[SENATE COMMITTEE ON APPROPRIATIONS HEARINGS ON INDEPENDENT OFFICES APPROPRIATIONS 1956]

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• Collection: General CIA Records
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• Publication Date: January 1, 1955
• Content Type: OPEN

1955
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CONGRESSIONAL RECORD -HOUSE 10459
of which are annual savings-Senate
Committee on Appropriations, hearings
on independent offices appropriations,
1956, pages 157-158.
The General Services Administration
stated clearly that surveys by such pri-
vate firms in records management of
Government agencies should supplement
and not supersede the central program
direction and continuing staff work by
the General Services Administration-
Senate Committee on Appropriations,
hearings on the supplemental appropria-
tion bill, 1955; page 936. By judicious
and firm central direction by the General
Services Administration, the savings in
records management can be very large,
SPECIAL ORDER
The SPEAKER. Under previous or-
der of the House the gentleman from
Illinois [Mr. O'HARA] is recognized for 30
minutes.
Mr. O'HARA of Illinois. Mr. Speaker,
I ask unanimous consent to revise and
extend my remarks, and I further ask
unanimous consent that the gentleman
from Ohio [Mr. FEIGHAN] be permitted
to extend his remarks following mine.
The SPEAKER. Is there objection to
the request of the gentleman from Illi-
nois?
There was no objection.
[Mr. O'HARA of Illinois addressed the
House. His remarks and those of Mr.
FEIGHAN will appear in the RECORD here-
after.]
SECTION 1032 OF THE INTERNAL
REVENUE CODE OF 1954
(Mr. MILLS asked and was given per-
mission to address the House for 10
minutes.)
Mr. MILLS. Mr. Speaker, early this
spring it came to my attention that the
tax services and commercial publications
were advertising as a loophole a section
of the Internal Revenue Code of 1954
about which I had long had misgivings.
That section is section 1032 which pro-
vides as follows:
(a) Nonrecognition of Gain or Loss: No
gain or loss shall be recognized to a corpo-
ration on the receipt of money or other prop-
erty in exchange for stock (including treas-
ury stock) of such corporation.
(b) Basis: For basis of property acquired
by a corporation in certain exchanges for
its stock, see section 362.
The terms of this provision operate to
permit corporations who trade in their
own stock for a profit to escape taxation
on the gains derived from such activity.
The only offsetting liability imposed for
this generosity is the denial of any losses
incurred from such activity.
The issuance of stock by a corporation
has never been treated for tax purposes
as an event giving rise to the recognition
of taxable gain or deductible loss for the
sound reason that the proceeds of such
transactions produce capital and do not
give rise to income. However, until the
enactment of section 1032 of the Internal
Revenue Code of 1954 Treasury stock
had always been dealt with by Treasury
regulations interpreting .the general pro-
visions of the law defining gross income.
These regulations which, with minor
changes, date from May 2, 1934-Treas-
ury Decision 4430, XII-1 C. B. 36-pra-
vide as follows:
Section 39.22 (a)-15: Acquisition or dispo-
sition by a corporation of its own capital
stock. (a) Whether the acquisition or dis-
position by a corporation of shares of its own
capital stock gives rise to taxable gain or
deductible loss depends upon the real nature
of the transaction, which is to be ascer-
tained from all its facts and circumstances.
The receipt by a corporation of the subscrip-
tion price of shares of its capital stock upon
their original issuance gives rise to neither
taxable gain nor deductible loss, whether the
subscription or issue price be in excess of, or
less than, the par or stated value of such
stock.
(b) However, if a corporation deals in its
own shares as it might in the shares of an-
other corporation, the resulting gain or loss
is to be computed in the same manner as
though the corporation were dealing in the
shares of another. So also if the corporation
receives its own stock as consideration upon
the sale of property by it, or in satisfaction
of indebtedness to it, the gain or loss result-
ing is to be computed in the same manner as
though the payment had been made in any
other property. Any gain derived from such
transactions is subject to tax, and any loss
sustained is allowable as a deduction where
permitted by the provisions of the Internal
Revenue Code.
The Tax Court has applied these regu-
lations uniformly, holding that a cor-
poration was not dealing in its shares
as it might the shares of another cor-
poration where motivated by a nonprofit
business purpose requiring the use of its
stock. The Circuit Courts of Appeal,
with equal uniformity, have refused to
follow the motive test laid down by the
Tax Court, holding, instead, that any
disposition of Treasury stock gives rise
to taxable gain or deductible loss except
in the case of a capital readjustment
actually involving retirement and reis-
suar)ce of shares.
The rule of the tax court applied the
regulation literally to determine whether
or not the corporation was trading in its
own shares as it might in the shares of
another for - profit. As so applied the
regulation turned on substance rather
than form, and application was premised
upon a search inquiring into the facts
and circumstances surrounding the
transaction in Treasury stock for pur-
pose of determining whether or not the
transaction was motivated by no more
than a desire for profit. The rule of the
circuit courts, on the other hand, turned
only upon whether or not the corpora-
tion went through the mechanics of act-
ually retiring its Treasury stock and is-
suing new stock. Finally, in Burrus
Mills, Incorporated (22 T. C. 881 (1954)) ,
the tax court, after remarking upon the
futility of its position, in the face of re-
peated reversals in circuit courts of ap-
peal reversed its position and adopted
that of the courts of appeal. The result-
ing uniformity was shortlived for on the
following day the Court of Claims decid-
ed the case of Anderson, Clayton & Com-
pany v. U. S. (122 F. Supp. 837 (1954) ),
holding that a sale of Treasury stock to
executives at a profit for the purpose of
keeping control in the active manage-
ment group did not result in taxable
gain. The Supreme Court of the United
States granted certiorari on February 7,
1955.- I am told that this and 11 other
cases, involving a total of $830,000, are
awaiting the decision of the Supreme
Court. -
The differences between authorized
but unissued stock and Treasury stock,
while usually unappreciated by those
outside the legal profession, are funda-
mental to an understanding of why
Treasury stock is so much in demand for
corporate business purposes. -
A corporation desiring to issue new
stock must comply with many laws and
regulations which exist for the protection
of stockholders which are not applicable
in the case of treasury stock. For ex-
ample, the disposition of treasury stock
lies completely within the discretion of
the board of directors who may dispose
of it without considering the wishes of
stockholders or considering stockholders'
preemptive rights. In addition, the di-
rectors may sell treasury stock for less
than its par or stated value. Treasury
'Stock is usually nonassessable and free
of many of the State and Federal se-
curity regulations applicable to unissued
stock and last, but not least, the Fed-
eral stamp tax imposed on the transfer
of such stock is less than that imposed
upon the issuance of stock. To these tra-
ditional incentives for a corporation ac-
quiring and dealing in its own stock, sec-
tion 1032 has made another and far more
profitable addition. The corporation
can now by law deal in its own shares and
enjoy its profits free of taxation.
These, and other considerations, are
not taken into account by those who
argue that there is no practical difference
between a purchase and resale of a cor-
poration's stock and the purchase and
retirement of stock followed by the is-
suance of new shares. The logic of
bookkeeping may, indeed, take no cogni-
zance of the differences, but this cannot
obscure the practical differences inherent
in the very nature of the two types of
stock.
The differences in tax treatment ac-
corded transactions involving newly is-
sued stock and Treasury stock by the
statutes and courts led corporations
holding both authorized but unissued
stock and Treasury stock to use the
Treasury stock only if the price they
had paid for it was less than its cost,
thus producing a tax loss. However, if
the price paid for the Treasury stock
was less than its current market price,
the authorized but unissued stock would
be used to accomplish their purpose, thus
avoiding the capital gain tax. In this
manner, corporate taxpayers were en-
abled to eat their cake and have it, too.
This coupled with the uncertainty pro-
duced by the conflict between the Tax
Court and the courts of appeal described
above, gave rise to section 1032.
.When I drew the tax avoidance possi-
bilities of section 1032 to the attention
of the Secretary of the Treasury, he
replied, under date of June 6, 1955, deny-
ing the existence of the loophole in the
following language: ,
The Treasury staff has reveiwed again sec-
tion 1032 of the Internal Revenue Code
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10460 CC IGRESSIONAL RECORD --HOUSE Jill y 29
of the joint Treasury and Congressional Start
Committee in 1953 which studied this point
of the tax law.
Corporations typically buy and use their
own stock only for limited purposes. In con-
nection with mergers. or stock option and
bonus plans. These transactions can be
and often are handled by newly issued stock
and are then clearly capital transactions.
The fact that they may buy their own stock
and use it instead of new stock does not
change the real character 01 the transac-
tions.
The Securities and Exchange Commission
holds that any gain or loss. arising from
dealings In Treasury stock affects the capi-
tal account and should not be reported In
income or in earned surplus. Thus the old
tax rule was directly contrary to what was
required for reports to stockholders and the
public.
There are relatively few instances where
corporations deal In their own stock for
profit and loss. If officers arrange for a
corporation to buy up its own stock because
of inside information. both the corporation
and its officers are liable to the same sort
of penalties under the Securities and Ex-
change Act as the officers would be if they
traded in the stock for their own sicc0Unt.
We shall continue to watch the operation
of this and all other provisions of the tax
law. If any abuses arise we shall promptly
report them to the Congress.
corporations required to register, only
376 companies subject to the Public
Utilities Holding Company Act of 1935
and 354 companies subject to the Invest-
ment Company Act of 1940 are subject
to restrictions imposed by the Securities
and Exchange Commission regarding the
volved, instead of selling Treasury stock anti acquisition and sale of the companies'
having a tax to pay on the gain, they could own stock. The Securities and Exchange
simply issue new stock which did not result Commission has similar authority with
in any taxable gain. Thus the old law really
respect to securities issued by closed-end
provided a loophole because companies could
take losses but avoid taxes on gains. ,he op- investment companies. It appears that
portunity to handle transactions to Ute tax- ,the SEC's statement is directly contrary
Although I have a high regard for the
Secretary, as a member of the tax-
writing Ways and Means Committee. I
feel qualified through actual experience
to recognize the inaccuracies of the Sec-
retary's opinions with respect to the
existence of a loophole and I was under
the impression that his statements re-
garding the operation of the laws ad-
ministered by the Securities and Ex-
change Commission were incorrect. To
verify my impression I wrote to the Se-
curities and Exchange Commission on
June 7, 1955, asking if there was any law
or regulation imposing a penalty on a
corporation buying and selling its own
stock similar to the penalty imposed
upon the officers or directors of corpora-
tions who indulge in inside dealings. On
this point the Securities and Exchange
Commission replied as follows:
There is no law or regulation which im-
poses upon a corporation that buys and sells
its own stock the penalty that is imposed
upon officers and directors who trade in such
stock. such as provided by section 16 (bl of
the Securities Exchange Act of 1934. In this
connection rule X-16A-4 (b) exempts from
the provisions of section 16 (b) securities re-
acquired by an issuer for its account during
the time they are held by the issuer. Clearly.
the issuer could not recover trading profits
from itself.
The Securities and Exchange Commis-
sion also supplied me with the informa-
tion that of hundreds of thousands of
aa?e similarly subject to criticism because
tl ey are not directed to the subject at
h d. For example, it is true that the
S unities and Exchange Commission
ho1 s that gain or loss arising from deal-
ingsn Treasury stock aficcLs the capital
accou{It of a corporation and should not
be tre ted as income or earned surplus.
However. this ruling is premised upon the
rectuireil fonts not of taxation but busi-
the operating income of a
but the logic of taxation
was. until section 1032. and should now
be. equally al amant in requiring such
profits to be a cluded in income for the
purpose of detel'tnining the corporation's
income tax. T se profits should also
be included in earnings and profits of the
corporation for pu;?. oses of determining
the amount of divi&ends to be taxed to
the corporation's shkreholders. Surely,
the Secretary of the 'reasurv could not
believe that earned sup pus for purposes
of bookkeeping is equivent to earnings
and profits, or that the c~onsiderations
c overning taxation are aliyays identical
to dealings in Treasury stock generally
imposed by the tax laws. This pro-
vided a source of information as to the
number of corporations dealing in their
own stock and as to the number and
value of the shares involved. This re-
quirement, together with tie fact that
corporations were required to pay taxes
on any gain derived from dealing in their
own shares, acted as a b:'ake on the
number of companies indulging in such
activity.
Putting the best face possible upon
section 1032, it is a poor substitute for
the Treasury regulations which its au-
thors intended it to replace. The pro-
vision is not as broad as the regulations.
It mentions neither the tax consequences
to a corporation on acquisition of its
own capital stock nor the consequences
to the corporation when such stock is
exchange for services rather than
money or property. If the objectives of
the section had any justification at all,
that justification lies only in the fact
that a corporation should be entitled to
reward the services of its employees
through incentive plans involving the
corporation's stock.
't'he tax laws have long been designed
to encourage such incentive programs.
However, section 1032 fails to include
services as one of the considerations for
which a corporation can gain its benefits.
Yet a loophole is wide open in it for
transactions involving money or prop-
erty.
I believe that it is possible to deal with
the problems proposed by the old Treas-
ury regulations without granting the
carte blanche of untaxed p?ofits award-
ed by section 1032. For that reason, I
renew my request to the Secretary of the
Treasury fqt'' a review of section 1032,
for a rev tv of the workings of section
chapjfr 1 of the Internal Revenue Code
of 54, and urge him to make recom-
and fiscal principles which should gov-
ern our tax laws.
SUPPLEMENTAL APPROPRIATIONS
FOR THE FISCAL YEAR ENDING
JUNE 30, 1956
Mr. CANNON submitted the following
conference report and statement:
CONY -ERENCE REPORT (H. REpr. No. 1586)
The committee of conference on the dis-
agreeing votes of the two Houses on the
amendments of the Senate to the bill (H. R.
7278) "making supplemental appropriations
for the fiscal year ending June 30, 1956, and
for other purposes," having met, after full
and free conference, have agreed to recom-
mend and do recommend to their respective
Houses as follows:
That the Senate recede from Its amend-
ments numbered 13, 46, 57, 65 66, 6'7, 68, 69,
70. 71, 72, 73, 74, 87, 96, 99, 101, 110, 111, 112,
118. 119. 121, and 136.
That the House recede from its disagree-
ment to the amendments of the Senate num-
bered 1. 4. 5. 6. 7. 8. 9, 10, 11, 15, 17, 18, 26,
32, 36, 42, 44. 47, 51. 55, 60. 77, 90. 94, 97, 102,
106, 108, 113, 114. 120, 124, 125, 126, 129, 132,
133. 134, 135, 137, 139, 140, and 141 and agree
to the same.
Amendment numbered 12: That the House
recede from its disagreement '.o the amend-
re the
tion 1032 law are yet to be processed
before assessments can be made. If only
those companies listed on the New York
Stoct: Exchange are taken into account.
the amount of Treasury stock held is
tremendous and the volume of trading
in such shares is more than substantial.
It is my belief that the enactment of
section 1032 has served to increase the
volume of trade in Treasury stock, and
such trade will, continue to increase in
volume now that such transactions are
no longer' subject to the capital gains
tax. Section 1032 is more than a loop-
hole. It is an open sesame to specula-
tion by a corporation in its own stock-
an invitation to reap untaxed profits.
The law existing prior to the enact-
ment of section 1032 had its imperfec-
tions and uncertainties. This, I do not
deny. But section 1032 is worse as a
cure than the disease. Under the old
law, corporations were not freed from
the reporting requirement stitli respect
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1955 CONGRESSIONAL RECORD - HOUSE 10461
ment of the Senate numbered 12, and agree Amendment numbered 63: That the House
to the same with an amendment, as follows: recede from its disagreement to the amend-
in lieu of the matter proposed by said merit of the Senate numbered 63, and agree
amendment insert: to the same with an amendment, as follows:
"For an additional amount for 'Loan au- In lieu of the sum named in said amend-
thori.zations', for loans under title II of the ment insert "$122,500"; and the Senate agree
Bankhead-Jones Farm Tenant Act, as amend- to the same.
ed, $15,000,000: Provided, That not to exceed Amendment numbered 79: That the House
the foregoing amount shall be borrowed in recede from its disagreement to the amend-
one account from the Secretary of the Treas- ment of the Senate numbered 79, and agree
ury in accordance with the provisions set to the same with an amendment, as follows:
forth under this head in the Department of In lieu of the sum proposed by said amend-
Agriculture Appropriation Act, 1952." merit insert "$1,200,000"; and the Senate
And the Senate agree to the same. agree to the same.
Amendment numbered 14: That the House Amendment numbered 81: That the House
recede from its disagreement to the amend- recede from its disagreement to ,the amend-
ment of the Senate numbered 14, and agree merit of the Senate numbered 81, and agree
to the same with an amendment, as follows: to the same with an amendment, as follows:
ment insert "$350,000"; and the Senate agree
to the same.
Amendment numbered 16: That the House
recede from its disagreement to the amend-
ment of the Senate numbered 16, and agree
to the same with an amendment, as follows:
In lieu of the matter stricken out and in-
serted by said amendment insert:
"Office of the General Counsel
"For an additional amount for "Office of
the General Counsel', $40,000."
And the Senate agree to the same.
Amendment numbered 21: That the House
recede from its disagreement to the amend-,
merit of the Senate numbered 21, and agree
to the same with an amendment, as follows:
In lieu of the sum named in said amendment
insert "$600,000"; and the Senate agree to
the same.
Amendment numbered 24: That the House
recede from its disagreement to the amend-
ment of the Senate numbered 24, and agree
to the same with an amendment, as follows:
In lieu of the sum named in said amendment
insert "$37,730,000"; and the Senate agree
to the same.
Amendment numbered 30: That the House
recede from its disagreement to the amend-
ment of the Senate numbered 30, and agree
to the same with an amendment, as follows:
In lieu of the matter proposed by said
amendment insert:
"Central Intelligence Agency
"Construction
"For the preparation of detail plans and
specifications of a Central Intelligence
Agency headquarters installation and for
other purposes as authorized by title IV of the
Act of July 15, 1955 (Public Law 161), to re-
And the Senate agree to the same.
Amendment numbered 45: That the House
recede from its disagreement to the amend-
In lieu of the sum proposed by said amend-
ment insert "$750,000"; and the Senate agree
to the same.
Amendment numbered 91: That the House
recede from its disagreement to the amend-
ment of the Senate numbered 91, and agree
to the same with an amendment, as follows:
In lien of the sum proposed by said amend-
ment insert "$250,000"; and the Senate agree
to the same.
Amendment numbered 100: That the
House recede from its disagreement to the
amendment of the Senate numbered 100,
and agree to the same with an amendment,
as follows: In lieu of the sum proposed by
said amendment insert "$220,000"; and the
Senate agree to the same.
Amendment numbered 103: That the
House recede from its disagreement to the
amendment of the Senate numbered 103,
and agree to the same with an amendment,
as follows: In lieu of the matter proposed
by said amendment insert:
"Mental Health Activities
"For an additional amount, for 'Mental
health activities', $250,000.
And the Senate agree to the same.
Amendment numbered 105: That the
House recede. from its disagreement to the
amendment of the Senate numbered 105,
and agree to the same with an amendment,
as follows: In lieu of the sum proposed by
said amendment insert "$600,000"; and the
Senate agree to the same,
Amendment numbered 107: That the
House recede from its disagreement to_ the
amendment of the Senate numbered 107, and
agree to the same with an amendment, as
follows: In lieu of the sum proposed by said
amendment insert "$256,327,000"; and the
Senate agree to the same.
Amendment numbered 115: That the
House recede from its disagreement to the
92, 93, 95, 98, 104, 109, 116, 117, 123, 127.
128, 130, 131, 142, and 143.
CLARENCE CANNON,
JOHN TABER.
As to chapter I:
JAMIE L. WHITTEN,
FRED MARSHALL,
H. CARL ANDERSEN,
As to chapter II:
PRINCE H. PRESTON, Jr.,
ALBERT THOMAS,
FRANK T. Bow.
As to chapter III:
GEORGE MAHON,
HARRY R. SHEPPARD,
ROBERT L. ?F. SIXES,
R. B. WIGGLESWORTH,
ERRETT P. SCRIVNER,
GERALD R. FORD, Jr.,
As to chapter IV:
OTTO E. PASSMAN,
J. VAUGHAN GARY,
R. B. WIGGLESWORTH,
As to chapter V:
GEORGE ANDREWS,
GEORGE MAHON,
IVOR D. FENTON,
As to chapter VI:
ALBERT THOMAS.
SIDNEY R. YATES,
JOHN PHILLIPS,
As to chapter VII:
MICHAEL J. KIRWAN,
W. F. NORRELL,
BEN F. JENSEN,
As to chapter VIII:
JOHN E. FOGARTY,
A. M. FERNANDEZ,
T. MILLET HAND,
As to chapter IX:
Louis C. RABAUT,
MICHAEL J. KIRWAN,
As to chapter X:
JOHN J. ROONEY,
PRINCE H. PRESTON, Jr.,
F. R. COUDERT, Jr.,
As to chapter XI:
J. VAUGHAN GARY.
OTTO E. PASSMAN,
GORDON CANFIELD,
As to chapters XII, XIII, XIV, and XV:
Louis C. RABAuT,
W. F. NORRELL,
WALT HORAN,
Managers on the Part of the House.
CARL HAYDEN,
RICHARD B. RUSSELL,
DENNIS CHAVEZ, .
ALLEN J. ELLENDER,
LISTER HILL (except as
to amendment num-
ber 104),
JOHN STENNIS,
STYLES BRIDGES,
LEVERETT SALTONSTALL,
WM. F. KNOWLAND,
MILTON R. YOUNG,
EDWARD J. THYE,
Managers on the Part of the Senate.
meat of the Senate numbered 45, and agree amendment of the Senate numbered 115, and
to the same with an amendment, as follows: agree to the same with an amendment, as
In lieu of the sum named in said amend- follows: In lieu of the sum proposed by said
merit insert "$50,000"; and the Senate agree amendment insert "$1,970,000"; and the
to the same. Senate agree to the same.
Amendment numbered 52: That the House Amendment numbered 122: That the
recede from its disagreement to the amend- House recede from its disagreement to the
ment of the Senate numbered 52, and agree amendment of the Senate numbered 122,
to the same with an amendment, as follows: and agree to the same with an amendment,
In lieu of the sum proposed by said amend- as follows: In lieu of the sum proposed by
ment insert "$825,000"; and the Senate agree said amendment insert "$336,630"; and the
to the same. Senate agree to the same.
Amendment numbered 53: That the House Amendment numbered 138: That the
merit the amend-
ment the from its e ate numbered disagreement to 53, and agree House recede from its disagreement to the
amendment of the Senate numbered 138,
to the same with th a an amendment, , as follows: : and agree to the same with an amendment,
i
In lieu of the sum proposed by sa
d amen- follows: In lieu of the matter proposed by
merit insert "$10,000,000"; and the Senate said amendment insert "Senate Document
agree the same. Numbered 75 and"; and the Senate agree to
Amendment numbered 54: That the House
the same.
nd
me
-
o
th
e a
t
t
recede from its disagreemen
ment of the Senate numbered 54, and agree
to the same with an amendment, as follows:
In lieu of the sum named in said amend-
ment insert "$1,500,000"; and the Senate
agree to the same.
STATEMENT
The managers on the part of the House
at the conference on the disagreeing votes
of the two Houses on the amendments of
the Senate to the bill (H. It. 7278) making
supplemental appropriations for the, fiscal
year ending June 30, 1956, and. for other
purposes, submit the following statement in
explanation of the effect of the action agreed
upon and recommended in the accompany-
ing conference report as to each of such
amendments, namely:
CHAPTER I
T
he
com
nt
mittee of conference report
amendments numbered 2
in d
3
is-
19,
Department of Agriculture
agr
20
eem
22,
e
23,
,
25, 27, 28, 29, 31, 33, 34,
,
35,
37,
Amendment No. 1: Inserts heading.
,
38,
39,
40,
41, 43, 48, 49, 50, 56, 58,
59,
61,
Amendment Nos. 2 and 3: Reported
62,
64,
75,
76, 78, 80, 82, 83, 84, 85, 86,
88,
89,
disagreement.
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10462 CONGRESSIONAL RECORD - HOUSE
Amendment Nos. 4 through 8: Strike out
House language as proposed by the Senate.
Amendment No. 9: Appropriates $330('0
for the Commodity Exchange Authority as
proposed by the Senate.
Amendment Nos. 10 and 11: Insert head-
ings.
Amendment No. 12: Authorizes $15.000 -
000 for loans under title If of the Bzilkheac-
Jones Farm Tenant Act as proposed by the
Senate, with perfecting amendment.
Amendment No. 13: Eliminates $2.9,000 -
000 proposed by the Senate for farm housing
loans.
Amendment No. 14: Appropriates $350,000
for salaries and expenses. Farmers Home
Administration instead of $1.300,000 as pro-
posed by the Senate.
Amendment No. 15: Strikes cur House
language as proposed by the Senate.
Amendment No. 16: Appropriates $40.000
for the Office of the General Counsel instead
of $65.000 as proposed by the Senate. and
eliminates House language appronrlatin;
$36.000 to this office for the rural dccel,p-
ment program.
Amendment Nos. 17 and 18: Strike out
House language as proposed by the Senate,
Amendment Nos. 19 and 20: Reported In
disagreement.
CHAPTER 11
Department of Connnrrce
Amendment No. 21: Appropriates $600.000
for operation and regulation, Civil Aeronau-
tics Administration instead of $1.200.000 as
proposed by the Senate.
Amendment Nos. 22 and 23: Reported fit
disagreement.
Amendment No. 24: Appropriates $3 7,-
730.000 for the Inter-American Highway in-
stead of $49,730.000 as proposed by the
Senate.
Amendment No. 25: Reported In disagree-
ment. The motion which will be offered Ili
the managers will recommend an additional
$500.000 to be used entirely for hurricane
and tornado research.
Amendment No. 26: Inserts headine.
Amendment Nos. 27 through 29: Reported
In disagreement.
CHAPTER III
Central Intelligence Agency
Amendment No. 30: Appropriates 35.500.-
000 for the Central Intelligence Agency head-
quarters Installation instead of $7.000.000 as
proposed by the Senate. The managers, by
the action taken, are not designating any
particular site nor do they preclude the selec-
tion of any particular site. Of the amount
appropriated not to exceed $350.000 may be
used for the purchase of a site in the event
the Langley, Virginia, site is not selected;
and in the event the Langley, Virginia. site
(which is now Government owned) is selected
not to exceed $2,500,000 of the amount au-
propriated may be used in connection with
the taking of steps with regard to roads and
other facilities.
Department o/ the Army-9filitary
Construction
Amendment No. 31: Reported In disagree-
ment for technical reasons. The motion
which will be offered by the managers will
recommend the sum of $485.077.000 which
represents modification of the amount In the
Senate bill by deletion of the Item of $1,-
350,000 for family housing at the Black Hills
Ordnance Depot. South Dakota. The In-
crease of $200.000 proposed by the Senate for
Fort Leavenworth, Kansas., and the increase
of $1,265.000 proposed by the Senate for Fort
Huachuca, Arizona, are Included in the total
appropriation agreed upon.
Department of the Navy-Military
Construction
Amendment No. 32: Inserts heading.
Amendment No. 33: Reported in disagree-
ment for technical reasons. The motion
which will be offered by the managers will
recommend the sum of $442.628.300. which
represents modification of the amount In the
Senate bill In the following respects: (1)
Omission of the $2,000,000 for plans for a
new drydock at the Puget Sound shipyard;
(2: Rectorati'in of the $350,000 for plans for
a new Armed Services Medical Library; and
13 , Restorat.on of $1,000.000 (allowing a
total of $3.040.000) for family housing at
the Marine Corps base, Quantico, Virginia.
In connection with acceptance of the Senate
addition of $3.800,000 for a new manufac-
turing buildii g at the Naval Ordnance Plant.
Macon, Georgia, the managers on the part of
tln? Senate and the House are in agreement
that this construction project shall not be
undertaken unless and until the Secretary
of Defense certifies in writing to the Com-
mittees on Appropriations of the House and
the Senate tl.at such project Is essential to
the national defense and in the best interests
of the Government.
Amendinen? No. 34: Reported In disagree-
Department of the Air Force-Military
eunst r action
Amendment No. 35: Reported In technical
dis,,greemeut. The motion which will be
olfered by the managers will recommend an
aplrcopriation of $994,291,000, of which $255,-
000.000 shall be derived by transfer from
the appropriatton "Procurement and produc-
tion. Army". This represents modifications
of the amount in the Senate bill In the fol-
lowing respects: (1) omits $5,822.000 for
Grind Forks Air Force Base: (2) omits $1.-
881,000 for Traverse City Area Air Force Base;
(3) omits $155 000 additional proposed by the
Senate for a second swimming pool at Lake
Charles Air FL rce Base: 14) omits $2,667,000
additional proposed by the Senate for a hos-
pital at Llnco:n Air Force Base, and deletes
language rela?ing to this base; (5) omits
*218.000 additional proposed by the Senate
for it second swlmming pool at Travis Air
Force Base: (61 omits $129.000 additional
proposed by tile Senate for a second swim-
ming pool at England Air Force Base: (7)
provides $20.000,000 for the Air Academy
instead of $70.527.000 as recommended by
the Senate: (8 i reduces the amount for clas-
sified overseas bases by $16,556,000, and t9)
deletes $70.000 to correct an error inprevious
estimates.
The managers are agreed that the Air
Force should proceed with land acquisition
and construction of the Grand Forks Air
Fore Base with presently available funds
In the amduni. of $6.280,000. In the event
additional funds (within limit of the total
authorized for this baser are required for
obligation during fiscal year 1956 they may
be obtained front other available funds
through the regular reprograming ))race-
dun-s.
In providing $20,000,000 for the Air Acad-
emy the managers are of the opinion that
essential preliminary construction can pro-
ceed pending further finalization of the de-
sign and plans. Request for additional
funds based upon more complete design
work can be presented to the Congress In
the next sekalon.
Funds were left in the bill for a second
swimming pool at Hunter Air Force Base,
because the existing pool at this base was
colotructed from nonappropriated funds.
Amendment No. 36: Inserts center heading.
Amendments Nos. 37 through 41: Reported
In technical disagreement. The managers
on the part of the House will move to recede
and concur.
CHAPTER TV
Department of Dc/ense--Civil functions
Amendment No. 42: Inserts heading.
Amendment No. 43: Reported In dleagree-
mee t.
Jul -19
CHAPTER V
General Government matters
Amendment No. 44: Inserts chapter num-
ber.
Amendment No. 45: Appropriates $50.000
for Office of Defense Mobilization instead of
$100,000 as proposed by the Senate.
Amendment No. 46: Deletes Senate pro-
posal to appropriate $25.000 for District of
Columbia Auditorium Commission.
Amendment No. 47: Inserts heading.
Amendment No. 48: Reported in disagree-
ment.
Amendment No. 49: Reported In disagree-
ment.
Amendment No. 50: Reported In disagree-
ment.
CHAPTER VI
Independent ogees
Amendment No. 51: Changes chapter
number.
Amendment No. 52: Appropriates $825.000
for the Federal Civil Defense Administration
for "Operations" instead of $650,000 as pro-
posed by the House and $1,000,000 as pro-
posed by the Senate.
Amendment No, 53: Appropriates $10,-
000.000 for "Surveys. Plane, and Research"
of the Federal Civil Defense Administration
instead of $8.000.000 as proposed by the House
and $12.000.000 as proposed by the Senate.
Amendment No. 54: Appropriates $1,-
500,000 for "Salaries and expenses, Civil De-
fense Functions of Federal Agencies" instead
of $3.050.000 as proposed by the Senate.
Amendment No. 55: Inserts heading.
Amendment No. 56: Reported in disagree-
merit.
Amendment No. 57: Deletes item of
$300,000 for "Acquisition of Land. District of
Columbia" proposed by the Senate.
Amendment No. 58: Reported in disagree-
ment.
Amendment No. 59: Reported in disagree-
ment.
Amendment No. 60: Inserts heading.
Amendment No. 61: Reported In disagree-
ment.
Amendment No. 62: Repotted In disagree-
ment.
Amendment No. 63: Appropriates $122,500
for "Operating Expenses, National Archives
and Records Service" instead of $145,000 as
proposed by the Senate.
Amendment No. 64: Reported in disagree-
ment.
Amendment Nos. 65 through 74: Strike
out amendments proposed by the Senate.
The managers on the part a`. the House and
Senate do not believe the additional appro-
priations and Increased authorizations in-
cluded In said amendments for the Housing
and Home Finance Agency and its constituent
agencies are necessary at this time. How-
ever, should housing amendments for cer-
tain new and expanded programs be enacted
In the present session of tie Congress, or
should the need for additional funds be-
come acute because of unanticipated In-
creases In programs, the Director of the Bu-
reau of the Budget may accelerate apportion-
ments of funds presently available by mini-
mum amounts pending the submission of
supplemental estimates to the next session
of the Congress.
Amendment Nos. 75 and )6: Reported in
disagreement.
CHAPTER VII
Department of the Interior
Amendment No. 77: Changes chapter
number.
Amendment No. 78: Reported in disagree-
ment.
Amendment No. 79: Appropriates $1,200,000
for Bureau of Mines, Conservation and De-
velopment of Mineral Resources, Instead of
$625.000 as proposed by the House and
$1,450.000 as proposed by tae Senate. Of
the amount provided $1,000,000 is for con-
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41
1955
tinuation of research in mining methods at
the Rifle, Colorado, oil shale plant and for
putting the retorting, refining, and all other
research facilities into standby condition.
Amendment No. 80: Reported In disagree-
ment.
Amendment No. 81: Appropriates $750,000
for Fish and Wildlife Service, Construction,
instead of $325,000 as proposed by the House
and $786,000 as proposed by the Senate. Of
this amount provided $6,000 is for the, con-
struction of an auxiliary spillway on the
James River at the Dakota Lake National
Wildlife Refuge in North Dakota.
Amendment No. 82: Reported in disagree-
ment.
Department of Agriculture
Amendment No. 83: Reported in disagree-
ment.
Alexander Hamilton Bicentennial
Commission
Amendment No. 84: Reported in disagree-
ment.
Boston National Historic Sites Commission
Amendment No. 85: Reported in disagree-
ment.
John Marshall Bicentennial Celebration
Commission
Amendment No. 86: Reported in disagree-
ment.
National Capital Planning Commission
Amendment No. 87: Strikes language in-
serted by the Senate.
Smithsonian Institution
Amendment No. 88: Reported in disagree-
ment.
Soo' Locks Centennial Celebration
Commission
Amendment No. 89: Reported in disagree-
ment.
CHAPTER VHI
Department of Labor
Amendment No. 90: Changes chapter
number,
Amendment No. 91: Appropriates $250,000
for "Salaries and expenses, Office of the So-
licitor" instead of $110,000 as proposed by
the House and $303,800 as proposed by the
Senate.
Amendment No. 92: Reported in disagree-
ment.
Amendment No. 93: Reported in disagree-
ment.
,Department of Health, Education, and
Welfare
Amendment No. 94: Inserts heading.
Amendment No. 95: Reported in disagree-
ment.
Amendment No. 96: Strikes appropriation
of $8,700 for "Salaries and expenses, Gal-
laudet College" proposed by the Senate.
Amendment No. 97: Inserts heading.
Amendment No. 98: Reported in disagree-
ment.
Amendment No. 99: Strikes appropriation
of $220,000 for "salaries and expenses, How-
ard University" proposed by the Senate.
Amendment No. 100: Appropriates $220,000
for "Salaries and expenses, White House
Conference on Education" instead of $50,000
as proposed by the House and $238,000 as
proposed by the Senate, however, the man-
agers on the part of the House reiterate the
thought set forth in House Report No. 1116,
that the legislation which authorized the
White House Conference on Hducation does
not authorize the use of Federal funds for
the travel expenses of delegates to the Con-
CONGRESSIONAL RECORD - HOUSE 10463
ference,.and will expect that the Department
secure an opinion on this matter from the
Comptroller General before obligating any
funds for such purpose. If his opinion is
that the use of funds for such purpose is not
so authorized, it will be expected that the
Director of the Bureau of the Budget will
impound $170,000 of the appropriation for
this item.
Amendment No. 101: Strikes appropria-
tions for 19 Public Health Service items
totaling $1,375,000 proposed by the Senate.
Amendment No. 102: Appropriates $1,190,-
000 for "Sanitary engineering activities" as
proposed by the Senate.
Amendment No. 103: Appropriates $250,000
for "Mental health activities" for the purpose
of carrying out the purposes of Public Law
182, approved July 28, 1955, as proposed by
the Senate.
Amendment No. 104: Reported in disagree-
ment for technical reasons. A motion will
be made to recede from disagreement to the
Senate amendment that proposed an appro-
priation of $60,000,000 for "Grants to States
for poliomyelitis vaccination" and concur
therein with an amendment to substitute
the sum of $30,000,000. The managers are
agreed that, if legislation is enacted which
will require more than $30,000,000 in fiscal
year 1956, the Director of the Bureau of the
Budget should apportion these funds on a
deficiency basis.
Amendment No. 105: Appropriates $600,000
for "Construction of housing facilities for
animals" instead of $400,000 as proposed by
the House and $685,280 as proposed by the
Senate. The language of this paragraph is
sufficiently broad to permit the Public Health
Service to handle the construction direct or
to arrange for contracts through the General
Services Administration. The managers will
expect the method to be employed which will
assure the earliest completion of the build-
ing.
CHAPTER IX
Public works
Atomic Energy Commission
Amendment No. 106: Changes chapter
number.
Amendment No. 107: Appropriates $256,-
327,000 for Plant and Equipment instead of
$163,577,000 as proposed by the House and
$270,800,000 as proposed by the Senate.
None of the amount appropriated is to be
used for construction of the new Reactor
Training School, Argonne National Labora-
tory, as proposed in the Budget.
Amendment No. 108: Deletes House lan-
guage.
Amendment No. 109: Reported in disagree-
ment.
Department of the Interior
Amendments Nos. 110 through 112: Strike
headings and language inserted by the Sen-
ate.
The use of $240,000 of available funds for
completion of the Yellowtail-Lovell trans-
mission line is approved.
Department of Defense-Civil Functions,
Department of the Army
Amendment No. 113: Appropriates $5,-
551,014 for Rivers and Harbors and Flood
Control Construction, General, as proposed
by the Senate.
CHAPTER X
Department of State
'Amendment No. 114: Changes chapter
number.
Amendment No. 115: Appropriates $1,970,-
000 for "Salaries and expenses" Instead of
$1,820,000 as proposed by the House and
$2,120,000 as proposed by the Senate.
Amendment No. 116: Reported in disagree-
ment.
Amendment No. 117: Reported in disagree-
ment.
Amendment No. 118: Deletes language
proposed by the Senate.
Amendment No. 119: Deletes language pro-
posed by the Senate.
Amendment No. 120: Appropriates $75,000
for "Salaries and expenses, International
Boundary and Water Commission, United
States and Mexico," as proposed by the Sen-
ate.
Department of Justice
Amendment No. 121: Deletes proposal of
Senate to appropriate $500,000 for "Build-
ings and Facilities."
United States Information Agency
Amendment No. 122: Appropriates $336,630
for "Salaries and expenses" instead of.
$243,260 as proposed by the House and $430,-
000 as proposed by the Senate.
Funds appropriated to the President
Amendment No. 123: Reported in disagree-
ment.
CHAPTER XI
Treasury-Post O fice
Amendment No. 124: Changes chapter
number.
Amendment No. 125: Appropriates $7,000,-
000 for Operating Expenses, Coast Guard, as
proposed by the Senate instead of $5,000,000
as proposed by the House.
Amendment No. 126: Inserts heading.
Amendment No. 127: Reported in dis-
agreement.
Amendment No. 128: Reported in disagree-
ment.
CHAPTER XII
District of Columbia
Amendment No. 129: Changes chapter
number.
Amendment No. 130: Reported in dis-
agreement.
Amendment No. 131: Reported in dis-
agreement.
CHAPTER XII!
Legislative branch
Amendment No. 132: Inserts chapter
number.
Amendments Nos. 133 and 134: Insert
headings.
Amendment No. 135: Appropriates $185,835
for Contingent Expenses of the Senate, as
proposed by the Senate.
Amendment No. 136: Strikes out language
proposed by the Senate amending Section
1311, Public Law 663, Eighty-third Congress.
CHAPTER XIV
Claims for damages, audited claims, and
judgments
Amendment No. 137: Changes chapter
number.
Amendments Nos. 138 and 139: Appropri-
ate $8,117,523 as proposed by the Senate in-
stead of $5,343,868 as proposed by the
House; and insert reference to Senate Docu-
ment.
CHAPTER XV
General provisions
Amendment No. 140: Inserts chapter
number.
Amendment No. 141: Inserts heading.
Amendment No. 142: Reported in dis-
agreement.
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10461 CONGRESSIONAL RECORD - HOUSE
Amendment No. 143: Reported in dis-
agreement.
CLARENCE CANNON,
JOHN TADER,
As to chapter I:
JAMIE L. WHITTEN,
FRED MARSHALL.
H. CARL ANDER,EN,
As to chapter II:
PRINCE H. PRESTON, Jr.,
ALBERT THOMAS,
FRANK T. Bow,
As to chapter III:
(',FORCE MAHON.
HARRY R. SHEPPARD.
ROBERT L. F. SIXES,
if. B. WIGCLESWORTII,
ERRETT P. SCRrVNER,
GERALD It. FoRD, Jr.,
As to chapter IV:
OTTO E. PASSMAN,
J. VAUGHAN GARY,
R. B. WIGGLESWORTH,
As to chapter V:
GEORGE ANDREWS,
GEORGE MAHON,
IVOR D. FENTON,
As to chapter VI:
ALBERT THOMAS,
SIDNEY R. YATES,
JOHN PHILLIPS,
As to chapter VII:
MICHAEL J. KIRWAN.
W. F. NORRELL,
BE--N F. JENSEN,
As to chapter VIII:
JOAN E. FOGARTY,
A. M. FERNANDEZ,
T. MILLET HAND.
As to chapter IX:
Louis C. RABACT.
MICHAEL J. KIRWAN,
As to chapter X:
JOHN J. ROONEY.
PRINCE IT. PRESTON, Jr..
F. R. COUDERT. Jr.,
As to chapter XI:
J. VAUGHAN GARY,
OTTO E. PASSMAN,
GORDON CANFIELD,
As to chapters XII, XIII. XIV, and XV:
Louis C. RABAUT,
W. F. NORRELL,
WALT HORAN.
Managers on the Part of the House.
CORRECTION OF RECORD
Mr. THOMSON of Wyoming. Mr.
Speaker, I ask unanimous consent that
my remarks on the floor of the House
yesterday, as they appear on page 10295
of the CONGRESSIONAL RECORD be col'-
rected as follows: On line 20, page 10293,
strike out the words "do not."
The SPEAKER. Is there objection to
the request of the gentleman from Wyo-
ming?
'there was no objection.
EXTENSION OF REMARKS
By unanimous consent, permission to
extend remarks in the Appendix of the
RECORD, or to revise and extend remarks,
was granted to:
Mr. CooPER and to include a report
from the Treasury Department with re-
spect to the tax treatment of Cooper-
atives.
Mr. VINSON, and to include an address
made by Hon. DEWEY SHORT before the
Post-Graduate Medical Society at Hous-
ton, Tex.
Mr. PRICE in five instances and in each
to include extraneous matter.
Mr. MuLTEIt in five instances and in
each to include extraneous matter.
Mr. MuLTER. the remarks he expects
to make in Committee of the Whole
today and to include extraneous matter.
Mr. LANKFORRD and to include an article.
Mr. SIXES in two instances and to In-
clude other material.
Mr. HAYS of Ohio in two instances and
to include extraneous matter.
Mr. WALTER and to include an article.
Mr. MADDEN and to include a state-
ment..
Mr. MAGNUSON in five instances and to
include extraneous material.
Mr. FALLON.
Mr. DEROUNIAN.
Mr. BOGGS.
Mr. PHILBIN in four instances.
Mr. REECE of Tennessee (at the re-
que:;t of Mr. BROWN of Ohio) and include
certain material.
Mr. SAYLOR in three instances in each
to include extraneous matter.
Mr. SMITH of Wisconsin in five in-
stances in each to include extraneous
matter.
Mr. RADWAN (at the request of Mr.
ARENDS).
Mr. LAIRD in five instances in each to
include extraneous matter.
Mr. RIEHLMAN in two instances in each
to include extraneous matter.
Mr. MILLER of Nebraska.
Mr. BROwNSON and to include extra-
neous matter.
Mr. PILLION.
Mr. UTT and include extraneous
matter.
Mr. PowELl. (at the request of Mr.
MADDEN) in two instances and to include
extraneous matter.
Mr. PATmAN, his remarks made in
Committee of the Whole and to include
extraneous matter.
Mr. IIEBERT (at the request of Mr.
MULTER) and to include extraneous mat-
ter.
Mr. KLEIN (at the request of Mr. MUL-
TER) and to include extraneous matter,
notwithstanding that it may exceed two
pages of the RECORD and is estimated by
the Public Printer to cost $280.
Mrs. KELLY of New York (at the re-
quest of Mr. ZABLOCKI) in six instances
and to include extraneous matter.
Mr. FLOOD at the request of Mr. ZAE-
I.ocKI) in two Instances.
Mr. ZABLOCKI in two instances.
Mr. PELLY in five instances and to in-
clude extraneous matter.
Mr. MACK of Washington in five in-
stances and to include extraneous mat-
ter.
Mr. VANIK to revise and extend his re-
marks made in Committee of the Whole.
Mr. THOMSCN of Wyoming.
Mr. DODD in two instances and to in-
clude extraneous matter.
Mr. TEAGUE of Texas.
Mr. MCDowoumi.
SENATE BILLS REFERRED
Bills of the Senate of the following
titles were taken from the Speaker's table
and. under the rule, referred as follows:
8.360. An act for the relief of Bart Krij-
ger; to the Committee on the Judiciary.
J((t/ .-J
S. 421. An act for the relief of Jose Al-
varez; to the Committee on the Judiciary.
8. 433. An act for the relief of Markos De-
metrius Spanos; to the Committee on the
Judiciary.
S. 912. An act to amend the Act of April
23. 1930, relating to a uniform retirement
date for authorized retirements of Federal
personnel. and the Foreign Service Act of
1946, as amended; to the Committee on Post
Office and Civil Service.
S. 1105. An act for the relief of Mrs. Liese-
lotte Emilie Dailey; W the Committee on the
Judiciary.
S. 1118. An act for the relief of Katherine
Lajimodiere (nee Schneeberger); to the
Committee on the Judiciary.
S.1125. An act for the re:tef of Stephen
Fodo; to the Committee on the Judiciary.
S. 1226. An act for the relief of Soterios
Christopoulos; to the Committee on the
Judiciary.
S. 1299. An act for the relief of Mrs. Fs-
tent Rodriguez Estopinan de Witlicki; to the
Committee on the Judiciary.
S. 1348. An act for the relief of Anna
Jerman Bonito; to the Committee on the
Judiciary.
S. 1357. An act for the relief of Ingeburg
Edith Stallings (nee Nitzki) ; to the Commit-
tee on the Judiciary.
S. 1594. An act for the re:fef of Dosinda
Gonzalez Mendez; to the Committee on the
Judiciary.
S. 1676. An act for the relief of Antonio
Domenico Narciso Bianchi; to the Committee
on the Judiciary.
S. 1682. An act for the relief of Maria Del
Carmen Intriago Martinez; to the Commit-
tee on the Judiciary.
S. 1706. An act for the relief of Spyridon
Saintouf)s and his wife Efrossini Saintoufls;
to the Committee on the Judiciary.
S. 1732. An act for the relief of Panagio-
t.is Nicolas Lalos and his wife, Antyro Pana-
giotis Lalos; to the Committee on the Ju-
diciary.
S. 1787. An act for the relief of Edith
Kalwies; to the Committee on the Judici-
ary.
S. 1818. An act to limit the amount of land
on Federal irrigation projects which may
he exchaneed under the act of August 13,
1953: to the Committee on Interior and In-
ternal Affairs.
S. 1882. An act for the relief of Constan-
tine Salmon; to the Committee on the Ju-
diciary.
S. 1888. An act for the relief of Cesare
Picco: to the Committee on the Judiciary.
S. 1905. An act for the relief of Winston
Bros. Co. and the Utah Construction Co. and
the J. A. Terteling & Sons, Inc.; to the Com-
mittee on the Judiciary.
S. 1917. An act to authorize the construc-
tion within Grand Teton National Park of
an alternate route to United States Highway
89, also numbered U. S. 187 and U. S. 26
and the conveyance thereof to the State of
Wyoming, and for other purposes: to the
Committee on Interior and Irsular Affairs.
S. 1933. An act for the relief of Dr. Elpidio
Dorado. Aurelia. Deanna, Elpidio. Jr., and
Ambrosio Dosado; to the Cormittee on the
Judiciary.
S. 1972. An act for the relief of William
Theodore and Emily Sansur Saad; to the
Committee on the Judiciary.
S. 1973. An act for the relief of Touflc N.
Jildeh: to the Committee on the Judiciary.
S. 1983. An act for the relief of Myra Louise
Dew; to the Committee on tte Judiciary.
S. 2036. An act for the relief of Rosa
Roppo: to the Committee on the Judiciary.
S. 2053. An act for the relief of Ivan
Gerasko; to the Committee on the Judiciary.
S. 2060. An act to amend tte act of March
3. 1901 (31 Stat. 1449), as amended, to incor-
porate in the Organic Act of the National
Bureau of Standards the authDrity to use the
working capital fund, and to permit certain
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