her exports and her exports alone." [From U.S. Treasury reports] UNITED STATES "HELD THE BAG" IN EIGHT-NATION SILVER PACT When the World Economic Conference met in London in June Fine ounces Value 1933 an agreement for holding or buying silver, initiated by the American delegates, was entered into between them and the dele­ gates of seven other nations. The nations were China, India, and 1933______23, 002, 629 $8J 050,920 1934·------32, 725,353 21, 155,784 Spain, as the holders and users of large quantities of silver, on one 1935______45, 924, 454 33,008,201 hand; and Mexico, Canada, Peru, Australia, and the United States, 1936 ______·------63,812, 176 (1) as the principal silver producers, on the other hand. 1937------2 68, 400, 000 The United States agreed to purchase annually about not less than 24.4 million ounces of American mine production and Mexico 1 Not stated. 7.2 million ounces, Canada 1.7 million ounces, Peru 1.1 million 2 Handy & Harman estimate. ounces, and Australia 0.6 million ounces, of their respective domestic The Government paid as high as 77.57 cents an ounce for much production. This made a grand total of 35,000,000 ounces to be of that part of its silver hoard acquired from domestic producers. taken off the market annually. It will be noted that Mexico, the It is .now paying the same group 64.64 cents for what it acquires. largest silver-producing country in the world, was to purchase only Silver 1s selling in the open market in New York at 42.75 cents an 20.5 percent of the 35,000,000 ounces agreed upon in the pact, ounce. It sold as high as 81 cents in New York. in April 1935 when while the 'United States, despite its smaller production, was to pur­ the Government's buying policy led to wild speculation in the .chase 69.7 percent. world markets. It is assumed that these· countries lived up to their agreement as · the United States did. What benefit, if any, the United States SILVER A STORMY PETREL IN AMERICA'S FISCAL HISTORY derived from this self-inspired agreement is difficult to estimate. It Silver has played a sinister part in American history commencing ts significant, however, that when it expired on December 31. 1937, with the ill-considered adoption of bimetallism by Alexander not one of .the eight countries which signed the agreement sug­ Hamilton in 1792 with the same silver dollar we now have and a gested a renewal of it. And there is reason to believe that most gold dollar. The result was that our gold was drained to England. of the silver purchased by the other four producing countries In 1834 and 1837 Congress reduced the size of the gold dollar, finally was dumped on the United States, much to the relief of its establishing a ratio of 16 to 1. This diminished the fioating supply holders. · of silver change in the country to such an extent that it created The United States began its purchases of silver under the agree­ havoc in retail trade. ment in December 1933 at 64.64 cents an ounce, the Government Silver production was greatly stimulated by the Bland-Allison exacting 50 percent of the coinage rate of $1.29 + as seigniorage. Act in 1878 and the position of the silver interests in Congress At that time the market price of silver was about 43 cents. 'rhis strengtliened. In 1890 they helped pass the Sherman Act, one of was the initial step, leading to the accumulation of our present the provisions of which forced the Government into the market for stupendous hoard of silver. silver to about twice the extent it had been. Together, the Sher­ In June 1934, following the Gold Standard Act, the present Silver man and the Bland-Allison Acts resulted in the Government Purchase Act became a law. This measure, which was acclaimed coining nearly 600,000,000 silver dollars. by the mining interests and speculators, directed the Secretary of The dollars were ref~ed in payment of foreign debts and our the Treasury to purchase silver at a reasonable price up to the supply of gold began to shrink. In 1893 a severe depression set in statutory value of $1.29+ an· ounce until the Treasury held silver and the country was in the midst of a panic when President Cleve­ equal to one-quarter of the monetary value of its combined gold land, denouncing currency experiments which jeopardized the and silver holdings. soundness of the people's money, called a special session of Con­ In August of that year silver was nationalized by Presidential gress and the Silver Purchasing Act of 1890 was repealed. This proclamation and existing commercial stocks taken over by the ended a 15-year period of silver buying which cost the Government Government at a fixed price, the Treasury claiming the difference $464,210,000 and was undermining the credit of the Nation. between that price and $1.29+ as seigniorage. The Treasury The country failed to learn a lesson from this, however. Again began buying silver in the London market and speculation became the silver forces urged bimetallism as a cure for the depression for increasingly active with prices rising. which the lately repealed silver legislation had been in large part CHINA BECOMES VICTIM OF UNITED STATES ALTRUISM responsible. In 1896 Bryan's "cross of gold" speech brought silver violently into the foreground where it continued a subject of bitter In September China protested that any further increases in the controversy until the depression ended in 1897. price of silver would cause her serious injury and possibly severe panics. The following month the Chinese Government placed an WORLD DEPRESSION REVIVED AGITATION FOR REHA,BILITATION OF SILVER embargo on exports of silver, and smuggling of silver from China It has been the unfortunate history of silver that it is called for sale to the United States Government developed on a large scale. upon to play a prominent part on the world's monetary stage only What had happened was that China had become a victim instead ~n times of acute depression or national crisis and that with the of a beneficiary of the American silver policy. The immediate effect return of prosperity or the ending of the emergency it is retired to of the American silver policy on China was ably summed up in the the minor role it fills in its relationship to gold in the economic bulletin of the National City Bank previously referred to, which life of nations and the useful place it occupies as a commodity in said in part: the arts and industries. "During the depression silver had been falling in price, like other During the World War, in 1918, England was hard pressed for commodities. It had fallen from an average of 58 cents an ounce silver because of the continuous presentation of rupee currency for in 1928 to 27.8 cents in 1932. But in 1933, with the dollar off gold, redemption in silver in India where she was buying large war sup­ and silver lifted by the eight-power agreement, silver averaged plies. The United States had a reserve of some 568 .million silver 34.7 cents. In 1934, with the aid of the United States Govern­ dollars in the Treasury and sold England 200 million of them ment, it averaged 47.9 cents. In the latter part of 1934, with the which were immediately coined into the form of rupees. This Treasury buying aggressively and the goal of $1.29+ in view, reduction in the silver stock of the United States was a short-lived speculation became very active. 1939. .·coNGRESSIONAL RECORD-SENATE 8543 "However, instead of benefiting China and our trade with China, would the Treasury be holding the bag, because the Treasury­ the rising price of silver had the opposite effect. Silver being the thanks to some admirable spade work on the part of Senator PITT· money, the rising price for the silver coins meant lower prices MAN 5 years ago-can take in 43 cents worth of silver, and presto! for the products of the country. Even in 1932 and 1933 the low issue silver certificates against it at the rate of $1.29 in paper money prices for Chinese products had caused an adverse trade balance, for every ounce of metal. with an outflow of both silver and gold. Now, Chinese traders "Of course, this little operation would dilute our currency to the were shipping silver direct to New York, to be sold to the United extent of about $900,000,000 and thereby place a tax on each and States Government." every one of our citizens of about 16 percent in the form of higher In 1935 the price of foreign silver delivered at New York declined prices. But, after all, think of what a fine thing it would be for to 43 cents an ounce from a high of 81 cents, the Treasury still the cotton farmer. And the foreign importer. Oh, yes--and the continuing to pay 77.57 cents to American producers. In Novem­ silver boys." ber of that year China completed its nationalizing of silver and adopted a managed paper currency. In May 1936 China made an GOVERNMENT "PHILANTHROPY" AT THE TAXPAYERS' EXPENSE agreement with the United States to sell an unnamed quantity of The American silver-buying policy was pointedly referred to by silver for dollar credits or gold. This agreement was renewed the New York Times on October 14 last in an editorial commenting several times. The United States Treasury has received around on Mexican Government purchases of wheat from our Government 300,000,000 ounces of silver from China since the Silver Purchase at less than the market price. The editorial, headed "Buy Dear, Act went into effect in 1934, it is estimated. Sell Cheap," illustrates how unsound economic theories of govern­ UNITED STATES SILVER POLICY HAS CREATED A FRANKENSTEIN ment--financed by the taxpayer's dollar-work out in practice: "The Mexican Government is buying from our Government The 2,373,000,000 ounces of silver the United States held on 3,000,000 bushels of wheat at less than the market price. Our Gov­ June 30, 1938, had a statutory value of more than $3,061,000,000, ernment--!. e., our taxpayers--will take the loss. We continue to but a value at open-market prices of only $1,020,000,000. Both buy from our own producers silver at a price much higher than the valuations are fictitious in the sense that they never could be market, and we continue to buy from Mexico and other countries realized, for at no time since the Silver Purchase Act went into silver that we do not need at a price made artificially high by our effect in 1934 could the Treasury have offered silver for sale with­ buying. Thus we lose money both ways. If an individual thought out demoralizing the silver markets and causing a price collapse that he was benefiting himself by selling his own goods much below and panic of world-wide proportions. the market price and buying other people's goods that he did not In other words, the silver-buying policy of the United States need at prices higher than there was any good reason to pay, the Government has created a Frankenstein of incalculable potenti­ authorities would begin to look into his sanity. The same policies, alities for economic catastrophe not only nationally but interna­ when we follow them as a nation, are hailed as masterly economic tionally. It is fortunate--in the sense only that it prevents such maneuvers." disaster-that the Silver Purchase Act is still in effect. In every other sense it seems a tragedy that the United States Government CHAMBER FOUGHT UNITED STATES SILVER BUYING 60 ~S AGO ever allowed itself to be Inisled into becoming the world's dumping It is interesting to note that since as far back as 1878 when the ground for unwanted silver. For even the mining interests in the Bland bill was pending in Congress, the Chamber of Commerce of seven principal silver-producing States--Nevada, Idaho, Montana, the State of New York opposed purchases of silver by the Govern­ New MeXico, Arizona, Utah, and Colorado-which temporarily are ment and the compulsory coinage of silver dollars. In that year the profiting from the bonus prices the Treasury pays for American­ chamber warned that the proposed legislation "had wrought most mined silver, must view with grave concern the time when the unfavorably upon the commercial interests of our city, retarding United States, which today controls world silver prices, will cease recovery from the effects of the revulsion of 1873 by extending the buying. distrust which was before limited to individuals, corporations, and It is true that purchases by the United States Government have States to the United States Government itself." In 1879, the year removed a large part of the world's floating supply of silver from following its passage, the chamber declared that the act would the market, but the concentration of so huge a quantity of silver subject the currency to "violent perturbations, breeding specula­ in the hands of a single nation is and will continue to be a depress­ tion, and ending in widespread ruin." ing influence on silver prices. Silver, unlike many other commodi­ In 1883 it urged repeal of the Bland Act and in 1884, in resolutions ties, is not perishable. It diminishes very little in actual use. sent to Congress, pleaded for suspension of the act for at least 2 When the United States ceases to purchase silver, as it eventually years. In 1885 the chamber memorialized Congress, stating that the must and permits its free flow through normal channels of trade, compulsory coinage of silver dollars had reached "such an extent how many years must elapse before it safely can begin to dispose that its further continuance perils the credit of the Government of part of its accumulations? There is little inclination on the and the prosperity of the people." part of any nation today to increase the use of silver for its coinage. The chamber protested to Congress when in 1890 the silver inter­ Neither India nor China now use silver as a hoarding medium as ests succeeded in having a clause put into the Sherman bill com­ extensively as they did in the past. The quantity which can be pelling the Government to purchase 4 ~ million ounces of silver a consumed by the arts and industries will continue to be limited month. In 1891 it named a special committee to prepare a memo­ unless invention produces some new large-scale demand for the rial to Congress urging repeal of the silver clause in the Sherman metal. Act. What is going to happen when, as Congress has decreed it should, Presented to Congress in March 1892, when depression was laying the amount of silver held by the Treasury reaches the total required hold of the country, the memorial contained much that is food for to make its statute-fixed value equal to one-quarter of the mone­ serious thought today in any consideration of where the present tary value of the combined holdings of gold and silver? silver policy of the Government may lead the Nation. A great deal What will happen should Congress, pausing to listen to the pro­ of what the chamber said nearly half a century ago might be applied tests of the taxpayers who are footing the bill, count the cost of with equal force to the situation today-for example: the Nation's futile silver philanthropy and suddenly decide, as it "The attempt thus made to advance the price of silver by legisla­ did in the great emergency of 1893, to put an end to such unsound tion has, therefore, not only utterly failed, but has had a most expenditure of public funds and repeal the Silver Purchase Act? disastrous effect upon the general business of the country. Confi­ dence has been impaired, and the investment of capital in new THE LATEST PROPOSAL ON SILVER enterprises has been arrested at a time when our bountiful harvests Congress has shown indifference to the Government's present and the foreign demand for our food products ought to have pro­ silver policy since its inception in 1933-34. At the last session duced an era of progress and prosperity • • • and it is the Senator JosiAH W. BAILEY of North Carolina, did offer a resolution deliberate opinion of the chamber that [if the silver law were re­ directing that silver purchases by the Treasury should cease, but pealed] new life would be infused into business, and the close of nothing came of it. the century would witness a development of wealth and prosperity The latest proposal for furt}ler Government action on silver unequaled in any previous age or country." emanated from Senator PITTMAN on September 28 last and is truly In 1893 the Nation was in the midst of panic, for which the silver philanthropic. He advocated that in order to dispose of the large policy of the Government was held chiefly responsible. There was cotton carry-over the Government should trade 10 pounds of cotton grf.l~ apprehension both at home and abroad as to the ability of for 1 ounce of silver in the foreign markets. In this way, he esti­ the Government to maintain at par nearly six hundred millions of mated, 13,400,000 bales of 500 pounds each could be disposed of in silver with a gold reserve of less than one hundred millions. The the foreign markets. With the 670,000,000 ounces of silver thus chamber, after having repeatedly urged Congress to stop silver acquired he proposed that the farmer should be paid for his cotton buying, finally besought President Cleveland to call a special ses­ at the rate of 12.9 cents a pound by the issuance· of certificates sion of Congress. This was done and the silver-purchase law re­ (paper money) against the silver. pealed, with the result that confidence in the credit of the Nation Under the caption "It's All Done With Silver!" the New York was restored and the panic checked. Herald Tribune on September 30 commented editorially on Senator In 1896 and 'again in 1900 the chamber appealed to "the commer­ PITTMAN's scheme, saying in part: cial bodies and businessmen of the United Stat es" to unite in a "Here is the perfect solution of a (the cotton surplus) problem­ vigorous effort to urge the selection of delegates to the political a solution under which everybody wins and nobody loses. The conventions of both great parties who were in favor of the main­ farmer who, if he had to sell his cotton in the open market, would tenance of the gold standard of value. The appeals said the con­ be lucky to get 8 cents a pound would receive 12.9 cents. The for­ tinued agitation for free coinage of silver blocked a revival of con- eign importer would receive a discount as handsome as the farmer's fidence and national business prosperity. · premium. All he would have to do would be to buy an ounce of When the present Silver Purchase Act was pending in Congress in silver, which would cost him 43 cents, and exchange it for 10 pounds 1934, the chamber unanimously opposed its passage, warning that of cotton worth, at present market quotations, 80 cents. Nor Government buying of silver bullion could not possibly promote LXXnV--539 8544 ,CQNGRESSION AL RECORD-SEN ATE JULY 5 sound recovery, but, on the other hand, would increase the liabili­ tion upon prices of goods entering foreign trade are often un­ ties of the Federal Government and reduce: confidence in the reliable. Nation's currency. · EFFECT ON DOMESTIC DEBTS AND PRICES OCTOBER 20, 1938. Domestically, devaluation would have no effect whatever upon Sources of information: Reports of Handy & Harman, dealers in internal debts. These are expressed in domestic dollars, and can precious metals; reports of United States Treasury Department; be paid only in these dollars which at present are inconvertible reports of Director of United States Mint; August 1938 bank letter paper or silver certificates or silver. Domestic debtor and creditor of the National City Bank of New York; miscellaneous data. relations could be affected by devaluation only if domestic debtors Mr. BRIDGES. Mr. President, I have before me an could hold or obtain the gold units with which to pay. Conse­ quently, the frequent assertion that devaluation lessened the article entitled "Wh9.t Devaluation Means," by Walter E. burden of domestic debts is fallacious. Spahr, professor of economics in New York University, in The effects of devaluation upon domestic prices are extremely which he discusses the question rather briefly. I ask that .uncertain and diiDcult to trace. These effects are reflected back on domestic prices from the changed prices or profits of com­ this article be included in the REcoRD as a part of my modities entering foreign trade. The net effects of devaluation on remarks. domestic prices are, therefore, unpredictable and beyond any There being no objection, the article was · ordered to be accurate ascertainment. printed in the RECORD, as follows: NOT THE SAME AS CURRENCY INFLATION Nor is devaluation the same as currency inflation. Inflation WHAT DEVALUATION MEANS exists when purchasing power, either in the form of money or (By Walter E. Spahr, professor of economics, New York Univer­ credit, has been extended to such a degree that it cannot be liqui­ sity, and secretary-treasurer of the Economists' National Com­ dated without loss when the debt becomes payable. Any trans­ mittee on Monetary Policy) action which makes possible such losses is an inflationary pro­ Discussions of further devaluation of the dollar have recently cedure. been rather widespread. Although the denial of the Secretary of Devaluation changes the size of the gold unit; inflation takes the Treasury of any intent on the part of the President to de­ place on the unit in existence. Devaluation produces more gold valuate the currency further may temporarily minimize such dis­ units; inflation does not. Devaluation changes legal foreign ex­ cussions, it seems highly probable that the question will continue _ch~nge pariti~s; inflation does not. Devaluation operates on to plague us from time to time. The Thomas Inflation Act of pnces through its effects on the prices of goods entering foreign May 12, 1933, as amended, gives the President the authority to trade and, consequently, only indirectly on domestic prices; in­ reduce the weight of the standard gold dollar unit to · 50 percent flation operates directly on domestic prices. of its previous weight. Until this act is repealed the question SOME FUNDAMENTALS TO BE CONSIDERED will continue to arise as to whether or not he will exercise this power despite Secretary Morgenthau's encouraging antidevalua­ Devaluation is a device which we, like other nations, used to tion statement. Just prior to the Secretary's statement, various make our currency purchase less. But abroad, the countries farm bureaus, . encouraged and coached by devaluationists and devaluated because they had previously inflated ·their currencie~ inflationists, were passing resolutions in favor of further devalua­ to such an extent that their gold reserves were inadequate to tion and trying to stimulate sufficient sentiment in its behalf support their outstanding notes and deposits. The United States, to put effective pressure upon the President and Secretary of the however, devaluated the dollar not because her gold reserves were Treasury. inadequate but as a device to encourage exports and to raise Entirely apart from the misconceptions and fallacies which domestic prices. Such a procedure was unprecedented·. The characterize a large proportion of the statements of the advocates theory underlying it was unsound, and the consequences flowing of further devaluation of the dollar, it is clear that the general from this act have in general refuted the contentions of its public has a very inadequate understanding of the nature and advocates. implications of devaluation. Considering these times, and the · Our devaluation· of the dollar involved an attempt to exchange unsatisfactory status of the monetary issues in this country, it is more of our goods for less currency in terms of gold. Carried important that the American people have a proper appreciatiO!l to extremes it would involve giving away our goods for nothing of what is involved in currency devaluation. but pieces of paper. Competitive devaluation throughout the world is a struggle of nations to exchange their goods for less HOW TO CALCULATE DEVALUATION and less of the importers' gold. This ridiculous struggle to see Devaluation of a currency involves the reduction in the weight who can give away the most goods for the least gold in return of the standard monetary unit by government act. For example, rests upon a confusion between real wealth and money. De­ our Government reduced the _weight of the gold dollar unit on Jan­ valuation also has the foolish effect of increasing the cost of our uary 31, 1934, from 23 .22 grains (fine) to 13.714 (fine), or from 25.8 debts to foreigners, and of reducing the cost of their debts to grains (nine-tenths fine) to 15 5/ 21 grains (nine-tenths fine). This us. meant that an ounce of fine gold, weighing 480 grains, would now A careful presentation of evidence regarding the consequences coin up into $35, instead of $20.67. In other words, our Government of currency devaluation involves the examination of a tremendous agreed to pay $35, instead of $20.67, for each ounce of fine gold. This mass of statistical data. Apparently there is no simple way to reduction in the weight of the gold dollar unit by approximately summarize such detailed factual data for the public so that 41 percent gave us a gold dollar unit only 59.06 percent as heavy the issues involved can be removed from serious debate. It as formerly. our total gold supply, when divided into these "59- must suffi.ce here to say that it cannot be demonstrated that our percent" dollars, yielded two and eight-tenths billion dollars of devaluation of the dollar had the effect upon our domestic price profit, all taken over by the Federal Government. level that the principal advocates for devaluation claimed that it The relationships between the gold dollar and all foreign mone­ would have. There is no predictal;>le relationship between a given tary gold units were legally altered. It now required 69 percent percentage of devaluation of our currency unit and the ultimate more of these "59-percent" dollars to equal in gold what the effect upon the price level. Factors to be considered are: The former "100-percent" dollars would equal in foreign gold. Foreign­ importance of foreign trade; the changes in supply of and demand exchange parities were thus marked up 69 percent. This is for · commodities and services; inflation; tariffs; governmental equivalent to raising the tariffs by 69 percent against all imports. policies; prosperity and depression; the political situation na­ It also meant that it would cost the foreigner 41 percent less in tionally and intex:_nationally; and psychological factors. his gold units to purchase the same number of dollars formerly Mr. purchased. Foreign debt obligations to us were written down Mr. BRIDGES. President, I have before me an edi­ 41 percent. Our debt obligations to foreigners in terms of their torial from the New York Sun of Friday, June 30, entitled _gold unit were increased· 69 percent. "Roosevelt, Hull, and Mexico," in which the silver situation PRICES OF GOODS IN FOREIGN TRADE is dealt with. I ask that the editorial be incorporated in the The prices of goods entering foreign trade could be affected in REcORD as a part of my remarks. several ways. Our exporters might leave their dollar prices un­ There being no objection, the editorial was ordered to be changed, and thus reduce the prices to foreign buyers in terms of foreign currencies by 41 percent. Or, the prices in foreign · printed in the RECORD, as follows: currencies could be left unchanged and the prices in dollars could [From the New York Sun of June 30, 1939] theoretically be increased by 69 percent. But this could not happen unless foreigners were charged more than our own people ROOSEVELT, HULL, AND MEXICO at the point of origin for the goods; and a mark-up of 69 percent It is odd to see some tears over the "wrong'' which the Senate for all buyers, domestic and foreign, could not take place because did Mexico in its action on dollar valuation and silver purchase. demand would decline. It is qUite probable, therefore, that prices A correspondent as experienced as David Lawrence sees the "whole would fall somewhere between these extremes, thus giving both foreign policy of America" put in hazard because the Senate "pro­ the American exporter and the foreign importer some benefit from jected itself" into the relations between the United States and the change in the weight and purchasing power of the dollar. Mexico. The same general readjustments, of a converse order, would The Senate constitutionally and traditionally has a right to take affect the prices of our imports. a hand in foreign affairs. But, aside from that, what are the rela­ But, in addition, the prices of both exports and imports would tions between the United States and Mexico? Two points sticlt be affected by changes in demand and supply, following the out. The Mexican Government confiscated farm lands owned by initial changes in price, and by tariffs erected to offset currency Americans and oil lands owned or leased by Americans. It prom­ devaluation. ised to settle for the farms after formal negotiation. But it re­ As a consequence of the operation of these various factors, fused to make even that doubtful promise with regard to the oil the usual offhand generalizations regarding the effects of devalua- lands. In spite of this violation of international law and of com- 193~ CONGRESSIONAL RECORD-SENATE 8545 man honesty the Roosevelt administration continued to play the Mr. President, I am in accord with the opinion of the Mexican game by buying Mexican silver, thUs providing the means by which the Mexican politicians could continue their impudence President and the Treasury concerning fixing the price of in the confiscation of the oil lands. The only reasons that have domestically mined silver. I desire to support the adminis­ been given for this performance are based on the passion of Secre­ tration in that particular respect; but because in the confer­ tary Hull and his chief for fattening other nations or governments ence report we are taken outside the field of the administra­ at t he expense of Americans and for turning the other cheek when a swiftly administered kick would be the right gesture. In prin­ tion's desire, and because in the conference report we are ciple, all the silver purchases were wrong, but to continue them in asked to set aside the opinion of the Senate in the matter of the case of Mexico was to submit ourselves to robbery and humili­ purchasing foreign silver, I find myself in the unpleasant ation. position of being unable to support the conference report. Fond as it is of President Roosevelt and attached as it has been to the international policies of Secretary Hull, the New York Times I believe it would be disastrous to American business to con­ cannot stomach the murmurs of the State Department about the tinue the purchase of foreign silver. Earlier in the debate "serious crisis caused in Mexico." "Are our purchases of Mexican I stated some of the reasons why I thought it would be silver," the Times asks, "to be thought of as a form of political dangerous to business, and detrimental to the industrial blackmail that we must pay to keep more American property in Mexico from being seized?" silver interests of the country, and why I thought it was The incident is typical of the Roosevelt administration. Tlle a fallacy, to purchase silver to be buried in the ground up President shakes his finger at distant dictators. but not as vig­ in the State of New York. orously as he shakes his fist at American business. And when he is confronted by common larceny, thinly veiled as "sovereign right," Mr. President, I earlier advocated, and I again take the he and Mr. Hull moan over the plight of the perpetrator of the liberty of advocating, that we handle this legislation in a larceny. different way-I think the lawyers call it ab initio. That Mr. BRIDGES. Mr. President, I have about concluded my does not mean that we should have to send it back to the remarks on this measure. However, in closing, I wish to committee for hearings and study. There is not a Member say that the individuals who comprise this body must some of the Senate who does not thoroughly understand the situa­ day answer to the people of the country and to their God tion and the proposal, and who has not made up his mind for their actions. When the vote is taken this afternoon, it how he would vote. This legislation, divided into separate will be a good time to show one's colors and whether or not parts, could be reported out of the committee within a very one is for America first. few days. It seems to me-and I am anxious to support the attitude and desire of the administration-that in that Mr. MALONEY. Mr. President, I wish to take just enough way we could come nearer to what the administration de­ time to keep the record clear on the conference report, inso­ sires, and could bring about a continuing authority on the far as I am concerned. I try not to take the time of the part of the President of the United States to devalue the Senate; and I do so only on occasions when I feel that I may dollar. The legislation should be submitted in separate parts. make at least a slight contribution to the matter under con­ I am very anxious that the power to devalue the dollar be sideration and on occasions when I desire that my own continued in the hands of the President. I am very easily record shall be entirely clear. able to set aside the eloquent opinions expressed in the de­ Mr. President, I shall vote against the conference report. bates a few days .ago to the effect that taking the authority • I shall do so with some reluctance. I am very strongly in away from the President of the United States would remove favor of continuing to delegate to the President the power to fear. I think it might intensify fear in some places. I think devalue the dollar, and I am sorry there is so much opposi­ it might do irreparable harm to our own industry and to what tion to that delegation of authority. I likewise favor a foreign trade and friendly relations we still have. continuation of the stabilization fund. Mr. President, yesterday afternoon I experienced a daytime Like some other Members of the Senate, my knowledge of train ride through five States. One does not see very many this particular subject is limited. I feel that we must place pretentious homes alongside the railroad tracks. Those are our faith in the experts who are charged with the' responsi­ likely to be among the shabby homes of the country. In bility of our Treasury affairs, and that we should delegate large part the poor people live in such homes. I do not say this power to the President because it is sought at an that I was surprised to see it, but I d.:d rejoice to see the flag unusual and an uncertain time in the world's history. of our country in front of or over ever so many of those The proposal to delegate authority to the President of the humble homes in celebration of the Fourth of July. That United States is not new in the history of our country or fact indicated to me that there is a continuing confidence and in governmental practice. We do it in time of war. It is hope. It indicated to me that there is a continuing great traditionally a fact that we do it in time of emergency. The satisfaction in our form of government and the way in which powers under consideration were originally delegated at a it is being conducted. There is no fear in that quarter, and time of emergency, and I do not believe a single Member of I do not believe there is much fear in other places. I would the Congress will dispute the fact that this is an hour of rather believe that an ultraconservative press, exercised about emergency in the world's history. It is a time when dicta­ a problem which it does not clearly understand, has to some torial governments, and other governments not so dictatorial, extent whipped up a frenzy in some places over the country have placed in the hands of those in charge of monetary in an endeavor to make the people believe that the President affairs the right to regulate the value of money. has asked for power to which he is not entitled. Let me point It has been said during the debate that there is no need out, Mr. President, that no charge has been made that the to do this particular thing; that it is not a matter of impor­ President of the United States wanted this particular author... tance that this power rest with the President of the United ity or power for a selfish reason. No one can point out how States, because if a sudden emergency should arise, Congress it would in the least bring a profit or any special power could be called into session, or, if it were in session, could to him. act upon this particular proposal. So, Mr. President, having had this chance to have made my Mr. President, it seems to me that those expressing that own position clear and to have pointed out that there is a viewpoint entirely lose sight of the true situation, and do way by which we may enact this legislation, in my opinion, as not clearly understand the purpose of giving this power to the Treasury officials desire it, I am hopeful that the con­ the President. I have understood that it was desired to ferees will have a further chance to consider the conference have this proposed power in the hands of the President as report, and that, if necessary, the bill will be sent back to the a sort of defensive threat to those who may endeavor to committee to be brought again to the Senate in separate juggle the finances of other countries and thereby affect our form in order that we may clearly vote on these individual money. If the power is to be used as a defensive threat, proposals as our consciences dictate and as we feel needs of if it is to be kept as a weapon of defense, it is fallacious to the country and of the world require. suggest that the Congress could act, because in my opinion Mr. McCARRAN. Mr. President, will the Senator yield for the time when Congress would act according to the pro­ a question? posals of those who have so contended in the debate would The PRESIDENT pro tempore. Does the Senator from probably be entirely too late. Connecticut yield to the Senator from Nevada? 8546 ~ONGRESSIONAL RECORD-SENATE JULY 5 Mr. MALONEY. I yield. Mr. McKELLAR. I yield. Mr. McCARRAN. The Senator very eloquently made men­ Mr. McCARRAN. Mr. President, I desire the RECORD to tion of his trip through some five States and observing .the show that I testify in my individual right to the ability and flag in front of humble homes. Then he made mention of the courage and the determination of the Senator from Con­ the fact that he did not believe the President of the United necticut. Everything he has said here today reflects his gen­ States had used or intended to use this power for selfish eral attitude and a studiousness, a courage, and an American­ motives. Did the Senator as he passed through the five ism that is beyond all criticism. Whatever course he may States, observing the flag in front of humble homes, notre­ pursue here, everyone who views that course will knpw it is flect that their occupants might be celebrating the fact that that of an outstanding, upright, splendid American. this is a constitutional democracy, that they rely on the Mr. McKELLAR. Mr. President, I shall support the con­ Constitution for their individual liberty; that one of the ference report and the purpose of my rising is to say a word provisions of the Constitution is that the Congress of the in answer to the very able argument of the Senator from Ver­ United States shall coin money and regulate the value mont [Mr. AusTIN] this morning. The Senator is a most thereof; and that if the framers of the Constitution had excellent lawyer, and I have the greatest respect for his views intended that that power should be vested in the Chief on all legislative subjects; he is a fine legislator; but I think Executive they would have so ordained? I wonder if the he has made a mistake in the interpretation of this proposed Senator might have dwelt on those thoughts? law. In order to show that I am going to refer to opinions, Mr. MALONEY. Yes, Mr. President; I have dwelt on but, first, I desire to read from the bill itself as follows: those thoughts. I think that the Senator from Nevada, Be it enacted, etc., That subsection (a) of section 10 of the Gold for whom I have so much respect, knows as well as any other Reserve Act of 1934, approved January 30, 1934, as amended, is Member of the Congress can know at what length I have further amended by striking out the period at the end of such sub­ section and adding thereto the words "and to the Congress." dwelt on that particular theme. SEc. 2. Subsection (c) of section 10 of the Gold Reserve Act of 1934, Mr. McCARRAN. I wish to testify to that at length, approved January 30, 1934, as amended, is further amended to read because I know the thoughts of the Senator and have been as follows: very close to the Senator in those thoughts. We have pro­ "(c) All tne powers conferred by this section shall expire June 30, 1941, unless the President shall sooner declare the existing emergency ceeded together very much along the very same line. It ended and the operation of the stabilization fund terminated." was not with the idea at all of reflecting on the Senator, but rather of expressing my approbation of the Senator's The Senator from Vermont argues that that was a sepa­ turn of mind and his general view of the subject that I rose rate provision in the Gold Reserve Act of 1934, that it has to interrupt him. been completely eliminated, and is just the same as if the · Mr. MALONEY. I thank the Senator from Nevada. I Supreme Court had declared it to be unconstitutional. think the founders clearly pointed out, Mr. President, that Mr. AUSTIN. Mr. President, will the Senator yield for a they had a feeling that, come an hour of emergency, there correction? was a need for delegating special and unusual power and Mr. McKELLAR. Yes. authority to the President of the United States. We have Mr. AUSTIN. I think the Senator is laboring under a recognized that sentiment of the founders, and have exer­ misapprehension as to the section to which I referred. I cised it in periods of emergency. We are now in such a call the Senator's attention to it. The conference report period of emergency; we are living in a mad world, which, refers to title m of the act approved May 12, 1933, which apparently, is more bewildered than at any other time in all relates to the exercise of the power under section 8 of arti­ its history. The fears of the world have been intensified to cle I of the Constitution to coin money and regulate the a very great degree in the last few weeks, and it is within value thereof, and not to the Gold Reserve Act of 1934. the realm of possibility that we are at this hour in the If the ·Senator is construing my debate regarding the shadow of war. Because of the turmoil abroad, and be­ separate and distinct powers as referring to the Gold Reserve cause of existing uncertainty here, it seems to me that we Act of 1934 he is in error, because I was following the report should place our trust in those who have a special knowl­ of the conferees which points to paragraph (b) (2) of sec­ edge of monetary affairs-those to whom we charge the tion 43, title ill, of the Emergency Farm Mortgage Act of responsibility of directing our monetary affairs. I do not 1933. think that we go outside the Constitution one step or that Mr. McKELLAR. Then, as I understand, the Senator we go outside the opinions or the aims or the vision of the does not argue as to subsection (c) of the Gold Reserve Act, founders 1 yard in continuing to give the President the au­ which reads as follows: thority that is asked for by this particular proposal. (c) All the powers conferred by this section shall expire 2 years I feel badly when I am not in accord with the views of after the date of enactment of this act, unless the President shall the Senator from Nevada, because I admire him and his sooner declare the existing emergency ended and the operation of the stabilization fund terminated, but the President may extend courage and his experience and his judgment so greatly, such period for not more than 1 additional year after such date but I cannot see any violation of any law or any tradition by proclamation recognizing the continuance of such emergency. of our country in granting this particular authority. I feel badly, too, for my sake, that I am denied the opportunity That it has been repealed or otherwise interfered with to vote for the conference report, simply because I think it except as to the time limit? is all important that the President should have that con­ Mr. AUSTIN. I make the claim that that is dead because tinuing authority. of its own limitation. Mr. McKELLAR, Mr. McCARRAN, and Mr. DANAHER Mr. McKELLAR. That is what I understood the Senator addressed the Chair. to say this morning, and I merely wanted to call his atten­ The PRESIDENT pro tempore. The junior Senator from tion to it. Connecticut [Mr. DANAHER] is on the list of speakers at this Mr. AUSTIN. If the Senator will yield, my interruption­ time. The Chair does not know whether or not he desires to to which the Senator so graciously yielded-had reference to speak. paragraph (2), which was referred to by me as being picked Mr. DANAHER. I do; but I shall be glad to yield to the out and separated from all the other parts of section 43. Senator from Tennessee. Mr. McKELLAR. The Senator may have done that; but Mr. McKELLAR. I will take only a few moments. I am he also said, as I understood him, that subsection (c) was perfectly willing to yield, of course, to the Senator from dead, that it was separate and apart from the rest of the act Connecticut. and was no longer a part of it, and that we could not revive Mr. DANAHER. I yield to the Senator from Tennessee. it after the date of expiration. That is the way I understood Mr. McCARRAN. Mr. President, will the Senator from the Senator's argument. Tennessee yield to me in order that I may have my remarks Mr. AUSTIN. That we could not revive it by language follow as closely as possible the remarks of the able senior which merely fixed a new expiration dat~ it being already Senator from Connecticut [Mr. MALONEY]?. dead. 193~ CONGRESSIONAL RECORD-SENATE 8547 Mr. McKELLAR. Yes. In that I disagree with the Sena­ act, and that is the purpose here. What we want to do is to tor; and I am going to offer at this point, not a direct deci­ extend this act; and, believe me, I think we will do it. sion on the subject, because there are none, as I understood Mr. AUSTIN. Another question. I want to give the Sena­ the statement of the Senator this morning, There are no tor full opportunity to meet these claims. decisions upon the part of our Supreme Court on the direct Mr. McKELLAR. I shan be glad to do so if I can. question whether in this situation a statute can be revived Mr. AUSTIN. The section to which the Senator is ad­ after the date of expiration of the particular powers; but I dressing his very able discussion is a section of the Gold desire to read what our Supreme Court has said. Reserve Act relating to the emergency fund, the stabilization In the case of Blair v. Chicago (201 U. S. 400), the Court fund; is it not? said, on page 475, in referring to a similar situation, the Mr. McKELLAR. Yes. opinion being by Mr. Justice Day: Mr. AUSTIN. It is all-comprehensive. It says: The rule is correctly stated tn Endlich on Statutes, section 294, All the powers conferred by thi~ section shall expire 2 years after as follows: "A statute which is amended is thereafter, and as to the date of enactment of this act unless the President shall sooner all acts subsequently done, to be construed as if the amendment declare the existing emergency ended and the operation of the had always been there, and the amendment itself so thoroughly stabilization fund terminated. becomes a part of the original statute that it must be construed, in view of the original statute, as it stands after the amendments Does not the Senator recognize the difference between a are introduced and the matters superseded by the amendments eliminated." statute which has no attachment to anything else that will keep it alive and the one we are considering, which is all­ Of course the Senator would not argue for a moment that comprehensive, which there is not anything to help out, and this statute could not have been amended. As I understand, which says that all the powers terminate? he admits that it could have been amended up until last Mr. McKELLAR. The Senator has asked me a question Friday night at 12 o'clock of June 30, or 1 o'clock of July 1. which I shall be very happy to answer if I can; and I think If it could be amended then, it can be amended now. This I can. statute is not dead, as the Senator argues, but is a part of I see a difference, of course; and the difference is tre­ the act: The only thing that has been interfered with-the mendously in favor of the act now before the Congress. only thing that has been put out of commission, so to The reason is this: In the Wendell case, a New York case, speak-is the date on which it will end. Now, the Congress, there was a provision that a certain railroad company unquestionably having the right to amend this act, does should commence to build a road within 4 years. The rail­ amend it by adding certain words. road company did not take a step toward building the road In justification of what I have already said, I want to within that time. It completely ignored the statute. Not a read the only case I have been able to find directly on the step was taken; and naturally it could have been argued by point; and this case is directly on the point. It is the case my distinguished friend, along the lines that he argued this of Crocker v. Crane (21 Wendell 211, 34 Am. Dec. 228). I morning, that that ended the matter, and that the original read first from the statement of the case: act was at an end. But the subsequent act of a year or two It further appeared that the construction of the road was not later was passed, which by implication revived the right to commenced until July 1836, after the expiration of the time build this road; and the road was built, and the action of limited in the original act of incorporation of April 14, 1832. The plaintiffs contended, however, that the provisions of that act were the railroad company was upheld. revived and continued by the act of May 7, 1836, by which the I say that that is a very much weaker case than the case time for commencing the w.ork was extended, and the judge so we have. We are dealing with an act which the Senator charged the jury against the request of the defendant. will not deny is in full' force and effect; every particle of it In delivering the opinion of the court, Judge Cowen said: is in effect except one thing, only one, and that one thing The second point of the defendant is not well taken. The act is the time of expiration of the powers of the President over of 1836 does not say in terms that the first act shall be revived- two important features of the act. A bill has been intro­ duced which, in my judgment, amply revives the act. It Let me read that again: does not use the word "revived"-no-but what does it say? The act of 1836- It provides as follows: Just like the act in question here- Subsection (c) of section 10 of the Gold Reserve Act of 1934- does not say in terms that the first act shall be revived; but it does the same thing by implication. The first act had expired by There cannot be any doubt about that act. There cannot its own provision- · be any doubt about subsection (c). The bill is just as good as if subsection (c) had been enumerated in the words of Just as this act expired. This part of the act had expired this bill, because it states: by its own provisions last Friday night- Approved January 30, 1934- because the road had not been commenced within 4 years. The last act declares that the time shall be extended, and then pro­ And here is the act approved January 30, 1934--­ fesses to amend the former act and repeal parts of it. The mean­ ing of the legislature is perfectly plain; and apt words are not as amended, is further amended to read as follows: essential. ''Is further amended to read as follows:" That is the identical case here. It is directly in point, and (c) All the powers conferred by this section shall expire June 30, in the limited time at my disposal I have found nothing to 1941, unless the President shall sooner declare the existing emer­ the contrary. gency ended and the operation of the stabilization fund terminated. Mr. AUSTIN. Mr. President, will the Senator yield at Therefore, Mr. President, taking the statement of what this this point? amendment will do, as given by our own Supreme Court in Mr. McKELLAR. I yield. the case referred to, Blair against Chicago, decided in 1905, Mr. AUSTIN. I do not want to interrupt the Senator at when it states that when an act is amended it is "to be con­ the wrong p1ace. · strued as if the amendment had always been there," it seems Mr. McKELLAR. I am glad to yield. to me that there cannot be the slightest question about the Mr. AUSTIN. I ask the Senator if he does not observe the matter. I thought so last week and I think so now a thousand difference between the statute he is discussing and the statute times stronger since I have examined the cases. . I run quite now under consideration. In that statute there was affirma­ sure there cannot be a particle of doubt about the power and tive language with reference to extension. In this statute authority of the Congress to pass this measure, and that it there is negative language with reference to termination. will date back as if it had been in the act originally, and it That is a great difference. would make the time July 1941. Mr. McKELLAR. The Court holds that that is not· o. Mr. AUSTIN. Mr. President, will the Senator yield once difference. The Court holds that the language in that case more? was imperfect, but that the purpose was to extend the pri~r Mr. McKEI .I .AR. I am glad to yield. 8548 ·coNGRESSIONAL -RECORD-SENATE JULY 5 Mr. AUSTIN. Suppose we should adjourn this session of subject were reported by a committee, I doubt whether the Congress, and that the Seventy-seventh Congress should pass entire Gold Act of 1934 would be reported in so many words a measure reading: in the new measure. All the powers conferred by this section shall expire June SO, Mr. AUSTIN. I have not claimed that the whole act was 1941, unless the President shall sooner declare the existing emer­ affected by this, but section 9 is what is affected, and all the gency ended and the operation of the stabilization fund terminated. powers conferred by that section expired. That is the point Does the Senator think that would extend the power? in this matter. Mr. McKELLAR. I do not know whether the particular Mr. McKELLAR. The general act itself is still in effect words the Senator has mentioned would be the proper ones to and in my judgment is perfectly good. use, but offhand I think it would extend the power. I think Mr. TAFT. In the Senator's opinion, where is the $2,000,- that the Congress had before the 30th of June 1939 full and 000,000 fund now? complete power to amend the act and extend the time, and I Mr. McKELLAR. It is in the hands of the Secretary of am sure the Senator woUld not disagree with that statement. the Treasury. It was last Saturday night; I suppose it still is. If it had the fUll power then, it has it now. The only verbiage Mr. TAFT. Has it not reverted to the general fund of which really refers to the act in any way is in the title, "to the Treasury? Is not that where it is? extend the time"; but that is immaterial. The act itself is Mr. McKELLAR. Does the Senator mean what has be­ what controls the decisions of the courts, and, in my judg­ come of the physical money? If so, I could not tell him. ment, our act will be upheld by the courts, if it is ever at­ Mr. TAFT. I suppose the gold is just where it was, in the tacked, and I doubt whether it ever will be attacked. State of Kentucky, between the Senator's State and my State. Mr. AUSTIN. Mr. President, will the Senator yield for Mr. McKELLAR. As to its figurative location, I imagine another question? the Secretary is patiently waiting to see whether the confer­ Mr. McKELLAR. I yield. ence report shall be agreed to, and if it is agreed to, the fund Mr. AUSTIN. Does the Senator think it makes any differ­ will be just where it has been since it was put in the Treasury. ence, so far as the effect of the language to which we have Mr. TAFT. Where would it be if the conference report been referring is concerned, whether it is adopted in a con­ should be rejected, in the opinion of the Senator? ference report today, or in a special, independent statute in Mr. McKELLAR. If no bill amending the act should be another session? passed, it would expire, and the fund woUld go back into the Mr. McKELLA~. It coUld be done either way. The meas­ Treasury. ure we have acted on is now before us, it has been passed by Mr. TAFT. Into the general fund. If it would go back both Houses, the House has adopted the conference report, into the general fund, it went back at midnight on June 30. and we will probably adopt the conference report this after­ On what other possible date could it go back? noon. If we do, it will be just as good an act of Congress Mr. McKELLAR. I think the Senator is ignoring the fact as we could possibly make it at any session. that whenever an amendment is adopted, as our Supreme Mr. AUSTIN. Let me call to the Senator's attention, with Court has held, in the case from which I read a few moments his kind permission, a case right in point on that question: ago, it is just the same as if the amendment had always been in the act; and the fund will be in the same situation. The legislature cannot give life to a dead act by amending certain of its provisions at a later session, so that, if the original Mr. TAFT. It seems clear to me that if the fund has re­ act is unconstitutional and void, the amending act is likewise verted, the power might be restored, but there would not be void. any money in the fund, bec·ause it would be necessary to re­ Citing Cobbs v. Home Insurance Company of New York appropriate the $2,000,000,000, as it was originally appropri­ (91 Southern 627; 18 Ala. App. 206), certiorari denied; ated. This was an appropriation out of the general fund to Ex parte Home Insurance Company of New York (91 South­ the stabilization fund. ern 922; 207 Ala. 712). Mr. McKELLAR. That would·be a question which might Mr. McKELLAR. From what is the Senator reading? arise. I doubt whether it will arise. I do not think the money , Mr. AUSTIN. That is from the Third Decennial Digest, will have to be reappropriated. I think the act itself, when it is amended, reappropriates. volume 25, under the topic "Statutes.'~ Mr. McKELLAR. It is not a decision of a court? Mr. TAFT. It cannot be an appropriation without being Mr. AUSTIN. It refers to a desision of the Alabama an appropriation. Court of Appeals. It is not a court decision itself. Mr. McKELLAR. If it is necessary to appropriate it, I Mr. McKELLAR. It does not report the decision? feel that it will be appropriated. Mr. AUSTIN. No. Mr. TAFT. I take it, then, the Senator is very doubtful Mr. McKELLAR. It probably refers only to the general about where the money is today. principle referred to by our own Supreme Court in the Mr. McKELLAR. No; I am not doubtful at all. It is in statement I have just read: the Treasury of the United States, where it has been all the time. A statute which is amended is thereafter, and as to all acts subsequently done, is to be construed as 1f the amendment has Mr. TAFT. And if we rejected the conference report today, always been there. the Senator would say that it would be restored to the general fund? If the act had been declared unconstitutional and a re­ Mr. McKELLAR. It would still be in the same place, and vival of the act was undertaken by an amendment, I imagine would be restored to the general fund, where it was before the author of the book felt that the revival also woUld be the bill was passed. unconstitutional. But there is no question of the constitu­ Mr. TAFT. Suppose we should reject the report; would tionality of the act here in question. That question has not the money go right back, or would the Senator favor sending been raised, and it cannot be raised. The act is on the books the matter to conference again? Just when would the Sena­ in full force and effect, and we are seeking to amend, not a tor have the money revert? dead act, not an unconstitutional act, but to amend a live act, Mr. McKELLAR. I would not do it at all. I would leave which is known as the Gold Act of 1934. it to the Secretary of the Treasury, and it would be honestly Mr. AUSTIN. Does the Senator conceive that an act done, I have every confidence that it woUld be fairly and which is dead for one cause can be more dead for another honestly done. The a.ctual physical location of the gold will cause? probably not change at all. Mr. McKELLAR. I do not. There is one portion of the Mr. President, that is all I care to say about the matter. act which the Senator says is dead. The act is not dead. We have a right to refer to an act by name. We need not MESSAGE FROM THE PRESIDENT set out in so many words the entire act in order to amend it. Messages in writing from the President of the United States · That is rarely done. It is not done in this case. It is not submitting nominations were communicated to the Senate by 1 proposed to be done in this case, and if a new bill on the _Mr. Latta, one of his secretaries. · 193~ CONGRESSIONAL RECORD-SENATE 8549

MESSAGE FROM THE HOUSE When, however, for one reason or another the operations in the various exchange markets become speculative or panicky in charac­ A message from the House of Representatives, by Mr. Cal­ ter, with abnormal fluctuations, then the stabilization fund steps loway, one of its reading clerks, informed the Senate that into the market and becomes active in buying and selling gold and Hon. SAM RAYBURN, a Representative from the State of Texas, foreign exchange for the purpose of minimizing fluctuations. had been elected Speaker pro tempore during the absence of Yet, just a.s the Senator from Michigan [Mr. VANDENBERG] the Speaker. · pointed out in his address the other night, were that stabiliza­ The message also announced that the House had passed a tion-fund proposal to come before us in the form of _a joint joint resolution

OREGON thank Thee. Now, out of the·infinite ease of Thy power and graciousness, may we strongly forget self. Remind us that we Robert W. Zevely, Prineville. must live·a mutual life in a mutual world, and where much ·is PENNSYLVANIA given much is expected. Grant us, 0 Lord, the wisdom to Arthur B. Schemer,. Bath. fashion as we feel, the courage to labor as we know, and the William s. Scheiry, Bechtelsv:i,lle. purpose to·do Thy will. · 0 Love supreme ~ we pause beside the Willard Price, Canadensis. river; an honored Member has passed through this strange Michael S. Travers, Castle Shannon. · house of life, and speechless sorrow has come to the cherished Tilghman S. Cooper, Coopersburg. home of peace and happiness. We pray Thee to lighten the Walter 0. Miller, Duncannon. weary load that the family must bear ·and make the weight Raymond D. Kehrer, Eagles Mere. Thine own. In the dear Redeemer's name. Amen. Charles H. Adams, Esterly. The Journal of the proceedings of Saturday, July 1, 1939, James N. Gardner, Glen Campbell. was read and approved. Katharine Olive McCoy, Grov~ City. Maurice M. Rodger, Hooversville. EXTENSION OF REMARKS James M. Eagen, Jermyn. Mr. MACIEJEWSKI. Mr. Speaker, I ask unanimous con­ Marie Bengele; Loretto. . sent to insert in the RECORD a speech made by me at the dedi­ Joseph C. McCormick, Marion Center. cation of the Cicero Ogden Grade Separation, in the town of Stephen M. Telep, Mayfield. Cicero, Ill., on June 30, 1939. Claude E. Musser, Millheim. The SPEAKER pro tempore. Is there objection to the Luther A. Strayer, Mount .Wolf. request of the gentleman from lllinois? Charles W. Aldrich, New Milford. There was no objection. William Leslie, Parkers Landing. William B. Johnston, Philipsburg. IMMINENCY OF WAR IN EUROPE Thomas V. Brennan, Plymo~th . Mr. BLOOM. Mr. S:r;eaker, by direction of the Committee Lela E. Randolph, Portland. on Foreign Affairs, I submit· herewith an adverse report on Mae Morgan Beagle, Watsontown. House Resolution 232. RHODE ISLAND The Clerk read as follows: James R. Brennan, East Greenwich. House Resolution 232 Resolved, That the President of the United States is hereby re­ SOUTH CAROLINA quested to transmit forthwith to the House of Representatives, if C. Lamar Richey, Abbeville. not incompatible with the public interest, such information as may be in his possession or in the files of the State Department which Eugene B. Mack, Elloree. indicates that actual war is imminent between certain countries on Martin H. Moore, La France. the continent of Europe. Marion J. Simpson, Laurens. Josephus S. Nichols, Leesville: Mr. BLOOM. Mr. Speaker, I have just been informed that the gentlewoman from Massachusetts [Mrs. RoGERS] has VIRGINIA been called out of the city, but this is the last day for calling Mary· Drewry, Capron. up the matter, and it will have to be acted upon. I was in­ James Long Haley, Cheriton·. · formed by the gentlewoman from Massachusetts [Mrs. Benjamin W. Councill, Holland. RoGERS] that she would be here today. Henry L. Munt, Hopewell. Mr. MARTIN of Massachusetts. · Mr. Speaker, may I say James D. Crawford, Keysville. that the gentlewoman from Massachusetts has been called Homo D. Gleason, Lovingston. . home on account of the serious illness of her uncle, and she Thomas B. Cochran, The Plains. wished me, if possible, to have this matter continued to some Wallace P. Ashburn, Virginia Beach. .. day when she could be present.· Merritt W. Foster, Williamsburg. Mr. BLOOM. I will be perfectly willing to have the matter WASHINGTON called up later, provided we do not lose any of our rights, Alfred J. Twining, Coulee City. because this is the final day for calling up the resolution. Mark L. Durrell, Deer Park. Mr. MARTIN of Massachusetts. I am perfectly willing, by George A. Hauber, Leavenworth. unanimous consent, for the gentleman to preserve any rights Charles E. Schutz, Lind. . he may have in the matter. Etta R. Harkins, Manette. The SPEAKER pro tempore. Without objection, the reso­ Tolaver T. Richardson, Northport. lution will be referred to the House Calendar, and .the gentle­ Harold F. Ottestad, Odessa. man from New York may reserve ·his right to call the matter Andrew J. Cesser, Port Angeles. up later. Joseph V. Mayrand, Poulsbo. There was no objection. John C. Cody, Republic . . . GOVERNMENT EXPENDITURES Will W. Simpson, Spokane. Bernard B. Pollard, White Salmon. Mr. RICH. Mr. Speaker, I ask unanimous consent to speak Royce H. Mitchell, Woodland. for 1 minute. Raymond M. Badger, Winthrop. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Pennsylvania? There was no objection. HOUSE OF REPRESENTATIVES Mr. RICH. Mr. Speaker, we closed the fiscal year on June 30 with a deficit of over $3,600,000,000. We spent last year WEDNESDAY, JULY 5, 1939 over $9,2&0,000,000, the greatest spending spree this Nation has ever seen during peacetime. It was greater by one­ The House met at 12 o'clock noon, and was called to order half million dollars than the year we paid the soldiers' by the Speaker pro tempore [Mr. RAYBURN]. bonus. The Chaplain, Rev. James Shera Montgomery, D. D., offered I believe the Members of Congress who are responsible for the following prayer: this great spending spree should have gold medals made Our Heavenly Father, Thou art ever very near us in tender out of the gold that is now stored in Kentucky, because of love and mercy. May never a day nor night pass unhallowed the fact they have made for themselves a medal that will but that we shall still be grateful for what the Lord hath always be a millstone around the neck of the people of done; for all the manifestatiqns of Thy holy presence we this Nation of ours.