CUBAN EMBARGO

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000200170021-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 15, 2016
• Document Release Date: February 13, 2004
• Sequence Number: 21
• Publication Date: January 1, 1961
• Content Type: OPEN

/
A 6402 (' ,, ,I~ Sr a Fc e~e ? f jf % El RD P APPENDIX 0200170021-3 August 15
Cuban Ear
go Klamath's SherifF of Old West Practices donated books, which contains such diverse
Arlodern Penology as "Plutarch's Lives," "Chips Off the Old
EXTENSION OF REMARKS Benchley" and "Double Muscadine." There
HON. SEYMOUR HALPERN
is a stack of back issues of the National Geo-
EXTENSION OF REMARKS graphic, old school books and several Bibles,
of but more volumes would be welcomed.
Reader
it b
i
s s
es
de
of NEW the bookshelf on a solid
YORK HON. AL ULLMAN walnut bench made by "Red" in 1928 as a
IN THE HOUSE OF REPRESENTATIVES OF OREGON project for his eighth grade manual training
- ~a ~..e iuen in ms care
Mr. HALPERN, Mr. Speaker, H.R. Tuesday, August 15, 1961 must keep some rights as human beings,
8689, which I introduced, calls for acorn- "Red" has provided them with a television
plete embargo on goods to and from Mr. ULLMAN. Mr. Speaker, Sheriff set in the recreation room and a subscription
Cuba. "Red" Britton of Klamath County, Oreg. to the Klamath Falls Herald & News, the
Earlier this year I called on President has long been well known in our local daily. He also has a barber come in to
Kennedy to invoke a complete ban on part of the country, both for the efficient give shaves and haircuts at prevailing union
administration of his office and for the scale on certain days each week.
Cuban imports and exports but to this Britton is especially proud of the barber
day, Cuba is still doing business in many unique museum and display maintained chair. It's 100 years old, and he found it in
commodities with the United States. at the Klamath County Jail, which the town of Sprague River on the Klamath
How ironic a situation, Mr. Speaker. makes it a must for visitors to Klamath Reservation. Britton has had it restored, so
How ridiculous, if it were not so tragic. Falls. The Portland Reporter, in its Au- it works as well as when it was brand new.
Ninety miles from our shores, Cuba, gust 7 edition, paid tribute to Sheriff He even has the original headrest with its
under the Castro regime, has become a Britton and it is a pleasure to call the paper roll to protect the customer's head.
Soviet satellite and its government has article to my colleagues' attention: In the evenings, he and such prisoners as
have musical talent get together to play the
confiscated hundreds of millions of dol- KLAMATII'S SHERIFF OF OLD WEST PRACTICES Violin, with "Red" providing terrific honky-
lars worth of American property. Nev- MODERN PENOLOGY tonk piano accompaniment. The piano is
ertheless, our Nation, acknowledged as (By Mary Ann Campbell) another item "off the reservation," as "Red"
the leader of the free world, continues KLAMATI3 FALLS.--Most law enforcement says. It's afour-pedal cabinet grand, made
to provide Dictator Castro with the cash officers, in the tradition of the Royal Cana- by Weser Bros., New York, and is probably
which he desperately needs to maintain dian Mounties, have to go out and get their close to the century mark also.
his antidemocratic, anti-U.S. regime. man. Outside the Jail, "Red" and his charges
Time is 10 But Oregon has one sheriff whose job is maintain a little pioneer display, which origi-
ng overdue for imposing and greatly simplified because wanted men come nated during the Oregon Centennial in 1959.
enforcing a firm embargo across the to him. There are models of animals, an ox with
board to end this ridiculous and dam- This unusual sheriff who is sought out by marble eyes and a horse or two; a copy of
aging contradiction. criminals instead of the other way around an old-fashioned high-wheeled bicycle made
In introducing this legislation I join is J. Murray "Red" Britton of Klamath Coun- by the prisoners, a model of a frontier fort
my distinguished colleague, the gentle- ty. and some old-style tombstones.
man from Florida, PAUL ue th , who has One such turned. up at the sheriff's office "Red" also has acquired the traces of the
on the second floor of the courthouse in freight and passenger stagecoach that went
provided superb leadership in this Con- Klamath Falls one day this spring and asked between Klamath Falls and Lakeview many
gress to effectuate such an embargo. I if Britton was looking for him. years ago. The garden is cared for by true-
am privileged to associate myself with "Heck, no," "Red" said, "What would I ties, who are permitted to work outside with-
him as cosponsor of this legislation. want with you?" out being under guard. Red believes in their
The bill would effect such an embargo His visitor shrugged and left. word that they will not run away and can
by banning all interstate shipment of Twenty minutes later, Britton discovered boast that he has never lost a. prisoner since
goods imported into the United States he did indeed have a warrant for the man, he took office on January 16, 1952.
from Cuba, and all goods destined for on charges of contributing to the police His beliefs are also expressed in a sign
export to Cuba. It now seems necessary quency of a. minor. City and State ha burg over the jail office.
began looking for the man, but "Red" as- guests are human beings," it reads.
for Congress to take strong action and sured them he'd be back. "They are here as punishment, not for
end the continuous flow of American He was right. The wanted man returned punishment."
dollars to the Castro regime. This bill and again asked if the sheriff wasn't looking This is a view prison organizations wish
would prevent the interstate transporta- for him. This time, Britton told him he were held by more sheriffs throughout the
tinn of annAc +n..,'. f,..,,,- -w_ ---' - -_.. ..,"r i-A.-I ........,,,, country
per month that Cuba still receives from his Thunderbird out to "Red's" house to give uer stanas near Klamath Falls, Red took
himself up. He arrived just as Red was sit- some of "MY boys" out to help fight the
this trade. This measure would further ting down to supper. Red invited him to blaze. During the firefighting some of the
ban goods shipped from any third coun- join him, but the suspect had eaten, so he men weru separated from the main group
ill the burning woot and
try through the United States to or from talked with the sheriff until the meal was back town on
. made ce pi way
Cuba. finished. Then, the two men drove in their up on ad outside State police pFaed
There is no excuse, no justification for own cars to the county jail. and d an br ught the him roo to d the eheri a Sheri Klamath Fags
"Red"
of trade with Cuba. It "Red" gets along well with his charges, him office, charg-
him with attempted escape,
the is time to continuation resolve the present paradox of both white men and Klamath Indians, be-
cause he encourages the men to work in their ':Red" hotly defended his prisoner.
our Cuban policy. We have, on the one own trades or to develop trades while servin ,
g let escaping," he explained, "I
hand, withdrawn diplomatic relations, time in his jail,
g let him out."
branded Castro's government as Com- Eddie Chile uin, whose Odd though this statement sounds from
munist, supported grandfather was a law enforcement officer, the system works.
free Cubans in their the man the reservation town of Chiloquin The man really was returning to the jail
efforts for liberation, and cut the im- was named after. has painted several pictures and "Red's" custody.
portation of sugar from Cuba into the the jail. His study of a buffalo hunt
United States. Yet, we still allow many hangs in the jail office, his Indian horses are
other
other Cuban imports into this country displayed over the piano in the small recrea- Temple University's Police Science and
for imports dollars, is country tion room, and his religious paintings, copied
and many other items whose exportation from small Sunday school cards, hang in the Administration Program
hallways of each of the building's three floors.
can only bolster the Castro regime. A saddlemaker, Stephen Walcott, whose
Surely this policy cannot continue if parole somehow got revoked this summer, EXTENSION OF REMARKS
we expect to advance freedom at full spends his time in jail making saddles and of
speed in Cuba. Positive action is nec- repairing those used by the sheriff's mounted HON. HERMAN TOLL
essary to hasten Castro's downfall. Mr. posse. He has made a magnificent black
Speaker, I proudly join my colleagues leather saddle with silver trimmings for use OF PENNSYLVANIA
who are fighting for this objective and i on special occasions and important parades. IN THE HOUSE OF REPRESENTATIVES
Financing for these projects largely comes
call upon the Congress to enact a com- out of "Red's" own pocket. Tuesday, August 15, 1961
plete trade embargo which would help To provide the prisoners with reading ma- Mr. TOLL. Mr. Speaker, I would like
end this tyranny. terial, "Red" has set up a small library of to bring to the attention of all Members
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 Approved For CORelease NGRESSIONAL RECORD - XI PEEN 200170021-3
1961
such change. Mutual institutions, like every ice to the owners of their demand accounts
other individual or group of taxpayers will which costs the bank money. The fact is
never be heard to complain about the re- that, with rare exception, any demand ac-
duction of taxes, if it is done fairly and ic count that does s not pay otherwise its own is wvery ay by serv-
without discrimination. e charges , -. the h-nti
liquidity and the other to assure solvency.
(I ignore at this time the manipulation of
reserve requirements by the Federal Reserve
System for credit purposes, because that does
not enter into the tax problem.)
The power to tax is the power to destroy.
This committee, however, and this Congress,
I am certain will never use that power in
that manner.
But you will come close to doing that if
you increase the taxes on mutual thrift or-
ganizations. Their liquidity, their solvency,
their usefulness, depend on their ability to
build up their reserves.
I beg of you not to engage in a strictly
banking function of determining what is or
is not a proper reserve through the guise of
a tax measure.
I am not raising the jurisdictional ques-
tion that this is a proper subject for hearings
by the Banking and Currency Committee.
I am pointing out that this question is not
as it has been made to appear, a simple tax
problem. It is not. It has much greater
implications. 'Before you have any right to
change this tax formula you must determine
that the reserves of these institutions are
high enough for safe and sound operation
and that such reserves must not be per-
mitted to increase at the same rate as at
present. I say all the proof is to the con-
trary.
In 1951, Mr. Chairman, the House and the
Senate considered this same proposal-to
impose a corporate income tax on the mu-
tual savings banks. It was felt then that the
Korean emergency demanded that such a tax
be imposed. We determined then, however,
as I think we must determine now, that the
proper functioning of the mutuals requires
s'uruuvlnuuic, v -
their depositors' and shareholders' money
for investment and can create no checkbook
money.
Commercial banks are constantly creating,
by their loans, new checkbook money,
which after deducting a reserve, they can
lend out all over again.
Under present tax law, both mutuals and
commercials are subject to the same normal
tax and surtax; both are subject to the same
rate; both may deduct operating expenses;
both may deduct taxes paid to State and
local governments; both may deduct inter-
est paid to depositors; both may deduct ad-
ditions to reserves for bad debts; and both
compute their reserve deduction differently
than other taxpayers.
Mutual savings banks have a provision
for reserve additions which takes account of
their special needs. Except upon liquida-
tion, these reserves can only be used for
losses. As already indicated, the commer-
cials can use their reserves as the basis for
new loans and the creation of new check-
book money.
Commercial banks also have a unique
formula that enables them to base their de-
duction on losses substained 30 years ago.
A heavier tax on savings banks, which
would in turn reduce interest rates to de-
positors and thus reduce total savings,
would reduce funds for home financing in
the years ahead-one of the very things we
must avoid if we are not to negate the
gains made in this area by the passage of
the Housing Act of 1961.
A heavier tax on mutuals would reduce the
reward for savings by reducing the interest
rate paid to millions of savers. This would
first penalize the saver of modest means
who prefers to save in a specialized mutual
by deduction from gross income, to protect thrift institution.
depositors against loss. The Congress at that Tax equality arguments of the commer-
time made specific provision in section 593 cial bankers are fallacious. Commercial
of the Internal Revenue Code to safeguard bank income tax payments to the Treasury
this very function of the mutuals. It is this result mainly short-term t their very p profitable
provision of the Code that you are being earnings from
s and time ac-
ir savin
th
g
e
to review and change. ing. They use
I have carefully analyzed the arguments counts in the same manner as their demand you ande Fe deral Deposit Insurance and Savings
pro and con advanced on this subject by the money.
financial institutions. I am convinced that Mr. Chairman, I would like to suggest Loan Insurance Corporation as to what they he amount
of think
are the inequalities that the commercial bank-
reserves that e hneed, ouldthbeu judged ton individual what ratere those e r ese v esp musteincr ase to
ers man. to establish add up to a straw
man. If there should be a tax x on n the mu- merit-there is every reason not to equalize keep our thrift system sound.
tuals before they pay the net earnings to these requirements between commercial Bear in mind that FDIC today has total
for
of its
in insured accounts of
that to do so would re- every insure
their shareholders and depositors, then the It is mand onvmutual iction and
interest the
iwhich commercial al accounts bankers not pay o on be sult in serious consequences to our eco- FSLIC has only 67 cents for every $100 of
a
their deductible and timeexpense before a sh aou arriving at the nomic stability. A sound thrift system is insured accounts.
a deore at he ure test
of the taxable income of the commercials. as essential to national security as is imme- reseThe one rves oisboth theof bankscand the
If the administration and the commercial diate Treasury revenue.
bankers are serious in their contention for I said earlier that 70 percent of the operat- savings and loan associations is this:
equality we should impose upon the com- ing funds of the commercial banks is cost Whenever the Congress can safely repeal
mercial banks the same requirements we im- free to them. The figures are quite inter- the FDIC uncontrolled borrowing power from
pose upon the mutuals by requiring that esting. I use the year 1960 throughout. the Treasury of $3 billion and that of FSLIC
time and savings accounts in the commer- Total assets of all commercial banks was of three-fourths of a billion dollars, the two
cials may be invested only in the same in. in excess of $282,800 million. Of that their systems will have built up sufficient reserves
vestments permitted the mutuals. Let us pand total reserves, were $41,800 mil- own to t soundness,
further tamper
nds, the profits
commercials require that for those fu
commercials ls must carry the e same reserves as lion. Their deposits were $213 billion. with their reserves or the rate of growth
are required of the mutuals. It appears to Bear in mind that they are prohibited by thereof.
me that this would remove the inequality law from paying any interest on their de- For those who might be inclined to feel
that the commercial bankers insist is present. mand accounts and the maximum interest sorry for the poor commercial banks, may I
Let us not overlook a real inequality that most of them are permitted to pay on time suggest they read the item in the American
exists: the mutuals are required to pay for and savings accounts is 3 percent. The mu- Banker of August 7, 1961, headlined 1'Bank
the use of almost every dollar with which tuals must pay dividends on the full amount Stocks Reach New High Level," which in-
they operate (at least 93 percent thereof), of all of their accounts. The commercials cludes the prediction that an even better year
while the commercials are permitted to use use in their income earning operations all is ahead for them, better than their best year
70 percent of their resources (that is their of their ep s moneys less only the ama ount thus s fare you as strongly as I can, not to carry as eserves demand deposits) free cost, that they are required
The commercial bankers will dispute that pursuant to either the Federal Reserve Act, change the tax structure of these mutual
statement by saying that they render a serv- if they are members of the Federal Reserve thrift institutions at this time.
A6401
System, or of State law if they are not in
the System.
In 1960 they paid dividends to their stock-
holders of $832 million, an average of 7.4
percent of their income. In the same year
they paid $1,785 million as interest on their
time and savings accounts. All of that in-
terest was tax deductible as an expense of
operation before they paid any taxes. They
paid out for salaries and wages 25 percent
of their income as against only 7 percent
paid by savings banks.
On the other hand, the mutual savings
banks had total deposits of $36 billion and
the savings and loan associations had total
deposits of $58 billion. All of these moneys
of course belong to the depositors. The
savings banks earned and paid dividends to
their owners of slightly more than $1 bil-
lion, or an average of 3.49 percent. Savings
banks' total surplus and reserves were only -
$3,600 million. Savings and loan total sur-
plus and reserves were about $4 billion.
Savings banks, out of total income of
$1,600 million paid out 67 percent in divi-
dends to their depositors for a total of
$1,073 million, while adding to their surplus
and reserve accounts $168 million, or 10.5
percent.
The savings and loan associations paid out
57 percent of their earnings to their de-
positors.
It should be borne in mind that the com-
mercial banks can be required by the bank-
ing authorities to increase their capital when
their financial condition requires it. The
only way a mutual can improve its capital
position is by increasing its surplus and
reserve by additions thereto out of earnings.
I most respectfully direct your attention
to the political impact of increasing the tax
on mutual thrift institutions and thereby
reducing the income or return to the deposi-
tors and shareholders in these fine organiza-
tions.
There are almost 37 million depositors in
the mutual savings banks of the country.
There are more than 27 million shareholders
or depositors in the mutual savings and loan
associations of the country. There are over
12 million depositors or shareholders in mu-
tual credit unions. This makes a total of
well over 76 million accounts that will be
affected by what you do here.
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