15802 CONGRESSIONAL RECORD - HOUSE August 'l I am sure repudiation of this attack Sta.tes to investigate the claims Of Citizens May we never become hysterical and will be forthcoming shortly from Demo o.f the United States who su1fered property panic stricken when we think of the mag damage in 1951 and, 1952 as the result o.f the cratic national headquarters. At least, a:rtificia:l raising of the water level of Lake nitude of the issues that are involved or I fervently and sincerely hope it will. Ontario; feel the agony of suspense as we anx Madam President, in connection with S. 3109. An act to amend chapter 17 of iously wait for the better and brighter these remarks I ask unanimous consent title 38, United States Code, in order to days of peace and good will. to have printed in the RECORD the article authorize· hospital and medical care .for We humbly confess that we do not from the New York Times of August 7, peacetime veterans suffering from non know what value and relevancy our written by Wallace Turner,·reporting on compensable service-connect~d disabilities; prayers may have in the course and issue this rather surprising statement made at and S. 3&25. An act to authorize the Adminis of events but we are appropriating by Seattle. trator of General Services, in connection with faith the testimony of the ancient apos There being no objection, the article the· construction and maintenance o.f a Fed tle that "the supplication of a righteous was ordered to be printed in the RECORD, eral omce building, to use the public space man availeth much." as follows: under and over 10th Street SW., in the Dis Give us a deeper and profounder. in Fu.ND OFFICIAL AT'l'ACKS- FBI CHIEF ON RED trict of Columbia, and for other purposes. sight into Thy ways and will and may we "LEGENDS" understand tha.t the secret of knowing (By Wallace Turner) ADJOURNMENT UNTIL 11 A.M. that we are being divinely guided is to be SEATl'LE, WASH., August 6.-The vice presi TOMORROW f The SPEAKER pro tempore. - Is there · BUSINESS WHIC~ MAY BE CARRIED ON ship, and at all times to inspect and -copy objection to the request of the.gentleman SEC. 3. A limited partnership may carry any of them, (b) have on demand true and full infor from Missouri? on any business which a partnership with out limited partners may carry on. mation of all things affecting the partner There was no objection. ship·, and a formal account of partnership CHARACTER OF LIMITED PARTNER'S CONTRmU- affairs whenever circumstances render it just T~ON and reasonable, and UNIFORM LIMITED PARTNERSHIP SEC. 4. The contributions of a limited part (c) have dissolution and winding up by ACT IN THE DISTRICT 01,'1 ner may be cash or other property, but not decree of court. COLUMBIA services. (2) A limited partner shall- have the right A NAME NOT TO CONTAIN SURNAME OF LIMITED to receive a share of the profits or other Mr. WHITENER. Mr. Speaker, by PARTNER; EXCEPTIONS compensation by way of income, and to the direction of the Committee on the Dis return of his contribution as provided in sec SEC. 5. (1) The surname of a limited part tions 15 and 16. trict of Columbia, I call up the bill ner shall not appear in the partnership (H.R. 11019) to provide that the Uni name, unless- STATUS OF PERSON ERRONEOUSLY BELIEVING form Limited Partnership Act shall ap (a) it is also the surname of a general HIMSELF A LIMITED PARTNER ply in the District of Columbia. partner, or · SEC. 11. A person who has contributed to The Clerk read the bill, as follows: (b) prior to the time when the limited the capital of a business conducted by a person or partnership erroneously believing Be it enacted by the Senate and House partner became such the business .Jlad been carried on under a name in which his sur that he has become a limited partner in a of Representatives of the United States of limited partnership is not, by reason of this America in Congress assembled, That this name appeared. (2) A limited partner wh~se name ap exercise of the rights of a limited partner, a Act to provide for the formation of limited general partner with the person or in the partnerships in the District of Columbia pears in a partnership name contrary to the provisions of paragraph ( 1) is liable as a partnership carrying on the business, or and to make uniform the law with respect bound by the obligations of such person or thereto, shall be in effect in the District of general partner to partnership creditors who extend credit to the partnership without ac partnership: Provided, That on ascertaining Columbia on and after the date of the the mistake he promptly renounces his in enactment of this Act. tual knowledge that he is not a general partner. terest in the profits of the business, or other LIMITED PARTNERSHIP DEFINED compensation by way of income. LIABILITY FOR FALSE STATEMENTS IN CERTIFI SECTION 1. A limited partnership is- a CATE ONE PERSON BOTH GENERAL AND LIMITED partnership formed by two or more persons PARTNER SEC. 6. If the certificate contains a false under the provisions of section 2, having as statement, one who suffers loss by reliance SEC. 12. (1) A person may be a general members one or more general partners and on such statement may hold liable any party partner and a limited partner in the same one or more limited partners. The limited to the certificate who knew the statement to partnership at the same time. partners as such shall not be bound by the (2) A person who is a general, and also obligations of the partnership. be false- ( a) at the time he signed the certificate, or at the same time a limited, partner shall FORMATION (b) subsequently, but within a sufficient have all the rights and powers and be sub ject to all the restrictions of a general part SEC. 2. (1) Two or more persons desiring to time before the statement was relied upon form a limited partnership shall- to enable him to cancel or amend the certifi ner, except that, in respect to his contribu (a) sign and swear to a certificate, which cate, or to file a petition for its cancellation tion, he shall have the rights against the shall state-- or amendment as provided in section 25 ( 3) • other members which he would have had If he were not also a general partner. I. the name of the partnership, LIMITED PARTNER NOT LIABLE TO CREDITORS II. the character of the business, LOANS AND OTHER BUSINESS TRANSACTIONS SEC. 7. A limited partner shall not become III. the location of the principal plac~ of WITH LIMITED PARTNER business. liable as a gene.ral partner unless, in addi tion to the exercise of his rights and powers SEC. 13. ( 1) A limited partner also may IV. the name and p~ace of residence of loan money to and transact other business each member; general and limited partners as a limited partner, he takes part in the con with the partnership, and, unless he is also being respectively designated, trol of the business. a general partner, receive on account of re V. the term for whic:l;l the partnership . is ADMISSION OF ADDITIONAL LIMITED PARTNERS sulting claims against the partnership, with to exist, SEC. 8. After the formation of a limited general creditors, a pro rata share of the as VI. the amount of cash and. a description partnership, additional limited partners may sets. No limited partner shall in respect to of and the agreed value of the other property be admitted upon filing an amendment to any such claim- contributed by each limited partner, the original certificate in accordance with ( a) receive or hold as collateral security VII. the additional contributions, if any; the requirements of section 25. any partnership property, or agreed to be made by each limited partner (b) receive from a general partner. or the and the times at which or events on the RIGHTS, POWERS, AND LIABILITIES OF A GENERAL partnership any payment, conveyance. or happening of which they shall be made, PARTNER release from liability, if at the time the as VIII. the time, if a.greed upon, when the SEC. 9. (1) A general partner shall have all sets of the partnership are not sufficient to contribution of each limited partner ts to the rights and powers and be subject to all discharge partnership liabilities to persons be returned, the restrictions and liabilities of a partner not claiming as general or limited partners. IX. the share of the profits or the other in a partnership without limited partners, (2) The receiving of collateral security, or compensation by way of income which each except that without the written consent or a payment. conveyance, or release in viola limited partner shall receive by reason of ratification of the specific act by all the lim tion of the provisions of paragraph ( 1) is a his contribution, ited partners, a general partner or all of the fraud on the creditors of the partnership. X. the right, if given, of a. limited partner general partners have no authority to- to substitute an· assignee as contributor in (a) do any act in contravention of the RELATION OF LIMITED PARTNERS INTER SE his place, and the terms and conditions of certificate, SEC. 14. Where there are several limited the substitution, (b) do any act which would make it im partners the members may agree that one XI. the right, if given, of the partners to possible to carry on the ordinary business of or more of the limited partners shall have a admit additional limited partners, the partnership, · priority over other limited partners as to XII. the right, if given, of one or more of (c) confess a judgment against the part the return of their contributions, as to their the limited partners to priority over other nership, compensation by way of income, or as to limited partners, as to contributions or as (d) possess partnership property, or as any other matter. If such an agreement is to compensation by way of income, and the sign their rights in specific partnership prop made it shall be stated in the certificate, nature of such priority, and in the absence of such a statement all erty, for other than a partnership purpose, the limited partners shall stand upon equal XIII. the right, if given, of the remaining (e) admit a person as a general partner, footing. general partner or partners to· continue the (f) admit a person as a limited partner, business. on the death, retirement, or tn unless the right so to do is given in the COMPENSATION OF LIMITED PARTNER sanity of a general partner, and certificate, SEC. 15. A limited partner may receive XIV. the right, ~f given, of a limited part~ (g) continue the business with partnership from the partnership the share of the profits ner to demand and receive property other .property on· the death, retirement, or. in or the compensation by way of income than cash in return for his contribution; _ sanity of a general partner, unless the right stipulated for in the certificate: Provided, (b) file for record the certificate in the so to do is given in the certificate. That after such payment is made, whether Office of the Recorder of Deeds of the District from the property of the partnership or that of Columbia. RIGHTS OF A LIMITED- PARTNER of a general partner, the partnership assets (2) A limited partnership is formed if SEC. 10. ( 1) A limited partner shall have are in excess of all liabilities of the partner there has been substantial compliance in the same rights as a general partner to- ship except liabllitles to limited partners on good faith with the requirements of para- (a) have the partnership books kept at account of their contributions and to gen graph (1). - a principal place of business of the partner- eral partners. 15814 CONGRESSIONAL RECORD - HOUSE August 7 WITHDRAWAL OR REDUCTION OF LIMITED PART• ASSIGNMENT OF LIMITED PARTNER'S INTEREST pensation by way of income on their con NER'S CONTRmUTION SEC. 19. (1) A limited partner's interest is tributions. SEC. 16. (1) A limited partner shall not assignable. (c) Those to ·limited partners in respect receive from a general partner or out of part (2) A substituted limited partner is a per to the capital of their contributions. nership property any part of his contribution son admitted to all the rights of a limited ( d) Those to general partners other than for capital and profits. until- partner who has died or has assigned his ( a) all liabilities of the partnership, except interest in a partnership. ( e) Those to general partners in respect liabilities to general partners and to limited ( 3) An assignee, who does not become a to profits. partners on account of their contributions, substituted limited partner, has no right to (f) Those to general partners in respect have been paid or there remains property of require any information or account of the to capital. the partnership sufDcient to pay them, partnership transactions or to inspect the (2) Subject to any statement in the cer~ificate or to subsequent agreement, (b) the consent of all members is had, partnership books; he is only entitled to unless the return of the contribution may receive the share of the profits or other com limited partners share in the partnership be rightfully demanded under the provisions pensation by way of income, or the return assets in respect to their claims for capital, of his contribution, to which his assignor and in respect to their claims for profits or of paragraph ( 2) , and for compensation by way of income on their (c) the certificate is canceled or so would otherwise be entitled. ( 4) An assignee shall have the right to contributions respectively, in proportion to amended as to set forth the withdrawal or the respective amounts of such claims. reduction. become a substituted limited partner if all · (2) Subject to the provisions of paragraph the members (except the assignor) consent WHEN CERTIFICATE SHALL BE CANCELED OR (1) a limited partner may rightfully demand thereto Or if the assignor, being thereunto AMENDED the return of his contribution- empowered by the certificate, gives the SEC. 24. ( 1) The certificate shall be can (a) on the dissolution of a partnership, assignee that right. celed when the partnership is dissolved or or (5) An assignee becomes a substitued all limited partners cease to be such. (b) when the date specified in the cer limited partner when the certificate is ap (2) A certificate shall be amended when tificate for its return has arrived, or propriately a.mended in accordance with sec ( a) there is a change in the .name of the (c) after he has given six months' notice tion 25. partnership or in the amount or character in writing to all other members, if no time (6) The substituted limited partner has of the contribution of any limited partner, is specified in the certificate either for the all the rights and powers, and is subject to (b) a person is substituted as a limited return of the contribution or for the dis all the restrictions and lia.bil1ties of his as partner, solution of the partnership, signor, except those liabilities of which he (c) an additional limited partner is (3) In the absence of any statement in was ignorant at the time he became a limited admitted, the certificate to the contrary or the con partner and which could not be ascertained (d) a person is admitted as a general sent of all members, a limited partner, ir from the certificate. partner, respective of the nature of his contribution, (7) The substitution of the assignee as a ( e) a general partner retires, dies, or be has only the right to demand and receive limited partner does not release the assignor comes insane, and the business is continued from liability to the partnership under sec under section 20, cash in return for his contribution. tions 6 and 17. (4) A limited partner may have the part (f) there is a change in the character nership dissolved and its affairs wound up EFFECT OF ~ETffiEMENT, DEATH, OR INSANITY OF of the business of the partnership, when- A GENERAL PARTNER . (g) there is a false or erroneous statement ( a) he rightfully but unsuccessfully SEC. 20. The retirement, death, or insanity in the certificate, demands the return of his contribution, or of a general partner dissolves the partner ( h) there is a change in the time as (b) the other liabilities of the partner ship, unless the business is continued by the stated in the certificate for the dissolution ship have not been paid, or the partnership remaining general partners- of the partnership or for the return of a property is insufDcient for their payment as (a) under a right so to do stated in the contribution, required by par~graph (la) and the limited certificate, or (1) a time is fixed for the dissolution of partner would otherwise be entitled to the (b) with the consent of all members. the partnership, or the return of a contri return of his contribution. DEATH OF LIMITED PARTNER bution, no time having been specified in the certificate, or LIABILITY OF LIMITED PARTNER TO PARTNERSHIP SEC. 21. (1) On the death of a limited (j) the members. desire to make a change SEC. 17. (1) A limited partner is liable to partner his executor or administrator shall in any other statement in the certificate in the partnership- have all the rights of a limited partner for order that it shall accurately represent the (a) for the difference between his contri the purpose of settling his estate, and such agreement between them. bution as actually made and that stated in power as the deceased had to constitute his assignee a substituted limited partner. REQUIREMENTS FOR AMENDMENT AND FOR the certificate as having been made, and CANCELLATION OF CERTIFICATE (b) for any unpaid contribution which (2) The estate of a deceased limited part he agreed in the certificate to make in the ner shall be liable for all his liabilities as a SEC. 25. ( 1) The writing to amend a future at the time and on the conditions limited partner. certificate shall- stated in the certificate. RIGHTS OF CREDITORS OF LIMITED PARTNER ( a) conform to the requirements of sec tion 2 ( 1) (a) as far as necessary to set forth (2) A limited partner holds as trustee for SEC. 22. (1) On due application to a court the partnership- clearly the change in th~ certificate which of competent jurisdiction by any judgment it is desired to make, and (a) specific property stated in the certif creditor of a limited partner, the court may icate as contributed .by him, but which was charge the interest of the indebted limited (b) be signed and sworn to by all members, not contributed or which has been wrongfully partner with payment of the unsatisfied and an amendment substituting a limited returned, and amount of the judgment debt; and may ap partner or adding a limited or general partner (b) money or other property wrongfully point a receiver, and make all other orders, shall be signed also by the member to be paid or conveyed to him on account of his directions, and inquiries which the circum substituted or added, and when a limited contribution. stances of the case may require. partner is to be substituted, the amendment (3) The liabilities of a limited partner as (2) The interest may be redeemed with shall also be signed by the assigning limited set forth in this section can be waived or the separate property of any general partner, partner. compromised only by the consent of all mem but may not be redeemed with partnership (2) The writing to cancel a certificate shall bers; but a waiver or compromise shall not property. be signed by all members. affect the right of a creditor of a partner (3) The remedies conferred by paragraph (3) A person desiring the cancellation or ship, who extended credit or whose claim ( 1) shall not be deemed exclusive of others amendment of a certificate, if any person arose after the filing and before a cancella which may exist. designated in paragraphs (1) and (2) as a tion or amendment of the certificate, to ( 4) Nothing in this Act shall be held to person who must execute the writing refuses enforce such liab111ties. deprive a limited partner of his statutory to do so, may petition the United States Dis (4) When a contributor has rightfully re exemption. trict Court for the District of Columbia to direct a cancellation or amendment the_eof. ceived the return in whole or in part of DISTRIBUTION OF ASSETS the capital of his contribution, he is never (4) If the court finds that the petitioner theless liable to the partnership for any sum, SEC. 23. ( 1) In settling accounts after dis has a right to have the writing executed not in excess of such return with interest, solution the liab111ties of the partnership by a person who refuses to do so, it shall necessary to discharge its liabilities to all shall be entitled to payment in the following. order the Recorder of Deeds of the District creditors who extended credit or whose claims order: of Columbia where the certificate is re arose before such return. (a) Those to creditors, in the order of corded to reco: d the cancellation or amend priority as provided by law, except those to ment of the certificate; and where the cer NATURE OF LIMITED PARTNER'S INTEREST IN limited partners on account of their con tificate is to be amended, the court shall PARTNERSHIP tributions, and to general partners. also cause to be filed for record in said SEC. 18. A ltmited partner's interest in the (b) Those to ltmited partners in respect office a certified copy of its decree setting partnership is personal property. to their share of the profits and other com- forth the amendment. 1962 CONGRESSIONAL RECORD - HOUSE 15815 ' (5) A certificate is amended or canceled · The - committee amendments were chanical, or manufacturing businesses, when there is filed for record in th.e office agreed to. and have not more than six limited part of the Recorder of Deeds of the District of Mr. GROSS. Mr. Speaker, will the ners who must contribute cash in order Columbia where the certificate is recorded- ( a) a writing in accordance with the pro gentleman yield? to-· obtain limited liability. H.R. 11019 visions of paragraph (1) or (2.). or Mr. WHITENER. l would be happy would enable the use of limited partner (b) a certified copy of the order of court to yield to the gentleman from Iowa. ships in various fields, such as real in accordance with the provisions of para Mr. GROSS. What is the difference estate, construction, and ownership. graph (4) . between this bill, H.R. 11019, and H.R. Second. To meet economic growth in (6) After the certificate is duly amended 12675? They both deal with partner this area, businessmen and investors in accordance with this section, the amend ships, do they not? have-long been forced to resort to more ed certificate shall thereafter be :for all pur Mr. WHITENER. Yes. But there is unusual and complex forms of business poses the certificate provided for by this Act. as much difference in the two bills as arrangements to achieve some of the PARTIES TO ACTIONS there is between an airplane and an au benefits of limited partnership form of SEC. 26. A contributor, unless he is a gen tomobile. One deals with limited part business. organization. The bill would eral partner, is not a proper party to proceed nerships, and one deals with general obviate such arrangements. ings by or against a partnership, except where partnerships, which are entirely differ Third. Of desire for uniformity in this the object is to enforce a limited partner's right against or liability to the partnership. ent types of legal creatures. area. bringing the law of the District Mr. GROSS. One deals with limited into conformity with that of Virginia and NAME OF ACT partnerships and the other deals with Maryland, so that.business ventures may SEC. 27. This Act may be cited as the ..Uni general partnerships; are those the be conducted in any one or all three form Limited Partnership Act". words the gentleman used? jurisdictions without difficulty, and the RULF.s OF CONSTRUCTION Mr. WHITENER. That is right. This disparity among their laws will be elimi SEC. 28.- ('1) The rule that statutes in bill deals with limited partnerships. It nated. derogation of the common law ..are to be is the Uniform Limited Partnership Act No opposition to the bill was expressed strictly construed shall have no application which is now in e:ff ect in 40 States of the at the hearings. It is endorsed by the to this Act. Union, including -Maryland, Virginia, Bar Association of the District of Colum (2) This Act shall be so interpreted and construed as to effect its general purpose to and Iowa. bia, the Board of Commissioners of the make uniform the law of those States which Mr. GROSS. I thank the gentleman. District of Columbia, and by the Metro enact it. Mr. WHITENER. Mr. Speaker, the -politan Washington Board of Trade. (3) This Act shall not be so construed as purpose of the bill is to substitute the The bill was ordered to be engrossed to impair the obligations of any contract Unifarm Limited Partnership Act for the and read a third time, was read the existing when the Act goes into effect, nor to present law in the District--act of March third time, and passed, and a motion to affect any action on proceedings begun or 3, 1901, 31 Stat. 1415; District of Colum reconsider was laid on the table. right acc~ed before this Act takes effect. bia Code, 1961 edition, sections 41-101 Mr. WHITENER. Mr. Speaker, I ask RULES FOR CASES NOT PROVIDED FOR IN THIS ACT and the following. unanimous consent that I may insert in SEC. 29. In any case not provided for in Present law has not been revised in the the RECORD at the time of consideration this Act the rules of law and equity, includ 60 years of its existence, and despite the of each of these bills an explanatory ing the law merchant, shall govern. growth of multiple and complex business statement. PROVISIONS FOR EXISTING LIMITED PARTNERSHIPS and professional interrelationships, no The SPEAKER pro tempore. Is SEC. 30. (1) A limited partnership formed effort has been made to modernize the there objection to the request of the under any statute of this State, prior to the law to facilitate the organization of gentleman from North Carolina? adoption of this Act, may become a limited limited partnerships which would have There was no objection. partnership under this Act by complying practical application in the expanding with the provisions of section 2: Provided, That the certificate sets forth- economy. ( a) the amount of the original contribu The Uniform Act was approved by the FORMATION OF PARTNERSHIPS IN tion of each limited partner, and the time National Conference of Commissioners DISTRICT OF COLUMBIA when the contribution was made, and on Uniform State Laws--chosen from Mr. WHITENER. Mr. Speaker, by (b) that the property of the partnership the legal profession-46 years ago, and direction of the Committee on the Dis exceeds the amount sufficient to di!!charge since then the Uniform Act, approved by its liabilities to persons not claiming as gen trict of Columbia I call up the bill (H.R. the American Bar Association, has been 12675) to provide for the formation of eral or limited partners by an amount greater adopted and is in effect in 40 States, in than the sum of the contributions of its partnerships in the District of Columbia limited partners. cluding Maryland and Virginia. and to make uniform the law with re (2) A limited partnership formed under H.R. 11019 incorporates the Uniform spect thereto. any statute of this State, prior to the adop Act in its entirety, and its enactment The Clerk read as fallows: would conform the District's law to that tion· of this Act, until or unless it becomes Be it enacted by the Senate and House a limited partnership under this Act, shall of other jurisdictions. The bill repeals of Representatives of the United States of continue to be governed by the provisions present law with respect to limited part America in Congress assembled, That this of Thirty-first Statutes at Large, page 1415, nerships formed subsequent to the ef Act to provide for the formation of partner chapter 854, sections 1498-1506, 1508, 1510- fective date of its enactment, and sub ships in the District of Colum.bia and to make 1528, as amended, except that such partner stitutes a precise and comprehensive uniform the law with respect thereto shall ship shall not be renewed unless so provided formula for establishing limited part be in effect in the District of Columbia on _in the original agreement. nerships, carefully delineating the rights and after the date of the enactment of this REPEAL and obligations of the limited partners Act. SEC. 31. Except as affecting existing limited inter se and in relation to the partner PART I partnerships to the extent set forth in sec ship as a whole . Preliminary provisions .tion 30, Thirty-first Statutes at Larg.e, page . The bill also provides for filing of cer::" SECTION 1. NAME OF ACT.-This Act may "1415, chapter, 854, sectfons ' 1'49~15-06 ; 1508, be cited as the "Uniform Partnership Act". ·-1510-1528,· -as amended, ts· hereby repealed. tificate of limited partnership, and any amendment or cancellation thereof, with < SEC. -2. DEFINITION OF. 'n:RMs.-In this Act, With the following committee amend "court" includes every court and judge hav ·the recorder of deeds. Present law con ing jurisdiction in the case. _ments: tains a provision, anomalous in these "Business" includes every trade, occupa On page 19,. line 8, following the word times, requiring the filing of the certifi tion, or profession. ,"formed", strike "under -any statute of this cate of limited partnership in the· office "Person" includes individuals, partner State... and insert in lieu thereof the fol of the clerk of the U.S. District Court for -ships, corporations, and other associations. lowing: -"under the Act approved March 3, the District of Columbia. "Bankrupt" includes bankrupt under the -1901; as-amended," .. Federal Bankruptcy Act or insolvent under On page 19, line 21, following the word Need for the adoption of the Uniform any law o! the District o! Columbia. -"formed", strike "under any statute of ·this ·Act was stressed.at the hearings because: "Conveyance" includes every assignment, -state", and insert 1n·ueu thereof the follow- First. or the inadequacy of existing lease, -mortgage, or encumbrance._ ing: "unde.r the Act approved March 3, .1901, law ·under which limited partnerships "Real property0 includes land and any -as amended, ... . may be formed only for mercantile, me- interest or estate in land . 15816 CONGRESSIONAL -RECORD - HOUSE August 7 SEC. 3. INTERPRETATION OF KNOWLEDGE AND nership stock or subsequently acquired by in the partnership name, or in his own . NoTICE.-(1) A person has "knowledge" of purchase or otherwise, on account of the name, passes the equitable interest of the a fact within the meaning of this Act not partnership, is partnership property. partnership, provided the act is one within only when he has actual knowledge theredf, (2) Unless the contrary intention appears, the authority of the partner under the pro but also when he has knowledge of such property acquired with partnership funds is vision of paragraph (1) of section 9. other facts as in the circumstances show partnership property. (5) Where the title to real property is in bad faith. (3) Any estate in real property may be the names of all the partners a convey (2) A person has "notice" of a fact within acquired in the partnership name. Title so ance executed by all the partners ·passes all the meaning of this Act when the person acquired can be conveyed only in the part their rights in such property. who claims the benefit of the notice-- nership name. SEC. 11. PARTNERSHIP BOUND BY ADMISSION (a) states the fact to such person, or ( 4) A conveyance to a partnership in the OF PARTNER.-An admission or representa (b) delivers through the mail, or by other partnership name, though without words of tion made by any partner concerning part means of communication, a written state inheritance, passes the entire estate of the nership affairs within the scope of his au ment of the fact to such person or to a grantor unless a contrary intent appears. thority as conferred by this Act is evidence proper person at his place of business or PART m against the partnership. residence. SEC. 12. PARTNERSHIP CHARGED WITH SEC. 4. RULES OF CONSTRUCTION.-(1) The Relations of partners to persons dealing with KNOWLEDGE OF OR NOTICE TO PARTNER. the partnership rule that statutes in derogation of the com Notice to any partner of any ~atter relating mon law are to be strictly construed shall SEC. 9. PARTNER AGENT OF PARTNERSHIP AS to partnership affairs, and the knowledge of have no application to this Act. TO PARTNERSHIP BUSINESS.-(1) Every part the partner acting in the particular matter, (2) The law of estoppei shall apply under. ner is an agent of the partnership for the acquired while a partner or then present to this Act. purpose of its business, and the act of every his mind, and the knowledge of any other (3) The law of agency shall apply under partner, including the execution in the part partner who reasonably could and should this Act. nership name of any instrument, for ap have communicated it to the acting part (4) Tbis Act shall be so interpreted and parently carrying on in the usual way the ner, operate as notice to or knowledge of construed as to effect its general purpose to business of the partnership of which he is a the partnership, except in the case of a make uniform the law of those jurisdictions member binds the partnership, unless the fraud on the partnership committed by or which enact it. partner so acting has in fact no authority with the consent of that partner. ( 5) This Act shall not be construed so as to act for the partnership in the particular SEC. 13. PARTNERSHIP BOUND BY PARTNER'S to impair the obligations of any contract matter, and the person with whom he is WRONGFUL AcT.-Where, by any wrongful existing when the Act goes into effect, nor dealing has knowledge of the fact that he act or omission of any partner acting in the to affect any action or proceedings begun or has no such authority. ordinary course of the business of the part right accrued before this Act takes effect. (2) An act of a partner which is not ap nership or with the authority of his copart SEC. 5. RULES FOR CASES NOT PROVIDED FOR parently for the carrying on of the business ners, loss or injury is caused to any person, IN THIS AcT.-In any case not provided for of the partnership in the usual way does not not being a partner in the partnership, or in this Act the rules of law and equity, in bind the partnership unless authorized by any penalty is incurred, the partnership is cluding the law merchant, shall govern. the other partners. liable therefor to the same extent as the (3) Unless authorized by the other part partner so acting or omitting to act. PART ll SEC. 14. PARTNERSHIP BOUND BY PARTNER'S Nature of a partnership ners or unless they have abandoned the busi ness, one or more but less than all the part BREACH OF TRUST .-The partnership is bound SEC. 6. PARTNERSHIP DEFINED.-(1) A part ners have no authority to- to make good the loss: nership ls an association of two or more (a) assign the partnership property in (a) Where one partner acting within the persons to carry on as coowners a business trust for creditors or on the assignee's prom scope of his apparent authority receives for profit. ise to pay the debts of the partnership, money or property of a third person and mis (2) But any association formed under any (b) dispose of the goodwill of the business, applies it; and other statute of this jurisdiction, or any ( c) do any other act which would make (b) Where the partnership in the course statute adopted by authority, other than the it impossible to carry on the ordinary busi of its business receives money or property authority of this jurisdiction is not a part ness of a partnership, of a third person and the money or property nership under this Act, unless such associa (d} confess a judgment, so received is misapplied by any partner tion would have been a partnership in this (e) submit a partnership claim or liabil while it is in the custody of the partnership. jurisdiction prior to the adoption of this Act; ity to arbitration or reference. SEC. 15. NATURE OF PARTNER'S LIABILITY. but this Act shall apply to limited partner ( 4) No act of a partner in contravention All partners are liable- ships except insofar as the statutes of the of a restriction on authority shall bind the ( a) jointly and severally for everything District of Columbia relating to such ·part chargeable to the partnership under sec nerships are inconsistent herewith. partnership to persons having knowledge of the restriction. tions 13 and 14, SEC. 7. RULES FOR DETERMINING THE EXIST (b) jointly for all other debts and obliga ENCE OF A PARTNERSHIP.-In determining SEC. 10. CONVEYANCE OF REAL PROPERTY OF THE PARTNERSHIP.-(1) Where title to real tions of the partnership; but any partner whether a partnership exists, these rules may enter into a separate obligation to per shall apply: property is in the partnership name, any partner may convey title to such property by form a partnership contract. (1) Except as provided by section 16 per SEC. 16. PARTNER BY ESTOPPEL.-(1) When sons who are not partners as to each other a conveyance executed in the partnership name; but the partnership may recover such a person, by words spoken or written or by are not partners as to third persons. conduct, represents himself, or consents to (2) Joint tenancy, tenancy in common, property unless the partner's act binds the partnership under the provisions of para another representing him to anyone, as a tenancy by the entireties, joint property, partner in an existing partnership or with common property, or part ownership does not graph (1) of section 9, or unless such prop erty has been conveyed by the grantee or a one or more persons not actual partners, he of itself establish a partnership, whether such is liable to any such person to whom such coowners do or do not share any profits person claiming through such grantee to a holder for value without knowledge that the representation has been made, who has, on made by the use of the property. the faith of such representation, given credit (3) The sharing of gross returns does not partner, in making the conveyance, has ex ceeded his authority. to the actual or apparent part:µership, and of itself establish a partnership, whether or if he has made such representation or con not the persons sharing them have a joint (2) Where title to real property is in the name of the partnership, a conveyance ex sented to its being made in a public man or 'common right or interest in any property ner he is liable to such person, whether the from which the returns are derived. ·ecuted by a·partner, in his own name, passes the equitable interest of the partnership, representation has or has not been made or ( 4) The receipt by a person of a share of communicated to such person so giving the profits of a business is prima facie evi provided the act is one within the authority of the partner under the provisions of para credit by or with the knowledge of the ap dence that he is a partner in the business, parent partner making the representation or but no such inference shall be drawn if such graph (1) of section 9. . (3} Where title to real property is in the. consenting to its being made. profits were received in payment-- (a) When a partnership liability results, (a) as a debt by installments or otherwise, name of one or more but not all the partners, and the record does not disclose the right of he is liable as though he were an actual (b) as wages of an employee or rent to a the partnership, the partners in whose name member of the partnership. landlord, - the title stands may convey title to such (b) When no partnership liability results, (c) as an annuity to a widow or represent property, but the partnership may recover he is liable jointly with the other persons, ative of a deceased partner, such property if the partners' act does not if any, so consenting to the contract or rep (d) as interest on a loan, though the bind the partnership under the provisions of resentation as to incur liability, otherwise amount of payment varies with the profits of paragraph (1) of section 9, unless the pur separately. the business, chaser or his assignee is a holder for value, (2) When a person has been thus repre ( e) as the consideration for the sale of without knowledge. sented to be a partner in an existing part the goodwill of a business or other property (4) Where the title to real property is in nership, or with one or more persons not by installments or otherwise. the name of one or mQre or all the partners, actual partners, he is an agent of the per SEC. 8. PARTNERSHIP PROPERTY.-(1) All or in a third person in trust for the partner sons consenting to such representation to property originally brought into the part- ship, a conveyance executed by a partner bind them to the same extent and in the 1962 CONGRESSIONAL ~CORD-. HOUSE 15817 same manner as though he were, {I. partner ship as the personal represen~atives of .the actions, or to inspect the partnership books; in fact, with respect to persons· .who rely last· surviving partner. . · l:mt i~ merely entitles the assignee to receive upon the representation. Where all t)le SEC. 22. RIGHT . TO AN AccouNT.-Any "part in accordance with his contract the profits members of the existing partnership consent ner shall have the right to a-formal account to which the assigning partner would other- to the representation, a partnership act or as lio partnership a~airs-- wise be entitled. · · obligation results; but in all other cases it (a) if he is wrongfully excluded from the , (2) In.case of a dissolution of the partner is the joint act or obligation of the person partnership business or possession of its ship, the assignee is entitled to receive his acting and the persons consenting to the property by his co-partners, . ~ssignor's intere·st and may require an ac representation. (b) if the right exists under the terms of count from the date only of the last account SEC. 17. LIABILITY OF INCOMING PARTNER.~A any agreement, agreed to by all the partners. · person admitted as a partner into an existing (c) as provided by section 21, SEC. 28. PARTNER'S INTEREST SUBJECT TO partnership is liable for all the obligations ( d) whenever other circumstances render CHARGING ORDER.-(1) On due application to of the partnership arising before his admis it just and reasonable. a competent court by any judgment creditor sion as though he had been a partner when SEC. 23. CONTINUATIO.N OF PARTNERSHIP of a partner, . the court which entered the such obligations were incurred, except that BEYOND FrxED TERM.-(1) When a partner judgment, order, or de.cree, or any other this liability shall be satisfied only out of ship for a fixed· term or particular undertak court, may charge the interest of the debtor partnership property. ing is continued after the termination of partner with payment of the unsatisfied amount of such judgment debt with interest PART IV such term or particular undertaking without any express agreement, the rights and duties thereon; and may then or later appoint a _ Relations of partners to .one another of the partners remain the same as they were receiver of his share of the profits, and of SEC. 18. RULES DETERMINING RIGHTS AND at such termination, so far as is consistent any other money due or to fall due to him DUTIES OF PARTNERS.-The rights and duties with a partnership at will. · in respect of the partnership, and make all of the partners in relation to the partnership (2) A continuation of the business by the other orders, directions, accounts, and in shall be determined, subject to any agree partners or such of them as habitually acted quiries which the debtor· partner might ment between them, by the following rules: therein during the term, without any settle nave made, or which the circumstances of . (a) Each partner shall be repaid his con- ment or liquidation of the partnership af the case may require . tributions, whether by way of capital or ad (2) The interest charged may be.redeemed fairs, is prima facie evidence of a continua at any time before foreclosure, or in case of a vanc.e~ to the partnership property and tion of the partnership. sale being directed by the court may be pur share equally in the pr_ofits and surplus re PART V , maining after all liabilities, including those chased without thereby causing a dissolu to partners, are satisfied; and must contrib Property rights of a partner tion: . ute toward the losses, whether of capital or SEC. 24. ExTENT OF PROPERTY RIGHTS OF A ·. (a) Witp separate property, by any one or · otherwise, sustained by the partnership ac PARTNER.-The property rights of a partner more of the partners, or cording to his _share in the profits. are ( 1) his rights in specific partnership (b) With partnership property, by any one or more of the partners with the consent of (b) The partnership must indemnify every property, (2) his interest in the partnership, partner in respect of payments made and and (3) his right to participate in the man an the partners whose interests are not so agement. charged or sold. personal liabilities reasonably incurred by (3) Nothing in this Act shall be held to him in the ordinary. and proper conduct of SEC. 25. NATURE OF A PARTNER'S RIGHT IN deprive a partner of his right, if any, under its business or for the preservation of its SPECIFIC PARTNERSHIP PROPERTY.-(1) A part the exemption laws, as regards.his interest in business or property. ner is coowner with his partners of specific the partnership. (c) A partner, who in aid of the partner partnership property holding as a tenant in PART VI ship makes any payment or ·advance beyond partnership. the amount of capital which he agreed to (2) The incidents of this tenancy are such Dissolution and winding up contribute, shall be paid interest from the that: · SEC. 29. DISSOLUTION DEFINED.-The dis date of the payment o.r advance. (a) A partner, subject to the provisions of solution of a partnership is the change in (d) A partne~ shall receive interest on the this Act and to any agreement between the the 'relation of the partners caused by any capital contributed by him only from the partners, has an equal right with his part partner ceasing to be associated in the carry date when repayment should be made. ners to possess specific partnership property ing on as distinguished from the winding up (e) All partners have equal rights in the for partnership purposes; but he has no right of the business. management and _conduct of the partnership to possess such property for any other pur SEC. 30. PARTNERSHIP NOT TERMINATED BY business. pose without the consent of his partners. DISSOLUTION.-On dissolution the partner (f) No partner is entitled to remunera (b) A partner's right in specific partner ship is Iiot terminated, but continues until tion for acting in the partnership business, ship property is not assignable ~xcept in the winding up of partnership affairs is com except that a surviving partner is entitled to connection with the · assignment of rights pleted. reasonable compensation for his services _in of all the partners in the same property. SEC. 31. CAUSES OF DISSOLUTION.-Dissolu winding up the partnership affairs. .· ( c) A partner's right in specific partner tion is caused: (1) Without violation of tha (g) No person can become a member of a ship property is not subject to attachment or agreement between the partners- partnership without the consent of all the execution, except on a claim against the ( a) by the termination of the definite partners. · partnership. When partnership property is term or particular undertaking specified in attached for a partnership debt the partners, (h) Any difference arising as to ordinary the agreement, or any of. them, or the representatives of .(b) by the express wm of any partner mattei:s connected with the partnership a deceased partner, cannot claim any right business m~y be decided by a majority of the when no d~finite term or particular under under the homestead or exemption laws. taking is specified, partners; but no act in contravention of any (d) On the death of a partner his right agreement between the partners may be done ( c) by the express will of all the partners in specific partnership property vests in the who have· not assigned their interests or suf rightfully without the consent of all the survivil).g partner or. partners, except where partners. . . fered them to be charged for their separate the deceased was the last surviving partner, debts, either. before o- after the termination SEC. 19. PARTNERSHIP BOOKS.-The partner when his right in such property vests in his ship bo_oks . shall be kept, subject . to any of any specified term or particular undP.1"- legal representative. Such surviving part taking, . . agreement between the partners, at the prin ner or partners, ox: the legal representative of cipal place of business of the partnership, the .last surviving partner, has no right to ( d) by the expulsion of any partner from. · and every partner shall at all times have possess the partnership property for any but the business bona fide in accordance with access to and may inspect and copy any a partnership purpose. ' such a power conferred by the agreement be of them. . _( e) A partner's .right in specific partner tween the partn.ers; SEC. 20. DUTY OF PARTNERS To RENDER IN- ship property is not subject to dower, cur (2) In contravention of the agreement be . FORMATION.-Partners shall render bn de tesy, or· allowances to widows, heirs, or next tween the partners, where the circumstances mand true and full information of all things of kin. / do not perzµit a dissolution under any other affecting the partnership to any partner or SEC. 26. NATURE OF PARTNER'S INTEREST IN provision of this section, by the express will the legal representative of any· deceased THE PARTNERSHIP.-A partner's interest in of any partner at any time; partner or partner under legal disability. the partnership is his share of the profits and (3) By any event which makes it unlaw SEC. 21. PARTNER ACCOUNTABLE AS A FIDU surplus, and the same is personal property. ful for the business of the partnership to be CIARY.-( 1) ·:e:;very partner must account to SEC. 27. ASSIGNMENT OF PARTNER'S INTER carried on or for the members to carry it on the partnership for any benefit, and hold as EST.-(1) A conveyance by a partner of his in partnership; trustee for it any profits derived by him with interest in the partners!lip does not of itself (4) By the death of any partner; out the consent of the other partners from dissolve the partnership, nor, as against the ( 5) By the bankruptcy of any partner or any .transaction connected with the forma other partners -in the absence of agreement, the partnership; . tion, conduct, or liquidation of the partner entitle the assignee, during the continuance (6) By decree of court under section 32. ship or from any use by him of its property. of the partnership,. to interfere in ~he man SEC. 32. DISSOLUTION BY DECREE OF (2) This section applies also to the repre agement or administration of the partner CouRT.-(1) On application by ~r for a part sentatives of a · deceased partner engaged in s.hip business or affai_rs, or to require any ner the court shall decree a dissolution the liquidation of the affairs of the partner- information or account of partnership trans- whenever- 15818. CONGRESSIONAL .RECORD--HOUSE August 7 (a) a partner has been declared a lunatic been in any degree due to his connection (II) the right, as against each partner who in any judlclal proceeding or ls shown to with it. has · caused the dissolution wrongfully, to be of unsound mind, (3) The partnership ls in no case bound damages for breach of the agreement. (b) a partner becomes In any other way by any act of a partner after dissolution- 15820 CONGRESSIONAL -RECORD - HOUSE August 7 "(2) "Bank': any person or association of. signed by the donor and the designated cus age, he shall thereupon deliver or pay ~ it persons carrying on the business o! banking; todian: over to the estate o! the minor~ whether incorporated or not, in the District ;'GIFT UNDER THE DISTRICT OF COLUM " ( e) The · c\istocilan, · .notwithstanding of Columbia. statutes restricting "investments by fi "(3) 'Broker'.: one who is lawfully en . BIA UNIFORM GIFTS TO MINORS ACT duciaries, shall invest and reinvest the gaged in the business of effecting transac "I, (name of donor); hereby deliver to custodial ·property as ·would a prudent per tions in securities for the account of others; . (name of custodian) as custodian for (name son of discretion and lntelllgence who is a bank which effects such transactions; and .of minor) under the District of Columbia seeking a reasonable income and the preser one who is lawfully engaged 1n buying and Uniform Gifts to Minors Act, the following vation of capital, except that ·he may, in selling securities for his own account, security(les); (insert an appropriate descrip his discretion and without llab111ty .to the through a broker or otherwise, as a part of tion of the security or securities delivered minor or his estate,_retaln a security given a regular business. sufficient to identify it or them). to the minor in the manner prescribed in "(4) 'Court': The United States District this Act. Court for the District of Columbia. (signature of donor) "(f) The custodian may sell, exchange, " ( 5) 'Custodial property': Dated; ______convert, or otherwise dispose of custodial "(A) All securities and money, under the (Name of custodian) hereby acknowl property in the manner, at the time or times, - supervision of the same custodian for the edges receipt of the above described secu· for the price or prices, and upon the terms same minor as a consequence of a gift or rity(ies) as custodian for the above minor he deems advisable. He may vote in person gifts made to the minor in the manner pre- under the above Act. or by general or limited proxy a security scribed in this Act; · which is custodial property. He may con~ "(B) The income from the custodial prop (signature of custodian) sent, directly or through a committee or erty; and Dated: ______other agent, to the reorganization, consoli "(C) The proceeds, immediate and remote, "(3) If the subject of the gift ls money, by dation, merger, dissolution, or liquidation of from the sale, exchange, conversion, invest paying or delivering it to a broker or a bank an issuer, a security which ls custodial ment, reinvestment, or other disposition of for credit to an account in the name of the property, and to the sale, lease, pledge, or such securities, money, and income. donor, another adult, or a bank With trust mortgage of any property by or to such an "(6) 'Custodian·~ one so designated in the powers, followed, in substance, by the issuer, and to any other action by such manner prescribed in this Act. words: 'as custodian for (name of minor) an issuer. He may execute and deliver any "(7) 'Guardian of a minor': the general under the District of Columbia Uniform and all instruments in writing which he guardian, guardian, tutor, or curator of the Gifts to Minors Act'. deems advisable to carry out any of his minor's property, estate or person. · "(b) Any gift made in the manner pre powers as custodian. "(8) 'Issuer': one_who places or authorizes "(g) The custodian _!!hall register each scribed in subsection (a) may be made to . security which is custodial property and the placing of his name on a security (other only one minor. than as a transfer agent) to evidence that in registered form in the name of th~ Qusto it represents a Share, participation or other " ( c) A donor who makes a gift to a minor dian, followed, in substance, by the words: interest in his property or in an enterprise as prescribed in subsection (a) shall 'as custodian for (name of minor) under the or to evidence his duty or undertaking to promptly do all things within his power to District of Columbia Uniform Gifts to perform an obligation evidenced by the se put the subject of the gift in the possession Minors Act'. He shall hold all money which curity, or who becomes responsible for or and control of the custodian, but neither ls custodial property in an account with in place of any such person. the donor's failure to comply with this sub a broker or in a bank in. the name of the "(9) 'Legal representative': the executor section, nor his designation of an ineligible custodian, followeq, in substan_ce, by the or the administrator, general guardian, com person as custodian, nor renunciation by the same words. He shall keep all other cus mittee, conservatOr, tutor, or curator of a person designated as custodian shall affect todial property . separate and distinct from person's property or estate. . the consummation of the gift. his own property in a manner to identify it "(10) 'Member of a minor's family': any "SEC. 3. (a) A ·gift made as prescribed in clearly as custodial property. o.f the minor's parents, grandparents, broth this Act shall be irrevocable and convey to "(h) ':!'he custodian shall keep records of ers, sisters, uncles, and aunts, whether of the the minor indefeasibly vested legal title to all transactions with respect to the custodial whole blood or the half blood, or by or the security or money, given, but no guar property, and make them available for in through legal adoption. dian of the minor shall have any right, spection at reasonable intervals by a parent " ( 11) 'Minor': one who has hot attained power, duty, or authority with respect to the or legal representative of the minor or by the age of twenty-one years. custodial property except as provided in this the minor, 1f he has attained the age of "(12) 'Security•: any note, stock, treasury Act. fourteen years. stock, bond, debenture, evidence of indebt ' "(b) By making a gift in the manner pr_e . " ( 1) A custodian shall have and hold as edness, certificate of interest or participation scribed in this Act, the donor incorporates powers in trust, with respect to the custodial in an oil, gas, or mining title or lease or in in his gift all the provisions thereof and property, in addition to the rights and pow~ payments out of production under such a grants to the custodian, and to any issuer, ers provided in this Act, all the rights and title or lease, collateral trust certificate, 'transfer agent, bank, broker, or third per powers which a guardian has with respect to transferable share, voting trust certificate, or, .son dealing With a custodian, the respective property not held as custodial property. in general, any interest or instrument com powers, rights, and immunities provided in "SEC. 5. (a) A custodian shall be entitled monly known as an interim certificate, re _this Act. to reimbursement from the custodial prop ceipt, or certificate of deposit for, or any "SEC. 4. (a) Only one person may be the erty for his reasonable expenses incurred in warrant or right to subscribe to or purchase, custodian. He shall collect, hold, manage·, the performance of his duties. any of the foregoing. 'Security' does not in invest, and reinvest the custodial property. "(b) A custodian may act Without com clude a security of which the donor ls the . "(b) The custodian shall pay over to the pensation for his services. issuer. A 'security' 1s in 'registered form' minor for expenditure by him, or expend for " ( c) Unless the custodian is a donor, he when it specifies a person entitled to it or to the minor's benefit, so much of or all the may receive from the custodial property rea the right it evidences and its transfer may custodial property as the custodian deems sonable compensation for his services deter be registered upon books maintained for that ·advisable for the support, maintenance, edu mined by one Of the following standards in purpose by or on behalf of the issuer. .cation, and benefit of the minor in the man the following order: " ( 13) 'Transfer agent': one who acts as -ner, at the time or times, and to the extent " ( 1) A direction by the donor when the authenticating trustee, transfer agent, regis ·that the custodian in his discretion deems .gift ls m_ade; trar, or other agent for an issuer in the regis suitable and proper, with or without court "(2) Any statute of the District of Colum tration of transfers of its securities or in the order, with or without regard to the duty of .bia applicable to custodians; issue of new securities or in the cancellation himself or of any other person to support "(3) Any statute of the District of Colum of surrendered securities. the minor or his ab111ty to do SO, and with bia applicable to guardians; "(14) 'Trust company': a bank author or without regard to any other income or " ( 4) An order of the court. ized to exercise trust powers. property of the minor which 'may be ap " ( d) Except as otherwise provided 1n this "SEC. 2. (a) An adult may, during his life plicable or available for any such purpose. Act, a custodian shall not be required to time, make a gift of a security or money, to "(c) The court, on the petition of a parent give a bond for the performance of his one who ls a minor on the date of the gift, or guardian of the minor or of the minor, if duties. if the subject of the gift is a security- he has attained the age of fourteen years, "(e) A custodian not compensated for his " ( 1) 1n registered form, by registering 1t may order the custodian to pay over to the services shall not be liable for losses to the in the name of the donor, another adult, or minor for expenditure by him or to expend custodial property unless they result from a trust company followed, in substance, by so much of or aJ.l the custodial property as his bad faith, intentional wrongdoing, or the words: 'as custodian for (name of minor) is necessary for the minor's support, mainte . gross negligence or from his failure to.main- under the District of Columbia Uniform nance, or education . . tain the standard of prudence 1n investing Gifts to Minors Act'; "(d) To the extent that the custodial the custodial property provided in this Act. "(2) not in reg.istered form, by deliverln-g ~ property ls not so expended, the custodian "SEC. 6. (a) Only an adult member of the it to an adult other than the donor or a ·shall deliver or pay it over to the minor on minor's family, a guardian of ·the minor, or trust company, accompanied by a statement his attalning the age of twenty-one years a trust company shall be eligible to become of gift in the following form, in substance, or, if tht; minor dies before attaining that successor custodian. A successor custodian 1962 CONGRESSIONAL llECORD--HOUSE 15821 shall have all the 'nghts,· p<>Wers', duties, and todian of any money or other . property paid. beneficiafy of any such" contract held by- a immunities of a _ctistodla.n designated in the or delivered to him. ~-µstodian shall be the minor or, in the· manner prescribed by this Act.. "SEC. 9. (a) The provisions of this Act ~vent of his death, the minor's estate." "(b) A custodian• . other than the donor, shall be construed:to effectuate the general .· On page 10, lines 11 and 12, strike out may resign and designate his successor by- purpose thereof to make uniform the law "member of the minor's family". "(1) executing an instrument of resigna- of those States which enact such provisions. : On page 10, line 22, immediately after "reg tion designating the successo:i,- custodian; · "(b) This Act sball not be construed air istered form" insert "and each life insurance and providing an exclusive method for making · or annuity contract". "(2) causing each security which is cus- gifts to minors. On page 11, line 5, immediately after "suc- todial property and in registered _form to be ' "SEC. 10. If any provision of thfs Act or cessor cµstodfan," insert "each life insurance registered in the name of the successor cus- the application thereof ls held invalid, the or annuity contract registered in _the name todian followed, in substance, by the words: other provisions_or applications of such pro- of the successor custodian,". •as custodian for (name of minor) under the visions shall not be affected t~ereby. ·. On page 12, line 20, immediately after Distrlct of Columbia Uniform Gifts to Min- "SEC. 11. This Act may, be cited as the '~broker," insert "insurance company,". ors Act'; and 'District of Columbia Uniform Gifts to. "(3) delivering to the successor custodian Minors Act'." The committee amendments were the instrument of resignation, each security. . SEC. 2. (a) All laws or parts of laws in agreed to. registered in the name of the successor cus- conflict with any provision of this Act are Mr. . WHITENER. Mr. Speaker, the todian, and all other custodial property to- hereby repealed. purpose of the bill is to substitute the gether with any additional instruments re- (b) The amendments made to the Act of '.'Uniform" Gifts to Minors Act for the quired for tlle transfer thereof. August 3• 1956 <70 Stat. 1028; D.C. Code, present District of Columbia "Model" "(c) A custodian, whether or not a donor, secs. 21-214 et seq.), by the first section of may petition the court for permission to this Act shall not affect any right or liability Gifts to Minors Act, approved August 3, · resign and for the designation of a successor under such Act of August 3, 1956, existing 1956-70 Stat. 1028; District of Colum- custodian. on December 31, 1962. bia Code, 1961 edition, sections 21-204 "(d) If the person designated as custo-. SEc. 3. This Act shall take effect January and the following. · The effect will be to dian is not eligible, renounces or dies before 1, l963. - broaden the. old "model" present law to the minor attains the age of twenty-one Witll the following committee amend- permit gifts of money and insurance, as years, the guardian of the minor shall be ments: well as securities, to a -minor; to ~nlarge successor custodian. If the minor has no ·the choice of custodians,· and to permit, uardian, a donor, his legal representative, On page 2, line 12, strike out "and money'" gthe legal representative of the· custodian, an. and insert in lieu thereof ", money, life in- compensation to said custodians. adult member of the minor's family, or the ~urance and annuity contracts". Early experience in various States minor, if he has attained the age of fourteen On page 2, line 21, folloWing the word 14-with the Model Act led to the draft years, may petition the court for 'the desig- "money,'' !nsert "life insurance and annuity ing of a shorter, improved version, called nation of a successor custodian. contracts,". the Uniform Gifts to Minors Act, which, "(e) A donor, the legal representative of . On page 3, immediately after line 13, insert was approvedb y th e N a t•iona 1 C o nference a donor, an adult member of the minor's the following: of Commissioners on Uniform· State Laws family, a guardian of the minor or the minor, :•'Life insurance and annuity contracts': if he has attained the age of fourteen years, shall include only insurance and annuity and by the American Bar Association, may petition the court that, for cause shown contracts on the life of a minor or a member and is the basis of H.R. 11018. The in the petition, the custodian be. removed of the minor's family as herein defined.'" Vniform Act nas had almost nation and ·a successor custodian be designated or, On page 3; lines 14, l8, and 20, strike out wide acceptance. As of today it has been in the alternative, that the custodian be re- "(lO) ", "(ll) ", and "(12 ) ", and insert in enacted and is in effect in 47 States; quired to give bond for the performance of lieu thereof "(ll) ", "(12 ) '', and "(l3)" re-. ~nly three-Alaska, Georgia, ,and New his duties. , spectively.on page 4, line 2, strike out the word "anH J ersey-and the D"is t ric . t o f Co1 um b last"ll 1 · "(f) Upon the filing of a petition as pro- and insert in lieu thereof: "a security, or any- use the earlier model law. vided in this section, the court shall grant' an order, directed to the persons and return- certificate of interest of participation in,- H.R. 11018, as reported, defines "cus- able on such notice as the court may re- any temporary or.'' todial property" to' mean "securities, quire, to show cause why the relief prayed On page 4, lines 10and15, strike out "(13) ·~ ip.oney, life insurance, and annuity con-. for in the petition should not be granted and "(l4) ",and insert in lieu thereof "(14>" tracts." Eight of the States. which have and, in due course, grant such relief as the and "(l5)", respectively. adopted the Uniform Act, Illinois, Ken- court finds to be in .the best interests of the On page 4• line 18• stt:lke out .. or nioney" t k N H hi minor. and insert i,n lieu thereof ", money, life UC Y. ew amps re, North Carolina, insurance or annuity contract" Ohio, Wisconsin, Massachusetts, and "SEC. 7. (a) The minor, if he has attained on page 5 immediately before· line 5 insert Michigan-likewise include "insurance" the age of fourteen years, or the legal repre- • · • sentative of the minor, an adult member of the following: in their Uniform Acts. It is recom- the minor's family, or a donor or his legal "(3) If the subject of the gift ls a life mended bytheAmericanLifeConvention representative may petition the court for an insurance or annuity contract, the owner- and the Life Insurance Association of accounting by the custodian or his legal rep- ship of the contract shall be registered by America, having a combined membership resentative. the donor of such contract in his own name - of 306 life .insurance companies-repre- "(b) The court, in a proceeding under this or in the name of an adult member of the senting 94 percent of the legal reserve Act or otherwise, may require or permit the guardian of the minor, followed l;>y the words l.f . minor's family or in the name of any 1 e msurance business in the United custodian or his legal representative to ac- •as custodian for (name of minor) und_er the States-150 of which do business in the count and, if the custodian is removed, shall District of Columbia. Uniform Gifts to District of Columbia. so require and order delivery of all custodial Minors Act', and such contract shall be Th property to the successor custodian and the delivered to the person in whose name it is e committee intends the phrase "life insurance" to m· elude endowment execution· Of all instruments required for thus registered as custodian. If the con~ the transfer thereof. tract is registered in the name of the donor, policies, it having been advised by the "SEC. 8. No issuer, transfer agent, bank, as custodian, such registration shall of itself local insurance associations that this broker, or other person acting on the instruc- constitute the delivery required by this is a proper interpretation of said lan tions of or otherwise dealing with any per- section.'' · guage in this jurisdiction. The specific son purporting to act as a donor or in the on page 5, line 5, strike out "(3)" and amendments reported with respect to capacity of a custodian shall be responsible insert in lieu thereof "(4) ". . insurance follow closely the provisions for determiningh whether t d d the person desig-ti on page 6, line 7, strike out "or money" m. th e N orth Caro1 ina and Kentucky nat e d by t e purpor e onor or purp~r ng and insert in lieu thereof ", money, l~fe to act as a custodian has been duly desig· insurance or annuity contract". statutes, and they restrict the life insur- nated or whether any purchase, sale, or trans- on page 6, line 14, immediately after ance under· the bill to insurance on the fer to or by or any other act of any person "broker," insert "insurance company,". life of a minor ·or a member of the purporting to act in the capacity of cus- 0 g 7 u l3 imm di t 1 ft " minor's family. todian is in accordance with or authorized pay~ ipnaseret ,;it"n. e ' e a e Y a er or With respect to custodians, the bill, by this Act, and shall not be obliged to in- On page 9, immediately after line 8, insert , as reported, provides that the dono~ quire into the validity or propriety under . the following: the provisions Of this Act of any instrument "(J) I! the subject of the gift is a life in- 'may Select a8 CUStodian any adult per or instructions executed or given by a person surance or annuity contract, the custodian son in whom he has confidence, and this purporting to act as a donor or in the capac- shall have all of the incidents of ownership includes banks and trust companies. ity of a custodian, and shall not be bound in the contract which he may hold as cus~ These, as well as the guardian of -the to see to the application by any person todian to the same extent as if he were the -minor, may ·aiso qualify as successor purporting to act in the capacity of a. cus- owner thereof personally. The designated custodian. CVIIl--997 15822 CONGRESSIONAL RECORD - HOUSE August 7 Under present law, a custodian re have recovered from his injury or other dis Also, the Police Department's accident ceives no compensation unless he is a ability to the extent of being able to prepare reports are made available to the Bureau and submit the required report.'.'; and (b) by court appointed guardian, and the prop striking "substantial" in the third para of Traffic Engineering of the District erty is held by him as guardian. · To graph. of Columbia Highway Department, compensate the nonfamily types of cus SEC. 2. Nothing in this Act shall be con where they serve as an invaluable guide todians, permitted under the reported strued so as to affect the authority vested to the identification of dangerous areas bill, provision is made to permit compen in the Commissioners by Reorganization in the city's street system. The reports sation to the custodians. Plan Numbered 5 of 1952 (66 Stat. 824). The to the safety responsibility officer, on · As with present law, the bill provides performance of any function vested by this the other hand, are said not to be suit that the gifts permitted under the bill Act in the Commissioners or in any office able for this purpose, ·and hence 9,000 or agency under the jurisdiction and con vest indefeasible legal title in the minor, trol of said Commissioners may be delegated possible indications of need for correc and may not be revoked by the donor. by said Commissioners in accordance witb tion of perilous street conditions are lost The bill also follows the Uniform Act by section 3 of such plan. each year. broadening existing law to permit gifts ·I feel that these conditions should not of money for investment under the With the following committee amend be allowed to continue, and that the pro "prudent man" rule prescribed in sec ments: tection of the public demands the im tion 4(e). Page 2, beginning line 1, strike out the provements which will be possible only No opposition to the bill was expressed words "with any person or object, shall, when all such motor vehicle accidents within forty-eight hours from the time such in the public hearings held. In addition collision occurs" and substitute in lieu are required to be reported immediately to those mentioned, the Bar Association thereof the words "which has resulted in to the Chief of Police. of the District of Columbia, the Associa damage to the property of any one person Mr. GROSS. Mr. Speaker, I move to tion of Stock Exchange Firms of New in excess of $100 or in bodily injury to or strike out the last word. York, and the Board of Commissioners in the death of any person, shall im Mr. Speaker, will the gentleman give of the District of Columbia also urge the mediately". us a brief explanation of the purpose passage of this bill. Page 2, line 5, strike out the words "extent of this bill? or amount of the damage or". Mr. Speaker, I move the previous ques Page 2, line 10, strike out the words Mr. WHITENER. I am happy to. At tion. "within the time" and substitute in lieu present in the District of Columbia only The previous question was ordered. thereof the word."as". those motor vehicle collisions which in The bill was ordered to be engrossed volve personal injury are required to be and read a third time, was read the third The committee amendments were reported to the Police Department. In time, and passed, and a motion to re agreed to. addition, collisions which result in prop consider was· laid on the table. Mr. WHITENER. Mr. Speaker, at erty damage in excess of $100 must be present, only those motor vehicle col reported to the safety responsibility lisions in the District of Columbia which officer through a functionary of the De REPORTS OF COLLISIONS IN DIS involve personal injury are required to partment of Motor Vehicles '. These re TRICT OF COLUMBIA be reported to the Police Department. ports do not reach the Police Department In addition, collisions which result in and therefore the only motor vehicle Mr. WHITENER. Mr. Speaker, by di property damage in excess of $100 must accidents not involving personal injury rection of the Committee on the District be reported to the District of Columbia which come to the attention of the of Columbia, I call up the bill-H.R. Safety Responsibility Officer, who·func Police Department are those which are 8737-to amend section 10 of the Dis tions as part of the Department of Motor trict of Columbia Trame Act, 1925, as voluntarily reported to them. Vehicles. However, these reports do not Briefly, I can tell the gentleman that amended, so as to require reports of col reach the Police Department, and hence lisions in which motor vehicles are in the only motor vehicle accidents not in according to the testimony before the volved, and ask unanimous consent that volving personal injury which come to committee there were some 9,000 motor it be considered in the House as in Com the attention of the District of Columbia vehicle accidents involving substantial mittee of the Whole. property damage in the District of Co Police Department are those which are lumbia during 1962 fiscal year which The SPEAKER. Is there objection to voluntarily reported to them. were never reported to the Police De the request of the gentleman from North This situation came to our attention partment. This came up in the hear Carolina? a year or more ago, when it developed ings on another matter before the sub There was no objection. in a hearing that the Police Department committee of which I am the chairman The Clerk read the bill, as follows: was unable to furnish statistics as to the frequency of motor vehicle accidents in and hence this bill was introduced. Be it enacted by the Senate and House of While we feel that the reporting to the Representatives of the United States of a certain heavily traveled area of the . Safety Responsibility Division is import America in Congress assembled, That sub city, because only those accidents result section (a) of section 10 of the District of ing in personal injury would necessarily ant from the standpoint of civil damages Columbia Traffic Act, 1925, as amended ( 43 have been reported to them. and statistical data as to highway Stat. 1124; sec. 40-609(a), D.C. Code, 1951 We were informed that during fiscal safety we also feel that the Police De ed.) , is amended (a) by adding at the end year 1962, some 9,000 motor vehicle ac ,partment should be the recipient of this of the first paragraph the following: "In cidents involving substantial property information where the damage exceeds addition to the preceding requirements with $100 to the property of any person in respect to the action to be taken immedi damage in the District of Columbia were volved. ately in cases involving personal injury or never reported in any way to the Police substantial damage to property, every per Department. This situation is unsatis Mr. GROSS. The bill states as fol son who, in the District of Columbia, oper".' factory for several important reasons. Jows, "shall immediately make a written ates a motor vehicle which is involved in a The safety responsibility officer's report thereof to the Chief of Police, on co111sion with any person or object, shall, chief function is to ascertain the finan a form prescribed by him." within forty-eight hours from the time such cial ability of the drivers of the vehicles I take it that in the case of an acci collision occurs, make a written report there in collisions to satisfy claims which are. dent involving an estimated damage of of to the Chief of Police, on a form pre $100 or more, it would be sufficient for scribed by him. Such written report shall brought against them as a result, and be made without regard to the extent or in some cases to take steps which may the. person or persons involved in the amount of the damage or degree of personal lead to the suspension or revocation of accident to.go to any pr_ecinct police sta injury resulting from such collision. . In the drivers' permits. While this is of course tion, and this would meet the require event the operator of a motor vehicle in a useful and important service, the fact ment of making a. report to the Chief of volved in a collision is injured or otherwise remains that the Safety. Responsibility Police? . -. · disabled to such an extent as to render him Division cannot initiate court action Mr. WHITENER. There is no ques incapable, in the opinion of his attending against any of the drivers in these 9,000 tion about that. In many cases the re physician, of making any report of the col lision within the time required by this sub accidents per. year, .. and .in many such port can be made at the scene of the 'section, such operator shall make such re cases, particularly those involving -re collision to the investigating omcer. port within forty-eight hours after the date peat offenders, . legal prosecution is the -Mr. GROSS. There is nothing in the on which, in the opinion ()f h~s attending only adequate means, of serving .the .in bilL to that effect. It says only that the physician, he can reasonably be expected to terest of public safety. report must be made . to the Chief of 1962 CONGRESSIONAL RECORD - HOUSE 15823 Police. The bill does not state that the this Act or the amendments made by this sions shall be issued by the clerk of the said report can be made to the investigating Act) or in any regulation to the Municipal court. A subpena may be served at any place officer or to any precinct station. I am Court for the District of Columbia, such within the District of Columbia, or at any reference shall be held to be a reference to place without the District of Columbia that confident the gentleman is correct and the District of Columbia Court of General ls within one hundred miles of the place of it is my purpose only to establish legis Sessions. the hearing or trial specified in the subpena'; lative i:htent. SEC. 2. Subsection (a) of section 4 of such The form, issuance and manner of service of Mr. WHITENER. We have to pre Act, approved April l, 1942, as amended (D.C. a subpena shall be as prescribed by Rule 45 suppose as we use the words "Chief of Code, sec. ll-755(a)), ls amended to read of the Federal Rules of Civil Procedure." Police" that we are referring to the De as follows: SEC. 5. (a) Section 1114 of the Act en partment. That is.the intent, and I am "(a) The District of Columbia Court of titled "An Act to establish a code .of law for sure that there will be no problem General Sessions, as established by this Act, the District of Columbia", approved March shall consist of the crlmlnal, civil, and small 3, 1901 (31 Stat. 1189; D.C. Code, sec. 11- created by the legislation such as the claims and conciliation, and domestic re 1520), is hereby repealed. gentleman means to convey. lations branches. The court and each judge (b) The paragraph relating to witness fees Mr. GROSS. The gentleman probably thereof shall have and exercise the same under the heading "District of Columbia" cannot answer this question and I am powers and jurisdiction as were heretofore in the Act entitled "An Act making appro not addressing it to him, but I assume had or exercised by the Municipal Court for priations to supply deficiencies in the appro that had the accident in which a Mr. the District of Columbia or the judges there priations for the fiscal year ending June Powers, an employee at the White House, of on the day before the effective date of thirtieth, nineteen hundred and two, and for this amendatory subsection, and in addition prior years, and for other purposes", ap and his family, was involved last Friday the said court shall have exclusive juris proved July l, 1902 (32 State 552, 561; D.C. evening, using a White House car and an diction of clvil actions commenced after the Code, sec. ll-1520a), ls amended by striking Army chauffeur to drive him to the effective date of this amendatory subsection, "cases in the police court of the District of President's rest haven up at Camp David, including such actions against executors, ad Columbia" and inserting in lieu thereof occurred in the District the details would ministrators and other fiduciaries, in which "criminal cases in the District of Columbia have been reported to the police since the claimed value of personal property or Court of General Sessions". there was at least one serious injury. I the debt or damages claimed, does not ex ( c) The fees and travel allowances to be am sure the gentleman from North ceed the sum of $10,000 exclusive of interest paid any witness compelled by subpena to and costs, and, in addition, shali have juris attend any branch of the District of Colum Carolina and the gentleman from Iowa diction of all cross-claims and counterclaims bia Court of General Sessions other than regret injury to anyone in an accident, interposed in all actions over which it has the criminal branch shall be the same but otherwise we seem to be unable to jurisdiction regardless of the amount in amount as paid a witness compelled to at find out how White House cars and volved: Provided, however, That nothing tend before the United States District Court White House rest havens are being used herein shall deprive the United States Dis for the District of Columbia. for the weekend pleasure of White House trict Court for the District of Columbia of SEC. 6. The court established by section 6 employees and their families. So if this jurisdiction over counterclaims, cross-claims, of the Act of April l, 1942 ( 56 Stat. 190; D.C. or any other claims whether or not arising Code, sec. 11-771), hereafter shall be known bill will require a reporting of informa out of the same transaction or occurrence as the "District of Columbia Court of Ap tion that the public might not otherwise and interposed in actions over which the peals". Wherever reference is made in any obtain, I am glad to support the legis Uni'ted States District Court for the Dis Act of Congress (other than this Act) or in lation. trict of Columbia has jurisdiction. The Dis any regulation to. the Municipal Court of Mr. WHITENER. I am not familiar trict of Columbia Court of General Sessions Appeals for the District of Columbia, such with the case the gentleman mentions. shall also have jurisdiction over all cases reference shall be held to be a reference to Mr. Speaker, I move the pre.vious properly pending in the Municipal Court for the District of Columbia Court of Appeals. question. the District of Columbia on the effective date SEC. 7. This Act shall take effect on the of this amendatory subsection." first day of the first month which begins The previous question was ordered. SEC. 3. Subsection (a) of section 5 of such after the sixtieth day following the date of The bill was ordered to be engrossed Act approved Aprill, 1942, as amended (D.C. its enactment. · and read a third time, was read the third Code, sec. ll-756(a)), ls amended to read as time, and passed, and a motion to re follows: Mr. WHITENER. Mr. Speaker, the consider was laid on the table. "(a) If, in any action, other than an action pending measure, H.R. 12708, a bill to in for equitable relief, pending on the effective crease the jurisdiction of the municipal date of this amendatory subsection or there court for the District of Columbia, to after commenced in the United States Dis ch~nge its names, and for other purposes, MUNIC~PAL COURT FOR THE DIS trict Court for the District of Columbia, it is a clean bill. Following hearings on TRICT OF COLUMBIA shall appear to the satisfaction of the court the original bill, H.R. 12202, by a sub at or subsequent to any pretrial hearing but committee of the Committee on the Dis Mr. WHiTENER. Mr. Speaker, by di prior to trial thereof that the action will not rection of the Committee on the District · justify a judgment in excess of $10,000, the trict of Columbia, changes were ap of Columbia, I call up the bill Such legislation-Public L~w 85-554; may certify the action to the District of and report the bill to the House with such 72 Stat. 415-was approved and the new Columbia Court of General Sessions. In amendments as may have been adopted, and jurisdictional minimum has been opera such case, the pleadings, docket entries, the previous question shall be considered as ordered on the bill and amendments thereto tive in other U.S. district court jurisdic court orders, and any deposit for costs to final passage without intervening motion tions but not in the District of Columbia. shall be sent to the clerk of the court of except one motion to recommit.· · · The question of increasing the jurisdic general sessions. The case shall be tional amount of the municipal court of treated. as tfiough it had been originally the District of Columbia from $3,000 to filed in the court of general sessions CALL OF THE HOUSE $10,000 and the proposal to empower the which shall have jurisdiction even court to secure attendance of witnesses though the amount claimed is in excess Mr. GROSS. Mr. Speaker, I make the within a radius of 100 miles came before of $10,000. point of order that a quorum is not the Judicial Conference for the District Under the terms of section 4, the court present. of Columbia in May 1960. Thereafter, of general sessions is given the power The SPEAKER pro tempore. Evi study committees were set up to review to compel the attendance of witnesses in dently a quorum is not present. Mr. . DA VIS of Tennessee. Mr. th~ problems involved in the proposed cases pending before it and enforce its changes and to make recommendations orders. The court may serve subpenas Speaker, I move a call of the House. for legislative action. The study com within a 100-mile radius of the place of A call of the House was ordered. mittee recommendations were reviewed hearing or trial. The procedure for the The Clerk called the roll, and the fol and further views and recommendations service of subpena shall be as prescribed lowing Members failed to answer to their were expressed by the judicial council, in rule 45 of the Federal Rules of Civil names: Procedure. [Roll No. 190) the judicial conference and the bar Abernethy Gilbert Mosher association. The pending bill, H.R. Section 5 of -the bill repeals the pres Andersen, Goodell Moss 12708, represents the product of this ent provisions of law as to the payment Minn. Granahan Moulder - of fees and travel allowances to wit Avery Grant Multer careful legislative effort. Baring Gray Nedzi At hearings on the legislation, the nesses in civil cases who are compelled Barrett Green, Oreg. O'Brien, N.Y. committee was advised that the bill was to attend the municipal court of the Bass, N .H. Griffi.ths O'Hara, Mich. District of Columbia and provides that Battin Gubser Osmers approved by the Judicial Conference for Blitch Hansen Powell the District of Columbia, the Bureau of such fees and travel allowances shall be Boll1ng Harrison, Va. Purcell the Budget, the Commissioners for the the same as in cases before the U.S. Boykin Harrison, Wyo. Randall District Court for the District of Co Breeding Harsha Reece District of Columbia, and the bar asso Brewster Harvey, Ind. Riley ciation. Favorable testimony was re lumbia. This section also continues the Bromwell Healey Rogers, Tex. ceived by the committee in behalf of the present witness fees for the court of Broomfield Hebert Santangelo chief judge of the U.S. District Court for general sessions as are provided for the Buckley Hoffman, Ill. Saund Cannon Hoffman, Mich. Schadeberg the District of Columbia, and the chief municipal court in criminal cases. Casey Hull Scott judge of the U.S. Court of Appeals for Section 6 of the bill provides for the Celler Ichord, Mo. Scranton the District of Columbia. Similar ap changing of the name of the "District of Chamberlain Inouye Seely-Brown Clark Jarman Shelley proval and support for the bill was ex Columbia Municipal Court of Appeals" to Coad Jonas Sheppard pressed by representatives of the munici the "District of Columbia Court of Collier Jones, Mo. Shipley pal court of appeals and the municipal Appeals." ' Colmer Karsten Shriver Conte Kearns Smith, Miss. court for the District of Columbia. No Section 7 provides the effective date Cook Kilburn Smith, Va. witness nor any communication to the for the act. This date is the first day of · Corman King, Utah Spence committee expressed any objection to the the first month which begins 60 days Cunningham Kitchin Stephens Curtis, Mass. Kyl Stratton legislation. - after the enactment of the bill. Curtis, Mo. Landrum Taber The first section of the bill provides This bill, H.R. 12708, was reported to Derwinski Lankford Thompson, La. the House by the full Committee on the Diggs Latta Thompson, N.J. that the municipal court established by Dingell Lesinski Thornberry the act of April 1, 1942, shall be known District of Columbia, all members pres Dole Loser Tuck as the District of Columbia Court of ent concurring in recommendation of Dooley Mcsween Tupper General Session. This, the committee. its approval by the House. Dulski McVey Van Zandt Mr. Speaker, I move the previous ques Durno Macdonald Weis believes, is in keeping with the dignity Ellsworth Martin, Mass. Whitten and importance of the court. tion. Farbstein Martin, Nebr. Wickersham · Section 2 of the bill provides that the The previous question was ordered. Findley Mason Winstead The bill was ordered to be engrossed Flood Merrow Yates court of general sessions and its judges ·. Flynt Minshall Younger shall have the same powers and juris and read a third time, was read the Frazier Moeller Zelenko dictions as were available to the court third time, and passed, and a motion to Garland Moore immediately preceding the effective date reconsider was laid on the table. Giaimo Moorhead, Pa. of these amendments. In addition, the The SPEAKER pro tempore. On this rollcall, 303 Members have answered to court shall have exclusive jurisdiction AMENDMENT OF FOREIGN SERVICE of civil actions, including actions against their names, a quoruin. executors, administrators arid other BUILDINGS ACT, 1926 By unanimous consent, further pro fiduciaries where the value in controver Mr. MADDEN. Mr. Speaker, by di ceedings under the call were dispensed sy does not exceed $10,000, exclusive of rection of the Committee on Rules, I with. interest and costs. The court of general call up House Resolution 741 and ask for sessions shall also have jurisdiction of its immediate consideration. all cross-claims and counterclaims in The Clerk read the resolution, as AMENDING THE FOREIGN SERVICE terposed in all actions regardless of follows: · BUILDINGS ACT the amount of such claims. The section Resolved, That upon the adoption of this The SPEAKER pro tempore. The also assures that the U.S. District Court resolution it shall be in order to move that Chair recognizes the gentleman from for the District of Columbia shall con the House resoive itself into the Committee Indiana [Mr. MADDEN]. to of the Whole House on the State of the tinue exercise the same powers as to Union for the consideration of the bill (H.R. Mr. MADDEN. Mr. Speaker, I yield all actions over which it · has jurisdic- 11880) to amend the Foreign ·Service Build 30 minutes to the gentleman from Cal tion. · · ' ings Act, 1926, to authorize additional appro ifornia [Mr. SMITH] ; and pending that Section 3 provides that in any action priations, and for other purposes. After I yield myself such time as I may require. for other thari equitable relief, pending general debate, which shall be confined to Mr. Speaker, House Resolution 741 on the effective date of these amend the bill, and shall continue not to exceed provides for the consideration of H.R. two hours, to be equally divided and con to ments or commenced thereafter in the trolled by the chairman and ranking 11880, a bill amend the Foreign Serv U.S. District Court for the District of minority member of .the Committee on For ice Buildings Act, 1926, to authorize ad Columbia, if the court is satisfied at or eign Affairs, the bill shall be read for amend ditional appropriations for the acquisi after any pretrial hearing but before ment under the five-minute rule. At the tion of sites and buildings in foreign trial that the action will not justify a conclusion of the consideration of the bill countries for use by the United States, judgment in excess of $10,000, the court for amendment, the Committee shall rise and for other purposes. The resolution 1962 - CONGRESSIONAL RECORD - HOUSE 15825 provides for an open rule with 2 hours from Ohio CMr. HAYS] was very straight which the committee has given a good of general debate. forward in saying that the committee deal of study. The problem in Paris as The purpose of H.R. 11880 is to author intended to police this program to see it exists today is that the offices for ize an appropriation of $31,806,000 for that there are no waste or unnecessary American personnel are scattered all the purchase, construction, major alter expenditures therein. We will probably over the city. We own a lot of prop ation, and long-term leasing of build have some questions on Africa, as to erty in Paris. There are four different ings overseas needed by the Department whether the buildings there are neces major locations. It is proposed to con of State in connection with the operation sary. solidate and to dispose of some of the of its 293 posts. The amount author I think the program was considered in property so as to get away from so much ized in the reported bill will make avail- a very able way by the committee. I driving around from place to place, by . able to the Department sufficient funds support the bill, and I know of no ob consolidating our activities in one place. to carry out the 2-year building program jection to the rule. Although the total appropriation in the justified to the committee. The bill also Mr. MADDEN. Mr. Speaker, I move bill may seem large, actually the sale authorizes the appropriation of such ad the previous question. of property, the money from which will ditional sums as may be necessary for The previous question was ordered. revert to the Treasury will cut that down the operational activities of the building The resolution was agreed to. to a rather negligible figure. program such as maintenance, repair, Mr. HAYS. Mr. Speaker, I move that Mr. CEDERBERG. Mr. Chairman, and furnishing. Finally, the bill deletes the House resolve itself into the Com will the gentleman yield? from existing law all references to the mittee of the Whole House on the State Mr. HAYS. I yield to the gentleman. Foreign Service Buildings Commission. of the Union for the consideration of the Mr. CEDERBERG. With reference Mr. Speaker, I urge the adoption of bill 15826· CONGRESSIONAL RECORD - HOUSE August 7 Mr. CEDERBERG. So we will still build a high-rise office building within Mr. GROSS. Is this the total expend have two buildings instead -0f five1 the limitations. 1 do not know whether iture for these buildings or is there Mr. HAYS. That is right. Then the the gentleman is familiar with the site other money authorized to be expended Ambassador's residence will be moved bY the NATO building. There is space by way of counterpart funds that do not to the Rothschild property. which is for an office building there no matter show up here?- about a half block from the chancellery. what we do with the Rothschild site. Mr. HAYS. No. I will say to the This will not require travel through . Mr. CEDERBERG. If the gentleman gentleman we had intended, and had heavy traffic. will yield for another question, there is written into the bill, a continuing au Mr. CEDERBERG. The reason I have no escaping the fact that the present thorization for maintenance and re questioned the Ambassador's residence property needs modernizing; I think it pairs. In other words, under the pres is because I recognize that in the neigh certainly needs it. Is there any thought ent law, if the wind blows the roof o:fl a borhood of the present Ambassador's of moving the entire Embassy out to this building, they have to have money au residence you have a traffic problem that NATO area now that we are getting this thorized and appropriated to fix it. We does cause some concern. However, in international complex out there? met with some questions and resistance 1948 we paid $1,459,000 for this build Mr. HAYS. If there is, it has not in the Rules Committee, I will be very ing and the gentleman knows that if we been brought out. We feel this is a sensi frank with the gentleman, so the com were to restore the present property it ble solution. The committee was unani mittee has an amendment authorizing would cost another million and a half. mous in its decision as was the sub a specific fund for annual maintenance I am taking figures from the hearings committee, and I am sure this can be and repairs for 2 years. I propose at the in the gentleman's committee. So the testified to by the gentlewoman from proper place to o:fler that amendment. expense would be considerable. Ohio [Mrs. BoLTONJ, and the gentleman It will be on page 3, line 8, of the bill and I was over there with my colleague, from Ohio [Mr. AnAIRJ, who were very will make specific authorization for each the gentleman from California [Mz.-. regular in attendance. of the fiscal years 1963 and 1964. That LIPSCOMB]. We went through that We were convinced that is the feasible will run in the neighborhood of $11 mil Rothschild property. It seemed to us thing to do, with a very little cash ex lion a year. So that the total amount ihat this would be a good place to build penditure when you consider what we ~uthorized and including new construc an office building. I understand, how would be taking in. tion, the U.S. Information Agency, ever, that they want to be closer to Mr. BARRY: Mr. Chair.man, will the maintenance and repairs will total $53 NATO. I realize there are a lot of em gentleman yield? million. ployees-of the present Embassy working Mr. HAYS. I yield to the gentleman . Mr. .GROSS. The maintenance and under almost intolerable conditions, but from New York. repair item is in addition to the $31 I have a deep and serious concern about· Mr. BARRY. The gentleman stated million? the fact that we would have some $4 that this property was purchased with Mr. HAYS. Yes. The $31,806,000 is million tied up in a residence for the counterpart funds. Would the construc for acquisition and new construction. Ambassador, and that just seems to me tion of a new building in NATO and the Mr. GROSS. That will total around exorbitant. repair of the Rothschild Building be also $50 million. Mr. HAYS. I am sure the gentleman with counterpart funds? That would be, then, the total expendi-. knows the nature of the property. It Mr. HAYS. We put in the report we ture for new construction, for mainte would be used not only for a residence expected them to use local currency nance and repair, and for·renovation and but many offices would be in the area, funds whenever it was available and remodeling; is that approximately cor-_ so we would get some additional office feasible. I understand there will be an rect? space. It looks high as the gentleman amendment submitted which will write Mr. HAYS. That is correct. states it, and his figures are as sound that into the bill. The committee is pre-. Mr. GROSS. What is the situation as anything any of us have, but when pared to accept that amendment. We then with respect to counterpart funds? the gentleman realizes that the purchase thought putting it in the report would Will they be purchased out of these of this property was made with counter do the job, but if it is written .into the funds? part funds, and they are funds we could bill, that is fine with me and fine with Mr. HAYS. That is right. The local not use except for acquisitions of this the other members of the committee, currency funds are held by the Treas kind that we would probably .have lost· because we consulted with them. Exact ury. .If we authorize $53 million and if on conversion, the price is not so high~ ly what local currency funds are avail the Committee on Appropriations appro especially when it is realized we can sell able in France I do not know, but I think priates substantially that amount, the Avenue d'Ilena property. there is sufficient that would probably wherever they use local currency funds, Another factor that has to be con see this thing through. it would actually be a bookkeeping trans sidered is that it must be in keeping Mr. GROSS. Mr. Chairman, will the action. They would take dollars appro with other buildings in the area-the gentleman yield? priated and pay the Treasury for the British Embassy is next to ours. An Mr. H~YS. I yield to the gentlema.n like amount of local currency funds and other factor is adequate space for con• from Iowa. · use that currency in construction. ferences at the Presidential level and · -Mr. GROSS. On page .2 of the report I . might tell the gentleman the total the secretarial level. a problem which it is .stated that the subcommittee .rec amount expended over the years for this arose, as the gentleman will remember. ommends $31,806,0QO. On page 5 of the program is about 85 percent in local cur when former Pr,esident Eisenhower was report there is a table which states that rency funds and not in dollars. Page 4 there with his staff. the committee recommendation is $27,- of the committee report gives the de The figures look high as the gentle 250,000. Can the gentleman tell me why tails. We have had a very fine record man .states them, but as y-0u evaluate this difference in figures? on that. We have accumulated a sub them further they do not seem so high. Mr. ADAIR. Mr. Chairman, will the st·antial amount of property around the Another factor that .has to be taken gentleman yield? world for w'hfoh we are not paying rent · into consideration is the Paris Beaux Mr. HAYS. I yield to the gentleman and which we obtained with money Arts Commission. While the Roths from Indiana. which we could not otherwise have used. child mansion may be a shell, French Mr. ADAIR. I .have a copy of the bill I might say further that out of around authorities do not want it turned into a here and I may say to the gentleman if $241 million total expenditures-an but high-rise office building. he will turn to page 2 of the bill, para about $32 million have been local cur Mr. CEDERBERG. I realize there is graphs l -- 1962 CONGRESSIONAL RECORD - HOUSE 15827 only for myself-that there would be what runs the price up in that particular time and I can truthfully say that we some Public Law 480 funds used in this instance. I am against that kind of have never had such thorough hearings, particular program. money being expended in any country nor have we ever had such a respon Mr. GROSS. I would hope so. like that. We made it clear to them sive group from the administration. Mr. HAYS. And, the amendment will that we expect those figures to be cut They listened to our complaints and provide that to the maximum extent pos down. I am sure the gentleman read assured us they would conform. We are sible they be used. We hope that that about the fight with reference to the going to see how much they really di will represent a very high and substan Ambassador's residence in Cypress where gested of what they were given. tial amount. they wanted $300,000 for the Ambassa The gentleman from Ohio [Mr. HAYS] Mr. GROSS. The gentleman spoke of dor's residence. is an exceedingly hard taskmaster, but space and rentals. I do not want to' take We told them that this was ridiculous he is exceedingly just. There were sev all of the gentleman's time. Does the and to forget the plans which they had eral times when he and I disagreed but gentleman care to yield further? for such construction, and to obtain that is all right, too. '!'he justice of his Mr. HAYS. I would be glad to yield some new ones and start over and cut it final word has been very much appre further to the gentleman from Iowa. down at least by 50 percent or better. ciated in the Department as well as by Mr. GROSS. The gentleman spoke of If these people who represent the De the other members of the subcommittee. space being scarce and rentals high in partment will do as we suggest-and Mr. Chairman, I yield 5 minutes to the Africa. The space would · not be so frankly I say this without any fear of gentleman from Indiana [Mr. ADAIR]. scarce and the rentals so high if this reservation-they will all try, and if I am Mr. ADAIR. Mr. Chairmi:tn, I would Government did not have so many people chairman of the subcommittee when urge the committee and the House to over there. Does the gentleman agree or they come ·back in the next Congress adopt this bill. It is a very carefully disagree with that statement? and they have not done as the subcom thought out and worked over piece of Mr. HAYS. The gentleman will agree, mittee has indicated or tried to save legislation. There are two or three and I am sure the distinguished gentle money, and hold down costs, they will things, perhaps, that might be pointed man from Iowa has probably read the have a real rough time getting any funds out about it in addition to what has hearings more thoroughly than anyone at all on which to operate. in the future. already been said. not on the committee. Mr. GROSS. Mr. Chairman, I hope In the first place, when this legisla Mr. GR0SS. Yes, I have read the that through this and other devices they tion was brought before the subcom hearings, I will say to the gentleman and will be impressed with the necessity of mittee, it called for a 4-year program they are the most informative that have getting rid of some of the surplusage of costing in the neighborhood of $100 mil come out of the Foreign Affairs Commit personnel they have in these foreign lion. It was immediately sent back with tee in years. I commend the gentleman countries. As the gentleman from Ohio the admonition that we did not want from Ohio and his subcommittee. · well stated in the hearings time after that much of a program.· When it was Mr. HAYS. The gentleman I think time, "You have altogether too many returned .to. us as a 2-year program, it would find in the hearings that the chair chiefs for the number of Indians you called for the approximate amount of man of the subcommittee who is now have." I hope the committee will bear $40 million for the building and· long - speaking !ectured the ·representatives of down and bear down hard upon this sur term leasehold aspects of it. · · · · the various agencies and departments ~lus of personnel overseas that brings repeatedly about .the · number of people about unnecessary spending to house As has· been pointed out, the subcom they' have. I think we have made some and otherwise take care of them. mittee reduced that part of the bill to impression upon them, and we are going With respect to Somalia, the gentle something over $31 million, a reduction to keep on doing it, because I could not man made a very good point in the of between $8 and $9 million. · agree more that many of these African hearings, I thought, that within 10 .years The question always presents itself; I countries, as small as they are, with a or even less, there may be no Somalia suppose, as to whether an authorization small population require a certain basic as an independent country, as an entity. of this sort should be for the world at number of people to run any kind of em If that is true then· this Government is large without any -regional political bassy, but there is no use ballooning the going to spend a lot of money to really no boundaries or whether it should be made staffs. Therefore, we have made it per good purpose. for specific countries. The subcommit fectly clear that within a period of 2 Mr. HAYS. Mr. Chairman, I might tee chose neither. It chose, upon re years they are going to get into serious tell the gentleman an interesting little· flection and discussion, to make this au trouble if that situation is not corrected story about that, and I think I shall take thorization available by regions of the and if these staffs are not brought within a minute to do it. He might be inter world. Those who are interested may reasonable figures. ested to know that the deskman for refer to page 5 of the report and there Mr. GROSS. Is there any evidence Africa came up and wanted me to delete find the five regions of the world, the of a change in this sort of a situation that remark from the hearings because it amount of the executive request, and the and I gleaned this from your hearings might offend somebody in Somalia. I committee recommendations for these in the request for a $70,000 residence for said, in the first place, I do not think various regions. It was felt, Mr. Chair the Ambassador in Uganda as well as a anybody in Somalia is going to read man, that by this device certain elastici $175,000 ho11se for the Ambassador in these hearings; if they do and they are ty and flexibility would be provided to Somalia? Did the committee take a po off ended by an actual statement 0f fact, the Committee on Appropriations to sition with respect to changing those that is just too bad; they would have work within these boundaries. We would plans? . to be off ended. not be hampering them by tying them Mr. HAYS. Yes. The committee told In other words, the people from the down to specific countries but we would them that it thought these figures were Department did not dictate to the sub be giving th~m the opportunity to 'work too high. I am sure the gentleman can committee. We listened to them, we within these regions of the world. That gather this from the hearings: No one criticized them, sometimes we sympa is what we desire to do. was harder on them than I was. thized with them. But I think, and I Reference has been made here earlier Mr. GROSS. I agree with that. The am sure my colleagues on the gentle this afternoon to the use of local foreign gentleman repeatedly made his position man's side of the aisle can testify, we currencies. It has been suggested that clear. made an impression on them. possibly an amendment along this line Mr. HAYS. But, taking Somalia, for Mr. GROSS. I thank the gentleman would be offered, and it is my intention example, it looks like a high figure, and for yielding so much of liis time and for to offer such an amendment. In the it is a high figure. But one has to take his frankness in dealing with this hearing before the Committee on Rules into consideration the fact that there subject. the gentleman from Kansas [Mr. AVERY] is no water supply, no sewage sys Mrs. BOLTON. Mr. Chairman, I yield and others suggested that although we tem, and there is no electricity for myself such time as I may require. have wording in the report and although this Ambassador's residence and com Mr. Chairman, I simply want to say the hearings are replete with statements pound. We have to provide our own that I echo in every regard what the that local currencies would be used, and electrical plant, water system, and a sew chairman of the subcommittee has said. although the record indicates that such age disposal system. These items are I have been· on this committee spme has been tl~e case in the p~st, many 15828 CONGRESSIONAL RECORD - HOUSE August 7 would feel more assurance if -we did ac right and frank and cooperative. They Embassy was a bit of America abroad. tually write into the legislation the stip are not often the recipients of bouquets When we found that they were buying ulation that these currencies must be on this floor, but I should like to be an their silver, for exa~ple, in Peru, their used to the extent possible. Therefore, exception to the rule and pass on a few glassware in Sweden or some other at the appropriate time this will be done. compliments. - I feel that the procedure foreign country, and the same with other Mr. Chairman, I should like to con-· in this committee might well serve as a things, we told them that American sil elude by echoing a statement that has model for other relations between the ver and glass manufacturers had a been made here today, that is, that I executive and · legislative branches of product which is beautiful, which is think ·within the experience of most of Government in important matters such unique, and which should be used in the us now serving on the Committee on as the considerations with which this Embassy. I cited as an example the Foreign Affairs this proposal has re- bill is concerned. British Embassy here in Washington. ceived the most careful consideration by With reference to the use of foreign They are very proud to serve visitors on all odds of any such proposals as have currency which was previously referred British china and other products of the ·come before us. We went over the situ to, I should like to point out the table British Empire. I do not see any rea ations country by country, city by city, on page 4 of the committee report which son why we should not be proud to have and project by project. It is true that shows that throughout the years from our Embassy not exclusively using in many of these areas, and I would re 1946 until the present time, .the sum of everything American, but at least a sub f er particularly to some of the newly $209 million has been appropriated for stantial part. It would have an effect independent nations of Africa, the costs the use of foreign currency as against a on the outflow of gold, but also it would seem excessive, but we made the closest_ U.S. dollar appropriation of $32,525,000. reflect some of the art and industry of inquiry upon these matters. We re This is an important and canstructive America. quired assurance that the U.S. Govern use of counterpart and has saved us Mrs. BOLTON. Mr. Chairman, I ment was not paying more than other many dollar expenditures. yield 5 minutes to the gentleman from countries or other individuals. In case I should like to say, too, that the Pub Iowa [Mr. GROSS]. after case we went into it on this basis. lic Law 480 funds which the gentleman Mr. GROSS. Mr. Chairman, I think So that although the costs do seem high, from Iowa CMr. GRossJ referred to the cart is before the horse in this bill as the chairman of the subcommittee amount to $9,150,000 and that this sum and I doubt very much that I can sup has indicated, in practically all instances in foreign currencies is in addition to port it to the tune of $53 million. we believe they are comparable with the amounts contained in the table to When I say the cart is before the ·costs for similar developments in the re which I refer. horse, I think Congress ought to have spective countries. There is one other point which I some clear assurance that the State De On the basis of the study that has been should like to mention and it is an im partment and other agencies will cut made and the assurances which have portant point. That is the interest that the personnel they have overseas be been given, and upon the further basis the committee has had, and this inter fore we build residences, apartments, of the amendments which are to be of est is set forth specifically on page 5 of and embassies to accommodate the sur fered, I would urge the adoption of this the report, in requiring that· buildings plus. legislation. abroad be furnished with materials and Mr. ADAIR. Mr. Chairman, will the· Mr. HAYS. Mr. Chairman, I yield 5 equipment of American manufacture. gentleman yield? · minutes to the gentleman from Connec Certainly, we do not want to be chauvin Mr. GROSS. I yield. ticut [Mr. MONAGAN]. istic about this matter, but the fact re Mr. ADAIR. It can be said that by Mr. MONAGAN. Mr. Chairman, I mains there are many times when it is the reduction the committee has made rise in support of this bill. unnecessary that exclusively foreign ma in some of the requests in all probability This is really a housekeeping bill. It terials be bought for our buildings and a reduction in personnel will result; in is something that we as a nation are there are many times instead when it other words, if there are not places to compelled to consider and act upon as a is appropriate from an esthetic point of house people in a good many of these result of the many branches of our For view that American furniture and Amer countries abroad, the newly independent eign Service which represent us through ican equipment be used in these build ones particularly, in my opinion they out the world. Certainly, it costs us a ings. This has been pointed out in our are not going to send people there. I great deal of money but it is a necessity report and, I am.sure that the represent think that will serve as a governor upon for the proper carrying on of our diplo atives of the department will bear this the number of people. matic service that the members of the in mind in future purchases. It has im Mr. GROSS. I will say to the gentle Foreign Service and the office in which portance at a time when we are con man that I am pleased to see the ranking they do their work should be physically cerned with our balance of payments. members of the Appropriations Subcom adequate. This is a somewhat complex mittee on the floor at this time, the gen-. matter because the buildings with which So, Mr. Chairman, I believe this is a tleman from. New -York -[Mr. ROONEY] we are concerned are located all over the very constructive bill. I would call. to th~ _attention of the committee in clos and the gentleman from Ohio [Mr. world. Many of them are situated . in BowJ. It is my hope that when this bill Africa,_ as the· chairman has said, and ing the table on page 5, in which there is approved and goes to the Appropria -· - the need for action there has come is set forth a division of authorizations tion Committee for funds that they wade suddenly. into regions and where the African in, as I am sure they will, and find out The birth of these new governments is countries, the American republics and the why of this overstaffing in so many something over which we have no con so forth are considered separately rather than on a worldwide basis. I oversea posts. trol. That is beyond our power, but it Mr. ADAIR. As I pointed out to is necessary, when governments are think this contributes to clearer think others this afternoon, we certainly would created, that we have representatives to ing and better legislation than otherwise might be the case. welcome a very close scrutiny on the part deal with them and, therefore, this of the Subcommittee on Appropriations housekeeping or functional activity is The CHAIRMAN. The time of the that deal with this matter. We have necessary. gentleman has expired. tried by this legislation to set guidelines I want to express my appreciation too . Mrs. BOLTON. Mr. Chairman, I yield and general philosophy, but there is cer for the careful manner in which the 2 minutes to the gentleman from New tainly plenty of room for the Committee hearings on this bill were conducted. I York [Mr. BARRY]. on Appropriations to operate in. am proud to be on this committee which . Mr. HAYS. Mr. Chairman, I yield Mrs. BOLTON. Mr. Chairman, will has so carefully gone into this very com myself 1 minute. the gentleman yield? plex and difficult matter. The chairman Mr. Chairman, I take this time to say , Mr. GROSS. I yield to the gentle was extremely cautious and extremely just one word about something I for woman from Ohio. searching in his questioning of the wit got that the gentleman from Connecti Mrs. BOLTON. I want to make it very nesses who appeared before the sub cut [Mr. MONAGAN] brought out, that is clear that the State Department itself committee. the matter of furnishings and equip does not. occupy all of this property. I should like to say too that the repre ... ment for some of these embassies. You will note in the report that the De sentatives of the . Department of. State - ·We made it very-plain to the people in partment· of Agriculture, the USIA, and were, in my opinion, exceedingly forth- the State Department that an .t\.merican various other departments, -including 1962 CONGRESSIONAL RECORD - HOUSE 15829: Defense, have r·epresentatives over there. · other. Do I understand that with other do not think all of- this is bad. It is the Instead of making it necessary for them and lesser American employees and na outright junketing to which I take ex to go out on their own and find housing tives it all adds up to 501 people on our ception. for these people, which would be diffi- payroll in Brazzaville? Mr. HAYS. If the gentleman will cult, we have taken them all into this Mr. HAYS. No. That was in Liberia. yield further, Mr. Dumont had a pretty bill and we are insisting on a cut of I may say to the gentleman I brought rough time in the committee. He was personnel. that out in committee because I had probably a little provoked in what he Mr. GROSS. I may say to the gentle- been in Brazzaville 4 years ago. There said and, perhaps, what he said was woman from Ohio that my remarks are was one person at that time. Now there right. But I will say this to the gentle not confined to the State Department. are 32. But let me say I am not defend man: I have traveled a good deal. As They are directed to all other agencies, ing them because I was rough on them. the gentleman said, many of the ques including the Peace Corps, which I no- Brazzaville is directly across the river tions there came about because I had tice is coming in for quarters in some from Leopoldville. Brazzaville is the some personal knowledge of the situa of these compounds and residences that capital of the Congo, which we knew as tion. But in all the traveling I have are in existence and proposed to be the French Congo. done I have stayed exactly two nights built. The explanation was-and I think it at an Am·erican Embassy or American Mrs. BOLTON. I thank the gentle- was at least partially justified-that they consulate. During all the rest of the man for his assistance. had i:;nore people over there because of time-the other 14 years-I have stayed Mr. HAYS. Mr~ Chairman, will the the sensitivity of the situation across the at hotels. I will say something .else which gentleman yield? river. Once that quieted down they we have done: When I have traveled as Mr. GROSS. I yield to the gentleman would not need nearly so many on the chairman of the subcommittee, if there from Ohio. French side of the Congo. But these was any entertainment, we always sent Mr. HAYS. This committee has no are two separate countries. You can out a telegram requesting that such jurisdiction over authorizing money to cross the river there within 15 or 20 min entertainment be kept to a minimum. pay the salaries of personnel. That is utes by boat. This is the reason we But on one occasion I remember in one a continuing authorization. The com- have some people over there, which is of the African countries the Chief of mittee headed by the gentleman from another country where they are safe and State gave a dinner for us and we felt New York CMr. RooNEY] and the gentle- where they can conduct their business we had to reciprocate. I think it did man from Ohio [Mr. Bowl has done a without shooting in the streets, and some good. We found it was going to very good job in holding these figures what have you. take most of the amount that the post down. I told the witnesses I did not Mr. GROSS. In connection with had for representation. I ordered the mean any reflection of the two gentle- Dakar-if that is the way it is pro staff to pay for the cost of that, which man I just mentioned. However, these nounced-you questioned State Depart I think came to $150, out of counterpart were ceilings and on past performance ment officials and they stated that aside funds authorized to us, and not to take we expect they may not get up to the from the Deputy Chief of Mission they it from the Embassy. Whenever the ceiling. I will say to the gentleman from had two Political officers, an economic gentleman talks about freeloaders the New York [Mr. ROONEY] that his com- 01'.llcer as well as an administrative of gentleman is not talking about the chair mittee passes on the amounts to be al- ficer. I do not know whether one of ~an of this subcommittee, or others. located for salaries. I am sure the gen- those was the labor officer or not. You I think, anyway, what Mr. Dumont tleman has read this in the testimony. questioned ":hether there should be a said is exaggerated. I have observed When we questioned them about the labor officer m such a post, and so do I. members of other committees who were number of people at a post, we found a ~r. HAYS .. I say .to the gentlem~ traveling and I think they do the same minor number of them were state De- agam that I did question them. I agam as I do; they stay in hotels, and pay partment people. There were people say t~at we have no authority in this their bills out of funds allocated to them, over there from every other agency of committee to make them cut down. If so that it does not come out of the State Government. I am talking from memory they have too many at many of these Department's pocket. now, but in Liberia we found in that posts, and I am sure, based upon what I Mr. GROSS. Mr. Chairman, I will say country of a few million population that have heard on the floor year m and year in conclusion that I think the bill is there were 501 American personnel out, that the members of the Committee pretty rich under the circumstances. I Mr. GROSS. That is right. · on Appropriations .and others think so. do not see how I can support it. I hope Mr. HAYS. Which is one for every I cannot say anything else to the gentle- that the Appropriations Subcommittee 2,000 Liberians. Again I am speaking m~n. . when it gets to the business of provid:. from memory, but I think Mr. ROONEY Mr. GROSS. I agree with th~ ge~tle- ing the cash will use a sharp pruning and Mr. Bow had only authorized money man. . B~t it ad~s up to one th~g · We knife on it. for a very small number. The rest of are buildi~g housmg accommodations for Mr. BARRY. Mr. Chairman, will the the 501 came from the Department of a substantial n1:1mber of ~ecessary em gentleman yield? Agriculture the Department of Com- ployees. and with servants .quarters so Mr. GROSS. I yield. · ' they will have them at their beck and Mr. BARRY. I would like to say to merce: AID, a~d other departments and call. Some of them never had it so good. the gentleman that even though the agenci~s. ~ think the State Department Then, there is another reason why costs may appear high, especially in is ~ettmg mt~ a crossfire not only from there is apparently some oversta:ffing, Africa, a great deal of it is for land costs. this s~bcommittee but B:ls~ from the Sub- which reason is to be found on page 86 It may surprise us in America to think committee on Appropriations. . of the hearings when Mr. Dumont said of land costs being high in some of these Mr. GROSS. What w~ are d~i~g here, "Whether we like it or not in the For cities in Africa, but the fact is that they at least to. some e~tent, is providing ac- eign service, we have people come in are high and if the United States wants commodat1ons, residence, and what have under the recommendation of the Gov to be represented in a location where you for all of these people. ernment-Agriculture, Members of Con- other nations' embassies are, in the heart Mr. HAYS. I may say to the gentle- gress-and we have to take care of them. of the city, we have got to pay those· man not nearly all of them were State. We are glad to take care of them. A lot costs. We told them that they would have to of them are chores." Perhaps Congress Mr. HAYS. Mr. Chairman, I yield 5 cut their personnel down to fit the build- can take credit for at least a little of this. minutes to the gentlewoman from New ings. I am not opposed to oversea travel on York [Mrs. KELLY]. Mr. GROSS. Your hearings show- the part of Members of Congress if those Mrs. KELLY. Mr. Chairman, I am and correct me if I am wrong-that 4 who engage in it work at the job of very happy to be a member of the Com years ago the State Department had one trying to ascertain how the taxpayers' mittee on Foreign Affairs and also happy officer in Brazzaville, however it is pro- money is being spent. I think the value to be a member of this Subcommittee on nounced. I cannot pronounce any num- of some of the traveling showed up in State Department Organization and ber of these names. the questioning by various members of Foreign Operations. I am proud to have Mr. HAYS. The gentleman is right. the subcommittee in eliciting informa the gentleman fi'om Ohio CMr. HAYS], as Mr. GROSS. Today, how man~? tion that we did not previously have out chairman of this subcommittee. In ad Ten officers of one description or an- of the Foreign Affairs Committee. So I dition, the following members serve on 15830 CONGRESSIONAL RECORD - - HOlJSE August 7 the subcommittee: the ·gentleman from it and I hope it will .pass as it was Not all the work of selling our -point-of Wisconsin [Mr. ZAaLOCKI], the gentle brought to the floor. view in the United Nations is done in man from New York [Mr. FARSSTEIN], Mrs. BQLTON. Mr. Chairman, I yield the United Nations. A considerable the gentleman from California [Mr. such time as lie may require to the gen amount of it is done in the nations them SAUND], the gentleman from Connecti tleman from Indiana [Mr. BRUCE]. selves. We felt that the way they out· cut [Mr. MONAGAN], the gentlewoman Mr. BRUCE. Mr. Chairman, I shall lined their needs the money would be from Ohio [Mrs. BOLTON], the gentle take only a minute or two to say that I well spent, and we allotted it. We do man from Indiana [Mr. ADAIR], and the do share some of the apprehensions ex plan on going into this in much greater gentleman from Connecticut [Mr. pressed by the gentleman from Iowa detail in the next session, when they will SEELY-BROWN]. [Mr. GROSS]. Also I would like to ex be coming up with a bill for the fiscal We worked diligently in bringing to press my appreciation as a Member of years 1965 and 1966. the House an outstanding bill. The ad the House to the chairman of this sub Mr. HARVEY of Indiana. I am not in ministration requested $110 million for committee and the members of the sub any way criticizing the gentleman or the a period of 4 years. The subcommittee committee for a very thorough and subcommittee. I hope he understands wisely decided on a 2-year authorization. penetrating hearing. that. By way of suggestion I am saying The administration requested authori As I read the hearings, for one of the that I think there is probably a consid zation of approximately $62 million. few times I became encouraged at the erable need in some of the nations that This request was reduced to $31 million. decisiveness of the questioning. Anyone have recently become members of the Mr. Chairman, I would like to answer who could read these hearings and reach United Nations to have· more adequate some of the questions raised by my col the conclusion that the subcommittee facilities there. I am also at the same league the gentleman from Iowa [Mr. was a rubberstamp of the State Depart time suggesting that possibly some of the GRoss]. There may be a large number ·ment or the Executive would be reading rather obvious errors we made in our of people representing the United States between the lines better_than 'I could. initial efforts in this area can be over in many small countries. Nevertheless I I want to express my thanks to the come, and that we will thereby not con only wish that we had one or more addi chairman and the members of the sub tinue making some of the mistakes we tional in Cuba before the Castro takeover committee for a very thorough piece of made in the past. and in Peru before the elections, includ work in these hearings and in presenting Mr. HAYS. I well recall this at the ing representatives of labor, so that we this proposal. , time it started in 1949, and I have fol would know 1more what has happened or Mr. HAYS. Mr. Chairman, I have no lowed this very closely since then. further requests for time; Mr. HARVEY of Indiana. I am sure is expected to happen. the' gentleman has. Mr. Chairman, I see on the floor the Mrs. BOLTON. Mr. Chairman, I yield 5 minutes to the gentleman from In Mr. HAY$. I am sure the gentlem~n very able chairman. of the Appropria diana [Mr. HARVEY]. will agree they made a lot of mistakes tions Subcommittee, the gentleman from Mr. HARVEY of Indiana. Mr. Chair then, and have continued. to do so, but New York [Mr. ROONEY] . I think he they have improved over the years. performs very nobly in his position. man·, I should like to direct this question to the chairman of the subcommittee, the Mr. ADAIR. Mr. Chairman, will the The seniority he has attained as a Mem gentlelllan from Ohio. I am sure the gentleman yield? ber of the House and as chairman of the gentleman from Ohio recalls that several . Mr. HARVEY of Indiana. I yield to subcommittee is a tribute to the great years ago we served together on a sub the gentleman from Indiana. service he has rendered to his country. committee that investigated the facility · Mr. ADAIR. May I say to the gentle I want to say to the Members of this needs of our Foreign Service in the Mid man from Indiana that most of this in House that I hope he will pay sympa dle East. I am sure the gentleman's in formation service money provided in this thetic attention to the revision of the terest in this problem has been a contin bill goes for three categories. Foreign Service Act by the Committee on uing one since that time. Principally, it goes for information Foreign Affairs for I feel that in some At that time we found a great deal of centers where information relative to cases reductions on specific embassy diversity of opinion as to what type of our Nation and our philosophy can be projects have been too deep. I under facilities were needed and the extent of disseminated and made available to. the stand he has granted practically every the facilities neded for the Information peoples of the countries in which these cent requested by the State Depart Agency. I have not had an opportunity centers are located. There is a little ment for the administration of our em to study the hearings, but I note that money for cultural centers and a little bassies abroad, which I think was very some of the provisions of authorization money for residences of public relations J;loble of him, but also I think some items in here are for the Information Agency. officers. In those three categories, how should be increased, such as repre I wonder if the gentleman would tell me ever, lie almost all of the money, with sentation allowances for our ambassa just a bit in brief as to what type of emphasis on information centers. dors. facilities is proposed here and whether he Mr. HARVEY of Indiana. I thank When I was in.Yugoslavia, the amount feels that a better scheduling of the the gentleman. In conclusion, I want to allocated to our Ambassador at that time plans and arrangements for the use of reiterate .the fact that too often in the for entertainment was only $1 ,000. He these facilities is in being than has pre- past we have been guilty of the error of had to take money out of his own pocket vailed in the past. . feeling that if we hire so many people for entertainment in · that country. I Mr. HAYS. I may say to the gentle and build so many buildings, we are go was very happy to reimburse him for my man that because of other commitments ing to solve the problems. If there has stay at the Embassy since hotels were of the full committee, and I want to be been any one area where we have been not available. '.!'his was embarrassing very candid and honest about this, the remiss, it has been in this area and that to the Ambassador. subcommittee just simply did not have is evii:lenced by the reaction I get from I have heard that our present Am the time to go into the U.S. Information people in whom I have a good deal of bassador to France was forced to resign Agency request in detail as we did the confidence who have returned from vis for the very same reason, finances. I others. We asked the ·building people itS to these various areas who have com think the time has come wheri we would what was the minimum amount they plained to me that they do not feel that like to have our ambassadors given a could usefully use, and they came up we, as a country, have been putting.forth sufficient amount of money to run their with a figure. Most of it is for reading · our· best image-that we have not pro embassies and that personal wealth rooms, places for dissemination of infor jected ourselves propetly and while they should not be the basis for the selection mation about the United States. Most are not entirely critical, they feel iii. of ambassadors. '!'.here are m~ny .in this of the money will be used in new places many respects we have done a good job, country, meritorious civil servants, who where we have not had such facilities, but there is always a feeling that we would like to serve at these posts but are such as in Africa. In th.eir justifications have not done nearly as good a job as prevented because of their financial they point out that there is need in we can. So I hope that we will improve limitations. these newly created nations for the dis in our tactics and our efforts as we move Mr. Chairman, I think this is an out semination of information. Also, being along. standing bill. The committee did· a very very candid, these new countries have The CHAIRMAN. The time ·of· the good ser.vice to our country by ofrerin~ one vote apiece i~ the ·united Nations. · -gentleman h~s expir~d . . 1962 CONGRESSIONAL RECORD - HOUSE 15831 Mr: MORSE. Mr.' Chairman, I ask "(A) for use in Africa, not to exceed $10,- bill be considered as read and open !or unanimous consent to ·extend my re 500,000, of which not to exceed $6,000,000 amendment at any point. - may be appropriated fo'r the fiscal year 1963; marks at this point in· the RE;CORD and "(B) for use in the American Republics, The CHAIRMAN. I.s there objection include extraneous matter. not to exceed $4,300,000, of which not to to the request of the. gentleman from The CHAIRMAN. Is there objection exceed $1,800,000 may be appropriated for Ohio? to the request of the gentleman from the fiscal year 1963; There was no objection. Massachusetts? "(C) for use in Europe, not to exceed $7,- Mr. HAYS. Mr. Chairman, I offer an There wa.S no objection. 500,000, of which not to exceed $2,250,000 amendment. Mr. MORSE. Mr. Chairman, although may be appropriated for the fiscal year 1963; The Clerk read as fallows: "(D) for use in the Far East, not to exceed I will support H.R. 11880, I would like Amendment offered by Mr. HAYS: On page to · $2,250,000, of which not to exceed $2,000,000 to call ·the attention of this body an may be appropria;ted fox: the fiscal year 1963; 3, strike out lines 8 and 9 and insert in example of what I regard as a totally "(E) for use in the Near East, not to exceed lieu thereof the following: indefensible policy that concerns the $2,800,000, of which not to exceed $2,100,000 "(3) for use to carry out the other pur furnishing of our embassies throughout may be appropriated for the fiscal year 1963; poses of this Act, not to exceed $22,093,000, the world. "(F) for facilities for the United States of which not to exceed $10,893,000 may be I was troubled when I read in the Information Agency, not to exceed $1,854,000, appropriated for the fiscal year 1963." New York Times of Friday, July 20, 1962, of which not to exceed $759,000 may be ap Mr. HAYS. Mr. Chairman, this an article ·appearing on page 11 of that propriated for the fiscal year 1963; and "(G) for fac111ties for agricultural and de amendment, as I said in general debate, issue, entitled "Elegance Prevails in fense attache housing, not to exceed $800,- sets a specific ceiling for money to carry U.S. Embassies Throughout the World." 000, of which not to exceed $400,000 may be on the necessary maintenance, repairs, In the course of the article, which ap appropriated for the fiscal year 1963; and other operating expenses for the peared under the byline of Charlotte "(2) for acquisition of leaseholds under next 2 years. We encountered some op Curtis, appears a very disturbing para this Act, for payments under such lease position to an open-end authorization in graph. Let me read it: holds, and for contingenc.ies, not to exceed the Committee on Rules, and I gave an Although most :fUrnishings ordered by the $1,802,000, of which not to exceed $802,000 implied promise that we would correct State Department are designed and made may be appropriated for the fiscal year 1963 for leaseholds; and that situation. This amendment at in the United States, some are bought tempts to do that. I want to say in all abroad. Most of the sterling silver platters, "(3) such additional sums as may be nec trays, anq. flatware used in the official build essary to carry out the other purposes of this candor this is a ceiling. We did not go ings abroad are made in Lima, Peru; Act. over these item by item, but we do know Sums appropriated pursuant to this author that the Appropriations Subcommittee I cannot help but wonder what our ization shall remain available until ex will. This is a maximum amount that American silversmiths, many of whom pended." they can appropriate. They can appro are located in my home State of Massa SEC. 2. (a) Section 2 of the Foreign Serv ice Buildings Act, 1926 (22 U.S.C. 293), is priate any amount· under that that they chusetts, might think upon reading this repealed. think is necessary to carry on these func report. I am reliably informed that for . (b) The first section of such Act (22 U.S.C. tions . many years other nations have been 292) is amended- Mr. Chairman, I ask that the amend pirating American patterns, producing ( 1) by striking out ", subject to the di ment be adopted. exact duplicates which are heavy in sil rection of the co1llill4lsion hereinafter es Mrs. BOLTON. Mr. Chairman, will ver but otherwise of inferior quality. tablished,"; the gentleman yield? ·Can the purchase by the State Depart (2) by striking out "under such terms ment of Peruvian silver for use in our and conditions as in the judgment of the Mr. HAYS. I yield to the gentle embassies be regarded as other than commission may best protect the interests woman. discrimination against the silverware in of the United States,"; · Mrs. BOLTON. May I say that the (3) by striking out", to the extent deemed committee members on our side are dustry of the United States which helps advisable by the commission,''; and to pay the taxes that contribute to the (4) by striking out", which buildings shall happy to accept this amendment. support of those very embassies? be appropriately designated by the commis Mr. HAYS. I thank my colleague. Although I supported the Trade Ex sion, and the space in which shall be allotted Mr. GROSS. Mr. Chairman, will the pansion Act which this House passed by the Secretary of State under the direc-, gentleman yield? tion of the commission" and inserting ape Mr. HAYS. I yield to the gentleman recently, I am convinced that the pur riod and the following: ·"The space in such chasing policies of the State Department buildings shall be allotted by the Secretary from Iowa. require an immediate examination, as of State". Mr. GROSS. I understand that the well as a continuing review. (c) Section 3 of such Act (22 U;S.C. 294) is gentleman cannot commit the conferees And, it seems to me, when guests at amended- ·on this bill, if a conference is called our embassies abroad examine their (1) by striking out", subject to the direc for, and a conference probably will be shrimp forks, they should reasonably ex tion of the commission," and "in the judg necessary in view of .the upping nature pect to find that they are American ment of the commission,''; and of the other body. I wonder if the I (2) by inserting immediately before the made products, and will welcome an period at the end thereof the following: gentleman can give us any assurance- explanation of this purchasing policy by "and without regard to section 3648 of the this bill being $8 million below the ad the Secretary of State. Revised Statutes of the United States (31 ministration's request--whether we Mrs. BOLTON. Mr. Chairman, I have u.s.c. 529) ". could have assurance that the conferees no further requests for time. (d) Section 4 of such Act (22 U.S.C. 295) will stand firm against the other body The CHAIRMAN. All time has ex- is a.mended by striking out ", subject to the putting that money into the bill? pired. direction of the commission,". Mr. HAYS. I will say to the gentleman (e) Section 9 of such Act (22 U.S.C. 300) The Clerk will read. is amended- as chairman, and I assume I wm be, of The Clerk read as follows: (1) by striking out "with the concurrence the House conferees, you can have every Be it enacted by the Senate and House of the Foreign Service Buildings Commis assurance that we will stand firm. In of Representatives of the United States of sion,"; and the conference on toreign aid, the other America in Congress assembled, That sec (2) by striking out ", as in the judgment body came down $690 million and we tion 4 of the Foreign Service Buildings Act, of the Commission may best ser.ve the Gov went up $3,500;000. So I think that was 1926 (22 U.S.C. 295), is amended by adding ernment's interest". a pretty good deal-$3;500,000 for $690 at the end thereof the following new sub (f) Section l(e) of Reorganization Plan million-and I expect to be about as section: Numbered II of May 9, 1939 (53 Stat. 1432), "(d) In add!tion to amounts authorized is repealed. generous in compromising with the other before the date of enactment of this section, · (g) All references to the Foreign Service body on this bill as we were on that bill. there is hereby authorized to be appropriated. Buildings Commission, originally established Mr. GROSS. I thank the gentleman to the Secretary of State- by the Foreign Service Buildings Act, 1926, for his statement. " ( 1) for acquisition, by purchase or con 1n all laws of the United States are hereby The CHAIRMAN. The question is on struction (not including acquisition o! lease- repealed. holds) of sites and bulldings in foreign the amendment. countries under this Act. and f<;>r major · Mr. HAYS l ·-·---, 1962 CONGRESSIONAL RECORD - HOUSE 15837 business concern has the capacity and able price. This safeguard is just as such. The fact is that the larger the credit to perform a specific contract. effective in the set-aside program as it contractor, the more the subcontracting. Such certification must be accepted by is in every other procurement program. Fifth. They falsely assert that SBA the procuring agency as conclusive. The procurement agencies of the Gov~ makes the set-asides. In carrying out this certificate of ernment have repeatedly asserted that Another charge, a double-barreled competency program, SBA conducts a they have no evidence that the small one, is that first, SBA arbitrarily deter thorough and careful investigation and business construction set-aside program mines the size of contracts to be set analysis of a small business· concern's involves additional costs to the taxpayer. aside for small business; and second, financial and technical ability to per Former Secretary of the NavY Connally, SBA takes away from contracting au form the specific contract. A certifi in testifying not so long ago before the thorities most of their discretionary cate of competency will not be issued Senate Procurement Committee said: power. unless this investigation and analysis I do not know of a case where the Navy Neither of these charges is true. The establish a reasonable assurance that or the Government has wound up paying dollar value is not one of the criteria. the contract will be satisfactorily per more money for an item as a result of doing business with small business firms. Congress in sections 2 (a) and 15 of formed. the Small Business Act declared it to In the construction industry, where And, in a report to the Senate Small be the Government policy, and directed from 1953 to date SBA issued some 30 Business Committee, on February 5, that all Government agencies utilize all certificates of competency, not one of the 1962, the Department of Defense in means properly available to set aside a contracts involved in these certificat.ions cluded the following statement: portion of all Government contracts have been terminated for default. This, Some questions have, in fact, been raised exclusively for small business participa I suggest, sufficiently proves that SBA as to whether we have not overemphasized tion so as to assure small businesses the does not certify competency unless it is the role of small business in our construction opportunity to bid on and receive a fair there, nor does it bring into the program programs at the cost of paying unreasonable prices to effectuate set-asides. We have, share thereof. inefficient contractors. In order to effectuate this congres It is, there!ore, absurd to charge that however, conducted a thorough review of construction contracts awarded during the sional mandate small business set-aside the construction set-aside program 6 months ending June 1961, and have con criteria have been developed not by SBA places Government defense construction cluded that this allegation is unfounded. in the hands of less capable, less effi. alone, but by it in cooperation with the cient contractors. Admiral Peltier, in And just the other day, on July 19, military and civilian agencies of the testimony before the House Appropria 1962, to be specific, in a hearing before Government. tions Subcommittee last May, was asked: the Senate Armed Services Committee, The program is a relatively simple the Assistant Secretary of the Depart one. Its purpose being to assure small To what degree do you exercise the same business the opportunity to bid on and prerogative of checking competence in the ment of Defense, the Honorable Thomas award and set-aside with small business as D. Morris, reiterated that there is no receive a fair share of Government con compared to what you had in the regular evidence bearing out a charge of higher tracts, SBA has assigned representatives routine procedure where you selected con cost to the Government as a result of to as many major Government purchas tractors in the ~sual way? set-asides. ing offices as can be covered by the Where, then, does the higher prices agency's limited staff. These SBA rep His answer was: resentatives and the purchasing officials We make the same check. Since so many allegation by those who parrot the AGC line stem from? I believe that it stems screen proposed purchases. Some of the people in the construction field are small agencies have small business specialists. business, they are competent. There is no from the isolated few instances where question about that. a large contractor has submitted a lower, These men are not employed by or re nonresponsive bid on a set-aside pro sonsible to SBA. They are responsible Third. They falsely claim that con curement. Since under a small business only to the agency employing them. The struction set-asides result in higher costs set-aside unsolicited bids by large con representatives of the procurement to the Government. tractors cannot be accepted, and large agency and those of SBA jointly deter Another AGC misrepresentation re contractors are aware thereof. some mine whether small firms can supply lates to the claim that construction set have submitted lower than normal bids the items or services. They jointly eval asides result in additional costs to the knowing that they can do so with im uate the small business competition; and, Government. · punity, for they cannot be called upon if there is a reasonable expectation that To my knowledge, there is no evidence to perform at the low bid price. These sufficient responsible small business com to support this view. The evidence is ineligible large firms are, thus, free to petition can be obtained, earmark the to the contrary. People who make this bid unrealistically or even at a loss in purchases for bidding by small firms. If allegation do not seem to realize that order to discredit the bids offered by they do not find at least three responsible protection against unreasonable prices small firms who are bound by the prices and competent small business firms who lies in the fact that pertinent regulations they quote. will bid, there is no set-aside. If at least authorize the contracting offi.cer to reject On the other hand, the records af three do not bid, the set-aside is revoked. all bids and readvertise any proposed firmatively disclose that during the last Although the above procedure is fol procurement, including a small business fiscal year alone, the SBA certificate lowed in setting aside maintenance, re set-aside, if he determines that the prices of competency program saved our Gov pair, and construction contracts., AGC is submitted are unreasonable. The final ernment $4.5 million and at the same persistently fostering a misunderstand determination in this regard rests with time provided employment to 1,360 work ing to the effect that all construction the Government procuring agency. Once ers who might have had no jobs. contracts between $2,500 and $500,000 all bids are ·rejected, the award based on Fourth. They also claim there is too are automatically set aside for small the new bidding must go to the lowest much subcontracting. business. It is claimed, or at least sug competent, responsible bidder, big or gested, that procurement ofilcials have Still another irresponsible complaint been deprived of· discretion with respect small. · made against construction set-asides is In this connection it is to be noted to the award of such contracts. That is that small firms which receive the con untrue, for no purchase can be set aside that the Government engineers de tract subcontract too much of the work. signing the technical specifications for for small business by anyone but the The AGC knows that in the construc procuring agency. SBA can only recom ·a construction contract, normally pre tion industry a prime. contractor rarely .pare an advanc~ estimate of the costs mend, period . involved. In fact, such an estimate is handles the whole project himself. When the set-aside program was first required in case of construction con They have no -reason to believe that established, it was necessary for the SBA tracts which are expected to cost more small cons~ruction firms subcontract procurement center representative to re than $10,0QO. The estimate, which is more of the work than is. customary in view each procurement and to initiate kept secret until the bids· are opened, the industry. No less than their large individual set-aside action on each pro -provides contracting officers with reliable competitors, these small firms assume all curement meeting the established statu guidanc·e in determining whether the of the risks and burdens of prime con tory and regulatory criteria for a set lowe5t bid received represents a reason- tractors, and they deserve recognition as aside-the availability of a sufficien~ CVHI--998 15838 CONGRESSIONAL RECORD - HOUSE August 7 number of qualified small business con Complaints have been voiced by the stood, the misguided will retreat from cerns to assure competition at fair and AGC and its minions, regarding SBA's their too hastily occupied position. reasonable prices. Furthermore, it was definition of "small business" in the But until then let me return to the necessary to repeat this action even when construction industry, especially that the alleged detrimental impact of the set the same items were purchased recur criteria established are .unrealistic. asides on wages. rently and there had been no changes in In the construction industry, SBA's The small construction concerns are conditions which justified the original former size criteria were independent not enjoying any preferential treatment set-aside. This resulted in a duplication ownership and operation, nondominance as regards compliance with the prevail of effort. In order to simplify and ex in the field, and annual average receipts ing wage provisions of the Davis-Bacon pedite the program the Congress for the past 3 years not exceeding $5 Act-49 Stat. 1011. Compliance there amended the Small Business Act in 1958 million. SBA changed its size defini with is required, regardless of size, of to authorize set-asides, not only with tion, effective as of August 1, 1962, thus all contractors performing Government respect to individual awards or contracts, allowing firms with average annual re construction contracts in excess of but also for classes of awards or con ceipts of up to and including $7% mil $2,000. I am confident that there is no tracts. lion to qualify as small construction method whereby a small construction Now, where SBA has reason to believe firms. Although the changed definition contractor can legally avoid the provi that the criteria are generally applicable will give an additional number of con sions of the act. Labor in response to to a class of contracts, it requests the tractors an opportunity to participate in my request has failed to identify a single procurement agency to treat each con Government construction, the AGC is instance where that has occurred. tract in such class as if it had been the continuing its drum beating. (b) They also mistakenly say that subject of a specific set-aside recom Anyone having a just complaint as to set-asides cause unemployment of union mendation by SBA. In no respect does size standards may present it and get a labor. this impair the right of procurement offi full hearing and relief, if justified, either Since the wage charge falls of its own cials to reject a recommendation. In on a specific case basis or on an indus weight, it is asserted that the set-aside fact, they can and do call SBA's atten trywide basis. program hurts the members of building tion to those contracts in which the par Seventh. Labor opposition is not trade unions who become unemployed. ticular circumstances would not justify justified. Let me analyze that validity of this a set-aside. Where warranted the rec In a separate category entirely is the complaint. ommendation is rescinded. · grievance voiced by some representatives First, the matter of whether or not In cases of disagreement section 15 of of labor against the construction set employees are unionized or not has, as the Small Business Act specifically pro aside program. This, Mr. Speaker, is the Congress well knows, nothing what vides that-- the most painful aspect of this entire soever to do with whether a Government The matter shall be submitted for deter matter. The AGC and the enemies of contract is awarded by the method of mination to the Secretary or the head of the labor have succeeded in persuading some set-aside or otherwise. Unionization is . appropriate department or agency. labor representatives that labor's inter a matter for consideration by the in Thus, all SBA can do in such cases is to ests lie with the large construction firms. dustry and the trade unions, and there appeal. The final authority is in the pro I am confident, however, that when all are simply no grounds for the assump curing agency. the facts are bared and understood, bet tion that set-asides have an effect on ter . judgment will prevail and the few unionization. But, they do have · an The application of this procedure to opposing labor leaders will realize · that construction contracts is me~ely an ex effect upon employment. In.fact, they· tension . of the class recommendations their interest and that of the public lies constitute one of _this administration's. made in other industries for items such not in the ·destruction, but in the sup most effective weapons in its struggle as adhesives, ready-mix asphalt, boxes port of the small construction firms of against the continuing national plight of and crates, cement, various types of con the country. unemployment. Based on past experi tainers, and for services sucli as dry · Let us examine for a moment the al ence, I concluded that if the objectives cleaning, janitorial, guard, and watch-· legations concerning labor. of the set-aside program were to be man services. (a) They mistakenly assert that achieved, there would· be an increased As the procurement agencies gained· small contractors are not required to need, and not a lessening one, for con experience in the field of construction, it pay prevailing wage scales. struction workers, especially in areas became apparent that the class set They say that contractors perfarming other than metropolitan. aside procedures are applicable' to the set-aside contracts are not required to The law very properly requires set bulk of construction contracts between pay prevailing wage scales and therefore asides in labor distress areas even at $2,500 and $500,000. Accordingly it was the set-aside program is undermining higher prices in order to give work agreed that ·the contracting officer union wage rates. where otherwise there would be none: should consider each requirement for This criticism is as unjust as it is un I do not stand alone in this view on construction within these dollar limita true. Nothing could be further from the the beneficial effect of the set-aside pro tions as if SBA had made a specific truth, and labor should be well aware of gram on the employment situation. recommendation to restrict it to small -that. Witness the legislative program Only recently the Oklahoma Depart business. But he still retains full juris of 1962 of their building and construc ment . of Highways and the Oklahoma diction to exercise his own discretion. tion trades department presented at the Highway Commission submitted a joint An analysis prepared by the Depart eighth annual legislative conference held resolution to the Congress, urging con ment of Defense covering the first half March 5-8 at tlle Sheraton Park Hotel finement of highway construction bid.:. of calendar year 1961 illustrates the in Washington, D.C. ding to ·small business as one means of workings of the system. During this Although they there opposed the set alleviating unemployment in that State. period the - Department of Defense aside program, they did not do so on the Any hopes anybody may have that an awarded 5,291 construction contracts un ·wage account, but for the alleged and increase in construction contracts der $500,000. In approximately 20 per equally unjustified reason that the pro~ awards to large firms will result in an cent of these cases the Department of gram causes unemployment. increased demand for labor are illusion Defense determined with the concur If unemployment, however, is labor's ary. Experience shows that large con rence of SBA that the governing facts concern, little do they realize that their cerns are often able to perform addi would not justify a set-aside. This rec opposition to the small business set tional contracts with their existing labor ord will hardly sustain the contention asides equally spells the death knell of force, whereas small concerns are al either that SBA arbitrarily determines the labor set-asides, a measure designed most always hiring additional labor the size of contracts to be set aside for solely to alleviate unemployment in labor when awarded a Government contract. small business or that it is taking away surplus areas. Their position, then, is CONCLUSION from the contracting authorities most of contrary to their very own vital in: In closing,. I · should like· to reiterate their discretionary power. terests and demonstrates incomprehen emphatically, Mr. Speaker, that opposi · Sixth. Another falsehood is the claim sible shortsightedness. This is why I tion to the construction set-aside pro that the small business size criteria are say that if all facts are bared, and the gram stems from only a few large unrealistic. impact of the proposed bills under- contractors and association officers and 1.962 . CONGRESSIONAL RECORD - HOUSE 15839 directors, not rank and file -members, of that committee had examined and found to the Government of Pakistan, pursuant to the various branches of AGC. Letters truly enrolled a bill of the House of the section 7 of Public Law 87-387; to the Com- mittee on Armed Services. · I have seen bear this out fully. following . title, which was thereupon 2379. A letter from the Secretary of the I exnort the op:ponents of the program. signed by the Speaker: Army, transmitting the annual report of the to ask themselves what would happen H.R. 2206. An act to authorize the con. U'.S. Soldiers' Home for the fiscal year if set-asides were .really to be discon- struction, operation, and maintenance by the 1961, pursuant to an act approved March . tinued and construction contracts Secretary of the Interior of the Fryingpan 3, 1883, as amended (24 U.S.C. 59 and 60); awarded on the basis of competitive Arkansas project, Colorado. to the Committee on Armed Services. bidding open to small and large firms .2380. A letter from the Comptroller Gen eral of the United States, transmitting a re alike. SENATE ENROLLED BILLS SIGNED port on the examination of the pricing of Theoretically the idea sounds great. spare engines for fire-crash vehicles under The fact of the matter, however, is that The SPEAKER announced his signa Department of the Air Force fixed-price large companies have the mobility which ture to enrolled bills of the Senate of the prime contracts with Continental Motors enables them to enter any State· of the following titles: Corp. (Continental), Muskegon, Mich.; to the Union where contracts are available and S. 1771. An act to improve the usefulness Committee on Government Operations. bring with them many of their em of national bank branches in foreign coun 2381. A letter from the Assistant Secretary ployees, and bid against the local small tries; of the Interior, transmitting a draft of a pro S. 2869. An act to amend chapter 31 of posed bill entitled "A bill to authorize the contractor. This possibility is denied title 38, United States Code, to afford addi acquisition of lands for addition to the to the little firm by virtue of its very tional time during which certain veterans Adams National Historic Site"; tO' the Com smallness. Thus, deprived by the power blinded by reason of a service-connected dis mittee on Interior and Insular Affairs. ful outsider of its local opportunities ability may be afforded vocational rehabili 2382. A letter from the executive secretary; and unable to seek work elsewhere, the tation training; National Music Council, New York, N.Y., small contractor is doomed to economic S. 2978. An act to authorize the Foreign transmitting the financial report of the Na extinction. Claims Settlement Commission of the United tional Music· Council· for the year ending · This, Mr. ·speaker, is the reason why States to investigate the claims of citizens of April 30, 1962, pursuant to Public Law 873, 84th Congress; to the Committee on the I, 90 the United States who suffered property the SBA, and percent .of the con damage in 1951 and 1952 as the result of the Judiciary. struction industry feel that in .the face artificial raising of the water level of Lake 2383. A letter from the Administrator, Na of the continuing decline in the small Ontario; tional Aeronautics and Space Administra business share of Government procure s. 3109. An act to amend chapter 17 of tion, transmitting a report to the Committee ment, the program must be maintained title 38, United States COde, in order to au on Science and·Astronautics of the House of and strengthened as well. thorize hospital and medical care for peace Representatives pursuant to section 3 of the The alternative, I submit, is a stunt time veterans suffering from noncompen act of July 21, 1961 (75 Stat. 216, 217), and ing of the economic growth of the in sable service-connected disabilities; and submitted to the Speaker of the House of S. 3525. An act to authorize the Admin Representatives pursuant to rule XL of the dustry, and absolute concentration istrator of General Services, in connection Rules of the House of Representatives; to thereof in the hands of a few. I urge with the construction and maintenance of the Committee on Science and Astronautics. you to believe me when I say that the a Federal office building, to us.e the public 90 percent of the construction industry space under and over 10th Street SW., in cannot be preserved unless the actual the District of Columbia, and for other REPORTS OF COMMITI'EES ON PUB and potential capacity of small business purposes. LIC BILLS AND RESOLUTIONS is encouraged and fostered under the set-aside program. Small business has Under clause 2 of rule XIII, reports of the technical know-how and resource BILLS-PRESENTED TO THE committees were delivered to the Clerk fulness but is in no position to compete PRESIDENT for printing and reference to the proper with big business. It looks to this Con Mr. BURLESON, from the Committee calendar, as follows: gress to help it stay viable and share on House Administration, reported that Mr. PRICE: Committee on Armed Services. in the defense and well-being of our that committee did on August 6, 1962, H.R. 5423. A bill to amend title 10, United States Code, to authorize the Secretary of country. present to the President, for his approv the Navy to take possession of the naval oil al, bills of the House of the. following shale reserves, and for other purposes; with titles: amendment (Rept. No. 2141). Referred to LEAVE OF ABSENCE . H.R .. 3822. An act for the relief of Ahsabet the Committee of the Whole House on the By unanimous consent, leave of ab~ Oyunciyan; and State of the Union. sence was granted to Mr. CUNNINGHAM H.R. 10904. An act making appropriations Mr. PRICE·: Committee on Armed Services. (at the request of Mr. ARENDS) from Au for the Departments of Labor, and Health, S. 2020. An act to amend part IV of sub Education, and Welfare, and. related ag.en title C of title 10, United States Code, to au gust 7 through August 14, on account of cies, for the fiscal year ending June 30, 1963, thorize the Secretary of the Navy to develop official business. and for other purposes. the South Barrow gasfield, naval petroleum reserve No. 4, for the purpose of makii;ig gas available for sale to the native village of EXTENSION OF REMARKS . . ADJOURNMENT Barrow and to other non-Federal communi By unanimous c.onsent, permission to ties and installations, and for other pur Mr. HAYS. Mr. Speaker, I move that poses; without admendment (Rept. No. extend remarks in the CONGRESSIONAL the House do now adjourn. 2142). Referred to the Committee of the RECORD, or to revise and extend remarks, The motion was agreed to; according Whole House on the State of the Union. · was granted to: ly (at 2 o'clock and 28 minutes p.m.) the· (The following Members (at the re House adjourned until tomorrow, quest of Mr. KEITH) and to include ex Wednesday, August 8, 1962, at 12 o'clock PUBLIC BILLS AND RESOLUTIONS traneous matter:) noon. Mr. JOHANSEN. Under clause· 4 of rule XXII, public Mr.GLENN. bills and resolutions were introduced Mr.FINO. EXECUTIVE COMl\4UN±CATIONS, ETC . . and severally referred· as follows: EXT ENS I 0 N-S 0 F R E·M ARKS Labor Dumps Baring for Stand Against fore your group and seek labor's support for Let's see what my stand on this matter is. my candidacy for the Congress of the United · The King-Anderso:i:i bill was introduced in Socialized Medicine States. both the House and the Senate, and in Seven times over a period of 14 years your neither body were the proponents of the bill g_roup has overwhelmingly supported my able to get it out of committee. (For your in EXTENSION OF REMARKS candidacy. Labor has always joined with OF formation, I did not serve on the House com me and I with them in facing our common mittee which had the b111 under considera HON. WALTER S. BARING foe at election time. The results generally tion. At the time the King-Anderson bill - have been quite favorable but we have al was introduced, it contained certain lan OF NEVADA ways had a pretty rough road to travel. The guage and methods which I did not feel were IN THE HOUSE OF REPRESENTATIVES r€cord of that 14 years speaks for itself. Your national representatives have been in the interest of the majority of the people Tuesday, August 7, 1962 high in their acclaim of my stand on matters in either the State of Nevada or the United Mr. BARING. Mr. Speaker, under affecting organized labor. Within the State States of America. I therefore announced itself, your leaders and members of the to the press that I was opposed to the King leave to extend my remarks, I should various locals have from time to time con Anderson bill in its original form. Let's see like to have inserted in the CoNGRES tacted me and have expressed their satis what happened.) SIONAL RECORD a reprint of a speech I faction with my representation not only of ·The proponents of the bill, who had the made which was reprinted and circulated the State of Nevada, but of organized labor strong support of President Kennedy, and by friends who have the same belief as itself. after consultation with him themselves de I do regarding medic are under the,social I have journeyed here for the purpose of cided that the bill in its original form had security system, which appears to me to receiving my eighth consecutive endorse no chance of passing. be the start of socialized medicine. ment. I have read and heard of criticism in They amended and watered down the some quarters as to my standing on some King-Anderson bill substantially through This speech was made at the AFL-CIO present matters of legislation. Frankly, I convention in Las Vegas, Nev., which en was not too concerned. I attributed the ap legislative maneuver, and put it on as a rider dorsed my opponent after I had been parent misunderstandings to an unfavorable to the welfare bill in the Senate. The Senate told in advance that such endorsement press. defeated the measure by a narrow margin. would be mine if I would vote for the However, shortly after arriving in town I Those voting against were 21 Democratic King-Andersen bill: had, a visit from two of the leaders of this Senators, constituting a third of the Demo State organization, and was advised by them crats in the Senate, and 31 Republican NEVADA LABOR BOSSES DUMP CONGRESSMAN that unless I came forward and made an out Senators. This b111 has never been voted on BARING FOR HIS COURAGEOUS STAND AGAINST and-out commitment to be in favor of the in the House and will not be presented until SOCIALIZED MEDICINE PLAN King-Anderson b111, . otherwise known as the · next session . of the Congress. This wm be the eighth time in 16 years medicare, my continuing support by your I am as compassionate as anybody Jiving that it has been my pleasure to appear be- organization would be in jeopardy. for the fine elderly and needy people in our
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