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September 28, 2006
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July 14, 1955
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Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 ~,)J 14 CONGRESSIONAL RECORD - HOUSE 9013 permitted to sit this afternoon during general debate. The SP KER. Is there objection to the requef the gentleman from Colo- rado? Mr. HOSMER. Mr. Speaker, I object. FREE IMPORTATION OF GIFTS FROM MEMBERS OF ARMED FORCES ON DUTY ABROAD Mr. COOPER, from the Committee on Ways and Means, reported the bill (H. R. 7205, Rept. No. 1175) to extend for 3 years the existing privilege of free im- portation of gifts from members of the Armed Forces of the United States on duty abroad which was referred to the Union Calendar and ordered to be printed. SUPPLEMENTAL APPROPRIATIONS, 1956 Mr. CANNON. Mr. Speaker, I move that the House resolve itself into the Committee of the Whole House on the State of the Union for the consideration of the bill (H. It. 7278) making supple- mental appropriations for the fiscal year ending June 30, 1956, and for other pur- poses; and pending that motion, Mr. Speaker, I ask unanimous consent that general debate proceed not to exceed 4 hours. The SPEAKER. Is there objection to the request of the gentleman from Mis- souri? Mr. TABER. Mr. Speaker, reserving the right to object, there is nothing in the request about the control of the time. The SPEAKER. The Chair is sure that that is understood. Mr. CANNON. Mr. Speaker, I sup- plement that with the request that the time be equally divided, half to be con- trolled by the gentleman from New York [Mr. TABER] and half by myself. Mr. TABER. Further reserving the right to object, Mr. Speaker, is it expect- ed that the bill will be concluded today? The SPEAKER. It depends on how fast the committee in charge of it works. Mr. TABER. That is what I was try- ing to do. The SPEAKER. It is hoped that it may be completed today. Mr. TABER. It seems to me that 3 hours would be sufficient to cover what- ever we would need on the bill. I won- der if the gentleman could not reduce that request to 3 hours. Mr. CANNON. Mr. Speaker, I have a number of requests for time. The re- quest is not to exceed 4 hours. If we can conclude it in 3 hours or 2 hours or 1 hour, I would be very happy. We shall consume no more time than is absolutely necessary. The SPEAKER. Is there objection to the request of the gentleman from Mis- souri [Mr. CANNON] ? There was no objection. The SPEAKER. The question is on the motion. The motion was agreed to. Accordingly the House resolved itself into the Committee of the Whole House on the State of the Union for the con- sideration of the bill (H. R. 7278) mak- ing supplemental appropriations for the fiscal year ending June 30, 1956, and for other purposes, with Mr. MILLS in the chair. The Clerk read the title of the bill. By unanimous consent, the first read- ing of the bill was dispensed with. The CHAIRMAN. Under the unani- mous-consent agreement, the gentleman from Missouri [Mr. CANNON] will be rec- ognized for 2 hours, and the gentleman from New York [Mr. TABER] will be rec- ognized for 2 hours. The Chair recognizes the gentleman from Missouri. Mr. CANNON. Mr. Chairman, I yield 15 minutes to the gentleman from Michigan [Mr. RABAUT]. Mr. RABAUT. Mr. Chairman, with malice toward nobody but with determi- nation to do my duty as I see it, I want to report to this House that yesterday I appeared before the Committee on Rules, as was the request of the full Committee on Appropriations. I told the Committee on Rules that this bill was filled with paragraphs that were subject to points of order; that the bill probably contained very few pages where a ruling could be denied against points of order, and the bill would be bad. I said there were so few pages that I limited it to about four pages that would not be subject to a point of order. I read to the committee a prepared statement and said the bill contained many of the paragraphs that were in the final supplemental bill as handled by the Committee on Appropriations every year, and that a rule is usually granted. The gentleman from New York [Mr. TABERI, the gentleman from California [Mr. PHILLIPS], and the gentleman from Wisconsin [Mr. DAVIS] were present and opposed a rule. Mr. DAVIS lent his moral support. Past history always allowed a rule. To my surprise the committee failed to act, and we find ourselves with a bill involv- ing approximately $1,650,000. Twelve subcommittees of the Committee on Ap- propriations worked on this bill, prac- tically the entire membership of 50; the hearings comprise several volumes, yet under the situation the House will not be able to work its will as to accepting or rejecting the many provisions and amounts in this bill before us because a point of order would lie in most instances. Rather than to have a field day on points of order I intend to ask unani- mous consent to ask for deletion from the bill of all the paragraphs subject to a point of order so the House may work its will on that part of the bill on which the decision of the Rules Committee per- mits us to function. This will represent a big saving in time and much useless talk. I regret that under the circumstances the normal procedure of originating an appropriation bill in the House in this instance, due to the denial of a rule, passes over to the other body. We pass over to them our prerogative of initiat- ing appropriation bills. It will be en- trusted in this instance to the Senate. This, incidentally, is probably a new inconvenience to the House as a result of the Dixon-Yates fiasco. Previous to the consideration of the public-works appropriation bill on the floor of the House, Republican Members held two caucuses, and there is no denial of the fact that they were concerned over Dixon-Yates. As a result, when the public-works appropriation bill came to the floor of the House, we had a demon- stration of logrolling never equaled in my long years of service in this body, and there was pork on both sides of the aisle. The committee completely lost control under the policy of "You rub my back and I'll scratch yours." As a re- sult, we took the bill to the Senate with little or no grounds on which to argue with that body, inasmuch as, living in a glass house, we were unable to throw a stone. That there is a connection be- tween Dixon-Yates and that which is taking place here today there is no doubt. Then, when the public-works bill emerged from the Senate-House con- ference we had the camel's nose under the tent with new expenditures that eventually will hit proportions of from $10 billion to $20 billion. And to- day with a bill up for consideration in the sum of $1,650,000,000, approxi- mately, we still hear the echo of the Dixon-Yates controversy. I think they are now talking about settlement of the controversy with damages running into a few million of dollars and the word being spread around is to be liberal. So there seems to be no need under the circumstances for the House to waste its time since we come without a rule on a bill that could prove of no use to us or to those who sought to embarrass the 50 members of the Appropriations Com- mittee who worked long and hard, as is evidenced by the testimony compiled in several volumes before us. So this is my notice that I intend to cite the para- graphs that are subject to points of or- der and ask for their deletion from this bill. Mr. TABER. Mr. Chairman, I yield myself 5 minutes. Mr. Chairman, I opposed the rule be- cause there was a paragraph in the bill that I felt was not proper, and I do not believe that the Members of the House will feel it is proper if they read it. When that point is reached I pro- pose to offer a point of order against it. On the other hand, there are in the bill an enormous number of items, as always appear in a supplemental bill at the end of the session, that contain language that makes them particularly subject to a point of order.' Those para- graphs have been before the House time after time and very seldom, if ever, have points of order been raised against them. Frankly, I do not see how we can meet our responsibility in connection with the Government without considera- tion of a very large number of items that are covered in this bill. I cannot under- stand just why any Member of the House would feel that he should want to make a point of order against an item unless that item was, in his opinion, against the interests of the Government. That will be my approach to the problem and I will confine my points of order to what I believe may not be in the interests of the Government. With that statement, I shall feel obliged to object to an omnibus request Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 9014 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE July 14. to be made before the reading of the individual paragraphs. Mr. CANNON. Mr. Chairman, the United States-its Government-its in- stitutions-and its people are in dire danger. They are confronted by the greatest, the most powerful, the most ruthless, the most modern, military organization in the history of the world-ready to attack at the first sign of weakness. The Bolsheviks have announced, and it has been their position from the be- ginning, that communism and democracy cannot live side by side and they they propose to take over by force and vio- lence the rights and property of every people in the free world, as they have al- ready taken over the satellite nations which surround them. It has not only been their open objec- tive, their philosophy, their program, but they have steadily and consistently or- ganized and drilled armies, and equipped them with modern armament, in order to be in a position to carry out that objec- tive at the first opportunity. We are in danger not of defeat: not of a situation which can be retrieved in case of disaster. We face extermina- tion. The Russian dictatorship still adheres to the Marxian philosophy of world rev- olution and proletarian dictatorship. It is arming and has continued to arm feverishly. Their factories running in three 8-hour shifts per day, are prepar- ing to take over America, to destroy our cities, to drive what is left of our popu- lation into concentration camps and slave-labor barracks. Do not say it can- not be done. It has taken place before our eyes in Russia and every Russian conquest. And, they have driven a knife between us and our allies. In every former war we have had powerful allies who held the enemy in check until we could get ready, until we could mobilize and pre- pare. Today every potential ally is under the guns of the Communist regime. They could not survive 24 hours against the barrage of atomic weapons which Russia is prepared to launch within an hour or sooner. And therein lies our greatest danger. War has developed so drastically that it is now largely matter of who gets in the first blow. The battleship I. now as obsolete as the bow and arrow. The mighty Missouri is a museum piece. At one time our first line of defense, the battleship and heavy naval guns, devel- oped to a point where the ship that got in the first shot, that made the first hit, was practically in control of the situa- tion. To practically the same extent today a Nation with sufficient bombs and the planes to deliver them can with one stroke simultaneously attacking every center of communication, production, transportation, and population, so para- lyze us that there could be no recupera- tion. The theory of retaliation upon which we have depended so strongly in recent years is no longer applicable. Our military authorities tell us that with a simultaneous attack with weapons which Russia now has at her command they could destroy at the first blow 53 of our major cities, including Washing- ton. The only defense that has been suggested is evacuation. The President this week asks Attorney General Brownell to conduct a study of methods of invoking martial law, gov- ernment by the Army, over the entire country. Nothing could more vividly and more emphatically delineate the situa- tion in which we find ourselves-the danger of the country today than the study of this stark measure of last re- course. Only the most imminent po- tential menace could have prevailed on the head of the government to resort to such significant measures. And the President has moved none too soon. Russia today has military su- periority over all the combined powers of the entire free world. They have more modern submarines by far. Within the last fortnight we are told it has just been discovered that Russia has superiority in numbers and design of planes with which to deliver the atomic bomb around the globe. They have acres of modern tanks. They have a manpower which the free world can- not approach. Within 30 to 60 days they could sweep every free nation from the continent. And this situation is deplorably illus- trated by the supine attitude of the United States Government today. Ah, you will remember, Mr. Speaker, under the administration of Theodore Roosevelt, a foreign power detained one private American citizen and President Teddy Roosevelt sent one message. He said, "Pericardis alive or Raisouli dead." And in 6 hours that American citizen was released. Mr. MCCORMACK, the majority leader, placed in the RECORD this week a long list of civilian and military personnel, including priests, rabbis, ministers, nuns, now detained without any authority of law whatever and in contravention of all international jurisprudence-American citizens-and we do not dare to send the Roosevelt telegram. You will remember that when they sank the Maine President McKinley de- clared war. No one ever knew whether the Maine was sunk by accident or by a military enemy, but on the mere sus- picion that a foreign power had sunk an American ship in neutral waters we declared war. You remember the Lusitania. She was not an American vessel. She sailed under the flag and the commission of another nation, but we had a few Ameri- can citizens on board, and on the strength of that insult to our national honor Congress declared war. Just the other day Russia deliberately shot down an American plane under conditions about which there could be no question whatever. They did not deny it. There was no excuse. What did we say? We said, "Oh, don't pay any attention to that. It was merely a local incident." What would Teddy Roosevelt have said to that? What would McKinley have said? What would the American Congress, which declared the last World War, say about that? We have fallen on evil days. We can- not defend our own nationals. We do not dare to assert our nation integrity under the most insulting ciristances. They shot down an American plane and then they came in as if they had knocked us down on the street and said, "Well, we'll pay half of your hospital bill." They say, "We'll pay half of the loss of your plane." And they laugh behind their hands, and all of the communistic world takes note that we dare not call them to time. Here were international criminals of the worst order destroying our planes in time of peace, and we did not dare resent it. Mr. Speaker, we won the last war. We did not negotiate with the enemy. We called them in and said, "These are the terms of peace. Sign on the dotted line." And they signed. But today bands of lawless brigands in Asia bush- whack American citizens and we say, "Now, now, now, you ought not to do that. Be nice. Let us have a truce." But we have to wait for months even to get them to agree to a truce. Mr. Chairman, that it was not the in- trepid valor of our troops that won that war. It was not the superb generalship of the American command that won that war. It was not the patriotic support of the American people that won that war-it was the superiority of American science that won the war and ended the war. It was the landing duck; it was the proximity fuze; it was the all-seeing radar; it was the atomic bomb that won that war against European nations which had always insisted, and which the world had always conceded, were superior in research, and leaders in every scientific field of development and in- vention. American science coming from behind created the scientific instruments and agencies that won the war. It was the TVA that made these sci- entific achievements possible. We could not have developed them; we could not have developed the bomb or the alumi- num for the wings of the planes that carried the bombs had it not been for the TVA. And in this moment of dire national peril, confronted by the most menacing situation in the history of American arms, there are those who are moving to shackle TVA so that they can have more dividends, so they can prof- iteer on the American consumer. Why are they opposed to TVA? Why do they seek to destroy REA and AEC? Oh, they say it would create a Govern- ment monopoly. No; statements like that are as obviously false as any state- ment made by the Russian Government. When our armies closed in on Japan, when hundreds of thousands of Ameri- can boys were poised for the drive in which vast numbers of them would sure- ly die, at that supreme moment one American plane with material supplied by TVA power-with one atomic bomb which could not have been made without TVA power-ended the war, TVA saved the boys and sent them home to their families; TVA saved bil- lions of dollars to the American taxpay- ers; TVA ended the war. But they say TVA should never have been built. It is socialistic. The natural resources of Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 1955 CONGRESSIONAL RECORD - HOUSE the Tennessee Valley rivers belong to the people. But they should be paying divi- dends to private enterprise-to men like Samuel Insull and Dixon and Yates. How can they justify such piracy? Oh, they say, "We want freedom." What freedom? Freedom to plunder the American consumer. And they invariably wind up with "The Government is trying to establish a monopoly." No more barefaced effort to deceive was ever made. We are op- posed to a government monopoly. We believe in private enterprise. We de- mand that the private utilities control at least 85 to 91 percent or more of the business of production and distribution of electric energy in the Nation. But the last 21/2 percent at least, TVA and REA municipal ownership, should be re- tained-TVA by the Government, REA by the private cooperatives, farmer co- operatives, and municipal plants by the cities which have built and developed them. We must have these small yard- sticks; we must have a policeman on the corner. The American consumer must be protected from exploitation and profiteering by the giant nationwide private monopolies. "Oh," they say, "private monopolies cannot overcharge the consumer. We have Government regulation." The trou- ble is that Government regulation never regulates. We have an example of that in my State. Some years ago when competition be- tween buses and passenger trains-and between trucks and freight cars-be- came heated, a cry went up for the State of Missouri to establish a public utili- ties commission to regulate passenger fares and freight rates. And, thinking it would keep down transportation charges, we agreed to it. The first thing they did was to call in the bus companies and order them to increase fares. "But," said the bus companies, "we are getting a good return on our investment. We are making good money at the present rates." "That has nothing to do with it," said the public utilities commission-the government regulation agency-"your rates are un- fair competition with the railroads. Raise your rates on the consumer." And the buses raised rates that were already producing an adequate income. Government regulation does not regu- late. The only effective regulation is to keep a yardstick and the TVA, REA, and municipal ownership must be retained to protect the standard of living of the American family. Of course when Dixon and Yates start their creeping monopoly there is danger of forgetting the real value of TVA. But Russia does not forget it. Our scientists have just learned that Russia built and has operated successfully since 1949 the largest synchro-cyclotron in the world. The largest we have ever built in America has a maximum capacity of 450 million electron volts. But the Russian plant has a capacity of 680 million volts. The Dixon-Yates backers are proposing to destroy even the small one we have. But Russia is already outbuilding it. Russia is looking ahead. And the Presi- dent is trying to make arrangements to maintain military government when the Russian TVA and its products devastate 53 American cities-and tells Attorney General Brownell to try to figure out a place where Congressmen can assemble when Washington is destroyed-if there is a quorum left after the dust settles. I appeal to the Congress to stop these men who are scheming, who are main- taining here in Washington such vast lobbies, who are intimidating Members back in their districts in a way that amounts practically to blackmail, as you have seen in the last 2 or 3 weeks. They are trying to take over TVA. But they cannot do it unless this Congress grants them the power to do it. Mr. Chairman, will we in time of dire national peril give an irresponsible pri- vate monopoly control of the economic welfare of the Nation? Mr. TABER. Mr. Chairman, I yield 7 minutes to the gentleman from Mary- land [Mr. MILLER). Mr. MILLER of Maryland. Mr. Chair- man, the portion of this bill to which I will address my comments has to do with military construction, which forms the principal item as far as the money in- volved in this measure is concerned. Of the over $1.6 million provided by the various chapters, there is some $1.4 mil- lion that has to do with military con- struction throughout the world set forth in chapter III. While this comes to you in a supple- mental bill, that huge sum for military construction is really an integral part of our military program and would nor- mally come in the Defense Department appropriation bill for the current fiscal year had it not been for the fact that the thousands of items involved had to be processed. It was only in recent weeks that the details of the needs requested were presented to our committee. It required long, hard sessions, but even so, the time was too short to adequately cover such a large program. One thing that you will note about the setup with respect to this chapter is that included are projects the cost of which totals roughly 25 percent more than the money that has been allotted by appro- priation or transfer. That unusual sit- uation comes about due to the fact that the services believe that inevitably in a program of this magnitude, which re- quires construction all over the conti- nental United States and in many for- eign countries, there will be slippages. They have requested that selected proj- ects that have been authorized be appro- priated for, as they would like to get them under way this year; but it is con- ceded it will not be possible to get them all under way during the fiscal year. They cannot, however, at this time defi- nitely determine the ones that may or may not be delayed. _. Our committee in its wisdom, has re- duced the amount requested for the overall program even further because we felt that the slippage was sure to be even greater than for which the services had made allowance. But, there is still nothing in the way of an austerity pro- gram as far as the military portion of this bill is concerned. While it is true that there are only a limited number of permanent establishments provided for, the amount spent this year will greatly improve the living conditions of the men 9015 in uniform both at home and abroad. Our committee has urged those carry- ing out the programs to concentrate on necessary operational facilities, and quarters for the soldiers, sailors, and airmen; that first priority be given these items wherever possible. It is not practical to be arbitrary about various categories, because where in one location a post theater, for example, might be in the nature of a luxury and it may be that there are facilities that can be used, in other areas, if the post happens to be far away from civilization, if it happens to be in a locality where there are no amusements available, it might be almost a necessity. So it is that in a program as vast as this, with so many thousand line items, it is hardly the proper approach to say we will not approve any type of building across the board because it does not come within a certain priority category, when at a particular location it might be far more important than would seem to be the case in another locality. The services, I think, are to be com- mended in that there is a program going forward and beginning to bear fruit of standard types of construction to be used for the most part in permanent installa- tions. A new type of barracks has been developed for 2 units rather than for 1 with a capacity of 327, I think it is, troops in the Army, and a similar program for the installations on land in the other services. Standard types of bakeries, or post-exchange buildings, theaters, and so forth, have been worked out, and the program is going forward with the effort made to make living conditions and the so-called fringe benefits better for the men in the service. One of the very important elements in this program is the housing program for dependents, and there are a good many million dollars authorized to provide better living quar- ters in proper localities for dependents of those stationed in the area. This chapter having to do with the Department of Defense has received the most careful study of the subcommittee during the limited time available. Of necessity, .it was impossible to analyze the thousands of line items in great de- tail. However, I am confident that we have brought you a sound bill and I urge its passage. (Mr. MILLER of Maryland asked and was given permission to revise and ex- tend his remarks.) Mr. CANNON. Mr. Chairman, I yield 15 minutes to the gentleman from Texas LMr. MAHONI. Mr. MAHON. Mr. Chairman, it would seem quite certain that this bill is to some degree controversial. However, I think probably the major items in the bill, from the standpoint of money, are not very controversial. This bill pro- vides $1.8 billion for military public works within the continental United States and outside the limits of the con- tinental United States. This is not an austerity program. We have come to the acceptance of the phi- losophy that we are probably going to be in a state of peril as a nation over a considerable number of years. We have abandoned the idea of temporary con- struction, theater of operation type con- Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 9016 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE July 14 struction. We are building our military installations on a more or less permanent basis. They cost a little more that way, but I, for one, feel that the best interests of national defense and economy are served by more substantial construction practices. One of our troubles is the members of the Committee on Appropriations are not adequately prepared fully to comprehend and discuss all the features of the mili- tary portion of this bill. That is through no fault of our own. The President. through the Bureau of the Budget, did not send down the budget requesting $2.2 billion for military public works un- til about the first day of July. The au- thorizing legislation upon which this portion of the bill is predicated is, I be- lieve, to be signed perhaps this afternoon. So we have not had the opportunity which we desired and deserved in which to screen these requests for funds. It is true that in the overall picture we have been pretty adequately briefed. We are building in the Army toward a reduced structure but a structure that will take care of our people on a perma- nent basis within the framework of our present regular forces. In the Navy we have about 1,000 oper- ating ships and with all the support re- quired on land and at sea we are building to meet that requirement. The Congress has been urging the Executive over a period of years to hasten the construction of a 143-wing Air Force program. That program in the last cou- ple of years had been reduced to the 137- wing program. We are building the base, so to speak, for that sort of Air Force. And we have been told at great length and with some degree of clarity by the officials of the Department of De- fense that these items in this bill are es- sential toward the realization of our de- mand for a 137-wing program. As I say, this is not an austerity pro- gram. It costs us about $5,000 every time a serviceman does not reenlist; and there are millions who do not reen- list. For good or ill, we are trying to make military life, since apparently it is going to be with us for a long, long time, more attractive to the young men of our country. In the desert we are building swimming pools. In other areas we are building gymnasiums. We are seeking to provide adequate recreational facilities. We are building clubs for noncommissioned officers and for en- listed men. We are building officers' clubs. We are doing a lot of things that perhaps some people would like to be critical of us for doing. But if we are going to undertake to have these Ameri- can men of the Armed Forces live some- what like the rest of us and if we are going to try to make military life more attractive and keep them in the service as a career, I think we have got to do that sort of thing. At least, that is the philosophy which we have accepted in approving this bill. I am not ashamed of the fact that we are building solidly in military construction. I think that is a step in the right direction. Since we did not have an opportunity to explore each individual project as thoroughly as we should like to we are selecting some engineers to spend their time between now and the reconvening think the committee report is a very of Congress making on-the-spot studies excellent document. I believe that by of these various projects. I for one reading it you will get perhaps a better think that such action is in the public picture than you will be able to get from Interest and will be very helpful to the this sketchy discussion on the floor. committee. It is impossible and I do not think it was ever intended that the Congress should inspect the way every nail is driven and every plan is laid out in every installation around the world. It is our duty to initiate policy, to make policy, and our overall policy with re- spect to this bill, as far as military con- struction is concerned, I think is good. The bill is a little misleading It you look at the table of figures. The Army portion of the military public works is not to be financed out of any new appro- priation to be made today. It is to be financed out of funds already available to the Army and unused and unrequired at this time for production and procure- ment, funds which the Army had but which it does not require now by reason of the fact that we have slowed down our military effort since the end of the Korean war. So that generally is the situation. This bill provides for 523 projects in many nations including our own. We struck from the bill 14 projects. Of course, some of the projects are small and some of them are very large indeed. We struck from the bill certain proposed bases overseas. I for one have some very serious concern about this farflung pro- gram of base construction by the United States taxpayers in other sovereign coun- tries of the world. I have no special alternative to offer, but I shall not be surprised if we wake up a number of years hence and find that these bases are no longer available to us. If those countries remain friendly, then perhaps we will continue to draw considerable benefit from the construction of these bases. I think the construction of these bases has meant a great deal in deter- ring aggression, but I think it would be foolish if we should fail to overlook the perils and dangers which are inherent in this operation, which almost seems fan- tastic when you sit and think of it soberly. Mr. GROSS. Mr. Chairman, will the gentleman yield? Mr. MAHON. I yield to the gentle- man from Iowa. Mr. GROSS. I commend the gentle- man on that statement and want to say to him that I certainly share his fears. Mr. MAHON. I thank the gentleman for his contribution. Here is the picture in brief and in round figures. There are $2 billion worth of projects authorized. In the new bill, which I think the President will sign today, there are $2 billion more authorized. The President through the budget has asked for appropriations in the sum of $2.2 billion. We have re- duced that sum in this bill by $394 mil- Mr. ROGERS of Colorado. Mr. Chair- man, will the gentleman yield? Mr. MAHON. I yield. Mr. ROGERS of Colorado. Your re- port came somewhat as a surprise to us in Colorado, particularly in view of the fact on Monday we went out and dedi- cated the Air Force Academy, and then on Tuesday, on page 32 of your report, you say that all new funds for the con- struction of the Air Academy are with- held, and it is the wish of the committee that no construction whatsoever be started until it has been approved by this committee. Also, I want to direct your attentionto page 207 of the hearings of your subcommittee wherein it was out- lined that there was $15 million previ- ously appropriated for the Air Force Academy. The first question is: Is it the intention of this committee that the Secretary for Air should not stop all plans that he has in connection with the Air Force Academy until his plans have been submitted and approved by your committee? Mr. MAHON. There is no disposition whatever to insist that the plans for the Air Force Academy be approved by the committee because we are not engineers or architects, but the Department of Defense asked us to appropriate $79 mil- lion for the Academy, which is to cost over the long pull probably about $150 million. But, the Secretary did not know what the plans would be. He was not sure of the design. We were being asked to approve $79 million of the tax- payers' money to buy something that even the Department of Defense did not know what it was going to look like. I think the gentleman from Colorado and I, myself, would hesitate personally to give the money for a house to be built or an edifice to be constructed when we did not know what it was going to look like. After the plans are drawn, and after the matter is agreed upon by the Secretary, then we hope that the Depart- ment can come back and get the money. Mr. ROGERS of Colorado. Is that due to the fact that the testimony on page 206 of the hearings reflects that the plans themselves will not be ready, that is, the designs will not be finished before September of this year; and is it due to this fact that the committee hesi- tated to approve the complete $79 mil- lion for the going ahead of the construc- tion at this time? Mr. MAHON. I would say that the plans, as we observed them, which are not final and which have not been ac- cepted by the Secretary, did not impress us very much. It would appear to be an appropriate edifice for a modern fac- tory or something of that kind, but there was so much controversy about these lion, and the bill includes money in the plans and so many reservations by mem- amount of $1,800,000,000. So that brief- hers of the committee that we hesitated ly and in rough figures is the picture. to put the money in the bill. For those who want to know about of course, we realize we take some projects in their States and in their criticism for not putting the money in, areas, let me refer you to the committee but the gentleman will recall the lines report because the committee report has, of the Melancholy Dane who preferred I think, a very excellent breakdown. I to bear the ills he had rather than to Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE 9017 fly to others that he knew not of. We did not know just what this leap was going to be, and so in some degree of caution we clamped down on the purse strings for a time. I would like to exhibit this artistic drawing of the chapel. This seems to look like a tent of sorts, and when I saw it a very familiar line from an old hymn came to mind=tenting on the old campground. I suggest that a little bit of caution in the closing days of the session might serve us well when we return home. The CHAIRMAN. The time of the gentleman from Texas has expired. Mr. DEANE. Mr. Chairman, I yield the gentleman from Texas 5 additional minutes. Mr. MAHON. Mr. Chairman, I yield further to the gentleman from Colorado. Mr. ROGERS of Colorado. Certainly it does not subscribe to the testimony of Mr. Wright, the architect, that this chapel should be built up on the moun- tain about a thousand feet, and that they provide escalators to take them to and from the services. Mr. MAHON. I will say that we did not undertake to pass on any design. Personally, I was unable to hear the testi- mony of Mr. Wright, except for a very few minutes, but looking at these build- ings in the artist's drawing now before us, the Academy looks pretty flat. Maybe we ought to go a little higher up and see if we cannot get a little more glory for our country out of this project. Mr. ROGERS of Colorado. It is my understanding that it was the intent of the committee that when the Secretary has submitted definite plans, which may remove some of the objections, particu- larly that of glass, and substituting stone or marble, and making it fit more into the picture against the mountain side. Mr. MAHON. I am inclined to think it would. I thank the gentleman for making a contribution. Mr. CHENOWETH. Mr. Chairman, will the gentleman yield? Mr. MAHON. I yield. Mr. 'CHENOWETH. I would like to relieve the gentleman's mind of the con- cern and apprehension over this par- ticular design of the chapel. I was in Denver on Monday with other Members of the House and Senate to attend the dedication ceremonies of the temporary Air Academy at Lowry Air Force Base. I was very pleased to note that the de- sign of the chapel has been changed, and in my opinion, greatly improved. Mr. MAHON. Yes. I think they were originally proposing to make the sides quite considerably out of glass. It would have been quite expensive to hire work- ers to keep this glass bright and shiny. But I think we have been able to get them to recommend less glass. If we keep hammering away, we will have an edifice of which we can be proud. Mr. CHENOWETH. I think the gen- tleman will be pleased with the new de- 'sign of the chapel. Mr. MAHON. I am glad to hear that. I do not want to ridicule this project. I think we are trying to do a good job, but we do not want to get so far out in the bright blue yonder that we lose the American People. The American people are paying for this Academy, and they ought to get something that would please Americans generally. Mr. CHENOWETH. I appreciate the gentleman's attitude. I know he wants to see the Air Force Academy the finest school that can be constructed, and one of which we can all be proud. Mr. ROGERS of Florida. Mr, Chair- man, will the gentleman yield? Mr. MAHON. I yield. Mr. ROGERS of Florida. I note that the committee has not seen fit to allo- cate moneys for the proposed Bucking- ham Center in Fort Myers, Fla., in my district. I have studied the needs thor- oughly, and have gone over the testi- mony and discussed it with the Air Force. It is my understanding that this is a training center and the present fa- cilities that the Air Force have do not allow them to properly train the Air Force for the defense of our country. I wonder what comment the chairman may have on that. Mr. MAHON. There are rare excep- tions when military facilities are lo- cated on a political basis. In all my experience I do not think I could name very many. I know there are no politi- cal implications to this project in Flor- ida. We did not have time to go thor- oughly into it. I have looked into this matter further since the hearings were concluded, and I am inclined to feel that the project is necessary if we are going to train these air-defense squadrons that guard our cities and would be available to us in the event of enemy attack. But it is true they have another facility of this general type in Yuma, Ariz. There are other areas over the ocean that would be available for use of the Armed Forces. We were hoping that this in- stallation could be suspended and some of the other installations could be used. But I think the Defense Department was very probably correct, and I do not think the gentleman should be concerned about this problem. It should work out. It is one of those things about which there was a difference of opinion. I think we made several mistakes in the bill, I will say to the gentleman; perhaps this i~ one. Mr. ROGERS of Florida. I thank the gentleman. Mr. ADAIR. Mr. Chairman, will the gentleman yield? Mr. MAHON. I yield to the gentle- man from Indiana. Mr. ADAIR. Directing the attention of the chairman of the subcommittee to page 29 of the report, I find there an item of $285,000 for an air-reserve base at Fort Wayne, Ind., my home town. In communicating with people in that com- munity I find some differences of opin- ion. There are those there who feel that adequate quarters milt be had on a rental basis rather than on a construc- tion basis. The question I am address- ing to the chairman, therefore, is: If con- tinuing study should develop that it would be better, in the interest of econ- omy and in the interest of national de- fense, to rent rather than build in that community, is it the intent of the com- mittee that that might be done? Mr. MAHON. I shall take the liberty of directing a letter to the Secretary of the Air Force requesting that he hold plans in abeyance on this construction until he has thoroughly explored the feasibility of renting facilities. When we make these funds available it does not mean that officials have to spend them. If in the light of other circumstances and developments they can get along without this project in Fort Wayne or elsewhere we want them to do it. That is the policy of the com- mittee. I think the gentleman is ren- dering a great public service in raising this issue. Mr. ADAIR. I appreciate the state- ment of the chairman of the subcom- mittee, very much, as I am sure we both want proper defense facilities. Yet at the same time to have the American tax- payer in mind. Unanimous consent having been granted, I wish to insert at this point a portion of the committee report: DEPARTMENT OF DEFENSE INTERSERVICE ACTIVITIES The budget estimate of $2,250,000 for ad- vances to the Bureau of Public Roads for ac- cess roads is approved. These funds are used for the construction of roads to military in- stallations and defense plants upon certifi- cation by the Secretary of Defense under au- thority of the Defense Highway Act of 1941, as amended. The bill includes the full amount of the budget estimate, $4,200,000 for the construc- tion of additional Loran stations by the Coast Guard. The contemplated program will ex- tend to certain vital areas the present Loran system. MILITARY CONSTRUCTION Submission of budget estimates The most important comment the com- mittee can make with respect to this chapter in the accompanying bill is to call to the at- tention of the Congress the apparent disre- gard on the part of responsible officials of the executive branch of the statutory responsi- bilities of the Congress to fully evaluate and pass upon the fiscal requirements of the executive branch. Why this committee and the Congress should be obliged to consider during the closing days of each session of the Congress measures of this magnitude and im- portance is difficult to understand. A valid reason has not yet been advanced. It was testified that the services originally requested of the Office of Secretary of De- fense approximately 10,500 items, totaling nearly $3 billion. While the number of items and requested appropriation were somewhat reduced by the Office of the Secretary of Defense, formulation of the final budget estimates, received July 1, did take approxi- mately 1 year. The Congress, having a responsibility for the efficient and economi- cal application of appropriated funds, was obliged to give only hurried consideration to the budget estimates because the new fiscal year had already begun. The committee is in position to appre- ciate the mass of detail encompassed by the estimates for military public works, but must, nonetheless, insist that this program be submitted to the legislative committees during the month of January in order that time may be available for full consideration of the budget estimate. Mr. Franklin G. Floete, Assistant Secretary of Defense for Properties and Installations, has testified to the effect that insofar as his office is con- cerned, the program will be transmitted to the Congress early in January of each year. Status of authorizations The total amount of authorizations re- maining unfunded as of June 30, 1955, is approximately $2,057,000,000. Total author- Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE JOY 14 Izations provided for In H. R. 6829. recently enacted by the Congress, is $2,306,000,000, or a total authorization availability in fiscal year 1956 of $4,363,000,000. It should be noted, however, that section 501 of H. It. 6829 provides for the repeal of certain prior authorizations as of July 1, 1958. The iden- tifiable total that will be so repealed is $811 million, although it may reach a much larger figure. Committee recommendations Against the total currently available au- thorization of $4,363,000,000 the Department of Defense has programed for construction in fiscal year 1956 a total of $2,630,055,000. Against this program a total adjusted ap- propriation of $2,220,800,000 was requested, the difference being considered as unneces- sary because of general fluidity In a pro- gram of this magnitude and because of nor- mal and expected slippage generally accepted by the ccnstruction industry. The original budget estimate, transmitted to the Con- gress prior to the enactment of H. It. 6829. totaled $2,273,550,000, of which $800 million was to be derived by transfer from the ap- propriation "Procurement and production, Army." The committee recommends a decrease In the program to a total of $2,471,745,000. To implement this proposed program a total appropriation of $1.879,491.000 is included in the bill, a reduction of $394,059,000 In the budget estimates. Of the total recom- mended, the amount of $483,612,000 is to be derived by transfer and $1,395,879,000 represents new appropriations. It Is fully recognized that so long as we have an Army, Navy, and Air Force we must have adequate facilities and bases to maintain and house these services, and the reduction effected in the appropriation request should not be Interpreted as a reduction in the needed program. Action is predicated solely on the considered judgment of the committee as to money requirements based on Its analysis of the program and the history of military construction funding. The difference between the contemplated program and the appropriation recommended is $592,254,000. The Department or Defense. however, should not consider the entire list or facilities included In the report as per- manently approved. and It is expected that all projects in this or previous programs not specifically financed from available funds and for which financing Is requested In the future, will again be presented In the detail program supporting future fund requests. During fiscal year 1955 the amount of $1,964,000,000 is estimated to be obligated out of a total availability of $2,903,000,000, leaving an unobligated balance on June 30 of $939 million. While a reasonable unob- ligated balance is necessary In this type program. 32 percent obviously Is excessive. The recommended appropriation of $1,- 879.491,000, together with the unobligated balance, provides an availability for obliga- tion in 1956 of $2,818,491,000. This com- pares with a total availability of $2,903,- 000,000 in fiscal year 1955. The elimina- tion of specific projects In the amount of approximately $150 million will, of course, reduce the total estimated obligations in 1956. which is reported in the amount of $2,235,000,000 for all three services. Thus, even should the total obligations approach $2,100,000.000, the remaining unobligated balance of something over $700 million should enable the services to continue with- out interruption an orderly construction program into the first quarter of fiscal year 1957. While the fiscal situation Is slightly different in each of the three services, It Is believed that, generally, each service will be in position with the funds provided to pursue its program as Initially planned. Miscellaneous Military considerations should be the para- mount factor in decisions made by the De- partment of Defense with respect to the location of facilities and defense spending generally. The committee has sought to reduce the land-acquisition program to a minimum. The Department now owns ap- proximately 29,500,000 acres, representing a total Investment. Including facilities, of about $21,400,000.D00. The committee is somewhat concerned over the growing centralization of military activities in the vicinity wherein Camp Car- son and the Air Defense Command are now located and the new Air Force Academy is proposed. It Is suggested. therefore, that a further study be made of this area with especial reference to the water situation, bearing in mind the potential growth in population that the water and other re- sources will serve In the foreseeable future. Considerable discussion was had during and subsequent to the hearings on the matter of single bedroom family housing. It is recommended that the programs of each of the services for this type con- struction be reviewed to insure that only those single-bedroom dwellings will be con- structed as definitely meet the tong-term demands of the services. It Is truited that the existing understand- ing with the committee calling for the allo- cation of adequate funds required for the construction of a usable facility will con- tinue. Disruption of the construction proc- esses, no matter how short the duration, is costly and shou!d be avoided, DEPARTMENT OF TILE ARMY The Department of the Army has requested $545,000,000 for the appropriation "Military Construction, Army." to be derived by trans- fer from the appropriation "Procurement and Production, Army." The committee rec- ommends an appropriation of $483,612,000, to be derived by transfer as proposed in the estimate, a reduction of $81,388,000. This is the first time since fiscal year 1953 that the Army has requested funds for this appropri- ation due to large unobligated balances that were available and now have been reduced through reprograming authorized by the Congress. In addition, request has been made for permission to reprogram $15,091,00D of prior authorizations and the committee recommends that this authority be granted in the manner justified to the committee, as set out In the following table: Aberdeen Proving Ground. Md_-_ $150,000 Fort Dix, N. J------------------ 1,972,060 Fort Bragg, N. C ---------------- 339.000 Fort Campbell. Ky-------------- 4, 180.000 U. S. Military Academy---------- 8, 450,000 Total -------------------- 15,091,000 The Item In the above tabulation for the United States Military Academy Is to be specifically noted. In accordance with the committee's report last year a survey was made of the proposal to convert the riding ball to classroom spaces and authority is now given to proceed with this construction as originally planned out of funds previously authorized. Testimony indicates that the rise in construction costs have increased the current working estimate to $8,950,060. In addition to approving the request to repro- gram $8.450,000 permission is granted to use additional available funds to cover the In- crease in costs tdRaling $500,000. The appropriation recommended, $483,- 612.000. Is to finance a program totaling $553.880,c 0 as set forth in the following tabulation. Those projects that have been specifically denied are set out In the para- graphs following the tabulation. These amounts may be compared with a program request of $566.533.000 and a funding re- quest of $545.000.000. The committee recog- nizes the need for latitude In a construction program of this magnitude. and feels that it has provided such latitude In approving an amount only $70,268,000 below the estimated cost of the recommended 1956 program. This amount takes into consideration a slippage of approximately 13 percent. It was testified a slippage of 10 to 15 percent is generally accepted as normal. The committee feels that as the program Is developed and as deletions are made due to slippage in programing or construction, first consideration should be given toward providing quarters and necessary operational facilities. If there are items which can or must be deferred they should be in other categories. DEPARTMENT OF THE NAVY The program For the Navy military public works pro- gram, the committee had before it for con- sideration a tentative program request for 1956 totaling $646,196,300, of which 8596,- 140,900 t5 new authorizations In the House version of H. R. 6829 and $50.055,400 Is pre- viously approved but unfunded projects. Conference adjustments on H. It. 6829 had the effect of reducing the total to $614,279,- 700 as shown in the table on page 15 of the printed hearings. The committee has ap- proved for funding projects totaling $606,- 479,700. a reduction of $7,800.000, represent- ing reduction in one item and deletion of two projects. These are commented upon below. The approved total includes $61,- 937,700 for 3,650 family housing units. The /unding The budget estimate for appropriation pur- poses to fund the 1956 program Is $528,550,- 000-somewhat less than the program pre- sented for funding authority. The commit- tee recommends appropriation of $439,950,- 000. a reduction of $88,600,000. The appro- priation for 1955 was $98 million under which. Ili combination with unobligated bal- ances from prior years, the Department In- dicates estimated obligations in 1955 of $248 million. Approximately $122 million un- obligated will carry over Into 1956, most of which, however, is stated to be committed to previously approved projects. Basically, the reasons advanced for not requesting appropriation to an amount equal to the total of the projects on which the Department seeks funding authority are un- foreseeable delays on projects occasioned by land acquisition problems, timing of grant- ing of base rights, etc. The total list of projects, however, is justified as urgent, and if delays occur on certain ones the Depart- ment can proceed on others and thus ex- pedite consummation of the total long range construction requirements. The reduction of $88,600,000 Is based on several things. One is the final adjustment in the conference on H. It. 6829 wherein sev- eral projects in the original budgeted pro- gram were dropped. Further, the commit- tee has reduced or deleted three items as pre- viously indicated. Still another reason-and this is the foremost-is the fact that to get this large program underway, the Depart- ment does not need as much as requested. The budget projects, as of the end of fiscal year 1956, an unobligated balance of about $242 million. A substantial portion of that balance will be supported by detailed project plans and specifications and thus required to permit orderly flow of contract placement In the ensuing few months pending availabil- ity of 1957 funds to keep the program in mo- tion. On the other hand, the evidence is clear that a sizable part will not be sup- ported by detailed plans. Contracts cannot be advertised and construction obligations Incurred without such plans. The committee's action should in no way slow down the orderly prosecution of the approved program. The Department should proceed, within the amount allowed, to have detailed plans and specifications prepared and ready on all approved projects as orig- inally planned. Funding requirements for Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 1955 CONGRESSIONAL RECORD - HOUSE 9019 actual contractual purposes can be further determined in the 1957 bill. ? w a ? DEPARTMENT OF THE AIR FORCE The Department presented a program in- cluding several thousand individual projects at over 250 Air Force bases totaling $1,449,- 242,000. The committee has deleted specific projects from this total in the amount of $137,857,000. For appropriation in the new fiscal year the Department requested $1,200,- 000,000, of which $255,000,000 was to be de-. rived by the transfer of unobligated funds available to the Army. The committee is recommending for direct appropriation $955,929,000, a reduction of $244,071,000 in the overall funding request. This amount for appropriation together with the balances carried into the new fiscal year should be sufficient to keep essential Air Force con- struction going throughout fiscal 1956 and provide adequate balances to keep the pro- gram going into fiscal 1957. The difference between the amount pro- gramed for specific projects and the amount to be appropriated is $355,456,000. In other words this is the amount in the Air Force program for which funds are not provided. However, the projects which might have been covered by this amount are not iden- tified, and no priority list has been estab- lished. A program as diversified as the Air Force program must of necessity have a cer- tain amount of flexibility in order that full advantage may be taken of continually changing requirements. The committee is, accordingly, approving as eligible for con- struction air bases and facilities at the above stated cost in excess of the funds provided. The committee is certain that many of the projects still remaining in the program should be given further study. It is ex- pected that this will be done and that with the funds appropriated only those projects most vital to the Air Force program will be undertaken. Mr. TABER. Mr. Chairman, I yield 13 minutes to the gentleman from Kan- sas [Mr. ScRIVNER]. (Mr. SCRIVNER asked and' was given permission to revise and extend his re- marks.) Mr. SCRIVNER. Mr. Chairman, I dis- like very much to find myself in some disagreement with our committee chair- man, the genial gentleman from Mis- souri [Mr. CANNON], but I do not share his alarm as to the comparative situation between the United States and Russia. I do not concede that they are ahead of us in any way except perhaps in the number of jet planes. We are as smart as they, and a little smarter. They pos- sibly have a greater number of jet fighter interceptors, that is logical, because the jet fighter is used to intercept bombers, and we have, the largest number of bombers that can carry death and devas- tation to any corner of Russia today any time we want to give the signal. We not only have the machines, but also we have the trained pilots who are superior to any, and we proved our superiority in Korea by a ratio of 15 to 1. Furthermore, we have the adequate bases, a circle of bases from which we can attack, if necessary. We have su- perior crews in every way, including navi- gation, and we have the years of experi- ence in long-range bombing which they cannot possibly have and which they cannot now get. So I am not going to lose any sleep at all tonight worrying about any state- ment the gentleman has made. I am going ahead and plan my life with a full sense of security; I am going to urge my daughter to educate her son, my grand- son and not worry for 1 single minute about reports of Russian superiority or threats to this country. Much as we may dislike it, we have got to face the facts with which we have to live for the next 25 or 50 years. When we came out of World War I we thought we were in for perhaps a century of peace. We did not have it. We came out of World War II thinking perhaps we might have a quarter of a century or maybe half a century of peace. We do not have it, The Korean war is end- ed. With those three examples we should finally realize we must face facts which are simply these: We must expect for the next 25, 30, to 50 years we are to have a large military force. If we are to have that force-they are situ- ated in widely scattered areas in all parts of the world-we must give them facili- ties with which to work. We have to give them adequate housing. As a mat- ter. of fact, there are quite a few mil- lion dollars in this bill for family hous- ing for the military services-the Army, Navy, and Air Force. In years past in connection with ap- propriations we have heard about "self- liquidating projects." We have seen few, if any, of them. This public hous- ing-and this is a very, very big public housing program, make no mistake about that-this military public housing will be perhaps the nearest to a self- liquidating project of anything we have ever undertaken because we are required by law to furnish our military men with either housing or a rental allowance in lieu of military housing. So that the more military housing we have the less money we pay out for rental allowances which will then in turn pay for these projects we are now building. Not only that, but some of these bases are located at some far away and out-of-the-way places where there is no adequate hous- ing for our men until we build them. Even giving them the best housing we can for the family, the duties they are going to undertake will be pretty stren- uous and arduous no matter how good we make it. I do not worry too much about some of the situations we are told about. Actually, however, I have visited some of these, military bases here and abroad. I have seen some of the housing quar- ters in which some of our military peo- ple have been trying to live with their families. I am quite frank in telling you if someone told me that I had to serve at a certain place and live in cer- tain quarters which I have seen them live in, I would find it difficult to refrain from resigning. So this is not just doing something out of the goodness of our hearts. We are doing it for the good of the service and to fill a very necessary need. We have been told by the gentleman from Texas that we are building up to the 137-wing base. That is quite true. For every new squadron, for every new wing, we must have adequate bases. You can put it down just as simply as that. And according to the mission, every new base is going to cost from 15 to 150 million dollars and in connection with some of the bases it is going to cost you considerably more than that. You cannot operate 137 wings without bases. You have to have everything that goes with a base-you have to have, among other items, runways, taxiways, han- gars, shops, administration and opera- tions buildings, fuel systems. All of those things cost money. As we look at this bill, it is merely a defense public works bill. The big military part has already gone through. Anyone can see that our national defense is costly. It takes men, it takes machines, it takes money, not mere millions but billions of dollars-thousands of millions of dol- lars, which all comes out of the taxpay- ers' pockets. The job we have to do, working with the military, is to see that we get a dollar's worth of defense for every defense dollar we spend. Mr. MAHON. Mr. Chairman, will the gentleman yield? Mr. SCRIVNER. I yield to the gen- tleman from Texas. Mr. MAHON. Since the gentleman has referred to the cost of the Depart- ment of Defense, I think it would be well to place in the RECORD at this point the complete figures. We appropriated for the Army, Navy, and Air Force-the De- partment of Defense-$31.8 billion. In this bill there are appropriations of $1.8 billion for military public works, which would make $33.6 billion for the De- partment of Defense for the current fiscal year. Mr. SCRIVNER. I thank the gentle- man for making that observation. What this public works bill is doing in part is to build up our bases for this long pull, whether it is 10, 20, 30, 75, or 100 years. The buildings we are now seeking to construct for the main part are what we term permanent buildings. We found that our investment in semipermanent types of buildings and barracks just did not pay off. They were comparatively low cost in the first place, but in the long run they were not cheap. They are now becoming dilapidated. Their main- tenance is expensive. But, we just must face the realization that without bases our Navy and the Air Force and the Army cannot operate. We must have them. It is a big bill, yes, but we should expect, as soon as the 137-wing base structure is completed, that there will be a gradual tapering off of requests for new construction, of public works money. Maybe from 3 to 5 years should see the tapering. We have bases some of which probably existed for 100 years. All of the buildings are not that old, but I can show you military buildings that are 100 years old. And we have to go through our old established bases and begin re- constructing some of our worn out, dilap- idated structures to carry on in the fu- ture if we are to do the job that we feel we are called upon to do. It is a big bill. It has got to be paid. It must be faced. We must face the fact that we are going to be presented with similar Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 9020 CONGRESSIONAL RECORD - HOUSE requests to this for some time to come. Mr. GROSS. Mr. Chairman, will the gentleman yield? Mr. SCRIVNER. I yield to the gentle- man from Iowa. Mr. GROSS. Why is It that the De- fense Department does not use perma- nent Installations such as the one we have in Iowa constructed during the war and has not been utilized since? Mr. SCRIVNER. I do not recall at the moment what permanent base the gen- tleman is referring to. Mr. GROSS. The Navy base at Ot- tumwa, Iowa. Mr. REES of Kansas. Mr. Chairman, will the gentleman yield? Mr. SCRIVNER. I yield to the gen- tleman from Kansas. Mr. REES of Kansas. The gentleman has called attention to the need for ad- ditional bases because of the extension and expansion of the Air Force, and per- haps in line with what the gentleman from Iowa has alluded to, I am wonder- ing whether the committee in its hear- ings has discussed the question of the number of bases that were closed after World War II. I have in mind, for ex- ample, the one at Herington, Kans., which was quite an important base. Mr. SCRIVNER. Not only this year but in years past we have discussed many of those bases in detail. The one the gentleman is referring to was a training base, if I am not mistaken. Mr. REES of Kansas. That is cor- rect. Mr. SCRIVNER. There were many bases which were used for training in World War II which are not usable now. If they were to be used, you would have to practically start from scratch be- cause the type of planes that our fliers are training in now cannot take off and land on those fields today. Mr. REES of Kansas. I appreciate the gentleman's statement, but still I have the feeling that there is a tendency on the part of those in the Air Force to sort of overlook some of these bases that we have. Mr. SCRIVNER. If you will read the hearings, you will see that the request made by the Air Force for land is very, very, very small. As far as I can recall now, the only new land we are buying is where it is absolutely necessary for the extension of runways, because with our B-47's and B-52's you have to have 10,000- to 12,000-foot runways, and many of our bases during World War II were established with 6,000-, 7,000-, and 8,000-foot runways. That was all right for the planes that we had then, but the planes you have now just cannot operate on those short runways. Mr. REES of Kansas. I appreciate the gentleman's statement. Mr. SCRIVNER. If the Air Force were to come up and say "We want to go out and buy a block of ground right here someplace for a new base," they would not get very far, because we would point out just what the gentleman from Kan- sas and the gentleman from Iowa have pointed out and say, "You have some bases; you have land that you own, that you bought in World War II. Use that. Do not ask us to buy more land." or course, our Air Force activities were larger then than they are now. Our Navy activities were larger in World War II than they are now. Our Army was far larger in World War II than now. While we are still large, we are not as large as in World War II. and as a result we do not need as many bases as we did then. Perhaps some day we will need them. Who knows? Maybe we will continue to expand. We may have to go back to the bases In Kansas and other States of the Union and make use of them, as well as those we are presently using. But that does not seem probable in the foreseeable future. Mr. REES of Kansas. If the gentle- man will permit, I am making the in- quiry and the observation largely on the basis of what the gentleman has said, that we are going to have expansion and extension in respect to planes and bases. Mr. SCRIVNER. We have the 137- wing base structure pretty well under way right now. The CHAIRMAN. The time of the gentleman has again expired. Mr. CANNON. Mr. Chairman, I yield 15 minutes to the gentleman from Cali- fornia IMr. SHEPPARDI, vice chairman of the Subcommittee on Armed Services. Mr. BAKER. Mr. Chairman, will the gentleman yield? Mr. SHEPPARD. I yield to the gen- tleman from Tennessee. Mr. BAKER. Will the vice chairman of the committee inform me as to whether or not there is any money in this bill for the construction of hospi- tals abroad, outside continental United States? Mr. SHEPPARD. Is the gentleman referring to the Navy portion of the bill, or the whole bill? Mr. BAKER. Any place in the bill. Mr. SHEPPARD. I should like to refer that question to my chairman, the gentleman from Texas [Mr. MAHON), as to how many hospitals there are outside continental United States in the bill. I do not have the answer at hand. Mr. MAHON. I will say to the gen- tleman that the budget request orig- inally contained about 10,000 line items, such as hospitals, dormitories, quarters, and what not. Those were for the au- thorization bill. There are some hos- pitals outside of continental United States to be sure. There are hospitals in north Africa where we have many men. There are hospitals available to our Armed Forces in all important areas. Upon checking our records, I find that there are no new hospitals in this bill for overseas areas. These have been provided in past appropriations and un- doubtedly there will be some future re- quests. This bill specifically provides for a few infirmaries and dispensaries. These are, of course, set up to care for patients on a temporary basis at each major facility until the patients can be transferred to a regular hospital. Mr. BAKER. Mr. Chairman, will the gentleman yield further? Mr. SHEPPARD. I yield, certainly. Mr. BAKER. Are there funds in this bill for hospital purposes outside the United States? Mr. MAHON. I think so, but I would have to take a little time to list the loca- July 14 tions, and I shall undertake to supply the Information. Mr. BAKER. I thank the gentleman. Mr. SHEPPARD. Mr. Chairman, I should like at this time to address myself strictly and specifically to the presenta- tions of the Navy. I was, of course, privileged to sit in on the policy evidence that was submitted by the Secretary of Defense and the respective Secretaries and their comptrollers. I want to pay my compliments to my colleagues on my committee, Messrs. Norrell, Andrews, Wigglesworth, and Os- tertag. also Mr. Wilson, of our staff, for the manner In which we were able to handle the problem in a short period of time and do the very best we could under the circumstances that prevailed. In order that the House may have my views pertinent to the Navy aspect, I will present to you these facts: As in the case of the Army and Air Force, the Navy presented for approval a group of projects totaling more than the request for actual appropriation. Within the time available, the commit- tee has reviewed the total list of projects presented and with exception of those I will mention In a moment, has given the Navy the go-ahead on them. The report contains the actual list by loca- tion. Several hundred separate line- item projects are involved. The program is presented on this lag or slippage basis, if I may use that termi- nology, because experience shows they always have difficulties and delays in getting base rights, land acquisition, and other unpredictable delays or changes of one kind or another. The program presented to the com- mittee totaled $646,196,300 but the actual request for appropriation is $528,550,000. The presentation was made on the basis of the House version of the authorization bill and now that the conference has re- solved the differences on that bill, we have had to make some deletions from and additions to the original program. We have also disallowed 2 projects and reduced 1 other. Then, on top of that, we examined into the status of the projected unobligated carryover, par- ticularly as to availability of detailed plans and specifications without which they cannot advertise and award con- tracts. We found that we could with- hold some funds on account of this factor. All told, we have reduced the program from $646,196,300 to $606,479,700, which is a cut of $39,716,600. As to the appro- priation request, we have cut it from $528.550,000 to $439.950,000, a cut of $88,- 600.000. I think under all the circum- stances we have cut about as much of their money as we should. The money cut is about 17 percent. Now to recap the situation, and give you the specifics on the projects deleted, let me give you these figures: The Navy originally presented proj- ects for our approval totaling $646,- 196,300. There were several projects which the conferees on the authorization bill dropped out and a couple which they added, so we took them into account. A list of them appears on page 15 of the Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE 9021 Navy hearings. They make a net reduc- tion of $31,916,600. That left a total revised amount of $614,279,700. Then the committee cut out two proj- ects and reduced another, totaling for all three, $7,800,000, which we took out. That leaves the total which is ap- proved for funding listed in the report and it totals $606,479,700. The three projects we deleted or re- duced are: First. We took $2 million off the $6 mil- lion request for replacement of facil- ities destroyed or damaged by fire, hur- ricane, and so forth. That gives them the same as they had last year. Second. We took out the $2 million put In by the other body for plans for a new drydock at the Puget Sound shipyard to handle Forrestal carriers that may have been battle damage. It was not budget- ed, and we had no hearings on it, so we did not feel we could include it at this time. Third. Then we deleted the item of $3,800,000 for a new building at the naval ordnance plant at Macon, Ga., for man- ufacturing inert ammunition parts. With the administration's present policy prevailing having to do with getting the Government out of competitive business, it seemed to your committee rather doubtful whether we should go ahead at this time and expend $3,800,000 for a new building and a business that would keep the Navy in a fabricating category wherein the field has a lot of competi- tion from private business. There is a difference of opinion about this issue. In fact, there was a differ- ence of opinion within our committee, and an amendment was offered to correct that situation. However, the commit- tee as a whole sustained your Subcom- mittee on Naval Appropriations in keep- ing the deletion in the bill. Mr. Chairman, in general, and rather briefly, that covers the actions that have been taken by the subcommittee han- dling appropriations for the Navy. I have been associated with this committee and with this work, as you Members know, for a good many years and so have my col- leagues, the gentleman from Massachu- setts [Mr. WIGGLESWORTH], and others of my able associates. We feel that so far as the Navy is concerned, we have done the best job we could on the basis of the evidence they presented and con- sidering the availability of the properties of the Navy, which the Navy is presently using and which it is contemplating using. Whether or not in the final analysis what we are recommending will be ultimately accepted by the House, of course, remains to be seen. I assure each and every one of you that in this instance as in every other instance, I am per- fectly willing to submit to the will of the House as to the final conclusion. Mr. Chairman, I yield back the re- mainder of my time. Mr. WIGGLESWORTH. Mr. Chair- man, I yield 5 minutes to the gentleman from New York [Mr. OSTERTAGJ. Mr. OSTERTAG. Mr. Chairman, as a member of the Committee on Appropria- tions' defense subcommittee and more particularly on the Navy panel, I want to pay tribute first of all to our distin- guished chairman, the gentleman from California-[Mr. SHEPPARD], for his able and considered guidance of the work of our subcommittee, and also pay tribute to my colleague, the gentleman from Massachusetts [Mr. WIGGLES WORTH], who is the ranking minority member of our subcommittee. Both of these gen- tlemen have been courteous and fair and I am grateful to them for their many considerations and kindnesses. The gen- tleman from California [Mr. SHEPPARD] has ably described the general changes and adjustments that have been made in this particular phase of the military con- struction appropriation bill. I might point out that in the Navy's presentation to us, there were some 632 projects in- volved. It was pointed out that the Navy plant, the construction plant, the property itself, is valued at some $7 bil- lion. And, too, it has been pointed out that it will take approximately $12.5 billion more to bring the Navy's estab- lishment up to modern standards and re- quirements. I think it might be well for us to pause a moment to reflect the changes in the overall picture so far as our Military Establishment is concerned. With the Navy being called upon to meet tremendous responsibilities worldwide, and with the increased importance of naval aviation in our defense picture, it is reasonable to understand why we must begin to move toward modernizing the facilities that are so essential to our se- curity and to our defense. Another point I would like to make, which perhaps might be overlooked in a general discus- sion, is that the Navy has within the military construction appropriation bill some $15 million allocated for the pur- pose of pollution abatement within the continental United States. I am not sure at this point whether all of the other services have followed the directive of the Executive order calling for plans, programs, and steps to elimi- nate pollution caused by our Military Establishment, but the Navy has in this instance provided some $15 million to eliminate pollution in the waters and streams of the United States of America. These particular projects and this $15 million does not complete the job, but it is a logical step forward, and I hope that all of the services and the Defense De- partment will move in unison in this task, which is so essential to the preser- vation of our water resources and to pub- lic health. To my mind it does not make much sense for the Navy to spend mil- lions of dollars to eliminate waste and pollution and treat sewage with the Army and the Air Force right alongside of that very facility dumping waste and sewage into the same waters and streams. Mr. Chairman, there is much that might be said about the many projects that are approved and incorporated in this bill. Among them, of course, are the facilities for the shipyards, for the fleet bases, aviation facilities, fleet sup- port air stations, Marine Corps air sta- tions, and many facilities overseas, in- cluding places such as Hawaii, Okinawa, the Philippines, French Morocco, Alaska, Guam, Japan, Newfoundland, Italy, and other points of vital impor- tance to our defense. As has been previously pointed out, the committee approves and recommends a total of $439,950,000 in new money, which is a reduction of $88,600,000 over the budget estimate for funding during fiscal 1956. Bear in mind that $122 million in unobligated funds will carry over into this fiscal year but it is understood that these moneys are committed to projects previously approved. In the Navy, as in all other services in our Defense Establishment, a general fluidity in the program applies because of slippage and other construction fac- tors. The CHAIRMAN. The time of the gentleman from New York [Mr. OSTER- TAG] has expired. (Mr. OSTERTAG asked and was given permission to revise and extend his re- marks.) Mr. TABER. Mr. Chairman, I yield 15 minutes to the gentleman from Wis- consin [Mr. DAVIS]. (Mr. DAVIS of Wisconsin asked and was given permission to revise and ex- tend his remarks.) Mr. DAVIS of Wisconsin. Mr. Chair- man, I find myself in general agreement with the statements which have been previously made in connection with the military construction program we have before us today, and it is entirely to that program that I wish to devote my allot- ted time. The chairman of the subcommittee, the gentleman from Texas [Mr. MAHON], mentioned the difficulties under which we were required to work in conducting the hearings on the military-construc- tion program. That certainly was true. It seems that in this program, as long as I have known it, we have always been re- quired to labor under extreme difficulties in trying to bring to the floor of this House an appropriation bill for military construction. The major responsibility for that, of course, must lie with the ex- ecutive department, because the repre- sentatives of the Department of Defense have failed to bring legislation before this Congress in a timely fashion. I know that the Committee on Armed Services has gone out of its way to bring authorizing legislation to the floor of this. House promptly after it has been submitted to it. There ought to be a reasonable lapse of time after the au- thorizing legislation has been before the Congress, so that the staff of the Com- mittee on Appropriations could go through the justifications of the things that have been authorized, so that the committee would be prepared to conduct hearings in an orderly and informative manner after that legislation has been passed. In my experience that has never been the case. I can recall that back in 1951, which was the first year I served on the sub- committee that handled this appropria- tion, we were called back here in Septem- ber, and a huge stack of justifications was submitted to us; because at that time we feared, with no little justifica- tion, that the war going on in Korea might well be the beginning of world war III. So we attempted to get some grasp Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 9022 CONGRESSIONAL RECORD - HOUSE of what was submitted to us. and finally, because the executive department itself had not formulated a program for the expansion of the physical facilities of the Armed Forces commensurate with what we thought might be ahead as a result of Korea, we finally had to end up with a lump sum without any pinpointing of the appropriation whatsoever. In 1952, it was substantially the same story over again. Shortly before the Congress had made up its mind to ad- journ, huge stacks of justifications to the extent of $1,800,000,000 were submitted to the committee. Members of the com- mittee, after some consideration of what they might possibly do, finally ended up again with a lump sum appropriation of about $1,200,000,000. We did a little better in 1952 than in 1951. At that time there was set up a grid of so much for each command, and so much for each purpose, broad cate- gories such as pavements and utilities within the amounts allotted by those commands, and that grid plan was put into operation for funding Air Force construction, being known generally as "the Davis grid." During that year, 1952, the executive branch and the Con- gress were both pretty much at sea as to what was going on in the field of military construction. The Riley sub- committee was established and an at- tempt was made to go into the standard- izing of facilities and the charges of waste and inefficiency in this program that were reported to the committee, in- cluding the much-publicized situation in French Morocco. I think the work of that subcommittee still stands as an ex- ample of judicious, conscientious investi- gation into this kind of program, and I think this entire Congress is indebted to the gentleman from South Carolina for the work which he accomplished in that session. Mr. MAHON. Mr. Chairman, will the gentleman yield? Mr. DAVIS of Wisconsin. I yield. Mr. MAHON. I want to concur in the gentleman's statement in regard to the work of this subcommittee upon which the gentleman from Wisconsin served so effectively. Does not the gentleman think that the sort of job that was done there has paid dividends and been helpful to us with respect to further developments in mili- tary public works? And does not the gentleman think that the public works program as it has pro- gressed through the years since Korea has gradually improved and is improved now over last year and the year before? Mr. DAVIS of Wisconsin. I am sure that is the case. and I think we can trace the standardization of facilities both in terms of physical structures and the costing structures in the Military Estab- lishment to the work which was done by that subcommittee in 1952. It was not until the late autumn of the year 1952 that the executive department finally began to attempt to get these things under overall control. We had the three branches of the service running off in three different directions with dif- ferent criteria of construction and no attempt to standardize the structures or costing. Late in 1952 Frank Creedon was appointed as a Director of Installa- tions within the Department of Defense, by the Secretary of Defense, in an at- tempt to coordinate the military public- works program. There was a conscien- tious man. He did as much as he was permitted to do under the circumstances. The trouble is that he was not given the authority to do the job that needed to be done. Then came 1953, and in that year there was an overall revision that took place, because Defense Department officials were attempting to get their feet on the ground with respect not just to installa- tions but to the whole operational con- cepts of the armed services; and in that year our subcommittee attempted to pin- point each particular line item, and there was a grant of funds to construct each of the approved line items. The diffi- culty was that the Armed Forces simply were not equipped in terms of organiza- tion and manpower to proceed in an orderly fashion on the size of the con- struction program that was contem- plated. So there were slips and lapses here and there. Therefore, we went into the 1955 fiscal year with huge unobli- gated balances. Last year we adopted a new system. We tried to work out something that rep- resented a workable compromise between the years of 1951 and 1952 when we had to literally give them a lump sum and say: "You put it wherever you think it will do the most good," and what we attempted to do in 1953, the pinpointing of a certain amount of money for every single line item. That was the dual sys- tem that was put into effect by the sub- committee last year of setting up a pro- gram and saying: This is the program upon which you can build, but we know you are not going to be able to build all of those things. You are going to have trouble acquiring land here, you are go- ing to have difficulty with architecture there, difficulty with planning some- where else and difficulty with letting contracts; so we will appropriate a less- er amount and let you use that money across the broad field of the specific items of the program we have approved. That permitted them a flexibility which proved, in my opinion, to be very effective. At the time of the hearings this year it was clear that this huge un- obligated balance had disappeared in all three branches of the service. It is true there is what may appear to be a large amount of money carried over un- obligated into this 1956 fiscal year, but in any construction program of this kind and of the magnitude that it involves, there has to be, in my opinion, an ob- ligated carryover in the neighborhood of about 20 percent in order that the pipe- lines will be filled for the first quarter of the new fiscal year before the new money becomes available. That has been accomplished substantially as of this date and I would say under the flexible program which this subcommit- tee Instituted last year, we are in pretty good shape as far as the unobligated balances of this program are concerned. The executive branch apparently thought it was a good idea too, because July 14. the program that was submitted to the committee this year was geared to that basis: a program on the one hand and a smaller amount of requested money on the other that could be obligated across the field of the approved program of construction items. Our programs for military construc- tion in past years, at least in recent years, have been characterized by a couple of things that I think should be called to your attention, primarily be- cause they do not apply to the program that we have before us now. One of them was what we used to call an austerity program. We were dealing with the bare essentials, we were doing things plainly, without frills, at what we thought was a minimum reasonable cost. The second characteristic of that pro- gram as we knew it then was that we were going to get it done in about the 1957 fiscal year. We anticipated that requests for appropriations would taper off in the next fiscal year after this one. Neither of those things is applicable to the program we have before us. It is not proper to call this an austerity pro- gram because instead of dealing mainly in operational requirements without frills, this program, for the first time, is geared to a number of frills. In other words, there is emphasis on welfare ac- tivities, service activities, and recrea- tional activities, and that is completely consistent with what apparently is the prevailing view and part of the prevail- Ing program to make life pleasant enough in the armed services so that enlistment rates will remain high and we will not need to resort to selective service to such a large extent. The second thing is that we forgot any thought of tapering off in the 1957 fiscal year. I suppose the program submitted to you next year will be just as large as the one we have before us this year, and I will be surprised if the one that is sub- mitted for fiscal 1958 is much smaller than the one we now have before us. I do not know when we can reasonably anticipate a tapering off of the requests for military construction. The only major criticism that I would have with respect to the bill as it is now reported would be a failure to pinpoint the limitations on the overall program. I think the money that is involved-and I suppose that is a major consideration- is completely consistent with my own personal point of view. But, I do feel that we have failed to pinpoint limita- tions on the overall program, and, of course, where the commitments are made. When you commit yourself to the building of a program, it does not make too much difference whether you are going to put the money in this year or next year it is going to cost just as much, and if the cost of construction continues to go up. It will cost more, perhaps, if the money is put in in a subsequent year. But there again I cannot place any im- mediate responsibility on the part of the members of the committee. It is part of the failure of the executive branch to submit this program to the Congress in a timely fashion. We have been prom- ised improvement on that score in the next year by Assistant Secretary of De- Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE 9023 fense Floete, because I think we on the committee owe a responsibility to the Congress and the people of doing a better job than it has been physically possible for us to do in presenting this year's program. So, with those weaknesses, which are not important weakness on the part of anyone in this room, or for which they must accept major responsibility, I sup- port the bill as it stands before us, and I hope the majority of this House will do likewise. Mr. REES of Kansas. Mr. Chairman, will the gentleman yield? Mr. DAVIS of Wisconsin. I yield to the gentleman from Kansas. Mr. REES of Kansas. I just want to say that this House and the Congress and the country are indebted to the gen- tleman from Wisconsin who just ad- dressed the House and the group to which he belongs for the splendid service rendered this country in dealing with this most intricate problem. Mr. DAVIS of Wisconsin. I thank the gentleman. Mr. SCRIVNER. Mr. Chairman, will the gentleman yield? Mr. DAVIS of Wisconsin. I yield to the gentleman from Kansas. Mr. SCRIVNER. I concur in the re- marks made by the gentleman from Wis- consin about the gentleman from South Carolina [Mr. RILEY], but I believe he has been unduly modest, because the gentleman from Wisconsin labored with -the gentleman from South Carolina on that committee and helped bring about that possible result. Mr. DAVIS of Wisconsin. I thank the gentleman. I suppose it might be proper for me to add here, if the gentleman from South Carolina who has just risen will bear with me, I think I took more than the normal amount of disappointment when the subcommittee organization for' handling this program was changed in this 84th Congress, because I felt there was an unusual affection and under- standing and conscientious cooperation that existed among the members of the subcommittee that handled this pro- gram during the 83d Congress, and that certainly includes a man who devoted all his working hours to furnishing the members of the subcommittee with the information they needed to attempt to do an intelligent job with respect to this program, and, of course, I refer to Frank Sanders, who served as the executive clerk of this subcommittee during the 83d Congress. Mr. RILEY. Mr. Chairman, will the gentleman yield? Mr. DAVIS of Wisconsin. I yield to the gentleman from South Carolina. Mr. RILEY. I wish to concur in the remarks made by the gentleman from Kansas in regard to the splendid con- tribution of the gentleman from Wiscon- sin. I wish to express my appreciation to the gentleman from Wisconsin for the very extravagant remarks he has made about me. The study referred to was a cooperative movement on the part of the Committee on Appropriations in order to bring about a more realistic and a more practical program in the construction of military bases. This committee was originally set up by the distinguished gentleman from Missouri [Mr. CANNON] in an effort to coordinate the military construction program and work out a useful and at the same time an economical construction program in the services. Through the efforts of the staff and the members of the committee, with the exception of the gentleman who is speaking, they did work out a program and spotlighted it to the Army, Navy and Air Force. I think the program has progressed and is still progressing. I think it has become more realistic and more practical and I believe will continue in that direction as a result of the study made by this committee and the spot- lighting of the weaknesses and the recog- nition on the part of the military defense forces of the suggestions of this sub- committee. I appreciate the gentleman from Wis- consin bringing this matter to the at- tention of the House, and I am sure the House appreciates the very fine service that he has given. He has given un- stintingly of his time and efforts and talents to bring success to this program. It has been a bipartisan movement. Mr. DAVIS of Wisconsin. Mr. Chair- man, I simply want to say when these remarks are submitted to me for revi- sion, I intend to take the liberty of strik- ing out the exception which the gentle- man made with respect to himself. Mr. CANNON. Mr. Chairman, I yield such time as he may desire to the gen- tleman from Missouri [Mr. HULL]. (Mr. HULL asked and was given per- mission to extend his remarks at this point in the RECORD). Mr. HULL. Mr. Chairman, this col- lege, the Command and General Staff College, at Ft. Leavenworth, Kans., is the senior tactical school of the United States Army and the only Army school of combined arms. Upon the proper ac- complishment of its mission depends the successful tactical implementation of our war plan. It is an extremely criti- cal component of our national defense. The course of instruction at this col- lege is being conducted in three build- ings which were originally constructed and used respectively as a stable, riding hall, and World War II temporary gym- nasium. They are inadequate for the accomplishment of the mission of the college and have been uneconomical to maintain since they were converted to college classroom space and are becom- ing progressively more expensive to keep in a a serviceable condition. They do not measure up to the facilities pro- vided for similar level colleges operated by the other services and are not in keeping with the dignity of this college and United States world leadership in the eyes of the many foreign dignitaries who visit here each year and of the se- lect allied officers in the student body- 85 from 42 allied countries this year. Further, the Department of the Army program planning is aimed toward an increase of over 25 percent in the student load of selected Regular Army, National Guard, and Reserve officers by Septem- ber 1957, the date planned for the open- ing of this building. Throughout the years many of our greatest military leaders have studied at this institution and I know of by own personal knowledge that this new facility is a necessity. Furthermore, to deny this much-needed academic building is to detract from the dignity and prestige of our country. Mr. CANNON. Mr. Chairman, I yield 3 minutes to the gentleman from Cali- fornia [Mr. HOLIFIELD]. (Mr. HOLIFIELD asked and was given permission to revise and extend his remarks.) Mr. HOLIFIELD. Mr. Chairman, in looking through the report of the sub- committee I note, on page 11, at the bot- tom of the page, the committee reports that they eliminated $12,650,000 to pro- vide for the design and construction of a hull of a new atomic-powered mer- chant ship. And, on page 51, at the bottom of the page of the report, it says: The merchant ship Reactor, for which $21 million was programed, has not been au- thorized, and the funds have been disal- lowed. I want to compliment the committee on this particular action. As a member of the Joint Committee on Atomic En- ergy since its inception, I believe that I can state, without exaggeration, that I am one of those on the committee who wants to see an atomic reactor of a type that would be available for a surface ship developed just as quickly as it can be developed. In fact, we put into the authorization bill for construction sev- eral items along this line, one of which for $25 million was to be used for re- search and development in reactors, which I regret to say has been elimi- nated by the committee. But I shall speak at some length on that at a dif- ferent time. But in regard to the $21 million re- actor fund that was disallowed for a merchant ship, the committee followed the general thinking of the majority of the members of the Joint Committee on Atomic Energy. There are several rea- sons why we were against that $21 mil- lion item. The main reason was that an attempt at this time to build a Nautilus- type reactor which would have been merely an enlargement of the reactor which is used in the submarine Nautilus would have been very expensive. It would have involved, for the ship, the hull, and the reactor, anywhere from $34 million to $47 million. It would have produced a ship which had an obsolete atomic reactor in it. It could not have carried a pound more of cargo. It would have cost, according to our estimates, approximately 10 times as much to run it as an ordinary merchant ship. In other words, fora quarter of the cost and for a tenth of the operating cost you can have a merchant ship that will do all the functions which this ship would perform. In the authorization legislation from the Atomic Energy Commission there was a $50 million item for the develop- ment of what we commonly call a car- rier-type ship reactor. This carrier-type reactor would not be a single reactor, it would be-created in multiples of 2, 4, 6, 8, something on that line. When those Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE JOY 14 reactors are developed any one of more of those reactors can be placed in a merchant ship and used for ship pro- pulsion, so, in effect, that type of re- search and development work is going on. It will go on under Admiral Rick- over, who is the best man I know of to get the job done, with the limited num- ber of physicists, scientists, and engi- neers who are capable of doing that high-class work. I am sure under the program already authorized this work of building a reactor which is appropriate for a merchant marine ship will be done. Therefore, I compliment the committee on recognizing these facts and deleting these amounts from the appropriation bill. Mr. HAYS of Ohio. Mr. Chairman, will the gentleman yield? Mr. HOLIFIELD. I yield. Mr. HAYS of Ohio. There are a great number of merchant ships moored up and down the Hudson and in other har- bors that are available in case of neces- sity. As I understand, if this reactor is developed, it will be of a type that can perhaps be placed in those ships to make them fast and usable and bring them up to date. Mr. HOLIFIELD. I think there is a possibility of that being done, all right, although the hull that may be needed may be of a special type. Mr. RABAUT. Mr. Chairman, I yield 10 minutes to the gentleman from Mis- sissippi [Mr. WHITTEN]. (Mr. WHITTEN asked and was given permission to revise and extend his re- marks.) Mr. WHITTEN. Mr. Chairman, I shall not belabor the committee by going into the various phases of our military program and the system of handling the military programs in our appropriation and legislative process. The hearings clearly point this out. I have served on the Armed Services Appropriations Committee, being back on it this year after being off for a num- ber of years. You could not be on a committee where the members are more able or one where they work harder or where it is more of a pleasure to serve with them. My complaints have been directed toward the expansion of per- manent real estate bases and on the size of the whole military operations contin- uing at present levels for 20 or 30 years. I have also raised the question if per- haps by appropriating the full amount of money that completed contracts might cost in advance, we were not inviting the actual expenditure of those funds. In our efforts to restrict or to contain the public works expansion of the military, I wonder if sometimes we have not fol- lowed a program which tends to make the Armed Services Committee and the Appropriations Committee really the Public Works Committee. It is to them that chambers of commerce, cities and towns look for spending military money by locating military establishments there. I say that without any criticisms of any individuals involved, but it has come to our attention in these hearings in several instances where selections were made, expenditures were made, where certain military considerations and costs to the Government seem to be laid aside for pressure of various kinds. I hope we can go into these matters more fully next year and get some cor- rection. For one I have tried to point out the reasons in the hearings and have urged investigations to substantiate the case I believe the hearings have made. We have succeeded in our efforts to get these matters investigated. I am pleased to state at the present time we have in the Committee on Appropria- tions investigations either cleared or going on at the moment on procurement, public works and on many, many other activities of the Department of National Defense. This information will be made available to the committee next year, and at that time we will be able to sus- tain many of things, I think, which we see should be corrected. Mr. Chairman, my prime purpose in taking this time is to put into the RECORD and to bring to your attention actions of the appropriations' subcommittee for agriculture. I know it has been noised abroad in the last day or two that the Committee on Appropriations had put various legislative provisions in the ap- propriation bill. There are several of those in the agricultural subcommittee's part of this bill. In every instance. these are at the request of President Eisenhower in connection with aid to the low-income farmer. I havebeen serving on this appropriations' subcommittee for some 10 years, for 5 years I have been chairman of it. During that period of time I have never written legislation in that bill nor has our subcommittee, where we did not first go to the leaders of legislative committee on agriculture and asked if they did not wish us to do it. This is no exception, I went to the gentleman from North Carolina [Mr. COOLEY I and to the gentleman of Texas [Mr. POAGEI pointing out that this was the last appropriation and that the President had asked for certain rela- tively minor and small amounts of money to carry out his program, and asked if they did not think it wise to put it in this bill. The said it would be O. K. to go ahead: then the amounts were put into this bill. The only excep- tion to that is we have in the bill pro- vided a grade 17 for a salesmanager of the Commodity Credit Corporation. That is a $7 billion corporation. It has had no sales policy and no sales manager. In our recent report on our regular appropriation bill, we pointed out those facts and I am pleased to note that sub- sequent to that the Department of Agri- culture has appointed a sales manager for the Commodity Credit Corporation. He was appointed July 1. In other words, while that item appears in the bill, it is only a question of whether you pay him at the same rate as others in the Department who do similar work. We do not have to pass any authorization for the creation of the position. The right, already existed with the Department. We just found fault because they did not see fit to exercise it. Personally, I do not know whether objections will be made to the items In this bill or not. Personally. I cannot see that the items we have in our bill are going to in any way cure the present ills that face the low-income farmers. I do feel, and our committee felt, and we so expressed our- selves in our report that the farm situa- tion is bad enough; and we felt we should give the Persident and the ad- ministration these requested funds to try to relieve the situation. Again, may I say I cleared that with the gentleman from North Carolina [Mr. COOLEY] and the gentleman from Texas [Mr. POAGE]. We acted after they said the thing to do was to go ahead, and if subsequently any change was made in attitude, we could raise it when it reached the floor of the House. If the items go out, I do not think we will have lost a great deal. But, I will say to the committee that your subcommittee on agricultural ap- propriations have put these items in the bill because, certainly, we want to be in a position of supporting the President in his efforts to relieve this low-income farm situation. I cannot help but say, however, in our report we also pointed out that the suggested course of the ad- ministration was missing the boat and would not relieve the situation which they attempt to relieve. Mr. H. CARL ANDERSEN. Mr. Chairman, will the gentleman yield? Mr. WHITTEN. I yield to my col- league from Minnesota. Mr. H. CARL ANDERSEN. Mr. Chairman, the distinguished gentleman from Mississippi [Mr. WHITTEN] has stated the position exactly as it exists. We have placed these items in the bill at the request of the administration and both the gentleman from Mississippi [Mr. WHITTEN 1 and I hope that in spite of the fact that points of order would lie against them, that they will remain in the bill. Mr. WHITTEN. I thank the gentle- man. May I say there has been one ex- ception insofar as legislation we have had in this bill in former years is con- cerned. One exception where we have asked for a rule was at the request of the legis- lative committee on agriculture. Two or three years ago the committee had failed to pass a new authorization bill for the ACP program, and at their re- quest we included funds and asked for a rule. Except for that, may I again say the legislative provisions have always been cleared with the leaders of that committee. The ones we have today are at the request of the President. I do not think it will do a great deal, but I am willing for him to have his chance to bring about some relief for the low-in- come farmers. I have asked permission to revise and extend my remarks, and I will include a copy of our report and such other in- formation which we have, which more clearly shows this picture. DEPARTMENT OF AGRICULTURE RURAL DEVELOPMENT PROGRAM On April 26. 1955, the President submitted to Congress a message calling attention to the need for further assistance to the more than 1,500,000 American farm families which now have an Income of less than $1,000 per year. In the words of the President: "In this wealthiest Nation where per capita income is the highest in the world, more than one-fourth of the families that live Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE on the farms still have cash income of less than $1,000 a year. They neither share fully in our economic and social progress; nor contribute as much as they would like and can contribute to the Nation's production of goods and services." In an effort to meet this problem, the Bu- reau of the Budget on May 26, 1955, sub- mitted to the Congress supplemental budget estimates (H. Doc. No. 171) to enlarge the programs of the Department of Agriculture in the following amounts: Direct appropriations Agricultural Research Service---- $380,000 Extension Service--------------- 1,286,000 Soil Conservation Service -------- 150, 000 Agricultural Marketing Service--_ 250, 000 Farmers' Home Administration--- 850, 000 Office of General Counsel--------- 36,000 Office of Secretary--------------- 19,000 Office of Information ------------ 30, 000 Loan authorizations Farmers' Home Administration: Production and subsistence loans -------------------- 15,000,000 Small - farm development loans --------------------- 15,000,000 30, 000, 000 The program for which these funds are requested, as outlined to the committee by the Under Secretary of Agriculture, proposes to find solutions to the problems of these farmers through improving production and marketing practices, by shifting from full- time to part-time farming, by encouraging off-farm employment wherever possible, and by appealing to local States and communities to help at the local level. The additional funds provide for increased research, exten- sion, and soil-conservation work by the De- partment and an expansion of the loan pro- gram of the Farmers' Home Administration. With some misgivings, the committee Is approving the full amount requested, since the serious plight of the farmers throughout the country is such as to require the en- couragement of every action which may help, even if only in a small way. The committee believes that the Department of Agriculture, State, and local agencies, and the people themselves should be given every opportunity to foster and promote those measures which the Secretary feels will contribute to solving the unfortunate plight of these 1,500,000 low-income farmers. According to the De- partment's own survey, 130,000 additional low-income farmers were added by cotton- acreage reductions this year and 58,000 farm- ers were forced off of farms entirely by such action. The committee is going along with the President's proposal in the hope that it will enable him and the Secretary of Agri- culture to recognize that reductions in the level of price support, without proper pro- vision for meeting increased farm costs, and reduced acreage made necessary by failure of the Department to sell in world markets at competitive prices, are the factors which are creating the very conditions which they hope to correct. At the same time, the majority of the members of the committee do not consider the Secretary's proposal as a real farm pro- gram, nor do they feel that it reaches the basic causes of the problem. They are of the opinion that it can in no way substitute for a farm program which would meet pres- ent rising costs, decreased volume, and re- duced prices; and they are certain that it will not provide sufficiently adequate income to the farmer, In the immediate future, to en- able him to stay on the farm. While the committee recognizes that off- farm employment has been helpful to rural families in maintaining a reasonable stand- and of living in some areas, the majority of its members have little confidence in a program designed to encourage them to look to city employment in preference to con- sidering agriculture as a worthwhile occupa. tion and a wholesome way of life. They can see some real dangers to the American way of life If the present trend away from the farm is allowed to continue and actually encouraged by the Secretary. Further, since the present problem in many areas of the country is one of creating additional em- ployment for people now living in the cities and towns, they cannot accept this feature of the administration's proposal as a long- range solution to agricultural problems. Mr. Morse, Under Secretary of Agriculture, speaking for the Department, told the com- mittee that the increased costs incident to the President's requested increase in mini- mum wages for labor would not appreciably hurt the low-income farmers. Mr. Morse further stated that reducing price supports had not and would not appreciably hurt the farmer. He also attempted to defend the Department in its refusal to sell in world markets at truly competitive prices, which thereby cuts the farmer's acreage, produc- tion, and Income. Now, with the small farmer in bad finan- cial shape, as recognized by the President, the United States Department of Agricul- ture is asking the committee to believe that to lower his price, increase his cost, and cur- tail his production will not appreciably hurt him. Perhaps the only thing left for the Department of Agriculture to recommend is that the low-income farmer get a job in town. And that is largely what the Presi- dent, his Bureau of the Budget, and his De- partment of Agriculture have recommended to the committee in support of funds pro- vided in the accompanying bill. The farmers of this Nation received 12 percent of the national income in 1946, 11.6 percent in 1948, 9.4 percent in 1951; and in 1954 the farmer's share of the national in- come dropped to 7.2 percent. This year the indications are that this percentage will go down still further, with a drop of $1 billion in farm income In sight. It is expected that the national Income will increase another $20 billion at the same time. Supporters of flexible supports frequently contend that a 75 percent of parity support program will not hurt the farmer, because he is already hurt under 90-percent support. It is true that he has been in very bad finan- cial shape, but in the absence of price sup- ports his situation would have been much worse. The farmer's income is dependent upon the volume he produces, multiplied by the price he receives, less his cost. In recent years the farmer's prices have been reduced, and his cost has gone up greatly, more than 12 percent in the last few years. The Presi- dent has requested an increase In the mini- mum wage for labor and has supported in- creases in income for other groups. As a result, farm costs are bound to continue to go up. With his income dependent upon price times volume, reducing the price can only make the farmer's situation worse. A majority of the committee believes that what is needed is to at least maintain the price the farmer has been receiving, and to in- crease his volume of production by selling competitively in world markets what he produces. In the opinion of a majority of the com- mittee, what has really hurt the farmer is that his production has not been sold in world markets-because the Department of Agriculture has not offered such commod- ities for sale at truly competitive prices. According to the Department's own testi- mony, almost $4 billion worth of farm com- modities are In the hands of the Government, and are not being offered in world trade at competitive prices. The United States is 9025 the only country which follows such a short- sighted policy. By refusing to sell, the CCC has built its stocks up by billions of dollars, paying huge amounts of storage. Such storage expense will soon reach the staggering total of $1 million per day, largely on commodities which are not offered in world trade at com- petitive prices. Then further, such commodities, under the formula in the law, are counted to reduce the farmer's acreage and marketing quotas. Thus, the farmer's trouble and his reduced income under 90-percent supports have come about largely because of his constant price- now a reduced price under the parity formula of the administration-multiplied by a con- stantly reduced volume, less ever-increasing costs. It is the belief of the majority of the members of the committee that to solve pres- ent difficulties Congress and the Secretary of Agriculture must correct two weaknesses in present programs. The first is to adopt a plan which willmaintain reasonable prices for agricultural commodities. Nearly every segment of this country's economy is sup- ported by one means or another, and it ap- pears entirely reasonable to provide some comparable protection to the agricultural producer. If this fact were fully understood by all the people of the country, there is no doubt In the minds of the majority of the committee that there would be little objec- tion to such a program. The second solution which must be fully recognized and vigorously pursued is to make certain that agricultural commodities ac- quired by the Commodity Credit Corpora- tion as a part of a price-support program are sold on a truly competitive basis as au- thorized by law. The majority of the com- mittee would point out that the Commodity Credit Corporation has full authority in its basic charter to sell agricultural commod- ities abroad at competitive prices, which will move them into world trade channels. Committee hearings disclose that, while the Department holds a convenient price umbrella over world production, American financial interests have increased their pro- duction in foreign countries as fast as the American farmers have been reduced at home. A recent study by the investigative staff of this committee shows that in Mexico, cotton production has increased from a pre- war average of 324,000 bales to a postwar 5-year average of 577,000 bales and to 1,780,- 000 bales in the crop year 1954-55; at the same time, cotton exports have increased from 105,000 to 1,150,000 bales. This study also shows the following with reference to cotton production increases in other areas of the world: In the Middle Eastern countries of Turkey, Syria, Iran, and Iraq, cotton production de- creased from a prewar 5-year average of 459,- 000 bales to a postwar 5-year average of 390,- 000 bales and then increased to 1,260,000 bales in the crop year 1954-55. Cotton ex- ports for the same periods decreased from 157,000 to 85,000 and then increased to 684,- 000 bales. It is believed that there will be continued increases in cotton production in the Middle East. Cotton production in Nicaragua, El Sal- vador, and Guatemala has increased steadily from approximately 50,000 bales 4 years ago to an estimated 300,000 bales in 1954-56. A further increase of about 100,000 bales is expected in 1955-56, and potential annual production estimates after several more years Of development range from 700,000 to 900,000 bales. In Peru, cotton production has increased 25 percent during the past 5 years to 505,000 bales in 1954-55. During the same period exports, which are a large proportion of production, Increased 25 percent. However, it is reported the Peruvian Government holds cotton and sugar production (the most Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE July 14 profitable crops) under strict control in order to insure the production of adequate food crops. This same situation also exists for other crops. For example, this same committee report reveals the following with reference to wheat: Sharp increases in wheat acreage and pro- duction have been recorded in a number of the European and Middle Eastern countries which have received substantial foreign aid grants in recent years. France, although reducing slightly the acreage devoted to wheat In 1954 as com- pared with the 1935-39 average, produced over a third or 100 million bushels more wheat in 1954 than In the prewar years. Turkey has almost doubled her wheat acre- age since the 1935- 36 to 1939-40 average and more than doubled her total production in 1953-54. Unfavorable yields in 1954-55 re- sulted In a sharp drop in wheat production as compared with a year earlier, yet it re- mained a third higher than in the prewar years. Greece although on a net Import basis has increased her wheat acreage 20 percent and production by 50 percent as compared with prewar years. Most Latin American countries, as a part of their programs to Increase home food pro- duction, have expanded their wheat acreage and production. The acreage in wheat In Mexico has Increased 50 percent while pro- duction has more than doubled since the period 1935-36 to 1939-40. Although wheat is a minor crop in Peru. the acreage has in- creased 50 percent and production has almost doubled as compared with prewar years. TOBACCO World tobacco production Increased from an annual average of 6.5 billion pounds In the 1935--39 period to 7.8 billion pounds In 1954 or an increase of 20 percent. During this same period the world acreage devoted to tobacco production increased from 7.5 mil- lion acres to 8.6 million acres or an increase of 15 percent. United States production of tobacco in- creased from 1.5 billion pounds in the period 1935-39 to 2.2 billion pounds In 1954, an Increase of 47 percent, in spite of the fact that the acreage devoted to tobacco In 1954 was slightly smaller than the 1935 to 1939 acreage. Canada and southern Rhodesia are among the more important countries from the standpoint of tobacco production Increases. In both of these countries the expansion has been encouraged by long-term contracts offered by British tobacco companies. Increases in acreage and production from 1935-39 to 1954 are as follows: --- - Pcra?nt I'~'rrr?nt incrcn r in In,rrav' in acreage production f'ana, I a._,.'--'-'-----______ 91 1:4S iulhern Kliadesia ------------ .2501 3W Japan has increased her tobacco acreage from 92.000 acres in 1935-39 to 172,000 acres in 1954 and from a production of 149 mllllon ponds in the prewar years of 256 mllllon pounds in 1954. Turkey has increased her production of tobacco sharply from 128 million pounds In the prewar years to 206 million pounds in 1954 and acreage from 194,000 acres to 323,000 acres during the same period. Italy also has increased both acreage and production of tobacco over 50 percent during the same period. Brazil. by far the largest tobacco producer In Latin America. has Increased her tobacco acreage from 250.000 acres In 1935-39 to 433.- 000 acres in 1954. Tobacco production In Brazil increased from 203 million pounds a year In the 1935-39 period to 298 million pounds In 1954, an Increase of 46 percent. Colombia almost doubled both tobacco acreage and production In the same period, and Mexico more than doubled her produc- tion with about 50 percent Increase In acreage. Tobacco production has declined In India, Pakistan. and Iran. Flue-cured tobacco usually accounts for about 80 percent of all United States exports. World production of this type of leaf has shown striking increases. The acreage of flue-cured tobacco in the major present and potential competing countries Increased from 384.000 acres to 1,045 million acres, 172 per- cent. between 1935-39 and 1954 and produc- tion increased from 370.8 million pounds to 986.1 million pounds, 166 percent, during the same period. Tobacco production is expected to increase further In the sterling area countries where British Interests are stimulating Increased production. Further Increases In acre yields also are expected in most countries, especially In Latin America, The committee study also developed the following with respect to American financial Interests behind these Increases In produc- tion abroad: The survey made to date on this phase of the directive indicates that the major portion of private United States capital Investments, financing and management, has been concen- trated to a large extent on one of the basic commodities, cotton, and that this activity has been substantially limited to Mexico, Central and South America, generally re- ferred to as Latin America. Here the increased agricultural production, extensive in cotton but also to a lesser degree in other basic commodities, has been gen- erated to an Important extent by United States private interests. Although It is not now indicated that much actual farming or production has been undertaken by Ameri- cans, in many instances the establishment of markets, cotton gins, elevators, processing plants and the financing of production has provided the incentive and Impetus for an Important part of the Increased output. In Mexico, Anderson, Clayton & Co. has in- creased its net capital investment account In plants and equipment by $8,911,709 to a total of $12,653,316 during the period July 31, 1947. to July 31, 1954: and in Brazil by $7,140,303 to a total of $15,354,158 for the same period. 'rhls company has Increased total net capital investment In plants and equipment In all Latin American operations, by approximately $16,791,214 to a total or $33,073,037 for the same period. As of March 1955 Anderson, Clayton's foreign plants consisted of 15 com- press and warehouse units, 22 oil mills, 112 cotton gins, 10 oil refineries. 5 finished prod- uct plants. and 5 soap plants. The company operates through a number of subsidiaries in Mexico, Argentina, Brazil, Peru. and Para- guay, all of which are mostly wholly owned. Operations were started In Mexico about 1924 and in Peru. Brazil. Argentina. and Paraguay during 1933-35. Crop loans In all foreign op- erations as of July 31, 1954, were $14,955,477. (Source: SEC records and company reports.) The Corn Products Co. has plants, and grain operations at Guadalajara. Mexico, In Argentina, and in Brazil. It manufactures and distributes products using corn or milo- ntai7e as the raw materials. As of December 31, 1954, investment of this company In for- eign subsidiaries built up over some period of time Is listed at $14.749.000. During 1954. foreign aides of corn products by the com- pany's domestic plants total $11,888.041 or approximately 5 percent of total sales. Latest figures for sales of Its foreign subsidiaries show that In 1953 these amounted to 395.313,- 550. (Source: SEC records and company reports.) The W. R. Grace Co. has one of its principal foreign operations in Peru. Peruvian subsid- iaries of the Grace Co., Jointly owned with leading local industrialists, operate 4 inte- grated cotton mills, the largest In Peru, 2 sugar estates of approximately 10,000 acres each, and numerous other merchandising, exporting, and importing activities. These subsidiaries buy large quantities of cotton, mostly for their own mills, although some is exported. The Grace Co. has other cotton mills in Colombia and Chile. In the latter country It produces 20 percent of Chile's cot- ton and rayon blend cloth and, in addition. some woolen goods. Overall. Grace's Latin American affiliates produced in 1954, 97,600,- 000 yards of cotton, rayon and woolen fabrics. W. R. Grace & Co. owns a large percentage of the stock in the Grace National Bank of New York City. The foreign branch of this bank is closely connected with banking insti- tutions In Latin America. The Hohenberg Bros. Co. of Memphis is one of the largest companies in the cotton business. It finances and gins cotton in Mexico with its subsidiaries Algodonera Ho- henberg S. A. de C. V. in Mexico City, and Empresas Hohenberg of Torreon. It also owns Hohenberg, S. A. in Sao Paulo, Brazil, and has a substantial amount of business in Eu- rope, Africa, and Asia. POINT 3 The extent to which such United States financial Interests receive special tax con- cessions from the United States Government on income from production in other countries. Federal income tax treatment of United States interests on income from without the United States corporations 1. Introduction: The Internal Revenue Code of 1954 provides certain credits or tax advantages for United States corporations doing business in United States possessions or In foreign countries. In some instances the credits are allowed to avert double taxa- tion; In others special treatment is permitted to encourage United States trade and invest- ment abroad, particularly in this hemisphere. The following is an outline of Federal in- come-tax treatment accorded income of do- mestic corporations from without the United States. The section references are to the In- ternal Revenue Code of 1954. Public Law 591, 83d Congress. approved August 16, 1954. 2. Foreign Tax Credit (secs. 901-905): A domestic corporation may elect to take credit against Its total Income tax for any income, war profits. or excess-profits taxes paid or ac- crued during the taxable year to any foreign country or to any possession of the United States. The term "Income, war profits, and excess-profits taxes" Includes taxes paid In lieu thereof, such as taxes based upon gross sales or unit of production. The credit is not allowed against the following United States taxes: The tax on accumulated earn- L1gs, the additional tax on war-loss recov- eries or the personal-holding-company tax. The amount of credit for foreign taxes is lim- ited to the proportion of United States tax applicable to that particular foreign income. A credit Is also permitted a domestic cor- poration for the proportionate part of foreign taxes paid on income by a foreign corpora- tion which results in dividends to the do- mestic corporation. At least 10 percent of the voting stock of the foreign corporation must be held. A further proportionate credit is allowed if such foreign corporation owns 50 percent or more of the voting stock of an- other foreign corporation and receives divi- dends therefrom, and such dividend becomes part of the dividend paid to the domestic corporation. An example of the latter situation would be: The A corporation, a domestic corpora- tion, receives $100,000 in dividends from B corporation, a foreign corporation in which Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 1955 CONGRESSIONAL RECORD - HOUSE A corporation holds more than the requisite 10 percent of the voting stock. B corporation in turn holds all of the stock of C corpora- tion, another foreign corporation. The ac- cumulated profits of B corporation amount to $400,000 (including a $50,000 dividend from C corporation). The foreign income taxes paid by B corporation with respect to such accumulated profits amounts to $120,000. C corporation has accumulated profits of $300,000 with respect to which for- eign taxes of $90,000 have been paid. Under these circumstances there would be added to the $120,000 tax with respect to the accumulated profits of B corporation: $50,000 X $90,000, or $15,000 representing the 300,000 foreign income tax paid upon that portion of the accumulated profits of C corporation used in the payment of $50,000 dividend to B corporation. The total tax paid or deemed to have been paid by B corporation with respect to its $400,000 accumulated profits is $120,000 plus $15,000, or $135,000. The amount of tax deemed to have been paid by the domestic corporation with re- spect to the $100,000 dividend received from B corporation would then be: $100,000 X$135,000, or $33,750, which may be 400,000 claimed as a foreign tax credit. 3. Western Hemisphere Trade Corp. (secs. 921-922) : A Western Hemisphere trade cor- poration is a domestic corporation all of whose business (other than incidental pur- chases) is done in any country or countries in North, Central, or South America, or in the West Indies, and which satisfies the fol- lowing conditions: (1) if 95 percent or more of the gross in- come for the 3-year period immediately pre- ceding the close of the taxable year (or for the part of such period the corporation was in existence) was derived from sources with- out the United States; and (2) if 90 percent or more of its gross in- come for such period was derived from active conduct of a trade or business. A deduction in computing taxable income is allowed Western Hemisphere trade corpo- rations as follows: (A) First determine the taxable income of the corporation. (B) Multiply the amount determined in (A) by the fraction- (a) the numerator of which is 14 percent; and (b) the denominator of which is that per- centage which equals the sum of the normal tax rate and the surtax rate for the taxable year. The effect of this computation is to al- low a deduction which results in a 14-per- cent reduction in tax rate. It is understood that Western Hemisphere trade corporations are being rather widely used for United States trade and investment in Canada, Central, and South America. 4. Income From Sources Within Posses- sions of the United States (sec. 931): Do- mestic corporations engaged in the active conduct of a trade or business within a possession of the United States are exempt from tax on income from sources outside the United States, if for the 3-year period end- ing with the close of the taxable year (or the applicable part of that period)- (a) at least 50 percent of gross income is from that trade or business; and (b) at least 80 percent of gross income is from any source within the possession. The Virgin Islands of the United States are expressly excluded by statute from "posses- sions of the United States." The credit for taxes paid to foreign coun- tries and possessions, discussed in section 2 above, is not allowed to corporations re- ceiving the benefit of this section of the Code. 9027 5. China Trade Act Corporations (sees. 941- States taxation only as gains subject to the 943) : Corporations organized under the limitation on taxation of capital gains. China Trade Act, 1922 (15 U. S. C., ch. 4, Such corporations would fall essentially sec. 141 et seq.) are allowed a special deduc- into two categories: tion derived from a proration of taxable (1) Those incorporated in the country in income from sources within Formosa and which operations are conducted. Hong Kong, such deduction being limited (2) Those incorporated in countries in to the amount of the special dividend which which operations are not conducted but merce to the Secretary of the Treasury. China Trade Act Corporation benefits are believed to have an inconsequential effect on the agricultural situation under study. 6. Dividends received from certain foreign corporations (sec. 245) : Foreign corporation dividends (other than from a foreign per- sonal holding company) received by a do- mestic corporation are subject to a deduc- tion if- (a) the foreign corporation is subject to United States income tax; and (b) if it has derived 50 percent or more Panama, for instance, imposes no income tax except on business conducted in Panama. Panama, Bermuda, Bahama, and Liberia cor. porations have been frequently used, Such foreign corporations are not under United States authority and information as to the extent of their utilization is not now available. Even though such foreign cor- poration are subsidiaries of domestic corpo- rations, United States taxation is avoided unless dividends are paid to the parent com- panies. Individuals of its gross income from sources within the 9. Introduction: The tax benefits to indi- United States for an uninterrupted period viduals from residence abroad, or from in- of not less than 36 months, ending with the come from United States possessions or for- close of such foreign corporations' taxable eign countries, are important in encouraging year in which such dividends are paid (or, United States citizens to accept employment if the corporation has not been in existence or to invest abroad. The following sections for 36 months at the close of such taxable outline these benefits. year), for the periods the foreign corpora- 10. Foreign tax credit (sees. 901, 903-5): tions have been in existence as of the close of The foreign tax credit described under sec- such taxable year. tion 2 above on corporations is also applica- The dividends received credit is 85 percent ble to individuals. All features enumerated but is limited to the percentage which the therein apply except for the credit allowed a gross income of such foreign corporation domestic corporation for a proportionate from sources within the United States bears part of taxes paid by a foreign corporation. to its gross income from all sources. 11. Earned income from sources without 7. Tax treaties (sec. 894) : The code in the United States (sec. 911) : An individual section 894 provides: "Income of any kind, to citizen of the United States, who has been the extent required by any treaty obligation a bona fide resident of a foreign country or of the United States, shall not be included countries for an uninterrupted period which in gross income and shall be exempt under includes an entire taxable year, is exempt this subtitle." from tax on amounts received from sources The development of United States busi- ness abroad and the increasing business done in the United States by aliens throughout the years have created complex tax prob- lems. To solve these problems equitably for taxpayers and to protect United States reve- nues a number of tax treaties have been con- cluded, or are in negotiation. Basically, these treaties are designed .to eliminate international double taxation and to assist in mutual tax enforcement. An essential of such treaties is, therefore, the establishment of bases for determining sources of income. Tax treaties have been concluded with the following countries: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, Union of South Africa, United Kingdom. Negotiations are underway with: Austria, Colombia, Cuba, Honduras, Israel, Italy (awaiting exchange of ratification), Mexico, Philippines. An idea is being explored to consider in future treaty discussions an item of taxes spared. The principle involved is that when a foreign country offers the inducement of without the United States (except amounts paid by the United States or any agency thereof) if such amounts constitute earned income attributable to such period. The individual is not entitled to any deductions related to such exempt income, but is al- lowed personal exemptions. Exactly the same treatment is accorded individual citizens who are present in a foreign country or countries at least 510 full days during any period of 18 consecu- tive months. Under this provision, if the 18-month period includes the entire taxable year the amount excluded shall not exceed $20,000. If the 18-month period does not include the entire taxable year the amount excluded from tax is the ratable portion. "Earned income," under these provisions, means amounts received as compensation for personal services actually rendered, but does not include any payment which repre- sents a distribution of earnings or profits. If the taxpayer is engaged in a trade or business in which both personal services and capital are material income-producing fac- tors, a reasonable allowance, not to exceed 30 percent of his share of the net profits, is considered to be earned income. 12. Income from sources within possessions waiving taxes for an initial limited period of the United States (sees. 931 and 933) : of years to encourage new industry to enter The provisions relating to income from the country, the treaty could provide that within United States possessions described the taxpayer be allowed a credit for the under section 4 on corporations are also ap- taxes which would have been paid but for plicable to individual taxpayers. the tax sparing. The purpose would be to In addition, section 933 of the code con- encourage the investment of United States tains a special provision for individuals on capital in enterprises in friendly nations. "Income from sources within Puerto Rico." 8. Foreign corporations not subject to This section provides that in the case of an United States taxes: Foreign corporations individual who is a bona fide resident of owned by United States interests and not Puerto Rico during the entire taxable year subject to United States taxes are naturally income derived from sources within Puerto not covered by the Internal Revenue Code, Rico (except amounts received for services but may be an important vehicle for employ- performed as an employee of the United ment of United States capital abroad. Such States or any agency thereof) shall not be corporations can be utilized to accumulate included in gross income. No deductions earnings, with such earnings being ulti- assignable to such excluded income (other mately liquidated and brought under United than personal exemptions) are allowed. Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 - CONGRESSIONAL RECORD HOUSE July 14 Also. if an Individual citizen of the United States has been a bona fide resident of Puerto Rico for at least 2 years before the date on which he changes his residence therefrom, Income derived from sources therein (except amounts received for serv- ices performed as an employee of the United States or any agency thereof) which is at- tributable to the Puerto Rican residence Is excluded. Deductions relating thereto (ex- cept personal exemptions) are not allowable. 13. Tax treaties (sec. 894): The tax trea- ties mentioned in section 7 under "Corpora- tions" also cover individual taxpayers.. 14. Partnerships (sees. 701-771 and sec. 1361): Since partnership returns are Infor- mational only and the distribution to part- ners is taxable on Individual returns, the preceding sections dealing with individuals cover the tax benefits arising from partner- ship operations in possessions and foreign countries. Section 1361 of the code, added In 1954, provides that partnerships In certain cir- cumstances may elect to be taxed as domestic corporations. This provision is not con- sidered significant to the present study. POINT 4 The extent to which such financial In- terests are tied Into the Department of Agri- culture and national farm organizations, through representation on advisory com- Inittees and similar groups. The Department of Agriculture has fur- nished the committee staff a listing which purports to include every advisory commit- tee of the Department as well as all its con- sultants. These advisory committee lists have been reviewed to segregate those which are germane to the survey and those which are not, such as Farmer Cooperative Serv- ice, Rural Electrification Administration, etc. The staff Is presently engaged In studying the composition of relevant committees to determine the extent of representation of private United States Interests which are engaged In agricultural activities in foreign countries. To date It has been found that the following officials of companies either believed or known to be engaged in such activities are currently serving on the Indi- cated committees: Advisory Committee on Foreign Trade and Technical Assistance: W. C._Schllthuis, Con- tinental Grain Co.. alternate; Lamar Flem- ing. Jr., Anderson, Clayton & Co.. alter- nate. Cotton Export Adivisory Committee: La- mar Fleming. Jr., chairman, board of di- rectors, Anderson, Clayton & Co. Cotton Price Support Advisory Committee: A. M. Crawford, Well Bros. Grain Export Advisory Committee: Andre Hinschler. Bunge Corp.; Harold E. Sanford, Continental Grain Co.; W. C. Schilthuls. Continental Grain Co. Wheat Advisory Committee: H. E. Sanford, vice president. Continental Grain Co. Corn Advisory Committee; William F. Brady. Corn Products Refining Co.; Robert C. Woodworth. vice president, Cargill, Inc. Dairy Export Advisory Committee: George M. McCoy. Borden Food Products Co.: A. W. Sigmund. Kraft Foods, Inc.; Leslie J. Lindell, General Milk Co. Dairy Industry Task Committee: Arthur W. Sigmund, Kraft Foods, Inc.; D. M. Dent, Borden Food Products Co. CCC Storage Committee: Loren Johnson, Continental Grain Co. National Agriculture Advisory Commission: Jesse W. Tapp, Bank of America.' This name Is Included as the Mexican press has reported that the Bank Of Amer- ica has issued credit of $10 million for fi- nancing cottongrowers in Mexico. Several other banks have representatives on com- mittees but It has not yet been determined whether they finance foreign production. In connection with the Cotton Export Ad- visory Committee listed above it should be noted that a temporary committee of the same name was appointed by the Secretary of Agriculture on February 13, 1953, and was comprised of the following Individuals: D. W. Brooks. general manager. Georgia Cotton Producers Association, Atlanta, Ga. C. R. Sayre, president. Delta Pine & Land Co., Scott, Miss. Everett R. Cook, Cook & Co., Memphis, Tenn. Lamar Fleming, Jr., president, Anderson, Clayton & Co., Houston. Tex. William A. McGregor, vice president, Guaranty Trust Co., New York. N. Y. Charles H. Cannon, president, Cannon Mills. Kannapolis. N. C. Walter L. Randolph, president, Alabama Farm Bureau Federation. Montgomery, Ala. This is the committee referred to on Feb- ruary 28. 1955, by Senator EASTLAND, page 49, part I. of hearings before the Subcom- mittee on Disposal of Agriculture Surpluses of the Senate Committee on Agriculture. The committee staff has been Informed that it held several meetings (luring the calendar year 1953. submitted a report to the Secre- tary of Agriculture. and that the Secretary considered it dissolved. The present Cotton Export Advisory Com- mittee was appointed by the Secretary of Agriculture on May 24, 1955, to serve for the coming year. and is comprised of the fol- lowing Individuals: Walter L. Randolph. vice president, Amer- ican Farm Bureau. Montgomery, Ala. Alan G. Patteson. producer, Jonesboro, Ark. J. B. Hubbard. president. J. B. Hubbard & Co., Cotton Exchange Building, Dallas. Tex. Allison Pell, president. Pell Cotton Co., Charlotte. N. C. Lamar Fleming, Jr., chairman, board of directors, Anderson, Clayton & CO., Houston, Tex. E. F. C'reekmore, president. Creckmore & Co., Cotton Exchange Building. New Orleans, La. S. Y. West, president, S. Y. West & Co., Memphis. Tenn. D. W. Brooks, general manager. the Cot- ton Producers Association, Atlanta, Ga. The committee staff Is continuing its study to determine the extent of representation of private United States interests. engaged in agricultural activities in foreign countries. POINT 5 The amount of foreign-aid funds which have been used to encourage increased agri- cultural production In foreign countries. As of March 31, 1955, cumulative obliga- tions of the Foreign Operations Administra- tion and its predecessor agencies aggregated approximately $19.1 billion. Around 63 percent or $12.1 billion represented obliga- tions for assistance activities in 20 selected countries where agriculture relatively is most important. (See table I.) In these 20 coun- tries slightly less than $1 billion has been obligated for agricultural assistance Includ- ing health and Industrial assistance activ- ities having a direct bearing on agricultural production and processing. In addition, ap- proximately $710.8 million in local counter- part funds created by assistance activities in these 20 countries have been programed for the furtherance of agricultural produc- tion and processing. Because of the outstanding importance of agriculture and substantial Increases in agri- cultural production, particularly cotton in recent years in Iran, India, Pakistan, and Turkey as compared with the other coun- tries receiving assistance the activities in these countries are being analyzed in detail. Thus far detailed data are available only for Iran. (See table 2.) As of March 31, 1955, approximately $201.2 million United States foreign assistance funds have been obligated for the Iranian program. of which amount $47.3 million has been incurred for agricultural assistance, including those health and industrial activities bearing di- rectly on agricultural production. The breakdown on these funds by field of activity and between projects and technical assist- ance is as follows: "iAinount in millionol ITech- tticisils Activity Odd Prnj- and I Total cch train- ,c5 Agriculture ................... $17.7 $3. n 62;1.3 llcalth. _ ~ 9.9 25 1'2.1 Industry, transiw,rtatu,n, and tnmtnunity developntceit___ 11.6 ._..._._.I 11.8 Total ------------------ I 39. 2 8. 1 47.3 TABLE l.-PrnmeIion of agriculture abroad-Funds obligated by Foreign Operations Adniinislra(ion and prcdccessor agencies, Apr. 3, 1948, through .iIur. 31, 19.1.-,:0 srlerted cotn,(rus 'rccltnicians rroif'Cts ' and Comnmdi- tics ' Approved withdraw- al) trot,, coon trr- part funds for pro- motion of agrieut- tun, I Latin Ameti,:c n'sq 4F9 1 xt. $r2 ft. ttwi t~olontt,ta.._... -- - - - ------ --- -- , , iii, .'1x) 1. 11141. 0x14 Nirtrat'ua . ---- 451, 7.51 1, 047, 1814 ___ _,r,15,341 2,1151.383 G. 8.49, 40R 111. 119. !M 4:.N, fxlfl 280, 15x1 tt'eatrt n 1Frrtoauy----- ------------ 3.51, (a) l nacd khtg,ioin .... _ ...._.__.__. 242, 001) 1, 337,15x1 NcSr en'l Stiddk East: . 3, 'fork,.. .... ........... . " ... 030.4737 424,VA 1, t/rcca ---------------- 1 706. 000 t yrW ..................,.._ ._.._-- ..A. (M7, 472 Ir,n-_--- ..............) 39. 246. f'A india.................. I 167, 630, 800 ti, 0.18, :117 Footnotes at end of table. _ I-------------- -------------- Total (or pro- Inotion fur agriculture 1 Total aid by- FOA and prr, irct?s'n r agcucies 1 $.5, 291, 495 $10,643,471 I----------- _ 2, MIA, 124 3.509.8211 _ .____.-___ 1, 774,.W A 3, 774,2A9 I______-_-___ 1, 52A, 544 I 2. 413, 211 _ --_-.-__ _ _ 5,5tki724 7. ti'.Nl, Atxl _ _-____-- -------------- 16,94*2.451 28,03 15 $1-9,910,434 1911 .3116, 434 3, 204 , 1.53 -W, '$253,11(10 (l0() 30,140, 821 311, 42ti, x21 1, M3:736:24'03 259, (5)0, . NO 11.0, 608. 397 IN I, 999, 387 1, 414, 547, 6.39 100, 44.51, (85) 103. 2611, 820 103, 50x, 820 3, 812, 513, SFXJ 700, 000 493, 911., 272 ; 495. 303, 272 110, 124, 951, 222 11,19, 100. 000 63, 64S. 967 43,177,977 68, 870, 604 45, 368, 888 -------------- 47, 334, 122 174,445N 867 309, 019. 922 1 R. CM. 00(1 831', 508, 7110 lH, 5(10, ow 58,140 .--------- _ 2)1, 729. 759 .--_----_- 21.1, 562, 193 .------_-._- Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE 9029 TABLE 1.-Promotion of agriculture abroad-Funds obligated by Administration and predecessor agencies, Apr. 3, 1948, through selected countries-Continued Approved withdraw- Technicians Commodt- Total for pro? f Total aid by 1'OA and als from counter - counter- art funds Country Projects I and inees t ties a motion or agriculture 4 redeeesso r a p for pro. ra gencies motion of agricul- ture' Near and Middle East-Con. ________ _ _ Pakistan $42, 621, 235 $1,554,772 $5,570,495 $49,782,502 $118, 531, 295 $2,100, 000 ____ _ Iraq___________________ 612,207 2,250,259 ______ 2,862,466 6,557,732 T 735, 556 23, 327, 507 112, 600, 386 386, 663, 449 1, 792, 406, 803 85, 500, 000 Africa: Egypt___________ 32,022,964 1,478,261 501,225 -33, 30,244,551 -_____--___ Far East: Burma 6,079,003 450 7,572,359 21,181,588 800,000 ____ .Japan---------------- - Thailand -------------- ---- ------- 34 , 271, 100 --_- - ------ 377, 654 7,000,000 37,149, 680 10,140,145 61, 329, 453 ----------- 5, 400, 000 Total_ ________ 40, 350,103 378, 1.04 - 51, 722, 039 82, 651,186 6, 200, 000 Grand total---------- 329, 958, 091 36, 640, 855 984,159, 436 12, 067, 381, 449 710,800,000 I Project obligations primarily represent total equipment and supply costs which will he borne by the United States in conducting specific activities, C. g. locust control, dam construction, etc., under signed project (activity) agreements with the respective countries. % Technician and trainee obligations represent salary, per diem, transportation, and other costs incidental to fur- nishing United States technicians to the respective countries and the training of local nationals in the United States. a Commodity obligations primarily represent the cost of agricultural products, machinery and supplies, textile- mill machinery, and food-processing equipment furnished. Local currency counterpart funds are created by the local sales of these and other commodities in the recipient countries. 4 Includes the dependent overseas territories of the European countries, nonregional, and other program obliga- tions of FOA and its predecessor agencies. Counterpart fund withdrawals for the promotion of agriculture are primarily directed toward land reclamation and irrigation, research and extension, and farm credit. General technical assistance is being pro- vided to Iran in the field of agriculture, health, and industry. Inasmuch as cotton and wheat are grown throughout the coun- try, all technical assistance rendered to Iran is indirectly beneficial to the production of these two commodities. As of March 31, 1955, approximately $3.4 million in obligations have been recorded for projects related specifically to cotton, wheat, and general agricultural production and the introduction of new seed strains. The amount devoted specifically to cotton and wheat is not available. Now let us see what the effect is on American agriculture this year alone: DEPARTMENT OF AGRICULTURE, Washington, D. C., February 3, 1955. To Extension Directors in Cotton States: Congressman JAMIE L. WHITTEN, chairman of the House Subcommittee on Agricultural Appropriations, has requested that a survey be made immediately to secure the best pos- sible answers to the two questions on the attached sheets, a supply of which we are sending you. On Wednesday, February 2, a group of State representatives from the cotton States and the Department met and recommended the following procedure to obtain this infor- mation. Will you please proceed immediately along the following lines: A. Contact other agency heads in your State and work out any mechanics necessary to get the information for each cotton county. B. We suggest that the county agent call together appropriate USDA personnel oper- ating within the county to discuss the ques- tions and to answer them to the best of their ability. C. Send to the Federal Extension Service, Washington, D. C., your county replies to arrive not later than February 16. Due to time limitations we suggest counties send report directly to the Federal Extension Service with copies to you for your infor- mation. Sincerely yours, E. T. BENSON, Secretary. STATE CONSERVATIONISTS, SCS. CHAIRMAN OF STATE ASC COMMITTEE. STATE DIRECTORS, FHA. Please give your best estimates for your county on- 1. How many renter families (tenants and sharecroppers) have been or will be forced off farms due to 1955 reduction in cotton allotments? The question is concerned only with the number of renters (as defined above) forced off farms due to the 1955 reduction in cotton-acreage allotments and not for other causes such as mechanization, drought, etc. Answer -------------------------------- 2. How many small cotton farmers (1. e., those with 5 acres or less of cotton allotted In 1954) will have net income for the farm reduced by $100 or more due to the 1955 cotton acreage reduction? Do not include in this estimate the number who may have income reduced due to not planting full allotmens. The value of crops produced on acres diverted from cotton should be con- sidered in arriving at the net income loss. Answer -------------------------------- County -------------------- State ---------------------- Date ----------------------- UNITED STATES DEPARTMENT OF AGRICULTURE- ATTENDANCE AT CONFERENCE ON SURVEY ON COTTON ACREAGE REDUCTION, ROOM 218-A, FEBRUARY 2, 1955 C. A. Vines, State extension service, Ar- kansas. Clay Lyle, director, State extension service, Mississippi. G. G. Gibson, director, State extension service, Texas. C. B. Ratchford, State extension service, North Carolina. Shawnee Brown, director, State extension service, Oklahoma. James T. Lunsford, State director, Farm- ers' Home Administration, Alabama. R. L. VanSant, State director, Farmers' Home Administration, Georgia. James W. Cross, Jr., chairman, agricul- tural soil-conservation committee, Tennes. see. Foreign Operations Mar. 31, 1955-20 . Ben Boatwright, chairman, agricultural soil-conservation committee, South Caro- lina. Cecil Collerette, member, agricultural soil- conservation committee, Arizona. Charles A. Sheffield, Federal Extension Service E. L. . Langford, Agricultural Research Service. R. B. Bridgeforth, Commodity Stabiliza- tion Service. C. M. Ferguson, Federal Extension Service. M. H. Holliday, Farmers' Home Adminis- tration. J. C. Wheeler, Office of Budget and Finance. Milan D. Smith, Office of the Secretary. J. A. McConnell, Office of the Secretary. E. C. Betts, Jr., Office of the Secretary. of cotton and number of countries re- porting Number of counties having 1,000 or more acres of cotton Number of coun- ties reporting Alabama ------------------------ Arizona------------------------- Arkansas------------ ------------ California----------------------- Florida-------------------------- Georgia------------------------- Illinois-------------------------- Kentucky----------------------- Louisiana ----------------------- Missouri------------------------ Mississippi---------------------- New Mexico-------------------- North Carolina_________________ Oklahoma- - - -- - - - - - ------------ South Caroliua------------------ Tennessee_______________________ Texas--------------------------- V irginia------------------------- Summary of answers from 887 counties to the following question: "How many renter families (tenants and sharecroppers) have been or will be forced off farms due to 1955 reduction in cotton allotments?" The question is concerned only with the number of renters (as de- fined above) forced off farms due to the 1955 reduction in cotton-acreage allotments and not for other causes such as mechanization, drought, etc." Renter families Alabama--------------------------- 7,554 Arizona----------------------------- 127 Arkansas--------------------------- 4,426 California-------------------------- 0 Florida----------------------------- 279 Georgia---------------------------- 8,157 Illinois----------------------------- 40 Kentucky--------------------------- 60 Louisiana --------------------------- 3,395 Missouri---------------------------- 2,202 Mississippi -------------------------- 11,981 New Mexico------------------------- 137 North Carolina---------------------- 2,783 Oklahoma-------------------------- 1,477 South Carolina-------.-------------- 4,147 Tennessee-------------------------- 3,075 Texas------------------------------ 5,580 Virginia---------------------------- 108 Total ------------------------- 55,348 Summary of answers from 887 counties to the following question: "How many small cotton farmers (i. e., those with 5 acres or less of cotton allotted in 1954) will have net income for the farm reduced by $100 or more due to the 1955 cotton-acreage reduction? Do not Include in this estimate the number who may have Income reduced due to not planting full al- lotments. The value of crops produced on Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE July 14 acres diverted from cotton should be con- sidered in arriving at the net Income loss." Alabama------------- -------------------------- 17.595 Arizona--------------------------- 38 Arkansas-------------------------- 1,496 California------------------------- 0 l'lorida---------------------------- 2,348 ieorgia---------------------------- 14,888 Illinois ---------------------------- 147 Kentucky------------------------- 203 Louisiana------------ ------------- 6.649 Missouri-------------------------- 1.881 Mississippi----------- ------------- 34,414 New Mexico----------------------- 64 North Carolina --------------------- 17,397 Oklahoma------------------------- 378 South Carolina -------------------- 10.400 Tennessee------------------------- 14.944 Texas----------------------------- 6.129 Virginia--------------------------- 1.632 Total------------------------ 130, 803 Mr. RABAUT. Mr. Chairman, I yield such time as he may desire to the gen- tleman from Minnesota I Mr. MARSHALL 1. (Mr. MARSHALL asked and was given permission to revise and extend his re- marks.) Mr. MARSHALL. Mr. Chairman, not long ago I was able to spend a few days in my home district. While there I had the opportunity of talking with a num- ber of people concerning the financial position of farmers. I found there are two groups of farm- ers these days. One is the group of farmers that was fortunate enough to be able to pay off debts during and after the war, and before the present farm recession started. These farmers are established. While they are not getting anywhere under present conditions of income, they are able to keep farming even with the lower prices and reduced acreages of the Benson administration. The other group of farmers Is the less fortunate group that has been forced to accumulate debt at the tail end of a pros- perous period in agriculture. This group is now caught in the nutcracker of de- clining prices, low income, and the ur- gency to maintain earnings high enough to provide a decent living and meet debt payments at the same time. This group is in a tough position and is having a difficult time. Unfortunately, many of the members in this group are the younger farmers, and the GI's who have returned to the land after serving their country. Mr. Chairman, anyone who went through the difficult period of the twen- ties which eventually led to the deep de- pression of the thirties cannot help but find similarities in the situation in agri- culture today with that of 30 years ago. One of the better agricultural letters published in Washington has a good ar- ticle on this subject in its issue of July 9. I am speaking of Wayne Darrow's Wash- ington Farmletter, and would like to quote from it: More credit will be needed for land pur- chases in the period ahead than Is required now. USDA studies Indicate. Recent trends point to this already. The trend will pick up when the social security program for farmers gets into full swing. A higher percent of farm purchases re- quire credit now than at the close of World War IT. About 3 out of 5 farms bought need credit now against 2 out of 5 farms at close ui the last big war. The amount loaned per acre has about doubled-up from around $30 average debt per acre after the a ar to about 860 an acre now. Average size of new mortgages also has jumped-from approximately $3,500 at close of the war to around 86.000 now. However, good land Is not considered too high now. In fact, It's sought after. Mortgage debt is not too high yet in relation to total Invest- ment. Are we heading for another big debt, farm foreclosure period like the late 1920's? Of- ficials don't think so. But there are similari- ties. The farm mortgage debt climbed 7 percent last year. Its now 72 percent above the low of 1946. Officials are not concerned over size of the debt. so far. Present total of $8.2 billion, though large, is smaller than the peak of $10.8 billion in 1923. This year's debt represents only 8.9 percent of the value of farm real estate, against 21 percent In 1923. Mortgage debt is concentrated on fewer farms now. About 29 percent of all farms are mortgaged now-the lowest percentage since 1890. The reason is: We've just passed through the most prosperous period for agriculture In this century-the period of the 1940's. This Is shown in many ways. Including the number of years It takes for net farm In- come, or earnings, to equal capital invest- ment-capital turnover This Is a measure of ability to pay off debt. During the 7 years 1942-413 it took 51.2 to 6i2 years for net income to equal the value of all physical assets-the most favorable period In this century. The ratio has been on the rise since. Now it takes about 10 years for net Income to equal total investment This Is roughly comparable with the last half of the 1920's and with the late thirties, Darrow's Farmletter also comments on the greater concentration of farms in fewer hands. It says: Net migration from farms to cities aver- ages over 1 mlllion yearly. There's been a net movement away from farms every year since 1920. except in 1945 and 1946-years when veterans were returning. For every 5 people on farms In 1947. there were only 4 in 1954. Farm population de- creased 8 percent from 1947 to 1950.-12 per- cent from 1951 to 1954. Net migration away from farms iexcess above movement back w farms i averaged 4.6 percent of the total farm lxipuiation yearly during 1947-53. Census reports so far show fewer farms than in 1950-but no reduction In farm acreage. The trend is unmistakably toward fewer but bigger farms. Commercial farm- ing Is becoming more pronounced. Mr. Chairman, it is not my intent to well unduly on the unhappy experi- ences of the twenties. However, a few reminders may be in order. Today's situation makes me think of the previous time our boys marched off to save the world. When the war ended the farm boys came back to their homes only to find hieh mortgage debts, prices inflated for the things they had to buy, but prices down for the things they had to sell. It was the kind of situation calculated to place young farmers in an impossible debt situation. And the ad- ministration then in power was un- happily the kind that had no real un- derstanding of the problems of farmers. Many of the young farmers of the day were unable to provide their families with a decent standard of living. Debts mounted. Health needs were neglected. Surpluses accumulated, and while the stock market boomed, farm prices sank lower and lower and the whole shaky structure collapsed into the big depres- sion of the early thirties. Mr. Chairman, it is almost frightening to contemplate the similarities between the situation in the early twenties and that of today. The income position of agriculture is almost identical. Prices have gone down, down, and down. Costs have stayed consistently high. Income is thus pinched, squeezed, and diluted. While the rest of the country is enjoying a fair- ly high degree of prosperity, the farmer is losing ground. Veterans who were forced to purchase their livestock at prices prevailing at the time of their return, have seen their livestock inventory reduced in value from a third to a half. These farmers eventually may be faced with debt adjustment, possible foreclosure and forced departure from the land. In our free economy we do not expect persons to be in business only for their health, yet many farmers are literally. This shows up in nearly all major products, especialy in the livestock prod- ucts. Farmers have been giving the con- sumer more than he has ever had, and for less and less money-so far as the farmer's income is concerned. Let me give you a few concrete examples: In 1948 farmers produced a little more than 21 billion pounds of the red meats for consumers, receiving over nine and a third billion dollars. But last year farmers produced a little over 25 and a half billion pounds of the red meats, re- ceiving only $8.8 billion. In other words, Mr. Chairman, last year farmers received 6 percent less money for 20 percent more production than just 6 years before. Putting it in terms of the value of 1948 dollars, farmers last year received 14 percent less money for supplying each consumer with 10 percent more red meat. The year we are in now is the third straight year of producing more than 150 pounds of the red meats for each man, woman, and child in the United States. And all the production above 150 pounds a per- son has, in effect, been given away by farmers. Here is another example: In 1954 per capita consumption of poultry meats was 6 pounds a person higher than in 1948. Total production was a fourth higher than in the earlier year. Yet, in dollars of the same buying power for both years, farmers received practically the same for tl.eir poultry in the 2 years. In other words, the extra 6 pounds of meat pro- vided each consumer was given free, so far as farm income was concerned. Mr. Chairman, we would expect this kind of thing during a serious depres- sion, but we do not expect it in a time which we are told is the most prosperous in history. What might apply to the rest of the country does not apply to those who live on the land. Actually, the farm-debt situation Is better now than in the twenties. Those forced into debt just prior to the pres- ent farm depression are having a hard Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE 9031 time of it. But the prosperity of farmers in recent years has enabled many of them to pay off debts. And while the mortgage debt is growing, it is concen- trated on fewer farms. It is a situa- tion that needs careful watching, but it is not yet critical. There is one other important differ- ence between the fifties and the twenties. Today we have established farm pro- grams that can be used to protect agri- culture in this period of obvious in- equity-if we have the will to use them, that is. What is the difficulty? I am afraid the real trouble lies with the administration, Mr. Chairman. It is in the unconcern of the Eisenhower- Benson direction of agricultural pro- grams that we have a situation fright- eningly close to that of the twenties. It is a statement of simple fact that the Department of Agriculture, under Secretary Benson, has not faced up to its responsibility. Secretary Benson has engaged in the easy sport of buck pass- ing. He has tried to fasten blame for his own indecision and inaction on the preceding administration. He has taken liberties with laws placed on the statute books by this body. He has shown himself to be more in- terested in the welfare of processors than in the welfare of the producers. He has failed to meet situations squarely-as witness his still lack of an adequate program for the dairy indus- try and his "too little and too late" pro- posals for wheat. He has sat around hoping that some- thing favorable would happen, and not doing anything to make it happen. He has sought excuses for inaction when he should have been seeking answers on which to base action. He has used per capita income as a cover up for the severe decline in na- tional farm income-as though it were his policy to increase per capita income of farmers by cutting down the number of farmers. Mr. Chairman, this is a bloody way of bringing about prosperity in agriculture. It is based on the as- sumption that to bring prosperity to a few you must liquidate the others. I do not believe that such a policy can be continued, or should be condoned in the name of our free-enterprise system. One of the high purposes of the De- partment of Agriculture should be to use its brain, its brawn, and its ample bank account in helping farm people achieve an ever-rising standard of living along with the rest of the economy, and to give aid in bringing to those in agricul- ture an equality with all groups. Having had a good deal of experience with the Department of Agriculture, Mr. Chairman, having sat through a good many hearings with its top offi- cials; having had some part in the legis- lation enacted for agriculture by this body, and having observed the function- ing of those in the Benson administra- tion, I am forced to the conclusion that the Secretary is a failure. He may not yet realize the extent of his inadequacies. I am also forced to conclude that the President has a blind spot which pre- vents him from knowing any of the real problems of farmers, let alone under- standing them, or desiring to understand them. What else can be concluded from one who not only condones the inade- quacies of Secretary Benson, but praises them? Mr. Chairman, if anything is to be done to check the present system of drift, decline, and eventual disaster; if we are to lay away the ghost of Hoover- ism, it must be done by the farmers themselves and by the Congress. Or, we will all go bust with Benson. Mr. RABAUT. Mr. Chairman, I yield 10 minutes to the gentleman from Flor- ida [Mr. SIKES]. (Mr. SIKES asked and was given per- mission to revise and extend his re.- marks.) [Mr. SIKES addressed the Committee. His remarks will appear hereafter in the Appendix.] Mr. METCALF. Mr. Chairman, when further investigation is made of the Wichita Wildlife Refuge and the need for the perpetuation of the refuge is bal- anced against the national defense needs continuing the operation of Fort Sill and its magnificent artillery school, I am sure the committee will come to the conclu- sion there are alternative methods for continuing long-range artillery instruc- tion at Fort. Sill. The Wichita Mountain area is the last primitive area in Oklahoma. It is like- wise Oklahoma's greatest scenic and recreational area. This year close to 1 million people have already used its invigorating mountains and scenic val- leys for relaxation, picnicking, fishing- 1,200 fishermen a week-camping, hik- ing, mountain climbing, and viewing the big-game herds of buffalo, elk, deer, and lesser species, such as wild turkey, quail, squirrels, and other small game. The most important preservation herd of the original Texas long-horned steer is maintained here by the Fish and Wild- life Service. The area wanted by the Army is the most important watershed in the refuge, supplying the water for the many swimming and fishing lakes and for the luxuriant stand of prairie short- grass on which the herds wax fat. The proposed firing of the atomic can- non and the 722 millimeter corporal rocket here will aggravate the existing fire hazard, which is a serious threat from July 1 of each year. The above firing on the refuge area will speedily burn over the mountain area of 10,700 acres being taken over by the Army. The Service, on the basis of its past ex- perience, feels that the fires cannot be controlled in the mountain and that they will sweep through both the recre- ational grounds and the big-game pas- ture. It should be noted that approxi- mately half of the refuge's recreational area will be involved in this transfer. Many species of plant life and several species of birds are found in Oklahoma only on the refuge lands. The proposal of the Army is totally unnecessary. The service has suggested a compromise plan whereby they would close the lower two tiers of sections across the south portion of the refuge as a buffer area when the Army is firing its big cannons. The public would be kept out of the area during that period, but allowed to use this most fascinating por- tion of the refuge when no firing was taking place. During World War II and since, the Army had under permit from the serv- ice 35,000 acres from the refuge for maneuvers. They complied with the terms of the permit thoroughly, and the best of cooperation existed between the Fort Sill authorities and the refuge manager. Except for some damage to roads by heavy equipment, the Army ex- ercised its permit without damage to the refuge. This permit could be continued indefinitely and, with the addition of the buffer area that the service is pre- pared to close when the guns are fired, would in the service's opinion meet the immediate needs of the Army at this point. This is especially true if the Army buys the private land as announced. However, to our knowledge the Army made no effort to investigate the alter- nate plan offered by the service. During the past 15 years the Service has had to permit Fort Sill to emplace some of its biggest guns on the refuge so that they could be fired and the shells land on Fort Sill's impact areas. This was necessary all during World War 11. The Service in the present controversy has offered to provide Fort Sill authori- ties with a larger gun emplacement any- where on this 10,700 acres on which they can fire the big guns and rockets con- templated and land the shells on Fort Sill proper. The Army did not investi- gate this plan at all. Apparently the invasion of the Wichita Refuge is part of a general plan on the part of the Army to move in on the national wildlife re- fuge program. It would appear that the large areas of wildlife land which the Service has set aside for preserving dis- appearing big-game herds are particu- larly attractive to the Army authorities for their testing and training purposes. The Air Force has recently informed the Service that instead of their present firing permit on the Desert Game Range in Nevada, they want to take over pri- mary jurisdiction. This would close the door on the wildlife interests of the area. Likewise, the Army has asked for three- fourths of the Kof a Game Range in southwestern Arizona, the home of the remnant Galliard mountain sheep, for use in testing poisonous gas on a battle- front scale. It takes little or no imagi- nation to perceive what will happen to the resident Galliard sheep, mule deer, white-winged doves, and pygmy antelope and many other interesting species if this comes about. Mr. TABER. Mr. Chairman, I yield such time as he may desire to the gen- tleman from New Jersey Mr. FRELING- HUYSEN 1. (Mr. FRELINGHUYSEN asked and was given permission to revise and ex- tend his remarks.) Mr. FRELINGHUYSEN. Mr. Chair- man, I should like to call attention to the serious cut in funds for the White House Conference on Education being proposed by the committee. Only $50,- Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE JOY 14 000 has been recommended out of $238,- COO requested for this purpose. I should like to point out to the House that the committee decision on the funds for the White House Conference was ap- parently based on a misconstruction of facts. Let me quote the committee state- ment: Salaries and expenses, White House Con- ference on Education: The committee has allowed $50,000 of the request for $238,000. The request included $170.000 to provide travel funds for 1.700 of the 2.000 delegates expected to attend the White House Con- ference on Education. The additional $68.- 000 was for Federal staff costs in connection with the Conference. The committee was in- formed that the legislation which authorized the White House Conference on Education does not authorize the use of Federal funds for the travel expenses of delegates to the conference. Therefore. no funds for travel expenses of the delegates are included in the bill. I have, and I should like to read, the epinion of counsel that there does exist adequate authority to spend funds for the transportation of delegates from the States. Mr. Parke Banta, General Counsel for the Department of Health, Education, and Welfare, describes the situation as follows: Public Law 530 authorizes appropriations to enable the President to hold in Washing- ton. D. C., "a conference broadly representa- tive of educators and other interested citi- zens from all parts of the Nation, to be called the White House Conference on Education, to consider and report to the President on significant and pressing problems in the field of education." Section 2 of the set authorizes grants to States for the purpose of bringing together "prior to the White House Conference on Education, educators and other Interested citizens to discuss educational problems in the State and make recommendations for appropriate action to be taken at local, State, and Federal levels." Section 3 rounds out the picture by au- thorizing "to be appropriated to the Commis- sioner of Education for the fiscal years end- ing June 30, 1955. and June 30, 1956. such sums as Congress determines to be necessary for the administration of this act, Includ- ing the expenses of the Office of Education to making available to the public the findings and recommendations of the Conference." There is. of course, no specific reference to payment or travel costs contained in Public Law 530. There is, however, specific author- ity to hold a conference In Washington, D. C., to be attended by individuals "from all parts of the Nation," coupled with a specific au- thorization for appropriations "necessary for the administration of this act." As was pointed out in the testimony before the Sub- committee of the Committee on Appropria- tions of the House of Representatives, hear- ings before subcommittees of the Com- mittee on Appropriations. -House of Rep- resentatives. 84th Congress, 1st session. page 608 et seq., It is essential to the achievement of the broad representation contemplated by the act that funds for trans- portation costs be available. Certainly, the Congress must have intended that such ex- penses be paid, since it would not be rea- sonable to expect those Individuals chosen to advise the President to attend at their own expense: Indeed, many, even though willing to do so, could not afford it. In view of the forecoing it is our opinion that Public Law 530. 83d Congress, when read as a whole and in the context of its general purpose to bring together in Washington, D. C., a "broadly representative" group of individuals "to consider and report to the President on significant and pressing prob- lems In the field of education," can and should be construed as authorizing appropri- ations to pay the travel costs of persons offi- cially Invited to attend the conference. I am sure it is not the intent of this Congress to torpedo the biggest and most important program on education in his- tory. We in this House, by Public Law 530, 83d Congress, authorized the State and White House Conferences. We cannot scuttle the program at this point. Even if no action is taken here today to rescue this program, perhaps action can be taken by the other body. The 83d Congress required that the White House Conference be "broadly rep- resentative of educators and other in- terested citizens from all parts of the Nation." Without funds to pay travel expenses of the participants, the intent of Congress will not be achieved. Without such funds, those who reside in the Washington area may be expected to attend. So, too. will those who have the funds and the time. Finally we may expect representatives of various organi- zations which are well financed and deep- ly committed to preconceived points of view. To dray only from these three groups. I think we can agree, will mean that the White House Conference will not be broadly representative, contrary to the expressed intent of Congress. In establishing the State and White House Conferences on Education, the Congress set in motion a citizen study of education in all 53 States and Territories. Literally tens of thousands of people are taking part in this program. By deny- ing the funds with which these States may send their designated representa- tives to Washington to take part in the White House Conference, we would be. in effect, scuttling the program which Congress inaugurated by passing this law. There are no other funds which can be used to bring to the White House Conference the people who would con- stitute a broad national representation from all parts of the country. We need that kind of representation. The chairman of the White House Conference on Education committee, Neil H. McElroy. has stated in a recent letter to Mrs. Hobby the committee's po- sition as follows: The committee does not want to hold a conference which, because of lack of funds to pay travel expenses of participants, Is attended primarily by persons residing near Washington, by representatives of organi- zations who may wish to use the conference as a national sounding board. and others who for personal reasons alone desire to be part of the White House Conference. We con- sider that participation of this kind would represent failure of the requirement placed upon us that the Conference be broadly rep- resentative of educators and other interested citizens from all parts of the Nation. The President's committee has reviewed this matter very carefully and believes unant- mously that balanced representation is an essential element of the White House Con- ference. The administration strongly sup- ports these recommendations of the Presi- dent's committee for the White House Con- ference, Some might say that expenses of par- ticipants to the White House Conference should be paid by the States. Let me make two points: First, the White House Conference is not a State meeting. but a national meeting which we in this Congress au- thorized and to which we wanted citi- zens to come. Second. a poll of 45 States indicates that only 1 State has both the State funds and authority within State law to pay the travel costs of representatives to the White House Conference. For the first time we have the opportunity here to find out what the American public wishes to be done. If we deny this conference, we have denied the voices of those whose only interest is the public interest. This is not a partisan program. State conferences have been called by the governors, 27 of whom are Democrats and 21 Republi- cans. Let me give you some examples of where these funds will go. They are not to send Federal employees to the States, they are to bring representative citizens from the States to Washington. For example, California would be asked to send 98 persons chosen in California. The travel expense is more than $23,000. New York would have 123 participants whose travel cost is almost $6,000. Texas would have 67 representatives; Ohio, 68; Illinois, 73; Washington State, 20, etc. Is it reasonable to assume that in or- der to advise on solutions to the Nation's school problems that California, Florida, Montana, and the other States distant from Washington should be required to spend more money to give this infor- mation to the Federal Government than those States immediately surrounding the District of Columbia? The money requested is $170,000. It is for the payment of travel expense only. It does not include funds for hotel rooms, meals, and other expenses of participants. The participants at the White House Conference are willing to pay these expenses, but they should not be expected to pay also the cost of travel to and from a meeting which was authorized by the Congress of the United States. What are we to tell our people at home if we say to them, "we are not sufficiently interested in your opinion on school problems that we would vote to share with you your exppense in taking part in this national conference?" Mr. RABAUT. Mr. Chairman, I yield 5 minutes to the gentleman from North Carolina [Mr. DEANE]. (Mr. DEANE asked and was given per- mission to revise and extend his re- marks.) Mr. DEANE. Mr. Chairman, as a member of the Air Force Panel of the Department of Defense appropriation bill I am impressed with the total dollars appropriated by the Department of the Air Force. I point out that the Army is recchvng $483,612,000; the Navy $439,- 950.000. a total of $923,562,000. While the Air Force is receiving under this ap- propriation bill $955,929,000. Thus you see Mr. Chairman a heavy responsibility rests upon the Air Force to consider a wise use of the dollars herein recom- mended. Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 1955 CONGRESSIONAL RECORD - HOUSE Mr. Chairman, the Air Force panel is chairmanned by the distinguished gen- tleman from Texas [Mr. MAHON] ; other members include the gentleman from Mississippi [Mr. WHITTEN], the gentle- man from Kansas [Mr. SCRIVNER], and the gentleman from Wisconsin [Mr. DAVIS]. Your panel was faced with a serious problem in the amount of time needed to consider an appropriation bill of this size. Mr. MAHON. Mr. Chairman, will the gentleman yield? Mr. DEANE. I yield to the gentleman from Texas. Mr. MAHON. The gentleman is pointing out the very significant fact that in view of the fact that the budget estimate came down so late we were not able to do the thorough job we want to do. For a number of years we have had this problem, but I am persuaded to be- lieve that the Assistant Secretary of De- fense for installations is correct in assur- ing us that they will come much earlier next year. I would like to say that the gentleman from North Carolina [Mr. DEANE] who is now addressing the committee made a very substantial contribution to this bill. He presided most of the time over the Air Force panel and he did a good job. I think the House ? would ' want to know of the conscientious effort he made in that regard. Other Members working on the full subcommittee and on other panels, of course, also made a contribu- tion, but I did want to refer to the par- ticular contribution of the gentleman from North Carolina. Mr. DEANE. Mr. Chairman, I thank the gentleman. I feel the House owes a great debt of gratitude to the gentle- man from Kansas [Mr. SCRIVNER] who served as chairman of this committee in the last Congress. The gentleman from Mississippi [Mr. WHITTEN] and the gentleman from Wisconsin [Mr. DAVIS] each made a significant contribution. Each member of the committee holds certain convictions about the committee work. We urgently need an enlarged staff. Our executive secretary, Sam Crosby, has served with distinction. The chairman of the Appropriations Com- mittee, the gentleman from Missouri [Mr. CANNON] has indicated that any time we feel there is need for additional staff, if we will make the request, it will be granted. I trust that next year we will have the staff that is necessary to adequately go into the many ramifica- tions of this military construction program. Mr. Chairman, the military construc- tion program of the Air Force was pre- sented chiefly by Maj. Gen. L. B. Wash- bourne, Assistant Chief of Staff for In- stallations, and Brig. Gen. J. F. Roden- hauser, Director of Real Property for the Department of the Air Force. The overall public-works program of the Air Force was outlined to the com- mittee by General Washbourne and the detailed justification, base by base, was the duty and responsibility of General Rodenhauser and specialized witnesses associated with General Rodenhauser. I was impressed with the sincerity of all of. these witnesses. In most all instances they were conversant with the problems facing the Air Force panel. There were a few glaring examples where witnesses were asked to testify who had only re- cently been brought into administrative jobs and who were sadly lacking in the information needed by the committee. NEED OF CONTINUED LIAISON Mr. Chairman, my service on the Air Force panel reveals. the urgent need of keeping operational officers in a spot long enough that they can give Intelli- gent answers which must be a part of the record if the program is to have the proper support by your committee. This gives me real concern. Several witnesses appeared before our commit- tee who had only recently been brought .from the field and placed in administra- tive positions to justify a budget that they knew very little about. It was not the fault of the officers. The responsibility must rest upon in- dividuals in the Penatgon for requiring an officer to be placed in such a position. BRIG. GEN. J. F. RODENHAUSER, DIRECTOR OF REAL PROPERTY FOR THE DEPARTMENT OF THE AIR FORCE Mr. Chairman, I want to particularly express my appreciation to General Rodenhauser, Director of Real Property, the principal witness before our Air Force panel on the base-by-base justifi- cation. General Rodenhauser has served in headquarters, Army Service Forces, and headquarters, United States Air Force, since June 1944, with appropriate breaks for service outside the Washington area. On his current tour beginning in 1951, he has served as Director of Real Prop- erty, and in similar capacities, in the Assistant Chief of Staff, Installations, Headquarters, United States Air Force. In this capacity he has been responsible for the procurement, development, and issuance of military construction pro- gram guidance; for the assembly, vali- dation, and defense of military construc- tion programs; for the selection and planning of installations world wide; for validation of qualitative and quantitative requirements for installations facilities; for inventory of real property; for real estate acquisition and disposal actions; and for management of real property utilization. General Rodenhauser made his initial presentations of military-construction programs to the congressional commit- tees beginning with the fiscal year 1954 military construction program. Since that time he has presented each subse- quent program, including the fiscal year 1956 military construction program. General Rodenhauser has completed his present tour in the Washington area and is being assigned for overseas duty, to the North Atlantic Treaty Organiza- tion. I feel I speak for our Air Force panel in expressing our appreciation for the faithful and constructive service of Gen- eral Rodenhauser and wish for him a successful tour of duty in his new assign- ment. Mr. GROSS. Mr. Chairman, will the gentleman yield? Mr. DEANE. I yield. 9933 Mr. GROSS. A report is being cir- culated that there may be in this bill funds for construction of two hotels in Germany for service personnel. Does the gentleman have any knowledge of any such appropriation? Mr. DEANE. I would suggest to the gentleman that so far as the Air Force is concerned, if he will look at pages 27, 28, 29, 30, and 31, of the committee re- port he will see the items that are ap- propriated for the Air Force. The CHAIRMAN. The time of the gentleman from North Carolina has ex- pired. Mr. RABAUT. Mr. Chairman, I yield 3 additional minutes to the gentleman from North Carolina [Mr. DEANE]. THE OVERALL AIR FORCE CONSTRUCTION REQUIRE- MENTS FOR FISCAL YEAR 1956 Mr. DEANE. As a part of my remarks, Mr. Chairman, I would like to place in the record the overall Air Force con- struction requirements for fiscal year 1956 which were given to the committee by General Washbourne. Mr. Chairman, we must keep in mind that the objective of the base construc- tion program of the Department of the Air Force is to support 137-wing force level. As I quote below from the statement by General Washbourne, you will keep in mind, Mr. Chairman, that the dollar amounts for the various programs, as indicated, are not the amounts finally approved by the Air Force panel. It was the feeling of the committee that by a careful analysis of all construction con- tracts that the amounts indicated by General Washbourne could be consider- ably reduced. The committee could be in error. On the other hand, we felt that the Department of the Air Force should attempt to shape the figures as indicated below to conform to the overall final appropriated dollars. Your Air Force panel received the following information concerning the number of bases, construction objectives, program summary, and command distri- bution: NUMBER OF BASES The Air Force will, by the end of 1957, have a base structure consisting of 346 principal operational, training, logistic, and research installations which are required to operate and support the 137-wing force; 186 of these installations are in continental United States and 160 are in overseas loca- tions. Excluded from these totals are over 2,000 ancillary installations such as com- munications sites, navigational aids, radar stations, and classified locations. This bill includes construction at 255 of the principal bases, 152 of which are in continental United States, and 103 are overseas. In addition, it provides funds for construction of Reserve Forces facilities at 18 flying training bases and at 25 nonflying training centers; the construction of offbase navigation aids; area POL systems; aircraft control and warning system sites; and facilities at classified loca- tions, all details of which will be provided during discussion of the appropriation re- quest. CONSTRUCTION OBJECTIVES The construction objective of the Air Force is to have the facilities for sustained opera- tions of the 137-wing force in place by end of fiscal year 1957. This involves, first of all, the provision of bases to "bed down" the force in locations at which it can train Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 9034 Approved For Release 2006/11/09: CIA-RDP63T00245R000100120004-3 CONGRESSIONAL RECORD - HOUSE July 14 and attain full operational capability and from which it could launch defensive and offensive operations. To accomplish this goal the principal remaining requirements are: (a) Operational, staging, and training re- quirements for the new long-range heavy bomber, the B-52, being phased Into the SAC striking forces. (b) Development and expansion of the air-defense net, including warning sites in the United States and Canada and fighter- interceptor bases. (c) Family housing. (d) Aircraft-fuel storage. (e) Guided missile and pilotless aircraft facilities. (f) Research and development projects, including development of nuclear-powered aircraft. (g) Phased development of the base com- plex in Spain. (h) Air Force Academy. (1) Facilities for bases deferred from pre- vious programs due to lack of base rights. (j) Reserve forces facilities. (k) Replacement of deteriorated, obsolete, and substandard temporary structures with initial emphasis on medical facilities, dor- mitories, and dining halls. (1) Personnel and recreational facilities. In meeting our objective to provide a per- manent home for the 137-wing force, we have been, and are, constantly striving to improve standards of living and operational facilities within the limits of prudent ex- penditures. We plan to construct under this program facilities of durable, long-life usage comparable to good, commercial practice. The projects are priced accordingly. We believe this to be necessary to achieve mint- mum cost of maintenance for the extended period of time It is now anticipated we will need a 137-wing base structure, PROGRAM SUMMARY The Air Force fiscal year 1956 appropria- tion request is summarized on the first chart. CHART No. 1-Summary of Air Force fiscal year 1956 military construction appropriation request In thousands Continental United States ------- 8929,113 Outside continental United States ------------------------ 453.212 Minor construction-------------- 20.000 Planning ----------------------- 32,331 Total program ------------ 1, 434, G56 Less : Peseta counterpart funds_____________ 92.000 Unforeseeable delays- 232. 656 234.656 Total appropriation request- 1, 200. 000 As explained earlier, the Air Force Is re- questing approval of a program totaling ap- proximately $1.434,000.000. Of this amount 65 percent. or $929.113.000. are for projects in continental United States. Thirty-two percent of the total, or $453.212.000, is for overseas locations. The $20 million for minor construction provides for the construction of facilities which fall within the statutory limitations of section 707, Public Law 458, 83d Congress, and which have not been pro- vided by specific authorizing legislation. The $32,331,000 for planning will provide those funds which will be needed in fiscal year 1956 for base master planning. inves- tigational engineering, advanced planning of projects not yet authorized by law, and for project planning of authorized projects which have not been funded. The appro- priations being requested to finance the program of $1-4 billion amount to $1.2 bil- lion, or $234.656,000 less than the program. This reduction has been made by considera- tion of the anticipated availability of $2 million of peseta counterpart funds for base construction in Spain and by allowing for possible unforeseen delays in the overall construction program in the amount of $232,656,000. COMMAND DISTRIBUTION The next chart Indicates the distribution of the program by Air Force commands: CHART No. 2.-Command distribution of Air Force, fiscal year 1958 military construc- tion appropriation program )T)ollarc in thousands) Amount ?f ('unrinentnl l'nil,+i Flats $tratrgir Air ('nnmran4 $LMI, l40 IS.2 Aircraft Control and V ail,iag Sysiem 122, 19? F 5 Air ih-fem.- Command _-- - ( 113,453 7-9 Air Hewareh and Devel iptm?ut ('mmnwnd 110,730 f. 3 Air .lfatcr:el ('nn,runnd--------- F2. 07f. 5.7 Air Form Mmiernv_ .. .--_...-. 71:.478 b.3 Tnct iral Air ('ornmand.-------- IA. 5{(} 4.1 Air Trainine C'mnntau.. R'2, 721 3.7 ('oni lrleiHJi Air ('sinnand (Ce- 1 aer?vel _ 31..Wi 2.2 Milirnry Air Trtnsport Ferv.re.i !r. 537 I. If, Air l'ruviug Ground ('omm:ind 7,80.3 .5 (',,tinsel-il Air (bn,mand fft:nhr, .. ---- _-.._--. 5. 1,45 .4 Air 1?niv,?r*!ty -------- 2.5311 .2 iicndipinrtcrs ('oauuand---- .. 520 .1 V:uious_-_------ _------ .__--- 357 .1 'mist, mntln,-ntal t-ni,ed F t., t,s __-_ 52''.113 r,4.7 Outside mnlinrntal t'nitcd Gates: t'S A F Enrol? ?.. 2'.52. 962 l!", 5 Airendt (bnirol aol \I-arui?g N.t.-In 10.1, 1~93 7.4 Strategic Air (bu,tuand ..-..__. 37.(r4t1 2.6 A lnsknn Air ('onunnnd - 1 2S,929 2.0 Norilu-ast Air ( 'ontrn:uel . _1 23.1411 1.6 Military Air 't'ransport Eer v,n'. l 19. X47 1.4 Far E., 1 Air Farr _ ..1 14,1.52 1.0 I 'onm, on nilions and \AV. AII)9 ----_--_---i .:2f. .i vatknrs._ ------- i X53 .l ('arrilzvn Air ('