1941 CONGRESSIONAL RECORD-SENATE 51 rescinded; to the Committee on Ways and January 6, 1941, was dispensed with, and read, and, with the accompanying papers, Means. the Journal was approved. referred to the Committee on Commerce: 4. By Mr. FITZPATRICK: Petition of the Common Council of the city of Yonkers, MESSAGES FROM THE PRESIDENT To the Congress of the : Westchester County, N. Y:; registering its In compliance with the provisions of opposition to the enactment of any law by the Messages in writing from the Presi­ Congress of the United States which would dent of the United States were com­ section 22 (a) of the act approved June permit Federal taxation of municipal bonds municated to the Senate by Mr. Latta, 18, 1929, providing for the fifteenth and or other obligations of cities or the income one of his secretaries. subsequent decennial censuses and for received thereon · by the holders of such the apportionment of Representatives in bonds; to the Committee on Ways and Means. CALL OF THE ROLL Congress, as amended by the act of April 5. By Mr. MERRITT: Resolution of the Mr. HILL. I suggest the absence of a 25, 1940, I transmit herewith a state­ Queens County Board of the Ancient Order ment prepared by the Director of the of Hibernians in America, Inc., resolving that quorum. The VICE PRESIDENT. The clerk Census, Department of Commerce, giv­ this organization, consisting of faithful ing the whole number of persons in each American citizens of Irish birth or extraction, will call the roll. endorse the wise decision of President de The Chief Clerk called the roll, and State as ascertained under the Sixteenth Valera to preserve peace for men of good will the follo'wing Senators answered to their Decennial Census of Population, and the in Eire, and that this organization insists names: number of Representatives to which present and future aid to any warring power each State would be entitled under an in Europe be conditioned by the prohibition · Adams Gillette O'Mahoney Andrews Glass Overton apportionment of the existing number that no aid shall be giv.en to any: government . Austin · Green Radcliffe · of Representatives by the method known which may attempt in any way to violate the Ball Guffey Reed as the method of major fractions, which sovereignty so dearly won by Eire after 7 Bankhead Gurney Rzynolds was the method used in the last pre­ centuries of degraded oppression and heroic Barbour Harrison Russell sacrifices; to the Committee on Foreign Barkley Hatch Schwartz ceding apportionment, and also by the Affairs. · · Bilbo Hayden Sheppard · method known as the meth0d of equal Bone Herring Shipstead pr.oportions. 6. Also, resolution of the Medical Society Brewster Hill Smathers of the County of Queens, N.Y., resolving that Bridges Holman Smith The Director of the Census has in­ this society petitions those Government au-. Brooks Hughes Stewart cluded all Indians in the :tabulation of thorities under whose jurisdiction such mat­ Brown Johnson, Calif. Taft total population ·since the Supreme Court ters are . considered to rule that physicians Bulow Johnson, Colo. Thomas, Idaho - Bunker Kilgore · Thomas, Utah · · has held that. all Indians are now sub­ who are drafted tie assigned only to posi­ Burton La Follette Tobey . ject.to Federal taxation (Superintendent tions involving medical activities; ·to the Byrd Langer Truman v. Commissioner, 295 U. S. 418). The Committee· on Military Affairs. Byrnes Lee Tunnell · effect of this upon apportionment of 7. By the SPEAKER: Petition of the port of Capper Lodge Tydings · Beaumont, .traffic department, · Beaumont; Caraway Lucas Vandenberg ~epresentatives, 'however, appears to be . Tex., petitioning consideration of their reso­ Chandler McCarran Van Nuys for determination by the Congress, as Chavez McFarland Wagner concluded in the , Attorney General's lution with reference . to . the St. Lawrence Clark, Mo . McKellar Wallgren Waterway; to the Committee on Foreign Connally Maloney Wheeler opinion of November 28, 1940, to the Affairs. Danaher Mead White Secretary of Commerce, a copy of which Davis Miller Wiley is annexed hereto. Downey Murdock Willis George Murray -FRANKLIN D. ROOSEVELT. SENATE Gerry Neely THE WHITE HOUSE, January 8, 1941~ Mr. HILL. I announce that the Sen­ AWARDS OF QUANTITY CONTRACTS FOR THE WEDNESDAY, JANUARY 8, 1941 ator from North Carolina [Mr. BAILEY]; ARMY the Senator from Idaho [Mr. CLARK], the The .Chaplain, Rev. Z~Barney T. Phil­ Senator from Louisiana [Mr. ELLENDER], The VICE PRESIDENT laid before the lips, D. D., offered the following prayer: the Senator from Florida [Mr. PEPPER], Senate two letters from the Secretary of 0 Thou from whom all streams of the Senator from Oklahoma [Mr. .War, reporting; pursuant to law, relative blessedness proceed, who art the fount of THOMAS], and the Senator from Massa­ · to divisions of awards of certain quan­ life and all-abounding grace: Help us to chusetts [Mr. WALSH] are necessarily ab­ tity contracts for aircraft, aircraft parts, live our lives with high endeavor, serene sent from the Senate. and accessories therefor entered into of spirit, with strength and courage for Mr. AUSTIN. I announce that Ghe with more than one bidder under au­ the daily tasks, surrounded as we are with Senator from Oregon [Mr. McNARY] is thority of ·law, which were referred to beauty lavishly outpoured by Thee; re­ absent because of illness. the Committee on Military Affairs. joicing in the laughter of our unclouded The Senator from Nebraska [Mr. BuT­ . ORDINANCES OF PUBLIC SERVICE COMMISSION years, and calmed by every sad and LER] is absent due to the serious illness OF PUERTO RICO lovely thing brought forth from the of h is wife. The VICE PRESIDENT laid before the sacred treasure house of half-remembered The Senator from North Dakota [Mr. Senate a letter from the Acting Secretary days. Do Thou take a way from us the NYE] is necessarily absent. of the Interior, transmitting, pursuant sins of malice and disdain, scorn of the The VICE PRESIDENT. Eighty-five to law, several ordinances enacted by the lowly, envy of the great, and discontent Senators have answered to their names. Public Service Commission of Puerto that casts its shadow on the brightness A quorum is present. Rico, which, with the accompanying pa­ of our day. THE BUDGET (H. DOC. NO. 28) pers, was referred to the Committee on Lead us, 0 Father, in our world of Territories and Insular Affairs. wasted good, y the godward mind and The VICE PRESIDENT laid before the heart and will, that we may weave again Senate a message from the President of REPORT OF UNITED STATES TARIFF COMMIS­ and redesign, according to Thy plan, this the United States, transmitting the SION torn and tangled web of human destiny. Budget of the United States Government The VICE PRESIDENT laid before the When day is done, grant unto us the for the fiscal year ending June 30, 1942, Senate a letter from the Chairman of evening's b2nison. We ask it in the which was read, referred to the Commit­ the United States Tariff Commission, name of Jesu;:, Christ, our Lord and tee on Appropriations, and ordered to be transmitting, pursuant to law, the twen­ Saviour. Amen. printed. ty-fourth annual report of the Commis­ ATTENDANCE OF A SENATOR

VETO OF ITEMS IN GENERAL APPROPRIATION the attitude or policy which the people or nection with any subject which may be be­ fore said committee, the expenses thereof to BILLS the Government ·or the United States should adopt toward the wars now being fought or be paid out of the contingent fund of the Mr. VANDENBERG. Mr. President, I the belligerents engaged in such wars. The Senate; and that the committee, or any have just introduced Senate Joint Reso­ committee shall conduct such study and in­ subcommittee thereof, may sit during szs• lution 12, proposing an amendment to vestigation with a view to obtaining full and sions or recesses of the Senate. the Constitution permitting the item complete information concerning such com­ mittees and organizations with respect · to HEARINGS BEFORE COMMITTEE ON FINANCE veto. In connection with its presenta­ their (1) organizers and origin, (2) sources tion and reference to the Judiciary Com­ Mr. HARRISON submitted the follow­ of funds, (3) foreign connections, (4) mo­ ing resolution (S. Res. 24), which was mittee, I suggest that that committee tives, purposes, and objectives, and (5) ac­ should explore the question of whether tivities. The committee shall report to the referred to the Committee to Audit and the item veto requires a constitutional Senate, as soon as practicable, the results o:f Control the Contingent Expenses of the amendment, or whether it can be its study and investigation, together with its Senate: achieved by statute. recommendations, if any, for legislation Resolved, That the Committee on Finance, deemed by it to be necessary. or any subcommittee thereof, hereby is au­ FOR DESECRATION OF THE thorized to sit during the sessions or receEses UNITED STATES FLAG SPECIAL COMMITTEE ON FISCAL AFFAIRS OF of the Seventy-seventh Congress at such THE GOVERNMENT Mr. ANDREWS. Mr. President, I am times and places at it may deem advisable; Mr. TYDINGS submitted the following to make investigatlons into internal revenue, introducing, for appropriate reference, customs, and other matters within its juris­ a bill to prevent desecration of the flag resolution (S. Res. 22), which was re­ ferred to the Committee on Appropria­ diction, and to compile and prepare statistics of the United States of America. and document s relating thereto as directed It is not generally known that a Fed­ tions: from time to time by the Senate and as may eral law on this subject does not exist · Resolved, That there is hereby established be necessary, and to report from time to time as to offenses committed outside the a special committee, to consist of three Mem­ to the Senate the result thereof; to send bers of the Senate to be appointed by the for persons, books. and papers; to adminis­ District of Columbia. VV.hile section 5 President of the Senate, which shall make a ter oaths; and to employ such expert, steno­ of the act of February 20, 1905, prohibits full and complete investigation with respect graphic, clerical, and other assistance as may . the registration of any trade-mark which to (1) the amount, source, and type of reve­ be necessary; and all the expenses of such comprises the flag or coat of arms or nue raised annually by the Federal Govern­ committee shall be paid from the contingent other insignia of the United States or ment during the past 10 years; (2) the rela­ fund of the Senate. any simulation thereof, the desecration tionship between the appropriations made for or improper use of the flag is not now the variou::; branches of the Government and HEARINGS BEFORE COMMITTEE ON FOREIGN the revenues raised to support such appro­ RELATIONS a crime under any law of the United priations; (3) the amounts of Federal bor­ States, with the exception of the Dis­ rowings and the sources from which they Mr. GEORGE submitted the following trict of Columbia Act of February 8, have been obtained during the past 10 years; resolution (S. Res. 25), which was re­ 1917. (4) the amount and character of the annual ferred to the Committee to Audit and A majority of the States, however, deficits of the Federal Government during the ·Control the Contingent Expenses of the past 10 years; (5) what additional sources of Senate: have passed acts designed to punish revenue are available without serious injury those who cast contempt, scorn, or dis­ to the economic life of the Nation; (6) such Resolved, That the Committee on Foreign repute upon the flag, and the constitu­ other matters relating to the fiscal affairs of Relations or any subcommittee thereof be, tionality of such State legislation has the Government as are necessary to a con­ and hereby is, authorized during the Sev­ been upheld by the Supreme Court. sideration of the problem of balancing in­ enty-seventh Congress to send for persons, come and expenditures; and {7) the formu­ books, and papers, to administer oaths, and There have been a number of arrests, to employ a stenographer, at a cost not ex­ trials, and convictions under such State lation of a plan or plans for an automatically balanced Budget in times of peace. The ceeding 25 cents per hundred words, to re­ laws, the most recent being that of Helga committee shall report to the Senate as soon port such hearings as may be had in con­ Schleuter, of Southard, N. J., who was as practicable the results of its investigation, nection with any subject which may be charged with the "mutilation and defile­ together with its recommendations, if any, for before said committee, the expenses thereof ment of the American flag" during the necessary legislation. to be paid out of the contingent fund of the New Jersey State Volunteer Firemen's For the purposes of this resolution the Senate; and that the c;:ommittee, or any sub­ committee, or any duly authorized subcom­ committee thereof, may sit during the ses­ parade in Lakewood, N. J ., on June 29, sions or recesses of the Senate. last. She was held for action of the mittees thereof, is authorized to hold such hearings, to sit and act at such times and grand jury, indicted, tried, convicted, places during the sessions, recesses, and ad­ HEARINGS BEFORE COMMITTEE ON MILITARY and sentenced to a term of 1 to 2 years. journed periods of the Senate in the Seventy­ AFFAIRS The woman procured a certificate of seventh Congress, to employ such experts and Mr. SHEPPARD submitted the follow­ reasonable doubt, and her case is now such clerical, stenographic, and other assist­ ing resolution (S. Res. 26), which was re­ pending on appeal. ants, to require by subpoena or otherwise the ferred to the Committee to Audit and Mrs. Thomas Claire Maguire, State attendance of such witnesses and the produc­ tion of such correspondence, books, papers, Control the Contingent Expenses of the regent of the Florida Daughters of the and documents, to administer such oaths, to Senate: American Revolution, has also brought take such testimony, and to make such ex­ Resolved, That the Committee on Military to my attention the fact that there is penditures, as it deems advisable. The cost Affairs, or any subcommittee thereof, is au­ no Federal legislation of this character, of stenographic services to report such hear­ thorized, during the Seventy-seventh Con­ and this bill was drafted in line with ings shall not be in excess o:f 25 cents per gress, to send for persons, books, and papers, the research which Mrs. Maguire and hundred words. The expenses of the com­ to administer oaths, and to employ a ste­ other officials of this patriotic organiza­ mittee, which shall not exceed $15,000, shall nographer at a cost not exceeding 25 cents tion formulated. be paid from the contingent fund of the a hundred words to report such hearings as Senate upcn vouchers approved by the chair­ may be had on any subject before said com­ The bill

and papers, to administer oaths, and to em­ EMILY R. LIEUALLEN The address is ·as follows: ploy a stenographer, at a cost not exceed­ i~g 25 cents per 100 words, to report such Mr. THOMAS of Idaho submitted the AM:cRICA WILL SUPPORT BRITAIN, GREECE, AND hearings as may be had on any subject be­ following resolution (S. Res. 32), which CHINA AND EXERT UTMOST EFFORT TO BECOME fore said committee, the expense thereof to was referred to the Committee to Audit INVULNERABLE be paid out of the contingent fund of the and Control the Contingent. Expenses of Freedom .is under attack. Senate; and that the committee, or any the Senate: Throughout the ages, since man was or­ subcommittee thereof, may sit during any dered to eat his bread in the sweat of his session or recess of the Senate. Resolved, That the Secretary of the Senate brow, freedom has been under attack. hereby is authorized and directed to pay But freedom has always, throughout man's TEMPORARY ASSISTANT CLERK, COMMITTEE ON from the contingent fund of the Senate to struggle upward, been regarded as worth PRIVILEGES AND ELECTIONS Emily R. Lieuallen, widow of W. Grant fighting for. Wherever we find freedom, man Lieuallen, late first assistant librarian of the has fought to attain it and to maintain it. Mr. CONNALLY submitted the follow­ Senate, a sum equal to 1 year's compensation Today the British, the Greeks, the Chinese ing resolution

As we envisage the natiomi.l workshop and mediate surroundings to be willing and able INVOLVEMENT OF UNITED STATES IN WAR­ endeavor to convert the boundless resources to help save this country from this great EDITORIAL FROM COLORADO SPRINGS GA­ of this country into an ever-increasing menace. ZETTE stream of military supplies with which to I caution you against any Influence which overcome the aggressors, we need to remove would tend to weaken morale in the stead­ [Mr. WHEELER asked and obtained leave all obstacles to production. Speed is essen­ fast purpose to help Britain to the utmost, to have printed in the RECORD an editorial tial; extraordinary· effort of our nationals is and strengthen our own defense. from .the Colorado Springs Gazette of Decem­ absolutely necessary. Finally, the program already begun for ber 31, 1940, entitled "To Arms! To Arms!" It is oversimpliC.ed to say that we must training a substantial class each year for Which appears in the Appendix.] set up a 6-day week. The problem involves military service requires the cooperation of devoted interest, patriotic fervor, the spirit States, municipalities, and inhabitants. ATTITUDE OF NATIONAL ASSOCIATION OF of sacrifice, and endless work. There is much for all of us to do. Outside MANUFACTURERS TOWARD DEFENSE POLI­ All citizens should willingly curtail the use of the technical education involved, we have CI.ES of · luxuries and semiluxuries. the great problems of dislocation of industry [Mr. HILL asked and obtained leave to have All t axpayers should be willing to dis­ and employment, of our general educational printed in the RECORD an editorial from the charge the extra burden of providing the system, and of the moral habits of citizens Montgomery (Ala.) Advertiser of December means with which to pay labor such wages and trainees where great numbers of men are 27, 1940, entitled "Jubilant Stupidity," which that the high standard of diet, clothing, and suddenly brought together to live in a re­ appears in the Appendix.] housing may be maintained. Government's stricted area. participation requires modification of exist­ The generosity of the people of this coun­ TRIBUTE TO SERVICE IN THE MERCHANT ing clogs in the operation of private industry try is challenged by the need which the young MARINE . and amendment of existing contracts, so that men will have for wholesome•social relations [Mr. LODGE asked and obtained leave to both labor and capital may have the reason­ and beneficial activities for their spare have printed in the RECORD a tribute by for­ able compensation which is absolutely neces­ moments. mer Secretary of War Newton D. Baker to sary to a vigorous and effective economy. We are determined to make our defense those serving in the merchant marine, which In the great effort which is before us Amer­ invulnerable. Perfection alone is invulner­ appears in the Appendix.] ica may-and I believe will-rise to such a able. This is a high objective. Nevertheless, level of civilization as has not been attain­ we must strive for it. This calls for united, PUBLIC OWNERSHIP OF UTILITIES · able without the stimulus of such a cause· unselfish, and vigorous effort of the govern­ as that in which we are united. ment and its nations. It means disregard of Mr. BRIDGES. Mr. President, during Second. Our great regard for civil liberties causes. of petty dissensions, and the subordi­ the past few months, in the Senate and exposes our country to the inroads of the nation of perSQnal ambition, comfort, and .over the radio, and in the recent cam­ so-called "fifth . column.' ~ Undoubtedly the pr,oft.t; it means the exercise of the best that paign a good many statements were -FederaLBureau of InveJ>tigation and the Dies _is in each one of us to qualify our Govern­ . ment, our great national workshop, our finan­ ·made about public ownership of utilities committee are doing effective service gain­ and the activities of the Public Owner­ ing information calculated to be of. use in cial system, an~ above all, our spiritual for­ preparing our defense against this. well­ tress, to resist the great peril to everything_ ship League. I made various comments known weapon of the totalitarians. that we cherish. We sh_all triumph. _upon this subject, and from time to time_ We have repeatedly seen statements pur­ Thus, will our aid to Britain, Greece, and they have been questioned, and from porting to come from Hitler that the United China, be effectual without a single American · time to time I have been asked for fur­ States was on the brink of a revolution; that soldier engaging in combat. Thus, will we ther explanation of them. In order to be able to lay the foundation for a world not he was organizing his storm troops here to expedite the explanation and not take go into action at the proper moment. ruled by force. Thus, there will survive that world of the time of the Senate, I ask that an Congress has started upon the delicate task spiritual values which transcends any totali- exhibit which I have prepared be in­ of preserving civil liberties and at the same tarian world; - · cluded in the RECORD as a part of my time providing against the willful destruc­ remarks. tion of war material, the sabotaging of our AID TO DEMOCRACIES-ADDRESS BY WILLIAM factories, and the conversion of our na­ C. BULLITT The VICE PRESIDENT. . Is there ob­ tionals to revolutionary theories. jection? [Mr. BARKLEY asked and obtained leave Approximately a month ago the Sumners There being no objection, the exhibit bill, putting into effect in peacetime the to have printed in the RECORD an address de­ livered by Hon. William C. Bullitt on January was ordered to be printed in the RECORD1 Willful Destruction of war Materials Act of 7, 1940, at Chapel Hill, N. C., urging aid to as follows: 1918, became a law. democracies, which appears in the Appendix.] We have an espionage act, !~tended to pro­ EXHIIiiT I tect power plants and lines, dams and res­ STATEMENT BY MEMBERS OF OFFICE OF PRO- THE PUBLIC OWNERSHIP RACKET--8ECRET ervoirs, gas works and pipes, and communica­ DUCTION MANAGEMENT AGENT FOR ENGINEERING FIRMS AND tion facilities serving the armed forces or [Mr. HERRING asked and obtained leave EQUIPMENT MANUFACTURERS-AN EXPLANA­ defense plants. We have recentlY' COI;llpleted TORY COMPILATION OF DATA the registration of aliens, which has to have printed in the RECORD a statement by the members of the Office of Production Man­ The public-ownership movement has long strengthened the country's defenses against been sustained by its moral appeal. Its the Trojan horse. Sedition and the preach­ agement, published in the New York Times of today, which appears in the Appendix.] advocates have dressed themselves in the ing of the overthrow of the Government by cloak of righteousness, painting their pur­ force are punishable. AGREEMENTS BETWEEN EMPLOYERS AND EM- pose as that which will fulfill one of the The Department of Justice has asked for PLOYEEs-oPINION OF SUPREME COURT ideals of our ethical code-elimination of legislat ion to aid it in the discovery of evi­ [Mr. WAGNER asked and obtained leave to greed from an important segment of our dence an d the forestalling of sabotage. Such economic life. legislation would include the right by the have printed in the RECORD the opinion of the F. B. I., under direction of the Attorney Gen­ United States Supreme Court in Heinz against This has been accomplished in part by the eral, to tap wires in order to prevent and National Labor Relations Board, and a letter association of greed with the so-called profit ascertain attempts or plans to interfere with by Senator WAGNER to the New York Times on motive. This conne~tion of the two ideas has confused and misled many earnest and the n ational defense by sabot ~ e, treason, the subject of written agreements under the seditious conspiracy, espionage, and other National Labor Relations Act, which appear sincere leaders of public opinion. violations of law affecting our security. in the Appendix.] The Russian experiment has demonstrated, of course, that elimination of the profit Such legislat ion will be necessary in view of RESIGNATION OF WILLIAM ALLEN WHITE AS the Communications Act of 1934. motive from a nation's economy only accen­ CHAIRMAN OF THE COMMITTEE TO DEFEND tuates greed in other fields of human en­ There is anot her bill, aiming at registra­ AMERICA BY AIDING THE ALLIES tion of firearms which died in a commit tee of deavor, particularly manifest in cruel and the Senate with the end of the Seventy-sixth [Mr. CLARK of Missouri asked and ob­ bloody greed for personal political power. Congress. tained leave to have printed in the RECORD In America the sanctimonious atmosphere An act was recently passed permitting the an article from the Chicago Daily Tribune which has surrounded the public ownership several States to establish, by legislative ac­ quoting a letter from William Allen White to (or Marxian) movement has served the fur­ tion, home guards. The organizations created John Temple Graves 2d, which appears in ther purpose of shielding it from ordinary under this act should be able to give a large the Appendix.] rough-and-tumble political attack. By iden­ amount of organized protection to our in­ tifying their opponents with the forces of stitutions. EDITORIAL TRIBUTES TO THE LATE PRESIDENT greed and/ or evil, public-ownership advo­ I am confident that the Seventy-seventh OF FINLAND cates have cleverly soug:ht to cloak them­ Congress will give "fifth-column" preven­ [Mr. BROWN asked and obtained leave to selves in the robes of righteousness as a tion careful consideration and action. have printed in the RECORD several editorials sanctuary against attack. But this is not enough. We must have a paying tribute to the memory of the late In actual fact, the public-ownership move­ vigilant public. Every citizen is interested Kyosti Kallio, President of Finland, which ment would have died aborning but for th'e enough, and knows enough about his im- appears in the Appendix.] very profit motive it is proposed to eliminate. 58 CONGRESSIONAL RECORD-SENATE JANUARY 8 It is not an accident that public-ownership objectives began to appear-municipal owner­ sale of services and equipment to munici­ agitation has been confined chiefly to electric shiP. of public utilities. pally owned plants, the Public Ownership and water distribution. In those fields there The Public Ownership League came to hand League has been a mere racket. It has been exist powerful interests which can and have as an ideal sales front for those professional, the covert sales organization and propaganda been richly rewarded for their financial sup­ financial, and industrial interests which machine for interests financially profiting by port of the movement. found considerable profit in the selling of its activities. The imposing list of public Nor is it by accident that the titular lead­ generating and distributing equipment, fi· figures listed as officers of the organization ership of the movement rests with a saintly nancing and engineering for municipal elec­ were unwittingly lending their names to this looking, white-haired former minister of the trical plants. scheme. gospel. His evangelical fervor, his attacks Improvement of the Diesel engine to an How wholly dominated by these interests on sin-in the form of private enterprise­ efficiency point which sometimes made it a was Carl Thompson and his sales and service endow him with just the proper atmospheric fair competitor in generating economy of promotion organization, the Public Owner_­ coloration to lead what is supposed to be, some central station systems came in the mid­ ship League, will be found in a pair of inci­ among other things, a moral cause. twenties. A new and profitable market for dents that are a matter of public record. This man, Cad Dean Thompson, according such engines and -collateral equipment was First example: Fairbanks, Morse had en­ to Who's Who, terminated his first pastorate to be had in muntcipal plants. Private com­ countered sales resistance in Oklahoma be­ after 3 years to enter politics as a Socialist panies were not interested in Diesels because, cause of a constitutional provision prohibit­ in Wisconsin in 1901. His active connection with few exceptions, system-wide distribution ing issuance of municipal bonds without a With that party continued through the 1916 of steam-generated power was far cheaper and referendum by the voters of the community campaign, when he . was Socialist national more dependable than small, isolated Diesel involved. This provision did not close the campaign manager. At the time he founded engines. doors to municipal ownership but only re­ the Public Ownership League of America in Advertisements for Diesel engines and like quired that the- question be put to public 1914 Thompson was director of publicity of equipment, from municipal bond hous~. en­ vote. In another instance where such a pro­ the Socialist Party. He continues to be a gineering firms specializing in municipal vision did not apply, at Two Rivers, Wis .• professing Socialist, but apparently has long electrical distributions, began to flood the it has been shown in a city council investiga­ since ceased active participation in party pages of the Public Ownership magazine. tion made public and unanimously accepted affairs. The financial influence of this new source of by the council on March 26, 1935, a rep­ By the time of -the organization of the revenue soon showed in the policies of the resentative of Fairbanks, Morse had offered Public Ownership League in 1914 socialism, Public Ownership League. $1,000 per head for councilmanic votes in as an economic theory and as a basis for Without at first openly abandoning the favor of a Diesel. plant for that city. In political action, had become generally dis­ broad objectives of public ownership of all spite of prayerful urgings by Dr. Thompson credited in the public mind. Despite a few natural resources and other Marxian steps, and offers of bribes by the company, the local exceptions, the party's efforts in the the Public Ownership magazine and the company failed to put over its deal. national campaigns had become the butt of league gradually became the champion of Still the company apparently preferred political jokers. municipal electric utilities almost to the ex­ dealing directly with a city council than to The strategy then adopted ty many Social­ clusion of other Marxian propaganda. The put the question to a referendum test as ist leaders was .to continue advocacy of magazine soon became practically an under­ required in Oklahoma. So it secretly en­ Marxian objectives under color of organiza­ cover house organ for the Diesel-engine gaged an Oklahoma City attorney and po­ tion names more acceptable to the public. manufacturers and engineers specializing in litical figure, the late W. C. Bryant, to Thus the "transmission 'belt" technique later municipal ownership. The league in reality agitate for a constitutional amendment and adapted by the Communists, as recently was the active sales organization preparing to obtain sufficient signatures for a State exposed by the Dies committee, was first the field for these interests. In scores of referendum known as State Quest ion No. devised and used by less violent advocates American cities the league "fronted" for the 205. Bryant also was called upon to defend of communism-the Socialists. engineers and manufacturers. the legality of his petitions and retained The first such Socialist "transmission belt" Typical is a recent article appearing in one Herschel V. Lewis to appear on his be­ organization was Thompson's Public Owner­ the Public Ownership magazine, by Carl half. The financial backing of the Fair­ ship League. Others followed. For ex­ Thompson, on How to Start, Conduct, and banks, Morse firm was not then disclosed­ ample, the Intercollegiate Socialist Society Win Municipal Ownership Campaigns. Em­ this was in the spring of 1935. But Bryant took on . the more palatable title of League bedded in the text is this advertisement for died leaving Lewis' fee unpaid. So Lewis for Industrial Democracy in 1921-but re­ Burns & McDonnell: sued, not Bryant's estate but the Fairbanks, tained identical personnel. "Have engineers make a preliminary sur­ Morse Co. To prove that Fairbanks, Morse The Public Ownership League was founded vey of your city to determine, roughly at was the real &ponsor of the petition and that for the purpose of bringing about public­ least, how much the private company's prop­ Bryant had only acted for it, Lewis produced national or local-ownership and production erty is worth if purchased by the city; what three letters from responsible officers of of all natural resources including minerals, it would cost to build new and what savings Fairbanks, Morse to Bryant which not only forests, lands, and water power; and in ad­ and advantages could be realized. enclosed checks for Bryant's services but dition the public ownership and operation of "These are vita.I matters. It is especially whicl). also gave campaign directions and in­ railroads, electric, water, telephone, and other important that you get engineers that are structions. These letters, produced in Octo­ utilities. In short, the objectives of the not only experienced and capable but loyal ber 1938, proved a political bombshell and Public Ownership League were identical with to the cause of public ownership and, above destroyed whatever chance the referendum those of the Socialist Party. In fact it dif­ all, men who are not in the pay or under may have had. The company maintained a fered with the Communist Party only as to the influence of private power companies. majestic silence about it all. the methods to be used in achieving these The .league has such engineers affiliated with The letters also disclosed the closeness of ends, the latter advocating violent over­ its organization and upon inquiry can put the alliance between the machinery company throw of the existing regime as was done in you in touch with them." and Carl Thompson as well as suggesting the Russia. The function of the league was, and R. E. McDonnell, senior partner of the firm alliance between the firm and the engineering is, educational, i. e., the expert use of propa­ of Burns & McDonnell, the leading tlrm of company of Burns & McDonnell. ganda to injJuence public opinion. municipal ownership engineers for many One of the letters to Bryant signed by F. C. But even organizations dedicated to what years wa&-and. still is-not only chairman Dierks, secretary of the company, dated April its supporters assert. to be the cause of of the finance committee of the league but is 26, 1935, contains the following paragraph: idealism cannot live on love alone. In its also an associate editor of the magazine-­ "I might mention that while at Washington early days the league eked out a modest as is also his wife. For many years the firm 1n connection with other business I had an existence through the support of a few has been a regular advertising supporter of opportunity of discussing this matter with wealthy "parlor pink.. supporters supple­ the league. . Mr. Carl D. Thompson, and he has made a mented by Thompson's paid lectures-usu­ Chief Diesel manufacturing company giv­ special note to invoke all possible assistance ally under the auspices of the Intercollegiate ing financial support to the league by means in support of the constitutional amendment Socialist Society or its titular successor, the of advertising has been the firm of Fair­ in Oklahoma. I also spoke to him regar~ing L. I. D. ' The former source largely dried up banks, Morse. For many years this firm car­ the probability of asking for his services to shortly after the World War when the shock­ ried a.n annual contract for a full-page cover several public talks over the radio when ing results of the ruthless Russian experi­ advertisement on the back cover. It is in­ the matter has actually been submitted to ment in Marxism cooled the ardor of many teresting that thi& form of public support an election. Dr. Thompson was perfectly earnest early-day believers in socialism. was discontinued late last spring after there agreeable to this suggestion, and personally That democracy cannot exist under the had been threateneq a congressional 1nvesti­ the writer feels that this would be a splendid planned totalitarian type state, which Karl g_ation of the league and the financing of idea, with the understanding, however, that Marx blue-printed, dawned on many who had Carl D. Thompson Whether the league re­ both of us would review in advance his pro­ formerly felt that socialism was the hope ceives direct contributions from this source posed address." of humanity. 1s not known. Note that before the estimable Thompson But, as enthusiasm waned for the broad For years, &ince the league came under the is permitted to go on the air in a political objectives of the Public Ownership League, a financial dominance of commercial and pro­ address in favor of a secretly financed refer­ new source of support for one of its several tessional groups financially interested in the endum election, he must submit his speech to 1941 CONGRESSIONAL RECORD-SENATE 59 an officer of a company which is. the hidden ances of the public-ownership advocates by Ohio. There is no question but that his elec­ "sugar daddy" of the referendum movement reading a bill of particulars written by R. H. tion will be of considerable benefit to us. and his State political agent, "for review in McDonnell, of the Burns & McDonnell firm. I had hoped to discuss this matter with you advance of his proposed address." That the Senator, however, was quite inno­ personally and It might be well for you to Could any Power Trust charge against cent that he was pulling the chestnuts of a get Bartl~tt's opinion before making a defi­ Thompson be as revealing of the smug hypoc­ fee-foiled engineer out of the fire is demon­ nite decision. Please write me your reac­ risy of this ancient agitator than this matter­ strated by what followed. When the m.atter tion to this and what amount you believe of-fact discussion of how and where to make came up in the Senate, Senator King objected we would be justified in distributing. use of his services by an officer of a Diesel to the investigation because it was one-sided. BURNS & McDoNNELL, firm? The Senator from Utah agreed to passage Engineers. In the same series of letters L. H. Carr, provided the resolution be amended so as to H. J. RossoN. manager of this firm's Kansas City office tells authorize a double-barreled investigation, in­ The letter is self-explanatory. Its authen­ Mr. Bryant under date of July 9, 1935, that: cluding such organizations as the Public ticity was never denied. The plain inference "Our Mr. Guernsey called Burns & McDon­ Ownership League and its financial backing, · to be had from it is that the taxpayers of nell today. Mr. R. M. McDonnell, Sr. (sic.), or such firms as Fairbanks, Morse and Burns the city of Akron were overcharged in order is still out of the city and his son will not & McDonnell. Senator NoRRIS, not realizing to take care of the politicians whose influ­ take the initiative in making a contribution." that this was the last thing Thompson or ence made the $15,500 engineering fee pos­ At least they were not strangers. Of that McDonnell wanted, readily agreed to the King sible. tie-up there is more to be said in its proper amendments and the resolution was passed by Had this fact been aired in the national place. the Senate. Thereupon Thompson and Mc­ publicity of a Federal investigation, wherever . Second example: If Dr. Thompson was a Donnell promptly lost interest in the measure, the firm were employed in the future, the part-time tool of the machinery crowd, he was, and it died in committee in the House. question would arise in the minds of the and to this day•is, the-full-time stooge of the . Thompson's bland boast .of lobbying for citizens as to who had been bought and how engineering firm of ·Burns & McDonnell, of McDonnell, his finance chairman, in Wash­ much they had gotten and to what extent Kansas City. McDonnell, in his capacity as. ington leaves unnecessary further proof of the fee had been padded. Even the most chairman of the finance committee of the his fidelity to his hidden meal ticket. sanguine believers in municipal ownership Public Ownership League, has stated that 92 might question the estimates of an engi- . p-ercent of the business of his firm originated In fact, these two instances cited above neering firm whose ethics are k-nown to be through the activity of that organization. A clearly demonstrate that Thompson is not the no higher than that of an ambulance-chas- · letter of inquiry t_o the Public Ownership idealistic evangel against greed in the form ing lawyer and on whose own estimates of League of America· by a city councilman as to · of the profit motive, but, to use the parlance feasibility depend future fees and business. the possibilities of .a municipal. plant -in his of "confidence" men, .merely the "" for 2. The Ainsworth, Nebr., case: This is a · city results not only in an encouraging letter apparently respectable engineering and rna-. case where the city of · Ainsworth was en- · from the Public Ownership _League but also chinery firr.:s, which certainly operate for the joined .from purchasing a Diesel engine after a persuasive sales letter from BuJ,"ns & Mc­ profit motive. a preliminary survey by Burns & McDonnell, . Donnell soliciting business. Thousands of But why did the pressure suddenly slacken engineers, whose contract called for a $5,000 pamphlets advertising the firm of Burns & for passage of the resolution to investigate · fee conditioned upon the purchase of an McDonnell, written by-McDonnell or members · municipal-ownership elections after the . engine. of his staff, have been distributed by and · measure had been broadened to include the Here the court held "for some reason the under· the imprimatur of the Public Owner­ Public Ownership League? What had it and engineer approved not only a bid on the ship League of America. its backers to fear? original specifications that the city council Thompson, by his own naive admission, has A little research discloses that such an in­ refused to accept, because it did not con­ lobbied in the Halls of Congress for Mc­ vestigation, unless carefully conducted as a form to the specifications." The court stated, Donnell. whitewash similar to Biddle's T.V. A. investi­ in part: McDonnell almost built a plant at a fat fee gation, would have been dangerous to the "That the law, under certain conditions, in a Missouri town about 5 years ago, but reputations of certain persons financially in­ permits the city to employ and pay a special when the matter was put to a vote the ques­ terested in the Public Ownership League's engineer, there can be no doubt. When em-· tion was lost. McDonnell was furious· at the activities. played, he pecomes a representative of the interference with h is plans by the campaign For example: city, and his contract should be such as would against the proposal conducted by a Mil- . 1. The Akron case: During a municipal leave him ~ntirely free to act at all times fair­ waukee advertising agency openly employed election campaign in Akron a photostatic ly and for the best interests of the city. bY the local private electric company. He copy of the following letter was reproduced "The engineer·~ contract provides for the sent Thompson to Washingt on to lobby for in the Akron Beacon-Journal of October 23, ~ayment only if the city contracts. No con­ an investigation of the concern. The story is 1935: tract no pay. A conC.:itional contract, and told in the March 1937 issue of the Public JuNE 28, 1934. one that requires a bidder to advance to the Ownership League m agazine, as follows : R. E. McDoNNELL, city to enable the city to pay a $5,000 fee to "At the urgent request of many different Kansas City, Mo.: . an engineer, might be, undc::.r some condi­ public-ownership leaders in different parts of As you know, Dr. Hayes is a candidate for tions, an inducement to approve or advise the the country, and especially of R. E. McDon­ Congress from the Fourteenth District. In approval of a bid or contract, where to reject nell, of Kansas City, Mo., Secretary Thompson my early negotiations with the city of Akron it might be to receive nothing for work done. took this matt er up with Senator LA FoLLETTE, I found it would be necessary to get the For some reason the engineer approved, not Congressman RANKIN, and others, and m ade active support of Hayes and his campaign only a bid that failed materially to comply a careful investigation to see if some existing manager, R. C. Witwer. with the amended specifications, but also commission or committee of Congress could Had it not been for these two parties I do approved a bid on the original specifications undertake an investigation of this and simi­ not think we would have been able to secure that the city council refused to accept, be­ lar organizations. It was finally agreed that the engagement. At that time I told Hayes cause it did not conform to the specifications. under the acts governing this matter no ex­ we would contribute to his campaign fund "To say that certain specific requirements isting committee or commission could under in the event he made the race for Congress. in the specifications were omitted in the bid present provisions undertake the investiga­ No amount was mentioned and we are not because they WE:'re unnecessary or not essen­ tion. And that, therefore, a new act of Con­ definitely committed to any figure. However, tial, the engineer and the city council having gress should be introduced instructing the in presenting our proposal I had this in mind said they were, will not answer and leaves the Federal Trade Commission to proceed with . when I made the total amount $15,500 instead thinking mind in doubt as to what brought it the investigation and making the necessary of $15,000. · all <.bout. provision for the requisite funds. Both Hayes and Witwer brought this matter "The original specifications, and the bid of "United States Senator NoRRIS readily up on my last trip to Akron, and it appears Fairbanks, Morse & Co ., and that of Boulig­ agreed to introduce the bill in the Senate and that they expect more than we could possibly ney, a duplicate of Fairbanks, Morse & Co.; the Congressman RANKIN in the House. The afford to contribute. amended specifications that reduced the cost measures were immediately introduced, and, The main plank in the platform will be several thousand dollars, and the same bid in it is hoped, will quickly be passed by both municipal ownership, and speeches will be amount by Fairbanks, Morse & Co. on the Houses. If so, we are sure the President will made in Akron, Lorain, Elyria, and all the amended specifications as on the original add his approval and the investig,ation be other cities and towns in Summit, Portage, specifications; and other things that I need m ade. We will then be in a position to reveal and Lorain Counties. I have agreed to pre­ not mention might justify the allegations of these most recent and most pernicious activi­ pare some of these speeches and have also the plaintiff that there was collusion between ties of the private power companies in their arranged a meeting between Hayes and my the engineer and Fairbanks, Morse & Co. effort to block and fi nally to destroy the mu­ friend William Smith, councilman from "Who was interested in having the bid of nicipal and public-ownership movement of Elyria, who is running for State legislature. Fairbanks, Morse & Co . accepted? Fairbanks, the country." They are probably going to campaign Morse & Co. · to get the cont ract and the The sequel to this story was never told by jointly in Lorain County. If Hayes is elected, engineer to get his $5,000. While the evi­ the Public Ownersh ip magazine. we will have a strong friend in .Washington, dence is silent on the question, I venture the When Senator NoRRIS introduced the also he plans on delivering M. 0. speeches assertion that the engineer never conferred Thompson-lo6bied bill, he recited the griev- on the slightest provocation throughout with the city council on these omissions. 60 CONGRESSIONAL RECORD-SENATE JANUARY 8 Did the city council then know what a master Certainly no Federal investigation of mu­ influence for the purpose of interfering with clock was, cr that it had been omitted from nicipal ownership agitation could overlook an election or affecting the result thereof. the bid? Did the engineer inform the city the long trail of this alliance between a sup­ No officer or employee in the executive council, or did it know, that the specifica-· posedly pure white Public Ownership organ­ branch of the Federal Government, or any tions called for a closed cooling system, and ization and its benignant appearing director, agency or department thereof, shall take any that an open one was to be furnished? Can­ D. Thompson, on the one hand, and the firms active part in political management or in not the same be said of the day tanks, and of Burns & McDonnell and the Diesel manu­ political campaigns." the plumbing fixtures?" facturers on the other. Dr. Thompson, with his years of expe­ And the court added: "As to the alleged • • rience in public-ownership agitation, has be­ charge of collusion, I do not want it under­ With the coming of the New Deal the scope come an ace electioneer for the Bonneville stood that what I have said expresses an of these groups was vastly expanded. De1: pite administration. The story of his activities opinion. Merely a suggestion to be consid­ their clever operation, the stark fact · t hat in Washingt on and Oregon is amply related ered if the city takes further action • • * ." private effi ciency had overbalanced the tax in the House hearings for the 1941 appro­ There are other cases that indicate a flag­ and capital cost, public ownership advantages priation for the Interior Department, pages rant disregard for engineering ethics and in the operation of electric systems had made 264 to 284, inclusive. civic decency involving these two firms in public ownership in this field increasingly There seems little doubt that Thompson, their scramble for municipal ownership unpopular. To overcome this handicap, pub­ by the very nature of his activities in the contracts. lic ownership advocates were able to induce Northwest, shoulc be discharged as a Hatch 3. The contractual tie-in between Burns & Public Works Administrator !ekes-himself Act violator. But there is small chance of McDonnell and Diesel manufacturers: Two a member of the Public Ownership League such an eventuality, inasmuch as be con­ organizations have been operating on a you­ and for many years a personal friend of tinues on despite the protests of Congress­ scratch-my- back-and -1'11-scratch-yours basis Thompson-to establish a public power divi­ man Dudley White to Dr. Raver, Bonneville for many years. In the Two Rivers, Wis., case sion in the P. W. A. Cities were induced to Administrator, during last year's hearings. where it was shown by a city investigation go into municipal ownership by the free gift The chief beneficiary of this public-owner­ that the Diesel manufacturers had offered to of 30 percent-and later, 45 percent-of the ship racket appears to be the engineering buy council votes for $1 ,000 per head, the cost. This was excellent both for Burns & firm of Burns & McDonnell, not Carl Thomp­ Burns & McDonnell report of August 29, ·McDonnell and for the Diesel manufacturers son, who is only a "come-on" man for the 1933, to E. J. Donnelly, city manager, read since, being an unemployment-relief agency, game. as follows: the P. W. A. could not grant funds for pur­ The Diesel manufacturers find municipal "It is evident, therefore, that even with chase of existing systems, but was bound to plants only a fractional outlet for their the reduced rate charged by the city it will insist on construction of new and usually product and seem to be losing interest in be to the city's advantage to build a plant duplicating systems. That meant a gravy this market with the increase of Federal at this time and we recommend that the city train for both organizations. Burns & Mc­ waterpower development. make application to the Government for a Donnell were retained in scores of towns for It is pertinent, therefore, to appraise this loan under the new Federal Emergency Act. engineering surveys and other services. firm both as to its ethical and professional The 2,000-kilowatt Diesel plant still shows to P. w: A. showed a strong preference for Diesel standing. · the best advantage and we recommend its power. So strong was this preference that The technique of this firm usually is to installation." in one instance the P. W. A. refused the plea obtain a contract by hook or crook for a. One guess who the principal speaker in of the city of Carbondale, Ill., for a steam "preliminary survey" as to feasibility of a. the agitation for the Diesel was. Dr. Carl generating plant and insisted on Diesels even municipal system. Whether a. clause for D. Thompson, of course. Addressing an though the town is virtually built on a coal consulting services is conditioned on the fa­ audience at Two Rivers, on March 25, 1934, m. :1e and is situated in the heart of the rich vorable report or not there is no record of a Thompson said: "The cost of the plant would southern Illinois coal fields. report by this firm against the feasibility be $246,134. These figures are based upon an Perhaps it is only a coincidence that during of such a plant. Once the "preliminary sur­ engineer's report made by one of the best these early days of the P. W. A. Dr. Thomp­ vey" job is completed they make every effort firms of engineers in the United States." son served as an examiner of applications for to stir up by local agitation, through their Then he went on to attack greed-the profit municipal power grants in the power division "shill," Thompson, and by direct personal system. of the P. W. A.-and boasted of his activities agitation to put the proposition over. As early as 12 years ago the Burns & in the Public Ownership magazine. · The record of tbe firm as to accurate esti­ McDonnell tie-up with Fairbanks, Morse Co. By 1937 the economic fallacy of using work­ mates of savings and profits from proposed had been reduced to a contractual relation­ relief funds to construct public systems in systems is scandalous. It is understandable ship in at least one instance. Copy of a con­ duplication of private systems had become so that it would not be otherwise in face of tract approved June 22, 1928 between Burns apparent that Congress took cognizance of the fact that only by such underestimates it & McDonnell and Fairbanks, Morse Water the situation and even before the end of can obtain the fat fees that go with further Supply Co., a subsidiary manufacturing P. W. A. the latter agency had become con­ services as consulant should their estimates municipal water supply equipment, gives the siderably hampered in this field. be accepted. broad basis of the relationship between the But new fields opened up for Thompson. Some years ago the firm was retained by. two organizations at that time. For a fee of the city of Knoxville, Tenn., to make a pre­ 10 percent of the ultimate sale price, Burns While still retaining his directorship of tbe league and editorship of its magazine, liminary survey of the possible revenues 9f & McDonnell agreed to make preliminary a competing system. The Knoxville Journal surveys to determine the soundness and Thompson went on the pay roll of the Bon­ nev1lle administration early in November looked up the record as to Burns & Mc­ feasibility of possible projects, render all Donnell original estimates and actual re­ necessary engineering services, supervise the 1938. His salary is $5,600 per annum and his letting of subcontracts, and so forth. Per­ title is "power consultant," whatever that sults, which showed that the firm has been haps the unusually high fee of 10 percent as means. Under the laws of the States of off as much as 50 percent. . against the normal 5 percent is explained by Washington and of Oregon, districts, county­ Significant excerpts from this article pub­ the following clause in that contract, cer­ wide and larger, may be organized for the lished by the Journal, November 24, 1933- tainly calling for services seldom required of generation or purchase of power for distribu­ never denied by Burns & McDonnell-follow: bona fide engineers: tion within their areas. These laws were "An amazing record, to say the least, has "The engineers agree when and during the specifically enacted for the purpose of pur­ been made by the Burns & McDonnell Engi­ progress of their preliminary surveys, esti­ chasing power from the great Federal Colum­ neering Co., of Kansas City, Los Angeles, and mates and report to assist the owner in clearly bia River dams. The Pacific Northwest has , in connection with its activities presenting all the facts, advantages and bene­ been a ferment of political activ~ty in con­ to put over municipal ownership in different fits to be derived from the proposed water­ nection with numerous public utility dis­ parts of the country. supply project; and to make talks before trict elections for several years. Und·er the "A study of the firm's history reveals the councils, boards, or civic organizations, ex­ Bonnev1lle Act one-half of the power from fact that Knoxville was particularly unfortu­ plaining all the engineering facts and fea­ that project must be reserved for public nate in its selection of an engineering firm tures that would be helpful in closing a agencies until Jan ary 1, 1942. to make the city's report on municipal contract for the water-supply project as pro­ The same act limits the promotional ac­ ownership of electric facilit ies. posed by the owner." tivity of the Administration to supplying all "TREMENDOUS ERROR 4. Thompson's abuse of the congressional pertinent information and data to inter­ "For instance, in Crown Point, Ind., on June franking privilege: For years Thompson has ested parties. The Administrator, however, 7, 1932, the people voted $28,000 for the con­ openly boasted of his ability to have pro­ has construed that limitation so broadly as struction of an electric plant. Burns & public ownership propaganda inserted in the to provide. speakers for political rall1es in McDonnell's estimate of the cost was $38,167. CoNGRESSIONAL RECORD and then distributed local P. U. D. elections. In the opinion of The actual cost of the plant to date is $62,423 under congressional frank. The league has most lawyers this activity is clearly in vio­ and construction has not yet been completed. actually advertised for sale literll.ture bearing lation of section 9 (a) of the Hatch Act, "A report made for St. Paul, Minn., is inter­ the congressional frank. which readc; as follows: esting by comparison with the report for These are but a few examples of many that "It shall be unlawful for any person em­ Knoxvme in that the firm required from can be cited going back· over a dozen years of ployed in the executive branch of the Fed­ November 1932 to July 1933 to prepare the profitable political sales activities by all three eral Government, or any agency or depart­ first report and then submitted. a revised parties. ment thereof, to use his official authority or report 3 months later. 1941 CONGRESSIONAL RECORD-SENATE 61 . "A charge of $45,000 was made for the re­ mate the cost of construction of the Knox­ McDonnell estimate of receipts was $70,000 port, whereas a report was given KnoxviLle ville municipal-distribution system at $3,- too high and their estimates of expenditures in the space of a few days for $2,370. 225,000, but 6· months' time was required to was $30,000 too low. This showed that in­ "Upon the demand of the mayor of St. make the survey for Fort Thomas, Ky., a town stead of a yearly profit of $28,500, the plant Paul, the engineering firm was willing to re­ only one-eleventh the size of Knoxville. would show a yearly loss of $72,100. vise its report to eliminate the item of going " FIFTY PERCENT OFF "Paducah decided not to embark on the concern value and to reduce working capital "Burns & McDonnell, upon whose advice project.'' allowance, thus reducing its estimate of the the Canal CommisEion of Augusta, Ga., gave Nor are these old and isolated cases of value of the company's property by $2,227,164. its approval to an oil-engine plan, made a slack appraisal work by this firm. The case This amounted to a reduction of about 10 provable error of approximately $57,000 in es­ of Yonkers, N. Y., is another example. In percent from the original report. timating the profits they said might be made an appraisal of the properties of the Yonkers "In the past year or two, Burns & McDon­ from the oil-engine plant. Since they esti­ Electric Light & Power Co. for the city in a. nell have gone into 21 cities and re:::ommended !Dated net profits of only about $125,000, the pending rate case, the est imate of Burns & 'the construction of electric plants and dis­ McDonnell amounted to $8,500,000, while the ~rror reduced their claim of profits by nearly tribution systems which, if they had been 50 perce-nt. company estimate was $18,000,000 . In de-­ built, would have coot $28,626,700, according "In June 1932 Mayor Ralph Mackey, of Bel­ fending the discrepancy, one M. P. Hatcher, & to the estimates. videre, Ill., signed a contract with Burns & of the Burns McDonnell firm, stated that . "For making the reports, Burns & McDon­ McDonnell for the construction of a munici­ he had spent 3 or 4 weeks solidly in con­ nell were paid various fees. In addition, pally owned electric plant in competition with sultation as to costs of the underground many of their contracts called for percentages the Illinois Northern Utilities before the bond wiring with the firm of G. M. Gest, New of the cost of construction ranging from 3 Y2 issue had been voted. York contractors, specializing in such work. percent to 10 percent. "Before the election the contract came to This testimony brought forth a sworn state­ "The firm recommends the building of ment from Mr. Gest and his assistant, J. H. light, and the people discovered that it gave Lopez, with whom Hatcher had worked, that municipal systems almost invariably. Burns & McDonnell '5 percent of the cost of "LOW FEE FffiST said construction improvements, exclusive of instead of 3 or 4 weeks Hatcher had actu­ ally spent but 32 hours with Lopez. Per­ "Engineering firms catering to business any purchase price of the distribution system.' tinent excerpts from the sworn statement, from city councils make it a practice to offer More to their perturbation, they found that appearing in the Yonkers Herald Statesman to make a preliminary report for a low fee, this 5 percent was over and above 'service for of March 29, 1935: - · as was the case in Knoxville. But the fees expert testimony before any court, commis­ sion, or arbitration, or other boards or organ­ "I desire here and now to disclaim this exacted for serving as consulting engineers responsibility and desire to point out a few are on a much higher basis and sizeable sum. izations by a member of the firm of Burns & McDonnell, engineering company.' examples of misstatements and misin­ For inst ance, 5 percent of $3 ,225,000 would terpretations. be $161 ,250 . Quite naturally, the paramount "OVERWHELMING DEFEAT "Mr. Hatcher, on and about page 7115 of interest of the engineering firm in busfness "Such experts u~der the contract were to the April 3 transcript, refers to the time spent getting is not emphasized by the company be paid for at the rate of $75 per day 'plus with us and states he talked with us 'solidly and that point is not often appreciated by ·an traveling and hotel expenses of the engi­ for 3 or 4 weeks' in our office and. talked to ·the public. neers' representative or representatives while us 'almost continuously,' getting there 'as "Why did R. E. McDonnell come to Knox,­ absent from the office:' The bond .-issue was early as I could get ·there in the morning,' ville to speak at the mass meet!ng last night . defeated in every ward of the city, the total and spent 'most of the day on it.'- These unless he did so to further his firm's chances being 2,334 against and 1,204 for it. statements are more than inaccuracies. They of getting the consultants' fee if the city "In the Judicial Bulletin of the Oklahoma are m isstatements. votes bonds? Utilities Association, issued September 21, . "Mr Lopez put in a total of 48 hours, of "Mr. McDonnell appeared aggressively in a appears the following letter written to that ' ·which but about 32 were with ·Mr. Hatcher. campaign to vote bonds for-municipal

PERMISSION TO ADDRESS THE HOUSE vide for the extension of enlistments in the for the fiscal year ended June 30, 1940 (H. Navy to suspend the provisions of section Doc. No. 11); to the Committee on World War Mr. VOORHIS of California. Mr. 1422 of the Revised Statutes (18 Stat. 484; Veterans' Legislation and ordered to be Speaker, I ask unanimous consent that 34 U. S. C. 201) in time of war or national printed. on Monday, at the conclusion of legisla­ emergency, and for other purposes; to the 5a. A letter . from the Secretary of War, tive business and any other special or­ Committee on Naval Affairs. transmitting the reports of inspections of ders, I may address the House for 25 37. A letter from the Secretary of the Navy, records and accounts of disbursing officers of transmitting a dra~t of a proposed bill to re­ the Army made during the fiscal year ended minutes. move certain limitations on appropriations June 30, 1940; to the Committee on Expendi­ The SPEAKER pro tempore (Mr. BUL­ for the pay of midshipmen, and for other pur­ tures in the Executive Departments. WJ;NKLE) • Is there objection to the re­ poses; to the Committee on Naval Affairs. 54. A letter from the Secretary of War, quest of the gentleman from California? 38. A letter from the Secretary of the Navy, transmitting the Annual Report of the Activ­ There was no objection. transmitting a draft of a proposed bill to au­ ities of the National Board for the Promotion thorize major alterations to certain naval of Rifle Practice for the fiscal year 1940; to ADJOURNMENT vessels; to the Committee on Naval Affairs. the Committee on Military Affairs. Mr. HARTER. Mr. Speaker, I move 39. A letter from the Secretary of the Navy, 55. A letter from the Secretary of War, that the House do now adjourn. transmitting a draft of a proposed bill to au­ transmitting a draft of a bill to provide for thorize the Secretary of the Navy to establish the discharge or retirement of disabled en­ The motion was agreed to; accord­ certain naval hospitals; to the Committee on listed men of the Regular Army and the ingly