3104 _CONGRESSIONAL RECORD-SENAT_E MAY 10 969. Also, petition of P. S. Harrison, editor Harrison's Re­ ports, New York City, favoring the Sirovich resolution SENATE .CH.Res. 95); to the Committee on Rules. WEDNESDAY, MAY 10, 1933 970. Also, petition of General Credit Corporation, New (Legislative day of Monday, May 1, 1933) York City, favoring Senate bill 747 and House bill 4551; to the Committee on Banking and Currency. The Senate met at 12 o'clock meridian, on the expiration 971. By Mr. McFADDEN: Petition of the executive com­ of the recess. mittee of North Valley County Farmers' Union, of Montana, Mr. ROBINSON of Arkansas. Mr. President, I suggest the signed by S. A. Hinerman, Mrs. R. L. Cookson, E. A. Eliason, absence of a quorum. John H. Le Corner, and W.R. Hinerman, calling for abolish­ The VICE PRESIDENT. The clerk will call the roll. ment of the Federal Reserve System, that the United States The legislative clerk called the roll, and the following Sen­ issue non-interest-bearing Treasury notes, that Congress ators answered to their names: enact the Frazier farmers' farm relief bill, pay the soldiers' Adams Copeland Kendrick Robinson, Ark. Ashurst Costigan Keyes Robinson, Ind. bonus, etc.; to the Committee on Banking and Currency. Austin Couzens King Russell 972. Also, petition of Wyalusing Local of the Dairymen's Bachman Cutting La Follette Schall League Cooperative Association, Inc., by Frank Rought, sec­ Balley Dale Logan Sheppard Bankhead Dickinson Lonergan Shipstead retary, Sugar Run, Pa., opposing restrictions of use of motor Barkley Dieterich Long Smith trucks on highways, the placing of trucks under jurisdic­ Black Dill Mc Carran Stelwer Bone Duffy McGill Stephens tion of Public Service Commission, classification as common Borah Erickson McKellar Thomas, Okla. carriers, and favoring reciprocal agreements with States as Bratton Fess McNary Thomas, Utah to licenses; to the Committee on Interstate and Foreign Brown Fletcher Murphy Townsend Bulkley Frazier Neely Trammell Commerce. Bulow George Norbeck Tydings 973. By Mr. RUDD: Petition of Railway Express Em­ Byrd Goldsborough Norris Vandenberg Byrnes Hale Nye VanNuys ployees, Local 808, International Brotherhood of Trainmen, Capper Harrison Overton Walcott New York City, favoring increased postage rates sufficient to Caraway Hastings Patterson Wheeler pay the cost of handling; to the Committee on the Post Carey Hatfield Pittman White Clark Hayden Pope Office and Post Roads. Connally Johnson Reed 974. Also, petition of General Credit Corporation, New Coolidge Kean Reynolds York City, favoring the passage of Senate bill 747 and House Mr. KEAN. I should like to announce the absence of my bill 4551; to the Committee on Banking and Currency. colleague the junior Senator from New Jersey [Mr. BAR­ 975. Also, petition of Whitestone Association, Local No. l, BOUR], owing to illness. I ask that this announcement may New York City, favoring the passage of the Black-Connery stand for the day. 5-day week and 6-hour day bill CS. 158 and H.R. 4557); to Mr. KENDRICK. I desire to announce that the Senator the Committee on Labor. from Illinois [Mr. LEWIS], the Senator from Oklahoma [Mr. 976. By Mr. SMITH of West Virginia: Resolution of the GORE], the Senator from New York [Mr. WAGNER], the Sena­ members of the John Brawley Post, No. 20, of the American tor from Virginia [Mr. GLASS], the Senator from California Legion, Charleston, W.Va., urging the repeal of the Tyson­ [Mr. McAnooJ, and the Senator from Massachusetts [Mr. Fitzgerald bill; to the Committee on World War Veterans' WALSH] are necessarily detained from the Senate on official Legislation. business. 977. By Mr. STRONG of Pennsylvania: Petition of Ansell The VICE PRESIDENT. Eighty-five Senators have an­ E. McMullin Post, No. 392, American Legion, Reynoldsville, swered to their names. A quorum is present. Pa., recommending that "all contracts for the carrying of MESSAGE FROM THE HOUSE mail be awarded on competitive bidding to the lowest respon­ A message from the House of Representatives, by Mr. sible bidder "; to the Committee on the Post Office and Post Chaffee, one of its clerks, announced that the House had Roads. agreed to the report of the committee of conference on the 978. By Mr. SUTPIDN: Petition of Reserve Officers' Asso­ disagreeing votes of the two Houses on the amendments of ciation, Department of New Jersey, protesting against weak­ the Senate to the bill CH.R. 3835) to relieve the existing ening of national defense and against any reduction in the national economic emergency by increasing agricultural pur­ number of officers in the Regular Army; to the Committee chasing power, to raise revenue for extraordinary expenses on Military Affairs. incurred by reason of such emergency, to provide emergency 979. By the SPEAKER: Petition of the Reserve Officers' relief with respect to agricultural indebtedness, to provide Association of the United States, Department of New Jersey, for the orderly liquidation of joint-stock land banks, and protesting against any further weakening of the national for other purposes, and that the House insisted upon its defense, and in particular against any reduction in the num­ disagreement to the amendment of the Senate numbered 83 ber of officers in the Regular Army or in the amount of to the said bill. training given to reserve officers; to the Committee on Mili­ The message also announced that the House had disagreed tary Affairs. to the amendments of the Senate to the bill CH.R. 4589) 980. Also, petition of the city of Racine, Wis., petitioning making appropriations for the government of the District Congress to adopt a 30-hour work week measure with proper of Columbia and other activities chargeable in whole or in minimum-wage provisions attached without undue delay; to part against the revenues of such District for the fiscal year the Committee on Labor. ending June 30, 1934, and for other purposes; agreed to the 981. Also, petition of the Sixty-six Nonpareil Americans, conference asked by the Senate on the disagreeing votes of Inc., petitioning the President of the United States, the Con­ the two Houses thereon, and that Mr. CANNON of Missouri, gress now in session, and the Governor of the State of Mr. BLANTON, Mr. BUCHANAN, Mr. TABER, and Mr. BACON Alabama, in their respective powers, privileges, and discre­ were appointed managers on the part of the House at the tions, to intercede and save the lives and liberties of the nine conference. Scottsboro boys whose fate now pends before the courts of The message further announced that the House had agreed the State of Alabama and the United States Supreme Comt; to the report of the committee of conference on the dis­ to the Committee on the Judiciary. agreeing votes of the two Houses on the amendments of 982. Also, petition of the American Transit Association, the Senate to the bill (H.R. 4606) to provide for cooperation requesting to enact into law House bill 5009; to the Commit­ by the Federal Government with the several States and tee on the Judiciary. Territories and the District of Columbia in relieving the 983. Also, petition of the city of Cambridge, Mass., con­ hardship and suffering caused by unemployment, and for demning the persecution reported to be committed against other ptirposes. members of the Jewish faith in Germany; to the Committee The message also announced that the House had disagreed on Foreign Affairs. to the amendment of the Senate to the bill CH.R. 5480) to 1933 CONGRESSIONAL RECORD-SENATE 3105 provide full and fair disclosure of the character of securities exclusive of labor, contingent expenses of the Senate), which, sold in interstate and foreign commerce and through the with the accompanying papers, was referred to the Com­ mails, and to prevent frauds in the sale thereof, and for mittee on Appropriations. other purposes; agreed to the conference asked by the Senate AWARDS OF THE MIXED AND THE TRIPARTITE CLAIMS COMMISSIONS on the dis·agreeing votes of the two Houses thereon, and that The VICE PRESIDENT laid before the Senate a letter Mr. RAYBURN, Mr. HUDDLESTON, Mr. LEA of California, Mr. from the Secretary of the Treasury, transmitting a draft of PARKER of New York, and Mr. MAPES were appointed mana­ proposed legislation to amend the Settlement of War Claims gers on the part of the House at the conference. Act of 1928 for the purpose of extending for one additional The message further announced that the House bad dis­ year from March 10, 1933, the time within which American agreed to the amendments of the Senate to the bill (H.R. nationals who have obtained awards from the Mixed Claims 5081) to provide for the common defense; to aid interstate Commission, United States and Germany, or from the Tri- commerce by navigation; to provide fiood control; to pro­ . partite Claims Commission, United States, Austria, and mote the general welfare by creating the Tennessee Valley Hungary, may make application to the Treasury for the Authority; to operate the Muscle Shoals properties; and to payment of such awards, which, with the accompanying encourage agricultural, industrial, and economic develop­ papers, was referred to the Committee on Finance. ment; requested a conference with the Senate on the dis­ agreeing votes of the two Houses thereon, and that Mr. REPORT OF THE RECONSTRUCTION FINANCE CORPORATION McSWAIN, Mr. HILL of Alabama, and Mr. JAMES were ap­ The VICE PRESIDENT laid before the Senate a letter pointed managers on the part of the House at the conference. from the chairman and secretary of the Reconstruction The message also announced that the House had agreed to Financ,e Corparation, submitting, pursuant to law, a report a concurrent resolution (H.Con.Res. 18) authorizing the covering the operations of the Corporation for the first Clerk of the House, in the enrollment of H.R. 3835, to strike quarter of 193'3, January 1 to March 31, 1933, inclusive, and out the word" basic" where it appears in subsection (3) of for the period from the organization of the corporation on section 8, in which it requested the concurrence of the February 2, 1932, to March 31, 1933, inclusive, which, with Senate. the accompanying papers, was ref erred to the Committee ENROLLED BILLS SIGNED on Banking and Currency. The message further announced that the Speaker had REVISION OF ACCOUNTING MEmODS affixed his signature to the following enrolled bills, and they The VICE PRESIDENT laid before the Senate a letter were signed by the Vice President: from the Comptroller General of the United States, trans­ H.R. 48. An act to extend the time for completing the mitting, pursuant to Senate Resolution 350, Seventy-second construction of a bridge across the Missouri River at or near Congress, a report relative to the savings that may be Kansas City, Kans.; effected through the reorganization, centralization, consoli~ H.R. 1596. An act to extend the times for commencing dation, and/or elimination of accounting records, account­ and completing the construction of a bridge across the Pee ing and audit procedures, disbursing and collecting offices, Dee River and a bridge across the Waccamaw River, both and purchasing and warehousing activities of the Govern­ at or near Georgetown, S.C.; ments of the United States and the District of Columbia, H.R. 4127. An act to extend the times for commencing and which, with the accompanying report, was ordered to lie completing the construction of · a bridge across the Wac­ on the table and to be printed. camaw River near Conway, s.c.; and PETITIONS AND MEMORIALS H.R. 4491. An act to extend the times for commencing The VICE PRESIDENT laid before the Senate the follow­ and completing the construction of an overhead viaduct ing joint resolution of the Legislature of the State of Cali­ across the Mahoning River at Struthers, Mahoning County, fornia, which was referred to the Committee on Banking Ohio. and Currency: APPROPRIATION PROVISIONS PERTAINING TO THE STATE DEPARTMENT Assembly Joint Resolution 4. relative to memoralizing Congress The VICE PRESIDENT laid before the Senate a com­ to enact the Ludlow unemployment bill munication from the President of the United States, trans­ Whereas there is pending in Congress the Ludlow unemploy­ mitting three drafts of proposed provisions pertaining to ment bill, H.R. 5317, calling for the creation of a Federal indus­ trial commission to aid in the stabilization of employment in appropriations for the Department of State for the fiscal industry, agriculture, and commerce, with a view to formulating years 1933 and 1934, which, with the accompanying papers, such plans and recommending such legislation as will enable was referred to the Committee on Appropriatio-ns. employees to obtain a saving wage and investors a reasonable dividend; and CLAIMS ALLOWED BY THE GENERAL ACCOUNTING OFFICE Whereas the prevention of recurrent periods of industrial pros­ The VICE PRESIDENT laid before the Senate a com­ tration and unemployment is the greatest problem of our age; and _munication from the President of the United States, trans­ Whereas this Nation is experiencing a period of industrial, agri­ mitting, pursuant to law, a schedule of claims, amounting to cultural, and financial stress with over 5,000,000 willing workers $13,569.10, allowed by the General Accounting Office, as unemployed: Now, therefore, be it covered by certificates of settlement under appropriations Resolved by the Assembly and the Senate of the State of Cali­ fornia, jointly, That the Congress of the United States of America the balances of which have been carried to the surplus fund be hereby memorialized and earnestly urged to enact said bill, and of the Treasury (for the service of the Navy Department), the President and Vice President be likewise memorialized and which, with the accompanying papen;, was referred to the urged to support said bill; and be it further Resolved, That the chief clerk of t.t.e assembly be, and is hereby, Committee on Appropriations. directed to transmit copies of this resolution to the President and SUPPLEMENTAL ESTIMATES, LEGISLATIVE ESTABLISHMENT Vice President of the United States, to the Speaker of the House of Representatives, and to Senators and Representatives of Cali­ Thf! VICE PRESIDENT laid before the Senate a commu­ fornia in the Congress of the United States. nication from the President of the United States, transmit­ ting a supplemental estimate of appropriation pertaining to The VICE PRESIDENT also laid before the Senate the the legislative establishment under the Architect of the following concurrent resolution of the Legislature of the Capitol, fiscal year 1933, in the sum of $5,000, for main­ Territory of Hawaii, which was referred to the Committee tenance of the Senate Office Building, which, with the ac­ -0n Territories and Insular Affairs: companying papers. was referred to the Committee on Whereas section 41 of the organic act, being "An act to provide Appropriations. a government for the Territory of Hawaii", now, in effect, pro­ vides that the legislature shall meet on the third Wednesday in The VICE PRESIDENT also laid before the Senate a com­ February of every odd-numbered year; and munication from the President of the United States, trans­ Whereas tax returns are not made until the month of March mitting a supplemental estimate of appropriation pertaining of each year and as a consequence the income of the Territory and its various subdivisions is not ascertainable with any degree to the legislative establishment, United States Senate, fiscal of certainty until such returns are made, and by reason of such year 1933, in the sum of $20,000 (for miscellaneous items, fact the legislatw·e of the Territory is not in the time given the 3106 CONGRESSIONAL RECORD-SENATE MAY 10 data necessary to balance the budget of the Territory: Now, there· of Louisiana, endorsing Hon. HUEY P. LONG, a Senator from fore, be it the State of Louisiana, condemning attacks made upon him Resolved by the House of Representatives of tne Territory o/ Hawaii (the senate concurring). That Congress be requested to and remonstrating against a senatorial investigation of his amend section 41 of the Organic Act of Hawaii to the end that alleged acts and conduct, which were referred to the Com­ regular sessions of the legislature be held in Honolulu on the mittee on the Judiciary. third Wednesday in March in every odd-numbered year; and be it further He also laid before the Senate several letters in the nature Resolved, That copies of this concurrent resolution be for­ of petitions from sundry citizens of the State of Louisiana, warded to the President of the United States, the President of praying for a senatorial investigation of alleged acts and the Senate of the United States, the Speaker of the House of Rep­ conduct of Hon. HUEY P. LONG, a Senator from the State of resentatives of the United States, and to the Delegate to COilo"Tess trom Hawaii. Louisiana, which were referred to the Committee on the THE HOUSE OF REPRESENTATIVES OF THE Judiciary. TERRITORY OF HAWAil, He also laid before the Senate a letter from .John D. Ewing, Honolulu, Territory of Hawaii, April 24, 1933. president the Ewing newspapers, of Louisiana, transmitting We hereby certify that the foregoing concurrent resolution was adopted in the House of Representatives of the Territory of Ha· an editorial from the New Orleans States, in its issue of waii on April 24. 1933. Sunday, May 7, 1933, entitled "The Price Louisiana is Pay­ HERBERT N. AHUNA, ing for Longism ",which was referred to the Committee on Speaker House of Representatives. the Judiciary. JAS. S. ACHONG, Assistant Clerk House of Representatives. He also laid before the Senate a letter, in the nature of a THE SENATE OF THE TERRITORY OF HAWAII, memorial, from the San Antonio Manufacturers' Association, Honolulu, Territory of Hawaii, April 24, 1933. signed by its secretary, of San Antonio, Tex., remonstrating We hereby certify that the foregoing concurrent resolution was against the exemption of imports from the operations of adopted in the Senate of the Territory of Hawaii on April 21, 30-hour-week work legislation, which was refeITed to the 1933. Committee on the Judiciary. GEO. P. COOKE, President of t~ Senate. He also laid before the Senate the petition of "The Free­ ELLEN D. SMYTH, the-Scottsboro-Boys Marchers ", proposed by the League of Clerk of tne Senate. Struggle-for-Negro Rights and endorsed by the National The VICE PRESIDENT also laid before the Senate a let­ Scottsboro Action Committee, praying that no discrimination ter from the Governor of South Carolina, transmitting a be practiced in the exercise of civil rights by reason of race, petition signed by every member of the House of Repre­ nationality, or color, which was referred to the Committee sentatives of South Carolina, excepting two, recommending on the Judiciary. the appointment of William Pierce Drennon, an orphan, of He also laid before the Senate a resolution adopted by the Abbeville County, S.C., as a page in the Senate or House of city government of Chelsea, Mass., protesting against the Representatives, or to some other position, which, with the closing of the United States Naval Hospital located in accompanying petition, was referred to the Committee on Chelsea, which was referred to the Committee on Naval Rules. Affairs. He also laid before the Senate a resolution adopted by He also laid before the Senate a resolution adopted by the the Veterans' Postal Employees' Association of Philadelphia, Eastern Synod of the Reformed Church in the United States, Pa., favoring the passage of legislation permitting the op­ favoring necessary governmental action to feed, clothe, and tional retirement rather than the compulsory retirement of house innocent and helpless victims of the economic collapse. Federal employees who have completed 30 years' service, which was ordered to lie on the table. :which was referred to the Committee on Appropriations. He also laid before the Senate a resolution adopted by He also laid before the Senate a resolution adopted by the League of Catholic Women of Detroit, Mich., felicitat... the Reserve Officers' Association of the United States, De­ ing the President of the United States on his selection of partment of New Jersey, protesting against the weakening Hon. Frank Murphy, former mayor of Detroit, Mich., as of the national defense, and particularly against any reduc­ Governor General of the Philippine Islands, which was tion in the number of officers of the Regular Army or in the ordered to lie on the table. amount of training given to reserve officers, which was Mr. FLETCHER presented a concurrent resolution of the refeITed to the Committee on Appropriations. Legislature of the State of Florida, favoring the immediate He also laid before the Senate a letter in the nature of federalization of all of the Gulf Coast Highway and the allo­ a petition from Dr. Fayette C. Ewing, of Alexandria, La., cation of funds to Florida for the construction of such high­ praying for continuance of the investigation by the Special way, which was referred to the Committee on Post Offices Senate Committee on Campaign Expenditures of the Lou­ and Post Roads. isiana senatorial election of 1932, which was referred to the

insurance. But I am equally anxious that they be not THE MUTUAL LIFE INSURANCE CO. defrauded of their savings by unscrupulous or even vicious management of the companies which may be carrying their D. F. Houston, president______$100, 000 $125,000 insurance. F. L. Allen, vice president__------40, 000 40, 000 G. K . Sargent, vice president______40, 000 40, 000 When we learn that large companies of the United States W. ShirId s, vice president______31, 250 40,000 since the depression began have increased salaries of ex­ P. M . Foshay, vice president______30, 000 30,000 ecutive officials to such aggregates as $200,000 per year, to say nothing of other extravagances in management, while NEW YORK LIFE INSURANCE CO. at the same time they have violated their contractual obliga­ T . A. Buckner, president ____ ------$100,400 $125, 400 tions to the extent of denying loans to policyholders on the W. Buckner, vice president______55,360 55,400 policies and have suspended payments under the cash-sur­ T. A. Buckner, Jr., assistant secretary______8,604 10,000 A. L. Aiken, vice president ______45, 000 45, 000 render clause, it is high time that the United States Senate J. C. McC11ll, vice president______56, 200 55,000 take note of what is going on. L. H . McCall, secretary ___ ------18, 892 18,000 46,400 45,000 The very purpose of insurance is to protect the policy­ H. Palagano, treasurer __ ------holder against the proverbial rainy day. How tragic then it THE PRUDENTIAL INSURANCE CO. OF AMERICA must be when the rainy day comes and the policyholder learns that he is denied the benefits for which he has been E. H. Duffield, president______$125, 000 $125, 000 F. D'Olier, vice president______75, 000 75, 000 paying throughout the years. Such practice results in the G. W. Munsick, vice president______48, 000 50,000 defeat of the very purpose of insurance and in irreparable J. W. Stedman, vice president______43, 000 43, 000 injury to the policyholder. J. K. Gore, vice president______43, 000 43,000 There should be a thorough Federal investigation of the I I On April 2 the Tribune printed a New York dispatch announcing subject; but, unfortunately, the National Government at that the salary of President Duffield, of the Prudential, and its present has no authority whatever over insurance companies. other high officers had been cut 20 percent; that the salary of They are State institutions, and the United States Supreme President Parkinson, of the Equitable, had been cut to $96,000 Court has decided that insurance is not commerce and a year; and that the Mutual Life, the New York Life, and the Metropolitan had cut or would cut their higher officials' salaries therefore not within the commerce clause of the Federal 10 to 15 percent. All this "'8 later than the 1932 schedule printed Constitution. This situation should be corrected. There- above. \ 3110 .CONGRESSIONAL RECORD-SENAT;E MAY 10 AMENDMENT TO THIRD DEFICIENCY APPROPRIATION BILL The Corporation endeavored especially to bolster up banks in the summer and fall of 1932, and undoubtedly we saved a great Mr. ASHURST and Mr. HAYDEN submitted an amend­ many institutions and their depositors; but men and machines ment proposing to appropriate $10,000, payable from tribal can only stand a certain amount of strain, and by the 4th of funds on deposit to the credit of Indians of the Truxton March chaos was upon us. State after State declared moratoriums, both bank and law, Canyon Reservationt Ariz., for assisting in the eradication until it became necessary for President Roosevelt to make the bank of scabies in the livestock of such Indians, intended to be holiday Nation-wide. proposed by them to House bill 5390, the third deficiency Following that were days and nights of hectic effort to deter­ appropriation bill, which was ordered to lie on the table and mine upon the next step, culminating in the remarkable speech by President Roosevelt on the banking situation, which was heard to be printed. and read, I should say, in every hamlet of the Nation. And it is SALE AND DISTRIBUTION OF DAIRY PRODUCTS IN THE DISTRICT doubtful if any speech was ever more easily understood or better accepted. It gave the people confidence in their Government Mr. KING submitted the following resolution CS.Res. 76), and increased their confidence in their President. which was referred to the Committee on the District of The President stated that only sound banks would be permitted Columbia: to open, and the judgment of what constituted a sound , bank was not left to the determination of the people in charge of the bank. Whereas it is claimed that price levels in dairy commodities Thousands of banks were permitted to open on a limited-with­ within the District of Columbia indicate that competition in trade drawal basis and many others are in the hands of conservators. in such commodities has become stifled therein, and that the cost These banks are now receiving the undivided attention of the io the consumer of such commodities exceeds the cost to the pro­ Reconstruction Finance Corporation and the Comptroller's office ducer by more than a fair margin of profit to the producer: and, to a large extent, the Treasury, as well as the many State Therefore be it banking departments. Resolved, That the Committee on the District of Columbia, or Naturally every bank in the hands of a conservator or that is any duly authorized subcommittee thereof, is authorized and open on a limited-withdrawal basis wants to be the first waited directed to investigate conditions with respect to the sale and dis­ upon in the plan of reorganization, and as a result our forces are tribution of milk, cream, ice cream, or other dairy products within burning the midnight oil. the District of Columbia with a view to determining particularly We have invested and in the course of closing more than whether any individual, partnership, or corporation, whether re­ $50,000,000 in preferred stock in banks. In each instance we first siding in the District of Columbia or elsewhere, is operating within make a thorough examination of the bank. We feel that it is such District under any contract, combination in form of trust or necessary to be more careful in subscribing for stock and in be­ otherwise, or is a party to any conspiracy, in restraint of trade or coming stockholders in banks than in lending to banks for the commerce in any such dairy products, or in any way monopolizing reason that the public will have every right to assume when such trade within such District. The committee shall report to the Government subscribes for stock in a bank that that bank the Senate as soon as practicable the results of its investigations, will be thoroughly sound. together with its recommendations, if any, for necessary remedial Most of these reorganizations entail substantial loans to the legislation. old banks in order that the depositor may have as large a per­ For the purposes of this resolution the committee, or any duly centage as possible of his credit balance made immediately avail­ authorized subcommittee thereof, is authorized to hold such hear­ able. The percentage of deposits that can be made available in ings, to sit and act at such times and places during the sessions this way varies with localities and to a large degree measures and recesses of the Senate in the Seventy-third Congress until conditions in that particular locality. the final report is submitted, to require by subpena or otherwise In some instances, where new banks are organized, the common the attendance of such witnesses and the production of such stock is subscribed for by depositors of the old banks, the Recon­ books, papers, and documents, to administer such oaths, to take struction Finance Corporation matching dollar for dollar With such testimony, and to make such expenditures as it deems ad­ preferred stock. In others old banks are reorganized by freezing visable. The cost of stenographic services to report such hearings a percentage of the deposits to provide the common capital. shall not be in excess of 25 cents per hundred words. Where loans are made on these frozen assets to provide· liquidity, it is the purpose of the Corporation to carry such loans, giving MESSAGES FROM THE PRESIDENT time for orderly liquidation and the best possible results for the Messages in writing from the President of the United depositors and stockholders of the old institutions. Our largest single subscription for preferred stock is $12,500,000, States submitting several nominations were communicated and our smallest to date $12,500, the $12,500,000 going to Detroit to the Senate by Mr. Latta, one of his secretaries. and the $12,500 to Texas. SERVICES OF RECONSTRUCTION FINANCE CORPORATION As I see it, there is no reason why even sound licensed banks should not avail themselves of the privilege of issuing preferred Mr. SHEPPARD. Mr. President. I present. for publica­ stock and selling it to the Reconstruction Finance Corporation tion in the RECORD, an address by Hon. Jesse H. Jones, di­ in order to provide greater liquidity and to put themselves in rector of the Reconstruction Finance Corporation, before the better position to make loans to their customers, to the end that business and trade may be gotten under way. American Society of Newspaper Editors at Washington, D.C., All banks have had losses and, however sound, all have a cer­ April 28, 1933. tain amount of slow paper. It was the intention of the President There being no objection, the address was ordered to be and of Congress to provide banks with every possible facility for making credit plentiful and getting business started again. printed in the RECORD, as follows: Naturally, bankers are timid about extending credit, and, indeed, I appreciate the opportunity of addressing you and wish to good borrowers are ttmid about borrowing, with uncertainty con­ thank my friend. David Lawrence, for the invitation. tinually confronting them. But under the President's program There is no set of men for whom I have greater regard than you and with all these facilities it is my firm belief that the bankers and those of your profession, and no class has so great an i.nfiu­ of the country and the Federal Reserve banks should encourage ence upon the affairs of the world. borrowers where loans can be made on a safe basis, measured by The conditions through which we have passed and are passing the ordinary yardstick, and people put to work. will unquestionably leave a lasting influence upon our genera­ If everyone is required to liquidate, and business done on a cash tion. Let us hope that it does not extend beyond. basis, unemployment will increase to the point of national disaster. The reasons for these conditions are more easily understood After all, it is the money borrower who gives employment, buys than is the way out, but undoubtedly order is being restored materials, and makes business. and with it a wider and deeper interest in public affairs . . I doubt I am not so sure but that it would be helpful 1f all banks, the if any of us has ever felt quite so keenly that degree of responsi­ best and the most liquid, were required to increase their capital bility for the general welfare as he does now, and the result of the structures by the issuance of preferred stock to be sold, either to last Presidential election was evidence of the determination of our their present stockholders or to the Reconstruction Finance Cor­ people to right conditions. poration. That we have started out of the tangled maze under an inspir­ A billion dollars of added capital to our banks would expand ing leadership that is bold and unafraid can be accepted as an banking facilities and bank credit in a multiplied form. It would assured fact. build up the morale of our bankers and give them a sense of The eyes of the world and the hope of the world are centering security which would encourage them to confidence and action. on Franklin D. Roosevelt as much now as was true of Woodrow Of our $682,000,000 loans to banks and trust companies, more Wilson in 1918. No President of the United States ever faced a than $200,000,000 is to banks that are members of the Federal greater task than Franklin Roosevelt faces at this time, and none Reserve System, and it is the hope of our directors, as I am sure ever enjoyed greater confidence. His courage and determination it is the hope of Secretary of the Treasury William H. Woodin are admirable, as is his comprehension of world conditions. that these member banks wm find it desirable to get their accom­ People in all walks and of all political faiths are willing to modations from the Federal Reserve banks and thereby lessen the accord him a free hand. Congress is giving him the power to act-­ burden on the United States Treasury. to correct on the spot, as it were. Under section 10 (b) of the Glass-Steagall bill and the new We in the Reconstruction Finance Corporation can see, as I am legislation, all banks, State and National, whether members of the sure you gentlemen see, decided signs of improvement. Federal Reserve or not, can bClrrow from Federal Reserve banks on The work of the Reconstruction Finance Corporation has been their assets, r~gardless of character. Naturally the Fed.era! Reserve so far-reaching that I should like to review it, but time will not banks should not be expected to make unsound loans, but they can permit of that except in the sketchiest sort o! way. lend on slow paper, just as the Reconstruction Finance Corpora- 1933 CONGRESSIONAL RECORD-SENATE 3111 tlon can lend on slow paper. They can lend at lower rates and tion and study of self-liquidating loans sometime cause us to be without burden to the Treasury. charged with too much red tape, but there is no red tape in the It is as much the responsibility of Federal Reserve management Corporation, nor is there unnecessary delay. to meet this situation as it is of the United States Government, During periods of depression there is a constant search for through the Reconstruction Finance Corporation, and to the signs of business revival; and while I have no intention of enter­ extent that the Federal Reserve makes these loans the demand by ing the field of prediction, I should like to leave a hopeful thought Reconstruction Corporation on the United States Treasury will with you-we have a resourceful nation, both in natural resources be reduced. and in men, and are espeeially fortunate at this time in having a These times require the willing cooperation of the Federal Re­ leader in whom the people have implicit confid-ence. serve banks, the Comptroller of the Currency, State banking au­ thorities, and the Reconstruction Finance Corporation. I am glad REGULATION OF PUBLIC UTILITIES-ARTICLE BY E. MICHAEL WHITE to add that at recent meetings this cooperation has been evidenced. Mr. DILL. Mr. President, I ask unanimous consent to It can no longer be regarded as a disgrace for a bank or banker in RECORD to be found in the borrowing class no more than an insurance have inserted the Appendix of the an article on company, a mortgage company, the Federal land banks, or, indeed, public utility regulation, by E. Michael White, appearing in any other money-lending agency. the Nation of date of May 3, 1933. It is our expectation that the home-l-0an banks will soon relieve There being no objection, the article was ordered to b& us of loans to building and loan associations and that the new Farm Credit Administration will take care of loans to Federal printed in the RECORD, as follows: land banks, joint-stock land banks, livestock-credit corporations. (From The Nation, May 3, 1933) Federal intermediate-credit banks, and regional agricultural-credit corporations. PUBLIC FUTILITY REGULATION That will leave the Reconstruction Finance Corporation with By E. Michael White banks, trust companies, mortgage companies, credit unions, insur­ The ability of the public-utilities monopoly to keep rates up to ance companies, railroads, self-liquidating loans, and loans for the 1929 level has been one of the bright spots in the depression­ marketing and exporting of farm products. that is, bright for the companies. It is a major problem for the Our loans to railroads, of approximately $350,000,000, are con­ consumer with a reduced income. In the 3 % yea.rs since No­ sidered by some as more or less doubtful; but, in my belief, most vember 1929 all other prices have dropped with unbelievable ra­ of these loans will either be collected or put on an entirely sound pidity to unbelievably low levels. This drop in prices has been basis through railroad reorganization. accompanied by reduced incomes. Why have utility rates escaped It is not unlikely that when these reorganizations are under­ the deflationary process? The answer is that the purchaser of a taken the Reconstruction Finance Corporation may be called upon competitive product or service is at the mercy of the law of supply to furnish additional funds, and in doing this these new funds, and demand and the vagaries of a competitive niarket, while the as well as previous advances, could become preferred claims. purchaser of gas, electricity, and telephone service is "protected" Some of our railroad loans, in my own opinion. have been wisely by public-utility regulation. This regulation, which preserved made and some not, but undoubtedly the Reconstruction Finance utility properties from confiscation, so-called, in periods of rising Corporation can be helpful in reorganizing railroads and in put­ prices, has utterly failed to protect the consumer in a period of ting their capital structures on a sounder basis. Indeed, until the falling prices. The facts tell the story. investing public can be brought back into the bond market, it In September 1929 the food bill for a typical workingman's will be necessary for the Government to furnish them with credit. family in New York City was $381.58 per year. In February 1933 I can conceive of the necessity arid the desirability of the Gov­ the bill had been reduced to $212.65, a drop of 44 percent. In ernment taking a strong position in financing the railroads. This September 1929 the same family paid $97 .80 annually for three can be safely done under the proposed coordination to eft'ect necessary services furnished him by the great utility companies. economy. He paid $4 a month for his telephone, for which the New York We have all been disappointed at the small amount of self­ Telephone Co. allowed him 66 calls; $2.30 to the Consolidated Gas liquidating loans we have been able to make. The law provides Co. for 2,000 cubic feet of gas; and $1.85 to the New York Edison that these loans may be made to States or their political subdi­ Co., a subsidiary of the same Consolidated Gas Co., for 25 kilowatt­ visions and to a certain selected group of private corporations for hours of electricity per month. In February 1933 he paid $4.25 construction projects which fill an economic need and are self­ for the telephone, $2.30 for the gas, and $2.30 for the electricity, Uqu1dating in character; that is, that the cost will be returned a total for the year of $106.20. In other words, his annual bill within a reasonable time by means of tolls, fees, rents, and such for the three services increased $8.40, or 8 percent. During the other charges as can be made, other than taxation. · same period factory employment decreased 44 percent in New York The variety of projects that have been offered for our consid­ state, and factory pay rolls dropped 60 per cent. eration ranges from intracoastal canals to bathing pools, from The electric bill of the average domestic consumer in the Nation 40-story market houses to subriver tunnels, from floating drydocks increased from $31.65 in 1929 to $33.64 in 1931. To be sure, he to airplane hangars. got more current for his money, owing to a decrease in the rate We have been able to find ways to lend to many small com­ per kilowatt-hour throughout the Nation of approximately 7 per­ munities for waterworks and sewers and, in some instances, for cent. During 1.;he same period, however, his income dropped ap­ light plants. We have made a few loans that carry water to arid proximately 45 percent, and a larger share of that reduced income land and one large loan that will carry electricity to a great city. went to pay what the economists call "rigid" utility prices. In We have also made loans under this provision of the act to addition to causing hardship for the individual consumer, the State institutions of learning for construction of dormitories and increasingly large share of our national income which is required have approved a very limited number of housing loans. to pay these " rigid " prices is a major barrier to economic There is a wide difference in opinion as to the advisability of recovery. housing loans, but they can pi:obal:1iy be justified especially where Now let us look at the dividend record of the utility companies new buildings replace old ones. such as slum clearance, and during the depression. In New York State total dividend pay­ because of the employment and stimulation of trade that they ments to gas and electric companies increased from $72,020,334 in provide. 1929 to $89,806,855 in 1931. This was in addition to increases in We have only authorized approximately $200,000,000 under the surplus. The companies serving New York City, most of which classification of self-liquidating loans and that includes $60,- are owned by the Consolidated Gas Co., increased their accumu­ 000,000 to the San Francisco bridge project and $13,000,000 for lated surpluses during this period from $223,458,282 to $251,- spanning the Mississippi River at New Orleans. Our directors and 809,399. In 1932 Brooklyn Edison, in addition to paying 8 percent engineers have strained every effort to make these loans qualify, on its overcapitalized common stock, increased its surplus by al­ but, under the law, they must and should be adequately secured. most $3 ,000,000. (That surplus had increased 250 percent in the We have authorized a total of $2,700,000,000 of loans. Of this past 5 years.) The theory of a surplus is that it is built up in the sum, $177,000,000 was canceled, $422,000,000 not yet disbursed, fat years to provide for the lean. and $448,000,000 has been repaid, so that we have outstanding at The rate of return on the book value of common stock of the .the present time loans aggregating $1,650,000,000, and that includes New York utilities ranged from 8 percent in the case of Brooklyn $234,000,000 relief to States. Edison to 25 percent for the Syracuse Lighting Co., 41 percent for While our organization was hurriedly put together and ex­ the New York Light & Power Co., and 60 percent for the Long panded rapidly, it ill fairly efficient, and I venture to say would Island Lighting Co. The 1931 dividend record was maintained in compare favorably with any private institution of approXimate practically all instances in the low-water year of 1932. One no­ complexity and extent. table exception was the New York Edison Co., which was forced A great deal of service is furnished to our borrowers and to to reduce its dividend rate from 12 to 10 percent! However, applicants for loans. We have a large engineering force that Consolidated Gas, the holding company to which the dividend helps applicants without expense to them, and this is true also was paid, declared the usual $56,000,000 dividend, which is at the with architects for housing and some of the self-liquidating loans. rate of 11.7 percent on its common. Our legal staff spends a great deal of time with applicants who How about rates in New York City, where we are supposed to are not qualified to borrow, and I am glad to say that our Board have one of the most enlightened and alert public-service com­ and all of our force resolve in favor of the applicant where and· missions in the country? Milo R. Maltbie, the new chairman of if a good purpose is to be served by making the loan; that is, that commission, in a letter to the New York electric companies we endeavor to make loans qualify under the act and to assist the in July 1930, made an eloquent plea for lower rates. He wrote: applicants in putting their applications in such shape that they " The trend of electric rates has been generally d0-wnward, and will qualify if and when a good purpose is to be served and men New York City should lead the procession. A number of other given new employment or ke!'t employed. ci-ties have lower rates than New York City, and with the excep­ We are in no sense technical in our requirements, but do exer­ tion of areas having cfieap hydroelectric power, New York com­ cise care in the granting of loans, and in the preparation of all panies ought to be in a position to serve their consumers at as necessary contracts and papers. This and the necessary examlna- low rates as any-metropolitan center. A factor in the approval of 3112 CONGRESSIONAL RECORD-SENATE MAY 10 mergers and consolidations permitted by this commission has been 1920 and is now on appeal to the Supreme Court. It required the the economies which could and should be effected, and you have taking of 62,864 pages of testimony and 4,232 exhlbits, and cost freely conceded that consumers should share in the economies." $10,000,000. Does New York "lead the procession"? The following table of Mr. Maltbie went on to say that if the reductions offered by annual electric b11ls of customers using 50 kilowatt-hours of cur­ the companies in that case were not accepted, they would be rent per month-the average for the country--demonstrates that withdrawn and the commission would be forced to resort to rate the only procession which New York City leads is the procession hearings, with all their delay and uncertainty. VVhat a position of exploited consumers: for the public! If it does not want to accept reductions offered Annual bill by the companies, it can take its chances with the courts and a New York CitY------$36. 60 commission whose chairman is pessimistic about the outcome of Average for the country------34. 88 a rate case. Here is a frank admission that the commission cannot Publicly owned plants: regulate, that it can only "force" reductions which are consented Cleveland, Ohio ------18. 00 to by the companies. This hat-in-hand policy means a surrender Los Angeles, Calif______24. 60 to the very monopolies which public-service commissions were Kansas City, Kans______21. 60 created to regulate. It is such abrogation of control which was Seattle, VVash------28.80 criticized by the legislative commission in 1929. It is true that there have been tremendous economies in the In its annual report of 1932 the New York Public Service Com­ producing of electricity in New York City as a result of mergers mission .d~fended its .Policy of negotiation, stating that "the policy and advances in the industry, but these economies have not been of obtammg reductions in rates by negotiation rather than by passed on to the consumer. Between 1920 and 1930 the four sub­ formal cases has been justified again by the results obtained in sidiaries of Consolidated Gas furnishing New York City with elec­ 1932." VVhat were the results? Reductions in 1932 resulting from tricity enjoyed operating economies of at least $14,000,000. (These both negotiations and rate cases in 1931 amounted to $1,884,200. figures do not take into account the tremendous savings due to Reductions negotiated in 1931 are supposed to save the consumers lower prices since that date.) The extra profit made possible by another $8,200,000 annually. Most of this last amount is ac­ these economies was paid to the holding company in the form of co~ted for by the reduction in electric rates in New York City, dividends on common stock. Consolidated Gas raised capital nec­ which resulted in an increased bill for 50 percent of the customers, essary to expand its plant during these 10 years by the sale of the small users who are least able to bear the increase. The total reduction is less than 2 percent of the revenues of the 5Y:z-percent preferred stock to the general public. It used this companies involved. A reduction in the dividend rate of gas and money to buy the common stock of its subsidiaries, on which it electric companies to 6 percent would have meant an annual receives a return of from 8 to 16 percent today-annual differen­ saving of $40,000,000. Such a reduction of the dividend rate of tial, $13,571,379. While the economies were taking place, the four the New York Telephone Co. alone would have meant a saving of electric companies increased their surplus by an average of $7.500,000 per annum. $9,360,000 a year. One further fact and the picture is complete. That is the fact During the war and after, many utilities, faced with ruin be­ of monopoly. Five great banker-industrial groups control from cause of the sudden increase in labor and commodity prices, 85 to 95 per cent of the electric light and power industry of the sought immediate relief-without the formality of rate cases and valuations upon which they now insist. They got it. Rate in­ Nation. The electric and gas industry in New York State is creases were allowed throughout the country on very limited dominated by three great holding companies-the Associated Gas showings by utility companies, and courts uniformly sustained & Electric Co., the Niagara-Hudson Power Co., and the Consoli­ these emergency measures. It was during this very crisis that dated Gas Co. The last two companies, controlled by J. P. Mor­ section 72 of the New York Public Service Commissions law was gan & Co., supply over 80 percent of the gas and electric con­ sumers of the State. amended, giving the commission the power to fix temporary rates; In 1929 the Legislature of the State of New York created a com­ and the New York commission has stated recently in several cases mission to investigate the system of regulation in the State. that it can fix temporary rates without the necessity of a com­ That commission, composed of the outstanding utility experts of plete valuation of all company properties. the country, reported as follows: The Wisconsin Public Service Commission has recently at­ " Effective regulation along the lines originally intended by the tempted to give the public the benefit of immediate and drastic act (the public service commissions law] has broken down and the reductions. In January 1932 it cut telephone rates 12Y:z percent, consumer has been left to the exploitation of the monopolistic thereby reducing the dividend rate of the VVisconsin Telephone private companies which control the public services." Co. to 6 percent. The reduction had been preceded by an investi­ The commission stated that Manhattan homes, for example, gation of 11 months. It was set aside by a Federal court after could get their electricity for a maximum of 5 cents per kilowatt­ a 3-hour argument, between trains. The Federal court was re­ hour if they were charged in accordance with the cost of serving cently reversed by the Supreme Court on procedural grounds and them. That estimate was based on peak 1929 prices. But in 1933, the case was sent back for reconsideration. The Wisconsin com­ when prices are at the bottom of the trough, the average con­ mission does not know today whether its decision will be upheld sumer pays 6 cents per kilowatt-hour and the small user pays by the Supreme Court. an average of 7 cents per kilowatt-hour. Consolidated Gas, which There is only one sure relief for the apparently helpless con­ was overcapitalized $150,000,000, had from 1921 to 1928, by means sumer. That is public ownership. The figures contained in the of a coal surcharge fraud, collected $20,000,000 more than the table quoted above are more eloquent than argument. Even increased cost of coal warranted. While the consumer was being the threat of public ownership would force the companies to see defrauded, Consolidated Gas absorbed Brooklyn Edison, and the the light, but in New York State we are denied that weapon. concrete result of that merger was an increase in cash dividends The public operation bill annually introduced into the New York of $18,000,000. State Legislature, giving cities the power to operate their own At the conclusion of its investigation, the legislative commission utility plants, was defeated again this year. The representatives had this to say about the public service commisison: of the utility companies argued to the legislative committee that " The public service commisison, as the evidence shows, has to allow cities to go into the business of producing gas and elec­ felt willing or obliged to sanction rates which cannot possibly t:i~ity would lead to "racketeering" and "extortion." The poli .. be justified on any economically sound basis of control. It has t1c1ans of New York City, who recently appropriated $50,000 in tended to dodge every vital issue of a controversial character order to force rate reductions, were noticeable by their absence because of its fear of court reversal, and has in effect surrendered from the hearing on the public operation bill, which the Demo­ to the utility companies the right to charge whatever rates the cratic senate failed to pass. conditions of their business and the monopoly character of their ASSOCIATED GAS AND ELECTRIC SYSTEM-ARTICLE BY RUTH FINNEY enterprise will support." If that was true in 1929, what words in the vocabulary of Mr. DILL. Mr. President, I a.sk unanimous consent to respectable men can describe the situation in 1933, when the have printed in· the RECORD an article entitled "A Pyramid plight of the consumer has reached a new low? Following the of Profit-the Associated Gas and Electric System", written report of that commission, Milo R. Maltbie, long an outstanding figure in public-utility regulation, was appointed chairman of by Ruth Finney, and appearing in the Nation under date the commission, to replace Mr. Prendergast, who took a $50,000-a­ of May 10, 1933. · year job with the E. L. Phillips interests, whose companies he had There being no objection, the article was ordered to be been regulating ineffectually. Under the leadership of Mr. Maltbie the New York Public Service Commission has attempted to reduce printed in the RECORD, as follows: rates by a policy of negotiation. This new policy was a result [From the Nation, May 10, 1933] of the difficulties inherent in a system of regulation. A PYRAMID OF PRO~THE ASSOCIATED GAS AND ELECTRIC SYSTEM In a decision involving electric rates in New York City in 1931, Mr. Maltbie sought to justify a reduction of $5,500,000 which he By Ruth Finney had negotiated, in place of reductions of from $15,000,000 to A strange reticence has overtaken the public-utility industry, $20,000,000 which the consumers demanded, on the ground that strange, that is, in contrast with its former ardent appetite for " a bird in the hand is worth two in the bush." He pointed out, ·attention. It is less remarkable when its practical results are con­ quite ably, the numerous obstacles to regulation-the time and sidered. When the industry was maintaining an elaborate coun.. expense involved, the uncertainty of the outcome due to the try-wide organization to get utility news before the public its confused state of the law, the large number of companies under self-praise, for lack of evidence to the contrary, was generally the jurisdiction of the commission (over 1,000) for whose regula­ accepted at its face value. Now publications are free to print tion the commission has a limited staff, and the lack of a scientific facts about gas and electric utilities whose accuracy is guaranteed basis for fixing rates. He referred to the New York Telephone by the Federal Trade Commission. And such is the nature -of the case, which is a classic example of the wastefulness and inefficiency facts that the energy once devoted to propaganda is devoted. now of the present system of regulation. That case was started in to keeping them obscure. 1933 CONGRESSIONAL RECORD-SENATE 3113

If utility lawyers went to court to try to stop the Federal Trade. company paid a $21,000,000 dividend to the Associated Gas & Commission, as the Electric Bond & Share Co. did once, that would Electric Co. be news, and the papers would print it. If they challenged the But it is in the intercompany fee system of Associated that the figures or conclusions of the commission's accountants that would jUiciest figures are found, the figures of most immediate concern be news. So expensive lawyers sit in silence at the com.mission to the ratepayers-the consumers of electricity and gas. Fees are hearings protesting not at all against what is said about their the simplest and most general method employed to defeat State clients, and the hearings are, therefore, extremely dull. regulation of rates. Large fees paid by operating companies for The Associated Gas & Electric System has been one of the management services, financial services, construction services, pur­ principal beneficiaries of this policy of silence. The Trade Com­ chasing services, all go into operating expenses, and thus into the mission's findings concerning it compose the most remarkable rate base. The companies which receive them are not regulated. record so far disclosed, yet few if any of its 1,425,000 customers Five servicing companies, all owned by the Associated Gas & and 104,000 holders of common stock have been enlightened. Electric Co., compete with each other in collecting fees in the J. I. Mange and H. C. Hopson control the entire $900,000,000 system Associated system; and in addition Associated Gas & Electric has of properties extending from Nova Scotia to Florida and from Cape been collecting fees itself and permitting another subsidiary to Cod to the Philippines, including 26 States of the Union. They do so without making even a pretense of giving services. Appar­ gained control by an investment of $298,318 in the Associated ently this last practice has been discontinued; but in 6 years Securities Co., and on that investment they netted a return of $9,970,944 was collected by Associated companies from Associated 164 percent in 1929. Investment of another $10,000 in a 2-man companies in the form of fees. Theoretically, these paid for serv­ trust association, the apex of their vast structure, secured them ices costing $3,397,204 to render. The net profit was $6,573.739. the assurance that control can never pass from their hands and But that is not all. So lucrative was the fee-collecting business that no one else shall share their ultimate profits. On this in­ that companies in the system bid for the right to it, and in the vestment the two men netted 265 percent in 1929. The names of space of 3 recent years fee-collecting rights were sold and resold Mange and Hopson, unlike those of In~ull and Young, have never to various Associated subsidiaries for amounts totaling $28,247,400. been household words. Mange, a practical operator of electric Associated Gas & Electric sold the privilege of collecting manage­ companies, has been part of the Associated System since its begin­ ment fees from its operating utilities to the Utilities Management ning in 1906. Hopson is an accountant who graduated from the Corporation for $5,200,000. Utilities Management hired another pay rolls of the Interstate Commerce. Commission and the Public subsidiary, the J. G. White Co., to do the work for which it was Service Commission of New York. being paid at $200,000 a year. It collected in 9 months $751,212, · The associated system is a perfect example of the sort of inter­ of which $571,850 was net profit. It then sold J. G. White its fee­ corporate complexities which even ut1lity men have ceased to collecting rights for $8,000,000. defend-since Samuel Insull's complexity collapsed. Associated Another subsidiary, the Consumers' Construction Co., was will­ Gas & Electric Properties is at the top. This is the trust owned ing to pay $5,000,000 for the right to fees. In 1928 the entire exclusively by Hopson and Mange. It owns all the stock of the operating expenses of this company were $113,208, and in that Associated Securities Corporation, which owns all the stock of the year the Pennsylvania group of operating utilities alone paid fees Associated Gas & Electric Co. The Associated Gas & Electric Co. amounting to $152,613. The Pennsylvania group could have hired owns: the entire stafi' of engineers and clerks of the construction com­ 1. Associated Utillties Investing Corporation, which owns seven pany, rented an office for them, paid all overhead. and still have holding companies, all of which own operating and servicing been $80,000 in pocket if relieved of fees. companies. The Utilities Purchasing and supply Co. paid $3,700,000 for 2. Associated Properties, Inc., which owns Associated Electric Co., the privilege of purchasing for the Associated system and collect­ which owns six holding companies, all of which own operating ing fees. Most amazing of all is the action of the Associated companies, and some operating companies of its own. Utilities Merchandising Co., which paid $5,900,000 for the right 3. Associated General Electric Corporation, which owns W. S. to engage in the appliance business with the operating companies Barstow & Co., Barstow Securities Corporation, and General Gas & and then made the operating companies pay all expenses of sell­ Electric Corporation, which owns operating companies. ing appliances while it collected the entire gross from them. It Beginning again at the top of the structure, Associated Gas & was, as the Trade Commission says, " a clever scheme for taking Electric Properties owns Manson Securities Trust, which owns New from the operating companies a normal and legitimate source of England Gas & Electric Association, which owns operating com­ revenue," which would of course have reduced operating expenses panies. It owns Associated Electric Cos., which owns operating and therefore rates. companies, and also Associated Electric Properties, which owns To cap the climax, the Associated Gas & Electric Co., in addi­ both operating companies and a subholding company, which owns tion to collecting fees directly and selling rights to other fees operating companies. It owns Transit Securities Associates and which it collects indirectly, until recently also apportioned all Railway and Buss Associates, which own a network of transporta­ its expenses to its operating companies. The operating companies tion companies. It owns three more trusts and companies. have been bearing the costs of services for which they pay fees In some cases six holding companies intervene between an oper­ far in excess of the costs. The public furnishes the money. ating company serving the public and the topmost trust where There are other ways of inflating operating costs to the detriment Mange and Hopson sit in joint remunerative control. The system of the ratepayer and the profit of the top companies. Take the earned $50,282,036 net in 1929. The money came from ratepayers Pennsylvania Electric Corporation division of the Associated sys­ in the New England States, New York, Pennsylvania, New Jersey, tem. All operating-company subsidiaries of Pennsylvania Electric and down the coast to Florida; from consumers in Missouri, Ken­ Corporation deposit all cash they receive to the credit of the hold­ tucky, Tennessee, and southward to Louisiana; and from others ing company. At the beginning of each month Pennsylvania westward from Texas to Arizona. Electric computes interest at the rate of 8 percent per annum To investors, "write-ups "-unaccountable appreciations in book on the open accounts maintained for the subsidiaries and charges values of the system-are of most immediate concern. The Trade this sum to the open account. The result amounts to a com­ Commission found that $33,362,152 has been added in this man­ pounding of interest on accounts receivable. Operating companies ner to book values of the Associated Gas & Electric Co. alone. would pay neither 8 percent interest nor compound interest if Other write-ups occur in the books of the numerous subholding they were free to get capital elsewhere. companies. For example, Pennsylvania Electric Co. books show a Another account on the books of the operating companies la­ $17,000,000 write-up, an amount equal to one third the entire beled "Federal income tax" helps to swell the amount of current ledger value of the company's assets at the close of 1929. A trans­ expense which the ratepayer must bear. It is the practice in the action which took place years ago between companies in the Asso­ associated system for subsidiary companies to accrue Federal in­ ciated system illustrates how values are infiated overnight. H. D. come tax as an expense, crediting the amount to the open ac­ Walbridge & Co. owned certain securities carried on its books at count maintained by their immediate holding company. The $10,176,636. It sold them to its subsidiary, the old Pennsylvania holding company computes a tax on the basis of the consolidated Electric Corporation, which then entered them on its books at income of the group of which it is parent, charges the amount to $20,919,750 valuation. its expenses, and credits it to the open account of the holding Constant calling and substitution of stocks within the Asso­ company next above it. But the senior company of this system, ciated system also makes the condition of the investor uncertain. Associated Gas & Electric, paid no Federal income tax to the Gov­ Investors who put their money into the Binghamton Light, Heat ernment for the years 1927, 1928, and 1929. The public paid rates & Power Co., an operating utility, found themselves a little later sufficient to cover a charge which any utility commission would with nothing to show for it but Associated Gas & Electric Co. have to allow, and the money went into the pockets of the asso­ debentures. The company had been merged with the New York ciated owners instead of into the Federal Treasury. State Electric & Gas Corporation, and Associated debentures were Write-ups, fees, 8 percent compound interest on open accounts, traded for the assets of the operating company. income-tax accruals that never go for income tax-how much do So complicated are the stock, bond, and dividend transactions they mean to the man who pays the bills? In Erie, Pa., served in the system that occasionally securities have been issued with­ by the Erie Lighting Co., a subsidiary of the Pennsylvania Electric out the authority of the directors supposed to have issued them. Co., which is a subsidiary of the Pennsylvania Electric Corpora­ On two occasions, the Trade Commission discloses, the board of tion, which is a subsidiary of the Associated Electric Co., which the Associated Gas & Electric Co. has passed retroactive resolu­ is a subsidiary of the Associated Gas & Electric Corporation, which tions ratifying various issues. As securities are issued in the sys­ is a subsidiary of the Associated Gas & Electric Co., families pay tem, it has been the practice to sell them for $35 to the Asso­ 8.5 cents a. kilowatt-hour for the first 50 kilowatt-hours of elec­ ciated Gas & Electric Securities Co., which resells them to the tricity used to light their homes, 4 cents for the next 2,950 kilo­ public at the market price, usually about $65 in normal years. watt-hours, and 3 cents for all in excess o.f this amount. As a result of this practice the Associated Gas & Electric Securi­ A few miles down the lake front is Ashtabula, Ohio, where elec~ ties Co. paid a dividend of $22,540,285 to the Associated Utilities tric service is supplied by the Cleveland Electric Illuminating Co., Investing Corporation in 1929 and in the same month this second part of the North American system, a company which has had to 3114 _CONGRESSIONAL RECORD-SENATE MAY 10 meet the competition of a. municipal plant in Cleveland for many E. I. DU PONT DE NEMOURS & Co., years and has done so on a profitable basis. Ashtabula families Wilmington, Del., May 8, 1933. pays 5 cents a kilowatt-hour for the first 40 kilowatt-hours used, Hon. GEORGE w. NORRIS, 4 cents for the next 200, and 2.8 cents for all thereafter. Trade Senator from Nebraska, Washington, D.O. Commission records should be even more illuminating to the peo­ DEAR SENATOR NORRIS: I read your address of May 1 on Muscle ple of Erie than the electric lights for which they pay so much. Shoals and your presentation of the bill you propose in the Senate with much interest and appreciation. May I congratulate you on HALFWAY MEASURES ARE DANGEROUS-EDITORIAL FROM THE your position in the matter, which seems to me both courageous PHILADELPHIA RECORD and full of wisdom. Mr. NYE. Mr. President, I ask unanimous consent to have Because of our large investment in the fixation of atmospheric nitrogen in the manufacture and sale of nitrogenous products we p1·inted in the RECORD an editorial appearing in the Phila­ have felt that we might be misunderstood and criticized if we took delphia Record of May 10, entitled" Half-way Measures are any part in the long controversy regarding the disposal of Muscle Dangerous." Shoals. We have, therefore, scrupulously refrained from any ap­ proach on the matter to members of this Congress or its predeces­ There being no objection, the editorial was ordered to be sors. Indeed, I am quite sure that the only contact which any printed in the RECORD, as follows: Du Pont man in a position of authority has had with a Member [From the Philadelphia Record, May 10, 1933] of Congress was our invitation to you to visit our plant at Belle, W.Va. May I add that my own recollection about that visit was HALF-WAY MEASURES AU DANGEROUS not that you wrote us requesting permission to see the plant, but The United States needs an increase in mass purchasing power rather that, understanding that you might be interested in such 1f the present improvement in business and prices is to be main­ a visit, I promptly called you up and told you how glad we would _tained. be to have you see what we were doing. That spirit of cooperation still exists, and if there is any information that we can contribute Two bills, framed with that purpose in mind. are now before the which would be helpful to your handling of the nitrogen phase of President. the Muscle Shoals matter we shall be very glad to respond, con­ One, by Senators LA FoLLETl'E, CosTIGAN, and CU'lTING, calls for a sistent, however, with our unwillingness to take up any contro- . $6,000,000,000 public-works program. versial position. The other, drawn up by Senator WAGNER with the cooperation I would like to correct one or two comments included In your of big business interests, calls for $1,000,000,000 in public works address. The man who accompanied you to Muscle Shoals was not and $2,000,000,000 in R.F.C. loans for private construction by a German chemist, but Dr. F. Sparre, then and now director of the industry. development department of the Du Pont Co., who is of Norwegian Under the terms of the Wagner bill also, trade associations· family but 100 percent American. He is, as you quite properly will have new power to fix prices, working hours, wages, and pro­ pointed out, an outstanding authority on nitrogen fixation, having duction under Government supervision. closely followed the progress of all phases of that development The Record hopes the President will choose the first. from the beginning. The Record believes that at least $6,000,000,000 must be spent You described synthetic ammonia as being the Haber process. on public works, and $6,000,000,000 distributed to depositors in It is probably not important but may be interesting to you that closed banks, to provide the increased purchasing power that will the Du Pont Co. did not follow the Haber process, but acquired enable business to resume production. rights to a French process and an Italian process for the synthesis · A $1,000,000,000 public-works program at this time would be of ammonia, adapted the best features of these to American condi­ of little effect-against the $5,000,000,000 deflation caused by clos­ tions, and made ourselves noteworthy contributions to the art, so ing the banks and balancing the Budget. that our present process is distinctively our own and is not derived Senator WAGNER'S plan to provide $2,000,000,000 for expansion from the Haber process. It is true that the Haber-Bosch process by private industry puts the cart before the horse. was the first successful commercial synthesis of ammonia, worthy Private industry cannot use its present plant to capacity until of great credit in this scientific development, but our work in this mass purchasing power is revived. country has not been one of imitation. We are proud of our plant Senator WAGNER, like Mr. Hoover, would pour more money into at Belle, of its efficient performance, amazingly low cost of produc­ the wrong end of the horn. tion, and its large potential capacity, though unfortunately its Mr. Hoover thought that if he gave the banks more credit, they capacity is only being partly utilized on account of what has been would expand their loans to business. in reality dumping at prices far below the cost of production, of But the bankers could not safely loan, and industry had no enormous qlD.antities of nitrogen products, imported into this coun­ use for more funds until people had money to buy. try from Europe and Japan over the past 3 years. Senator WAGNER'S plan would fail in the same way that Hoover's Incidentally, as you yourself pointed out, American nitrogen open-market operations failed to revive business. plants now have ample capacity to supply all American nitrogen Whatever the administration may decide about other features requirements. Even record-breaking demands for fertilizer nitro­ of the Wagner bill, it cannot safely accept the billion-dollar limi­ gen would not occupy them all fully. Prices in this country are tation on public works and the cart-before-the-horse proposal for the lowest in the world, except the fictitious or rigged prices 1n private-construction loans. Holland, and they are the lowest prices for nitrogen compounds The Record looks to the President for a $6,000,000,000 public­ in history. Increased production in our plants to supply all works program and for a $6,000,000,000 payment to depositors in American needs would give employment to hundreds more of closed banks. American workmen in these factories and in the coal mines, were Such a program would go far to fill the gap left by a shrinkage it not for this organized foreign attack on our market with which of some $18,000,000,000 in credit currency since 1929. The money we have had to contend. can be raised by direct discounting with the Federal Reserve banks. In your speech you made the excellent and very true point of The result would be to put us securely back on the road to the decreased consumption of power in the cyanamide process prosperity. compared with the arc process, and above all, in the synthetic am­ Half-way measures threaten the gains already won.. monia process compared with cyanamide. The arc process is obso­ lete and abandoned, cyanamide is on the decline except for spe­ MUSCLE SHOALS-LETTER FROM JASPER E. CRANE cial uses. But I did not notice that you pointed out that the reason for locating our plant in West Virginia was not the abund­ Mr. NORRIS. Mr. President, several days ago in the dis­ ance of high-quality coal for producing power, for the power cussion that took place on the so-called "Muscle Shoals requirements in synthetic ammonia are relatively low, but rather bill" I had occasion in some remarks I made to refer to the abundance of good coal for the production of coke as the raw material for making hydrogen. After all, that is the gist of the the plant of the Du Pont Co., located 5 or 6 miles out of matter. Though called the fixation of nitrogen, nitrogen 1s pre­ Charleston, W.Va .. where this company had set up~ plant sented to us almost without cost by the atmosphere, and for the purpose of obtaining nitrogen from the atmosphere. that exists everywhere. The expensive ingredient in making am­ monia is hydrogen, and it seems quite certain that hydrogen de­ I told the Senate of going down there and of the company's rived from any gas at real market value or produced by the sending down with me a man who I said was a German electrolysis of water with electric power at any equitable price chemist. cannot economically compete with hydrogen made from coke pro­ I have, this morning, a letter from the Du Pont Co., signed duced from good-quality, low-cost coal. That is the reason, therefore, to make cheap hydrogen, that we located our ammonia by Mr. Crane, vice president, in which he calls my attention plant in a good coal region. to the fact that I was in error and asks that it be corrected. I trust that these comments may be of interest to you and As soon as I read the letter I remembered distinctly that I perhaps of some use in any further statements you may have occasion to make in addition to your speech of May 1, which dealt had made a mistake in my statement in the Senate when so excellently with the questions at issue. I hope you do have I referred to this man as a German chemist. He was Dr. opportunity to correct one item, regarding the gentleman WhQ F. Sparre, a Norwegian chemist. I remembered that I was accompanied you to our plant at Belle. wrong as soon as my attention was called to the fact. In With kind personal regards, I am, yours sincerely, order that there may be no misunderstanding whatever JASPER E. CR.Am:. about it, I ask to have inserted in the RECORD, as a part of RELIEF OF AGRICULTURE-CONFERENCE RE.PORT my remarks, the letter of Mr. Crane. Mr. SMITH. Mr. President, I submit the report of the There being no objection, the letter was ordered to be committee of conference on House bill 8835, known as thQ printed in the RECORD, as fallows.;; "farm-relief bill"• anti move its immediate consideratio~ ~. 933 _CONGRESSIONAL RECORD-SENATE 3115 riie report was read, as follows: for hearing, that the licensee has violated the provisions of this subsection." The committee of conference on the disagreeing votes of And the Senate agree to the same. the two Houses on the amendments of the Senate (nos. 1 Amendment numbered 25: That the House recede from to 84, inclusive) to the bill

3116 CONGR~SSIONAL RECORD-SENATE MAY 10 " The rate of interest on such direct loans made at any Mr. SMITH. I move the adoption of the report. time by any Federal le.nd bank shall be one half of 1 per­ Mr. REED. Let us have the yeas and nays. cent per annum in excess of the rate of interest ~barged to Mr. McNARY. Mr. President, I desire to call for the yeas borrowers on mortgage loans made at such time by the bank and nays because some Senators desire to be recorded on through national farm-loan associations." this vote. On page 29, line 22, of the Senate engrossed amendments, Mr. BORAH. Mr. President, before that is done I should strike out " shall " and insert " may." like a brief explanation and statement with reference to the On page 34, line 6, of the Senate engrossed amendments, conference repart. before " value," insert " normal." Mr. SMITH: The conferees on the part of the House and On page 35 of the Senate engrossed amendments, begin­ Senate have agreed on every point with the exception of ning with line 13, strike out all through line 9, page 36. what is known as the Norris or Simpson amendment, which On page 36 of the Senate engrossed amendments, strike is the cost-of-production amendment. The House conferees out lines 12 to 19, both inclusive, and insert in lieu thereof disagreed and the amendment was taken back to the House the following: and by an overwhelming vote was rejected by the House. " SEC. 31. (a) Out of the funds made available to him The VICE PRESIDENT. The Chair calls attention to the under section 30, the Farm Loan Commissioner is authorized fact that the motion to proceed to the consideration of the to make loans, in an aggregate amount not exceeding conference report is not debatable. The motion to adopt $25,000,000, at a rate of interest." the report is debatable. The question is on the motion of the On page 39, line 6, of the Senate engrossed amendments, Senator from South Carolina to proceed to the consideration before " value ", insert " normal." of the report. On page 39, line 16, of the Senate engrossed amendments, The motion was agreed to. after " years ", insert " or, in the case of a first or second The VICE PRESIDENT. The question is on the adoption mortgage secured wholly by real property and made for the of the conference report. purpose of reducing and refinancing an existing mortgage Mr. SMITH. Mr. President, the only point of difference within an agreed period no greater than that for which was the price-fixing amendment. In view of the circum­ loans may be made under the Federal Farm Loan Act, as stances, I think the Senate should recede on the amendment, amended." because what there is in the bill that will benefit the farmers On page 39, line 19, of the Senate engrossed amendments, ought to be operating now. The cost-of-production amend­ before the period, insert " if the borrower shall not be in ment is the only point of difference. I think the author of default with respect to any other condition or covenant of the amendment himself sees the importance of having the his mortgage." matter acted on at once. Therefore I shall move that th~ On page 41, line 7, of the Senate engrossed amendments, Senate recede from its amendment. strike out " $8,500 " and insert " $10,000." The VICE PRESIDENT. The Senate will first have to adopt or reject the report. The question is on the motion On page 42, line 8, of the Senate engrossed amendments, of the Senator from South Carolina to agree to the confer­ strike out "(1) ." ence repart. On page 42 of the Senate engrossed amendments, begin· Mr. LA FOLLETI'E. Mr. President, will the Senator yield ning with the word " including " in line 10, strike out for a question? through the word "project", in line 24, and insert in lieu The VICE PRESIDENT. Does the Senator from South thereof the following: " and to political subdivisions of carolina yield to the Senator from Wisconsin? States, which, prior to the date of enactment of this act, Mr. SMITH. I yield. have completed projects devoted chiefly to the improvement Mr. LA FOLLE'ITE. I understand the conference report of lands for agricultural purposes." strikes out the word " basic " before the words " agricultural On page 45 of the Senate engrossed amendments, begin­ commodities "? ning with line 1, strike out all through the period in line 9, Mr. SMITH. It does in two places. and insert "Sec. 37." · Mr. LA FOLLETI'E. May r ask the Senator what is the On page 46, line 9, of the Senate engrossed amendments, effect, if any, upon any agreement which may be made by strike out " $325,000,000 " and insert " $300,000,000." processors of farm commodities so far as the antitrust On page 47, line 12, of the Senate engrossed amendments, acts are concerned? strike out " $8,500 " and insert " $10,000." Mr. SMITH. As everyone knows, the provision looks On page 47 of the Senate engrossed amendments, begin­ toward a suspension of the antitrust acts as applied to the ning with line 13, strike out all through line 20, page 48. particular commodity involved in any agreement which may On page 49, line 2, of the Senate engrossed amendments, be made. strike out "shall" and insert "may.'' Mr. LAFOLLE'ITE. The question which I desire to have On page 46, lines 3, 12, and 24, of the Senate engrossed answered is whether striking out the word "basic" en­ amendments, strike out "37 ", "38 ", and "39" and insert larges to any extent the privilege of entering into the agree­ " 38 ", " 39 ", and "40 ", respectively. ments which are not to be restrained by the antitrust acts. And the Senate agree to the same. Mr. SMITH. It does in some cases. That the House recede from its disagreement to the Mr. LA FOLLETI'E. Will the Senator explain how? amendment of the Senate to the title of the bill and agree Mr. SMITH. The agreements entered into would apply to the same. where the word" basic" is used and only to those commodi­ ties that are enumerated, but under the terms of the bill The committee of conference have not agreed on amend­ the processing tax would apply to any competing commodity. ment numbered 83. The Secretary of Agriculture requested that the word " basic " E. D. SMITH, be eliminated because in entering into the agreements con­ CHAS. L. McNARY, templated he might have opportunity not to apply the DUNCAN U. FLETCHER, processing tax in order to restrain the competition, and ELMER THOMAS, therefore we made it apply to practically all the agricultural ROBERT F. WAGNER, products that might come in as competitors to those which F. C. WALCOTT, were under the tax. Managers on the part of the Senate. Mr. LA FOLLETI'E. Is this a correct statement? The MARVIN JONES, effect of striking out the word "basic", as provided in the JOHN D. CLARKE, conference report, leaves it within the discretion of the Sec­ CLIFFORD R. HOPE, retary of Agriculture to permit the processors of any agri­ WALL DOXEY, cultural commodity to make agreements, the antitrust act to H. P. Fm.MER, the contrary notwithstanding? Managers on the part of the House. Mr. SMITH. That is true. 1933 CONGRESSIONAL RECORD-SENAT;E 3117 Mr. BORAH. Mr. President, may I ask the Senator from Mr. BLACK. It would include the processing of the hide, South Carolina if there is any provision in the bill repealing but it would not include the manufacture of shoes? the antitrust acts? Mr. SMITH. If they were to compete with any agricul­ Mr. SMITH. Oh, no; it does not repeal the antitrust tural products, though I do not know just how they would acts. It only provides that where agreements shall be en­ come in; I suppose the Secretary would have the power to tered into touching any commodities, the antitrust acts will include them. be suspended during the time of the life of such agreements, Mr. BANKHEAD. Mr. President, I want to make a state­ under such restrictions as the Secretary may make in the ment to my colleague, with the permission of the Senator agreements themselves. from South Carolina. Mr. BORAH. The effect is to suspend the antitrust acts The VICE PRESIDENT. Does the Senator from South in any instance in which the Secretary of Agriculture and Carolina yield to the junior Senator from Alabama? the processor make an agreement? Mr. SMITH. I yield. Mr. SMITH. That is true, but that was in the amend­ Mr. BANKHEAD. The clause referred to is designed to ment that was adopted by the Senate. We have not modi­ provide that only agreements made with the Government fied that a particle in conference. That was in the bill as shall be exempt from the effects of the antitrust law. It it passed the Senate and the House. That point was not in does not permit any agreement among the processors them­ conference at all. selves. Mr. BORAH. But there was a limitation by reason of the Mr. SMITH. Oh, no. word "basic"? Mr. ROBINSON of Arkansas. Mr. President, will the Mr. SMITH. Yes; there was a slight limitation. Senator yield? Mr. COSTIGAN. Mr. President, will the Senator from The VICE PRESIDENT. Does the Senator from South South Carolina yield? Carolina yield to the Senator from Arkansas? The VICE PRESIDENT. Does the Senator from South Mr. SMITH. Certainly. Carolina yield to the Senator from Colorado? Mr. ROBINSON of Arkansas. It is not to be assumed Mr. SMITH. Certainly. that the agreements that may be made will be violative of Mr. COSTIGAN. Supplementing what has been devel­ the Antitrust Act. The point is that if an agreement is oped, may I inquire whether the removal of the word made with the Government by the processors the arrange­ "basic" extends the exemption from the antitrust law to ment ought not to permit of a prosecution under the anti­ any, or at least any competing agricultural commodity? trust laws. That was all argued out in the Senate when Mr. SMITH. That is my understanding of the effect of the bill was before the Senate. It was maintained then the removal of the word "basic", because in dealing with that it would not be fair for the Government to authorize farm products the Secretary of Agriculture, if he is going entering into an agreement and then prosecute one of the to enter into these agreements, ought to have full and com­ parties to the agreement for having entered into it. plete authority to act. We all concede that what he is Mr. SMITH. Did I understand the senior Senator from trying to do in this emergency is to benefit agriculture to Alabama [Mr. BLACK] to ask if processors might have agree­ the fullest extent. If in his judgment by any entering into ments amongst themselves suspending the antitrust law? these agreements he will not have to impose the processing Mr. BLACK. Yes. Is that correct? tax and thus can get rid of the machinei-y that is set up Mr. SMITH. Oh, no; that could not be done. That for making it mandatory, if he can enter into the agree­ would apply only to agreements made with the Government. ments and reach the same end without the machinery and Mr. BLACK. Suppose they have an agreement among the embarrassment that would be necessarily involved, the themselves fixing prices, which is approved by the Gov­ committee thought it was best for him to have that power. ernment; would that be permissible and would that sus­ Mr. COSTIGAN. It is also true, is it not, if the Senator pend the antitrust law? will yield further, that the exemption from anti-trust laws extends to all parties who handle agricultural commodities, Mr. Sl\llTH. The Senator has read the bill. He knows and not merely to processors? just to what extent the power is given the Secretary of Agriculture to enter into the agreements. As the Senator Mr. SMITH. Certainly. If it did not we would have one contradicting the other. from Arkansas [Mr. ROBINSON J has already pointed out, Mr. COSTIGAN. In subdivision (3) of paragraph 8 the the suspension of the operation of the antitrust laws in word" basic" appears to have been retained unchanged be­ an agreement between the Government and an individual cause it was in the original bill and was approved by the is for the purpose of expediting the relief of agriculture if Senate. There has bee:a some intimation in the press that in the judgment of the Secretary of Agriculture he finds a supplemental measure will be presented which will elim­ that is the best course to pursue. inate the word "basic " from subdivision (3). Is that in Mr. BLACK. May I ask the Senator one other question prospect? . with reference to the striking out of the word" basic~'? Mr. SMITH. That is true. It' has been requested. Under The VICE PRESIDENT. Does the Senator from South the rules we will have to have an independent resolution Carolina yield further to the Senator from Alabama? passed eliminating that word. Mr. SMITH. I yield. Mr. ROBINSON of Arkansas. Mr. President, may I ask Mr. BLACK. Do I understand that striking out the word the Senator from South Carolina if the House has not al­ "basic" has the effect of permitting agreements with cer­ rt!ady passed a concurrent resolution for that purpose? tain businesses that compete with agricultural products that lV.u. SMITH. That is true. were not formerly included in the exemption? Mr. BLACK. Mr. President, will the Senator yield? Mr. SMITH. It gives the Secretary the right to cover the The VICE PRESIDENT. Does the Senator from South field with his agreements and does not restrict him to the Carolina yield to the Senator from Alabama? enumerated articles. Mr. SMITH. I yield. Mr. BLACK. · May I ask the Senator, for instance, as an Mr. BLACK. I desire to understand thoroughly the effect example, if that would permit a suspension of the antitrust from two standpoints. In the first place, the Senator said laws with reference to jute, which is in competition with the provision gives the right to suspend the antitrust laws cotton? as to all processors of agricultural products. Does that in­ Mr. SMITH. I do not see any reason why the Secretary clude cotton mills? might not enter into an agreement with the processors of Mr. SMITH. Certainly. jute and effect that just as he does in the other cases. Mr. BLACK. Does it include packers? Mr. BLACK. Could he do that if we leave in the word Mr. SMITH. It includes all. "basic" before "agricultural products"? Mr. BLACK. Does it include shoe factories? Mr. BORAH. Mr. President, I rise to a point of ordet. Mr. SMITH. I do not think shoe factories come under We cannot hear the Ghairman of the committee at all on its provisions at all. this side of the Chamber. 3118 CONGRESSIONAL RECORD-SENATE MAY 10 Mr. BLACK. The question. then. that I desired to ask was posed statute reveal, not be extended to cane and beet this: As the Senate passed the bill. keeping in the word growers. " basic ". would it have been possible for the Secretary to Mr. CLARK. That is precisely the point that I was about make an agreement with jute manufacturers suspending the to make, and I thank the Senator, because he has stated it antitrust laws for their benefit? much more clearly than I would have been able to do my­ Mr. SMITH. I think not. self. This section with the word" basic" omitted is designed Mr. BLACK. But the Senator does think that under the to strengthen the grip of the most merciless trust this Na­ terms of the bill as the conferees have agreed on it. striking tion has ever seen. out the word " basic ", there could be a suspension of the The amendment inserted in the Senate requiring that antitrust laws with reference to the jute manufacturers? the great army of agents and employees to be employed Mr. SMITH. That would necessarily depend. Of course, under this act-which, as I said in offering the amendment, the Senate realizes that in this emergency we must give to will probably exceed in number the combined military and the Secretary of Agriculture the fullest possible power to naval forces of the United States, and the reforestation accomplish the purpose for which the bill is passed. I think army added on-should be, as far as possible, practical all of us recognize the emergency; and therefore I hope that farmers, and should be confined in their efforts to the con­ the Senate will recede. gressional district in which they live, was stricken out. Mr. BORAH. Mr. President-- A week ago today, as I recall, the Senate wasted three The VICE PRESIDENT. Does the Senator from South hours and a half in a lengthy dispute as to whether the ad­ Carolina yield to the Senator from Idaho? ministrator under the $500,000,000 relief act should be paid Mr. SMITH. I am about to yield the floor, but I yield to $8,500 a year or $10,000 a year-a man necessarily required the Senator from Idaho. to be a technical expert, a position necessariiy requiring a Mr. BORAH. Do I understand that the word "basic" is great administrator-and yet, under the terms of this con­ stricken out of the bill? ference report, there is no limit on the face of the report as Mr. SMITH. Yes. to the number of $10,000 jobs that the Secretary of Agri­ Mr. BORAH. Where? culture may create. Mr. SMITH. We struck out the word" basic", except in If the Secretary of Agriculture and Professor Tugwell subsection (3) of section 8. should conclude that it is necessary to have one hundred Mr. BORAH. Was not the word" basic" in the bill as it thousand $10,000-a-year experts to bring to the hogs of the passed both the Senate and·the House? United States a clearer and more complete understanding Mr. SMITH. It was. of the Prophet Ezekiel's logarithmic formula, he has com­ Mr. BORAH. How did it get stricken out then? plete authority under this act to appoint them. [Laughter.] Mr. SMITH. The word " basic " was included in part of The pledges of every Democratic platform for 40 years are the Senate proposition that was not included in the House made hollow mockery by the emasculation of the laws against bill and therefore went into conference. I offered the trusts and monopolies. amendment here myself. Where the word " basic " was The provision inserted in the Senate putting a limitation included in the bill by the House, however, of course, the of 5 percent on the amount of the processing tax to be conferees could not do otherwise than leave it in. That is expended in administration was stricken out in conference, the origin of the proposed joint resolution to strike it from leaving absolutely no limitation whatever upon the enor­ the paragraph to which I refer. mous sums which may be squandered under this act. The Mr. CLARK. Mr. President, this was an exceedingly bad Norris-Simpson amendment, embodying the solemn pledge of bill as it passed the Senate. As it comes back from the the Democratic national platform. is omitted from the re­ conference, it is infinitely worse. This measure should be port, although no man has yet been able to explain why the entitled "An act to promote bureaucracy, to impose embar­ permissive-not mandatory-powers therein contained are goes, for the abdication of its powers and duties by Congress. any more unworkable and impractical than the rest of the and for the emasculation of the antitrust laws." bill. With remarkable supineness, the Senate conferees have Therefore I say, Mr. President, that we ought to have a succeeded in cutting out of the bill in their conference report record vote on this conference report and that the bill ought practically every beneficial amendment that was put in to be sent back to conference in order to have those salutary during the consideration and debate of the bill in the provisions reinserted. Senate. ·The VICE PRESIDENT. The question is on agreeing to Great pride is exhibited in the newspapers in the fact that. the conference report. the Senate amendment including cane sugar and beet sugar Mr. CLARK. I call for the yeas and nays. in the basic commodities was stricken o'ut of the bill, and I Mr. McCARRAN. Mr. President, under section 36 of the think it is a good thing to strike it out; but by the striking bill as it passed the Senate, provision was made for relief in out of the word " basic " in the section relating to trade nearly every line of agricultural pursuit that might require agreements, the Secretary of Agriculture is enabled, if he relief by way of borrowing money; and, included, we sought wants to, by a trade agreement, to put the SUgar Trust, to have the farmers of the West get just a little opportunity the sugar refineries of the United States, in the position of to borrow from the Reconstruction Finance Corporation having a greater stranglehold on the production and sale with the intention of paying back, bonding their districts. if of sugar in this country than it has ever had before. you please, with the intention and purpose of paying the Mr. COSTIGAN. Mr. President, will the Senator yield? required interest. Among those districts that might have The VICE PRESIDENT. Does the Senator from :Missouri been benefited by this act were the districts that were yield to the Senator from Colorado? created by the Newlands Reclamation Act-the districts Mr. CLARK. I do. where the farm-seeking people of the world were invited to Mr. COSTIGAN. The talented Senator from Missouri has come into the arid West and reclaim that territory. Those referred to the omission of sugar beets and sugar cane from· people now find themselves, by reason of a prevailing condi­ specified basic commodities. Does the Senator realize that tion, unable to pay the charges imposed upon them by the if exemption from antitrust laws is given to sugar processors, Government itself for maintenance and operation. All they and if there is no inclusion among the basic articles of sought by my amendment to the Wagner bill was to be per­ sugar beets and sugar cane, exceptional advantages will be mitted to borrow sufficient amounts to pay the maintenance given by law to the processors of sugar, and no assured and operation charges of last year, if you please, and to carry minimum farm wage of pre-war prices will be provided to out the privileges and the powers and the rights and the obli­ many forgotten farmer&-m~n and women who grow sugar gations that were imposed upon them by the Newlands Rec­ beets and sugar cane? In other words. safeguards thrown lamation Act and their contractual obligations with the about wheat growers will, so far as the terms of the pro- Federal Government. 1933 _CONGRESSIONAL RECORD-SENAT;E 3119 In some instances the settlers on these projects, for the The fact of the matter is that if the bill carries reference purpose of relieving themselves from the red tape and ex­ to any activity on earth from which the Reconstruction pense imposed upon them by the Reclamation Bureau, had Finance Corporation may hope to receive back the money special acts passed in the respective States whereby they it lends, it is the provision relating to loans to farmers' might take over to themselves, for themselves, under their organizations, especially western reclamation projects, be­ own administration, the projects in which they were the cause they borrow with the intention of paying back, and f ru.·mers, and organize their districts as bodies corporate, if that cannot be said of some of the other borrowers from you please, so that they might elect their own boards of the Reconstruction Finance Corporation. directors, and, by the election of their own boards of direc­ Mr. President, in view of the fact that every other con­ tors, cut down the expense naturally attendant upon the ceivable organization, every other kind of a body, every project when it was under the supervision of the Reclama­ other class of business has been permitted to come in and tion Bureau. borrow money from the Reconstruction Finance Corporation, These projects now conducting their own business find why, in God's name, cannot the actual farmer who tills the themselves in the condition that prevails with reference to soil, who plows the sagebrush, who is willing to take him­ all other farming communities, and they sought by my self and his family out into the desert and face the winds amendment to this bill to have some relief. On page q5, as of the desert to reclaim the West be permitted to borrow the bill returns here, commencing with the first line 10f sec­ from his Government--to protect the Government's own tion 36 and reading down to and inclusive of the word property, if nothing else? "State" in line 17, the conference committee saw fit to re­ I understand it has been asserted that to carry out the tain that part of the section. Thereby drainage districts provisions of my amendment to the Wagner bill it would be and levee districts in the South, on the Mississippi, are pro­ necessary to increase the amount from $50,000,000 to some tected, and they may borrow; but from there on, it is all greater sum. This assertion is entirely unfounded. The stricken out by the conferees, and the learned chairman amount of money required for maintenance and operation here, speaking for the conferees, says that he agreed to yield, charges on reclamation projects from year to year is not that my amendment might be stricken. So that those who so great that it would have materially affected the enormous represent this very industry that we encouraged by the New­ sum of $50,000,000 placed at the disposal of the Recon­ lands Reclamation Act, those who went into these projects struction Finance Corporation to be loaned to drainage, and reclaimed the West, are now, by the act of this confer­ irrigation, and levee districts. ence committee, deprived of the right to come in and ask The amendment which I proposed to the Wagner amend­ their own Government, through the Reconstruction Finance ment to the farm relief bill was the only comfort or assist­ Corporation, to be allowed to borrow sufficient to pay the ance that might be looked to by the western farmer growing charges of operation from year to year during the emer­ out of this legislation. The sum involved was but a pittance gency. as compared with the millions that will be taken for levee Let me explain the situation, because I take it that this and drainage districts along the Mississippi. The failure matter is not understood by those who are not familiar of the conference committee to sustain my amendment with a Federal reclamation project. strikes a blow at the tillers of the soil and the reclaimers of There are certain charges for maintenance and operation the desert and the builders of communities in these Federal that cannot be avoided. The Government imposes those reclamation projects established under and by sanction of charges. What are they for? They are for the purpose of the Newlands Reclamation Act. I realize that there are maintaining the canals and laterals that must be taken those in this Chamber who have little or no sympathy with care of every year. They are for the purpose of protecting reclamation projects. I realize that it is difficult for my the dams that impound the water and divert it from the colleagues here on the floor of the Senate who have never natural water courses, so that it may reclaim the land. May visited the West and have no knowledge of the history or I with propriety say that one object of my amendment was operation of reclamation projects to understand or realize to meet a condition that is personally known to me, where either the methods of their operation or the vast benefits a dam costing the Government of the United States nearly that flow from their existence. $7,000,000 is now in such a condition that the spillway apron Mr. President, it would be a glorious thing if there were of that dam is about to disintegrate. These farmers, con­ more reclamation projects in America, into which and onto ducting this project themselves, are required to protect· which there might come honest men and women, willing, that dam under their contract with the Government, and capable, and competent to bend their individual efforts and yet they have not the money with which to do it, and will cause two blades of grass to grow where one had formerly not be able to do it unless they can borrow the money under grown, and cause the soil to produce sufficient for their own the amendment that I offered and had placed in the bill, sustenance and for the sustenance of their dependent ones. commencing with the figure (2) on line 1 of page 56 of the All the millions that may be appropriated for unemploy­ bill as it returns here, down to and including the word ment relief, for emergency doles, if you please, are at best "project", the amendment reading as follows: but temporary in their nature and go nowhere toward the (2) To irrigation districts organized under the laws of any State, upbuilding of national life; but the moneys of the Govern­ and operating under contract with the United States, to aid in the payment of their operation and maintenance charges and to ment extended by way of encouragement to the men or provide funds for the installation and operation of necessary women who, tilling the soil, support themselves, is money works, and to protect the rights of the United States in the well expended, leads to national security, and builds a project. nation of industry. The honest tiller of the soil seeks for There was nothing in that amendment that indicated no dole. He only seeks an opportunity to cope with the that these irrigation districts would not pay back the loans forces of nature, cause the soil to produce and support that they wanted to make, the money that they wished to himself and his family. The millions of acres now in the borrow from the Reconstruction Finance Corporation. vast West, yet unclaimed, must in the days to come con­ There is nothing in my amendment that would make inse­ stitute the haven to which honest toil will turn, on which cure $1 or any sum borrowed by these farmers from the homes will be constructed and out of which a national life Reconstruction Finance Corporation. Indeed, if other loans and a national destiny will be perpetuated. made . by the Reconstruction Finance Corporation under Why, Mr. President, should we be willing to extend a congressional sanction were as secure or as certain of being helping hand to everyone who seeks to borrow Federal repaid as the loans provided for by the amendment which money but deny to the builders of the Nation the right to I offered to the Wagner bill, the Government and the Re­ prosecute an honest pursuit, out of which they will support construction Finance Corporation, acting for the Govern­ themselves and thus lighten 1ihe burden of national obliga­ ment, would have little to worry over. tion? 3120 CONGRESSIONAL RECORD-SENATE MAY 10 I Mr. President, for the reasons I have given, I must oppose Mr. ROBINSON of Arkansas. Mr. President, the Sen­ the adoption of the conference report. ator has referred to the fact that a separate vote was taken The VICE PRESIDENT. The question is on agreeing to in the House on the amendment to which he has been the conference report. referring. Mr. CLARK. I ask for the yeas and nays. Mr. NORRIS. Yes. The yeas and nays were ordered. Mr. ROBINSON of Arkansas. The RECORD shows that On a roll call, the conference report was adopted and the the vote was on a motion to recede and concur in the McCarran amendment was lost. Senate amendment, which was a direct vote on the amend­ Mr. NORRIS. Mr. President, I want to say a word or two ment. on the conference report before the vote is taken. Mr. NORRIS. A direct vote; yes. It seems to me that Senators ought to remember, to begin Mr. ROBINSON of Arkansas. And that the vote was 109 with, that all legislation is more or less the result of com­ in favor of the motion, to 283 against. promise. Necessarily, in order to reach any agreement, a Mr. NORRIS. With that vote staring us in the face, I conference committee must compromise. In this case the do not believe we are justified in delaying longer final action. committee has stricken out, in the compromise, an amend­ Mr. BORAH. Mr. President, will the Senator yield? ment which, in my judgment, as far as the farm portion of Mr. NORRIS. I yield. the bill is concerned, is more important than any other. Mr. BORAH. If a majority should vote against the adop­ I believe under it a great deal of good could have been done tion of the report, it would have the effect of sending it for the farmers. But I must say that the conferees acted back to conference? absolutely fairly with the Senate. I think the record shows Mr. NORRIS. Yes. that the conferees on the part of the Senate did the best Mr. BORAH. It is not a final disposition? they could to retain the amendment. They refused to agree Mr. NORRIS. No. to having it stricken out, and the House conferees took the Mr. FLETCHER. But there is nothing about which to matter back to the House. That was a fair thing to do. confer except this one amendment, and the House, by the That was a courteous and a gentlemanly and a logical way to vote just mentioned, rejected it. proceed. The House rejected the amendment by an over­ Mr. BORAH. I recall that at the last session the House, whelming majority. on three different occasions, voted a certain way, and finally, Mr. President, I should have liked to see that amendment on the fourth, reversed its position on the matter; so that there is a possibility of their changing in regard to this. stay in the measure, but it looks to me as though it is a Mr. NORRIS. I concede that there is a possibility that practical impossibility, with the record before us, to retain that might happen. that amendment, even if we should reject the pending con­ ference report. Mr. BORAH. I believe the cost-of-production provision, so far as the farm part of the legislation is concerned, is There were a great many other good features in the bill the most important part of the measure. I am in favor which have been kept in. I recognize that every Senator of making every effort to secure it as a part of the law. must balance in his own mind the importance of amend­ Mr. NORRIS. I think so. There is another thing about ments which he favors, and which have gone out, and put it. That provision, like all the other provisions in the farm on the other side of the scales the probability of accomplish­ part of the bill, would not be compulsory on the Secretary ing anything in the desired direction if we reject the con­ of Agriculture. That could be retained and still not be ference report. enforced. I was very glad to help put that provision in, in If the House had not acted on the amendment to which the committee, and was glad to defend it on the floor of the I have referred I would have been here today advocating Senate, and I should like to see it in the law. I believe there the rejection of this conference report; but I do not see how is a principle involved which is a right principle. I do not we can ask of our conferees, as far as that amendment is want to ask our farmers to produce anything at a loss. concerned, anyway, any greater work or any more :fidelity They are entitled to cost of production. to duty than they have exhibited. They went to the ex­ Mr. FRAZIER. Mr. President, will the Senator yield? treme. I thinlt they were justified in doing that; but, as I Mr. NORRIS. I yield. look at it, they did their absolute duty. They refused to Mr. FRAZIER. I want to have clear in my mind what consent to the elimination of the amendment until the the status _of the cost-of-production feature is to be if we logical step was taken which the House conferees agreed to adopt this report. take, until the bill was carried back for action in the House. Mr. NORRIS. It will be out of the bill, and our adoption If the amendment had been defeated by a close vote in the of the conference report, as I understand it, will be th~ House, I might feel differently about it, but it was defeated final act. I think that is correct. by an overwhelming vote. Mr. FRAZIER. As I understand the situation, the Sen­ Mr. FLETCHER. Mr. President, I may say to the Sen­ ator from South Carolina stated that he intended to move ator that that was the only amendment in disagreement, to recede to the House on this cost-of-production provision and we insisted that the House conferees take it back and after the report was adopted. get a vote on it. Mr. NORRIS. He could not do that, as I understand the Mr. NORRIS. They took it back, and the House has present parliamentary situation. acted. With the action of the House on that particular The VICE PRESIDENT. The question before the. Senate amendment before us, as much as I favor it, I must say that is on agreeing ·to the conference report, which does not I believe nothing else could be accomplished. If it were a include amendment no. 83. The Senator from South Caro­ separate bill, standing alone, and the same action had been lina [Mr. SMITHJ has announced that after the conference taken, if the House rejected it, no matter how we might report is agreed to, he will move that the Senate recede from feel about it, we would have to accept the result. its position on amendment no. 83. Mr. LONG. Mr. President, will the Senator yield. Mr. NORRIS. I did not understand that. Mr. NORRIS. I yield. Mr. LA FOLLETTE. Mr. President, I wish to say that in Mr. LONG. I do not desire to make a speech, but I want view of the circumstances I shall vote for this partial agree­ to say that I shall vote for the conference report and for the ment, but I shall also vote against receding from the position bill solely because provision for inflation has been incor­ of the Senate on the cost-of-production amendment, and I porated in the bill. shall vote against the joint resolution proposing to strike out Mr. NORRIS. Mr. President, that is one of the best the word" basic", and to extend the power to make agree­ things in the bill, I think. We have sometimes to yield in ments under immunity from the Antitrust Act. order to accomplish the enactment of any legislation, and, The VICE PRESIDENT. The yeas and nays have been for the reasons I have stated, I believe we ought to approve ordered, and the clerk will call the roll. the pending conference report. The legislative clerk proceeded to call the roll. 1933 CONGRESSIONAL RECORD-SENATE 3121 Mr. PATTERSON

3122 _CONGRESSIONAL RECORD-SENA.TE MAY 10 further statement that the farmers of the country would get tary of Agriculture in Washington in regard to the average more under his proposed plan than they would under the cost of production of wheat for the 1932 crop and that the cost-of-production plan. I submit that there is an absolute then Secretary of Agriculture last January made the report inconsistency in the statements made by the Secretary of that for hard wheat the average cost of production was $1.01 Agriculture. First, he states that the adoption of the cost­ per bushel and for winter wheat $1.14 per bushel. of-production plan will result in backing up commodities on Mr. WHEELER. Mr. President, my attention has just the farm because of the fact that the cost-of-production been called to this statement in the Democratic national price would make prices too high. Secondly, he states that platform: if the farmers should get what he proposes to give them, they The enactment of every constitutional measure that wlll aid the would get more than they would get under the cost-of-pro­ farmers to receive for their basic farm commodities prices in duction plan. Thirdly, he states that it is impossible to excess of cost. ascertain what the cost of production is, notwithstanding That pledge was in the Democratic national platform the fact that the Department of Agriculture has for years which was drafted in the city of Chicago last year. I was been asking the Congress of the United States to appropriate one of the members of the committee that wrote it. We millions of dollars to find out what is the cost of production wrote it in the platform because of the fact that farm of the farmer's product; and the Department has actually organizations came to Chicago and asked for that very given out statements setting forth what the cost of produc­ provision. Now we are not only not going to give them a tion is of wheat and cotton and various other commodities plan that would give them in excess of the cost of produc­ produced in the United States. tion but we are asking in this amendment that they be given The Secretary of Agriculture is in the position of coming only the actual cost of production. The Senator from South to the Congress of the United States and asking for unlim­ Carolina [Mr. SMITHJ-and I appreciate that he is actuated ited power to abolish by agreement the effect of the Sher­ by the fact that the Secretary of Agriculture has taken the man antitrust law, and he asks that he be permitted to put position he has taken-is asking Members on this side of into operation one of several different schemes for the pur­ the Chamber actually to go back upon the promise made to pose of raising commodity prices; but when the largest farm the people in our Democratic national platform. organization in the United States of America, representing Mr. NORRIS. Mr. President, I made some remarks on more actual dirt farmers than all other farm organizations the prior motion to agree to the conference report under a put together, request that there be inserted in this bill a misapprehension of the parliamentary situation. I thought provision giving the Secretary of Agriculture the discre­ it was a complete report and that the cost-of-production tion as to whether or not he shall put into operation the amendment was included in it. I would not be willing to plan which they have proposed and for which they are kill the bill by insisting upon the inclusion of the provision asking, then, Mr. President, the Secretary of Agriculture on which we are about to vote. I said what I did at that stat ~s that he does not want that power. I say that it is time on the theory that it was all included in the ~onference unfair to the farmers of the Northwest; and, in my humble report. I was unwilling to prevent the adoptiori of the con­ judgment, if we strike this amendment from the bill, we ference report and send it all back to conference by voting are really doing a disservice to the country. Not only has against the conference report. I find that I was wrong. the Farmers' Union, which, as I said a moment ago, and This is a proposal outside of the conference report which which I want to impress upon the Senate, represents more has been agreed to. This is a proposal to pass on the par­ actual dirt farmers in this country than all the remainder ticular amendment; in other words, it is a motion to recede. of the farm organizations put together, asked that the cost­ I believe that we are justified in sending it back to confer­ of-production plan be incorporated in the bill, but likewise ence, and that would be the effect of def eating the motion, the farmers in Iowa, in Wisconsin, and throughout the because its defeat would be followed by a motion to send it Northwest, who have recently organized a new group and back to conference. So far as I am concerned, I should like are now threatening a strike, have asked that this provi­ to try it again in conference, and therefore I feel justified in sion be placed in the bill. I see no reason in the world why voting against the motion. this Congress, the Democratic Members of which pledged Mr. ROBINSON of Arkansas. Mr. President, in view of themselves in the Democratic National Convention to give the vote in the body at the other end of the Capitol on this the farmers cost of production for their products, should amendment, a direct vote rejecting it, I do not believe that not have the courage to put the cost-of-production plan in the Senate is justified in delaying the final passage of the the bill so that the Secretary of Agriculture may have the bill by taking steps to return the bill to conference. If the power in his discretion to place it in operation. vote in the House had been close, Senators who favor I want to say to any Senator from the Middle West, to amendment no. 83 would apparently be justified in that any Senator from the Northwest, to any Representative course even though they favor the bill. But with a vote from any of the farming States, that he is going to have a of 109 in favor of amendment no. 83 and 283 against it, very difficult time explaining to his constituency, if we give a vote that is nearly 3 to 1 against it, it is apparent that the the farmer cost of production, how it is going to back up Senate will finally yield on the amendment. the products on the farm, and then say to the farmer in By reason of the injection into the farm relief bill of izn .. the next breath that we are going to give him more under portant but comparatively irrelevant matters, the consider­ this bill than if he had cost of production. Talk about in­ ation of the measure already has been long drawn out. consistencies on the part of the Department of Agricul­ Quite naturally those who are opposed to the legislation join ture! This seems to me to be the extreme limit. in proceedings calculated to defer its enactment in the Mr. President, I propose to vote against the motion of the hope that its def eat might finally be accomplished. Already Sena tor from South Carolina to recede from the amend­ the planting season in many sections of the country is far ment. I think it ought to be in the bill. I think Congress advanced. If the provisions of the bill having relationship ought to keep it there. If the Department of Agriculture to agricultural-commodity prices are to have any effect can find the cost of production, as they have said they have during this season, the measure must be quickly disposed of. found it, then. how can we go back and say to our people, The Senator from Nebraska [Mr. NORRIS], in my judg­ "We will give you this kind of price fixing bill, but we will ment, in his first statement took the correct position on not give you something else you have asked for"? the subject. I know there is much support here for the Mr. FRAZIER. Mr. President, the Senator from Montana so-called" cost-of-production amendment." It is well known [Mr. WHEELER] referred to the ability of the Department to to the Senate that I did not favor it when the bill was under get cost-of-production figures. In yesterday's debate on the consideration. For that reason I have no right to speak floor of the House Representative LEMKE, of North Dakota, for or attempt to bind those Senators who did favor it. made the statement that last January, which is January of But with the Secretary of Agriculture vested with discre­ the present year, the secretary of agriculture of the State tion in the use of the plan, with his announcement generally of North Dakota had made an inquiry of the then Secre- understood that he would not resort to the plan, nothing 1933 CONGRESSIONAL RECORD-SENATE 3123 whatever is . to be accomplished by incorporating it in the I agree with the Senator from Arkansas that it does not bill except perhaps embarrassment as to the administration cost the farmers of the United States a dollar and a half of other features of the bill. a bushel to produce wheat at the present time. I do not I shall not go at length into the merits of the cost-of­ know anything about cotton, but I assume likewise that he production plan for the relief of agriculture. It developed is correct when he states that it does not cost 23 cents a here that the proponents of the plan contemplated such a pound to produce cotton at the present time. In this amend­ system of reaching a conclusion as to what constitutes cost ment there is no mention of fixing the price of wheat at of production that the conclusion would have little relation­ $1.50 a bushel, nor is there any mention of fixing the price ship to any statistics that are available from any source. of cotton at 23 cents a pound, although I should like to see Reference has been made to the provision of the Demo­ the farmers get that price for their products. The amend­ cratic platform that prices be promoted for agricultural ment simply provides that the cost of production shall be commodities that would exceed the cost of production. That found, and the only people who will find it will be the De­ standard, of course, is somewhat indefinite. The plan incor­ partment of Agriculture when they fix it. porated in the bill, the fair exchange value, in most instances The cost-of-production provision of this bill is much would support prices that would exceed any cost-of-produc­ simpler, much easier, it seems to me, to put into operation, tion arrangement that might be worked out. There are much more consistent with Democratic principles, than other probably some instances in which that would not be true, features of the bill, in that it does not build up a great but if the fair exchange value can be given effect it would bureaucracy here in Washington; it does not seek to regulate result in justice to every one and in injustice to no one. every farmer in the United States; it does not seek to put It would be the equivalent of the cost of production except in a processing tax upon various industries, as is proposed a few cases. under the bill; it does not seek to break down the Sherman Mr. FRAZIER. Mr. President, will the Senator yield? antitrust law. And let me call attention to this fact: The VICE PRESIDENT. Does the Senator from Arkansas In the Democratic platform we have this provision: yield to the Senator from North Dakota? We advocate strengthening and impartial enforcement of the Mr. ROBINSON of Arkansas. I yield. antitrust laws to prevent monopoly and unfair trade practices. Mr. FRAZIER. The Senator from Arkansas made the Yet the effect of this bill as it now comes from the con­ statement that it would be an injustice to no one if the fair ference committee is completely to break down the Sherman exchange value was adopted. In cases where the fair ex­ antitrust law. The effect of it is to permit one man-the change value is less than cost of production, it would be Secretary of Agriculture of the United States of America-­ gross injustice to every farmer who produces commodities to enter into agreements with the packers of this country, that come under the provisions of the bill. with the millers of this country, and also with any other Mr. ROBINSON of Arkansas. I have already said that industry that he wants to enter into an agreement with in cost of production usually is actually less than the fair ex­ order, he-may say, to carry out the provisions of the bill. change value as contemplated in the bill. The Members of the Senate ought to realize, when they To give an illustration, which is one that I discussed here are casting a vote for this bill under these circumstances, some time ago, some of the proponents advocating the amend­ what they are doing. We ought to have the courage to ment before the committee took the position that in order stand up and express our own individual views with refer­ to give cost of production it would be necessary to fix prices ence to these matters, and not simply take the dictation of at $1.50 per bushel for wheat and 23 cents per pound for some professor down here in the Department of Agriculture cotton. I say that the conclusion is so erroneous as to raise as to what we should do and what we should not do with a question as to the value of the judgment of those asserting reference to these promises that we have made to the farm­ it. It does not cost anything like 23 cents a pound to grow ers and to the other people of this country. cotton, and every Senator from a cotton State knows that is So far as I am concerned, I want to say that when we true. It does not cost anything like $1.50 per bushel. save strike out this provision we are violating two provisions of perhaps in certain comparatively small localities, to produce the Democratic national platform adopted in the city of wheat. After all, an average must be taken. It costs less Chicago less than a year ago. We ought to realize the tre­ than 10 cents a pound to produce cotton in the cotton­ mendous power that we are placing in the hands of the growing states under present conditions. It costs less than Secretary of Agriculture, first, as I say, to fix prices. Talk $1 per bushel to produce wheat in most of the wheat-grow­ about a price-fixing scheme! The so-called " allotment ing sections of the country under present conditions. plan" is nothing more than a price-fixing scheme. Then I There is no use in attempting to fool the American want to repeat what I said a moment ago as to the incon­ farmer. There is no plan that can be resorted to that will sistent position taken in the letter of the Secretary of Agri­ fix the price of cotton at 23 cents a pound in the United culture. First, he says that if we give the cost of produc­ States without destroying both the cotton-production in­ tion, commodities will back up on the farm. Then he says dustry and the cotton-manufacturing industry. A similar in the same letter that if we pass this bill, the farmers will provision is correct with respect to the production of wheat. get more than they will get under the cost-of-production But, after all, those who favor the cost-of-production plan. I am perfectly amazed, and I want simply to say this amendment must realize that in order for the legislation to in conclusion: become effective at all there must be an agreement between I dislike very much to have to disagree with the Secretary the two Houses. The Senate conferees have been fair about of Agriculture, in whom I have a great deal of confidence the matter. Even after the House took the vote of 109 to and for whom I have a great deal of respect; but I think 283 against the amendment, the conferees did not attempt he is wrong in this instance. I think he is wrong when he to enter into an agreement but brought it back here for in­ comes here asking for power to place a tax upon com­ structions from the Senate. If we should send the bill back modities, when he asks for power to let these people enter to conference, as many are disposed to do, there would be into agreements with him violating the Sherman antitrust still further delay, and the result would be that in all prob­ law; and I think the Democratic Party will deeply regret ability we would have to yield in the end. the action it takes when it passes this bill containing some Mr. SCHALL. Mr. President, just a word. of these provisions. I think we are going to have to ex­ The farmers of my State are wondering why the admin­ plain our action to the people of this country when we istration is so zealous in avoiding competition and cut­ break down the Sherman antitrust law in the face of plat­ throat prices in all things that the farmers have to buy, while form pledges, in the face of the long-established principles it is strenuously opposing fair cost of production to the of our party. !armers. • I, for one, am going to assert my independence. I am Mr. WHEELER. Mr. President, I desire to call attention going to vote to keep the platform pledge. I am going to again to the Democratic platform in two particulars. vote to keep the promises that I made to the farmers of my 3124 CONGRESSIONAL RECORD-SENATE MAY 10 State, and not only to the farmers of my State, but to the METCALF] is specially paired with the Senator from Colo­ farmers in the entire Northwest, in Iowa, in Minnesota, in rado {Mr. COSTIGAN], who, if present, would vote "nay." North Dakota, in Wyoming, in Utah, and in Idaho, because The roll call was concluded. I went upon the public platform and said that when we Mr. McKELLAR. I desire to announce that my colleague adopted this platform we meant what we said. the junior Senator from Tennessee [Mr. BACHMAN] is un­ I never intended to vote for a bill giving to the Secretary avoidably absent on public business, and that, if present, he of Agriculture the power absolutely and completely to break would vote "yea." He is paired with the junior Senator down the Sherman antitrust law, and to let one man say from New Jersey [Mr. BARBOUR]. what is a good monopoly and what is a bad monopoly. I Mr. McADOO. I have a general pair with the senior never intended to vote to give to one man the power to tax Senator from Vermont [Mr. DALE]. Not knowing how he the people. I never intended, after making these pledges would vote on this question, I refrain from voting. If I were and saying to the people of this country, "We are going to at liberty to vote, I should vote "nay." give you cost of production'', to have one man come here Mr. FESS. I desire to announce the general pair of the and say, "We are not going to do it; and not only will we Senator from Rhode Island [Mr. HEBERT] with the Senator not do it but we will not even let the Congress of the United from Illinois [Mr. LEWIS]. States give us the discretion to use the cost-of-production I also desire to state that I am advised that the Senators plan in the event that we find that our own scheme does not from Rhode Island [Mr. METCALF and Mr. HEBERT), the Sen­ work out." ator from Vermont [Mr. DALE], and the Senator from New I hope the motion of the Senator from South Carolina will Jersey [Mr. BARBOUR] would, if present, vote "yea,, on this be voted down. question. Mr. FRAZIER. Mr. President, the remark made by the Mr. DIETERICH. I desire to announce the necessary ab­ Senator from Arkansas [Mr. ROBINSON] a few moments a,go, sence of my colleague [Mr. LEwrs], who is paired with the in regard to " fooling the American farmer ", reminded me Senator from Rhode Island [Mr. HEBERT]. If present, my of a statement made recently by John Simpson, the presi­ colleague would vote" yea." dent of the National Farmers' Union organization. He Mr. KENDRICK. I desire to announce that the Senator referred to the paragraph in the Democratic platform that from New York [Mr. WAGNER], the Senator from Oklahoma the Senator from Montana [Mr. WHEELER] read a few (Mr. GoRE], the Senator from Massachusetts [Mr. WALSH], moments a.go about giving the farmers cost of production the Senator from C-0lorado [Mr. COSTIGAN], and the Senator for their products. Mr. Simpson said that he was a delegate from Utah [Mr. KING] are necessarily detained from the from the State of Oklahoma, his own State, to the Demo­ Senate on official business. · cratic National Convention at Chicago, and was very anxious The result was announced-yeas 48, nays 33, as follows: to get that provision in the platfol"m, and succeeded in doing YEAs-48 so with the help of the Senator from Montana [Mr. WHEELER]. Adams Connally Harrison Pittman Ashurst Coolidge Hastings Reed Mr. Simpson states that he campaigned in 12 or 14 of the Austin Copeland Hayden Robinson. Ark. greatest agricultural States of the Nation last fall during the Balley Couzens Johnson Sheppard Bankhead · Dickinson Kean Smith campaign, he made over a hundred speeches, and especially Barkley Dieterich Kendrick Steiwer stressed that feature of the Democratic platform that the Black Fess Keyes Stephens farmers would get cost of production for the amount of their Brown Fletcher Logan Townsend Bulkley George Lonergan Trammell basic products used for home consumption here in the Byrd Glass McKellar Tydings United States. Byrnes Goldsborough McNary Walcott Carey Hale Patterson if White Mr. President, I submit that we strike out this provision NAYS-33 for cost of production it will amount to a repudiation of the Bone Erickson Norbeck Shipstead Democratic platform, and also of the RepubHcan platform, Borah Frazier Norris Thomas, Okla. because in the Republican platforms of the last 2 or 3 con­ Bratton Hatfield Nye Thomas, Utah. Bulow La Follette Overton Vandenberg ventions we have promised practically the same thing. So Caraway Long Pope Van Nuys it seems to me that if this is stricken out. it means fooling Clark McCarran Reynolds Wheeler Cutting McGill Robinson, Ind. the farmers some more; and I want to say right here that Dill Murph.y Russell the farmers of the Nation, not only in the Middle West but Duffy Neely Sch.all in the South and in the East and all over the Nation, are in NOT VOTING-14 no mood to be fooled a.ny longer. They want cost of pro­ Bachman Dale King Wagne:i: Barbour Davis Lewis Walsh duction for their products. They are entitled to it. They Capper Gore McAdoo should have it. They have been promised cost of produc­ Costigan Hebert Metcalf tion by the Democratic Party, which swept the Nation last So the motion of Mr. SMITH that the·Senate recede from fall. They have been promised cost of production in the its amendment numbered 83 was agreed to. past and fooled by the Republican Party; and now are they going to be fooled again by the Democratic Party? If they CORRECTION IN EN.ROLLMENT OF FARM RELIEF Bll.L are, it is going to be just too bad for that party. The VICE PRESIDENT laid before the Senate House Con­ The VICE PRESIDENT. The question is on the motion current Resolution 18, which was read, as follows: of the Senator from South Carolina [Mr. SMITH] that the Resolved by the House of Representatives (the Senate concur­ ring), That in the enrollment of the bill (H.R. 3835) to relieve the Senate recede from its amendment numbered 83. On that existing national economic emergency by increasing agricultural question the yeas and nays have been demanded and or­ purchasing power, to raise revenue for extraordinary expenses in­ dered. The clerk will call the roll. curred by reason of such. emergency, to provide emergency relief with. respect to agricultural indebtedness, to provide for the orderly The Chief Clerk proceeded to call the roll. liquidation of joint-stock land banks, and for other purposes, the Mr. PATTERSON

MUSCLE SHOALS the witness stand. But if a man is in a position of trust The VICE PRESIDENT laid before the Senate the action and confidence, and the message purports to be a code of the House of Representatives disagreeing to the amend­ message, whether it is a code message or not a code mes­ ments of the Senate to the bill (H.R. 5081) to provide for the sage, he still would be violating his trust if he deliberately common defense; to aid interstate commerce by navigation; and willfully published it or deliberately and willfully gave to provide flood control; to promote the general welfare by it to another to be published without competent authority, creating the Tennessee Valley authority; to operate the as provided in the bill. Muscle Shoals properties; and to encourage agricultural, in­ I do not think we should encourage trusted officers, who dustrial, and economic development, and requesting a con­ are in such confidential relationship, who are taught by the ference with the Senate on the disagreeing votes of the two United States Government to interpret other codes than Houses thereon. their own, who must have great confidence reposed in them, Mr. NORRIS. Mr. President, I move that the Senate in­ willfully and deliberately, without authority, to utilize that sist on its amendments, agree to the conference asked by the private information to the embarrassment of our Govern­ House, and that the Chair appoint the conferees on the part ment, or of any government with which we are friendly. of the Senate. Mr. BONE. Mr. President, will the Senator yield? The motion was agreed to; and the Vice President ap­ Mr. PITTMAN. I yield. pointed Mr. SMITH, Mr. KENDRICK, Mr. WHEELER, Mr. NORRIS, Mr. BONE. I am rather curious to know what it is that and Mr. McNARY conferees on the part of the Senate. we have managed to go along from the First Congress to the Seventy-third without this sort of legislation. What is the PROTECTION OF GOVERN?4ENT RECORDS purpose of it at this time? Mr. PITTMAN. Mr. President, I move that the Senate Let me ask a further question before the Senator answers. proceed to the consideration of House bill 4220, for the pro­ This measure apparently is quite broad enough to bring tection of Government records. about the imprisonment or the fining of a man for pub­ The motion was agreed to; and the Senate proceeded to lishing anything in any diplomatic code. For instance, if consider the bill. I were a Government employee and I should by some means The VICE PRESIDENT. On Monday last this bill was have access to a code of any nation on earth, and should passed and a motion was made and agreed to to reconsider publish any part of that code, having nothing to do with the vote by which it was passed. The question now is, Shall my own country at all-it might be a message passing be­ the bill pass? tween two European governments-if I got possession of Mr. JOHNSON. Mr. President, I had assumed that some­ that and published it in this country, I could, under this body would present this measure and explain it. If nobody measure, be subjected to fine and imprisonment. I am will, I will endeavor, for the benefit of the authors of the wondering whether it is necessary at this time to have this bill, to make the explanation which I think is appropriate, kind of legislation enacted. and then to state why I am against the bill. Mr. PITI'MAN. Mr. President, I will state that in the Mr. PITTMAN. Mr. President, a subcommittee of the past our Government apparently has been very fortunate Committee on Foreign Relations was appointed to consider in having trusted employees in these extremely confidential House bill 4220 and to propose amendments to it. The bill positions. It has, however, recently found, or believes it has as it came from the House provided that certain acts com­ found, that there are grounds for suspecting that that con­ mitted by the press should be considered as criminal acts. fidence has been violated, and may be violated again. If All of that portion of the measure has been eliminated. The this measure did not apply to information obtained by an only act made a crime by the measure as it now stands is officer through his public employment, I could understand that of a person who, by virtue of his employment, acquires why it would be pretty broad to say that the Senator from certain Government records, or correspondence between gov­ Washington, or anyone else, should not pick a code message ernments, and publishes it, or gives it to another to publish. out of the air and publish it. This measure applies only Mr. President, in its present form the measure provides­ to one who obtains possession of information by virtue of That whoever, by virtue of his employment by the United States, his employment by the United States, not to anybody else. shall obtain from another or having custody of or access to, or Mr. BONE. May I ask the Senator one more question? having had custody of or access to, any official diplomatic code or any matter prepared in any such code, or which purports to have Mr. PITTMAN. Certainly. been prepared in any such code, shall willfully, without authori­ Mr. BONE. Is this bill designed to punish someone who zation or competent authority, publish or furnish to another any has already committed some such offense? such code or matter, or any matter which was obtained while in Mr. PITTMAN. I think not, because in that event it the process of transmission between any foreign government and its diplomatic mission in the United States, shall be fined not would be an ex post facto law. It is, rather, a warning of more than $10,000 or imprisoned not more than 10 years, or both. what the department considers a violation of a trust. Ac­ In the first place, it will be observed that the measure is cording to the Secretary of State, it is deemed advisable in limited to the individual. It will also be observed that he the future to protect the Department against such breaches must acquire possession of the diplomatic papers by virtue of trust as are covered by the bill. of his office. In other words, the individual will be guilty I ask leave at this time to place in the RECORD a letter of a breach of confidence, and, to some extent, guilty of an from the Secretary of State with regard to the matter. I act almost verging on treason, in violating the extraordinary will not take the time to read it or comment upon it, except confidence placed in him by virtue of his office, where he to say that he disclaims emphatically any desire, in the first might obtain possession of code messages, whether those place, to have this measure refer to the press or in any way code messages were of his own Government or of some other restrict the press in the publication of facts; that he had no government. In my opinion, it is unconscionable for trusted knowledge that the bill was in that form when it was pre­ employees to publish private correspondence between for­ sented to the House of Representatives, and that he approves eign governments which they obtain by virtue of their office. the bill in the form in which it now stands with the amend­ That is all that is covered in the measure, in my opinion. ment reported by the Senate Committee on Foreign Rela­ There has been some objection to the words "or which tions. purports to have been prepared in any such code ", on line The PRESIDING OFFICER (Mr. BYRD in the chair). Is there objection? The Chair hears none, and it is so ordered. 9, page 3. The reason for that is this: If a message purports to be a code message between some foreign government and The letter referred to is as follows: MAY 6, 1933. our Government, or between two foreign governments, and The Honorable KEY PITTMAN, it is obtained by one through virtue of his office, or through United States Senate. his ability to crack a code which he has been taught by MY DEAR SENATOR: I am in receipt of your letter of May 3, 1933, be regarding the bill (H.R. 4220} for the protection of Government our Government, it might found almost impossible to records, and I submit, for your information and for such use as prove that it was a code of the foreign government without you may think proper, the following statement as to the genesis placing the representatives of that foreign government on of the bill. 3126 CONGRESSIONAL _RECORD-SENATE MAY 10

When I assumed my present official position at the State Depart­ NOTIFICATION OF NOMINATION OF J. F. T. O'CONNOR ment I soon learned that certain individual acts of interference with secret governmental code information in process of trans­ Mr. LONG. Mr. President, will the Senator from Cali­ mission between this and other countries, or like information in fornia yield to me to make a request for unanimous consent? process of transmission between a government and its diplomatic Mr. JOHNSON. I yield. mission in the United States, and the threat to make the results public, imperatively called for immediate action making such Mr. LONG. Mr. President, I ask unanimous consent that publication unlawful. the President be notified of the confirmation of the nomi­ I, thereupon, telephoned a ranking member of the appropriate nation of Mr. J. F. T. O'Connor as Comptroller of the committee of the House of Representatives, calling attention to this state of facts and suggesting appropriate legislation to make Currency. I think there is no objection to the request. unauthorized publication of the particular kind of code infor­ Mr. VANDENBERG. Mr. President, has the Senator con­ mation just described, unlawful. I think I suggested to one of sulted the Senator from Oregon [Mr. McNARY]? the attorneys in the State Department that he might well have Mr. LONG. I tried to see him, but he was not here. a similar telephone conve:rsation with a member or members of the appropriate committee of the House of Representatives, which Mr. VANDENBERG. The Senator from Oregon objected be late.r informed me he had immediately proceeded to cio. Some on a previous occasion, and I suggest to the Senator from days later I was informed that a number of officials in two or Louisiana that he wait until the Senator from Oregon shall three branches of the public service collaborated in the preparation be present before he makes the request. of the measure against which you complain, and also that certain of its provisions were being objected to upon the ground that The PRESIDING OFFICER. Objection is made. they infringed upon the freedom of the press. PROTECTION OF GOVERNMENT RECORDS Such effects as to the press, of course, were not remotely con­ templated by myself in telephoning, nor I run sure, were they The Senate resumed the considerati1ln of the bill (R.R. contemplated by those responsible for the final draft of the bill 4220) for the protection of Government records. in question. At any rate, I at once urged that any provisions Mr. ROBINSON of Indiana. Mr. President, will the Sen· that could possibly be construed as to the least extent affecting the freedom of the press be stricken out of the bill. There is ator from California yield to me for the purpose of suggest­ not the slightest relationship between the protection of code in.for­ ing the absence of a quorum? mation as aforesaid and the utmost freedom of the press. And Mr. JOHNSON. No. I thank the Senator very much. besides, my individual view is that the American public should suffer incalculable injuries in other respects before the freedom Mr. President, the suggestion was made by the Senator o! the press should be injuriously atfected to any material extent from Indiana that I yield for the purpose of having a whatever. I think I have a consistent public record of 40 years in quorum called. I deem it wholly unnecessary, because those support of this doctrine. who, like myself, have an academic or another sort of in· Sincerely, CORDELL HULL. terest in a measure of this kind would probably have very short shrift at this particular time in the pleading effort Mr. JOHNSON obtained the fioor. to create another crime at the instance of a particular Mr. CUTTING. Mr. President-- department of the Government. The PRESIDING OFFICER. Does the Senator from Mr. President, it will be observed that the title of this California yield to the Senator from New Mexico? bill is "An act for the protection of Government records." Mr. JOHNSON. I yield. On the calendar it is thus described as well-"An act for the Mr. CUTTING. Mr. President, I should like to ask the protection of Government records." As you read the bill, Senator from Nevada a question before he sits down. I Mr. President, you may regard it as quite innocent, as an merely want to ask the Senator for an explanation of the ordinary measure, creating another crime, it is true, but words "or any matter which was obtained while in the creating a crime designated therein that is repugnant, of p-rocess of transmission between any foreign government and course, to everyone who believes in the sacredness of fiduci­ its diplomatic mission in the United States." ary relations. Upon its face the bill is as conventional as As I read those words, they are not limited to questions a wed.ding and as respectable as a funeral. It is a measure, involving a code, but apply to any matter obtained in trans­ Mr. President, that as you read it would indicate that some mission of the kind indicated. I was wondering what, in wrong has been committed in the past or some wrong is the judgment of the Senator, the necessity was for those about to be committed or may be committed in the future words. that should meet with condign punishment from the Gov­ Mr. PITTMAN. It would undoubtedly cover mail corre­ ernment and should be repugnant to and should be repre­ spondence as well as wireless and telegraph messages in hended by ~very man who is called upon to pass upon a bill code. If a message were telegraphed or sent by wireless of this sort. and were not in code, then the provisions of the bill would But, Mr. President, if one reads with care, if one analyzes not apply; but if some employee of our Government " by the bill as one ought to analyze a measure creating a new virtue of his employment "-for I will have to tie everything crime, if we look at the measure in its implications and its to those words-obtained possession of a mail sack of the possibilities, it is not quite so innocent as it appears at first British Government directed to the British Ambassador blush, and it does not accomplish the result that was sought here and robbed it, or if he got possession of it in any way when the bill was presented. Probably there are not many by virtue of his employment under the United States, I say Members of the Senate here who are interested. in this bill that he should be punished. at all, but those who are here ought to know its genesis, and Mr. CUTTING. I agree with the Senator to that extent, they ought to understand exactly why it was presented in but I cannot read the bill as the Senator reads it. To my th fashion that it was. mind " by virtue of his employment by the United States " It happened that on a certain day young gentlemen from applies only to the obtaining of a code or other document the state Department rushed into the Capitol here, and said and anyone who shall obtain such code is thereupon for­ that, as a matter of emergency, in order that guns should bidden from publishing not merely the code but possibly any not rumble at our doors, we should forthwith pass this matter obtained, as the Senator says, while in transit measure. Indeed, so persuasive were they with the House through the mails. that the House considered it without ever telling its Mem­ Mr. PITTMAN. The interpretation I put on it, of course, bers why it was presented and without Members of the House is that the prohibition applies only to those who obtain the knowing at all the subject matter of the bill or the reason matter by virtue of their employment, whether it be a code for the emergency. "Emergency" was cried again and message by air or a communication lying on a desk which again in the House in respect to this measure; it was cried is intended to be confidential or a letter that is left on the so successfully that I think within the short space of a very table by accident in the office of the Secretary of State by a few hours the bill which was to rescue us from war was foreign ambassador. I think the words " by virtue of his passed without report, without knowledge, and without dis­ employment " qualify both acts. closure of any kind or any character. "Emergency", in or­ Mr. CUTTING. I apologize to the Senator from Cali­ der that we should not do a great wrong to a foreign coun­ fornia for taking his time. I intend to discuss the pending try; "emergency", sir, that we should be saved from the measure at greater length later. direful consequences, possibly of armed conflict. That emer- ~1933 CONGRESSIONAL RECORD-SENATE 3127 gency was a month and a half ago, and the bill has been In 1932, or perhaps in the early part of this year, he was pending ever since, but nobody has heard of any of the about to publish his second book. It was then that the dreadful and terrible things occuning that it was asserted great " emergency " arose. His manuscript, as I understand, were going to happen unless this bill should forthwith be­ was confiscated, and after its confiscation, then into the come the law of the land. So the reason for the passage of Halls of Congress came these frightened gentlemen to say the bill first so vehemently asserted, does not exist now, and, that it was such a delicate, perilous, and immediate emer­ calmly scrutinizing the past, never did exist. The hysteria gency that they had to have a new criminal statute. That of the young gentlemen of the State Department has doubt­ was the 1st of April or thereabouts of this year. So this less now been succeeded by a tempered judgment. proposed statute i.vas born. I dare state the facts because they have been published Immediately upon the bill being passed by the House­ throughout this country and there is no use in further con­ and it was passed in such fashion that no one knew anything cealment. They are these: Somebody, whose name escapes about it until it had been passed-the members of the press me for the moment, was in the employment of the Govern­ set up the usual howl of the press about the freedom of ment as a Secret Service man or as the head of one of the the press and how this sort of a statute would interfere secret-service departments during the late war. This in­ with them. The result was that, of course, everybody ran dividual was a master of the breaking of codes. Until 1929 to cover and the bill was amended in the twinkling of an eye every first-class government had in its employment in its in order that the press should not be interfered with and secret service an individual who broke the codes of every the freedom of the press at all hazards should be preserved. other country; and every other country on the face of the Then the original bill was reframed and the new measure earth that considered itself a first-class power through its is before us. secret-service agents would, we will say, appropriate-we That is the story of the amendment. The amendment is will not say "steal", but would appropriate-the code mes­ infinitely better than the original bill, I grant, although, of sages that would come into that country from another coun­ course, as will be demonstrated during the progress of the try, sent to the other's diplomatic agents. The nations em­ afternoon doubtless by the distinguished Senator from New ployed individuals to break those codes and, then, of Mexico [Mr. CUTTING], the amendment is not in good Eng­ course, after they had been broken, they were read and lish and makes no sense, but perhaps for that very reason digested by the officials of the country thus translating the it is infinitely better than the bill as originally presented. codes of other nations. [Laughter.] Be it said to the credit of the Government of the United Mr. PITTMAN. Mr. President- States and to the credit of the Secretary of State who came The PRESIDING OFFICER. Does the Senator from Cali­ into office in 1929 that when that practice was found exist­ fornia yield to the Senator from Nevada? ing in our country he stopped it forthwith, and he closed Mr. JOHNSON. Certainly. the particular office that was devoted in our country to that sort of business; and probably-I do not speak, of course, Mr. PITTMAN. Without trying to incriminate anyone, I with exact knowledge-but probably, sir, ours is the only want to say that I was not a member of the subcommittee first-class power in all the world not now doing this sort which prepared the amendment, but it was prepared by other of reprehensible thing that has been done for many years gentlemen. in the past. But remember, always, that the other nations Mr. JOHNSON. I know that. The gentlemen who were of the earth are doing it probably with our despatches sent on the subcommittee which drafted the amendment pre­ to our diplomatic agents in their particular countries. So pared it with the idea of removing the obnoxious portions that was the situation in 1929. of the bill that had been passed by the House. There is no An individual whose name I do not recall-it was pub­ doubt about that. That they did not succeed is the con­ lished in all the newspapers, however, after the particular tention I make. Their intentions were good, but their intelligence department was dispensed with in 1929-saw fit execution was not. to publish a book called "The Black Chamber." Mr. CONNALLY. Mr. President- Mr. CLARK. If the Senator will permit me, the name The PRESIDING OFFICER. Does the Senator from Cal­ was Yardley. ifornia yield to the Senator from Texas? Mr. JOHNSON. Yardley; that is the name. I thank the Mr. JOHNSON. Certainly. Senator from Missouri. Mr. Yardley published a book called Mr. CONNALLY. I am wondering what the Senator ob­ "·The Black Chamber." In that book he purported to set served about the subcommittee? I happened to be a member forth certain despatches that had come from the Japanese of the subcommittee. during the Disarmament Conference in 1922. I read the book Mr. JOHNSON. I said the subcommittee's intentions were at the time of its publication. There was nothing particu­ good, but its execution was bad. larly startling about it; it was more or less interesting; and Mr. CONNALLY. I thank the Senator for his 50 percent we all had the like feeling, I assume, and there could be agreement at least. [Laughter.] no difference of opinion among any of us concerning the publication of the despatches set forth in the volume. He Mr. JOHNSON. The Senator is entirely welcome. published code despatches from the Japanese Government [Laughter.] to its representatives that had come into his hands in 1922 Let us look at the bill as presented. I am speaking more while working for the United States Government. But re­ or less academically in respect to this matter. I do not be­ member also that in 1922, when those despatches were re­ lieve in creating unnecessary crimes. If it be essential that ceived which Yardley published in his book, they were de­ a crime should be created in order that punishment shall coded at the request of our own high officials and put upon be meted out, I can recognize, of course, that it is proper the desks of distinguished gentlemen who represented the for the legislature to undertake it; but unless an absolute United States of America, and they unquestionably were fa­ necessity exists, I do not like the idea of creating additional miliar with them and used them. All right! crimes. Here is a bill designed to fit a particular case. It Yardley committed his offense against good taste, against is a misfit and never will touch that case. It will rest upon every rule that relates to fiduciary relations that we can sug­ the statute books, a criminal law with harsh penalties, gest. I have nothing but indignation for that sort of act until-far in the future, when its original purpose will have upon any man's part, and no sympathy whatsoever with been forgotten-it will be used for another purpose for which him. After the publication of the book referred to he un­ it was never intended and may do gross wrong. dertook recently to publish another containing despatches This has ever been the story of this kind of law made to fit of the 1922 Disarmament Conference and relating, as had some past particular offense. I shall not attempt to parse his first book, to that period. These were communications the sentences. My distinguished friend the English scholar from the Japanese Government to its diplomatic agents here. and grammarian from New Mexico unquestionably will parse 3128 CONGRESSIONAL RECORD-SENATE MAY 10 them for the delectation of the Senate. But I find that Mr. ROBINSON of Indiana. Mr. President, when this this measure provides: measure was brought before the Committee on Foreign Re­ That whoever, by virtue of his employment by the United lations it was suggested by the eminent Senator from Cali­ States, shall obtain from another- fornia [Mr. JOHNSON], as I remember, that the Secretary of Is guilty of a crime. Under the plain import of the lan­ State should come before the committee and explain why guage of this particular measure, he is guilty of a crime for he wanted the bill passed. At a subsequent meeting of the obtaining from another. But, sir, when we go farther-­ committee the Secretary of State failed to appear, but in Mr. NORRIS. Mr. President, should he not be guilty? his stead came a clerk from that Department of the Gov­ If he does such a terrible thing as that, should he not be ernment. His name escapes me now. With all the ability guilty of a crime? which the distinguished Senator from California possesses Mr. JOHNSON. Obtaining from another? in cross-examination, and that is conceded by all of us to Mr. NORRIS. Yes. be much, it was impossible for him to learn from the clerk Mr. JOHNSON. Yes; I think so. In these days anybody from the Department of State why they desired the law that obtains anything f ram another ought to be condignly enacted. punished if he gets it, but the difficulty is with most of us Furthermore, it was suggested before the committee when that while we strive we do not succeed. [Laughter.] Mr. Yardley's name was mentioned that the clerk tell us Then we go on with the measure and we see that it pro­ just how he got the information with respect to a prospec­ vides that whosoever- tive book, the manuscript of which Mr. Yardley was pre­ shall willfully, without authorization or competent authority, sumed to have prepared. The clerk from the Department of publish or furnish to another any such code or matter, or any State answered the Senator from California something in matter which has been obtained while 1n the process of trans­ this fashion: "Do I have to tell that to this committee?" mission between any foreign government and its diplomatic mis­ Somebody asked him if he was not willing to tell it. He sion in the United States. was told, in effect, " This is the Committee on Foreign Re­ The Senator from Washington [Mr. BoNE] asked a ques­ lations, dealing with the foreign relations of the American tion a moment ago about obtaining matter in transmission. Government. It is om understanding that we have nothing The bill relates to obtaining matter in transmission between to do with breaking down codes of other governments in a government and its diplomatic mission in the United recent years, certainly not since 1929. If that is the case, States, no matter how it shall be obtained. private affairs ought not to be broken into here in this But just prior to that we say "which purports to have country." That was how the question was suggested: "How been prepared in any such code." There is an implication, did you get this information about Yardley?" He was silent. it seems to me, that ought not be written in a criminal Up until this moment nobody knows how he got it. statute. Whoever does a certain thing relating to a certain Mr. President, it looks like a gag proposition from be­ matter and publishes it, or anything that purports to be ginning to end. Representatives from the State Depart­ that kind of thing, is guilty of a crime. We cannot and ment might as well not have appeared before the Senate ought not to enact a penal statute of that sort, and it ought Committee. We received no worthwhile information from not to be in any such loose language. them at all. The committee is as much in the dark now as But we go far beyond that. When these gentlemen of to why the legislation should be enacted as it was then. the press fondly imagine that by this amen~ent they have Mr. President, since Mr. Yardley's name has been men­ corrected anything that related to them, they are simply tioned in the debate and brought into the question, I think suffering under a delusion. It is true that originally, with I ought to do what I had not before intended to do. I think a bluntness that is very strange and that never before have I ought to read a telegram from him. It happens that Mr. we encountered in statutes of this sort, the press was made Yardley is a citizen of Indiana. On the eve of the hearing practically particeps criminis, and the Senate committee before the Foreign Relations Committee, I may say to the hastened to answer the call of anguish of the press, but this Senate, I did my best in the interest of fair play to have the particular proposed statute would make them just as guilty Senate committee hear Mr. Yardley, but the committee under the law of conspiracy as they would be under the ref used to call him. original statute. If they imagine that they have gotten clear I had understood in conversation with Mr. Yardley that by virtue of the amendment, they are entirely in error. he had refused to call on the former Secretary of State, I am not so concerned with the press as I am with the Mr. Stimson. because he did not desire to discuss the ques­ making of a statute of this sort and with the right of any tion with him at all. But he stated that he would be glad man to express himself exactly as he sees fit. Of course, to call on the present Secretary of State and have a com­ freedom of the press is a matter of consequence that ought plete and full conference with him with reference to his own to be preserved, but the press will preserve it, Mr. President, activities or anything he had done. My understanding from without any of your valuable assistance or mine. They will Mr. Yardley is that Mr. Hull refused to see him or to discuss take mighty good care that we do not interfere with their the matter with him, although I had the clear intimation prerogatives. I am just as keen not to interfere with the from Mr. Yardley that Mr. Hull himself, or some agent of prerogative of just the humble individual to express himself his Department, had suggested the interview. Since Yardley freely. Side by side the two prerogatives should be main­ was not to be given an opportunity to appear before the tained, and each is fundamental, of course, in our kind of committee, and since hiS name was being used constantly government. in connection with the legislation, I got in touch with him The proposed statute is one made for a particular and spe­ and asked him to send me by wire his own position, and, if cific case. Statutes of that sort are always doubtful. Some­ it required a defense, his own defense, so that on behalf of times they are necessary, I am willing to concede; but this an Indiana citizen I could state his position to the committee. measure is made in such fashion, so loosely drawn with im­ Mr. LONG. Mr. President, will the Senator yield? plications and possibilities that may make for wrong and Mr. ROBINSON of Indiana. I yield to the Senator from injustice, that it ought not to be passed. I am not inter­ Louisiana. ested in the individual who is sought to be reached by this Mr. LONG. Do I understand that Mr. Yardley, while in kind· of a measure, of course. I would do with him any­ the employ of the Government, secured certain documents thing that might be justly desired, but keep in mind, sir, that were sent ·by another government to its agents here? that we are not only touching him with this measure, but Is that how he got them? we are touching anyone else from whom he obtains some­ Mr. ROBINSON of Indiana. Mr. President, in answer to thing. We are touching someone through whom he may the Senator's question, permit me to say that, so far as I communicate and the like, and we may be striking at the understand the matter, Mr. Yardley some years ago wrote very fundamentals that we would preserve in this country a book entitled "The American Black Chamber." It had, untouched and uµharmed. perhaps, a wide sale. He is said recently to have prepared 1933 CONGRESSIONAL RECORD-SENATE 3129 a manuscript to be incorporated into another book. Just mation-whether from the codes of foreign governments or what that book will contain I do not know. What objection­ otherwise? able features are in it, if any, I do not know. Until this Mr. ROBINSON of Indiana. No; he states to me no more minute we have been unable to elicit from the State Depart­ than what I have just read in his telegram. ment any important information on the subject, which Mr. CONNALLY. So he is not frank and free with the makes me believe that the purpose of this legislation is far Senator. He does not tell him where he did get this infor­ deeper and far more significant than anything with relation mation, and from what particular foreign nation he filched to Mr. Yardley. the information which he was peddling and wished to sell Mr. LONG. Mr. President, I am not violating any confi­ for money? dence. I received the common street rumor that was going Mr. ROBINSON of Indiana. Mr. President, I understand around that what had happened was that the gentleman, that if he got any information he got it, probably, through while in the employ of the Government, had come into con­ his connection with this particular work in deciphering these tact with some messages sent by another. government to codes, breaking them down. I do not know. I do not know some of their agents here in Washington, and, being very what information he got. I am only suggesting that he clever at the work of deciphering such messages, had been claims that in none of his books, past or prospective, was able to decipher them. I do not know whether this bill is there anything that in the least wise could be injurious supposed to try to protect them or not. either to this Government or to any other, or to this Gov­ Mr. ROBINSON of Indiana. There may be some truth ernment's relations with any other; and I am confirmed in in that. I am not familiar with the details. We have not my belief in Yardley's statement by what the Senator from been able to get them from any authoritative source. In California has said with reference to his notion about the any event, regardless of the facts with reference to Mr. same thing. Yardley, this bill would not reach him anyhow-not pos­ Mr. CONNALLY. Does not the Senator from Indiana sibly-nor would it reach any book he has written, past or think that his constituent, who expects him to defend him prospective, because the manuscript is in the hands of the on the floor and repel any charges of bad faith or betrayal publishers, and has been for, lo, these many weeks. As the of his duty to the Government for which he worked, ought Senator from California said so pertinently, it. was sent to to have been frank enough with the Senator to have told us as "a great emergency measure" that must be passed him the truth about the matter, and to have revealed the now, this instant. That has been 6 weeks and more ago, sources of the information which he was selling for money? and nothing has been done with it until now. So I am Mr. ROBINSON of Indiana. Why, bless the Senator's certain in my own mind that there are other motives be­ heart, we cannot get the truth from the State Department hind this proposed legislation, and entirely unrelated to up until this minute! Nobody knows why they want this Mr. Yardley. bill passed-not even the Senator from Texas. We did out Now, Mr. President, let me read Yardley's telegram under best to get them to tell us. We asked them how they got date of April 11: hold of the manuscript of Yardley. "Did you steal it? Where did you get it?" Not a word. "Do I have to tell Please refer to your telegram in which you ask that I give you my defense for my publications, since they seem to have inspired that?" they whimpered; and the Senator from Texas asks the lleW bill. me why Yardley does not tell a lot of things! The Senator I presume you refer to " The American Black Chamber." The cannot get the information from his own State Department, American Cip:...er Bureau, which intercepted and deciphered foreign though we are jointly responsible with the Executive of the code messages, was created by me in 1917 and directed by me until 1929, when the Government ordered it disbanded on the Nation for the conduct of the foreign relations of this land. theory it was unethical to read foreign code messages. I hold no brief for Yardley. I have not claimed to do so; My justifications for publishing The American Black Chamber, but I want Yardley's statement to go in the RECORD. He in which my activities are described, are: has a right to that. This is still America, I hope. Every (1) It could not injure this Government, because it proved to foreign nations that we would no longer stoop to this sort man is entitled to his day in court. I tried to get a fair deal of espionage. for Yardley before the committee. The committee refused (2) It could not offend any foreign government, because it to hear him. We tried to hear the young man sent up by contained no material about their machinations in this country. the State Department, and his voice was inaudible, and (3 ) It would, I hoped, awaken the conscience of the State De­ partment, so that they would revise their own code systems and we could get utterly no information from him. So we are render American diplomatic secrets invulnerable to attack by asked to pass this bill without one word, even at this moment. clever foreign cryptographers. We .have made Mr. Roosevelt a dictator-a dictator. No­ (4) I assumed that the United States Government belonged to body denies that statement. It is widely heralded on all the American people, and since this Government had washed its sides. Now we propose to gag the American people with hands of secret diplomacy, I saw no re~on why the people should not know about the world in which we live-a world in which we reference to all foreign relations, with the debt questions are too unconcerned to follow the espionage practices of all great coming up, the question of destroying our tariff walls and nat ions, a world in which we are even so unconcerned about our permitting all foreign nations, with their low-paid labor, own diplomatic secrets as to use unsafe codes. One press dispatch carries the story that the bill ls to protect to dump their cheaply made products continuously on our our own codes. Just to keep the record correct I wish to say soil, continuing to break the great American market and that I have been very careful not to publish a single word about to destroy the American people, economically at least. our own codes except to say a year or so ago that they were de­ We have just had a series of conferences here, Mr. Presi­ cipherable. If our codes have since been revised and are now indecipherable by master cryptographers of foreign nations, the dent. Though in office only 2 months, Mr. Roosevelt has publication of The American Black Chamber was not in vain. seen fit to invite the representatives of all the great nations This Government's fear of the unpublished manuscript now in here. Though we are ourselves in sackcloth and ashes, and its hands is, in my opinion, due to false sensational rumors origi­ one would naturally imagine it would require all of his at­ nat ing in New York. It is a dull treatise for scholars and stu­ dent s of history. The ordinary person would fall asleep while tention to remedy economic conditions in this country, with reading it. Whether it is published or not is of no consequence 15,000,000 men unemployed, he diverts as much of his energy to me. As a matter of fact, I am too busy in my laboratory com­ as it requires to discuss foreign questions with the great pleting my experiments on a commercial invisible secret ink for men of Europe, who have come trooping here in these latter children and adults to write their letters with to be at all con­ cerned about anything else. days. I make the bold assertion here and now that Europe HERBERT 0. YARDLEY, and Japan know more about what took place at those con­ Worthington, Ind. ferences than the American people. Mr. Roosevelt has not Mr. CONNALLY. Mr. President-- yet seen fit, up to this moment, to take the American people The PRESIDING OFFICER. Does the Senator from Indi­ into his confidence as to what transpired. What promises ana yield to the Senator from Texas? did he make to Great Britain with reference to their debt, or · :Mr. ROBINSON of Indiana. I yield to the Senator. to France, or to Italy, or to any of them? Mr. CONNALLY. Does Mr. Yardley, in the message to the If this bill goes into effect, anything that purports to be Senator from Indiana, disclose where he did get the infor- secret is taboo, and the American people must be kept in , 3130 CONGRESSIONAL RECORD-SENATE MAY 10 ignorance. Not a word! Who is there here who does not They can make anything purport to be official- remember the days just preceding the World War, when we Whoever without authorization or competent authority- had our secret agents running all over Europe, keeping the people in the dark? If there had been more "pitiless pub­ Where is the authorization to come from? Who is the licity" in that day, there would have been more "open competent authority? We tried our best to get somebody on covenants, openly arrived at", and America never would the committee to tell us, so that we would know when we have gone into the war-never! never! Do you suppose, if were violating the law. Who is this competent authority? the American people had known what Colonel House was Who is it? Silence. Nobody knows. PresPmably, from doing in Europe in those days, that we ever would have what follows, it might be a clerk in the Rumanian Legation gotten into that war? We have found out since what ·he here, or in the legation from Liberia. Who is it? Where did. We had him running over Europe secretly-secretly!­ rests this power to authorize? under a Democratic administration, which is presumed to Publish or furnish to another any such code matter- believe in the people, and to be keeping the people informed. Listen to this: Now we have another Democratic administration, and im­ or any matter which had been obtained while in the process mediately they attempt to apply the gag. of transmission between any foreign government and its diplo­ Dictatorial power? Yes. We understand that new dicta­ matic mission in the United States. torial powers will be asked for shortly with reference to the "Any matter." That would mean that if an American citi­ debts, with reference to the tariff, and other economic zen should somehow or other get information through anyone questions. The much-advertised big international confer­ employed by the Government, no matter what it might be, in ence is coming in June; and when it comes-listen!-when connection with some powerful foreign country, directed to it comes, if we pass this bill, it would not make any differ­ its ·mission here, or from here to its national capital, which ence if an American citizen knew that information with might be injurious to this country, to the extent that it which he came in contact, if given to the American people, might mean our dire peril, he could not publish it, no news­ would save the Nation; he would not dare publish it, and paper could publish it, it would be impossible, without vio­ any newspaper that attempted to publish it without " proper lating this proposed law. Then let us see what position he authorization ", whatever that is, would be engaged in a would be in. He would be subject to imprisonment of 10 conspiracy with the party who attempted to publish that years, or to a fine of $10,000. information, vital, it might be, to the life of the Republic. Mr. President, of course this is thoroughly unnecessary. Not a convincing reason has been suggested by any Mem­ We have gone along for 145 years, and, though we have had ber of the Senate for the passage of this gag law. The our troubles, we have done pretty well as compared with Senate itself bas largely become a rubber stamp in these other nations of the earth. Let it be remembered that early latter days. It will be completely so if we pass this meas­ in the history of this country, in the Adams administration, ure. A Member of Congress in either House would not dare the infamous alien and sedition laws were passed, which de­ go out and publish any vital information he might get if stroyed a President and a party. They were promptly Congress were not in session and he were unable to have repealed, and from then to now we have gone along without congressional immunity from the law. Even though it were sedition laws, without a gag law, without the" shush shush", to save the Nation, though the Republic's life were in dan­ and we have built up our marvelous prestige and reputation ger, it would. be impassible to publish it in any way, shape, as a nation since then. We have done that on a basis of or form under this infamous thing, and it would be impos­ free speech and a free press, and we can go on along the sible for a newspaper to publish it without violating the law. same line. I ask why it is that, during these last few days, the Presi­ Evidently something is wrong when it is necessary to re­ dent of the United States failed to take the American people sort to a "shush shush" law, to keep information, vital into his confidence as to what he was talking about with information, it may be, from the American people. these foreign diplomats. Ask any member of the press if he Mr. President, the measure is utterly vicious and inde­ knows just exactly what took place. But Europe seems to fensible from any standpoint. While I assume the votes are know all about it. The information filters back from Europe here to pass it, I should vote against it though I were the as to what took place at the conferences here, so I assume only Member of the Senate who did, and I hope, of course, that in time the American people will get the news second­ with all my heart, that the bill will be defeated. hand from foreign sources. Then this bill is brought in, and NOTIFICATION TO THE PRESIDENT-COMPTROLLER OF THE we are asked to pass it, and I suppose it will be passed. The CURRENCY President dominates the Congress, advertises the fact, and tells the Congress what to do. Mr. LONG. Mr. President, I ask unanimous consent that Mr. President, I am not afraid for the people to know the the President may be .notified of the confirmation of Mr. tacts. I go further; if the people of the world could always O'Connor as Comptroller of the Currency. know what is going on in diplomatic circles, there would The PRESIDING OFFICER (Mr. BYRD in the chair). Is never be any war. One of the most serious things to con­ there objection? The Chair hears none, and it is so ordered . . sider doing is to suppress free speech and a free press, the PROTECTION OF GOVERNMENT RECORDS sources of public inf 01·mation, and that is exactly what this The Senate resumed the consideration of the bill (R.R. bill undertakes to do. 4220) for the protection of Government records. Mr. President, I would oppose the bill no matter who was Mr. CONNALLY. Mr. President, I regret that the Sena­ President. It is un-American. It is contrary to everything tor from Indiana takes occasion to use every measure upon for which the country has stood in the past. It is the last which he speaks as a vehicle for denunciation of the Presi­ thing to which a republic ought to resort. It is dangerous dent and for the delivery of a bitter partisan speech: Let in the extreme. me remind the Senator that when we go to war, if we There were the old alien and sedition laws, which ruined unfortunately get into war, his party will have to fight just John Adams and the Federalist Party. the same as those on this side of the aisle. Just one more word, Mr. President, and I shall conclude. Mr. ROBINSON of Indiana. Mr. President, we did before. Here is the bill; I read: After a Democratic administration took us into war, Repub­ Whoever by virtue of his employment with the United States- licans helped to win it. No matter how he is employed, everybody is forbidden. Mr. CONNALLY. Mr. President-- "Shush, shush." "Gag, gag "- The PRESIDING OFFICER. The Senator declines to Any matter prepared in any such code, or which purports-- yield. Mr. CONNALLY. Mr. President, I shall yield when the The Senator from California has said all that is necessary Senator respectfully asks me to yield; but I do not yield to on that subject. a Senator who gets to his feet and, in a perfect frenzy of Which purports- rage, undertakes to interrupt the Senator from Texas with- 1933 CONGRESSIONAL RECORD-SENATE 3131 out permission. I want to be courteous; and if the Senator Senator from Indiana calls it, would do. This is what it from Indiana desires that I yield, I shall do so. provides: Mr. ROBINSON of Indiana. I merely repeat for the Whoever, by virtue of his employment by the United States­ RECORD what I just got through saying. In other words, whoever, in the confidence of the Govern­ Mr. CONNALLY. The Senator from Indiana returns ment, whoever, in the employ of the Department of State, brusqueness for courtesy and consideration. drawing a salary, under obligation to be loyal to his Govern­ Mr. ROBlliSON of Indiana. No, Mr. President; I have ment and to its citizens- the highest regard in the world for my good friend the Sen­ shall obtain from another- ator from Texas; I never question the motives of my friend, and I respect him as highly as one could another Senator. In other words, whether he gets it out of the file himself But, Mr. President, I was answering h1s question, or trying or obtains it from somebody else- to directly. Perhaps I was a little emphatic. What I had or having c~tody of or access to, or having had custody of or to' say was this: When a Democratic administration and a access to- Democratic President took us into the great World War­ What?- and I am not criticising the President, I am not finding any official diplomatic code. fault with him-I say that had the American people known It is confined to diplomatic codes; that is all. The United what Colonel House was doing in Europe, and all that was States code belongs to our Government; it is its property; going on over there at the time, we never would have en­ it has a right to keep it secret. The codes of foreign gov­ tered the war. But when we did go into it, under a Demo­ ernments belong to them; they are their property, and they cratic administration, the Senator will agree with me that have a right to be protected in their use. That is all this Republicans stood · shoulder to shoulder with Democrats. bill proposes. We went out to win the war, and. did win the war, and Now, whoever does those things and­ there was no shirking in Republican ranks. shall w111fully- Mr. CONNALLY. Mr. President, the Senator from Indi­ ana evidently misconstrued what the Senator from Texas Not innocently. The Senator from Indiana implied that intended to say, or he misunderstood the motives which a citizen might come into possession of some information prompted him. What the Senator from Texas desired to and might use· it innocently and thereby would incur the suggest was that the Senator from Indiana, when we are penalty of the penitentiary or an enormous fine. That iS here trying to consider emergency legislation, takes occa­ not true; that is not a fair conclusion. The individual must sion to make these bitter partisan speeches, dragging in divulge it or use it " willfully." What · does "willfully " President Wilson and Colonel House and the World War, mean? It means with an evil intent;- with an intent of mal­ which took place 15 years ago. · ice; with an unlawful intent. So there is no danger of any innocent citizen's becoming enmeshed in the terms of this What I meant to suggest was that this measure was based bill. . upon a desire to prevent the unlawful and illegal divulgence What else does it propose to do?- of State Department and diplomatic secrets which might involve us in war and that when we are involved in war Shall willfully, without authorization, or competent authority. the Senator's speeches will not be of any avail, because the And the-Senator from Indiana makes a great point as to Republicans will have to fight the war just as we shall fight who is the authority. The authority must come from some­ it on this side. · one who is charged with the responsibility of the custody Mr. ROBINSON of Indiana.. Mr. President, will the Sen- of the particular codes or papers, of course. a tor yield? · The Senator from Indiana has individuals in his office Mr. CONNALLY. I have not really answered what the and secretaries in his employ who are on the pay roll of Senator said as yet, but I shall yield. the Government. Suppose one of those clerks should go into Mr. ROBINSON of Indiana. I hope we will never get into the Senator's confidential files and purloin information and another war. When I see the veterans of the last war publish it to the world-would the Senator from Indiana reviled and abused and maligned all over the United States, think that act ought to be protected? Would that man not as they are today-and I have a photograph which I will put be guilty of disloyalty? Would he not be guilty of theft? in the RECORD tomorrow of a disabled veteran discharged Would he not be guilty of breaking faith with the Senator? According to the Senator's argument, every clerk in his from the hospital in Dayton in his underwear, not even being given clothes to go home in-I say that I hope there office ought to be free to disclose everything that is in his never will be another war. files. The Senator says he favors a free press; . let a citizen publish to the world everything that he may find out. no Mr. CONNALLY. Mr. President, if it is to bring forth matter where he got it. even though, in order to get it, he the repeated outbursts of the Senator from Indiana, I, too, must commit theft; he must be guilty of treachery to his hope. there will never be another war. [Laughter.] employer and treachery to his Government. What of that, I happened to be on the subcommittee which had some­ says the Senator from Indiana. If he can get control of the thing to do with the drafting of this amendment, and I information, he ought to have the right to publish it to the want to analyze this terribly repressive measure which has world. I dissent from any such view. aroused the bitter attack of the Senator from Indiana, and Mr. TRAMMELL. Mr. President-- _ I assume will arouse the attack of the cultured and literary Mr. CONNALLY. I shall yield to the Senator from Flor­ Senator from New Mexico [Mr. CUTTING]. ida in just a moment. What is prqposed to be done by this measure? All the Of course all of us believe in a free press, but a free press bill would do is simply to make it a criminal offense for a does not mean a press that is based upon treachery; it does scoundrel to betray his confidential relationship with the not mean a press that is based upon theft; it does not mean Government, or for another to conspire with some agent of a press that is based upon disloyalty to tl':e Government in the Government to get confidential information, and then whose employ the man works and whose money he draws. go out and sell it for money. That is what the measure Now;I yield to the Senator from Florida. would do, and that is about all it would do. Mr. TRAMMELL. I merely wanted to ask the Senator if Why was it proposed? ·It was proposed for the purpose of he did not think it more probable that the Senator from protecting the Government, for the purpose of keeping the Indiana would remove such a clerk and in that way punish Government out of unfortunate diplomatic situations which him? Certainly he would not promote him. might involve us in war, and it is designed to prevent our Mr. CONNALLY. To be sure he would punish him. I becoming involved in war. dare say the Senator from Indiana would not only " fire " Let us see what it would do; what this terrible measure that employee but that he ·would probably make him a would do. Let us see what this dictatorship bill, as the speech. [Laughter.] LXXVII--198 3132 CONGRESSIONAL RECORD-SENATE MAY 10 Mr. President, what is all this about? Why an· this tem­ pend upon each particular case. Instead of mentioning pest in a teapot? It is true that this man Yardley is a them by name, we simply refer to "competent authority'', citizen of Indiana, I understand, but it does not make any meaning that authority which under the law is charged difierence to the Senator from Texas whether· he is a with the custody of the records and which, in the ordinary resident of Indiana or a resident of some other State. My course of business, would have the right to divulge them to contention is that any citizen, whether white or black, male the public or to withhold them from the public. I do not or female, big or little, lean or fat, who is in the employ of know whether or not that answers the Senator's question. the Government and, having access to confidential papers Mr. CUTTING. Yes. I merely wanted to get the Sena­ and records, disloyally and improperly uses knowledge so tor's opinion as to what the words meant. obtained for private gain or private profit ought to be Mr. CONNALLY. Now, I wish to make just a few remarks punished. with reference to the attack of the Senator from Indiana on Suppose an employee does not get such knowledge from his President Roosevelt. The Senator from Indiana says, "We own Government, but by reason of the knowledge that he have a dictator, and everybody knows he is a dictator." gains in the Government's service gets information from the Well, the Senator from Texas wants to say that if that be codes of other governments and then publishes that ma­ tru&-and he is not saying that it is tru&-we have seen terial, when he knows that it is apt to involve his own Gov­ more improvement since the 4th day of March under the ernment in war or in diplomatic difficulties, he is as much a so-called " dictator " than we had during the 4 years prior traitor to his country as one who deserts his general on the to March 4 under the benevolent rule of the last 4 years field of battle. of the Republican administration. I do not want to bring Mr. President, what is there so wrong about this measure? on any bitter partisan debat&-and I do not intend to do What is there so terrible about it? Where is the Senator so-but, for one, the Senator from Texas is weary of the who approves pilfering private records? If there be such. Senator from Indiana on each day and each occasion seizing let him rise. Senators who become outraged because of a the opportunity to denounce and to abuse the present ad­ man's stealing a spotted calf and want to put him in the ministration, regardless of the bill that may be before the penitentiary would seem to entertain the idea that a man Senate, and no matter whether his remarks are relevant or could steal a public record or a public document and sell are wholly immaterial to the matter before the Senate. it for money to the newspapers and that that would be an Mr. ROBINSON of Indiana entered the Chamber. act of patriotism and public service. I do not so regard it. Mr. CONNALLY. I am glad the Senator from Indiana The newspapermen have a code of their own; they re­ has returned. I expressed grief over his absence a moment spect confidences. When they are told something in con­ ago, because I dislike to ref er to a Senator when he is not fidence they will not publish it; it is a violation of their present. I was just observing, and I shall reiterate for the highest ethics for them to violate a confidence; and yet Senator's benefit-- because the Government asks those who are in its employ Mr: ROBINSON of Indiana. Mr. President-- and who are receiving its compensation that they be loyal The PRESIDING OFFICER (Mr. BACHMAN in the chair). and not divulge information obtained in their confidential Does the Senator from Texas yield to the Senator from capacity Senators rise and say that we are interfering with Indiana? · a free press. Mr. CONNALLY. I yield. We are interfering with free thieving and free betrayal of Mr. ROBINSON of Indiana. I shall be very glad to hear trust; that is what we are interfering with. We are inter­ the reiteration, if the Senator desires. fering with free treachery to their employer and to their Mr. CONNALLY. I was referring to the fact that the Government; that is all. Senator from Indiana day after day seizes every opportunity Mr. President, the Senator from Indiana-and I regret he to abuse the President of the United States and the presen~ has left the Chamber, for I do not like to refer to Senators administration. He charged today that we have "a dic­ when they are not present-took occasion to denounce the tator" in the person of the President, and the Senator from President again, of course. and to say that he is a dictator. Texas merely wanted to observe, whether we have a dictator­ There is nothing in this bill which gives the President any ship or whether we have not, that since the 4th day of March power, except possibly that which refers to Government em­ under the so-called " dictatorship " the country has moved ployees' divulging matter covered by the bill without having forward farther and has accomplished more toward getting proper authority. Of course, the President, as the head of out of the depression than it did during the entire 4 years the Foreign Service Department of the Government, might under the leadership of the late administration, of which or might not withhold authority for the publication of any the Senator from Indiana was one of the most obeisant and information; but, other than that, there is no new power subservient followers. [Laughter.] conferred upon the President of the United States. Mr. ROBINSON of Indiana. Mr. President, will the Sen­ Mr. CUTTING. Mr. President-- ator yield? Mr. CONNALLY. I yield to the Senator from New Mexico. The PRESIDING OFFICER. Does the Senator from Mr. CUTTING. May I ask the Senator if his definition Texas yield to the Senator from Indiana? of ·• competent authority " as mentioned in this bill would Mr. CONNALLY. I yield. refer to the President of the United States, or to just what Mr. ROBINSON of Indiana. I never abuse the Presi­ official in his judgment would it refer? dent of the United States, no matter what party he may Mr. CONNALLY. I think that that term is comprehen­ represent, but I reserve the right to criticize the President sive enough to embrace both the President and the Secre­ of the United States freely and without reserve if I think tary of State. I think if a man obtained material and pub­ his policies are bad. That was true when the Republicans lished it with the consent of the Secretary of State or with were in office, and it is true now. Mr. President, I want to the consent of the President he would be protected, because assist the President of the United States, so far as I can do he would be acting under" competent authority." so in conscience, and if the Senator from Texas will go Mr. CUTTING. Take the case of a man who worked in over the record which has been made here during the past the War Department under the Secretary of War and who two months he will find that time and again I have not also has access to such records? only supported the President of the United States and his Mr. CONNALLY. In that case it would be the Secretary measures but have voted for them; and, so far as my feeble of War instead of the Secretary of State. influence could extend, I have used it in favor of every Mr. CUTTING. In other words, the provision would in­ measure that I thought was for the best interest of the clude the President, the members of his Cabinet, and others? country. It is never my intention to abuse the President Mr. CONNALLY. I shall say to the Senator from New of the United States. Mexico that my view is that the words " competent au­ Perhaps the Senator may mistake the emphasis with thority " would include any official whose legal duty it is which I speak at times for abuse, but I do not mean it to be to have custody of records, and that, of course, would de- abuse; I do not abuse, but I wlll freely criticize, just as for 1933 CONGRESSIONAL RECORD-SENATE 3133 years Senators on the other side of the aisle criticized The PRESIDING OFFICER. Does the Senator from Republican Presidents. They were well within their rights Texas yield to the Senator from Indiana? in doing so, and I never objected to that, but I think they Mr. CONNALLY. Very well; I yield. should be consistent about it now that we have a Democratic Mr. ROBINSON of Indiana. I recall when a Republican President. President bad been laid in his grave, that his body was Mr. CONNALLY. I am glad to have the assurance of the scarcely cold before be was denounced and abused and his Senator that he is going to follow the President in the memory profaned on the other side of the Chamber. Day future. after day that continued. It bas not yet stopped. Mr. President, the Senator from Indiana today denounced Mr. CONNALLY. If that were true, I have no admira­ the President of the United States because he did not pub­ tion for such conduct, and I cannot approve the action of lish all the details of the conversations which the President the Senator who uses that incident, which he himself de­ has been having with foreign representatives with reference nounces, as a precedent for now abusing and reviling the to the World Economic Conference which is to be convened memory of Woodrow Wilson. in June. Mr. President, there is not very much to the bill. The Mr. ROBINSON of Indiana. Mr. President, will the purpose is to protect the United States from having its in­ Senator yield at that point? ternational relations interfered with by those who obtain in­ The PRESIDING OFFICER. Does the Senator from formation while in the Government employ and publish it Texas yield further to the Senator from Indiana? to the world and offend foreign nations and perhaps in­ Mr. CONNALLY. I yield. volve us in difficulties. That is all there is to it. The im­ Mr. ROBINSON of Indiana. I did. I think the American mediate incident was a threatened publication by a man by people are entitled to know what went on there, and they the name of Yardley of a book with relation to affairs do not know; and they have no way of finding out except in the Far East. It was supposed to contain confidential through the President. information obtained from code messages of foreign coun­ Mr. CONNALLY. The Senator has made one speech on tries and perhaps from that of our own country. The bill the question. I am trying to answer the Senator's first is designed to prevent that sort of thing in the future. It speech without his making two. is simply a bill against intellectual theft. It is a bill against Mr. President, the Senator from Indiana now admits that treachery to the Government by its own employees. It is a he has been denouncing the President of the United States bill in the interest of peace by preventing the publication of for not publishing to the world the details of his conferences unauthorized diplomatic matter in order that our foreign with foreign representatives with regard to questions re­ relations may not be disturbed. lated to the world economic conference. There have been Mr. FESS. Mr. President, will the Senator yield? no secrets, so far as I know, about the subject matter of The PRESIDING OFFICER. Does the Senator from those discussions. Of course, they were private in the sense Texas yield to the Senator from Ohio? that when gentlemen meet together to discuss questions the Mr. CONNALLY. I am glad to yield. reporters are not always called in until after the discussions Mr. FESS. On page 3 of the bill, line 9, occur the words are over and a report as to the substance of those conver­ "or which purports to have been prepared in any such sations is made. The press will bear witness to the fact code." Does not the Senator think that language should that after each one of those conferences there were given be stricken out? out joint statements by the President of the United States Mr. CONNALLY. This is the reason for the insertion of and the foreign representatives as to the subject matter that language: If a man publishes it and says that it is discussed. Of course, they did not have a shorthand re­ from a code, it is just as harmful as if it were in fact from porter to take down each question and each answer. a code. On the other hand, in order to convict him and to If that is the idea of the Senator from Indiana of what show that it was from a code, the Government would have diplomatic intercourse ought to be, to have a conference in to reveal its code in order to prove that he had used the the morning and have a stenographic report of it pub­ code. Does the Senator get the point? lished in the afternoon papers, I want to observe that we Mr. FESS. I do. would never get anywhere in our diplomatic intercourse, and Mr. CONNALLY. For all intents and purposes there is the Senator ought to know it. just as much harm caused by the use of material which pur­ Mr. ROBINSON of Indiana. Mr. President, will the Sen­ ports to be the United States code as though it were the ator yield? genuine code. Mr~ CONNALLY. I yield, and I shall keep on yielding. Mr. ROBINSON of Indiana. That was Woodrow Wil­ Mr. ROBINSON of Arkansas. Mr. President-- son's idea. It was frequently announced by him-announced The PRESIDING OFFICER. Does the Senator from many, many times. Texas yield to the Senator from Arkansas? Mr. CONNALLY. If that is true, and the Senator from Mr. CONNALLY. Certainly. Indiana approves it, it is the first principle President Wil­ Mr. ROBINSON of Arkansas. If that language were son ever enunciated that has been approved by the Senator stricken out, it would place upon the Government the burden from Indiana. Woodrow Wilson now lies out yonder in of proof of the authenticity of the message and thus compel the Cathedral, his memory enshrined in the hearts of his it to make the disclosure itself. · countrymen, and yet on each occasion when his name Mr. CONNALLY. That is the point I was trying to indi­ is mentioned the Senator from Indiana violates that sacred cate to the Senator from Ohio. If we strike out that lan­ repository with his political footsteps and drags the memory guage, the Government would have to prove that he used and the name of Woodrow Wilson around the Senate the genuine code, and in order to do that would have to Chamber. I resent it. The Senator from Indiana can find reveal the code, which would be the identical thing we are no warrant in any words of President Wilson for the ut­ trying to prevent. It would give publicity to our own code terances now made by the Senator from Indiana. and to a foreign code. Mr. ROBINSON of Indiana. Mr. President, will the Sen­ Mr. FESS. I am in sympathy with the efforts to protect ator yield? matters of this kind, yet it is rather a serious thing to :Mr. CONNALLY. No; not for a moment. I shall yield interfere with publication. presently. Mr. CONNALLY. I agree with the Senator. We have The Senator from Indiana referred to President Wilson tried to limit it. If the Senator will read the bill carefully, here today and dragged his honored name around this he will see first that the person must have been in the Chamber for partisan purposes; that is why he did it. employ of the Government and bad access to or custody of Senators know it, and the Senator from Indiana knows it. the documents, or by reason of that relationship secured it Mr. ROBINSON of Indiana. Mr. President, will the Sen­ from another and then published it, not innocently, but ator yield now? wilfully, harmfully, maliciously, with an evil intent. 3134 CONGRESSIONAL RECORD-SENATE MAY 10 Mr. FESS. I think the point of the Senator is well taken. Mr. CONNALLY. Mr. President, will the Senator yield? I had not seen that side of the question. Mr. CUTTING. Certainly. Mr. CONNALLY. I thank the Senator. Mr. CONNALLY. I want to observe that the words "shall The PRESIDING OFFICER. Without objection, the vote obtain from another" ought to be kept in the bill. I under­ agreeing to the committee amendment as amended and the stood the Senator to say they ought to be eliminated. votes whereby the amendment was ordered to be engrossed Mr. CUTTING. No; I said the subsequent words," or hav­ and the bill to be read a third time will be reconsidered. ing custody of or access to", could be eliminated with mani­ Mr. CUTTING. Mr. President, I send to the desk an fest improvement to the grammatical construction and amendment in the nature of a substitute, which I ask to have without any injury to the sense of the provision. read. Mr. CONNALLY. But there are two points involved­ The PRESIDING OFFICER. The amendment in the first, that he should obtain it from another and, second, that. nature of a substitute will be read for the information of the he shall himself take it from the files or get access to it. Senate. The purpose of that is that he may be in the State Depart­ The CmEF CLERK. The Senator from New Mexico pro­ ment and get it from the Japanese code and then have poses the following in the nature of a substitute: Strike out it published. We want to prevent his obtaining it from all after the enacting clause and insert in lieu thereof the another and obtaining it from his own files. following: Mr. CUTTING. I think the Senator's object would be That whoever by virtue of his employment by the United States attained by striking out everything after the word " obtain " shall obtain and thereafter willfully, without authorization or com­ and before the words "any official diplomatic code", so it petent authority, publish or furnish to another any official diplo­ matic code or any message or matter prepared in any such code would read: shall, upon conviction thereof, be fined not more than $10,000 or Whoever, by virtue of his employment by the United States, imprisoned not more than 10 years, or both. shall obtain any official diplomatic code- Mr. CUTTING. Mr. President, with one sentence in the And so forth. Whether he obtained it from the files or speech of the Senator from Texas [Mr. CONNALLY] I am in from another, he is equally guilty if he obtains it "by virtue hearty agreement. The Senator from Texas said concerning of his employment by the United States." I think the this bill that there is not very much in it. I quite agree latter words are the important ones in the legislation, if the with the Senator in that respect. The trouble is that in a legislation is of importance at all. time of stress, a time of emergency, a time of crisis, it is Mr. TYDINGS. Mr. President-- quite easy to pass some measure about a matter which is The PRESIDING OFFICER. Does the Senator from New apparently trivial, but which may nevertheless have serious Mexico yield to the Senator from Maryland? consequences. I want to point out, so that Senators may know what they are voting on, exactly what is in the bill. Mr. CUTTING. I yield. Mr. TYDINGS. Suppose the man were not in the employ In the first place, the House of Representatives, as has been stated, passed a bill which was entirely intelligible. It of the United States, but obtained it, would he be guilty may have gone too far, but anyone who reads the text of the under this provision if he published it? House bill cannot fail to understand what it means. I sub­ Mr. CUTTING. The language is "whoever shall obtain mit that the language which was substituted by the Senate any code matter." If the subsequent words "having had committee is ungrammatical, unintelligible, ambiguous, and custody of or access to" mean that it applies to an ex­ therefore dangerous. employee, I suppose if he ever had been in a confidential I shall omit for the moment the subordinate clauses and relation to the Government he would be guilty. point out merely the subject, predicate, and object of the Mr. TYDINGS. My point in asking that question of the subordinate and principal clauses. In the grammatical form Senator was that just from looking at the language hastily, in which it came from the committee the bill provided that it seemed as if a person in the employment of the United "whoever shall obtain any code or matter, shall publish or States might give a code of this kind to me, or might give furnish any such code or matter, or any matter'* * • of it to someone who was not in the employ of the United a different description, * * * ' shall be fined or im­ States, and the second person might obtain it and publish prisoned." In other words, the word "whoever" governed it, but he would not be guilty under this proposed statute. three sets of verbs without any grammatical connection Mr. CUTTING. No; he would not, under the proposed between them. statute. On Monday the Senator from Arkansas [Mr. ROBINSON] Mr. CONNALLY. Will the Senator yield right there? amended the bill by inserting the word "and" before the Mr. TYDINGS. What I wanted to ask was, if this second "shall." That does away with some of the gram­ measure should go through, whether it is not the intention matical ambiguity. It shows at least that the crime consists of the proposed law to prohibit any publication of matter in first "obtaining" and thereafter "publishing." But I of this kind by any person, rather than just by one who was still submit that a great deal more has to be done to it to in the employ of the United States Government. get it in grammatical shape, because the insertion of the Mr. CUTTING. May I say to the Senator that, as I word "and" before the word "shall" leaves the clause "or understand, that was the intention of the House bill, but having custody of or access to or having had custody of or is not the intention of the Senate bill. May I ask the access to" fioating in the air without any connection with Senator from Texas whether I am correct? any other part of the sentence. Mr. CONNALLY. No; if the Senator will yield right The word " or " in line 2 is followed by " having custody there, the committee took the view that under the general of", but it is not preceded by any other participle or ad­ conspiracy statute, if an employee of the Government con­ jective. The words which I have placed in parenthesis on spired or agreed with an outsider to do this, they would the chart on the wall cannot be grammatically connected both be principals, and therefore it was not necessary to with any other part of the bill. That is a minor point. Per­ go farther than we have gone here. sonally, I think those words in parenthesis could be left out Mr. TYDINGS. Let me point out to the Senator from of the bill without injuring it in any way. I do not see that Texas rather an extreme case, I admit; but suppose a man it makes the slightest difference whether a Government em­ who was not employed by the Government of the United ployee had " personal access to " or " custody of " any partic­ States should happen to find in some abandoned papers a ular matter. If he obtained it by virtue of his employment number of code messages which had been deciphered or by the United States, he should be equally guilty when he broken down. Suppose he should take those code messages publishes it. That is the essence of the crime, as I under­ and publish them, and thereby disclose what these messages stand the intention of the committee, as expressed in the were said to contain when they were published subsequently. speech of the distinguished Chairman of the Foreign Rela­ I imagine that what is sought to be obtained by this legisla­ tions Committee [Mr. PITTMAN] and the speech of the dis­ tion is the prohibition of publication of any secret telegram tinguished Senator from Texas [Mr. CONNALLY]. or diplomatic paper or code or writing whatsoever, regardless 1933 CONGRESSIONAL RECORD-SENATE 3135 \ of whether it was obtained from a Government employee or Mr. TYDINGS. Mr. President, will the Senator yield? in any other manner. Mr. CUTTING. I yield to the Senator from Maryland; Mr. ROBINSON of Ark~nsas. Mr. President, will the but I want to remind him that I have not yet had much Senator yield? chance to say just what my opinion is about this bill. Mr. CUTTING. I yield to the Senator from Arkansas. Mr. TYDINGS. I appreciate that, and I shall not do more Mr. ROBINSON of Arkansas. That matter was gone into than make an observation. In line with what the Senator fully by the Committee on Foreign Relations. from Arkansas has said and what the Senator from New The history of this legislation is that after the bill came Mexico likewise has said, it occurred to me that if the lan­ over from the House, hearings were had by the Senate com­ guage were still further amended by inserting, for example, mittee; and a subcommittee was appointed, consisting of the " whoever by virtue of his employment by the United States, Senator from Idaho [Mr. BORAH], the Senator from Texas or who falsely represents that he is employed by the United [Mr. CONNALLY], and myself. At our suggestion,, the State States", that would cover the case of the man who falsely Department prepared this draft according to our instruc­ represented himself as being employed by the United States. tions. Considerable care was given to the preparation of Mr. ROBINSON of Arkansas. Or a man who was yester­ the draft; and it was the intention both of the subcommittee day in the employ of the Government, and who today took and of the full committee not to penalize a person publish­ advantage of his former situation; and that is the impli­ ing unless he was in the employ of the Government and cation of the Senator from Colorado [Mr. ADAMS], as I un­ abused his confidential relationship, or unless the person derstand. I see no objection to the suggestion. publishing willfully contributed to that act, advised, aided, Mr. CUTTING. May I say, in the first place, that with and abetted it. We still think that is the sound position. the intention of the authors of this bill, as explained by May I say now, in the time of the Senator from New the Senator from Arkansas and the Senator from Texas, Mexico, that the committee, I think, feels-those favoring I am in complete sympathy. My objection is that the bill, the legislation feel-that this is rather carefully worked as worded, takes in a great deal broader territory than was out. An instance was brought to light where one who was the intention of the authors of the proposal. in the employ of the Government went to a telegraph office, The Senator from Texas has talked about punishing represented himself as a Government agent authorized to "scoundrels who betray their confidential relations with the receive information in a secret code, procured the code, and United States Government", and has implied that those who then went out and tried to sell the information that he had object to this particular language are defending the " pilfer­ obtained from the telegraph company in some article or ing of records." That certainly is not my intention, and I book that he had written. It is to prevent such transactions want to make that clear at the outset. as that, and it is to prevent any publisher who tries to em­ Mr. CONNALLY. Mr. President, if the Senator got any barrass his Government by inducing persons in the employ such impression as to his own attitude, the Senator from of the Government to violate their trust, that this measure Texas abjectly begs his pardon. I did not assume that that is proposed. was the attitude of the Senator from New Mexico, becau8e It is not intended to interfere with the legitimate freedom I have understood that his was merely a complaint of the of the press. It is only intended to penalize a practice which text, and that he was not in opposition to the principle of has become too common in many countries; that is, of sell­ the measure. I did make some inferences which some other ing alleged Government secrets. When one publishes what Senator on the other side might apply to himself, but cer­ he claims to be a code he puts upon the Government the tainly they could not be applied to the Senator from New burden of making a denial and of proving what the actual Mexico. code is. This legislation is for the protection of the code, Mr. CUTTING. Then I misunderstood the Senator. and it is a fair proposition. Mr. ROBINSON of Arkansas. Mr. President, may I at Mr. ADAMS. Mr. President, will the Senator from Ar­ this juncture bring to the attention of the Senator from kansas allow me to make an inquiry? This language being New Mexico a difference between his proposal and the com­ construed somewhat strictly, I am wondering if the use of mittee draft which is the immediate ·subject matter of con­ the term " by virtue of his employment " does not narrow sideration which does not relate to any mere form of ex­ the bill more than is intended. Those words mean to me pression? It is found in the fact that the Senator omits that the only one who would be reached would be the man any reference whatever to procuring or publishing confiden­ who obtained the information actually by virtue-that is, tial communications that are in process of transmission. because-of his employment. For instance, suppose someone who' was in the employ of Mr. ROBINSON of Arkansas. That is true. That is what the Government should get possession of a diplomatic pouch it is intended to do. In addition to that, however, it would or of a mail bag containing a communication from the reach the person who incited, induced, aided, or abetted in Japanese Government to the Japanese Ambassador in Wash­ the perpetration of the act. ington. or from the British Government to the British Am­ Mr. ADAMS. I was speaking of the very· case the Sena­ bassador in Washington, and should publish the contents tor from Arkansas illustrated-the case of a man who went of that communication, even though it is not in code. While to a telegraph office. He did not get the information by it is in transmission, he procures it and publishes it, result­ virtue of his employment, although he was an employee, but ing in the same embarrassments that would occur if it were he got it by a misrepresentation or a deception, rather than in code. The Senator's amendment does not reach that case by virtue of his emplo:yment. at all. The committee draft does. Mr. ROBINSON of Arkansas. No: I do not think that Mr. CUTTING. I prefer to take up that point when I distinction is applicable. I think, when he was in the em­ come to it, if the Senator from Arkansas pleases. ploy of the Government, represented himself as such, and Mr. ROBINSON of Arkansas. Very well; I apologize. obtained secret, confidential information, his act comes fairly Mr. CUTTING. No; I did not mean to criticize the Sena­ and fully within the terms of this language. In any event, tor, but I left that out on purpose, for reasons which I shall the language is adequate to meet the purposes of the State explain in a moment. Department; and, as said by the Senator from Texas, I feel The amendment I have offered includes those who shall that it is almost unreasonable for a Senator to object to the confidentially obtain and thereafter willfully, without au­ passage of this measure. Of course, there can be no objec­ thorization or competent authority, publish or furnish to tion to perfecting or improving the language, as the Senator another certain matter. In other words, the crime is a from New Mexico [Mr. CUTTING] is attempting to do; but double one. First, the obtaining by virtue of employment how can it be alleged that there is something unfair, or in- by the United States, and secondly the publication. I think consistent with the fundamental liberties of our citizens, in that is the clear meaning of the original text, now that the trying to prevent one in a trust relationship from violating word" and" has been included. To some extent my amend­ his trust, or trying to prevent others from ind.ucing or aiding ment covers, perhaps, a little more ground even than the him in violating his trust? committee's version, because under it anyone who obtains 3136 CONGRESSIONAL RECORD-SENATE MAY 10 this matter by virtue of employment, whether or not he had or having had custody of or access to, any official diplomatic access or custody, comes under the provisions of the act. code or any matter." That is, anyone who obtains a code, What I think is important, however-- or matter prepared in a code, .through a confidential and Mr. ROBINSON of Arkansas. Mr. President, will the fiduciary relationship to the Government. He is punished Senator yield at that point? not only for the publication of that code or matter-and in Mr. CUTTING. I yield. that respect I agree with the authors of the bill; I think he Mr. ROBINSON of Arkansas. It might be oppressive to ought to be punished for such publication-but he is also enact a statute that would have the effect of punishing one punished for publishing matter which has no relation to who was in the employ of the Government merely for ob­ the matter which he obtained by virtue of his confidential taining the code. It might be his duty to obtain it, and no relationship to the Government. He is punished for any doubt it is the duty of certain employees of the Govern­ matter which may happen to come into his possession inno­ ment to obtain information respecting these messages. Un­ cently, and which he may think it his duty to the country der the Senator's language as he himself interprets it, if to publish. an officer of the Government in the discharge of his duties · The Senator from Texas called attention to the word should obtain information respecting these code messages, "willfully", and said that that word could only mean he would be liable to conviction. "harmfully", "maliciously", or "with unlawful intent." Mr. CUTTING. Not unless he thereafter willfully, with­ I submit that the intention of a statute is to be understood out authorization or competent authority, publishes or fur­ by the public at large, and that although that may be the nishes it. legal meaning of the word " willfully " it is certainly not the Mr. ROBINSON of Arkansas. Then the same rule applies meaning of common speech. I refer to Webster's Diction­ to the Senator's amendment that applies to the committee ary, which gives only two meanings for the word "willful", amendment. It is not the obtaining that is punished, as namely, on the one hand, " voluntary " or " intentional ", the Senator said a moment ago, but it is the obtaining and and on the other "obstinate'', "perverse", or "stubborn." publishing without authority. So I think this language would include a man who Mr. CO'I"I'ING. That brings me to what seems to me the patriotically and from the highest motives published any fundamental defect in the committee amendment, that you matter which was obtained while in process of transmis­ obtain one set of things and are punished for publishing or sion between any foreign government and its diplomatic furnishing an entirely different set of things. In my amend­ mission, although he got the matter not by virtue of his em­ ment you obtain and publish the same series of things. ployment by the United States but in some other way. As this bill comes from the committee it reads: Take, for instance, my own case. It so happens that for Whoever, by virtue of his employment by the United States, some years during the war by virtue of my employment by shall obtain from another- the United States I had daily access to and was daily ob- . Mark the words- taining our own diplomatic code and a number of diplo­ any official diplomatic code or any matter prepared in any such matic codes of foreign governments. As every Senator code, or which purports to have been prepared in any such knows, we had possession throughout the war of the German code- diplomatic code and they had ours, and those codes were in Those are the things which you obtain. You are punished daily use. Of course I could not today remember a single for publishing not merely those things, "any such code or word of the German code or a word of our own, but I still matter", but you are also punished for publishing an en­ come under the scope of this bill, because at one time I did tirely different thing-namely, any matter which was ob­ have access to and obtained from another an official diplo­ tained while in the process of transmission between any matic code and matter prepared in such code. foreign government and its diplomatic mission in the United Now, suppose I today were to discover some message, not States. As everyone has admitted, that language includes in code, passing between a foreign government and its diplo­ not only code matter, not only the things which you obtain matic mission. Suppose someone brought me such a mes­ by virtue of your employment by the United States, but sage and I felt it my duty to do something about it. Sup­ anything else in process of transmission between a foreign pose the message contained something which meant immi­ government and a diplomatic mission. nent danger to this country and its Government. I could Mr. CONNALLY. Mr. President, may I call the Senator's not without competent authority or authorization make any attention to the fact that he is in error again? The last use of that information. Who would be competent authority clause does not apply to the man who got the matter in the to give authorization to me to decide whether I should or employ of the Government. If I should intercept a diplo­ should not publish that matter, which did not come to me matic pouch, and I were not in the Government service, and by virtue of my employment by the United States? yet I got this matter out of that pouch and published it, as I Mr. COSTIGAN. Mr. President, will the Senator yield? understand, it is our purpose to punish that publication. Mr. CUTTING. I yield. Mr. GEORGE. Mr. President, I hope the Senator is not Mr. COSTIGAN. I assume that the Senator's difficulties right in that interpretation. If so, I should not vote for are increased by the fact that he is not only a Senator of it for a moment. the United States but a newspaper publisher. Mr. CUTTING. Nor should I. Mr. CUTTING. No; I do not think so, because I do not Mr. CONNALLY. Wait a moment- think there is anything in this bill which would include the newspaper profession. What the Senator means, I suppose,· Publish or furnish to another any such code matter, or any matter which was obtained while in process of transmission be- is that I could not give out the information to my news- tween any foreign government and its diplomatic mission in the paper or any other newspaper if I had it in my possession. United states- To that extent, of course, I would be handicapped, but I Mr. CUTTING. I think the Senator from Texas makes want to point out that I am in no peculiar situation in that out his own bill much worse than I ever thought it. respect. There were thousands and probably hundreds of Mr. CONNALLY. I am probably somewhat in error, but I thousands of American citizens, who during the war had ac­ know that was added as an afterthought. That last clause cess to diplomatic codes, and any one of them could be was added after the bill had been completed. punished under the terms of this bill .. Mr. CUTTING. That is exactly the way it reads, as Mr. President, I submit that the word "obtain" and the though it had been added as an afterthought; I am sure words "publish or furnish" ought to apply to exactly the that is the case. I believe the bill was very much sounder same objects, and that one should not be punished for pub­ without that clause in it. lishing or furnishing anything except what he obtained Let me point out that the subject of the whole bill is by virtue of his employment with the United States. That "whoever, by virtue of his employment by the United States, is what I have tried to remedy through the amendment in shall obtain from another or having custody of or access to, . the nature of a substitute which I have offered. 1933 CONGRESSIONAL RECORD-SENATE 3137 It is true, as the Senator from Arkansas says, that under Mr. CONNALLY. He would be guilty under the conspiracy my amendment we could not punish anyone who published statute if a publisher conspired with a man in the Depart­ or furnished matter that was "obtained while in process ment to get the material and publish it. of transmission between any foreign government and its Mr. JOHNSON. Certainly. diplomatic mission", but if we want to make that a crime­ Mr. CONNALLY. And if he did, he ought to be punished and I should be very hesitant about the advisability of put­ along with the man whose confidence he violated. ting any such crime on the statute books-then it ought Mr. JOHNSON. Very well; the Senato1· may be entirely to be a crime for everybody. We ought in that case to right. I am not defending the press, and I do not propose to. forbid everyone from publishing any such matter, and As I said in opening the remarks which I made on the bill, ought not to confine it to people who obtain an entirely the press will take care of itself. But when it is asserted, as different class of matter by virtue of their employment it has been asserted here today, that any question of publica­ with the United States Government. tion by the press is removed by the amendment presented by That is where grammar becomes important in framing a the Foreign Relations Committee, I insist that that is wholly bill of this sort, because, unless we can parse the sentence, inaccurate, that it has not been removed at all, and that the it is almost impossible to know to what it refers. It is press is just as responsible under this amendment presented almost impossible to know who is reached by this bill, or by the Foreign Relations Committee as it was in reality just exactly what is the crime sought to be punished. under the original bill that was passed by the House. I submit that the Senate should either adopt the substi­ Here is a new crime described, a new crime created. I do tute I have suggested, or should refer the bill again to the not like the creation of crimes unless it be absolutely essen­ Foreign Relations Committee for further consideration. I tial that they shall be created in order to meet a specific am sorry that the chairman of the committee is not pres­ case and remedy a particular wrong. Here was something ent, because I discussed my amendment with him a little that was done in 1922. Now, long subsequent to the publi­ while ago, and he seemed to have no serious objection to it, cation that occurred, a bill is insisted upon with us as being although he suggested one slight modification. I do feel an emergency measure that must be passed overnight, and that the Senate ought to know what it is doing when it concerning which there cannot be the slightest delay. There passes a bill so ambiguous, a bill in my opinion so danger­ is no emergency, there is no necessity in reality for this par­ ous, a bill so uncertain in its action as this one which comes ticular statute to meet the particular facts that were sug­ from the committee. I therefore move the substitution of gested originally which should be met, and there is preSfinted my amendment. here, therefore, a statute which, as demonstrated by the Mr. JOHNSON. Mr. President, when I inaugurated this Senator from New Mexico, is ambiguous and unintelligible, discussion on the pending bill in rather academic fashion, I and which ought not to be passed. had no idea it would take the range it ultimately did take. I submit, Mr. President, if we are going to enact a statute · I began the discussion because I saw defects in the bill at all covering this subject, the only one that is appropriate which I thought ought to be called to the attention of the to pass is the substitute presented by the Senator from New Senate, and my intention was ~ call those defects to the Mexico. attention of the Senate, and then permit the Senate to pass The PRESIDING OFFICER. The question is on the upon the matter. But the discussion has now taken such a amendment of the Senator from New Mexico to the amend­ wide range, that I wish to say a word or two with respect ment reported by the committee. Those in favor of the to some of the things which have been said. ·amendment will say " aye." [A pause.] Those opposed to All of us have a single idea in respect to fiduciary rela­ the amendment will say " no "-- tions. I yield to none in regard to the tenderness or the Mr. REED. Mr. President, before the result is announced, delicacy respecting that kind of relation. I insist it shall if I may have the attention of the Senator from New Mex­ be kept not only in the officialdom of this country but that ico, I inquire if any amendment to his proposed substitute it shall be kept in every relation wherein there is confidence has been suggested? bestowed and where fiduciary restraint ought to obtain. So Mr. CUTTING. No, Mr. President; no one has suggested we may dismiss the hot words on the one side or the other any amendment. concerning a fiduciary relation or a particular offense. I Mr. ROBINSON of Arkansas. Mr. President, while the am not interested in the individual whose actions precipi­ Senate is voting I think debate is not in order. tated a measure of this sort, nor am I interested in the Mr. REED. The result had not been announced, and I slightest degree in whether or not the bill shall provide for had been trying to attract the attention of the Chair. his punishment if he commits, in the days that are to come, Mr. ROBINSON of Arkansas. The Senate was engaged the offense he has committed in the past. in voting. There are implications in this bill, however, which I think Mr. REED. Very good. But the Senate had not voted. we ought not to tolerate, as lawYers, and which, I think, as Mr. ROBINSON of Arkansas. It has voted; that is the lawmakers, we ought to be very certain concerning, before we very point. pass a measure of this particular character. Mr. REED. But the result had not been announced. I do Mr. President, the Senators who are present will recall not believe that the Senator wants to cut me off. that when this bill came from the House it aroused intense antagonism on the part of the press. Immediately that was Mr. ROBINSON of Arkansas. I do not wish to be techni­ met, not alone by an authoritative utterance from the Sec­ cal about it, but we have been debating the bill for several retary of State, which has been put into the RECORD here hours. today, but it was met as well by an amendment to the bill Mr. REED. Would the Senator from New Mexico accept which came from the House which sought to eliminate and an amendment to his substitute by the insertion in line 5, to remedy the mistake or the error or the wrong which it after the word " prepared " of the words " or purporting to was assumed had been done in encroaching upon the free­ have been prepared"? dom of the press. Mr. CUTTING. I prefer the amendment as I submitted it. This measure was presented upon the theory, and it is Mr. ROBINSON of Arkansas. I insist upon the Chair an­ now asserted, that it does not in any degree affect publica­ nouncing the result of the vote. tions. But the answer to that was made by the Senator Mr. REED. And I insist on my right to be heard, Mr. from Texas just a moment ago, when he said that if any President. I have been recognized and the vote has not been of the matter referred to in this particular measure be pub­ announced. lished, then, under the general statute relating to conspiracy, The PRESIDING OFFICER. The vote had not been an­ the individual publishing it would be guilty with the original nounced when the Senator from Pennsylvania was recog­ wrongdoer, and in that he is absolutely accurate. nized. Mr. CONNALLY. Mr. President, will the Senator yield? Mr. REED. Would the Senator from New Mexico accept Mr. JOHNSON. I yield. the suggestion as I have indicated? 3138 _CONGRESSIONAL RECORD-SENAT;E MAY 10 Mr. CO'rl'ING. I would do so if that would harmonize Mr. JOHNSON. Mr. President, in order that there may the difficulty. I think it is better without those words in it, be no mistake concerning the matter, I call for a division but I do not think they would be particularly harmful. upon the amendment. Mr. REED. Take Yardley's case. If Yardley were tried Mr. ROBINSON of Arkansas. I suggest the absence of a for doing in the future what he has done in the past, he quorum, if the Senator insists uoon a division. could not be convicted under the Senator's proposed substi­ The PRESIDING OFFICER. ·The result has been an­ tute until the United States attorney had proved that the nounced. The question now is on the amendment of the matter was in the official Japanese code, and that is some­ Senator from New Mexico, in the nature of a substitute for thing that is wholly incapable of proof. the amendment of the committee. . I man who obtains a code or diplomatic matter by virtue of his inquire if the Senator from Wyoming [Mr. CAREY] has employment by the United States, be punished not merely for voted. publishing such code or matter, but also for publishing" any The VICE PRESIDENT. That Senator has not voted. matter which was obtained while in process of transmission Mr. BULKLEY. I have a general pair with the Senator between any foreign government and its diplomatic mission from Wyoming [Mr. CAREY], but I am advised that I may in the United States." transfer that pair to the junior Senator from Massachusetts It is not necessary, may I say to the Senate, that this [Mr. CooLIDGE], which I do, and allow my vote to stand. latter matter should be obtained by virtue of a man's em­ Mr. KENDRICK. I desire to announce that the senior ployment by the United States, but the bill refers to any Senator from Nevada [Mr. PITTMAN] is necessarily detained matter which may at· any time come within his knowledge, on official business. no matter how he derives that information. In other words, if Mr. FESS. I desire to announce the following general any man who has ever had access to a diplomatic code--and pairs: there are probably hundreds of thousands of such people in The Senator from New Jersey [Mr. BARBOUR] with the the United States-should discover or should have given to Senator from Kansas [Mr. McGILL]; him the information contained in the message between a foreign government and its agents here, he would.be unable The Senator from Missouri [Mr. PATTERSON] with the Senator from New York [Mr. WAGNER]; to publish the same, even though it might refer to blowing The Senator from Rhode Island [Mr. HEBERT] with the up the Capitol or assassinating the President. He would be Senator from Illinois [Mr. LEwisJ; fined or imprisoned unless he could get authorization or The Senator from Minnesota [Mr. SHIPSTEAD J with the competent authority. Who is competent to give authority Senator from Washington [Mr. BONE]; to a Senator of the United States, for instance, to publish The Senator from New Hampshire [Mr. KEYES] with the matter which he may consider of grave importance to his Senator from Louisiana [Mr. LoNG]; and Government and to his country? The Senator from Connecticut [Mr. WALCOTT] with the I submit that a man should be punished for the publica­ Senator from Arizona [Mr. ASHURST]. tion only of such matter as he has obtained by virtue of his employment by the United States and nothing else. I The result was announced-yeas 30, nays 42, as follows: therefore offered the following substitute, which I think is YEAS-30 Adams cutting McCarran ·steiwer intelligible and which seems to me to accomplish all that the Austin nm Murphy Stephens authors of the original bill endeavored to accomplish: Black Frazier Neely Townsend Borah Goldsborough Norbeck Vandenberg That whoever by virtue o! his employment by the United States Bratton Hastings Norris VanNuys shall obtain and thereafter willfully, without authorization or Byrd Johnson Nye Wheeler competent authority, publish or furnish to another any ofiicial Caraway Kean Robinson, Ind. diplomatic code, pr any message or matter prepared in any such Costigan La Follette Schall code shall, upon conviction thereof, be fined not more than NAYS-42 $10,000, or imprisoned not more than 10 years, or both. Bachman Copeland Harrison Reynolds I claim that that language is clear and that it adequately Bailey Dickinson Hatfield Robinson, Ark. Bankhead Dieterich Hayden Russell defines the crime which we are trying to define. Barkley Duffy Kendrick Sheppard Mr. President, I ask unanimous consent to have printed Brown Erickson King Smith in the REcoRD at this point in my remarks the language of Bulkley Fess Logan Thomas, Okla. Bulow Fletcher Lonergan Thomas, Utah the bill as contained in the chart, with the words and Byrnes George McKellar Trammell objects capitalized as they are on the chart. Capper Glass Overton White Clark Gore Pope The VICE PRESIDENT. Without objection, it is so or­ Connally Hale Reed dered. NOT VOTING-23 The chart ref erred to is as follows: Ashurst Dale McAdoo Shipstead WHOEVER, by virtue of his employment by the United States Barbour Davis McGill Tydings SHALL OBTAIN from another (or having custody of or access to, or Bone Hebert McNary Wagner having had custody of or access to) Carey Keyes Metcalf Walcott Coolidge Lewis Patterson Walsh ANY ofiicial diplomatic CODE (or any MATTER prepared Couzens Long Pittman in any such code, or which purports to have been prepared in any such code) So Mr. CUTTING'S amendment to the committee amend­ AND ment was rejected. SHALL (willfully, without authorization or competent authority) PUBLISH or FURNISH to another The VICE PRESIDENT. The question is on the adoption ANYSUCHCODEorMATTERor of the amendment of the committee as amended. ANY MATTER (which was obtained while in process of Mr. REED. Mr. President, before the vote is taken, just transmission between any foreign government and its dipiomatic mission in the United States) for the sake of correct English, I move to strike out the SHALL BE FINED not more than $10,000, or word "having" and to insert the words "shall have." IMPRISONED not more than ten years The VICE PRESIDENT. The question is on agreeing to or both. the amendment offered by the Senator from Pennsylvania to The VICE PRESIDENT. The question is on the amend­ the amendment of the committee. ment of the Senator from New Mexico in the nature of a The amendment to the amendment was agreed to. substitute for the amendment reported by the committee. The amendment, as amended, was agreed to. 3140 _CONGRESSIONAL RECORD-SENATE MAY 10 The amendment was ordered to be engrossed and the bill George Olof Olson. Willard John Smith. to be read a third time. John Birdsell Oren. Thomas Harold Stubbs. The bill was read the third time and passed. William Mulford Peet Louis MacLane Thayer, Jr. EXECUTIVE SESSION Richard Foster Rea. John Herbert Wagline. Mr. ROBINSON of Arkansas. I move that the Senate pro­ David Owen Reed. Quentin Robert Walsh. ceed to the consideration of executive business. Peter Joseph Smetonis. The motion was agreed to; and the Senate proceded to The VICE PRESIDENT. Without objection, the nomina- the consideration of executive business. tions are confirmed. Mr. STEPHENS. I ask that the President be notified of EXECUTIVE MESSAGES REFERRED the confirmation of these nominations in the Coast Guard. The VICE PRESIDENT laid before the Committee several The VICE PRESIDENT. Without objection, that order messages from the President of the United States submitting will be made. nominations, which were referred to the appropriate THE CALENDAR committees. (For nominations this day received, see the end of Sen­ The VICE PRESIDENT. Are there further reports of ate proceedings.) committees? If not, the calendar is in order. The legislative clerk announced Executive C C72d Cong., REPORTS OF COMMITTEES 2d sess.), a treaty between the United States and the Domin­ The VICE PRESIDENT. Reports of committees are now ion of Canada for the completion of the Great Lakes-St. in order. Lawrence deep waterway, signed on July 18, 1932, as first in Mr. TRAMMELL, from the Committee on Naval Affairs, order on the calendar. reported back favorably the nominations of First Lt. Edgar Mr. REED. I ask that the treaty go over. G. Kirkpatrick to be a captain in the Marine Corps from The VICE PRESIDENT. The treaty will be passed over. the 8th day of April 1933, and of Second Lt. Bernard H. Kirk to be a first lieutenant in the Marine Corps from the 8th day DEPARTMENT OF THE TREASURY of April 1933. The -legislative clerk read the nomination of Dean G. Mr. ROBINSON of Arkansas (for Mr. PITTMAN), from Acheson, of Maryland, to be Under Secretary of the Treasury. the Committee on Foreign Relations, reported back favorably Mr. FESS. Let that go over. the nominations of Dave Hennen Morris, of New York, to Mr. HARRISON. Mr. President, will not the Senator let be Ambassador Extraordinary and Plenipotentiary of the that nomination be considered? The Committee on Finance United States of America to Belgium, and also Envoy Ex­ had Mr. Acheson before it, and no objection was raised to traordinary and Minister Plenipotentiary of the United his confirmation. May I ask the Senator what reason there States of America to Luxembourg, and of George Bliss Lane, is for asking to have the·nomination go over? of New York, now a Foreign Service officer, unclassified, and Mr. FESS. I am making the request on behalf of the a vice consul of career, to be also a secretary in the Diplo­ Senator from Oregon [Mr. McNARY]. matic Service. Mr. HARRISON. I cannot insist on it, of course; but I Mr. TYDINGS, from the Committee on Territories and never heard that there was any objection to Mr. Acheson's · Insular Affairs, reported back favorably the nomination of confirmation. Robert Hayes Gore, of Florida, to be Governor of Puerto Mr. FESS. I myself have no objection. I am only com­ Rico. plying with the request of the Senator from Oregon. The VICE PRESIDENT. The nominations will be placed The VICE PRESIDENT. The nomination will be passed on the calendar. over. COAST GUARD PUBLIC HEALTH SERVICE Mr. STEPHENS. From the Committee on Commerce, I report back favorably . sundry nominations in the Coast The legislative clerk read the nomination of Albin R. Guard and ask unanimous consent for their immediate con­ Sweeney to be senior surgeon from March 7, 1933. sideration. The VICE PRESIDENT. Without objection, the nomina­ The VICE PRESIDENT. The Senator from Mississippi tion is confirmed. asks unanimous consent for the immediate consideration of The legislative clerk read the nomination of Harry F. the nominations reported by him. Is there objection? White to be senior surgeon from March 12, 1933. Mr. FESS. Mr. President, I hope the Senator will not The VICE PRESIDENT. Without objection, the nomina­ ask for that. tion is confirmed. Mr. STEPHENS. Mr. President, a special request has The legislative clerk read the nomination of Ray P. Breaux come that these confirmations be had as soon as possible. to be passed assistant dental surgeon with grade of passed These young men are nominated to be ensigns in the Coast assistant surgeon from July 21, 1933. Guard. I understand that they are to graduate within 3 The VICE PRESIDENT. Without objection, the nomina­ or 4 days, and it is desired that their commissions be issued. tion is confirmed. Mr. FESS. I withdraw the objection. The legislative clerk read the nomination of James F. Mr. ROBINSON of Arkansas. Mr. President, I under­ Lewis to be passed assistant dental surgeon with grade o! stand that they are mere routine appointments. passed assistant surgeon from July 21, 1933. Mr. STEPHENS. They are mere routine appointments. The VICE PRESIDENT. Without objection, the nomina­ The VICE PRESIDENT. Is there objection to the present tion is confirmed. consideration of the nominations? The legislative clerk read the nomination of Thomas L. There being no objection, the Senate proceeded to con­ Hagan to be passed assistant dental surgeon with grade of sider the nominations of the following-named young men to passed assistant surgeon from July 22, 1933. be ensigns in the Coast Guard of the United States, to rank The VICE PRESIDENT. Without objection, the nomina­ as such from May 15, 1933: tion is confirmed. David Hall Bartlett. Albert Everest Harned. The legislative clerk read the nomination of Donald J. Rudolph Bjorge. Clarence Herbert. Hunt to be passed assistant surgeon from March 1, 1933. Emmett Timothy Calahan. Swen Alfred Hill. The VICE PRESIDENT. Without objection, the nomina­ Albert John Carpenter. George Whisler Holtzman. tion is confirmed. Hubert Roe Chaffee. Joseph Howe. That completes the calendar. William Wilder Childress. John Jenkins Hutson, Jr. Eugene Auguste Coffin, Jr. Vaino Oliver Johnson. NOTIFICATION TO THE PRESIDENT--COMPTROLLER OF THE Warren Loomis David. Robert Egan Mccaffery. CURRENCY Harry Elmer Davis, Jr. Joseph Francis Mccue. Mr. ROBINSON of Arkansas. Mr. President, I inquire if John Herman Forney. Thomas Robley Midtlyng. at some time previous today consent of the Senate was given 1933 CONGRESSIONAL RECORD-HOUSE 3141 to the notification of the President of the confirmation of HOUSE OF REPRESENTATIVES the appointment of Mr. O'Connor to be Comptroller of the Currency. WEDNESDAY, MAY 10, 1933 The VICE PRESIDENT. It was. The President has been The House met at 11 o'clock a.m. and was called to order notified. by Mr. BULWINKLE, Speaker pro temp ore. Mr. ROBINSON of Arkansas. I thank the Chair. The Chaplain, Rev. James Shera Montgomery, D.D., RECESS offered the fallowing prayer: The Senate resumed legislative session. Grant us, blessed Lord, through the hours that await us. Mr. ROBINSON of Arkansas. I move that the Senate Thy wise, guiding presence. Look into our hearts. and take a recess until 12 o'clock noon tomorrow. mayst Thou hear the music of charity and justice to all The motion was agreed to; and