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12044 CONGRESSIONAL RECORD-SENATE . JUNE 6 8154. Also, petition of Chamber of ·commerce of the State 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, of New York, opposing the passage of Senate bil11963, regu­ 169, 170, 171, 172, 173, 175, 176, 177, 178, 179, 181, 182, 183, lation of common carriers by water in intercoastal com­ 185, 188, 189, 190, 191, 192, 194, 195, 196, 197, 198, 199, 200, merce; to the Committee on Interstate and Foreign Com­ 201, 202l 203, 204, 205, 206, 208, 209, 210, 211, 213, 215, 216, merce. 217, 218, 219, 221, 222, 223, 224, 226, 227, 228, 229, 230, 231, 8155. By Mr. SUTPHIN: Petition of Senate of the State 232, 234, 23'7, 238, 239, 240, 241, 242, 243, 244, 245, 247, 248, of New Jersey, objecting to the proposed 1-cent per gallon 249, 250, 251, 252, 253, 255, 256, 258, 259, 260, and 261 and tax on gasoline; to the Committee on Ways and Means. agree to the same. 8156. By the SPEAKER: Petition of Ida von Claussen, re­ Amendment numbered 1: That the House recede from its questing that she be allowed to appear before a duly consti­ disagreement to the amendment of the Senate numbered 1, tuted committee of the House of Representatives appointed and agree to the same with an amendment as follows: On to hear and pass upon her petition for the impeachment of page 2 of the Senate engrossed amendments, under the President , Ambassador , and heading " Title V -Miscellaneous Taxes " and the subhead­ colleagues; to the Committee on the Judiciary. ing "Part !!-Admissions tax," strike out" Sec. 712. Admis­ sion to Olympic Games."; and on page 3 of the Senate en­ grossed amendments, under the heading " Title VIII-Postal SENATE Rates," strike out " Sec. 1002. Adjustment of Postal Rates."; MONDAY, JUNE 6, 1932 and on page 3 of the Senate engrossed amendments, under the heading " Title IX-Administrative and General Pro­ (Legislative day of Wednesday, June 1, 1932) visions," strike out all after "Sec. 1106. Refunds of Miscel­ The Senate met at 12 o'clock meridian, on the expira­ laneous taxes.", the remaining portion of the matter in­ tion of the recess. serted by the Senate amendment, and in lieu thereof insert CALL OF THE ROLL the following: Mr. SMOOT obtained the floor. "SEc. 1107. Adjustments of carriers'' liabilities to conform Mr. FESS. Mr. President, will the Senator from Utah to recapture payments. yield to enable me to suggest the absence of a quorum? " SEc. 1108. Limitation on prosecutions for internal rev- The VICE PRESIDENT. Does the Senator from Utah enue offenses. yield for that purpose? "SEc. 1109. Special disbursing agents of Treasury. Mr. SMOOT. I yield. " SEc. 1110. Refund of taxes for taxable year 1918. The VICE PRESIDENT. The clerk will call the roll. "SEC. 1111. Definitions. The Chief Clerk called the roll, and the following Senators " SEc. 1112. Separability clause. answered to their names: " SEc. 1113. Effective date of act." And the Senate agree to the same. Ashurst Cutting Jones Robinson, Ind. Austin Dale Kean Schall Amendment numbered 9: That the House recede from its Bailey Davis Kendrick Sheppard disagreement to the amendment of the Senate numbered 9. Bankhead Dickinson Keyes Shlpstead Barbour Dill La Follette Shortridge and agree to the same with an amendment as follows: In Barkley Fess Lewis Sm.lth lieu of the matter proposed to be inserted by the Senate Blaine Fletcher Logan Smoot amendment insert "13% per cent"; and the Senate agree Borah Frazier McGill Steiwer Bratton George McKellar Thomas, Idaho to the same. Bulkley Glass McNary Thomas, Okla. Amendment numbered 29: That the House recede from its Bulow Glenn Metca.lf Townsend Byrnes Goldsborough Moses Trammell disagreement to the amendment of the Senate numbered 29, Capper Hale Neely Tydings and agree to the same with an amendment as follows: In caraway Harrison Norbeck Vandenberg lieu of the matter proposed to be inserted by the Senate Carey Hast~ Norris Wagner Cohen Hatfield Nye Walcott amendment insert the following: connally Hayden Oddle Walsh, Mass. "(r) Limitation on stock losses- Coolidge Hebert Patterson Walsh, Mont. Costigan Howell Reed Watson "(1) Losses from sales or exchanges of stocks and bonds Couzens Johnson Robinson, Ark. White (as defined in subsection of this section) which are not Mr. SHEPPARD. I wish to announce that the senior capital assets (as defined in section 101) · shall be allowed Senator from Virginia [Mr. SwANsoN] is necessarily absent only to the extent of the gains from such sales or exchanges as a member of the Geneva conference and that the junior (including gains which may be derived by a taxpayer from Senator from Louisiana [Mr. LoNG] is necessarily absent the retirement of his own obligations). from the city. "(2) Losses disallowed as a. deduction by paragraph (1). The VICE PRESIDENT. Eighty Senators have answered computed without regard to any losses sustained during the to their names. A quorum is present. preceding taxable year, shall, to an amount not in excess of the taxpayer's net income for the taxable year, be considered REVENUE AND TAXATION--cONFERENCE REPORT for the purposes of this title as losses sustained in the suc­ Mr. SMOOT submitted the following report: ceeding taxable year from sales or exchanges of stocks or The committee of conference on the disagreeing votes of bonds which are·not capital assets. · the two Houses on the amendments of the Senate to the bill "(3) This subsection shall not apply to a dealer in secu­ " and a comma; and the Senate to the same. agree to the same. Amendment numbered 99: That the House recede from its Amendment numbered 144: That the House recede from disagreement to the amendment of the Senate numbered 99, its disagreement to the amendment of the Senate numbered and agree to the same with an amendment as follows: 144, and agree to the same with an amendment as follows: 12046 CONGRESSIONAL RECORD-SENATE JUNE 6 In lieu of the matter proposed to be stricken out by the Sen­ Amendment numbered 187: That the House recede from ate amendment insert " toilet soaps

I:LECTRIC INDUSTRY NOT TO SHIFT 3 PER CENT TAX-UTILITY MEN SAY Mr. ROBINSON of Indiana. Mr. President, this is a most COMPANIES Wll.L AESORB NEW $55,000,000 LEVY ON GROSS INCOME amazing thing to me. After the Senate of the United states, The electric power and light industry is not expected to be able by a majority, adopts an amendment to revenue bill or to to pass on immediately to consumers any important part of the 3 a per cent excise tax adopted by the Senate and included in the new a bill of any kind, and instructs its conferees, in this case revenue bill, it was indicated yesterday by local utility men. five Senators, to insist on the Senate amendment, I am So that we had the matter as it passed the Senate in such wondering why the conferees should deliberately go into shape that the tax was to be imposed, not upon the consumer conference with a like committee from the House and then of electricity but on the producers and vendors of it. and there undertake to substitute their will for the will of Mr. SHORTRIDGE. Mr. President, what was the lan­ a majority of the Senate. guage of the House? Mr. SMOOT. Mr. President- Mr. WALSH of Montana. The bill as it passed the House The VICE PRESIDENT. Does the Senator from Indiana contained no provision on the subject at all. yield to the Senator from Utah? There were abundant reasons for that course, which were Mr. ROBINSON of Indiana. I yield. elaborated in the debate. The Senator from Nebraska this Mr. SMOOT. The amendment that is now in the confer­ morning called attention again to the fact that among all ence report was submitted by Mr. CRISP, chairman of the the various industries of this country, of almost any char­ conferees on the part of the House. acter one can think of at all, this is the one·industry that has Mr. GLASS. Mr. President, we can not hear the Senator not only maintained the standard of prosperity which it en­ from Utah. This is an important question, and I would joyed in 1929 but which has shown even better returns since like to know what he is saying. · that time. Mr. SMOOT. I said that the amendment which is in the Mr. President, on this point I desire to call attention to an conference report was submitted by Mr. CRISP, chairman of interesting observation on page 85 of the New Republic the conferees on the part of the House. The Senator from of June 8, 1932, the last number of that magazine, reading Indiana said that the conferees on the part of the Senate as follows: insisted upon having their way in the matter. What's all this nonsense about a depression? The Worcester Mr. GLASS. But the Senate conferees yielded to the Electric Light Co., of Worcester, Mass., hasn't heard of any such proposition as submitted by Mr. CRisP. thing. It paid a 32 per cent d.ividend last year. Mr. SMOOT. We did. I trust that Senators present at least may learn of this Mr. MOSES. Mr. President- splendid success of ~he Worcester Electric Light Co., of The VICE PRESIDENT. Does the Senator from Indiana Worcester, Mass. yield to the Senator from New Hampshire? The VICE PRESIDENT. The Senate will be in order. Mr. ROBINSON of Indiana. I yield. Mr. WALSH of Montana. The article reads: Mr. MOSES. I want to say, with reference to what the What's all this nonsense about a depression? The Worcester Senator has presented as to him an astounding thing, that Electric Light Co., of Worcester, Mass., hasn't heard of any such it seems to me to be entirely something that has taken place thing. It paid a 32 per cent dividend last year, amounting to three-quarters of a million dollars, and a 64 per cent dividend, or in the natural course of conferences. The discussion has a million and a. half, the year before, making a neat total of 96 gone far from the point of order. The prosperity of the per cent in two years, during which most business men were out electric companies or their bankruptcy has nothing to do in the garden eating worms. All this money went to the New with the point of order. The catalogue of offenses recited England Power Association, which some time ago bought the Wor­ cester company and is now proceeding to get back the purchase by the Senator from Nebraska [Mr. HoWELL], even an in­ price as rapidly as possible. The New England Power Association dictment for alleged crimes by the electric companies, has also bought local electric compani.es in other New England cities, nothing to do with the point of order. and lias been squeezing profits out of them at a similar fantasti­ cally high rate. In Quincy, the rate was 48 per cent in 1931; in The amendment, thoroughly debated as it was, agreed to Attleboro, 40 per cent; in Lowell, 14.4 per cent, etc. by the Senate by a large majority, went into the conference Large sums are also taken by the parent company for " manage­ room under the formal vote of the Senate that its conferees ment fees." These charges increased from $66,000 in 1927 to $1,500,000 in 1929, and there is no evidence that they have been were to insist upon the Senate amendments. much decreased, if at all, since then. Another scheme by which Under those circumstances the situation in which the the local companies are bled whtte is the withdrawal of money amendment was found in the conference room was that the for taxes. It is stated by the Federal Trade Commission that House conferees had three courses which they could pursue: each subsidiary company is forced to pay an amount equal to its full Federal taxes, although the New England Power Association They could agree, they could refuse to agree, or they could makes a. consoltdated tax return. While these vast sums are roll­ agree with an amendment. The third course is the one ing into the pockets of the Power Trust, the cities which are thus which the House conferees adopted. Since it has become being mulcted are struggling desperately to feed and clothe their the fashion in this session of Congress to make public unemployed. In Worcester, for example, the public treasury with difficulty found $1,200,000 for the poor last year, while the power things which happen in the conference room, the chairman company took away two-thirds of that sum in profits. As we of the conferees on the part of the Senate has now said that don't need to say, these profits are made possible by unfairly high this proposal to agree with an amendment came from the rates permitted by the State regulatory authority. • • • House conferees, as, indeed, it had to come. There was no Mr. President, I submit that it is a circumstance which other way in which it could come. ought to be taken note of by every Member of this body, The House conferees having pursued their constitutional that the Senator from Utah having been defeated upon the duty with the three alternatives presented to them, and this floor of the Senate in the amendment he proposed, and the amendment having gone to the conferees in such fashion Senator from Pennsylvania having been defeated in the that the entire subject was open for discussion and for Senate upon the amendment he proposed, both becoming amendment through an agreement with an amendment, the members of the committee on conference, then insert in conferees acted perfectly in line with the precedents, per­ the conference report practically the same propositions which fectly in line with their constitutional functions, and, in my met with the disapproval of the Senate upon a yea-and-nay opinion, the point of order can not be sustained. vote. Mr. ROBINSON of Indiana. Mr. President, I have been Of course that is aside from the question as to whether very glad to yield · to the Senator from New Hampsrl.ire, they have introduced new matter; and I submit, sir, that though I do not agree with all he has said in this connection. in three particulars the matter is new in these particulars: I may say that I am not so much interested in the outcome . The imposition of this tax upon the consumers of energy, of the point of order, whether it lies against the action taken the imposition of the tax upon all companies municipally or not. I think a point of order does lie and find myself in owned or privately owned, and third, the attempt to trans­ substantial agreement with the eminent Senator from Mon­ form the municipalities of the country owning their own tana [Mr. WALSH] in the position he has taken with refer­ electric-light plants into agencies and instrumentalities of ence to that matter and against the position of the Senator th• Federal Government for the collection of that tax. from New Hampshire. 12058 CONGRESSIONAL RECORD-SEN~ TE JUNE 6 But regardless of the point of order, the bill is still in ·con­ Shortridge Thomas, Idaho Tydings Walsh, Mass. Smith Thomas, Okla. Vandenberg Walsh, Mont. trol of this body, and something can be done and, in my Smoot Townsend Wagner Watson judgment, ought to be done. We have undertaken with this Steiwer Trammell Walcott White amendment to raise approximately $50,000,000. With one The VICE PRESIDENT. Eighty Senators have answered measure before the United States Senate and before the to their names. A quorum is present. If there be no further Con.,aress known as the economy measure we reduced by debate, the Chair is ready to rule. 10 per cent the pay of all employees of the Government, The Senate amendment is as follows: even, as has been mentioned, the charwomen and the jani­ There is hereby imposed upon energy sold by privately owned, tors, and those who receive very low pay. In the next mo­ operating electric power companies a tax eqUivalent to 3 per cent ment we tax these same people for a necessity, electric of tl1e price for which so sold. current and gas and all the various products of the utilities There is no provision in the Senate amendment relative of the Power Trust which has a monopoly on these very to the payment of the tax by either the vendor or the pur­ necessities of life, so that the consumer gets hit both ways. chaser, although it was doubtless the intent of the Senate We reduce his pay regardless of how little and inadequate that the tax should be paid by the power companies them­ it may be, and in the very next moment we heap this addi­ selves. However, in a parliamentary sense the conferees, in tional burden of taxes upon him, 3 per cent for the electric the absence of specific instructions by the Senate, undoubt­ energy, the power used or the current used, and then with edly have the right, in the interest of adjusting differences a sort of ironic gesture authorize the power company itself between the two Houses, to take the action they did in pro­ to collect that money from the consumer. viding for payment by the purchaser. Power com,panies, if any in this land, should be successful There is no provision in the House bill on the subject of and prosperous to-day. They have a complete monopoly power sold by electrical companies. Therefore, there are no of the product. The American people must use that prod- restrictions upon the power of the conferees, subject, of . uct. Power companies have insisted on keeping their rates course, to the limitations of the rule itself in dealing with at the highest point throughout all the depression. But for this matter. They have broader latitude and authority than some cause or other they have an enormous influence in this would otherwise be the case. They are empowered to make body, and apparently in the body at the other end of the any change or modification that is germane or relevant. Capitol, from all I have learned in the last few minutes. The term "new matter" contained in the rules embraces, But it makes no difference whether the proposition came as the Chair thinks, matter that is entirely irrelevant to the from the House conferees or from the Senate conferees, it is subject matter. unquestionably wrong. The Senate has decided on two suc­ The point of order is overruled. cessive votes that it was wrong, and finally on the third vote The questicn now is on agreeing to the conference report. decided definitely that the vendor, the power company it­ Mr. HOWELL. Mr. President, I appeal from the ruling self, must pay this tax. Then why not let the power com­ of the Chair. pany pay the tax? Why should the five Members of this The VICE PRESIDENT. The Senator from Nebraska ap­ body undertake to substitute their will for the will of a. peals from the ruling of the Chair. The question is, Shall majority of the Senate? Has the Senate become defunct? the ruling of the Chair stand as the judgment of the Is it impossible for this body to make up its own mind any Senate? further, but must we have 3 or 4 or 5 Members of the body Mr. HOWELL. Mr. President, as I listened to the reading decide for us what we are to do and set aside with impunity of the ruling by the President of the Senate, I did not the action taken by a majority of the Senate? particularly note that he ruled upon the point that the Mr. President, regardless -of the point of order, whether it conferees had provided for the taxing of the consumption of lies or not-though I think it lies-the bill should be sent electricity produced by publicly owned power plants. That back again for further action and this tax should be as­ was not included in the Senate amendment; that had not sessed and placed right where it belongs and where the been passed upon by either House; and that was unques­ Senate decided it should be placed, and that is on the ven­ tionably new matter introduced into this provision. dors themselves. , In the name of God, let us have some Mr. President, I ask for the yeas and nays. consideration for the consumers of the land, for those who The yeas and nays were ordered. are being taxed out of their homes, out of almost every­ Mr. AUSTIN. Mr. President, I did not understand the thing that life holds dear. Let us give the consumer, the question which was submitted to the Senate. man farthest down. a chance. I think the whole thing Mr. ROBINSON of Arkansas. Mr. President, I think the should go back to conference. parliamentary question ought to be stated. Mr. President, I am not certain about the parliamentary The VICE PRESIDENT. The Senator from Nebraska situation, but I do know the bill is still in control of the having appealed from the decision of the Chair, the question Senate, and we should see that justice prevails before we is, Shall the decision of the Chair stand as the judgment of release that control. I think the whole thing is an outrage the Senate? . that ought to be corrected. The Chief Clerk proceeded to call the roll. The VICE PRESIDENT. The Chair is ready to rule. Mr. GLASS

Mr. SCHALL

1932 CONGRESSIONAL RECORD-SENATE 12079 The PRESIDING OFFICER. Is there objection to the Kendrick Neely Schall Trammell Keyes Norbeck Sheppard Ty.dings request of the Senator from New Hampshire? The Chair LaFollette Norris Shortridge Vandenberg hears none. Logan Nye Smith Wagner Mr. MOSES. Mr. President, the substitute has been McGill Oddle Smoot Walcott McKellar .. Patterson Stelwer Walsh, Mont. printed, but under my right as the author of the amend­ McNary Reed Thomas, Idaho Watson ment to perfect the amendment I wish, on page 3, line 22, Metcalf Robinson, Ark. Thotna8, Okla. White Moses after the Arabic. number "(6) ,'' to strike out the words Robinson, Ind. Townsend "insolvent bank receivers and bank examiners" and insert The VICE PRESIDENT. Seventy-one Senators having "public officials and employees," so that it will read: answered to their names, a quorum is present. • • • public officials and employees whose compensation 1s Mr. MOSES. Mr. President, the amendment which I have not paid from the Federal Treasury. offered, and which is printed both in the RECORD of Satur­ This amendment is for the purpose of taking care of the day and in the usual form of printed amendments, presents personnel of the Federal Reserve Board, who are paid, not merely the question of policy, which has not as yet been from the Public Treasury but from funds provided by the taken up and determined by the Senate in connection with member banks. the matter of dealing with civil-service employees. The I also, on page 6, in lines 2 and 3, wi<>h to strike out the Senate already, in approving of the action taken by the words "the Administrator of Veterans' Affairs," this being special subcommittee on economy, which action has been done in order to make the amendment which I am perfect­ embodied in the legislative appropriation bill now before ing conform to the changes heretofore made in the text us, has passed upon the question of a horizontal uniform of the title as affected by individual and committee amend­ reduction in salaries of all who are in the Federal employ­ ments offered and already agreed to. ment. That, Mr. President, is a form of economy which I wish further, Mr. President, to perfect my amendment seems to me to be open to grave objection and to be un­ on page 3, at the end of the paragraph, by making the justifiable in that it penalizes many who are in the lower language to conform to the language which is in the bill as brackets of Federal employment. It is open to the further already agreed to. Therefore I wish to strike put, after the objection that upon the termination of the period within word "Treasury," the period and to insert the word "or," which these horizontal slashes of salaries will take place and then the words found on page 46 of the bill, beginning both the Congress and the employees affected by the legis­ in line 16, "the active enlisted personnel of the Army, Navy, lation will be subjected to the necessity of a complete re­ and Marine Corps." vision of the salary schedule, and it may be that at such Mr. JONES. I suggest to the Senator that he insert the time the temper of Congress will be such that the employees words" and the Coast Guard," which we just added. will suffer very greatly by the outcome of such an attempt; Mr. MOSES. I will add the words "and the Coast whereas the furlough plan which I have presented-and I Guard," those words having just been incorporated in the make no secret of the fact, Mr. President, that it embodies bill. the views of those who will have to administer whatever Mr. COSTIGAN. Mr. President, I ask the Senator again form of economy is applied to the Federal service-compels to state what his second perfecting amendment is. no employee to lose his place; it compels no employee to lose Mr. MOSES. The second perfecting amendment was to his salary; but merely lays upon each employee the burden strike out the words " the Administrator of Veterans' of absenting himself for a given period from the public Affairs." That amendment is proposed in order to make service without pay. the amendment conform to the bill as already acted upon Mr. BARKLEY. Mr. President-- by the Senate. The VICE PRESIDENT. Does the Senator from New Mr. FLETCHER. Mr. President, will the Senator from Hampshire yield to the Senator from Kentucky? New Hampshire yield to me? Mr. MOSES. I yield to the Senator from Kentucky. The VICE PRESIDENT. Does the Senator from New Mr. BARKLEY. The Senator may have ah·eady afforded Hampshire yield to the Senator from Florida? the Senate the information I am about to seek, but I should Mr. MOSES. I yield. like to ask whether the so-called furlough plan which has Mr. FLETCHER. As the Senator from New Hampshire been offered by the Senator is the administration's program proceeds to explain his amendment, I should like to inquire for the reduction of Government expenses? what effect the adoption of the amendment would have on . Mr. MOSES. Mr. President, I take full responsibility as employees who are not under the civil service, as well as a Senator from New Hampshire for having offered this plan, the employees of the Senate and the House, unless the Sen­ and I have already stated that it embodies the views of those ator proposes to exempt them? administrative officers who will have to put into effect what­ Mr. MOSES. The Senator will find, as he goes through ever kind of economy measures shall be agreed upon. my amendment, beginning at line 13, on page 4, all legisla­ Mr. BARKLEY. Does that include the President? tive salaries taken care of, including the salary of the Vice Mr. MOSES. I have never consulted the President about President, the Speaker of the House, and so forth. He will it, nor has the President informed me of his views. find that matter. entirely covered. Mr. BARKLEY. The Senator, then, does not know Mr. LA FOLLETTE. Mr. President-- whether in introducing this amendment he represents the Mr. MOSES. I yield to the Senator from Wisconsin. wishes of the President of the United States, or whether the Mr. LA FOLLETTE. Before the Senator from New President prefers the plan which has been adopted by the Hampshire begins his explanation of the amendment, will subcommittee? he yield to me for the purpose of suggesting the absence of Mr. MOSES. The Senator from Kentucky, in anticipation a quorum? of the duties which he possibly will have to take on in a Mr. MOSES. I yield for that purpose. few weeks, is undoubtedly very familiar with current events; Mr. LA FOLLE'ITE. I suggest the absence of a quorum, and, of course, he therefore is not in ignorance of the fact Mr. President. that the President hitherto has urged a furlough plan upon The VICE PRESIDENT. The Secretary will call the roll. the attention of Congress. The Chief Clerk called the roll, and the following Sena­ Mr. BARKLEY. I understand that; but I do not know tors answered to their names: that that necessarily has anything to do with the perform­ Austin Bulkley Costigan Harrison ance of any duty that may be incumbent upon me in the Ba1ley Bulow Couzens Hatfield future. Bankhead Byrnes Davis Hawes Mr. MOSES. Nor upon me. Barbour Capper Dickinson Hebert Barkley Caraway Fletcher Howell :Mr. BARKLEY. As a Member of this body, I thought it Bingham Carey George Hull probably would not be out of place to inquire whether the Blaine Cohen Glass Johnson Borah Connally Goldsborough Jones Senator's amendment is an administration proposal for Bratton Coolidge Hale Kean economy. •

12080 CONGRESSIONAL RECORD-SENATE JUNE 6 Mr. MOSES. Mr. President, my friendship for the Chief Mr. BORAH. After a time, however, we come to express Executive is so wen known that I need not dilate upon that; ourselves here, and the majority determines the matter. I and I merely beg my distinguished friend from Kentucky have wondered if there has been any action upon the part to accept my statement that I am offering this amendment of these organizations one way or the other npon this ques­ on my own responsibility. tion. It is a matter about which I should like to know. Mr. BARKLEY. Of course I realize that. We all do that Mr. MOSES. If the Senator means a plebiscite, a ques­ here. We introduce amendments on our own responsibility, tionnaire among all the membership of these organizations, because we have to; but we sometimes have suggestions I do not know that any such thing has taken place. I only from the outside as to the propriety of introducing amend­ know that those whom I have been accustomed to regard as ments. I, of course, would not intimate that the Senator the mouthpieces of great organizations have expressed to me from New Hampshire has to be prompted by anybody in their opinion as I now express it to the Senate. the matter of amendments or any other course he may see Since the matter involves merely a question of policy, far­ fit to pursue here. reaching in its effect-- Mr. MOSES. No, Mr. President; I am a self-starter. Mr. McKELLAR. Mr. President-- [Laughter.] The VICE PRESIDENT. Does the Senator from New Mr. BARKLEY. We all recognize that. Hampshire yield to the Senator from Tennessee? Mr. MOSES. And I hope that the Senator from Ken­ Mr. MOSES. I yield to the Senator. tucky would not be deterred from voting for my amend­ Mr. McKELLAR. I should like to ask the Senator what ment even if it were favored by the President of the United will be the amount of the reductions under his proposed sub­ States. stitute. Mr. BARKLEY. Oh, I would not be deterred on that Mr. MOSES. Upon the theory of the best computation account, although I might be more cautious in looking into which I have been able to make-and I do not claim to be an its merits than I otherwise would. actuary-! would set the saving to be made under the fur­ Mr. MOSES . . Mr. President, to resume at the period lough plan at approximately $90,000,000. It might run a where the pleasant interlude with the Senator from Ken­ little above that. I have not been able, under any set of tucky took place, I want to say that when we come to de­ computations which I could make, to bring it more than cide the important question of policy which is represented $2,000,000 below. first of all by a choice between what the committee has I recognize that there is a difference of a considerable recommended and what I am now proposing to the Senate, sum of money between this amount and the estimated and which in all of its implications means much more to economies to be had under the measure provided by the those who are affected by it than any discussion which committee; but lfhen we have before us the general question might take place here, we must not lose sight of the fact of taking action of this sort, so widely effective upon so that those who are most immediately affected by this type many people, it does not seem to me that we are wan-anted of legislation have some right to be heard. in making mere arithmetical computations to determine I do not assume to speak with authority for them. We all whether one set of proposals or another shall produoe the know, however, that at the outset they were rigidly opposed greater saving. to any policy of Federal economy which involved them and My desire is to bring about action along the lines of my their relation to the Federal pay roll. We know, however, earnest belief, namely, that every Federal employee should that the inexorable logic of events brought them to a point make some contribution in this crisis. My chief desire is where they recognized generously that .every citizen, whether to have ·that contribution· made in such wise that it will a public employee or not, must take on some share of the bear with least difficulty upoi1 those who have to take on burden necessitated by the task of bringing the country out the burden, will leave them in the best situation at the end of its present fiscal situation, whether by the payment of of the period for the economy which we are now instituting, additional taxes or by suffering a reduction in his Federal and will free the Congress from those widespread and com­ income. I think, however, from information which has plicated endeavors which we certainly will have to take up come to me within the last few days, that I am quite within if we are forced, a year from now, to undertake a general the bounds of accuracy in saying that the great mass of revision of the Federal pay roll. people who will be affected by this legislation infinitely pre­ fer the furlough plan to the horizontal drastic cuts in Fed­ Mr. BYRNES. Mr. President, I desire to explain as briefly eral pay. as I can the differences between the two plans now presented Mr. BORAH. Mr. President-- to the Senate. The VICE PRESIDENT. Does the Senator from New The plan represented by the Senator from New Hampshire Hampshire yield to the Senator from Idaho? [Mr. MosES], according to his statement, would save approx­ Mr. MOSES. I yield. imately $90,000,000. That is a higher estimate than has ever Mr. BORAH. I am rather surprised at that statement. I been made by any advocate of the plan. The highest esti­ suppose the Senator has some reason for making it. Every mate heretofore made by any advocate of the plan has been letter I have had, and every personal contact I have had $83,000,000. It is divided in this way: with the employees, has been to the contrary. It is claimed that in the Post Offi.ce Department, after I was stopped to-day on my way out by a committee-ap­ allowing for substitutes, there would be a saving of $24,000,- parently a committee-very much opposed to it. Of course, 000. It is claimed further that there would be a saving in they were not desirous of the salary reduction; but they said the allowance to rural carriers of $10,312,000. that they prefened the salary reduction to this, for certain Manifestly the rural carriers can not be furloughed; and reasons which at this time I perhaps will not state. But has when it was found by those advocating the plan that the there been any expression upon the part of their organiza­ rural carriers could not be furloughed they. provided that tions either way? the rural carriers should be taken care of by providing that Mr. MOSES. Mr. President, I think I am safe in saying they should receive only three-eighths of the amount now that those whom I have been accustomed to regard as the allowed to them on account of equipment allowance. That spokesmen for very large groups of Federal employees have means that by reason of the provisions of this furlough made known to me that they infinitely prefer the furlough amendment the rural carrier will sustain a reduction of the system to the pay-cut system. ~ amount allowed to him equal to a fraction between 13 and Mr. BORAH. There must be --a division among them. 14 per cent. Under the committee plan the rural carrier, Mr. MOSES. Oh, there is a division of opinion in any like all other employees of the Government, is asked to sus­ body of men. There is a division of opinion in the Senate tain a reduction of 10 per cent. By the provisions of this on a great many things. The Senator from Idaho and I, furlough plan he is made to suffer a greater reduction than though seeing eye to eye on many, many questions, find our­ any other employee of the Government of the United States. selves in radical disagreement on some other matters of The average equipment allowance is $383. Under this public policy. amendment they would be allowed three-eighths, or $144, 1932 .CONGRESSIONAL RECORD-SENATE 12081 making a loss to the carrier of $239, when the average pay of tor from New Hampshire, and 10 per cent under the com­ the carrier is only $2,017. mittee plan. In addition to that it is said that on account of the Under the plan of the Senator from New Hampshire it is employees outside of the Post Office Department there will 8% per cent on the man receiving seven or eight thousand be a saving of $46,000,000. While it is claimed that the fur­ dollars. It is a horizontal cut, but there is this fundamental lough plan would save $46,000,000, we are told that it would di:fference, that in the plan of the Senator from New Hamp­ offer an opportunity to employ substitutes. If substitutes shire it is provided that the President shall have power to are employed, it will never save any $46,000,000, and the exempt an employee from the provisions of the furlough advocates of the plan have never deducted a single dollar plan. from the $46,000,000 to account for the money that is to The committee knew that that power would have to be be paid to substitutes. But if we take every dollar that is exercised by the heads of the various departments, and that claimed, the saving under the furlough plan would amount inevitably it would result in favoritism being shown to cer­ to $81,713,000. tain employees. When the head of a department would The saving provided for in the committee bill is approxi­ say, "Mr. Jones, you are indispensable; therefore I recom­ mately $120,000,000. The Senator from New Hampshire has mend that you be exempted from the provisions of the fur­ spoken of his great friendship for the President, which he lough plan.'' Mr. Smith, in the same office, would say, says is well known to the Members of this body, and I " Because Jortes stands in with the boss of this department, really am surprised at his offering this amendment. I am he is exempted; he gets no deduction. I have to suffer a also surprised that the Senator from Indiana [Mr. WATSON], furlough and be sent out for 30 days without any pay at all.'' the Republican leader, should be in favor of it. In fact, I I believe it would result throughout the service of the was surprised on Saturday afternoon, when after we had Government in the exercise of discretion on the part of perfected this amendment both the Senator from Indiana bureau chiefs and of heads of departments which would and the Senator from New Hampshire voted against the cause more dissatisfaction throughout the service than any adoption of this amendment, which meant a saving of one thing I know of. It would give to the heads of the $120,000,000, because the President of the United States on departments the right to say that one man should suffer a Tuesday last made this statement to the Senate: loss of a month's pay but that another should not suffer the I do know that the committee has made honest and earnest loss of a dollar's pay. The committee took that into con­ effort to reach a just reduction in expenditures, and I trust. sideration. The Senator from New Hampshire just said therefore, that despite any of our individual views or the sacrifice of any group that we can unite in support and expeditious adop­ that District policemen and District firemen ought to be tion of the committee's conclusions. exempted. Under the committee plan they are not ex­ empted. What are we going to do about the men on guard · That was an appeal to the Senator from New Hampshire on the border in the Immigration Service and similar em­ and an appeal to the Senator from Indiana that notwith­ ployees in other services throughout the country? Who is standing any personal view held by them they might sacri­ going to take their places? Can they be furloughed for 30 fice that individual view in order to promote a reduction in days? If they are turned loose for 30 days, will it not be expenditures. Had the Senate followed the course of these necessary to put on substitutes; and if we employ substi­ two leaders, there would be no saving in the bill to-day on tutes, will there be any saving? The more carefully we account of salaries. analyzed it the more certain we became that no man could The Senator from Washington [Mr. JoNEs], the Senator figure what it would cost without knowing what the number from Connecticut [Mr. BINGHAM], the Senator from Iowa of exemptions would be. [Mr. DICKINSON], the Senator from New Mexico [Mr. BRAT­ Then we came back to the recommendation made to the [Mr. TON], the Senator from Tennessee McKELLAR], and committee of the cut of 10 per cent. That applies, as I said myself entered upon the consideration of these measures, the other day, from President to porter, and from judge never once having the question of partisanship raised, solely to janitor, with the exception of the enlisted men of the in the hope of accomplishing a reduction of expenditures. Army and Navy and Coast Guard. A man in the service We each made sacrifices daily of our views. I do not hesitate will say, "However much I dislike it, all are treated alike. to say that before I entered into an investigation of it I thought well of the furlough plan. I know that the Senator I am satisfied, since every man is to be made to make the same sacrifice at this time. I will be dissatisfied only if from Washington [Mr. JoNEs] sacrificed his view time and again, and during the last few days has cast votes not in favoritism is shown.'' This furlough plan would open the door for favoritism. accordance with his view as originally entertained-votes The President, speaking to the Senator from New Hamp­ that might affect him politically-but because of his courage he hesitated not, knowing it was in the interest of an agree­ .shire and the Senator from Indiana, in this Senate a ment by the Members of this body. I do not think that the week ago said: In a.ddltlon to the economies which may be brought about Senator from Indiana [Mr. WATSON], occupying the position through the economy b111, the direct reductions of the appro­ he does, and the Senator from New Hampshire [Mr. MosES] priations committee should increase this figure to at least $400,- should fail to accord to their President the support that he 000,000, not including certain postponements to later deficiency plead for last Monday when he begged that they sacrifice bills. their personal views and expeditiously adopt the recom­ That includes $250,000,000 savings proposed by the com­ mendations of this committee. mittee in this bill, and an anticipated $150,000,000 addi­ Mr. President, after carefully considering the furlough tional savings from appropriation bills. plan I deemed it impracticable and unfair; and I submit The President said further: that no matter what the Senator from New Hampshire may As this sum forms the basis of calculations as to increased say as to his plan being in accord with the views of those taxes necessary, it is essential tMt, no matter what the details who will be charged with administering it, I think it would may be, that amount of reduction must be obtained or taxes be exceedingly unwise. What is the di:fference? In the must be increased to compensate. amendment of the bill sponsored by the Senator from Wash­ This bipartisan committee and nonpartisan committee has ington it is provided that there shall be a 10 per cent cut. brought in a bill which provides a reduction of approxi­ The plan sponsored by the Senator from New Hampshire mately $250,000,000, including a reduction in salaries of provides for an 8% per cent cut. ;120,000,000. The plan of the Senator from New Ramp-_ Under the amendment of the Senator from Maryland to Bhire, according to its most enthusiastic advocates, would the committee bill no person receiving compensation of less save $83,000,000, a di:fference of $40,000,000. than a thousand dollars would suffer any reduction. Under The Senator from New Hampshire says the saving would the plan of the Senator from New Hampshire it is $1,200 be $90,000,000, and I accept the amendment. I referred to instead of $1,000. The difference in percentage is 8% on the most enthusiastic advocate, and I meant the most en­ tp.e man with a salary of $1,200 under the plan of the Sena- thusiastic advocate up to the time the eminent Senator from 12082 CONGRESSIONAL RECORD-SENATE JUNE 6 New Hampshire adopted it as his plan. Heretofore it has exemption orders, if and when necessary, are not likely to been claimed that it would save $83,000,000. Now the Sena­ be issued except for sound cause, and I do not believe any tor from New Hampshire says $90,000,000, which would mean Senator seriously thinks otherwise. a loss of $30,000,000 in savings. It could mean there would The second objection is that there is administrative diffi­ be favoritism shown to some employees, discrimination in culty in respect to the operation of the plan. Yet surely favor of some employees, while under the other plan there the Senator from New Hampshire is justified in stating would be an equal deduction of 10 per cent to all employees that the administrators of the Government, including the of the Government whose compensation is in excess of a President, have asked for the furlough plan in preference to thousand dollars. the straight wage-cut plan as an expression of their belief I hope the proposed plan will not be adopted by the for the best method of proceeding. If the administrators, Senate. those upon whom the responsibility for the administration Mr. VANDENBERG. Mr. President, with the greatest re­ will fall, take such an attitude, I think the legislative branch spect and deference for my able friend the Senator from of the Government is entitled to dismiss the question of ad­ South Carolina [Mr. BYRNES], I rise to differ from him in ministrative difficulty in deciding the alternative choice his viewPoint respecting the furlough amendment offered by between these two plans. the Senator from New Hampshire. The Senator from South The third objection is that the furlough substitute would Carolina is entitled to more consideration so fm- as the Sen­ not raise the same total sum as would the original commit­ ate is concerned, in view of his long study of the subject and tee bill. That is certainly true; it can not be gainsaid. But his unselfish and courageous service on the Economy Com­ the differential is not serious in view of our alternative mittee. But I am moved to wonder whether the Senator is economy opportunities. Indeed, it may develop that the not constrained to support the committee program because differential is of no major consequence at all. it is the committee program. I wonder whether he is now The committee bill as finally amended by the Senate's able to consider open-mindedly the present merit of the action in respect to the amendment submitted on Saturday alternative furlough proposition, and particularly the alter­ by the Senator from Maryland probably puts the salary re­ native furlough proposition as I shall ask the Senate to duction at a total of $114,000,000. I would say that the amend it. saving is in the neighborhood of $114,000,000 as represented It seems to me that the furlough plan, for one year only, by the bill as now pending. has credentials which entitle it to emphatic preference over If the Senator from New Hampshire is correct in his esti­ the straight horizontal pay cut which was voted on Satur­ mate respecting the furlough plan, there is a saving of day by the Senate. In the fi.Tst place, it avoids any dis­ $95,000,000 involved in its operation, and I may say to him turbance of actual wage rates. We have heard a great deal that my own inconclusive calculations on that subject bring about psychology, and its effect upon our economic situation the saving to between ninety and ninety-five million dol­ in the present unhappy condition in which the country finds lars, although it is exceedingly difficult to calculate. I pro­ itself. I know of no more useful contribution to helpful pose by amendment to increase this sum. psychology than not to disturb existing wage rates, if we can accomplish our unavoidable economy purpose by an­ Mr. MOSES. Mr. President, will the Senator yield? other method, and I think the distinction is a difference Mr. VANDENBERG. I yield. which is something more than a mere distinction. Mr. MOSES. I have just seen a telegram from the head of one of the largest and most important of the federated Furthermore, if we are thinking in terms of this popular psychology which we are asked so often to consult, it seems Federal services, which indicates that the total saving to be to me that it is particularly useful to embrace the furlough made under the furlough bill will be approximately plan. The furlough plan is a trend in the direction of ex­ $110,000,000. periment with the 5-day week. The 5-day week and the Mr. TYDINGS. Mr. President, will the Senator from shorter work day in the 5-day week are calculated, in my Michigan yield? judgment, to be the ultimate, inevitable economic reliance Mr. VANDENBERG. I yield to the Senator from Mary­ of the country in finally liquidating our economic difficulties land. in this mechanical age with its heavy and permanent tech­ Mr. TYDINGS. Mr. President, I am not out of sympathy nological unemployment. Here, in a sense~ is a laboratory with the furlough plan, but I want to express this thought. test in the shorter work week and the shorter work day. Assuming, fi.Tst, that the furlough plan would save $90,- Thus, the trends involved in the furlough plan, it seems to 000,000 in lieu of $115,000,000, that would mean a difference me, have infinitely much to commend them in preference of $25,000,000, which the 10 per cent cut would save over to the horizontal wage reduction which now stands in the the furlough plan. If that $25,000,0000 were used in the committee bill. The latter trend is reactionary. The lower wage brackets in the way of exemptions, it would be former is progressive. If we can save the public money suf­ possible to exempt all salaries of $1,800 and less from any ficiently by either method, I am persuaded that it is highly cut whatsoever, and get the same amount of savings. I preferable to do it in a forward-l~oking way. know there has been a great deal of sentiment to exempt Moreover, of course, it is less burdensome on the Federal the salaries in the lower brackets, so that if we are going to personnel. It contemplates an average reduction of 8.3 per adopt the furlough plan, which means a saving of twenty­ cent in compensation instead of an average of 10 per cent five or thirty million dollars less than under the 10 per cent in the committee bill. I mean that this is the mathematical cut, by adopting the cut plan and saving only $90,000,000 we equivalent of the furlough plan as compared with the hori­ could exempt every salary of $1,800 or less from any cut zontal pay cut. Therefore it would seem to me quite obvi­ whatsoever for the same amount of money. ous, as the Senator from New Hampshire has indicated, Mr. VANDENBERG. Mr. President, I believe there will be that the furlough plan would be preferred by the Federal no such differential between the furlough plan and the personnel itself. straight cut as previously ordered. Now, let me come to the Now, the objections to the plan: It is urged, in the first last and final objection, which I think is the one valid objec­ instance, by my able friend from South Carolina that the tion against the furlough plan. I have felt-and many furlough plan would be subject to favoritism in its admin­ others in this Chamber have the same feeling-that there is istration. It seems to me this is shadow boxing. It seems no equity and no justification in a universal horizontal re­ to me that is fighting ghosts. I can not believe that for a duction in all wage brackets at the same rate, applying the period of one year, during this next emergency 12 months same economy ratio to high and low alike. The Senator for which we are providing in this legislation, that there is from New Hampshire reminds me that he said precisely the any serious threat of favoritism either through the appli­ same thing. cation for or the issuance of an Executive order by the That criticism can still apply to the furlough plan, because President of the United States, which is the necessary in effect mathematically it applies a common rule to the routine in order to crea-te any exemption under the manda­ entire list, representative in dollars and cents of the equiva­ tory rule as laid down in the legislation itself. Executive lent of a reduction of 8.3 per cent. 1932 CONGRESSIONAL RECORD-SENATE 12083 Mr. President, it is at that point that I want to submit an Mr. NORRIS. Mr. President-- amendment, an amendment for the purpose, first, of restor­ The VICE PRESIDENT. Does the Senator from Michigan ing the idea of a sliding scale of reduction in the upper yield to the Senator from Nebraska? brackets; an amendment, second, which obviously will, Mr. VANDENBERG. I yield. therefore, increase the total revenue to be secured and thus Mr. NORRIS. There is another thing that troubles me, in turn will further meet the objection raised to the furlough which the Senator has not mentioned, and that is the ques­ plan upon this latter score. tion of substitutes. It is quite apparent that a good many I am going to propose an amendment to section 101, on places where it would be impractical to reduce salaries by a page 2, after line 23, inserting a new subsection to read in month's vacation without pay could not be taken care of part as follows: without putting in the place of the furloughed employee a Upon the compensation 1n excess of $3,000 per annum the fur­ substitute whom we would have to pay. lough provision heretofore defined shall apply after and 1n addition Mr. VANDENBERG. What happens to-day under similar to the following reductions 1n rates of compensation for the fiscal year ending June 30, 1933. circumstances? I assume the Federal employee to-day has $3,000 to $4,000, 1 per cent. his 30 days, vacation with pay, and if he is indispensable $4,000 to $5,000, 2 per cent. and a substitute were necessary, the substitute also is paid $5,000 to $6,000, 3 per cent. and there is that additional burden upon the pay roll. ,6,000 to $7,000, 4 per cent. $7,000 to $8,000, 5 per cent. Under the furlough plan he takes the 30 days' without pay, $8,000 to $9,000, 6 per cent. and if a substitute is hired as heretofore, the Government $9,000 to $10,000, 7 per cent. would still have the advantage of that month's pay, which Over $10,000, 8 per cent. otherwise has been given to the employee. Then follows the necessary clause to eliminate the hump Mr. NORRIS. Are there no provisions where the month's between brackets. pay under existing salaries is not allowed? Mr. BRA'ITON. Mr. President, will the Senator yield? Mr. VANDENBERG. 1 can not answer the Senator's The VICE PRESIDENT. Does the Senator from Michigan (luestion. yield to the Senator from New Mexico? Mr. NORRIS. I was impressed with what the Senator Mr. VANDENBERG. Certainly. from South Carolina said when he referred to the Immigra­ Mr. BRATTON. If that amendment should be adopted, tion Service. what would be the saving? Mr. VANDENBERG. I am not able to answer the Sen- Mr. VANDENBERG. The additional saving as the result . ator's question. I assume, from the fact that I have been of this amendment would probably be between $4,000,000 told all along that the administrative officers and depart­ and $5,000,000. Therefore the total saving, even under the ments of the Government preferred this method of opera­ figures as originally submitted by the Senator from New tion, that so far as its practical effects are concerned it Hampshire, would be in the neighborhood of $100,000,000 must be sound. and on the basis of the estimate which he most recently gave Mr. NORRIS. I am not sure that it would be objection­ the Senate would almost approximate the net saving avail­ able. I was wondering how it could be done without putting able under the committee bill as it now stands. some one in the place of some of the furloughed employees. Let me indicate precisely how this amendment would work. Mr. VANDENBERG. Some one may be put in their place The net result of the amendment would be to create a set-up precisely as has happened heretofore. as follows: No salary under $1,200 would be touched at all. Mr. NORRIS. Does the substitute specifically take away The furlough plan, representing the equivalent of an ulti­ the vacation allowance? mate mathematical deduction of 8.3 per cent in annual pay, Mr. VANDENBERG. That is my understanding. would apply up to $3,000 on the furlough basis. Above Mr. NORRIS. That would be absolutely necessary so $3,000 the furlough and the new percentage reduction would they would not have any vacation withbut pay. apply. Bear in mind the fact that the furlough reduction Mr. VANDENBERG. That is the net fact. represents 8.3 per cent. Then we can reach the total reduc­ Mr. NORRIS. So the Government employee would take tion of pay in the higher brackets by adding the proposed a month's vacation without pay? specific reduction in each bracket to 8.3 per cent, which is Mr. VANDENBERG. That is correct as I understand the the rate represented by the furlough. This, then, is the matter. final net result. Let me recall that on $1,200 to $3,000 the Mr. NORRIS. Who wo"ijld say when the furlough should reduction is 8.3 per cent. be taken under the proposed amendment? From $3,000 to $4,000 the reduction is a total of 9.3 per Mr. VANDENBERG. I assume that it is at the primary cent. · discretion of the administrator in each department, but From $4,000 to $5,000 a total of 10.3 per cent. may I anticipate the Senator from Wisconsin [Mr. LA FoL­ From $5,000 to $6,000 a total of 11.3 per cent. LETTE] to the extent of saying that I cordially agree with From $6,000 to $7,000 a total of 12.3 per cent. the proposal which he intends to submit that brings that From $7,000 to $8,000 a total of 13.3 per cent. matter back somewhat within the control of the employee From $8,000 to $9,000 a total of 14.3 per cent. himself. From $9,000 to $10,000 a total of 15.3 per ·cent. Mr. NORRIS. Who, for instance, would designate when Over $10,000 a total of 16.3 per cent. the Senator's month shall be when he must be taken off the Manifestly if the amendment were adopted a subsequent pay roll? Who would tell him when that should be? amendment would have to be offered at the point where the Mr. VANDENBERG. If anybody can find a furlough for compensation of the Speaker, the Vice President, the Mem­ me for even a few minutes, he will be doing better than I bers of the House and Senate are covered, by increasing that have been able to do for the last 12 uninterrupted montns. figure from 10 per cent in the pending amendment to 16.3 Senators, under my amendment. will take the highest reduc­ per cent, which is the total reduction in the top brackets tion, which will be 16.3 per cent, instead of 8.3 per cent in under the sliding scale. the committee bill Mr. President, it seems to me that if the value of. the Mr. LA FOLLETTE. Mr. President, it is my understand­ sliding-scale reduction in the upper brackets---which I may ing that it is contemplated under this plan that the great say parenthetically is a simple application of the standard majority of employees would take their furloughs distributed income-tax theory and plan of American operation-be in­ over a long period of time by having a virtual reduction of cluded in the furlough plan, the only substantial objection to the working time in each week or in each month, but that the furlough plan is eliminated and there is left all of these the draft provides in the alternative that they may require utterly sound and persuasive reasons for taking this alterna­ the furlough to be taken in consecutive days not to exceed tive method instead of the horizontal proposal which has 24 working days, which the amendment declares to be one come from the committee and which thus. far has been calendar month. I intend at the proper time to offer an approved by the Senate. amendment to the pending amendment on page 2, line 19, 12084 CONGRESSIONAL RECORD-SENATE JUNE 6 after the word "subsection," to insert a colon and the fol­ Mr. MOSES. Mr. President, as the author of the amend­ lowing: ment, I am inclined to accept the amendment proposed by Provided further, That no officer or employee shall without his the Senator from Michigan for a perfectly practical reason. consent be furloughed under this subsection for more than four If anyone would take the trouble to study the text of the days in any one calendar month. bill, it will be noted that the text perfected by the House is That would permit the employee in his discretion to insist changed very little, whereas the amendment which I have that his furlough should be distributed over a long period offered covers not only the entire text of the title, which of time, thus preventing him from being thrown out of work involves only 8 sections, but involves 12 sections and covers without any pay for practically a month. On the other the entire subject. hand, if he preferred that plan and the administrative offi­ If my amendment shall be agreed to, the whole question cer felt that it was better for the service that he should take as proposed by the House of Representatives and every it, he could take it in 24 consecutive working days. question involved in the discussiGn here will go to confer­ Mr. SHORTRIDGE. Mr. President--- ence, and, under the action already taken by the Senate The VICE PRESIDENT. Does the Senator from Michi­ to-day, we know the full powers of conferees with reference gan yield to the Senator from California? to matters of this sort, and because of the practical question Mr. VANDENBERG. Certainly. thus involved, I will accept the amendment proposed by the Mr. SHORTRIDGE. Do I understand that those receiv­ Senator from Michigan [Mr. VANDENBERG] to my amendment. ing salaries of $1,200 or less are exempted from the pro­ The VICE PRESIDENT. The Senator from New Hamp­ visions of the Senator's amendment? shire modifies his amendment. Mr. VANDENBERG. The Senator is correct. . Mr. MOSES. I will modify my amendment to that extent. Mr. SHORTRIDGE. Further, do I understand that the I do that without concurring in the entire argument ad­ police and firemen of the Distriot of Columbia are vanced by the Senator from Michigan, much of which, I exempted? recognize, has force, but I accept it in order that I may get Mr. VANDENBERG. They are exempted by the lan­ a vote upon the entire subject, for, as I have said, if my guage of the amendment submitted by the Senator from amendment shall be agreed to, the whole proposition will be New Hampshire. then in the hands of the conference. Mr. SHORTRIDGE. It does exempt them from the op- The VICE PRESIDENT. The question is on agreeing to erations of the reduction? the amendment of the Senator from New Hampshire as Mr. VANDENBERG. Yes; that is correct. modified. Mr. COSTIGAN. Mr. President-- Mr. VANDENBERG. Mr. President, then there are three The VICE PRESIDENT. Does the Senator from Michi­ points where the text will have to be subsequently brought in gan yield to the Senator from Colorado? line purely in relationship to the suggestions already accepted. Mr. VANDENBERG. I yield. Mr. MOSES. Yes; Mr. President, I find upon studying Mr. COSTIGAN. Neither the Senator from Michigan these proposals that they affect the section numbering as nor the Senator from New Hampshire has discussed an proposed in my amendment, and also I modify my amend­ amendment of the committee found on page 59, section 214, ment to that extent. with respect to furloughs of Government employees. Will The amendments of Mr. VANDENBERG to the amendment of it interrupt the Senator if he is asked at this time to explain Mr. MosEs are as follows: the relation of his amendment to that amendment? Amend section 105, subsection (a): Change 10 per cent to 16.3 Mr. MOSES. Mr. President, may I answer the Senator's per cent. Also amend seetton 105, subsection (b): Change 8.3 per cent to question? 10 per cent. Mr. VANDENBERG. I shall be very glad if the Senator Also amend section 105, subsection (c): After the words "8.3 will do so. per cent" add the following: "Provided, That subsection (d) in Mr. MOSES. May I say to the Senator from Colorado section 101 shall also apply in this category." that there are three further amendments which I intend to The VICE PRESIDENT. The question is on the amend­ offer in the event my pending amendment is accepted.. On ment of the Senator from New Hampshire as modified. page 59 the further amendment provides for striking out all Mr. LA FOLLETTE. Mr. President, I offer the amend­ of section 213. ment which I send to the desk to the amendment of the Mr. VANDENBERG. Mr. Pr~sident, the amendment I Senator from New Hampshire. have suggested raises the general question of whether or not The VICE PRESIDENT. Let the amendment to the we shall superimpose upon the furlough plan in the higher amendment be stated. brackets the graduated-scale theory of reduction.. It will The LEGISLATIVE CLERK. On page 2 of the amendment, in suffice to take the judgment of the Senate upon this one line 19, after the word "subsection," it is pn~posed to insert amendment. If it should be carried, subsequent amend­ a colon and the following: ments will be necessary to bring the balance of the fur­ Provided turtner, That no officer or employee shall, without his lough proposal into line. I offer the following amendment. consent, be furloughed under this subsection for more than !our The VICE PRESIDENT. The amendment of the Senator days in any one calendar month. from Michigan will be read for the information of the Mr. MOSES. ·Mr. President, if the Senator from Wis­ Senate. consin would change the numeral" 4" to the numeral" 5," The LEGISLATIVE CLERK. Amend section 101 by adding a I should be very glad to modify my amendment accord­ new subsection reading as follows: ingly; but I make that suggestion because it is the principle (d) Upon all compensations in excess of $3,000 per annum the of the 5-day week, which is set up in my amendment, and furlough provisions heretofore defined shall apply after and in I think it would be much more reasonable to make the addition to the following reductions in rates of compensation for limitation five days instead of four days. the fiscal year ending June 30, 1933 : Per cent Mr. LA FOLLETI'E. Mr. President, what I seek to accom­ $3,000 to $4,000______1 plish by this amendment is to prevent employees, without $4,000 to $5,000______2 their consent, being required to take their furloughs all in $5,000 to $6,000------3 one month's time. Senators are no doubt aware that many $6,000 to $7,000------4 $7,000 to $8,000______5 Government employees find it impossible to set aside any $8,000 to $9,000______6 savings, and that therefore they are dependent upon the $9,000 to $10,000------7 payments which come either monthly or bimonthly in order Over $10,000------8 to meet their current expenses. Therefore it seems to me Provided, That the application of these reductions shall not that one serious criticism of this furlough plan would be the operate to reduce the rate of compensation below that of the next lower rate in the same service to which a lower percentage of hardship which would be occasioned by employees being reduction applies. required without their consent to go for a whole month 1932 CONGRESSIONAL RECORD-SENATE 12085 without any income whatsoever. Under the terms of this basis is constructive step to cure depression and return prosperity. Saving of four hours' pay on each employee each week will reduce amendment, however, it will be possible for those who pre­ Government pay roll 9 1/11 per cent without reducing wage rate. fer to take their furlough all in one month, and who receive Increased efficiency and flexibility of forces to meet variable re­ the consent of the administrative officer to do so, to make quirements in governmental activities operated upon per diem basis through establishment of 5-day week wm provide greater saving such an anangement. than 10 per cent reduction in wage rates. Those who have I may say ftrrther to the Senator from New Hampshire strongly supported best traditions of our country have right to that my theory in suggesting four days was that in the aver­ expect our Government will take lead in providing only effective age month a 4-day furlough, taken weekly during a given solutions, for aggravated condition of unemployment is our greatest and most dangerous problem. If 5-day week with compens~tion month, would result in the reduction of the average working at ten-elevenths of present weekly wage is adopted, many private time by four or four and one-half days. industries will follow lead of Government and release from unem­ However, I am willing to accept the suggestion made by ployment will be quick and certain. Favorable action upon this the Senator from New Hampshire and I modify the amend­ alternative in preference to wage reductions most important to milllons of workers in private employment as well as those 1n ment by striking out "4" and inserting "5." Government service. · The VICE PRESIDENT. Without objection, the amend­ CHAS. P. HowARD, ment proposed by the Senator from Wisconsin is so modi­ President International Typographical Union. fied. Mr. MOSES. Mr. President, the percentage stated in the Mr. MOSES. To that extent I modify my amendment. telegram which has just been read means, as anyone can The VICE PRESIDENT. The Senator from New Hamp­ determine by a slight computation, something like $110,- shire further modifies his amendment. The question now 000,000 of savings under the proposal now before the Senate. is on the adoption of the amendment of the Senator from Mr. President, inasmuch as my single purpose is to estab­ New Hampshire as modified. lish a statement of policy on the part of the Senate and to Mr. HALE. Mr. President, I send to the desk an amend­ get into conference the conflicting views with reference to ment to the amendment. the question of policy, I want to modify my amendment in The VICE PRESIDENT. The clerk will state the amend­ every feasible way without destroying its integrity, and I ment to the amendment. am glad to modify it to the effect proposed by the Senator The LEGISLATIVE CLERK. In the amendment of the Sen­ from Maine. ator from New Hampshire it is proposed to insert in the The VICE PRESIDENT. Without objection, the amend­ proper place the following proviso: ment of the Senator from New Hampshire will be further Provided further, That the rate of compensation of any em­ modified. ployee furloughed under the provisions of this bill shall not be Mr. Mr. reduced by reason of the action of any wage board during the BORAH. President, the Senator must be certain fiscal year 1933. as to who the conferees are going to be. Mr. MOSES. No, Mr. President; but the Senator from Mr. HALE. Mr. President, on page 2 of the amendment Idaho has been here longer than I and is more practical of the Senator from New Hampshire the following proviso than I, in spite of his well-advertised idealism, and he knows is included: what happens when a Senator in charge of a measure ac­ Provided, That nothing herein contained shall be construed as cepts an amendment. modifying the method of fixing the dally rate of compensation of per diem officers or employees as now authorized by law: Mr. BORAH. I do. Mr. WALSH of Massachusetts. I present an amendment Mr. President, in the NaVY and also in the Army the wages which I ask to have printed in the usual form, printed in of many of the civilian employees are determined by wage the RECORD, and lie on the table. boards. Those wage boards sit from time to time and de­ The VICE PRESIDENT. The amendment will be re­ termine what the proper scale of wages should be. I under­ ceived, printed in the usual form, printed in the RECORD, stand, however, that the wage boards have not been in ses­ and lie on the table. sion for a considerable time. Should those wage boards The amendment intended to be proposed by Mr. WALSH of meet and decide upon a reduction in wages the cut might be Massachusetts is as follows: 10 per cent or 15 per cent or 20 per cent. Obviously it would Insert at the proper place in the bill the following: not be fair that these employees should be subject not only .. Provided, That any law, rule, or statute that requires a reduc­ to that cut but also to the furlough provisions of the bill. tion of salary additional to the reduction herein provided shall be They would be doubly penalized were that done. I ask the inoperative during the fiscal year 1933." Senator from New Hampshire if he will not accept the The VICE PRESIDENT. The question is on the amend­ amendment? ment offered by the Senator from New Hampshire as The VICE PRESIDENT. The question is on the amend­ modified. ment proposed by the Senator from Maine to the amend­ Mr. BRATTON obtained the floor. ment offered by the Senator from New Hampshire. Mr. BORAH. Mr. President, may I ask if it is the purpose Mr. WATSON. Mr. President, I have in my hand a tele­ of those in charge of the bill to have a vote on this subject gram that I think should be read from the desk, and I ask to-night? The Senator from New Mexico is just about to unanimous consent to have it read. start a discussion of it. The VICE PRESIDENT. Is there objection? The Chair Mr. WATSON. Mr. President, I was wondering in that hears none, and the Secretary will read. connection if we could not have a recess and let the amend­ The legislative clerk read as follows: ments be printed which have been proposed. INDIANAPOLIS, IND., June 6, 1932. Mr. JONES. I was going to suggest that, although most Hon. JAMES E. WATSON, of the amendments have been accepted. • United States Senate: This organization, composed of 78,000 members, with sub­ Mr. MOSES. May I ask, if that is going to be done, that ordinate unions in 750 cities and towns in United States, strongly my amendment may be reprinted, with the amendments commends your position in opposition to direct salary cuts of which I have accepted printed in italics, so that the differ­ employees of Federal Government as against the furlough plan. ence between my original amendment and the amendment We sincerely hope proposal for 5-day week !or all per diem em­ ployees wm be adopted by Senate in lieu of wage reductions. as modified may be readily seen? Employers in private industry strongly inclined to follow lead of Mr. JONES. That is what I was going to suggest, so that Government. Wage cutting will not provide way out of present we may see just exactly what the proposal is. deplorable condition, but will accentuate rather than relieve crisis Mr. BORAH. And what the conferees will have to settle. confronting our country. Five-day week w1ll spread employment among larger number workers, thus providing relief for many now The VICE PRESIDENT. Is there objection? suffering from enforced idleness. By thus diverting laq;er por­ Mr. BRATTON. Mr. President, I suggest to the Senator tion aggregates pay roll of Nation's industries into channels in charge of the bill that the Senate take a recess now until which provide substantial necessities of life, purchasing power will be increased and business turned to upward trend. Indus­ to-morrow morning and resume the consideration of the tries operating six days by staggering employment upon 5-day pending question at that time. LXXV--761 ... 12086 CONGRE-SSIONAL RECORD-- SENATE JUNE 6 Mr. MOSES. In the meantime the Senator from . New Not only is this true but my Information 1s that the insurance :rv.texico holds the floor. commissioners of the various States appraised. the collateral of the insurance companies held in the various States as a! the date of Mr. BRATTON. I hope so. July last year. But for this action their reserves would not have The VICE PRESIDENT. Is there objection to the re­ been sufficient to enable them to continue in business in a number quest of the Senator from New Hampshire to print his of States. For the life of me I can not see how it 1s to the public interest amendment as modified in the form suggested by him? The or to the interest of landowners or to the interest of the insurance Chair hears Iione, and it is so ordered. companies to foreclose and further depress valueR and throw RECOGNITION OF RUSSIA families out of house and home, especially when th1s'1s being done in face of the fact that these insurance companies have enjoyed Mr. JONES. Mr. President-- the indirect and direct benefits of Federal and State aids. Mr. McKELLAR. Mr. President, wiil the Senator yield There are many business concerns which if valued on the basis of their dividend production for the calendar year would not be to me to put two letters in the RECORD? worth a single dollar. 1\u. JONES. I expect to make a motion in accordance I write this in belief that this subject is big enough to warrant with the unanimous-consent agreement, but I yield to the an investigation on the part of the Senate a.s to the conduct of Senator from Tennessee. these beneficiaries of public favor. If these insurance companies can buy large lands at values of Mr. McKELLAR. I have in my hand a letter from Mr. to-day and at the same time enjoy normal dividends on their C. G. Bond, of Jackson, Tenn., to which I invite the par­ railroad bonds, which dividends are made possible by Federal ticular attention of the Senator from Idaho. It is a splendid loans, then we had all better live off of Federal subsidy. I believe that a committee of the Senate sitting in the interim letter in reference to the recognition of Russia and gives after adjournment might look into these matters with great benefit reasons why there should be such recognition accorded. I to a majority of landowners and without injury to the companies ask unanimous consent that the letter may be printed in the or policyholders. · RECORD as a part of my remarks. Most respectfully yours, The VICE PRESIDENT. Without objection, the letter H. H. SHOULDERS, M. D. Will be printed in the RECORD. MESSAGE FROM THE HOUSE-ENROLLED BILLS SIGNED ·The letter referred to is as follows: A message from the House of Representatives by Mr. JACKSON, TENN., June 1, 1932. Chaffee, one of its clerks, announced that the Speaker had Hon. K. D. McKELLAR, affixed his signature to the following enrolled bills, and they Senator from Tennessee, Washington, D. 0. were signed by the Vice President: MY DEAR SENATOR: You perhaps may recall a conversation you had some time ago with some of us in our court house here when S. 6. An act for the relief of the Union Ferry Co., owners I asked why had not the United States resumed diplomatic and of the ferryboat Montauk; friendly relations with Russia. You replied that the State De­ S. 326. An act for the relief of Abram G. O'Bleness; partment gave as an excuse that Russia owed us and would not S. 2436. An act for the relief of Alfred G. Simmons, jr.; pay. We both remarked that that was a poor way to settle debts, by one party having nothing to do with the other, and and especially while other nations, notably England and France, were H. R. 10236. An act to provide revenue, equalize taxation, virtually repudiating their obligations to us. and for other purposes. I am not a diplomat or politician and not up on statecraft, but in view of the growing attitude of Japan, encouraged by Great HAROLD I. JUNE Britain and France, it seems to behoove us to, as soon as possible, The VICE PRESIDENT laid before the Senate the amend­ resume friendly relations with Russia. Russia has been tradi­ tionally friendly to the United States and if our attitude of un­ ment of the House of Representatives to the bill (S. 432) friendliness continues, then in case of war with Japan our Alaskan granting permission to Harold I. June to transfer to the possessions would be in very great danger. The attitude of Fleet Reserve of the United States NavY, which was, on page France and England reminds me of school-boy days when a num­ 2, line 3, after the word" years," to insert" and one day." ber of boys would egg on two other boys to fight, by putting chips on their shoulders and daring the other to knock them off. Eng­ Mr. BINGHAM. I move that the Senate concur in the land and France, in all of their transactions, seem to try to put the amendment of the House. United States forward. They flatter our diplomats and make them The motion was agreed to. believe we are the greatest and richest people in the world and should, therefore, take the lead while they sit back and make INTERNATIONAL BRIDGE, PORT HURON, MICH., TO SARNIA, ONTARIO us draw the chestnuts out of the fire for them. Mr. VANDENBERG. Mr. President-- I hope that somebody will take the initiative and compel our State Department to recognize Russia, at least for our own safety The VICE PRESIDENT. Does the Senator from New in the future. Mexico yield to the Senator from Michigan? I hope you have entirely recovered from your illness. With very Mr. BRATTON. I yield. best wishes, I am, Mr. VANDENBERG. A brief time ago the House and Sincerely yours, C. G. BoND. Senate both passed a bridge bill permitting the construction of an international bridge from Port Huron, Mich., to FORECLOSURE OF MORTGAGES BY INSURANCE COMPANIES Sarnia, Ontario. Since then it has become desirable that Mr. McKELLAR. I ask unanimous consent to have the approaches to this bridge-it being a bri~ owned, built, printed in the RECORD, as a part of my remarks, a letter and operated by an instrumentality of the State-should from Dr. H. H. Shoulders, of Nashville, Tenn., in reference become eligible within the Federal-aid road system. The to the foreclosure of mortgages by insurance companies. Bureau of Roads in the Department of Agriculture entirely There being no objection, the letter was ordered printed concurs in the suggestion. If the thing is to be completed in the RECORD, as follows: at the present session of Congress, and the assent of the NASHVILLE, TENN., June 3, 1932. House also is to be secured, I must ask the Senate for pres­ Senator K. D. McKELLAR, ent consideration of the measure. Washington, D. 0. DEAR SENATOR McKELLAR : I hesitate to encroach upon the time I am wondering if there would be any objection to the. of a man as busy as you. I do so because I believe an opportunity present consideration of Order of Business No. 742, Senate exists for real service for a large number of your constituents. bill 4667, which I am sure will involve ~o discussion what­ The thing that has h appened is this: Insurance companies, particularly the New York Life, are pur­ ever. suing a policy toward some of their debtors which, to my way of Mr. McKELLAR. Was there any objection in the com- thinking, is very destru ctive and entirely out of line with the mittee? generous attitude t aken by life-insurance commissioners and the Mr. VANDENBERG. None whatever. Federal Government toward the companies. As you probably know, land values have sunk so low that they The VICE PRESIDENT. The clerk will read the bill. ofttimes do not bring the amount of the mortgage held by these The bill