AUTHORIZING APPOINTMENT OF ON ADDITIONAL ASSISTANT SECRETARY STATE
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Publication Date:
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19 61''
CONGRESSIONAL
as collateral and which guarantee your banks
against losses on loans you make to foreign
buyers on behalf of your exporting cus-
tomers.
I would be less than honest if I did not
stress the importance of the chief executive
officers of your banks interesting themselves
in these foreign credits. Our experience has
proven that unless the top brass takes the
leadership, little progress is made. The
junior officers cannot get to first base with-
out the enthusiastic support of their chair-
man or their president, as well as the board
of directors. It is an unfortunate fact that,
in many large cities in this country, the
chairman of the board and the presidents of
leading banks are not at all knowledgeable
on Eximbank's facilities and, amazingly
enough, do not even know what the Foreign
Credit Insurance Association is or does. How
can such great Massachusetts companies as
Gillette, Draper, Crompton & Knowles,
Heald Machine, Norton International, and
many others, carry on around the world
without the complete and absolute backing
of their Massachusetts bankers? How can
John Doe in Brockton or Joe Smith in Fall
River develop a new export business unless
his banker guides him and supports him in
his plans to expand abroad and reap the
profits that are waiting for him in countries
like Nigeria, Mexico, Venezuela, and many,
many others which are ready and anxious to
buy American products provided satisfactory
terms can be arranged.
Having been in the investment and com-
mercial banking business for the past 37
years, I am somewhat conversant with the
problems facing many bankers today. You
have bank examiners to cope with, possibly
a stodgy board of directors, and sometimes
senior officers who have not kept abreast of
this rapidly changing world and who believe
that they can build a giant wall around their
bank and smoke cigars in smug complacency.
What would your ancestors and mine, the
Founding Fathers of this country, think of
their descendants today who were too lazy,
too self-satisfied, and perhaps too timid to
extend a few foreign credits on behalf of
their customers, many of whom will not be
able to survive without substantial export
sales.
Do we forget that the original transporta-
tion systems and industrial plants in the
United States could not have been built
without the assistance of foreign capital
from Europe and Great Britain? How can
we increase our exports by $2 billion or $3 bil-
lion unless our banking system supports our
exporters with credit? Do you want to have
a new bureaucracy built in Washington that
will take over the whole operation, or do you
believe that private enterprise and capital
in America are still capable of financing
American business, whether it be located on
Massachusetts Bay or in the high mountains
of Peru? Our Government is offering you the
props and covering you on the risks that you
will not and should not take. Can't you, in
turn, do your share to the end that America's
foreign trade will prosper and thus help to
end the deficits in our international balance
of payments, not to mention our internal
budgetary deficits? Are you looking ahead at
the expanding European Common Market and
realizing that a giant is in the offing which
will, by 1970, have exports and imports of
$50 billion each year and which will provide
opportunities for American exporters un-
dreamed of in the history of man? It will
also provide competition heretofore un-
dreamed of and make necessary the mobiliza-
tion of all of our country's financial re-
sources to maintain and increase our posi-
tion as the greatest exporting and importing
nation in the world.
I ask you, the bankers of Massachusetts,
to contemplate these matters and then deter-
No. 181-17
RECORD ? SENATE 21057
mine whether or not you will get into the
ball game and place a small portion of your
vast resources at the disposal of your cus-
tomers, without recourse, so that they -will
have the credit facilities to go out and sell
American goods and equipment and Yankee
ingenuity to all parts of the free world. By
doing so, you will insure for your children,
grandchildren and great-grandchildren for
generations to come the blessings of the
American way of life which you and I have
been fortunate enough to enjoy, but which
would never have been possible without the
courage, initiative and pioneering spirit of
our hardy ancestors who founded a colony
here 342 years ago.
AMENDMENT OF LIFE INSURANCE
COMPANY ACT OF THE DISTRICT
OF COLUMBIA -
Mr. MANSriELD. Mr. President, I
would like to take up two bills which
have been cleared on both sides before
taking up the next conference report.
I move that the Senate proceed to the
consideration of Calendar No. 2231,
House bill 12546.
The PRESIDING OFFICER. The bill
will be stated by title.
The LEGISLATIVE CLERK. A bill (HR.
12546) to amend the Life Insurance
Company Act of the District of Colum-
bia (48 Stat. 1145) approved June 19,
1934, as amended.
The PRESIDING OFFICER. The
question is on agreeing to the motion
of the Senator from Montana.
The motion was agreed to; and the
Senate proceeded to consider the bill,
which had been reported from the Com-
mittee on the District of Columbia with
amendments on page 2, after line 8, to
insert a new section, as follows:
SEC. 2. (a) Subsection 10(b) (ii) of section
35 of chapter III of the Life Insurance Act
(48 Stat. 1145) is amended to read as fol-
lows:
"(ii) if such acquisition will not cause the
acquiring company's aggregate cost of in-
vestments under this paragraph to exceed,
in the case of a capital stock company, the
amount of capital, surplus and contingency
reserves in excess of $300,000 or, in the case
of a mutual company, the amount of sur-
plus and contingency reserves in excess of
$150,000."
(b) Subsection 15(ii) of section 35 of
chapter III of such Act is amended by strik-
ing "$150,000" and inserting in lieu thereof
"$300,000".
At the beginning of line 22, to change
the section number from "2" to "3"; on
page 3, at the beginning of line 5, to
change the section number from "3" to
"4"; in line 17, after the word ",employ-
ees", to insert "officers, directors, or li-
censed agents"; in line 19, after the word
"stock", to insert a colon and "Provided,
That the number of options per share
of stock shall be uniform"; and on page
4, at the beginning of line 1, to change
the section number from "4" to "5".
Mr. MANSFLELD. Mr. President, I
ask unanimous consent that the amend-
ments be considered en bloc.
The PRESIDING OFFICER. Is there
objection?
There being no objection, the amend-
ments were considered and agreed to en
bloc.
The PRESIDING OFFICER. The bill
is open to further amendment.
If there be no further amendment, the
question is on the engrossment of the
amendments and the third reading of
the bill.
The amendments were ordered to be
engrossed, and the bill to be read a third
time.
The bill was read the third time, and
passed. 4.--
DC--k
AUTHORIZING APPOINTMENT OF
ONE ADDITIONAL ASSISTANT SEC-
RETARY OF STATE
Mr. MANSFIELD. Mr. President, I
move that the Senate proceed to the
consideration of Calendar No. 2234, Sen7
ate bill 3459.
The PRESIDING OFFICER. The bill
will be stated by title.
The LEGISLATIVE CLERK. A bill (S.
3459) to authorize the appointment of
one additional Assistant Secretary of
State.
The PRESIDING OFFICER. The
question is on agreeing to the motion of
the Senator from Montana.
The motion was agreed to; and the
bill was considered, ordered to be en-
grossed for a third reading, was read
the third time and passed, as follows:
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled, That section
1 of the Act of May 26, 1949, as amended (5
U.S.C. 151a), is amended by striking out
"eleven" and inserting in lieu thereof
"twelve".
SEC. 2. Section 106(a) (17) of the Federal
Executive Pay Act of 1956 (70 Stat. 738) is
amended by striking out "(11)" and insert-
ing in lieu thereof "(12) ".
COMPENSATION FOR CERTAIN
WORLD WAR II LOSSES?CON-
FERENCE REPORT
Mr. MANSFIELD. Mr. President, I
understand the senior Senator from
South Carolina has another conference
report ready. I think he is ready to call
it up at this time.
The PRESIDING OFFICER. The
Senator from South Carolina.
Mr. JOHNSTON. Mr. President, I
submit a report of the committee of con-
ference on the disagreeing votes of the
two Houses on the amendments of the
Senate to the bill (H.R. 7283) to amend
the War Claims Act of 1948, as amended,
to provide compensation for certain
World War II losses. I ask unanimous
consent for the present consideration of
the report.
The PRESIDING OFFICER. The
report will be read for the information
of the Senate.
The legislative clerk read the report.
(For conference report, see House pro-
ceedings of October 2, 1962, pp. 20596-
20597, CONGRESSIONAL RECORD.)
The PRESIDING OFFICER. Is there
objection to the present consideration of
the report?
There being no objection, the Senate
proceeded to consider the report.
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21058 CONGRESSIONAL RECORD ? SENATE
Mr. MANSFIELD. Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that further pro-
ceedings under the quorum call may be
dispensed with.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
The question is on agreeing to the con-
ference report.
Mr. JOHNSTON. Mr. President, I did
not sign the conference report. I am
not for the bill as written. I have many
objections to the bill as it now stands.
I should like to place in the RECORD my
reasons why I am not for the conference
report and why I was not for the bill
when it was passed by the Senate.
Mr. President, as a member of the
conference that met on the war claims
bill, H.R. 7283, I would like to call the at-
tention of the Senate to certain points
in the conference report before final ac-
tion on this report. ?
When this measure was before the
Senate, I protested vehemently against
the manner in which it was being han-
dled on the floor. There were many sec-
tions of this particular bill which I
thought were unwise, and I have made
my views known on these issues before.
Consequently, I want to make a brief
statement concerning several items con-
tained in the conference report which I
believe to be to the detriment not only of
the war claimants but also of the United
States.
First of all, this conference report con-
tains a priority payment schedule for
certain claimants which I think is un-
precedented in the history of the U.S.
Senate. In my 18 years in the Senate I
have introduced much legislation and
fought many times to protect our small
business concerns. I am proud of the
record of the Senate in taking action to
see that our small business concerns are
protected from big business, which is
sometimes a little to avaricious. How-
ever, as thoroughly as I could search my
memory and my files, I could not find
another instance in which small business
concerns were given priority over the
claims of individuals.
The amendment adopted in confer-
ence, known as amendment No. 6, page
13, lines 9 to 14, gives priority to small
business concerns over the claims of in-
dividual claimants, which, as I said, is
unprecedented in the history of the Sen-
ate.
Because of my concern over the vari-
ous amendments in this bill, I wrote to
the Foreign Claims Settlement Commis-
sion to request their views on the amend-
ments. In a letter dated September 21,
1962, signed by Hon. Edward D. Re,
Chairman of the Commission, they had
this -to say concerning this particular
amendment:
The amendment in question is objection-
able because it would result in granting to
the so-called small business concern a pri-
ority payment for property loss claims over
individuals who sustained such losses. This
Is entirely at cross purposse with the sense
of H.R. 7283 as passed by the House which
included in section 213(a) (2) provision for
payment in full up to $10,000. This was
designed to provide for "the little fellow."
In addition, the House passed version in-
cluded a deduction requirement on awards
exceeding $10,000 where the claimant had
previously taken a tax writeoff. This, too,
was designed to favor "the little fellow" and
to prevent undue depletion of the fund.
The executive branch believes that there is
no justification for granting more favored
treatment to small businesses than would be
provided for individual claimants.
I want to call the particular attention
of the Senate to two points in the quoted
paragraph: First, this amendment gives
the right of priority of payment in full to
the claimants defined by the Small Busi-
ness Administration to have been a small
business on the date of loss. But, here,
I want the Senate to note, while the bill
requires that the business be a small
business concern at the time of the loss,
the amendment further insists that it
must have been a small business concern
within the meaning now set forth in the
Small Business Act.
Mr. President, this not only gives these
small business claimants priority over
our individual claimants?which could
go a long way toward depleting the
funds;?but it gives them the best of two
worlds. In the years since World War
II, when the losses would have occurred,
the definition of "small business" has
constantly upgraded to include larger
and larger businesses. Twenty years ago
when one spoke -of small business he
thought in terms of a concern employ-
ing 15 or 20, or less than 100 employees.
Under today's criteria, the Small Busi-
ness Administration does not even con-
sider a business as not meeting their
criteria unless it has over 250 or 300
employees. In many cases, business con-
cerns employing 1,000 people are con-
sidered small businesses.
Mr. President, the Small Business Ad-
ministation itself has four different cri-
teria under various programs whereby
it determines whether a business con-
cern is a small business. They have one
criterion for their small business loan
program; they have another criterion for
their Government sales program; and
still another criterion for their Govern-
ment procurement program. Anyone
concerned with the problem can readily
see that even if this amendment?de-
plorable as it may be?passed this Con-
gress the Small Business Administration
has no set of criteria which they can ap-
ply to determine what constitutes a small
business.
Regardless of the problems for the
Small Business Administration in this
amendment, my primary concern is the
inequities resulting when small busi-
nesses?for the first time in my recollec-
tion?are given priority over individual
claimants who might have suffered sim-
ilar losses.
Mr. President, even the Small Business
Administration itself, which is primarily
concerned with the problems and wel-
fare of small business concerns, does not
give priority to small businesses over in-
dividuals. In their disaster loan pro-
gram, the Small Business Administration
gives equal treatment to individuals and
small business concerns. Why the Con-
Octobk
gress of the United States should show
more concern for a small business, which
under the act is given equal treatment
with individuals and receives full pay-
ment up to $10,000, is beyond me.
Section 213(a) (2) of the bill provides
for payment in full up to $10,000. The
bill further provides that if funds are
available, everyone will be paid in full.
However, if sufficient funds are not avail-
able, only the first $10,000 will be paid in
full and any additional available funds
will be prorated among the claimants.
There is also a deduction requirement on
awards exceeding $10,000 where the
claimant has taken a tax writeoff. This,
too, is designed to protect the "little fel-
low" and to protect the war claims fund.
Since the adoption of this amendment,
the staff has attempted to find out how
much money would be involved in the
full payment of small business awards
before any payments to individual claim-
ants. No one knows the answer. The
Foreign Claims Settlement Commission
would not even give an approximate fig-
ure simply because such a priority has
never been granted before and there is
nothing upon which to base an estimate.
We have in our files reference to one
alleged small business loss reportedly of
over $1 million. How many more such
claims there are no one knows. But
even if only 10 percent of the funds
would be used in this priority payment,
it is still unfair to the individual claim-
ant, because it is more or less generally
agreed that the funds are insufficient.
Mr. President, it is inconceivable to me
that the Congress should vote out a war
claims bill allowing business concerns to
receive awards amounting in the millions
of dollars before an individual claimant
can even be paid 10 cents for his losses.
Mr. President, if the funds prove to be
insufficient, as current estimates indi-
cate, and somebody has to receive 10
cents on the dollar, the full burden of
the insufficiency will fall on the indi-
vidual claimants. I refuse to believe
that the Senate intends to pass a war
claims measure which contains such
inequities.
Mr. President, I have spoken at length
on the unwise action we are taking in
permitting a sale of General Aniline
& Film Corp. I have informed the
Senate that this amendment will merely
increase the amount of litigation in-
volved in determining true ownership of
the stock. I have informed the Senate
that the sale of this asset at this time
? will not?I repeat, will not?increase in
any way the money in the war claims
fund until this litigation is finished. I
have further pointed out that the future
profits of the company, instead of going
into the war claims fund, if the Govern-
ment prevails, will go into private pockets
under this proposed amendment. I have
further informed the Senate, should the
Swiss prevail, this amendment could cost
the taxpayers millions and millions of
dollars. My stand on this phase of this
bill is' a matter of record. I am content
that I have fought as sincerely as pos-
sible to protect all parties involved.
The Senate, however, has never had
an opportunity?nor have I?to go on
record as opposing the principle of al-
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12P2
CONGRESSIONAL RECORD ? SENATE
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
STATEMENT BY SENATOR SMITH OF
MassAciausErrs
Lt. Comdr. Richard Davids Stephenson
was killed in World War II on D-day over
Sicily on a volunteer mission while com-
manding an amphibious aircraft. He was
awarded, posthumously, the Distinguished
Flying Cross, lesser medals, and a British
decoration.
In 1946 Mrs. Helenita Stephenson, his
widow and mother of their four minor chil-
dren, went through a wedding ceremony
with one Frank Hine. The marriage was
never consumated because of impotence re-
sulting from an incurable, congenital brain
tumor which manifested itself also in inter-
mittent amnesia and Jacksonian epilepsy.
A few weeks after the marriage the purported
spouse disappeared and from then on was
hidden periodically in various hospitals and
sanitariums by his family. The claimant
was not informed of Mr. Hine's condition
before marriage during 8 months of court-
ship and she was unable to obtain evidence
of his condition after marriage because of
concealment in undisclosed institutions until
Mr. Hine became publicly 111 in 1954 and was
confined in a known hospital from which
she could subpena records. After this evi-
dence became available for the first time.
Mrs. Stephenson brought suit for annulment
in the U.S. District Court for the District of
Columbia in 1954. In her suit, heard in
June 1955, she requested restoration of her
rights and privileges as a unremarried widow
and an annulment of the marriage on the
basis of fraud as to physical condition and
inability to support. The case was defended
by attorney. The court held the marriage
void ab initio and restored her rights and
privileges. The expenses of this action were
raised by Commander Stephenson's class of
1935, U.S. Naval Academy.
In 1946 Mrs. Stephenson had mistakenly
informed the Veterans' Administration that
she had contracted a valid marriage. When
Mr. Hine deserted her shortly after her wed-
ding she reported this in person to the
Veterans' Administration and suggested rein-
statement as an unremarried war widow.
This was denied. Again, in 1955 after the
court verdict the Veterans' Administration
denied a pension on the ground that her
marriage was voidable but not void. This
ruling was questioned by a U.S. Senator as
contrary to the decree of the Federal Court
. that the marriage was void ab initio. As a
consequence, a hearing was, held at the Cen-
tral Office of the Veterans' Administration
in 1956 and the claim for pension was again
denied.
In 1956, after further congressional inter-
vention the Veterans' Administration again
denied the pension, this time on the grounds
that the decree of the court did not repre-
sent a final judgment as the purported
spouse had died within 90 days of the cotirt
action and consequently before the time for
appeal had elapsed. It may be noted that
the fact of his death had been known to the
Veterans' Administration in 1955 but the
court decree was not questioned as a final
judgment until after hearings on other
grounds had been held.
The Veterans' Administration is not sub-
ject to suit, but as Mrs. Stephenson had be-
come entitled to benefits from the Social
Security Administration under the Mothers'
Insurance Benefit Act and as this agency had
followed the ruling of the Veterans' Admin-
istration as to her status action was insti-
tuted against the Security Administration to
determine her rights. The U.S. Court of
Appeals of the District of Columbia in
this action upheld the decree of the
lower court in the annulment suit and de-
creed that the marriage was void ab initio
and that the claimant was entitled to all
her rights and benefits as a unremarried
widow.
After this decision, the Veterans' Adminis-
tration failed to act for 9 months until
the inconsistency of payment and recogni-
tion of her status by the Social Security Ad-
ministration and nonpayment and nonrecog-
nition of her as an unremarried widow was
brought to the Veterans' Administration at-
tention by the aforementioned Senator.
In October 1957 the Veterans' Administra-
tion finally sent a check for $1,425 to the
claimant with no explanation or covering
letter. The claimant computed the amount
as representing her pension from July 1955
to October 1957 or from 1 month after the
issuance of the court decree of annulment
of ab initio.
In connection with the proposed bill, it
may be noted that there is no law requiring
nonpayment of a war widow pension during
a period of a subsequent void marriage. Any
such law apparently would be unconstitu-
tional because contrary to the general prin-
ciple that a void contract has absolutely no
effect. Even though the Veterans' Adminis-
tration has wide discretionary authority, it
is difficult to understand how an act of this
agency which is contrary to general law is
not wisely remedied.
Moreover, under its wide discretionary au-
thority there would appear to be no justifi-
cation of fear of improper precedent. The
Veterans' Administration is authorized to
use its discretion in each individual situa-
tion. As the Veterans' Administration in a
requested status letter to the White House,
in March 1961, stated that this claim repre-
sented an exceptional case its merits would
appear subject to individual determination
without any effect on other distinguishable
situation in the future.
Under a recent decision the courts have
held that where eligibility was mistakenly
reported to the Government and payments
made, a beneficiary must repay the benefits
received through the mistake. Where a
claimant mistakenly reports ineligibility, as
in this situation, the Government similarly
would seem to be under a moral if not a
legal obligation to pay the beneficiary the
benefits that had been upheld through the
erroneous report of the claimant. The Gov-
ernment would not appear to be justified in
benefiting from error or a contract any more
than it should be expected to suffer a loss in
a situation created by error or a void con-
tract.
The enactment of H.R. 9285 will rectify a
situation where the only remedy available
to the claimant rests in the conscience and
sense of justice _of Members of Congress.
ITRADE EXPANSION ACT OF 1962?
CONFERENCE REPORT
Mr. MANSFIELD. Mr. President, the
distinguished chairman of the Finance
Committee, the senior Senator from Vir-
ginia [Mr. BYRD], wishes to call up the
conference report on the trade bill, I
believe.
Mr. BYRD of Virginia. Mr. President,
I submit a report of the committee of
conference on the disagreeing votes of
the two Houses on the amendments of
the Senate to the bill (H.R. 11970) to
promote the general welfare, foreign
policy, and security of the United States
through international trade agreements
and through adjustment assistance to
domestic industry, agriculture, and la-
bor, and for other purposes. I ask unan-
imous consent for the present considera-
tion of the report.
20997
The PRESIDING OFFICER. The re-
port will be read for the information of
the Senate.
The legislative clerk read the report.
(For conference report, see House pro-
ceedings of October 2, 1962, pp. 20597-
20598, CONGRESSIONAL RECORD.)
The PRESIDING OFFICER. Is there
objection to the present consideration of
the report?
There being no objection, the Senate
proceeded to consider the report.
Mr. BYRD of Virginia. Mr. President,
I wish to state that the Senate conferees
stood firm and was successful in re-
taining most of the' changes it had
made in the House bill. We were dis-
appointed in one or two respects, but
generally feel that we have maintained
the Senate position very well.
I shall briefly review the action of the
conferees, although I shall not take the
time of the Senate to discuss technical
or conforming amendments nor small
matters about which there is little dif-
ference.
In the statement of purposes there was
a compromise. The Senate had deleted
parts 3 and 4, having to do with assist-
ance in the progress of undeveloped
countries and the prevention of Com-
munist economic penetration. The
House conferees receded on No. 3, and the
Senate conferees receded on No. 4?so
that the statement of purposes now con-
tains a reference to the prevention of
Communist economic penetration.
The Senate amendments created a
new Free European Trading Community,
thus enlarging the possibilities of re-
ducing to zero the duties where 80 per-
cent of world trade is accounted for by
the United States and the countries of
that organization. On this the Senate
conferees were forced to recede. It was
pointed out strongly that to enlarge the
present European Economic Community
for the purposes of this section of the
act might act as a deterrent to en-
trance of the United Kingdom into the
Common Market, and the fact remains
that the authority to reduce tariffs by
50 percent is still available.
As I have stated, there was no way
in which that the Senate conferees
could persuade the conferees of the
House to accept this new principle.
With regard to the Senate amend-
ments concerning the Tariff Commission
reports and advice to the President on
the items which are to be negotiated
upon, the Senate conferees persuaded
the House conferees to recede. Upon
the Senate amendment, the type of
report to be prepared by the Tariff Com-
mission is much more detailed and com-
plete. The House conferees recognized
the value of this addition to the bill,
and accepted it. This accounted for
amendments Nos. 15, 16, 17, and 18.
Amendment No. 19 was a conforming
one.
The House conferees also receded on
amendment No. 20. Section 225(b) of
the bill as passed by the House required
the President, during the 4-year period
which begins on the date of the enact-
ment of the act, to reserve certain
articles?with respect to which the
majority of the Tariff Commission has
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20998 CONGRESSIONAL RECORD ? SENATE October 4
found injury under prior law?from
negotiation under the bill for a period
of 4 years. The Senate required the
reservation to be 5 years; and that figure
stands, inasmuch as the House conferees
receded.
Under amendment No. 21, section
231 of the bill as passed by the House
directs the President to suspend, with-
draw, or prevent the application of any
trade agreement concessions to products
of any country or area dominated or
controlled by communism. The Senate
amendment struck out "any country or
area dominated or controlled by com-
munism" and inserted "the Union of So-
viet Socialist Republics, Communist
China, and any other country or area
dominated or controlled by the foreign
government or foreign organization con-
trolling the world Communist move-
ment." On this the Senate was forced
to recede.
Mr. JAVITS. Mr. President, will it be
convenient for the Senator to yield at
this time on that point?
Mr. BYRD of Virginia. I yield.
Mr. JAVITS. I should like to pinpoint
one matter, to which I shall address my-
self later, namely, that this change in
definition makes a real difference in the
view of the conferees, in that the Presi-
dent will not be able to give the most-
favored-nation treatment to either Yu-
goslavia or Poland, if we adopt the con-
ference report language. Does it not?
Mr. BYRD of Virginia. That is cor-
rect. It is covered in the next para-
graph of my statement.
Mr. JAVITS. I thank the Senator.
Mr. BYRD of Virginia. The point at
issue was, Should the President be al-
lowed to give most-favored-nation treat-
ment to Poland and Yugoslavia? Under
the Senate amendment, he would be per-
mitted to do so; under the House version
Poland and Yugoslavia could not get
most-favored-nation treatment. The
bill states this should be accomplished
"as soon as practicable" which permits
the President to determine when the ac-
tion required under section 231 is feasi-
ble.
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. BYRD of Virginia. I yield.
Mr. JAVITS. Is the President of the
United States for or against the prpvi-
sion?
Mr. BYRD of Virginia. I understand
the administration was opposed to the
provision whereby the most-favored-na-
tion treatment could not be given either
to Poland or Yugoslavia.
Mr. JAVITS. Does the Senator know
if the administration is so much against
the provision that the President will veto
the bill because of it?
Mr. BYRD of Virginia. I have no in-
formation as to what the President will
do. I cannot imagine that he would veto
the entire bill because of the fact that
the House would not agree to the amend-
ment which was adopted by the Senate.
Mr. JAVITS. Nonetheless, it seems to
me that the President has made it clear
that he considers the limitation of his
power in this manner extremely embar-
rassing and damaging to the national in-
terest. I gather the Senator from Vir-
ginia has no actual information on that
subject. Is that correct?
Mr. BYRD of Virginia. I have no ac-
tual information, except that we were
told in conference the President favored
the Senate provision whereby the most-
favored-nation treatment could be given
to Poland and Yugoslavia. The House
was absolutely adamant. We were told
by the chairman of the committee in the
House that they would refuse to sign the
. report, and the Senate could do nothing,
but was compelled to recede.
Mr. JAVITS. If it wanted a bill.
Mr. BYRD of Virginia. If it wanted
a bill.
Mr. JAVITS. I thank the Senator
from Virginia.
Mr. BYRD of Virginia. It should be
noted, however, I will say to the Senator
from New York, that trade may continue
with these two countries, even though
they may not get the most-favored-na-
tion treatment.
Mr. JAVITS. Will the Senator yield
further to me at that point?
Mr. BYRD of Virginia. I yield.
Mr. JAVITS. I understand the coun-
try'on which this provision will bear most
heavily is Yugoslavia, because the great
preponderance of the trade of Yugoslavia
moves under the most-favored-nation
opportunity with the United States.
Perhaps the Senator from Virginia will
confirm for me whether it is not true that
in Yugoslavia's case, unlike the rest of
the Communist bloc, Yugoslavia's trade
is very substantially oriented to the free
world, rather than being intra-Commu-
nist bloc, as is true of the other nations
of the Communist bloc.
Mr. BYRD of Virginia. That is cor-
rect. The provision does not stop trade
with Yugoslavia; it simply takes away
the most-favored-nation treatment.
Mr. JAVITS. I thank the Senator.
Mr. BYRD of Virginia. Amendment
No. 22 provided that the Special Repre-
sentative for Trade Negotiations estab-
lished in the bill shall be the chief repre-
sentative of the United States for each
general multilateral negotiation, allow-
ing others to handle the minor negotia-
tions. The Senate receded, but won its
point?that is, that the Special Repre-
sentative need not personally conduct
every relatively minor negotiation, al-
though he will be responsible for the
conduct of every negotiation regardless
of size.
Amendments Nos. 23, 25, and 28 had
to do with the interagency organization
provided for by section 242 of the bill.
The House provided that the Chairman
of this organization should be a member
of the Cabinet selected by the President,
with the Special Representative an ex
officio member. The Senate provided
that the Special Representative should
be Chairman of the organization and the
'House receded on this point. Incident-
ally, he will be subject to confirmation
of the Senate. Thus, the Special? Rep-
resentative will be Chairman of the In-
teragency Organization as well as being
responsible for all negotiations under
the bill.
The Senate and its conferees thought
there should not be included a definite
mandate to the President that a member
of the Cabinet be appointed, because
these members may have some special
interests. Therefore, the President is
left with the capacity to appoint some
other outstanding person in charge of
negotiations, and that person's nomina-
tion will be subject to confirmation by
the Senate.
The changes in language adopted by
the Senate to section 252(a) of the
House bill were not acceptable .to the
House even though it was admitted that
the Senate amendment was fairly in-
ocuous. The term "unjustified" was re-
stored and the term "unjustifiably" was
deleted. The Senate receded.
On amendment No. 38 the conferees
compromised. Under the conference
agreement the President is to exercise
the authority of the Senate amendment
"to the extent he deems such duties and
other import restrictions" necessary to
prevent or remove foreign restrictions
on imports of U.S. agricultural prod-
ucts. With this modification the Sen-
ate amendment was accepted. The
new language adopted by the conferees
in no way alters the sense of the Senate
that the President shall have powerful
weapons with which to bargain down or
prevent the establishment of foreign re-
strictions which hinder our exports of
agricultural products.
By amendment No. 39 the Senate
strengthened section 252(b) of the bill.
In discussing the directive to the Presi-
dent to deny trade agreement benefits
to a country which maintains nontariff
trade restrictions which burden com-
merce in a manner inconsistent with our
trade agreements, the House referred to
"unlimited variable import fees." The
Senate deleted the term "unlimited," and
the House receded on this point.
Under amendment No. 41 the Pres-
ident is given authority to deny trade
agreement benefits to any country main-
taining unreasonable import restrictions
which burdens U.S. commerce. The
amendment requires that in giving effect
to this section the President is to give
due regard to our international obliga-
tions. The House receded and the
amendment stands.
On amendment No. 52 the House also
receded. This amendment provided
that the provisions of the bill do not in
any way affect section 22 of the Agricul-
tural Adjustment Act or any import
restrictions thereunder.
Senate amendment No. 53 adds a new
section to the Tariff Act relating to con-
servation of fishery resources. Under
this section the President is directed to
use all appropriate means to persuade
other countries to negotiate in good faith
concerning such conservation. If any
country fails to negotiate in good faith
the President may increase duties on im-
ports of fish products from that country.
The Senate amendment was retained,
the House receded.
Amendment No. 55 related to sec-
tion 301(a) of the bill. This has to do
with the filing of petitions for tariff ad-
justment and for petitions for eligibility
to apply for adjustment assistance.
This amendment also sets forth the two
types of petitions in separate paragraphs
and authorizes the filing of petitions for
the negotiation of orderly marketing
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1962,
CONGRESSIONAL RECORD ? SENATE 20999
agreements under section 352. The
House receded with a modification delet-
ing the reference to filing petitions for
the negotiations of agreements under
section 352 on the grounds that this is a
prerogative of the President after an
escape clause appeal to the Tariff Com-
mission has been successfully concluded.
Under amendments Nos. 57, 62, and 65
the Senate approved the strengthening
of the escape clause by stating that the
injury or threat of injury need only be
"in major part" the result of tariff con-
cessions. Under the House bill it might
have been interpreted that increased im-
ports as a result of tariff concessions had
to be the sole cause of the injury. On
this the House also receded. This same
principle applies to amendments Nos.
59 and 66 on which the House also
receded.
Under section 301(c) of the House bill
the Tariff Commission would be required
to make a complete escape-clause type
investigation for firms or groups of work-
ers as for whole industries. Senate
amendments Nos. 61 and 64 deleted the
requirement that industry determina-
tions be made in such cases and provided
in lieu thereof that petitions under sec-
tion 301(c) be made more promptly.
Here again the House receded and the
Senate amendment stands. By amend-
ment No. 67 the Senate deleted the pro-
viso that, during a period beginning not
earlier than 30 days after publication of
notice of hearings with respect to an in-
dustry and ending not later than the date
of the report of the Commission with re-
spect thereto, no petition for eligibility to
apply for adjustment assistance could be
filed by a firm or group of workers con-
cerning the same articles. The House
also receded in this case.
Senate amendments Nos. 69 and 70 -
were also designed to speed up operations.
Under the sections relating to adjustment
assistance, for example, hearings would
not be required unless requested by some
interested party. Once more the House
receded.
Amendments Nos. 71 and 72 extended
the time for Tariff Commission reports
under the escape clause to 6 months?
the House bill allowed 120 days plus an-
other 30 days if extended by the Presi-
dent. Here again the Senate amend-
ment was accepted and the House re-
ceded.
Under Senate amendment No. 75 the
amount of trade readjustment allowance
payable to any worker for any week is
reduced only by the amount of unem-
ployment insurance which he has re-
ceived or is seeking with respect to that
week. The Senate prevailed here also
and the House receded.
Senate amendments Nos. 76 and 77
were also adopted by the conferees.
Under No. 76 the number of weeks for
which any worker may receive trade re-
adjustment allowances is reduced only
by the number of weeks for which such
unemployment insurance or training al-
lowances are actually paid to the worker.
Amendment No. 77 provided that certain
additional amounts will be payable only
if the worker was actually paid unem-
ployment insurance or a training allow-
ance for the relevant week.
The House further receded on Senate
amendment No. 78. In agreeing to this
amendment the conferees intended that
if payments of unemployment insurance
are made by a State to an adversely af-
fected worker and the State agency is
reimbursed for such payments, and such
payments are disregarded under the
State law in determining whether or not
an employer is entitled to a reduced rate
of contributions permitted by State law,
then the worker is not to have his eligi-
bility for unemployment insurance re-
duced on account of such payments.
Amendments Nos. 84, 85, and 88 were
compromised, with the Senate receding
on No. 85. Under this compromise, the
increases in duties or other import re-
strictions proclaimed under the escape
clause of the present law shall terminate
in 5 years and such increases proclaimed
under the new law shall terminate in 4
years. The House version provided for
termination in 4 years of all such in-
creases under both the present law and
the new law, while the Senate amend-
ments provided for a termination in 5
years of all such increases. These same
periods also apply to the reservation of
articles from new negotiations.
The House receded on amendment No.
90. This was a new section added by the
Senate providing that the President may
enter into orderly marketing agreements
with foreign countries.
As you have seen, the House receded
on most of the Senate amendments.
However, they refused to recede on
amendment No. 91 which was a new
section added by the Senate giving the
President authority to increase tariffs,
and impose quotas or new tariffs when
he found it in the national interest. On
this the House stood firm and indicated
that no compromise was possible. The
Senate finally receded.
I am happy to report a successful con-
ference. Including technical changes
made necessary by Senate amendments,
the conferees discussed 94 amendments.
As I have indicated, the Senate stood
firm and held its position on most of
them. I hope the Senate will give
speedy approval to the conference report.
Mr. BUSH. Mr. President, will the
Senator yield?
The PRESIDING OFFICER (Mr.
YOUNG of Ohio in the chair) . Does the
Senator yield?
Mr. BYRD of Virginia. I yield to the
Senator from Connecticut.
Mr. BUSH. I wish to felicitate the
Senator from Virginia upon the conclu-
sion of his arduous labors in connec-
tion with this exceedingly comprehen-
sive and difficult piece of legislation.
Mr. President, I want the RECORD to
show that I support the conference re-
port. This is because I feel that the
Trade Agreements Act should not be al-
lowed to expire and also because I feel
that the President should have addi-
tional authority to continue trade nego-
tiations and to create new trade agree-
ments.
I opposed many sections of the bill,
and I still do oppose them. I offered
various amendments which I thought
would improve the bill by removing some
of its discriminatory features, thereby
creating a situation under which all ele-
ments of the economy would be treated
with equal fairness and justice.
One of the reasons why I voted against
the bill, and one of my objections to it,
was that various industries or various
elements of the economy were to be
given preferred treatment, while others
were to be left without any assurance of
protection or consideration, and without
what I considered to be an adequate
court or process of appeal to correct in-
justices or hardships which might be
created by excessive imports.
We worked hard to try to perfect the
bill in respect to those matters, and
others.
Inasmuch as the die is cast, and inas-
much as I wish the President to continue
to make trade agreements, I shall sup-
port the conference report. I express
very strongly the hope that the Presi-
dent, in using the vast new powers, will
use them with great discretion and with
equal and fair treatment to all elements
of the economy.
I will not say I have no doubt in that
regard, but I express the very strong hope
that the President will do this.
It seems to me that one class of peo-
ple or one element of our industriarand
commercial life should not be preferred
against another, but that equal treat-
ment should be accorded to all under an
important piece of legislation such as
this?and, indeed, under any piece of
legislation.
So I conclude by saying that I sup-
port the conference report. I hope that
the President will exercise his new
powers wtih great discretion and con-
sideration for all elements of our econ-
omy, and in such a way as to provide
an overall and very substantial benefit
for the United States. I thank the Sen-
ator for yielding.
Mr. MORSE. Mr. President?
Mr. JAVITS. Mr. President, will the
Senator yield?
Mr. BYFtD of Virginia. I yield to the
Senator from New York.
Mr. JAVITS. I am grateful to the
Senator for yielding. I, too, would like
to make a few observations, if I may,
on the conference report, which, I must
say, I find not nearly as satisfactory or
encouraging as does the Senator from
Connecticut.
We are facing a very serious situation
in the world which only enlarged exports
can change. It is absolutely astounding
to me that we do not show the necessary
economic sophistication to understand
that in order to enlarge the exportation
of goods, we must do something about
the bill which we are not doing.
In short, the very Senators who express
the gravest concern about voting for
foreign aid and how it would run the
country down the drain, and so forth,
are those who would probably embrace
with alacrity the very elements of this
bill which would prevent us from paying
the foreign aid bill without borrowing.
Our imbalance of international pay-
ments is serious. It continues to be
serious. In essence it represents some-
thing like $3 billion plus a year. It is
a substantial imbalance. Yet we have
found that it is the will of this body,
^
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21000 CONGRESSIONAL RECORD ? SENATE
with which I could not agree more, that
we shall continue our military and eco-
nomic aid obligations which do much to
create the imbalance.
Nor do we wish to restrict our private
investments abroad, which are essential
to the world's development. In fact, our
private oversea investment in many
areas is very deficient right now and, if
anything, we are not forwarding the
world's development as well as we must.
Nonetheless, when we get to the bill
we lose any understanding of the con-
nection between the balance of payments
and trade. If we want to balance our
international payments, we must trade
more than we do. Certainly we have a
$3-, $4- or $5-billion export surplus,
depending on whether or not one
counts Government supported exports,
but that is not enough. ? It is not
enough, also, for the development of the
world which represents perils and needs
way beyond that. But the House has
been allowed to prevail in the elements
of the bill which would bring about the
greatest restrictions and pull us back
from acquiring an ability to balance our
payments and to do the economic de-
velopment job.
I have no fault to find with the Sen-
ator from Virginia 11 Mr. BYRD]. I am
sure he did as well as he could. But it
represents a lack of consciousness on the
part of our country which does not come
back to Senators in order to give us the
strength and support, and in the other
body, also it is not communicated, as
to what we need in the way of a bill.
What is wrong with the bill? I shall
be brief, because I do not wish to keep
my dear friend the Senator from Oregon
on his feet longer than necessary.
First, we would place a premium on
the British getting into the European
Common Market whether they like it or
not, because by receding from that sec-
tion of the Senate bill which provided
that we could group together, for Pur-
poses of mutual tariff elimination, those
in the European Economic Community,
the Six Nations, with those in the Euro-
pean Free Trade Association, which
would include the United Kingdom, we
now have put another gun at Britain's
head to make Great Britain go into the
Common Market. Otherwise, she could
not make with us nor could we make with
her or any other nation an effort to ob-
tain the large concessions required to
expand international trade with respect
to most of the major items of that trade,
because we cannot go beyond the 50
percent tariff reduction limitation of the
bill, except when we and the European
Economic Community handle 80 percent
of the world exports of a particular
commodity.
The United Kingdom is not in the
European Common Market. Therefore,
we would put an additional burden on
her to get in, notwithstanding the dis-
quietude of many of her Dominions and
other, Commonwealth members, which
think the proposal is a very bad idea
for her and them, notwithstanding the
fact that in order to get in, she needs
to make a good trade deal with the Com-
monwealth. We want her in the Euro-
pean Common Market, but we want her
also to have her right to a ticket to
protect her Commonwealth and not to
have the ticket written by the European
Common Market countries. Yet, by
passing the bill in this fashion, we have
given Britain an additional handicap to
the one she is already under. She must
negotiate with the European Common
Marlot. We know she is under a con-
siderable handicap already.
That is the first point.
Second, we have a great opportunity in
making a bid to the non-Communist
world, the new nations in Africa, Latin
America, and Asia, which is infinitely
more important, in my view, than much
that we can do for them in terms of aid.
We have stricken out one sentence in
the Senate bill which would give away a
tremendous asset which we had in our
hands. One of the purposes of the origi-
nal bill was "to assist in the progress of
countries in the earlier stages of their
economic development."
That meant that when we bargained
with great industrial powers?and the
great industrial powers represent the
great export markets of the world?we
could bargain for Brazil's coffee. We
could bargain for Ghana's cocoa. We
could bargain for nitrates from Chile.
We could bargain for wool from Argen-
tina or meat from Argentina. We
could bargain for silver from Mexico.
In short, we could do something with our
great economic power to help the new
nations of the world in trade which to
them is far more important than aid.
By striking out that provision, we have
now limited the President's directive so
that he no longer must try to serve that
particular purpose. In my opinion, we
have deprived ourselves also of a great
propaganda asset with these newly de-
veloping nations, to which we could have
said, "We have inserted in our trade bill
a stipulation that we will provide what
is more important to you than aid itself."
Finally, I think we are making a colos-
sal blunder in respect of Poland and
Yugoslavia.
Mr. WILLIAMS of Delaware. Mr.
President, will the Senator yield on his
first point?
Mr. JAVITS. I do not have the floor.
I believe the Senator from Virginia has
the floor.
Mr. BYRD of Virginia. I yield.
Mr. WILLIAMS of Delaware. Merely
for the record, I should like to say that
I understand and sympathize with the
argument that the Senator has advanced
in connection with the exclusion of Great
Britain. But I think it would be well to
place in the RECORD that at that time
the amendment, which was , a Senate
amendment, as the Senator understands,
was approved in our committee. It was
approved and made a part of the Sen-
ate bill over the objections of the State
Department. They very strongly op-
posed that provision, which to lead the
bill into a conference. I understand un-
officially that they may have changed
their minds since. But as the bill came
from the House originally, they sup-
ported the position and opposed it
strongly in our committee and told us
they would like it deleted.
Mr. JAVITS. I thank the Senator. I
think the Senator knows me well enough
, Octobe?
to know that I have never claimed omni-
science for myself or the State Depart-
ment. I think perhaps they were wrong.
Mr. WILLIAMS of Delaware. I un-
derstand that they have now changed
their position and are on the other side.
Mr. JAVITS. I thank my colleague. I
feel strengthened on that point. I should
like to make the last point, which re-
lates to Poland and Yugoslavia.
Mr. President, I have always felt that
it was wonderful that in the Senate there
are those who have expertise in different
areas. We all do not have to know the
same things. I know very little about
Western reclamation. Many Senators
know a great deal more. I am desirous
of listening to them. I hope that Sena-
tors will try to really understand what
goes on with reference to Yugoslavia and
Poland. That is an area in which I have
had a great deal of experience. Ever
since 1945-I have studied the subject very
deeply.
Mr. President, surely the argument is
that we can negotiate a trade treaty with
Yugoslavia and with Poland directly,
and the President, subject to congres-
sional approval, can make concessions
and those countries can make conces-
sions. Therefore, the opportunity to
extend to them automatically the bene-
fits of the most-favored-nations clause,
it is said, cannot hurt us, because, after
all, if we can negotiate a treaty with
them containing mutual concessions, we
can negotiate any concessions we please.
But that attitude misses the boat com-
pletely for the following reason: Yugo-
slavia and Poland are in the Communist
bloc. We know that Khrushchev will
put down any show of real independence
in Poland with the same ruthlessness
with which he acted in Hungary. It is
not easy for. those countries to deal with
us directly. In many cases they cannot
do it in terms of the physical safety of
their own people. So where we have
been able to help them in terms of giving
them some economic independence from
the Communist bloc is by virtue of the
favored-nations clause. In short, we
would permit Yugoslavia and Poland to
have the benefit of the bill. They would
not have to negotiate with us, but would
receive the benefits nevertheless. The
fact is that the preponderance of Yugo-
slavia's trade is with the free world. In
the case of Poland, a large proportion of
its trade is with the free world, whereas
Czechoslovakia and Bulgaria and Ru-
mania and the other Balkan countries
are kept in absolute vassalage by the So-
viet Union, partly because they have lit-
tle trade except intra-Communist bloc
trade. Great strategists in the Senate
are always talking about the fact that we
will take the initiative; we will show the
Russians how smart we are. We are let-
ting slip out of our hands the greatest
economic initiative that we have; with
our eyes open it walks out the door and
gets away from us.
Why? It is because doctrinaire objec-
tions are made which are almost impos-
sible to understand. We say that we will
not do business with the Communists;
we will let them starve to death.
At the same time, they are constantly
being fattened, and in many cases are
becoming as strong as we are.
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1962 CONGRESSIONAL RECORD ? SENATE 21001
Mr. Khrushchev will be delighted. He
will not think it is a great victory for us.
He will be delighted to know what we
have done, because he knows better than
we the power of trade. He knows better
than we what it will mean to Yugoslavia
and Poland when they must turn to the
Communist bloc in order to do business,
in order to eat, in order to obtain the
necessities of life, instead of looking
more and more toward us.
This is a very serious blunder. I can-
not stop it. I do not understand why the
President of the United States has not
stopped it. I believe that if he had ex-
plained to the people of the country pre-
cisely what is involved here, if he had not
been so overwhelmed by the chairman of
one of the committees, he could have
prevailed.
I have backed the President time and
time and time again. I am dismayed
and disheartened when he fails to show
fight on economic issues.
Mr. President, this is particularly de-
plorable, because this is where it counts.
It counts more than the billions that we
will be spending on aid. These countries
could have been doing something on
their own. Instead, we have committed
a blunder. All I can do is make the
welkin ring. Perhaps my people in New
York will not send me back to the Sen-
ate. They may not like the strong posi-
tion I take on issues of this kind. I
have been trained in economics for years,
and this is the day that I pay back to
the country what I know about these
situations. I cannot do anything about
it. However, the voice of protest may
yet count after our experience shows
what a disastrous mistake we have made.
Mr. BYRD of Virginia. Of course, the
Senator knows that this provision was in
the Senate bill.
Mr. JAVITS. Of course, I am proud
of the Senate.
Mr. BYRD of Virginia. The House
refused to accept it.
Mr. JAVITS. I know. I am proud of
the Senate. The Senate acted in a
statesmanlike manner. I am proud in-
deed. I know the Senator did every-
thing he could to get this done. I am
grateful to the Senator.
Mr. President, at the conclusion of my
remarks I ask unanimous consent to
have inserted in the RECORD an article by
Walter Lippmarm from the Washington
Post of October 2, dealing with the issue
of trade with Poland and Yugoslavia.
There being no objection, the article
was ordered to be printed in the RECORD,
DS follows:
TODAY AND TOMORROW?BACKFIRING MISCHIEF
(By Walter Lippmann)
Although our attention is fixed on Missis-
sippi and although it is a long way to Yugo-
slavia and Poland, this Tuesday is a critical
day in the cold war in Eastern Europe.
The trade bill, on the whole so excellent, is
being reported out of the conference of the
House and Senate, and in its present form
it contains a provision, inserted by the House
against the will of the Senate, that would
damage severely U.S. policy in Eastern
Europe.
This policy was initiated by Truman and
Acheson, elaborated by Eisenhower and
Dulles, and carried on by Kennedy and Rusk.
No. 181-10
It offers material advantage to Communist
countries that try to achieve national inde-
pendence from the domination of the Soviet
Union. The trade bill as it now stands would
wreck this policy. On a crucial point the
House has prevailed over the Senate.
The difference between the two versions
turns on what is known as the most favored
nation, for short the so-called MFN clause
in trade agreements. Most favored nation
means that if a government grants tariff
privileges to another, it must do the same
for countries with which it has treaties con-
taining the most-favored-nation clause.
Thus, insofar as this country has lowered
its tariffs under the Reciprocal Trade Act, it
has granted to all nations with which it has
most-favored-nation agreements the same
concessions.
Moreover, if the 'President acts under the
trade bill to negotiate lower tariffs with the
Common Market, we must grant the same
lower duties to any other country with
which we have a most-favored-nation agree-
ment.
With Yugoslavia, since it was created after
World War I, our trade relations have been
governed by the 1891 Treaty of Friendship
Commerce, and Navigation with the old
kingdom of Serbia. It contains a most-
favored-nation clause. As an act of policy,
we have since December 1960, granted this
treatment to Poland, with which there is no
treaty.
Now in the trade bill as it passed the
Senate, the most-favored-nation treatment
would be denied to any "country or area
dominated or controlled by the foreign gov-
ernment or foreign organization controlling
the world Communist movement." This is
identical with existing law.
For some 13 years under three Presidents
the official American judgment has been that
although Yugoslavia is ruled by Com-
munists, in a very considerable degree
Yugoslavia is an independent national state
and in critical matters is not ruled by
Moscow.
About Poland, our feeling has been that
it is struggling rather effectively to achieve
increasing national independence. Thus
under the Senate version, Yugoslavia and
Poland would continue to be eligible for
most-favored-nation tariff treatment.
But in the House version, which prevailed
in the conference, the test is not national
independence but ideological belief. Thus
most-favored-nation treatment must be de-
nied to "any country or area dominated or
controlled by communism."
If this test prevails in the final bill, the
President will have to deny most-favored-
nation treatment "as soon as practicable"
to Poland and to Yugoslavia.
What will be the practical effect? The
economic impact will be much greater on
Yugoslavia, which does 70 percent of its
foreign trade with the Western countries,
than on Poland, which does only about
40 percent of its trade with the West.
The act of slamming the door in their
faces will be demoralizing to the younger
generation everywhere in Eastern Europe
who look increasingly toward the West.
The symbolic importance probably out-
weighs the material effect.
Because Yugoslavia has received most-
favored-nation treatment for so long a time,
it has built up a foreign trade dependent
on the tariff benefits, which give it a great
advantage as against its Communist
neighbors and parity with its competitors
in the non-Communist world.
If the trade bill prevails as it now stands,
the tariff duties on about 90 percent of the
goods imported into the United States from
Yugoslavia will be raised to the level of the
Smoot-Hawley tariff of 1930. They are be-
tween 2 and 3 times higher than the rates
that now prevail.
Yugoslavia will then face the same U.S.
tariff as does the Soviet Union, Hungary,
Ulbricht's East Germany, and Stalinist
Czechoslovakia.
As for Poland, the material effect will be
less catastrophic. Taking the 1961 figures,
out of a total of $41.2 million worth of U.S.
imports from Poland, there will be no in-
crease on about 80 percent.
This is mainly because so large a part of
the imports are canned meat on which we
have made no tariff concessions to any
country. For the rest, Poland has enjoyed
most-favored-nation treatment only since
December 1960 and has not had time to
develop much trade accordingly.
The fact that Yugoslavia has such a pre-
ponderant relationship with the non-Com-
munist world has had enormous bearing on
the cold war in Southern and Eastern
Europe.
Ideologically, the Yugoslav officials are
Communists. But they are Yugoslav Com-
munists and not Muscovite Communists.
So on matters that do not affect Yugoslav
national interests they generally follow the
Soviet line. But when their national in-
terests are involved, they act independently.
Thus, Yugoslavia is not a member of the
Warsaw military pact. What is more, be-
cause we have had the good sense to equip
the Yugoslav air force, the United States and
not the Soviet Union is the supplier of the
spare parts and replacements.
It is asinine to call this assistance to
communism. We have in fact achieved the
same kind of penetration of the Communist
world as Moscow has done in our world in
Cuba.
Though Tito is ideologically alined against
us, strategically and in the ultimate political
sense he is alined with us.
When he broke with Moscow in 1948, he
closed his frontier to the Communist guer-
rillas who were waging civil war in Greece.
He made a satisfactory settlement with Italy
in Trieste. And he worked out good arrange-
ments with his neighbor Austria.
In that part of Europe of which Yugoslavia
is the keystone, the imperial expansion of
the Soviet Union is not only contained but
is in fact rolled back.
The Senate understood this. The House,
which did not understand, has sabotaged a
highly successful national policy.
If the mischief cannot be undone, this
country will in a fit of imbecility have
wounded itself. It will have thrown away
one of our most effective weapons in the
cold war and it will have adopted a weapon
that is designed to backfire.
For we shall be saying to the Yugoslays
and the Poles and to others who may have
yearnings for freedom that they have no
future with the West and that they had
better come to terms with Moscow. ?
Mr. MORSE. Mr. President, let me
say to the chairman that in my many
years of service in the Senate we have
from time to time participated in the
making of legislative history on the floor
of the Senate with regard to many sub-
jects. Sometimes it has been with re-
spect to cherries. Sometimes it has
been with respect to the lumber industry
in my State. Sometimes it has been
with respect to the merchant marine as
it affects my State.
I want the Senator from Virginia to
know, in behalf of the people of my
State, that we appreciate very much the
cooperation that he has always extend-
ed to our State through our Senators
in making these records of legislative
history.
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21002 CONGRESSIONAL RECORD ? SENATE
As he will recall, when the bill was
before the Senate for consideration we
made legislative history with regard to
section 353, which has been dropped
from the bill. That history, had the
section remained in the bill, would have
been vital to a subsequent interpreta-
tion of the section either by the Tariff
Commission and by the President and
possibly the courts in case it ever reached
the courts.
I have always had the greatest pleas-
ure in cooperating with the Senator from
Virginia on any matter on which I could
be of assistance. In fact, I am some-
times amused when I pick up a news-
paper and read that a journalist or col-
umnist has written, "How can HARRY
BYRD and WAYNE MORSE be in the same
party?"
The trouble with such an uninformed
journalist is that he does not understand
one of the underlying tenets of our po-
litical philosophy, which is identical.
We both know that there can be no
political freedom in this country for fu-
ture generations unless we preserve eco-
nomic freedom. The Senator from Vir-
ginia and the Senator from Oregon may
follow different avenues and sometimes
different value judgments in seeking to
preserve economic freedom, but both of
us recognize that we have an obligation
to keep the economy of our country
strong, because without it there can be
no political freedom for our great-grand-
children.
Therefore I express my. appreciation
to the senior Senator from Virginia for
the wonderful help he has been to me
during my 18 years of service in the
Senate. I have a few questions that I
should like to ask him, in order to help
make legislative history.
When the trade bill was before the
Senate, the chairman of the Committee
on Finance discussed with me the ques-
tion of whether the legislation provides
the lumber industry with an adequate
opportunity to receive consideration for
protection from imports of lumber.
As the Senator from Virginia knows,
the lumber industry in the Pacific North-
west is in very critical condition. It is
in critical condition because we are be-
ing hard pressed by competition from
Canada. It is competition which in.-
volves subsidies, direct and indirect, by
the .Canadian Government to the Ca-
nadian mills. We seek only an equal Op-
portunity to compete with the Canadian
mills for the American market. We
are not seeking any advantage, and we
are not involving ourselves in any dis-
cussion of competition for lumber mar-
kets outside the United States. How-
ever, this industry deserves those pro-
tections and procedures which will give
our lumber operators an opportunity to
compete on an equal basis with the Ca-
nadian mills.
As the Senator knows, our colleagues
from the South in the Senate tell us
that they too are beginning to feel the
pinch of this competition from abroad.
With that as my major premise, I
should like to ask the Senator the fol-
lowing questions:
First, with the conference report be-
fore us, I know that some changes have
been made, and today I seek to ascer-
tain whether in the judgment of the
chairman of the Committee on Finance
the legislation now before us provides
essentially the same protection as would
have been provided by the Senate-passed
bill.
Mr. BYRD of Virginia. I thank the
Senator for his kind references to the
chairman of the Committee on Finance.
My answer to the senior Senator from
Oregon is that this legislation does pro-
vide adequate means for protection
wherever the facts warrant such action.
As the senior Senator from Oregon
knows, it is the purpose of this legis-
lation to have the Government provide
equal protection to each and every in-
dustry which believes that it is being
hurt by imports. The whole purpose of
the trade legislation is to prescribe the
machinery which is equally available to
every segment of our free enterprise
system, so that it may present its case
as to the effect of trade. The bill pro-
vides this machinery for use not only by
management, but also by labor.
Mr. MORSE. I thank the Senator. I
would like the chairman of the commit-
tee to advise me as to the effect of the
elimination of section 353 in the confer-
ence.
Mr. BYRD of Virginia. Section 353
proposed to give the President unlimited
and undefined power to impose tariffs
and quotas in any situation where he
thought the Nation's interest required.
After an 'affirmative finding by the
Tariff Commission, the President al-
ready has authority to impose quotas
and tariffs, but other sections of this
legislation spell out the limitations upon
this authority. The other thing that
section 353 appeared to do was to let
the President decide what was in the na-
tional interest without setting out any
standards. The whole concept of our
trade program is that through an order-
ly procedure, facts are presented and
judgments are made upon those facts.
While the facts may show some measure
of injury, the President is not bound by
the recommendations made to him by
the Tariff Commission, nor is the Con-
gress bound by the decision made by the
President. Each may look at the facts
and reach a conclusion, and this con-
clusion involved a consideration of the
national interest. Section 353 was a
sword which could cut two ways: First,
one problem was that there was no
procedure prescribed for ascertaining
the facts and, second, the other prob-
lem was that the Congress did not retain
the same opportunity for review as the
other sections of the bill provide.
. The bill, as it came from conference,
contains several substantial provisions
which can be extremely beneficial to the
lumber industry which the senior Sena-
tor from Oregon has been so diligent in
assisting.
Mr. MORSE. Will the senior Senator
from Virginia set forth for me the op-
portunities that this legislation con-
tains?
Mr. BYRD of Virginia. In response to
my colleague from Oregon, I would say
that there are four key things to this
bill:
October 4
First. We provided that any action
now pending before the Tariff Commis-
sion,' and this includes the lumber in-
dustry matter, would be continued.
Second. The proposed legislation
would permit the Tariff Commission to
recommend, and the Presidpnt to act, so
as to provide a tariff on lutnber 50 per-
cent higher than the tariff that was in
effect in 1934.
Third. Section 252 contains authority
for the President to act in situations
like those which now exist in relation to
Canada. As the senior Senator from
Oregon knows, Canada has increased her
duties on a number of items which we
export to Canada. Lumber was not in-
cluded in those increases; however, the
increases have posed problems for other
industries. This entire question involves
Canada's compliance with agreements
reached under GATT, and this entire
subject will be reviewed in the October
GATT conference. Section 252
strengthens the President's authority
here.
Fourth. Also, the committee added
section 352 which provides for the Presi-
dent to enter into orderly marketing
agreements with other nations in lieu
of the imposition of tariffs and quotas.
This provision should be of great value
in the situation facing the domestic lum-
ber industry.
Mr. MORSE. I thank the Senator
from Virginia. I proceed to my fourth
question: How may the lumber industry
avail itself of the opportunity in sec-
tion 352?
Mr. BYRD of Virginia. The lumber
industry or any other industry must
establish before the Tariff Commission
that it has a case. This is of prime
importance because the entire concept
of the trade bill is that we will move
toward the elimination of trade barriers
on a mutually beneficial basis. Thus, the
lumber industry must present its case
completely and factually to the Tariff
Commission. If the facts are strong
enough to obtain an affirmative finding,
then the President may impose a tariff
and quota, employ the alternative of the
marketing agreement in section 352,
utilize chapters 2 and 3 of the bill or
apply a combination of these actions.
It seems to me that the lumber industry
should be extremely pleased with this
trade bill because it does afford oppor-
tunities for a sound adjustment of any
real problem that it may have.
As the senior Senator from Oregon
has earlier explained to me in our dis-
cussion off the floor, the administration
has taken a number of steps on the
domestic front, as has the Congress, all
of which have been beneficial to the
domestic lumber situation.
Mr. MORSE. I thank the Senator
from Virginia. My final question to the
chairman is to seek his advice as to the
action that Congress might contemplate,
should the Tariff Commission delay too
long on the request of the lumber in-
dustry for relief.
Mr. BYRD of Virginia. I am quite
confident that the Senators from the
West, where the lumber industry is of
such large dimensions, and the Senators
from the South, where this industry is
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1962 CONGRESSIONAL RECORD ? SENATE
also most important, may desire to ad-
dress themselves to this question when
the Congress reconvenes in January,
should it be necessary. Certainly, we
would require that the facts be before
us before we acted, for, as the senior
Senator from Oregon knows, it has been
quite unusual for the Congress to do
something which both the Tariff Com-
mission and the President have refrained
from doing. Again, I would point out
to my colleague from Oregon that a suc-
cessful conclusion to the request by the
lumber industry for assistance and re-
lief, actually now rests in -the hands of
this industry. In fact, it has always
rested in their hands because the ma-
chinery of the trade law has always been
open to them. What we have done this
year is to open up new ways to solve
difficult economic problems which some-
times occur in the field of trade.
Mr. MORSE. I thank the distin-
guished Senator from Virginia, the
chairman of the Committee on Finance,
for his judgment and cooperation. He
has a long experience and great knowl-
edge in the field of trade legislation.
He is noted for his independent judg-
ment. In my opinion, adequate facts
have been developed to convince me
that action is necessary.
I am most pleased by the Senator's
description of what can be done under
section 352 of the bill and I take judi-
cial note of the individual and group
benefits available under chapters 2 and 3
of the bill. I hope that the lumber in-
dustry will take notice of what the Sen-
ator from Virginia has said about what
may be done when Congress returns in
January. I serve notice that I shall re-
view this situation and determine upon
a course of action based upon the rec-
ord that has been made before the
Tariff Commission and the judgments
which I hope both the Commission and
the President may have made by then.
I hope that in the light of the descrip-
tion of the benefits to be expected from
the trade bill, which the Senator from
Virginia has so capably outlined, the ad-
ministration will have taken proper
action on the major aspect of the situa-
tion facing the lumber industry.
Mr. President, that concludes my col-
loquy with the Senator from Virginia.
However, I desire to speak in my own
right, when I can obtain the floor, if
no other Senator wishes to ask questions
of the Senator from Virginia at this
time.
Mr. President, I seek recognition.
The PRESIDING OFFICER. The
Chair recognizes the Senator from Ore-
gon.
Mr. MORSE. Mr. President, I ask
unanimous consent to have printed at
this point in the RECORD an article en-
titled "Reedsport Ply Plant Up; Sawmill
Down," and published in the September
issue of Western Timber Industry.
There being no objection, the article
was ordered to be printed in the RECORD,
as follows:
REEDSPORT PLY PLANT UP; SAWMILL DOWN
REEDSPORT, OREG,?Typifyillg the trend of
the Pacific Northwest wood converting in-
dustry was the recent announcement that
the U.S. Plywood Corp. will shut down its
sawmill at Reedsport indefinitely, but will
build a major addition to its plywood plant
there.
Loss of employment at the lumber opera-
tion will be 18, but gain in the plywood end
will be 70. Total plywood payroll will jump
to $1 million for 150 employees.
A layup operation will supplement the
present green veneer plant.
Some 70,000 square feet of additional plant
space will be needed, Marshall Leeper, Eu-
gene, U.S. Ply vice president, reported. Pro-
duction will be about 80 million square feet
annually. Additional investment is esti-
mated at $1.5 million.
L. James Bagley has been named manager
of the Reedsport facilities of U.S. Ply. He
had been Oregon division logging and tim-
ber manager. Clarence Stevens will manage
the plywood plant.
U.S. Ply's Oregon softwood plywood pro-
duction will rise to more than 700 million
square feet when the plan is finished.
Mr. MORSE. Mr. President, the arti-
cle points out the type of change which
sometimes occurs in the complex forest
products industry. U.S. Plywood will
shut down a sawmill, dropping 18 jobs
at Reedsport, but the plywood end of the
Reedsport plant will increase by 70 em-
ployees, a net gain of 52 employees for
Reedsport, Oreg. .
However, a straight lumber mill cannot
always make this type of shift, and in
the face of Canadian lumber competition
cannot survive.
U.S. Plywood is a giant concern, hav-
ing good financial backing. It is the
small and medium mills, which are not
diversified, that are being hurt, and it
is this type of operation which needs
the various aids and the type of assist-
ance which can flow from chapters 2
and 3 of the trade bill; from section 352,
relating to marketing agreements; and
from the tariff and quota sections.
Mr. President, before the vote on the
conference report, I owe it to the people
of my State and to the lumber industry
of my State to make the record which
I now propose to make for the next few
minutes, in a speech that I shall entitle
"Lumber Policy."
LUMBER POLICY
Mr. President, I have recently talked
with a considerable number of rep-
resentatives of the lumber industry.
I would be less than honest if I did
not report to the Senate there are
many who are not very happy with the
trade bill, because they believe they suf-
fered a very severe blow when section
353 was dropped in conference. I have
spoken with the Senator from Virginia
[Mr. BYRD], and there is no question that
the Senate conferees sought to retain
section 353 in the conference report. I
have also spoken with the Senator from
Oklahoma [Mr. KERR], the Senator from
Louisiana [Mr. LONG], and the Senator
from Florida [Mr. SMATHERS], who were
other conferees on the bill. They as-
sured me that they desired to retain sec-
tion 353 in the bill.
I would also be less than honest if I
did not say, for the legislative record,
that each of the Senators to whom I have
referred said he was satisfied that the
bill provides much to protect the lumber
industry. All of these distinguished men
in the field of trade emphasize again and
again that if the lumber industry will
make use of the provisions of the bill,
21003
if they will make a good factual case,
they will find instruments or tools in this
bill which can be used to assist them in
solving the trade problems of the lumber
industry.
These Senators also point out what has
been done by the White House lumber
program of July 26. They said they had
no doubt that the President was deter-
mined to make certain that his recom-
mendations of July 26, which have be-
come known as the White House lumber
program, will be carried out by a deter-
mined President.
They also pointed out to me that the
changes which have already taken place
in regard to the procedures and policies
of the Forest Service ought to be recog-
nized by the lumber industry as being
of great value to the industry, because
great progress has been made toward
trying to provide some governmental re-
lief from the economic problems of the
lumber industry.
I do not deny any of the points raised
by those Senators, but the proof of any
pudding is in its eating. The proof as
to whether the lumber industry will be
able to overcome the economic crisis
which confronts it will be determined
by the action which it takes and which
the Government will take in the weeks
and months ahead to assist an industry
which is so sorely hurt economically.
Oregon is dependent upon the econ-
omy of the lumber industry?as is the
State of Washington. Although the
Senator from Washington [Mr. MAGNIT-
sox] , with whom I have worked very
closely in regard to lumber problems,
is not present this afternoon, I speak
in his behalf; and I can assure the Sen-
ate that the other Senators from the
Pacific Northwest have expressed the
same concern that I do over the crisis
in the lumber industry.
Mr. President, over the last several
months, I?along with other Northwes-
em Senators?have devoted a great deal
of time to improving the situation of our
domestic lumber industry. This Con-
gress is nearing the end of its session,
and the adoption of the conference re-
port on the trade bill represents one of
the last milestones in a record of con-
siderable accomplishments.
I recognize that the lumber industry
is disappointed that the conferees did
not accept section 353 of the trade bill.
COnsidered alone, the loss of this section
might seem of consequence. However,
I shall proceed to point out that under
the provisions of present law which are
contained in the trade bill and because
of the new provisions written into the
trade bill, plus?in total?some 18 ac-
tions which have been taken either by
the administration, the Senate, the
House, or both bodies, the result is a
substantial opportunity for the lumber
industry to achieve a better economic
situation.
Because of the point I have just
mentioned, Mr. President, I have de-
cided to vote this afternoon for adop-
tion of the conference report. As is
well known, there was a time when it
was my position that unless the trade
bill gave the lumber industry clear as-
surance that it contained adequate pro-
tective mechanisms, it would be neces-
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21004 CONGRESSIONAL RECORD ? SENATE
sary for me to vote against the meas-
ure, I said that I did not intend to
vote for the bill if it would result in the
exportation of jobs to Canada.
Mr. President, I would not vote today
for adoption of the conference report if
I felt that the trade program covered
by this measure would result in the ex-
portation of jobs to Canada.
As I have said, I have been in. confer-
ence with some of the lumber industry
leaders, and I have discussed with them
the position I would take on this meas-
ure. I have taken the position?and,
so far as I know, all of those with whom
I conferred shared my point of view?
that because of the assurance given me
by the Senator from Virginia [Mr.
BYRD 1 ?and he gave it to me just a mo-
ment ago?and because of my conviction
that the program will be carried out in
accordance with that assurance, I felt
that I owed it to the lumber industry and
to Oregon and to the Nation to support
the President by voting in favor of adop-
tion of the conference report.
I also said frankly to the represent-
atives of the lumber industry with
whom I conferred that I thought I would
be in a better position to be of assistance
to them in the future if I voted for the
conference report, rather than if I voted
against it. By voting in favor of adop-
tion of the conference report, I pledge
myself to be of assistance to the Presi-
dent in connection with the program to
be established under the bill; and after
having voted for adoption of the con-
ference report, I shall be in a better posi-
tion to help with the working out of the
program to be developed in line with
the President's conference on July 26.
I would be the first to admit that one
of the accomplishments which we set
as a goal has not been achieved. One
of these is the amendment to the Jones
Act; and this failed of accomplishment,
not because there was any lack of dili-
gence upon the part of Northwest Sena-
tors, but because the industry itself was
split, with the Southern segment op-
posing the proposed legislation which we
put forward.
In the light of this circumstance, the
Senator from Washington (Mr. MAGNET-
son) concluded that the Southern in-
dustry should have an opportunity for
hearings this fall, and thus has refrained
from bringing to a vote the proposed
legislation to amend the Jones Act.
We shall look at this matter again in
January. On every other front, how-
ever, progress has been made. There-
fore, I want to take this opportunity to
try to place in perspective not only what
has been done, but also what must still
be done. In doing so, I wish to empha-
size the point made by the Senator from
Virginia in one colloquy that the indus-
try itself has an obligation and a respon-
sibility which it must meet,
We have provided a great number of
tools which will enable the lumber in-
dustry to carve out within the frame-
work of free-enterprise economy, solu-
tions to the problems which confront it.
Mr. President, Mr. Mortimer B. Doyle,
of the National Lumber Manufacturers
Association, has sent to me and to other
Senators a telegram reading as fellows:
Deletion of section 353 from the foreign
trade bill in conference is being construed
as completely negating assurances given the
American lumber industry during a colloquy
among Senators MORSE; MAGNUSON, and
others on the floor of the Senate September
18, concerning domestic lumber industry
problems of ever-increasing Canadian lum-
ber imports.
On the advice of the President of the
United States and Members of Congress,
lumbermen have sought relief through the
Tariff Commission proceeding due to start
October 2.
Under the proposed law which will, pre-
sumably, be in force at the time of the Com-
mission finding, no tariff to provide effective
relief can be recommended despite the merits
of the lumber industry case.
The compromise trade bill as changed in
conference would remove the power of the
President to raise tariffs beyond 50 percent
above the specific duties of July 1, 1934.
Inflation has destroyed the effectiveness .of
those duties. The Senate received assur-
ances, on the floor of the Senate from the
chairman of the conference, that this in-
equity, of particular significance to the lum-
ber industry now in disastrous economic
condition, could be corrected by section 353,
which the conference committee has now
eliminated.
The lumber industry seeks justice for 361,-
000 workers and urgently requests that the
foreign trade bill either be returned to con-
ference for restoration of section 353, that
a compromise to offset inflation as in present
law be arrived at, or that special legislation
be passed to enable the Tariff Commission
to deal with the lumber relief proceeding
under present law.
Mr. President, if I thought he was cor-
rect, I would vote to return the trade bill
to conference.
As the Senator from Virginia has con-
firmed, the action of the conferees in no
way negates assurances given Northwest
Senators as to the effect of the trade bill
on the ability of the lumber industry
to get a just and fair solution to real
problems.
I think Mr. Doyle performed a service
for the Senators from the States in the.
Northwest by sending us the telegram I
have just read into the RECORD, because
the telegram led to a discussion among
the Northwest delegation. It produced
the constructive colloquy between my-
self and the Senator from Virginia,
which made the legislative history on
this bill. So I express my very deep ap-
preciation to Mr. Doyle and his associ-
ates for their cooperation with the dele-
gations from the Northwest as we have
worked out, together, the best possible
solutions which can be obtained under
the conference report for relief for the
lumber industry.
The acceptance of Section 353 by the
conference would not have automatically
directed the President to grant relief to
the lumber industry from Canadian
lumber without a finding of fact as to
the national interest. Without facts,
no President is going to determine the
course where the nationl interest leads;
and under Section 353, it is certain that
the President would have elected to get
the facts from the Tariff Commission?
perhaps on an abbreviated basis. The
loss of Section 353 is not a critical loss,
although I would prefer that it had not
been eliminated from the bill.
The President did not want this sec-
October 4
tion in the bill; and, under this cir-
cumstance, it is unlikely that he would
have used it. The President still would
have ,had discretion under the Act and
the Senator from Virginia has already
discussed the practical situation the con-
f errees faced.
For the information of Mr. Doyle and
his associates in the lumber industry. I
wish to say that I found this bit of in-
formation after I last talked with them.
I checked with advisers to the admin-
istration and I found that opposition to
section 353 existed within the adminis-
tration, particularly within the Depart-
ment of Commerce. I know that my
constituents within the lumber industry
are realists. They appreciate the fact
that if those to whom we look to for as-
sistance and cooperation in connection
with solution of the problems of the lum-
ber industry should be opposed to some
particularly discretionary procedure,
Senators from the Pacific Northwest
States and the Members of the House of
Representatives from the Pacific North-
west States would not be in a very strong
bargaining position, in asking the ad-
ministration to assist us with other
problems, if we, in turn, opposed the
President in a decision which it had
reached in regard to section 353, once
section 353 was eliminated from the bill.
The lumber industry is now in the
midst of its hearings before the Tariff
Commission. Even had section 353 been
retained commonsense dictates that the
President would have let the lumber
hearings run their course and the Tariff
Commission make a recommendation.
Prudence and wisdom would have called
for this course, especially if the first ap-
plication of the policy contemplated by
section 353 involved an industry pres-
ently before the Tariff Commission.
In addition to the question of speed,
there is the even more impelling aspect
of the President's determination of what
measures fall within the definition of
national interest, as contemplated in
section 353. As the Senator from Vir-
ginia so well pointed out, the vagueness
of the term and the lack of a standard
caused the President to object to this sec-
tion. In my judgment, however, the
national interest now calls for action on
Canadian lumber, but I can see where
reasonable men might differ on both the
type and approach. I am confident that
the President would willingly apply sec-
tion 352 and develop an orderly market-
ing agreement with Canada on lumber.
I am equally confident that if the indus-
try makes a good case which leads to
an affirmative recommendation by the
Tariff Commission, the President will
present Canada with a choice?tariffs
and quotas or cooperation on a market-
ing agreement on lumber.
All that section 353 would have
brought to the industry at this point
would be the opportunity for the Presi-
dent to place a higher tariff on Canadian
lumber than is possible under existing
law.
Later, I shall develop the positive steps
available in this bill which can be taken
by the lumber industry.
The National Lumber Manufacturers
Association contends that "no tariff to
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1962
CONGRESSIONAL
provide effective relief can be recom-
mended despite the merits of the lumber
industry case." I do not think the pic-
ture is this black?nor does the chair-
man of the Committee on Finance. In
our colloquy on September 18, we devel-
oped the facts on the maximum tariff
that could be imposed on Canadian lum-
ber. The NLMA contends the bill would
eliminate the power of the President to
raise tariffs beyond 50 percent above the
specific duties of July 1, 1934. The duties
on lumber were $4 per thousand board
. feet on that date and these could be
raised today to $6. This power is not
removed or changed. Lumber is subject
to duty.
I am presenting the material in this
form, setting forth the contentions of
the National Lumber Manufacturers
Association and the response to them,
because I think that is the best service I
can render to the lumber interests. We
have taken the points raised by the
National Lumber Manufacturers Asso-
ciation in regard to section 353, as well
as other parts of the bill, and we have
obtained from the administration the
basis for its objections to the arguments
of the National Lumber Manufacturers
Association and other lumbermen in
support of section 353. I am setting
those arguments out now because we
must face the fact that the position of
the administration is a reality. It is
now an after-the-fact matter. We must
move on from here, for if we just look
back we will not attain our goal. I want
the RECORD to show that I have placed
the administration's position in the
RECORD in answer to each of our objec-
tions to the elimination of section 353.
So that there may be no question of
doubt, let me make very clear that I
think it would have been much better
to leave section 353 in the bill, but as a
Senator representing my State, whose
duty it is to do everything he can for the
legitimate economic rights of the lum-
ber industry in his State, I am con-
fronted with the fact that we must move
from here. Where do we go from here?
I think the first thing is to make clear
what the administration's objections to
section 353 were and are, and to make
some suggestions, before I close, about
the relief I believe can be given to the
Industry.
The Internal Revenue Service has held
that lumber was on the free list in 1930,
and the import tax is a duty. Lumber
thus is dutiable. The Tariff Classifica-
tion Act changes import taxes to duties.
The contention of the lumber industry
that effective relief will be denied is
erroneous. Certainly, section 353 would
have taken away the tariff level ceiling,
but I am confident that, given the choice
between a $6 tariff on every thousand
board feet imported and a marketing
agreement under section 352, Canadian
lumbermen would be found eager to
agree to the type of solution suggested
by our lumbermen last spring, in the
conference with the Secretary of Com-
merce, Mr. Luther Hodges.
Now, let us take a look at the relief
sought then by the lumber industry.
They suggested that an amount of Cana-
dian lumber equal to 10 percent of do-
RECORD ? SENATE 21005
mestic production be permitted to enter
duty free and thereafter a 10-percent
tariff be applied. If this had been in
effect last year, when domestic softwood
production was about 27 billion board
feet, 2.7 billion board feet would have
come in duty free from Canada, and
1.2 billion board feet would have carried
a 10-percent duty, or an effective duty
on the entire imported volume of about?
3 percent.
Last year the value of lumber import-
ed was about $250 million, and a $6 tar-
iff on the 3.9 billion feet imported would
have totaled $23,500,000, or an effective
duty rate of about 9 percent. This rate
would have been almost three times
greater than the effective tariff under
the lumber industry's proposal. It is
true that, adjusted to the change in
values that has occurred since 1938, a
$6 tariff today is not comparable to the
$4 tariff that then existed. However, this
$6 tariff is greater than the industry pro-
posal of last spring. Not only is this true,
but both the present and proposed law
contain the authority .f or the President
to place a complete quota on Canadian
lumber.
I think it clear that the lumber indus-
try proposal, and the relief they seek
before the Tariff Commission, is based
upon a reasonable effort to reconcile
their problems with Canada. They seek
to equalize competition not to destroy
it?nor to disrupt Canada.
The problem that the lumber indus-
try must meet and solve, whether sec-
tion 353 is in or out of the trade bill,
remains the same. They must marshal
their facts to show injury. This is the
crux of the situation, and this is why it
Is imperative that a full case be made
before the Tariff Commission.
What we have done for this industry
in the trade bill so far is considerable
and constructive.
First. The criteria to be taken into ac-
count by the Tariff Commission have
been preserved.
Second. Duty levels of $6 per thou-
sand feet are available for the Presi-
dent to apply should the facts warrant,
and these are three times greater than
the industry itself has' requested. The
President may place a complete quota
on imported lumber, also, should the
facts before the Commission so warrant.
Third. Section 252 gives the President
authority to deal directly with the type
of situation we have with Canada should
he find that their import restrictions
Impair the value of tariff, commitments
made to the United States, unjustly op-
press the commerce of the United States,
or prevent the expansion of trade on a
mutually advantageous basis. Here the
problem will also be squarely before
GATT in October, because Canada's ac-
tions on its import duties have wide in-
ternational trade ramifications.
Fourth. Section 352 provides for the
development of orderly marketing
agreements, including the most valuable
tool for offering Canada a choice be-
tween a tariff and quota restriction on
her lumber, and a cooperative agree-
ment to limit exports along lines earlier
suggested by the NLMA itself. Here I
refer to their proposal for a tariff of 10
percent to be effective after imports
reach 10 percent of domestic production.
In using this section, the procedures
of either section 301 or 351 must be ap-
plied. However, the industry is now be-
fore the Commission on this basis.
Thus under section 352, a new avenue is
open and possible under this bill.
Finally, chapters 2 and 3 of the bill set
forth machinery for industrywide as-
sistance to labor and management as
well as for individual petitions by con-
cerns or workers. On this latter point
I take particular notice of the fact that
even should the Tariff Commission not
make an affirmative recommendation on
the overall lumber case, individual firms
can petition for relief.
I urge each association to alert its
members to the provisions of this sec-
tion. This will be useful in an overall
finding of injury or in its absence. I
pledge to every firm in Oregon my assist-
ance in getting just relief for their in-
dividual situation.
These five positive accomplishments in
the trade bill offer a real opportunity
for constructive solutions to a difficult
situation.
I am concerned that industry spokes-
men have, believed that the trade bill
threatened their opportunity to obtain
relief. The record does not bear this
out. The trade bill has protected and
broadened the lumber industry's ability
to obtain relief.
Therefore I am doing the best I can
to make an evaluation of every provision
of the bill. I think we can make use
of it in seeking to protect the economic
rights of the lumber industry, and we
must be prepared to use every avenue
for relief.
Instead of claiming at each step of
this bill that mortal wounds have been
inflicted, I have an obligation to follow
where the facts lead. If I did not care-
fully follow this course I would not be
properly serving the thousands of lumber
workers, thousands of stockholders in
lumber firms, and thousands of small
businesses in the lumber-dependent com-
munities of my State. I know the in-
dustry's situation is severe and I know
that facts are with us. I do not intend
to have this industry denied considera-
tion nor unduly delayed in its quest for
relief. I want to make certain that all in
the industry have the facts so that they
can act.
Difficult economic situations are not
solved in an emotional atmosphere. I
think we have to look coolly at what
has been done and what still can be
done.
In addition to the trade bill, which
gives a real opportunity for the industry
to get its house in order, the Kennedy
administration has embarked on a most
constructive course which has already
and will substantially benefit this in-
dustry.
On July 26, the President set into full
motion the program well underway since
his 1961 message to the Congress on con-
servation.
These steps include:
First. Constructive talks with Canada
during September, which pave the way
toward the type of solution which will
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21006 CONGRESSIONAL RECORD ? SENATE
be possible under section 352?a market-
ing agreement on lumber.
A good case of facts by the industry
before the Tariff Commission is essential
to obtain Presidential application of this
provision, just as it is essential to getting
the more drastic tariff and quota estab-
lished.
Second. Forest road and trail authori-
zations for the 3 years, 1963-65, will total
$215 million. Taken together with
special forest access- funds, 10-percent
funds plus funds available to the Depart-
ment of Interior, which for forest roads
are some $25 million, the total is over
$270 million. This is ?double the amount
of the previous 3 years.
The Canadian lumber industry must
bear the entire burden for forest road
construction. Here our Federal Govern-
ment correctly meets an obligation.
The cost of the road is recaptured
from the timber sold and the working
capital needs of many timber operators
are reduced below those required in a
comparable Canadian timber sale.
Third. Where timber purchasers must
construct access roads, the SBA has de-
veloped, in cooperation with the Forest
Service and the Bureau of Land Man-
agement, a program of loans which will
help finance this construction in a man-
ner which will reduce working capital
needs.
Fourth. Allowable timber harvests on
the forests of the Department of the
Interior have been substantially in-
creased. In the national forests, in-
creases have been made in the past, and
new increases are scheduled for October
15, 1962.
Fifth. Domestic lumber has been given
a preference when purchased by the
Government.
Sixth. The FHA has reviewed the
characteristics of Canadian lumber and
determined that in at least one case there
is a question of whether it meets strength
requirements which enable it to properly
compete with other U.S. lumber of simi-
lar dimensions.
Mr. President, in my colloquy with the
Senator from Virginia a few moments
ago he pointed out that, come January,
we shall be in a position to offer what-
ever legislative proposals may be neces-
sary to give to the lumber industry the
protection the facts show it needs, and
in case the administration has not acted
in the meantime.
I have heretofore said, but I reiterate
today, that if we cannot get the pro-
tection for our lumber industry that it
justly deserves, next January I shall in-
troduce a series of bills aimed at pro-
tecting the lumber industry. One of
them will deal with the matter of the
FHA financed homes. While the trade
experts say that a proposal that FHA
loans require the use of American lum-
ber for FHA financed housing would
place us in violation of our trade agree-
ments, I am confident that we could
work out a legislative solution. .
I hope that we shall not have to come
to that kind of legislation, although I
shall not hesitate 'to introduce it.
If the Canadian Government is not
cooperative in arriving at a voluntary
marketing agreement with us, I shall
not hesitate to introduce such pro-
posed legislation.
That is only one of the pieces of legis-
lation seeking to protect the lumber
industry which I shall introduce come
January.
Another one of the bills I shall give
consideration to introducing come Jan-
uary, if it becomes necessary, is a bill
which would involve the imposition of
lumber grade, strength, and marking
standards on imported lumber, so as to
give to American consumers an absolute
assurance that the standards for im-
ported lumber are equal to the standards
for American-produced lumber. I also
believe that we should consider requiring
that Canada's producers show propor-
tionately in the wood promotion pro-
gram. Actually if this could be done and
a marketing agreement reached, I think
both the 'U.S. and Canada's producers,
wholesalers, retailers, and the wood
users would benefit.
Seventh. SBA and the Area Redevel-
opment Administration have underway
an intensified program of loans to help
small businesses upgrade their produc-
tion and thus better compete with im-
ported lumber products.
Eighth. On September 14 in Portland,
Oreg., Secretary Freeman announced
several substantial revisions in policy.
These include elevation of the Forest
Resource Advisory Committee to a
broadly representative secretarial board,
as well as a review of timber contracts
and appeals procedure. I am particu-
larly pleased with this step because it is
the exact recommendation I made to the
President on July 26.
Ninth. The Forest Service appraised
timber prices have been reduced 30 per-
cent over the last 3 years, following
market trends. New procedures for ap-
praisal have been placed in effect to more
fairly write off road costs and properly
price low value species.
Tenth. The Forest Service timber sales
in the three major western regions
reached record levels in fiscal year 1962.
Region 6, covering Oregon and Washing-
ton, sold 4.8 billion board feet. Region
1, covering Idaho and Montana, sold
almost 1.5 billion board feet. Region 5,
covering California, sold over 1.6 million
board feet.
Eleventh. The Bureau of Land Man-
agement has liberalized its schedule of
timber sale payments and made other
changes which eliminate onerous re-
quirements which previously were placed
on timber contractors to perform such
functions as line surveys.
Twelfth. The Treasury Department
revised depreciation schedules this sum-
mer for the first time in years. Tax
savings to the forest industries here will
total over $25 million a year and Ameri-
can firms have been placed item by item
in as good or on a better position than
Canadian producers.
Thirteenth. The new tax bill's invest-
ment credit provision will be of benefit
to the lumber industry in its efforts to
modernize its equipment and machinery.
Fourteenth The trade bill itself, with
its five important provisions beneficial
to the lumber industry will provide an-
October -4
swers for trade expansion as well as
proper protection.
Fifteenth. The public works accelera-
tion bill provides an opportunity to ad-
vance forestry and conservation work on
the national forests and national land
reserve including road construction, re-
forestation, and other programs vital to
timber use and protection.
Sixteenth. The Department of Com-
merce has developed assistance 'programs
for the lumber industry to aid it in send-
ing trade missions abroad.
Seventeenth. S. 3517, already passed
by the Senate, would allow 50 percent
of lumber and forest products duty col-
lections to be made available for product
marketing and research.
Eighteenth. H.R. 12688, now before the
President, will expand forest research
at State colleges and universities includ-
ing research in forest management pro-
tection and utilization.
This is a most substantial and en-
couraging 18-point record.
My judgment on the attitude which we
must all take is very well expressed by
an editorial in the September 1962, issue
of Western Timber Industry entitled
"Fulminating Futile." I ask unanimous
consent that it be printed at this point
in the RECORD.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
[From Western Timber Industry,
September 1962]
FULMINATING FUTILE
We can only regard as hopelessly irrespon-
sible the comments to the effect that the
U.S. lumber industry may be "forced to en-
gage in a general anti-Canada campaign"
which were attributed to Henry Bahr, a vice
president of the National Lumber Manu-
facturers Association.
He was quoted as storming that "For years
we have tried to maintain peaceful rela-
tions with the Canadian lumber industry,
but if we get no cooperation here we may be
forced to use every political pressure possi-
ble to defeat U.S. policies that may be favor-
able to Canada."
He further fulminated, "If the Canadian
lumbermen want a cooling-off period to give
them more time to increase their exports
to the United States, then of course we won't
agree."
Frankly, we feel that this kind of temper
tantrum has no place on the lips of a high
official of a responsible national industry as-
sociation. There has been too much blowing
of battle trumpets and neighing of war
horses already?and from both sides of the
border.
There is a serious problem. The increase
in imports from British Columbia is wrench-
ing the Pacific Northwest lumber industry
painfully. But those who quit using reason
and resort to diatribes to find solutions ab-
dicate the title of "reasonable men." United
States and Canadian citizens have too much
common heritage and common future to
fal lout like feudal barons.
Mr. MORSE. Mr. President, I say
most sincerely and frankly, that I always
give most careful consideration to the
views expressed by competent people in
my State. If we set our sights correctly
and chart our course with wisdom we can
make real progress.
We have moved forward. We shall
move forward even more. The rate of
progress and the type of progress will
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CONGRESSIONAL RECORD ? SENATE 21007
depend upon constructive suggestions,
capably developed, carefully weighed,
well documented and fairly presented.
We must follow this cause, but we must
not shying from frank and full expres-
sion for individual views.
I do not want the Federal Govern-
ment to become so heavily injected
into the affairs of any private enterprise
that for all practical purposes it will
"run" the business.
The responsibility of the Federal Gov-
ernment is to create an economic climate
which will assure the growth of free
enterprise. That is what I meant when
I referred to the basic tenet which the
Senator from Virginia and the senior
Senator from Oregon share; namely,
that only to the extent we strengthen
economic and individual freedom in this
country shall we give assurance of the
perpetuation of political freedom. I
think we must apply this principle or
tenet to individual issues as they arise.
The tenet is before us in connection with
the lumber industry.
I shall support the Government going
as far as is necessary to protect the
lumber industry against unfair competi-
tion from Canadian or other foreign
Imports. I shall also stand on guard
against any attempt on the part of the
Federal Government to so intervene in
the operation of the lumber industry as
to jeopardize the exercise of the free
enterprise system within the industry.
The Kennedy administration has tried
to create a climate which will assure the
growth of free enterprise. The Kennedy
administration has done this. Every
step it has taken for the lumber indus-
try has been designed to aid, and in fact
has aided, this industry.
No administration should "spoon feed"
an industry. I therefore urge the
spokesmen for lumber to recognize what
has been accomplished. Even more, I
urge that they fulfill their obligation to
establish the facts which complete the
finding of a sound solution to the lum-
ber import problem they so well have
brought to the attention of the Congress
and the administration.
This has been the position of the senior
Senator from Oregon from the very be-
ginning of our hearings on the economic
crisis within the lumber industry.
Several weeks ago, in the public hear-
ings in Portland, Oreg., the senior Sena-
tor from Oregon urged the lumber in-
dustry to proceed with full speed to lay
its case before the Tariff Commission.
I knew them, and made clear to their
representatives, that the administration
was bound to be greatly influenced, and,
under the law, should be greatly in-
fluenced by the facts that the industry
presented, within the procedure under
the trade laws, before the Tariff Com-
mission as to the economic plight of the
industry.
As we move on critical situations will
require patience and a willingness to be
tolerant. I close by saying this. When
the Congress convenes in January, I shall
be prepared to take this matter up again
should the facts warrant it. I think the
record shows that I have told the in-
dustry that it must take certain steps so
that we in the Congress can go on in
their behalf. This the industry is doing.
I regret the industry delayed in making
its case before the Tariff Commission. I
wish this was complete because I am
confident that based on the facts as I
see them at this juncture, we would, to-
day, have an overwhelming vote in the
Senate for firm action. In fact, I am
convinced the President would be await-
ing only the signing of this bill to take
the 19th step?imposing a tariff and
quota, the 20th step?a marketing agree-
ment, or the 21st step?assistance to
mills and their employees.
I do not intend to look back. In Jan-
uary, if events have not properly restored
our lumber industry, if the facts require
it, I fully intend to offer additional legis-
lative remedies strong enough to assure
this restoration.
The lumber industry faces heavy com-
petition from other products as well as
from lumber from abroad. My goal is to
make certain that this industry has the
economic incentive and the vigor to de-
liver its benefits to our economy.
I think that this can be done and it
will be done. There is no doubt in my
mind that lumber is a basic commodity
which simply cannot be beaten in the
service it delivers to our economy.
In closing, I am privileged to say in
behalf of the Senator from Washington
[Mr. MAGNUSON] that he has given as-
surance to the lumber industry, and
that he will stand shoulder to shoulder
with me and, of course, I will continue
to stand shoulder to shoulder with him.
With our colleagues in the delegations
frOm Washington and Oregon we will
do what we can to see to it that the
legitimate economic rights of the lumber
industry are protected by whatever other
governmental course of action is neces-
sary in order to protect those rights.
Mr. President, I ask unanimous con-
sent that pertinent portions of the testi-
mony before the Tariff Commission by
Mr. Robert Dwyer be printed in the REC-
ORD at the conclusion of my remarks.
There being no objection the statement
was ordered printed in the RECORD, as
follows:
TESTIMONY OF ROBERT DWYER, COCHAIRMAN
OF THE LUMBERMEN'S ECONOMIC SURVIVAL
COMMITTEE BEFORE U.S. TARIFF COMMIS-
SION ON CANADIAN LUMBER, OCTOBER 2, 1962
My name is Robert Dwyer. I am appear-
ing today as a spokesman for the Lumber-
men's Economic Survival Committee in pe-
tition for a temporary quota on the import
of Canadian lumber products into this
country.
I am here to plead for your action to save
a capitalistic investment, to maintain some-
thing of a free enterprise system that has
been attacked and partially massacred in
the marketplace by a foreign operator able
to produce lumber and sell that lumber in
our marketplace at prices that cannot be
equalled by an American producer.
In addition to an industry, a capital in-
vestment in plant and equipment and re-
sources, I am asking this Commission to act
to save the payrolls of the 200,000 sawmill
workers in this country; 66,900 of those
workers are in our Pacific Northwest States
of Oregon, Washington, and Idaho. For
without your action I am convinced a good
deal of that capitalistic investment and a
good number of those payrolls will vanish
from the American industrial scene.
The lumber, industry does not need my
apologies, or a spokesman for its policies and
attitudes. It has been and it is today a
ruggedly, self-supporting industry that has
not come to the Government in the past
and isn't coming to the Government now for
subsidies, handouts of any form, or special
privileges. The men with whom I associate
and whom I represent today have banded
together under one creed and one objective?
an opportunity to compete with the world
on an even footing. We seek only equal
competition for ourselves as well as our
foreign competitors.
We have boasted, and I will again today,
that given an even break, or even a tolerable
handicap, our American lumber industry can
compete and with profit in any market of
the world, especially our own domestic
market.
But what has happened? Today we are
unable to compete in many markets of
the world and more and more each day we
are unable to compete in our own domestic
rosrket. I won't weight this testimony with
figures to demonstrate how Canadian im-
ports through the past few years have moved
into and taken over some 70 percent or
more of our eastern markets. I will point
only briefly to the tremendous timber re-
serves of Canada and warn you gentlemen,
as solemnly as I know how, that, without
a move toward equalization, they will cap-
ture more than a mere 70 percent of our
eastern market. There are men in the
Canadian lumber industry even today who
are projecting and spending to capture not
a mere 4 or 5 billion feet of the American
lumber market, but a 7- to 15-billion-foot
slice of that market. And this is in the
face of the fact that the American lumber
market has not grown perceptibly in the
past decade and isn't likely to grow in the
next. It means, gentlemen, that, without
the breathing spell we must have to get
our domestic policies fn order to create a
climate of equal competition, the Canadian
exporters will take over as much as half
of the entire American lumber market within
the next decade.
But the lumber industry's problems don't
need tricky mathematics to demonstrate
that they are severe and they have an in-
dustry in distress and near economic ruin.
And may I remind you or anyone else
interested in the economic welfare of this
country that these are not defense industry
jobs?these are not pump-priming jobs cre-
ated by Government spending of tax money?
these are not the welfare jobs nor the bu-
reaucratic jobs that require Government
spending to exist. These jobs are the fiber?
the lifeblood?of America's economy.
Gentlemen, the lumber industry's loss in
payrolls is a loss of a source of the profit
and money that is part of the basic, back-
bone strength of this country's economy?
the strength whereby we meet our domestic
and foreign obligations. These are the tax-
paying jobs of industries that contribute
in an ever-expanding area from trucks and
gasoline and equipment taxes to the basic
payroll taxes that have built the house you
and I live in today?the strength and shape
and power of America.
The American people have a vital stake in
the welfare of our industry beyond the
direct tax dollar contribution. The Ameri-
can people own most of the timber in this
country and it is this industry that must
manufacture and market that timber before
a tree, worthless deep in the forest, is worth
a dime. And it is this industry, made up
of many competing companies rather than
a few giants able to survive economic de-
pression of foreign competition, that must
be strong to compete and bid for that timber
if it is not to fall into a state where lumber
is manufactured like steel with six or seven
operators producing 90 percent or more of
the production.
The inroads of this outside competition
which we seek to have brought into equal
competition with our own industry has al-
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21008 CONGRESSIONAL RECORD ? SENATE
ready crippled the industry in 'areas like
Portland, Oreg., where the Dwyer Lumber &
Plywood Co. operates. Once our city had
18 huge, thriving mills with an 8-hour shift
capacity of 2,245,000 feet. Now we have but
four mills with a capacity of a mere 580,000
feet.
Let no one tell you this is a natural
evolution, that lumber is a dying industry
and that automation or any other technical
development is taking away the jobs we have
lost. I have listened to that rubbish right
from within our own industry from men
in a position to profit by a tightening of the
production, in a position to profit from vast
private timber reserves, from men with
shipping interests or with Canadian opera-
tions of their own, from some operating as
middle men who have created all of these
false images to confuse and sometimes ? di-
vide the industry in its fight for its economic
life. This is balderdash and you and I know
it! The story of the Canadian production
base expansion, the story that is shown in
the statements of Canadian lumber giants
like MacMillan Bloedel of British Columbia,
a story they spell out in their annual report
to stockholders, is evidence enough that the
profit and the jobs are still there in the lum-
ber industry. But the lumber industry today
is in Canada.
We are being nudged out of our market
and out of our traditional business, and
without this breather we are seeking from the
Tariff Commission, without the time to re-
group and reorganize our domestic affairs
so that we can create a climate of equal
competition with the Canadians, there will
be a great many more of us in this industry
who will go out of business.
We must pay our workers roughly 30
cents more an hour, including fringe bene-
fits, than the Canadians pay their workers.
We must pay our Government more than
twice the stumpage costs of the Canadian
Government. We must operate with a full-
value American dollar in paying out bills,
while the Canadian Government in nurse-
maiding its industry has created a 92-cent
dollar with which their industry can operate
and pay its bins.
This country was founded and its
economic strength was created on the belief
that a man could work, that a man with
brains and ideas and initiative could create
something for himself, that our people had
the rights of enterprise, yet we have seen
much of that eroded in the past decade or
more.
We have a country that holds these things
up to the rest of the world. We boast that
this is a place where a man willing to work
has the right and the opportunity to work.
But in exporting our markets and export-
ing our industrial base, we have deprived
some of those Americans of the right to work
just as surely as if we had legislated against
them. We have given their jobs away and
in doing so have deprived them of their jobs.
We will continue to deprive them of even
more if we do not get this petition we seek
-today to protect what is left of our industry.
America is not yet a socialistic state. It
is a country where there is yet great strength
in our willingness to compete with the world.
But a devalued Canadian dollar, Canadian
timber prices aimed at the sole objective of
undercutting American timber prices, the
creation by the United States of a merchant
fleet and the maintenance of that fleet for
the protection of the entire North American
Continent, not the United States alone?
these compounded are too big a burden to
put upon the back of your lumber industry
and expect it to survive.
Frankly, gentlemen, we have worked into
the nights as hard as we know how to stave
off this threat to an American industry.
Secretary of Agriculture Orville Freeman has
promised relief from the U.S. Forest Service
policies that were not geared to this coin-
petitive struggle. We now have promise of
a change of policy and attitude that would
create the more equitable timber costs we
need to compete.
Senators MAGNUSON, MORSE, NEUBERGER,
and our other Northwest delegates have
seen the problem and, working with
the industry, they have put a wedge into
our archaic domestic shipping laws in an
attempt to open the door to Puerto Rico to
American producers again for the first time
in years. Thanks, too, to these Northwest-
ern statesrhen, there is at least token recog-
nition by the Canadians that all has not been
fair in their monetary manipulations to
capture the American market.
Give this industry the time it needs to
bring these factors into balance, grant this
quota so that we can find the time to sur-
vive, and I promise you the American lumber
industry will again stand on its own feet and
contribute some of the strength this country
must have to lead the world.
Deny this petition, gentlemen, and I warn
you, the entire lumber industry will be de-
nied.
I have measured the men who have fought
to keep this industry alive; men who brought
about this hearing today. I have watched
them face up to those in their own industry
who have selfish interests such as Canadian
investments or vast timber holdings or ship-
ping interests as they shrugged off our pleas
for equal competition. I have watched them
push for equality for all of the industry in
the face of almost insurmountable opposi-
tion from sources where they should have
found support. I have watched them wade
Into this mass of Government technicalities
and legal obstacles. It was no simple matter
for them to get this far.
This is their day in court. This is the
moment where they seek and expect to find
the protection they are entitled to?the pro-
tectiot they must have if they are to keep
alive what they have created in industry
and jobs. Deny them now and you will de-
stroy something of this country and much
of this industry.
I ask you, give us the breathing spell we
need.
Give us the opportunity to compete equally
in our own market.
The PRESIDING OFFICER. The
question is on agreeing to the conference
report.
The conference report was agreed to.
MESSAGE FROM THE HOUSE
A message from the House of Repre-
sentatives, by Mr. Maurer, one of its
reading clerks, announced that the
House had passed, without amendment,
the bill (S. 3679) authorizing an ap-
propriation to enable the United States
to extend an invitation to the Food
and Agricultural Organization of the
United Nations to hold a World Food
Congress in the United States in 1963.
The message also announced that the
House had agreed to the report of the
Committee of conference on the dis-
agreeing votes of the two Houses on the
amendments of the House to the bill
(S. 1552) to amend and supplement the
laws with respect to the manufacture
and distribution oeugs, and for other
purposes.
The message furtadrAti d that
the House had agreed to th
ments of the Senate to the bill
8140) to strengthen the criminal laws
relating to bribery, graft, and conflicts
of interest, and for other purposes.
Octobo: 4
The message also announced that the
House had agreed to the amendment of
the Senate to each of the following bills
of the House:
HR. 10708. An act to amend section 203 of
the Rural Electrification Act of 1936, as
amended, with respect to communication
service for the transmission of voice, sounds,
signals, pictures, writing, or signs of all
kinds through the use of electricity; and
H.R. 12513. An act to provide for public
notice of settlements in patent interferences,
and for other purposes.
The message further announced that
the House receded from its disagreement
to the amendments of the Senate num-
bered' 1 and 6 to the bill (H.R. 12648)
making appropriations for the Depart-
ment of Agriculture and related agen-
cies for the fiscal year ending June 30,
1963, and for other purposes, and con-
curred therein; that the House receded
from its disagreement of the Senate
numbered 2 to the bill, and concurred
therein with an amendment, in which
it requested the concurrence of the Sen-
ate, and that the House further insisted
upon its disagreement to the amend-
ments of the Senate numbered 19, 44,
47, 48, 49, 50, 51, 52, 53, and 54 to the
bill.
INCOME TAX TREATMENT OF TER-
MINAL RAILROAD CORPORATIONS
AND THEIR SHAREHOLDERS
Mr. MANSFIELD. Mr. President, I
move that the Senate proceed to the
consideration of Calendar No. 2237, HR.
12599.
The PRESIDING OFFICER. The
bill will be stated by title.
The LEGISLATIVE CLERK. A bill (H.R.
12599) relating to the income tax treat-
ment of terminal railroad corporations
and their shareholders.
The PRESIDING OFFICER. The
question is on agreeing to the motion of
the Senator from Montana.
The motion was agreed to; and the
Senate proceeded to consider the bill,
which had been reported from the Com-
mittee on Finance with amendments, on
page 4, line 6, after the word "member",
to insert "other than as a common Par-
ent corporation,"; in line 21, after "(D) ",
to strike out "all of the shareholders of
which compute their taxable income on
the basis of the same taxable year as
the terminal railroad corporation." and
insert "each shareholder of which com-
putes its taxable income on the basis of
a taxable year beginning or ending on
the same day that the taxable year of
the terminal railroad corporation begins
or ends."; on page 6, after line 4, to
insert:
( e) APPLICATION TO TAXABLE YEARS END-
ING BEFORE THE DATE OF ENACTMENT.?In the
case of any taxable year ending before the
date of the enactment of this section?
"(1) this section shall apply only to the
extent that the taxpayer computed on its
return, filed at or prior to the time (in-
cluding extensions thereof) that the return
for such taxable year was required to be
filed, its taxable income in the manner de-
ribed in subsection (a) in the case of a
rrninal railroad corporation, or in the man-
er described in subsection (b) in the case
of a shareholder of a terminal railroad
corporation; and
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1962 CONGRESSIONAL RECORD ? SENATE
a proposed Amendment No. 2, to extend
through October 31, 1963, the concession
contract for the Mesa Verde Co., Inc., to pro-
vide facilities and services for the public in
Mesa Verde National Park, Colo. (with ac-
companying papers; to the Committee on
Interior and Insular Affairs.
REPORT ON AWARD OF YOUNG AMERICAN
MEDALS FOR BRAVERY AND SERVICE
A letter from the Attorney General, report-
ing, pursuant to law, on the award of Young
American Medals for Bravery and Service,
for the year 1960; to the Committee on the
Judiciary.
PETITIONS AND MEMORIALS
Petitions, etc., were laid before the
Senate, or presented, and referred as
indicated:
By the VICE PRESIDENT:
A resolution adopted at a mass meeting of
the American citizens of Baltic descent, at
Racine, Wis., protesting against the forceful
occupation of Estonia, Latvia, and Lithuania
by Soviet Russia on June 15, 1940; to the
Committee on Foreign Relations.
OIL IMPORT CURBS URGED BY
TYLER, TEX., CHAMBER OF COM-
MERCE
Mr. YARBOROUGH. Mr. President,
the board of directors of the Chamber of
Commerce of Tyler, Tex., has recently
expressed its concern over the high level
of oil imports and the resulting damage
to the domestic oil industry.
The Tyler Chamber of Commerce
board called for immediate action by
the U.S. Congress to establish a limita-
tion on U.S. oil imports, thereby reliev-
ing the domestic oil industry of an un-
fair and extremely damaging burden to
an important segment of our national
economy.
In support of this view, I ask unani-
mous consent to have printed in the
RECORD the following exceptionally well-
stated resolution, captioned "Resolution
Supporting Stronger U.S. Oil Import
Program," and signed by J. Harold
Stringer, president of the board of di-
rectors of the Tyler Chamber of Com-
merce.
There being no objection, the resolu-
tion was ordered to be printed in the
RECORD, as follows:
RESOLUTION SUPPORTING STRONGER U.S. OIL
IMPORT PROGRAM
Whereas U.S. imports of foreign-produced
crude oil and petroleum products continue
to rise to new record high levels every year
despite a Government restriction program
and which record was 697 million barrels in
1961, an increase of 32 percent over 1956;
and
Whereas imports of crude oil and petro-
leum products have become the largest single
contributor to the development of an un-
favorable U.S. trade balance such imports
reaching a value of $1,667 million in 1961
and which imports constituted 11 percent
of all U.S. imports and being far more than
coffee, the second ranking U.S. import in
1961; and
Whereas this rapid increase in petroleum
imports is a major cause of the seriously de-
pressed condition in which the U.S. domestic
petroleum industry finds itself today; and
Whereas this depressed condition of the
domestic oil industry in the United States
is particularly of evidence in the State of
Texas and especially in east Texas, as indi-
cated by the following facts:
1. In direct contrast with the large growth
of foreign oil imports, and despite an 11.6-
percent increase in U.S. petroleum demand,
U.S. domestic production of crude oil during
1961 was limited to almost the identical
level as in 1956, although there exists a shut-
in producing capacity of more than 21/2 mil-
lion barrels per day in the United States.
2. U.S. income from crude oil production is
less now than in 1957, due to a decline of
17 cents per barrel, or 5 percent, in average
U.S. crude oil prices at a time when domestic
producing rates have remained static.
3. Total new wells drilled for oil and gas
in the United States has decreased 19 percent
since 1956, including a 30-percent decline in
wildcat drilling upon which the discovery of
new producing sources is dependent.
4. The number of rotary drilling rigs able
to find work in the United States has de-
clined by 40 percent since 1956.
5. A decline since 1957 of 25 percent has
occurred in number of contracting firms
operating rotary drilling rigs in the United
States.
6. Total U.S. petroleum industry em-
ployees has dropped 11 percent since 1956:
Now, therefore, be it
Resolved, That the board of directors of
the Tyler Chamber of Commerce meeting at
Tyler, Tex., on June 6, 1962, does hereby
vigorously urge and request the executive
department of the U.S. Government to im-
mediately take steps which will impose an
overall limitation on all oil imports from
all sources into all areas of the United States
to a level that will not exceed the 14-percent
relationship of imports to domestic crude oil
production that existed in 1956; and be it
further
Resolved, That the board of directors of
the Tyler Chamber of Commerce advocates
and supports immediate action by the U.S.
Congress to establish such a limitation on
U.S. oil imports.
J. HAROLD STRINGER,
President.
10443
By Mr. JORDAN, from the Committee on
Agriculture and Forestry, without amend-
ment:
S. 2121. A bill to establish Federal agricul-
tural services to Guam, and for other pur-
poses (Rept. No. 1613);
5.2859. A bill to amend the Federal Crop
Insurance Act, as amended, in order to in-
crease the number of new counties in which
crop insurance may be offered each year
(Rept. No. 1614) ; and
S. 3120. A bill to amend section 6 of the
act of May 29, 1884 (Rept. No. 1615) .
By Mr. TALMADGE. from the Committee
on Agriculture and Forestry, with amend-
ments:
S.J. Res. 201. Joint resolution to amend
section 316 of the Agricultural Adjustment
Act of 1938 to extend the time by which a
lease transferring a tobacco acreage allot-
ment may be filed (Rept. No. 1612).
REPORTS OF COMMITTEES
The following reports of committees
were submitted:
By Mr. BYRD of Virginia, from the Com-
mittee on Finance, with amendments:
H.R. 6682. An act to provide for the exemp-
tion of fowling nets from duty (Rept. No.
1607).
By Mr. HICKEY, from the Committee on
Interior and Insular Affairs, without amend-
ment:
S. 536. A bill to approve an order of the
Secretary of the Interior adjusting, deferring,
and canceling certain irrigation charges
against non-Indian-owned lands under the
Wind River Indian irrigation project, Wyo-
ming, and for other purposes (Rept. No.
1611).
By Mr. CHURCH, from the Committee on
Interior and Insular Affairs, without amend-
ment:
S. 3018. A bill to provide for the convey-
ance of 39 acres of Minnesota Chippewa
tribal land on the Fond du Lac Indian Res-
ervation to the SS. Mary and Joseph Church,
Sawyer, Minn. (Rept. No. 1609).
By Mr. CHURCH, from the Committee on
Interior , and Insular Affairs, with amend-
ments:
S. 3224. A bill to declare that the United
States holds certain lands on the Eastern
Cherokee Reservation in trust for the Eastern
Band of Cherokee Indians of North Carolina
(Rept. No. 1610).
By Mr. ANDERSON, from the Committee on
Interior and Insular Affairs, without amend-
ment:
S. 2971. A bill to declare that certain lands/
of the United States are held by the United'
States in trust for the Ticarilla Apache Tribp
of the Jicarilla Reservation (Rept. No. 1608) .
INCREASE OF LIMIT OF EXPENDI-
TURES FOR COMMITTEE ON
FINANCE?REPORT OF A COM-
MITTEE
Mr. BYRD of Virginia, from the Com-
mittee on Finance, reported an original
resolution (S. Res. 350) ; which was re-
ferred to the Committee on Rules and
Administration, as follows:
Resolved, That the Committee on Finance
hereby is authorized to expend from the con-
tingent fund of the Senate, during the
Eighty-seventh Congress, $12,000, in addi-
tion to the amount, and for the same pur-
poses, specified in section 134(a) of the Leg-
islative Reorganization Act, approved August
2, 1946.
BILLS AND JOINT RESOLUTION
INTRODUCED
Bills and a joint resolution were intro-
duced, read the first time, and, by
unanimous consent, the second time, and
referred as follows :
By Mr. PROXMIRE.
S. 3454. A bill for the relief of Nick Mason-
ich; to the Committee on the Judiciary.
By Mr. DOUGLAS:
S. 3155. A bill for the relief of Melynda
Kim Zehr (Chun Yoon Nyu) and Michelle
Su Zehr (Lim Myung Im); to the Committee
on the Judiciary.
By Mr. SMATHERS:
S. 3456. A bill to authorize assistance un-
der the Area Redevelopment Act in the case
of any area which has been adversely af-
fected by the imposition by the United States
of an embargo on the importation of products
from Communist of Communist-dominated
countries; to the Committee on Banking and
Currency.
By Mr. McCARTHY:
S. 3457. A bill to amend title 3 of the Sugar
Act of 1948 to provide for the establishment
of fair and reasonable minimum wage rates
for workers employed on sugar farms, and for
other purposes; to the Committee on
Finance.
(See the remarks of Mr. MCCARTHY when
he introducecl the above bill, which appear
under a separate heading.)
By Mr. CASE of South Dakota:
S. 3458. A bill to provide relief for resi-
dential occupants of unpatented mining
claims upon which valuable improvements
have been placed, and for other purposes;
to the Committee on Interior and Insular
Affairs. /
C ti, By Mr. FULBRIGHT (by request) :
S. 3 &Jain to authorize the appoint-
,,,offrent o ne additional Assistant Secretary
?of State; to the Committee on Foreign
I I Relations.
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10444 CONGRESSIONAL RECORD ? SENATE
(See the remarks of Mr. FULBRIGHT when
he introduced the above bill, which appear
under a separate heading.)
By Mr. GRUENING:
S. 3460. A bill to authorize the payment
of certain claims for structural or other ma-
jor defects in homes covered by FHA-insured
mortgages, and to require indemnification
bonds in the case of certain new construction
under FHA-insured mortgages; to the Com-
mittee on Banking and Currency.
(See the remarks of Mr. GRUENING when he
introduced the above bill, which appear un-
der a separate heading.)
By Mr. DIRKSEN:
S.J. Res. 202. Joint resolution to provide
for the commemoration of the 175th anni-
versary of the Constitution of the United
States, on September 17, 1962; to the Com-
mittee on the Judiciary.
(See the remarks of Mr. DIRKSEN when he
introduced the above joint resolution, which
appear under a separate heading.)
RESOLUTION
INCREASE OF LIMIT OF EXPENDI-
TURES FOR COMMITTEE ON
FINANCE
Mr. BYRD of Virginia, from the Com-
mittee on Finance, reported an original
resolution (S. Res. 350) increasing the
limit of expenditures for the Committee
on Finance, which was referred to the
Committee on Rules and Administration.
(See the above resolution printed in
full when reported by Mr. BYRD of Vir-
ginia, which appears under the heading
"Reports of Committees.")
AMENDMENT OF TITLE 3 OF THE
SUGAR ACT OF 1948
Mr. McCARTHY. Mr. President, I in-
troduce, for appropriate reference, a bill
to amend title 3 of the Sugar Act.
This bill deals with the section under
which the Secretary of Agriculture is re-
quired to determine fair and reasonable
wages. It establishes the national mini-
mum wage as a norm, but it also provides
that the Secretary, after due notice and
public hearing, may make exceptions in
case of hardship. It also offers an in-
centive for producers to meet the
standard.
I ask unanimous consent that the bill
remain at the desk until the Senate ad-
journs tomorrow in order that Senators
who desire to sponsor the bill may have
an opportunity to do so.
The VICE PRESIDENT. The bill will
be received and appropriately referred;
and, without objection, the bill will lie
on the desk, as requested by the Senator
from Minnesota.
The bill (S. 3457) to amend title 3 of
the Sugar Act of 1948 to provide for the
establishment of fair and reasonable
minimum wage rates for workers em-
ployed on sugar farms, and for other
purposes, introduced by Mr. MCCARTHY,
was received, read twice by its title, and
referred to the Committee on Finance.
ADDITIONAL ASSISTANT SEC?RZ
TARY OF STATE
Mr. FULBRIGHT. Mr. President, by
request, I introduce, for appropriate ref-
erence, a bill to authorize the appoint-
ment of one additional Assistant Secre-
tary of State.
The proposed legislation has been re-
quested by the Assistant Secretary of
State, Mr. Frederick G. Dutton, and I am
introducing it in order that there may
be a specific bill to which members of
the Senate and the public may direct
their attention and comments.
I reserve my right to support or oppose
this bill, as well as any suggested amend-
ments to it, when the matter is con-
sidered by the Committee on Foreign
Relations.
I ask unanimous consent that the bill
may be printed in the RECORD at this
point, together with the letter from the
Assistant Secretary of State, dated
June 4, 1962, in regard to it.
The VICE PRESIDENT. The bill will
be received and appropriately referred;
and, without objection, the bill and letter
will be printed in the RECORD.
The bill (S. 3459) to authorize the
appointment of one additional Assistant
Secretary of State, introduced by Mr.
FULBRIGHT, by request, was received, read
twice by its title, referred to the Com-
mittee on Foreign Relations, and ordered
to be printed in the RECORD, as follows:
Be it enacted, by the Senate and House
of Representatives of the United States of
America in Congress assembled, That sec-
tion 1 of the Act of May 26, 1949, as amended
(5 U.S.C. 151a), is amended by striking out
"eleven" and inserting in lieu thereof
"twelve".
Sac. 2. Section 106(a) (17) of the Federal
Executive Pay Act of 1956 (70 Stat. 738) is
amended by striking out "(11) "and inserting
in lieu thereof "(12)".
The letter presented by Mr. FULBRIGHT
is as follows:
DEPARTMENT OP STATE,
Washington, D.C., June 4, 1962.
THE VICE PRESIDENT,
U.S. Senate.
DEAR MR. VICE PRESIDENT: Enclosed IS a
proposed bill, to authorize the appoint-
ment of one additional Assistant Secretary
of State, which the Department believes
will strengthen executive direction within
the Department. This position would be
used for the Director of the Bureau of In-
telligence and Research. The importance
and scope of the job and the need to main-
tain the Department's position in the in-
telligence community fully justifies this
action.
The Bureau of Intelligence and Research
has the dual function of meeting the require-
ments of the coordinated intelligence com-
munity under intelligence directives issued
by the National Security Council, and also
meeting the Department's own research and
intelligence needs. In a rapidly changing
world it is essential for sound policymaking
that adequate information be available re-
garding the current situation and the prob-
able future consequence of potential altern-
ative decisions. It is important to attempt
to look ahead, to try to anticipate problems
or opportunities for American foreign pol-
icy and it is also necessary to apply spe-
cialized skills to the task of improving the
basic assumption on which policy rests.
For these reasons the functions of the
Bureau of Intelligence and Research are
equivalent in importance to those of the
geographic and functional bureaus current-
ly headed by an Assistant Secretary. The
enactment of the proposed bill would en-
able the Department to give more adequate
attention to the quality of research activi-
June 21
ties and would insure consideration of re-
search information at a high level.
The Department has been informed by the
Bureau of the Budget that there would be
no objection, from the standpoint of the ad-
ministration's program, to the presentation -
of the draft legislation to the Congress for
Its consideration.
Sincerely yours,
FREDERICK G. DuTrow,
Assistant Secretary
(For the Secretary of State) .
COMMEMORATION OF 175TH ANNI-
VERSARY OF THE CONSTITU-
TION OF THE UNITED STATES
Mr. DIRKSEN. Mr. President, I call
attention to the fact that on the 17th of
September 1962 we shall observe the
signing of the final draft of the Con-
stitution of the United States at the
convention in Philadelphia. I propose
to introduce a joint resolution that the
17th day of September 1962 is hereby
designated as "the 175th anniversary of
the signing of the Constitution of the
United States", and the President of the
United States is authorized and re-
quested to issue a proclamation inviting
the people of the United States to ob-
serve and celebrate such date with ap-
propriate ceremonies and activities.
I introduce the joint resolution for ap-
propriate reference.
The VICE PRESIDENT. The joint
resolution will be received and appro-
priately referred.
The joint resolution (S.J. Res. 202) to
provide for the commemoration of the
175th anniversary of the Constitution
of the United States, on September 17,
1962, introduced by Mr. DIRKSEN, was re-
ceived, read twice by its title, and re-
ferred to the Committee on the
Judiciary.
CONFLICT-OF-INTEREST LEGISLA-
TION?AMENDMENTS
Mr. KEATING. Mr. President, the
Senate Committee on the Judiciary this
morning, held hearings on some ex-
tremely important legislation already
approved by the House of Representa-
tives. The bill before the committee was
H.R. 8140. This bill is the most com-
prehensive attempt to overhaul our con-
flict-of-interest statutes in many years.
There are some weaknesses in the bill
as it now stands, and I intend to offer
for myself and my colleague [Mr. JAvirs]
four amendments to improve the bill,
which I ask unanimous consent be
printed at the conclusion of my remarks
and referred to the appropriate com-
mittee.
The PRESIDING fanoiCER. With-
out objection, it is so ordered.
Mr. KEATING. Mr. President, the
first amendment would incorporate a
system of administrative enforcement for
the conflict-of-interest laws. The ad-
ministrative remedies and civil penalties
included in the amendment would in no
way prevent criminal prosecution but
would supplement the criminal provi-
sions of the conflict-of-interest laws.
The President's message to Congress of
April 27, 1962, on conflict-of-interest leg-
Declassified and Approved For Release @ 50-Yr 2014/05/02 : CIA-RDP65B00383R000300150008-0