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Adjusted gross income does not include interest on State and municipal bonds. It does not include write-offs for drilling and developmental costs in the oil and gas industry. It does not include one-half of capital gains. All these were in addition.

But with respect to the figures on adjusted gross incomes, there were, I repeat, five persons having incomes of more than $5 million who did not pay a single cent in taxes. Their real incomes were probably much in excess of this, to the degree that they owned State and municipal bonds, wrote off drilling and developmental costs, and had capital gains, only one-half of which goes into adjusted gross income.

AVERAGE FAMILY PAYS MORE TAXES

These figures are shocking when one considers that any worker with a wife and two children who is earning just $100 a week-$5,200 a year-an average American-would, under current tax rates, pay about $456 in Federal income taxes, at the same time that 5 persons having 1,000 times that worker's income can get away with paying no taxes whatever. The need for reform would seem to be clear.

Of course not every multimillionaire escapes wholly tax free, as these five managed to do. But the average multimillionaire comes surprisingly close to achieving just that. According to Treasury Department figures, for which I asked, and which are printed in part I of the hearings on the tax bill before the Committee on Finance, there were, in 1959, 37 people whose total incomes including all the taxable part of their capital gains-came to more than $5 million and they paid, on the average, a little less than 25 percent of their total incomes in Federal income taxes. That is only somewhat higher than the first bracket rate of 20 percent.

We hear great complaints about the "confiscatory" top income tax rates of 90 and 91 percent. Those rates are too high-but the fact is that the bark about the tax rates is far, far worse than the bite. Theoretically, if all of the income of these multimillionaires were subject to the tax rate schedule currently in the law, they would be paying to the Government taxes at the rate of about 90

percent. The fact is, though, they are paying less than 25 percent of their total

would be "aimed at providing a broader and more uniform tax base" and at esand more uniform tax base" and at establishing "a more equitable tax structure and a simpler tax law." Originally, that program was to be presented to us in 1962. It was delayed until 1963. When it came, it was, in some respects ambitious, and in other respects timid. But it was an effort at tax reform. I give the administration credit for the original bill.

REFORMS THROWN OUT

But what did the House do with it after considering it for no less than 7 months. The rollcall is a sad one.

The administration asked that action be taken to close up the gaping loophole in the capital gains tax treatment that permits between $12 and $13 million-I repeat $12 to $13 billion-to escape tax entirely each year when property transfers at death. The House rejected that entirely. The administration offered a quid for that quo-namely, a reduction in the capital gains rate for taxation of certain capital gains held more than 2 years. The House took the quid, but gave no quo. It lowered the capital gains rate to a maximum of 21 percent on many types of assets held more than 2 years and reduced the proportion of capital gains to be included in taxable income from 50 to 40 percent, but threw out the tax on transfers at death.

The administration made a subsequent offer to deduct from the capital gains any inheritance tax paid. For example, if the capital gains amounted to $200,000, but the inheritance tax paid was $50,000, the capital gains tax would be paid only on $150,000.

Second, the administration offered to levy the capital gains tax only upon the actual sale of the properties and the actual realization on capital gains. These proposals were rejected.

The administration proposed four mi

nor cutbacks in the oil depletion allowance, totaling $185 million. The House rejected three, and approved only one, for a revenue gain of only about $40 million-only a tiny fraction of the $3 billion the oil industry gets every year through depletion and the $2.5 billion it gets through the intangible drilling and development cost deductions.

The administration asked for a change in the capital gains on livestock. The House rejected this request.

The administration asked for a repeal

The administration recommended repealing the capital gains on coal royalties. Not only did the House reject that; it extended this favorable treatment to iron ore royalties.

These were all "reforms" which affect primarily the higher income taxpayers. They were rejected. But many of the so-called "reforms" affecting lower income taxpayers were approved, in whole or in part-for example, the taxation of a great deal of sick pay and of amounts paid out on certain State taxes. Apart from the repeal of the dividend credit, these in fact comprise the principal revenue-raising reforms approved by the House.

TREASURY HAS GIVEN UP ON REFORM

But now, Mr. President, the Treasury has given up on any efforts for the reforms rejected forms rejected by the House. Supposedly in the interest of quick enactment of a tax cut, it has decided not to "renew" its request for any of the rejected reforms. The only change in the House bill asked by the administration is the elimination of the lower capital gains tax approved by the House on the sensible ground that since nothing was done about the taxation of capital gains at death, there is no justification for approving the other part of the "package." But, in effect, Secretary Dillon has invited the Congress again to give the quid without the quo, by telling our committee, in response to one of my questions, that even if Congress gives high income taxpayers the best of both possible worlds-doing nothing about closing the $12 billion gains-at-death gap, while at the same time easing the capital gains rate which goes almost wholly to the wealthy-he will not recommend a veto of the bill. PROBABILITY OF NO ADDITIONAL REFORM AND

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And in view of the fact that, with 140 witnesses already scheduled to testify before the Finance Committee, and hearing these witnesses at the rate of 4 a day, 5 days a week, or 20 a week, there is

income in taxes or about the same pro- of the unlimited charitable deduction virtually no chance to get the tax bill

portions being paid by those with incomes of $20,000 to $50,000.

Mr. President, I shall ask unanimous consent that a table prepared by the Research Division of the Treasury Department be printed at the conclusion of my remarks.

Mr. President, this table also will be found in part I of the hearings on the tax bill before the Committee on Finance.

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one of the features partially responsible The House rejected this request. for the multimillionaires paying no taxes.

In his testimony before the House Committee on Ways and Means, the Secretary of the Treasury cited the case of one man who was able to get a tax cut of approximately $21 million on property which had originally cost him less than $500,000.

Secretary Dillon told our committee of value of $900,000. The administration one tax-free insurance policy with a face proposed ruling out such a "jumbo policy." The House did place a restriction on such policies for working employees but wholly exempted retired employees. For them, the sky's the limit.

this year, the excuse of the Treasury Department for giving up on the reforms is not well founded.

In fact, if the Treasury would help both to publicize the loopholes and truckholes and to fight alongside with us for reforms, we could make improvements without either delaying or jeopardizing the bill.

But reforms are needed, not only because of the gross injustices in the tax large incomes pay very low taxes. system and the fact that those with very

NEED FOR FAIR OVERALL TAX SYSTEM

Reforms are needed also to keep our tax system, when taken as a whole, from becoming a regressive system in which

the low- and middle-income groups pay a higher proportion of their income in taxes than do high-income groups.

At the moment, the Federal income tax is progressive. But this is greatly diluted and partially offset by the fact that those with big incomes escape taxation and also that some $10 billion of Federal revenues are raised through the excise taxes which fall disproportionately on the poor and the weak.

STATE AND LOCAL TAXES REGRESSIVE Furthermore, when we look at the total

tax system, we note that, of the $54 bil

lion which the State and local governments collected in 1961, some $18 billion was collected in property taxes, and an

other $12.5 billion in sales and gross re

ceipts taxes, both of which categories

are regressive and fall disproportionately on the low- and middle-income groups. SINCE 1954, TAX CUTS TO BIG TAXPAYERS

That was a cut of approximately $2.5
billion a year. But, prior to that, about
another $2.5 billion a year was given to
the large taxpayers, by way of the ac-
celerated depreciation schdeules enacted
in 1954 and the dividend exclusion and
credit passed at the same time.
As a
result, corporations, and the high in-
come individuals who receive the bulk
of corporation dividends have had a tax
cut, since 1954, which amounts to about
$5 billion annually.

In addition, special bills, such as the

Du Pont bill and H.R. 10, whose bene-
fits go largely to the wealthy and to upper
middle income professional groups, have
also been passed. But, the ordinary tax-
payer whose income is received in sal-
aries and wages, and who neither evades
nor avoids almost any of his taxes, has
had virtually no tax cut at all.

In this connection, I point out that
there is virtually no evasion in the pay-
ment of taxes on wages and salaries.
The taxes are withheld at the source.
In the debate last year on the withhold-
ing of taxes on dividends and interest,
we pointed out that approximately 11
percent of dividends did not pay taxes
and approximately 25 percent of interest
did not pay taxes.

OVERWHELMING ARGUMENTS FOR TAX REFORM

Thus, there are overwhelming arguments why tax reform is as important as tax reduction.

Reform is necessary in support of simple justice.

Reform is essential if the great mass of ordinary people in this country are not to rebel against a tax system which has in it such gross inequities and gross injustices.

Reform is necessary if we are to keep even a semblance of the progressive sys

tem of taxation when State, local, and Federal tax systems are viewed together.

Let us give equal weight to reform and

to tax cuts, in order to support simple justice for the 90 percent of our taxpayers with incomes of less than $10,000

a year who now have no loopholes and truckholes by which to avoid paying their fair share of our taxes.

Mr. President, I ask unanimous consent to have printed in the RECORD at the conclusion of my remarks a table dealing with certain matters I have discussed. The table was prepared by the Office of Tax Analysis.

Furthermore, the tax cuts passed since 1954 have gone almost entirely to the large taxpayers. Last year we gave to corporations and to their dividend recipients, about $2.5 billion in tax cuts by way of the investment credit-which I opposed-and the revision of the depreciation allowances-which I approved. TABLE 1.-Number of returns by effective tax rates, based on adjusted gross income by income classes (all returns with adjusted gross income of $500,000 or more, 1959)

There being no objection, the table was ordered to be printed in the RECORD, as follows:

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I nominate him for appointment to the grade
of lieuenant general while so serving.

Having designated, in accordance with the
provisions of title 10, United States Code,
section 5232, Maj. Gen. Victor H. Krulak,
U.S. Marine Corps, for commands and other
duties determined by the President to be
within the contemplation of said section, I
nominate him for appointment to the grade
of lieutenant general while so serving.

IN THE NAVY

Rear Adm. Wallace M. Beakley, U.S. Navy, for appointment to the grade of vice admiral on the retired list pursuant to the provisions of title 10, United States Code, section 5233.

CONFIRMATIONS

Executive nominations confirmed by the Senate November 1 (legislative day of October 22), 1963:

NATIONAL SCIENCE FOUNDATION

Dr. Robert S. Morison, of New York, to be a member of the National Science Board, National Science Foundation, for the remainder of the term expiring May 10, 1966.

NATIONAL LIBRARY OF MEDICINE

Dr. William Neill Hubbard, Jr., of Michi-
gan, to be a member of the Board of Regents,
National Library of Medicine, Public Health
Service, for the term of 4 years expiring
August 3, 1967.

PUBLIC HEALTH SERVICE

The following candidates for personnel ac-
tion in the Regular Corps of the Public
Health Service subject to qualifications
therefor as provided by law and regulations:
To be senior assistant sanitary engineers
Charles D. Larson
Francis M. McGowan
Donald W. Mantay

To be assistant sanitary engineer
Robert D. Shankland

To be senior assistant sanitarian Gerald J. Lauer

To be senior assistant dental surgeon John H. Holt

To be assistant sanitary engineer
Fred M. Reiff

To be senior nurse officer
Kathryn M. Fritz

To be sanitarian
Patrick A. Thibeau

To be senior assistant sanitary engineer
Thomas C. Tucker

To be assistant sanitary engineers
B. David Clark

Ira P. Leggett, Jr.
Joseph R. Tynsky

To be assistant pharmacist

Jackie L. Knight

To be senior assistant therapist C. Douglas Billion

EXTENSIONS OF REMARKS

Baltimore & Ohio Railroad Continues Record of Progress and Service in West Virginia-Morgantown (W. Va.)Dominion-News Commends Recent Improvements in Main Line Between Clarksburg and Parkersburg-PresiParkersburg-President Jervis Langdon, and Many West Virginians Have Made Notable Contributions to Transportation

EXTENSION OF REMARKS OF

HON. JENNINGS RANDOLPH

OF WEST VIRGINIA

IN THE SENATE OF THE UNITED STATES

Friday, November 1, 1963

Mr. RANDOLPH. Mr. President, in 1838 the Baltimore & Ohio Railroad began construction of the first railroad tracks in West Virginia, building westward from Harpers Ferry. In the century and a quarter which has elapsed since then, the development of the railroad has provided significant contributions to the economy of West Virginia, and to the well-being of its citizens.

Among the responsible individuals who have been instrumental in the B. & O.'s success in the Mountain State were the late Charles W. Van Horn, of Lost Creek, W. Va., who was vice president in charge of operations for many years. Another leader was the former Governor of our State, the Honorable John J. Cornwell, of Romney, who for some time acted as general counsel of the line.

And, the concern for progress and service which was so evident in frontier

days has not diminished with the years, but continues to expand and to bring forth achievement and benefit. A notable example of growth is the recent completion of important main line improvements in the B. & O. system between Clarksburg and Parkersburg, W. Va.

This improved line will provide a direct route for major freight shipments to the

Southwest, through the St. Louis gateway, and correspondingly improved serv

ice to the businessmen and citizens of the Mountain State.

It has recently been my privilege to correspond with the president of the Baltimore & Ohio Railroad, Mr. Jervis Langdon, Jr., congratulating his efficient organization on recent additions and im

provements. I likewise pointed out the immeasurable benefit which has come to West Virginia as a direct result of the enterprise and dependability of the B. & O.

I request that this correspondence be printed in the RECORD.

Mr. President, the experienced and respected editor and publisher of the Morgantown (W. Va.) Dominion News, Walter L. Hart, commented meaningfully on the contributions of the Baltimore & Ohio Railroad to the development in our State. In his October 31 editorial, "B. & O. Deserves Our Applause," Editor Hart stresses the importance of the new main line improvements. Further, he states that

We in West Virginia salute the railroad and hope, under its new management, it continues to make progressive moves designed to increase its service to the shippers of the world and in doing so become more valuable to all the areas it serves, including our own State of West Virginia.

I request that Mr. Hart's editorial be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

OCTOBER 29, 1963.

Mr. JERVIS LANGDON, Jr.,
President, Baltimore & Ohio Railroad Co.,
Parkersburg, W. Va.:

Sincerely regret Senate business here prevents my participation in your programdiner today. Your company has contributed much to the economic development of West Virginia and to the well-being of the citizens that in this centennial year the old B. & O. of our State. It is especially appropriate is the new B. & O. as it meets its responsibilities for improved transportation vital to the movement of coal and other traffic across our State and throughout an important part of

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B. & O. DESERVES OUR APPLAUSE We join with all progressive West Virginians in congratulating the Baltimore & Ohio railroad for its great main line improvement between Clarksburg and Parkersburg.

The prosperity-or lack of it-of this important railroad is of vital concern to every major taxpayer and in its continued progWest Virginian because the B. & O. is a

ress all of us have a real stake.

This main line improvement makes it possible to haul all major freight items west through the St. Louis gateway. This on the most direct route to the great Southis expected to greatly increase the revenues

of the railroad.

Adding this to the forward look the railroad has adopted in pioneering on unit coal freight trains and other projects designed to make the railroad a better facility for its customers and therefore a more profitable enterprise certainly is most desirable from all standpoints.

We in West Virginia salute the railroad tinues to make progressive moves designed to and hope under its new management it conincrease its service to the shippers of the world and in doing so become more valuable to all the areas it serves including our own State of West Virginia.

HOUSE OF REPRESENTATIVES

MONDAY, NOVEMBER 4, 1963 The House met at 12 o'clock noon. The Chaplain, Rev. Bernard Braskamp, D.D., offered the following prayer:

Romans 13: 12: Let us therefore cast off the works of darkness, and let us put on the armour of light.

O Thou God of all comfort and Father of all mercies, whose spirit of compassion broods over stricken and struggling humanity, grant that in these days of world darkness our minds and hearts may be aglow with the light of lofty idealism.

Emancipate us from selfishness and complacency and give us hearts to feel and eyes to see that it is our moral re

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The SPEAKER. Is there objection to the request of the gentleman from Texas?

There was no objection.

Mr. CASEY. Mr. Speaker, I want to call your attention to an article in yesterday's Washington Star as well as the Washington Post concerning the memorandum submitted by Mr. George F. Kennan, former Ambassador to Yugoslavia, in which Mr. Kennan has sent a memorandum to a Senate committee stating that he is quite disturbed with congressional politics interfering with our foreign affairs and our foreign policy. He has particularly noted the House's action in removing Yugoslavia and other Communist countries as most favored nations. What is Mr. Kennan's solution? His solution is that possibly we might set up a Secretary of State office as something in the nature of a Prime Minister. Such a change, he said, would gain acceptance by all parties of the principle that the external problems of the country should be given precedence over the internal ones, and that foreign policy should not be permitted to become a function of domestic-political convenience.

I do not know that I am equal to Mr. Kennan in educational background or brilliance, but I do think he should refresh his memory in history as to how this country started and the basis on which it has grown-that ours is a government of the people and by the people and that our Government receives its powers by consent of the governed. I think we fought a revolution to get away from just what he is advocating.

I think Mr. Kennan should realize what every schoolboy knows: that the responsibility for legislation belongs to the Congress and that the Congress is the voice of the people of this United States. I am a bit weary of diplomats, and others who are not responsible to the people of this country, assuming the role of papa knows best and saying that they alone know what is good for the people of the United States and for this country.

Mr. Speaker, it will be a sad day for our great country if the Congress should ever relinquish its right and responsibility to speak the will of the people of this country through the individual Members of Congress.

I want to point out one other thing which the distinguished gentleman finds fault with, and that is that the State Department cannot overrule other executive departments. He finds fault with the Immigration Service, as well as the FBI. In other words, Mr. Kennan thinks that the State Department should be all superior, not only over other executive branches, but the legislative as well.

Mr. Speaker, the article from the Washington Star that I refer to follows: [From the Sunday Star, Washington, D.C., Nov. 3, 1963]

CONGRESSIONAL POLITICS HURT FOREIGN
POLICY, KENNAN SAYS

(By Bernard Gwertzman) George F. Kennan, one of this country's leading experts on Communist affairs and until recently Ambassador to Yugoslavia, charged yesterday that congressional politics had played havoc with U.S. foreign policy.

Reflecting on his tour of duty in Belgrade, Mr. Kennan said that domestic-political considerations had led Congress to act against Yugoslavia last year "in the face of the most solemn and formal warnings and objections on my part, conveyed to congressional leaders on many occasions and in many ways."

Mr. Kennan was referring to the decision, taken suddenly by the last Congress, to forbid any Communist country from being en

titled to most-favored-nation treatment in this country. Such treatment grants normal tariff reductions to a country and allows it an equal opportunity to trade in the U.S. market.

HAD POLITICAL EFFECT

The removal of such treatment to Communist countries had an immediate political effect, since it clashed with administration policy to encourage Communist nations to seek closer ties with the West.

Yugoslavia and Poland are the two Communist countries which presently receive most-favored-nation treatment. The administration has attached to the foreign aid authorization bill now before the Senate a provision restoring to Presidential discretion the right to make such concessions to any nation if it is in the national interest to do so.

Mr. Kennan's views were released in a

memorandum he sent to the Subcommittee on National Security Staffing and Operations, at the request of the chairman, Senator JACKSON, Democrat, of Washington.

A former Ambassador to Russia and author of many books on Soviet policy, Mr. Kennan said that if he had known "how little value the Congress would assign to my own judgment, in the light of nearly 30 years in the affairs of the eastern European area," he would not have accepted the Yugoslav assignment.

MANY IN STATE AGREE

Mr. Kennan's views are quite similar to those expressed privately by many State Department specialists in Communist affairs. They believe that there is so much diversity in the Red world today that it often is in this contry's interest to trade or otherwise improve relations with different Communist countries.

The officials often assert that Congressmen and Senators, in an effort to win political support in their home areas, vote on certain foreign policy measures, without due consideration to the national good.

Mr. Kennan suggested that foreign policy be removed from domestic politics. He advocated raising the Secretary of State's office to something "in the nature of a prime minister."

Such a change he said, would mean acceptance by all parties of "the principle that the external problems of the country should be given precedence over the internal ones, and that foreign policy should not be permitted to become a function of domesticpolitical convenience."

INTERFERENCE CHARGED

Mr. Kennan also charged that State Department policy was hampered by interference from other governmental agencies. He singled out the Immigration Service and the Federal Bureau of Investigation for special criticism in the matter of passports, visas, and reentry permits.

According to Mr. Kennan, many people in those two agencies have acted in ways contrary to the policy of the State Department regarding Yugoslavia.

The administration does not consider Yugoslavia a member of the Soviet bloc, but Mr. Kennan says he had the impression that "many of the people (in the Immigration Service and the FBI) were going on the assumption that Yugoslavia was a member of the Soviet bloc, a thesis contrary to our own observations and to the established analysis of the department."

OPERATIONS HAMPERED

"This hampered our operations and had, in a number of instances, what I considered to be adverse effects on our operations in the

He also criticized long delays in getting authorization to spend money-even on certain improvements in the embassy.

"I should think that if a man enjoys such confidence on the part of his government that he can be entrusted with the responsibilities of an important diplomatic mission, it ought also to be possible to entrust him with a limited control over funds, not major funds, just governmental pocket money, so that he could at least make minor dispositions affecting government property at his post, without waiting years for approval," he said.

SPECIAL ORDER TRANSFERRED

Mr. HOEVEN. Mr. Speaker, I ask unanimous consent that the special order granted to me for tomorrow be transferred until Wednesday, November 6.

The SPEAKER. Without objection, it is so ordered.

There was no objection.

PROPOSED CHANGE IN ALCOHOL BEVERAGE CONTROL BOARD NOT IN THE PUBLIC INTEREST

Mr. SPRINGER. Mr. Speaker, I ask unanimous consent to address the House for 1 minute and to revise and extend my remarks.

The SPEAKER. Is there objection to the request of the gentleman from Illinois?

There was no objection.

Mr. SPRINGER. Mr. Speaker, many Members have asked me the last week of my objections and those of the District Commissioners to the proposed revision of the District liquor laws which will come up on Wednesday of this week as H.R. 8920.

The subcommittee had extensive hearings on this bill last year and again this year. I was opposed to the bill, and I am opposed to it now.

The heart of this bill sets up the Alcoholic Beverage Control Board as an independent agency. In so doing, it removes from the Board of Commissioners the right to supervise the ABC Board. In addition, it removes the right of the Commissioners to set the regulations which will be administered by the ABC Board. Responsibility for government in the District of Columbia rests with the District Commissioners. Under both Democrat and Republican administrations the District Board of Commissioners has been of a high order. I do not believe this could be said to be true of the ABC Board. When mistakes have been made by the ABC Board, the District Commissioners have been prompt in correcting the situation.

It appears to me that this bill is tailored to the interests of the liquor industry in the District of Columbia. It is strongly backed by what has been described generally as the liquor lobby.

In my opinion this bill is not in the public interest, and in the long run it will work against the interests of the people who reside in the District.

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AMEND THE ORGANIC ACT OF THE NATIONAL BUREAU OF STANDARDS The Clerk called the bill (H.R. 5838) to amend the act of March 3, 1901 (31 Stat. 1449), as amended, to incorporate in the Organic Act of the National Bureau of Standards the authority to make certain improvements of fiscal and adcertain improvements of fiscal and administrative practices for more effective conduct of its research and development activities.

The SPEAKER. Is there objection to the present consideration of the bill?

Mr. FORD. Reserving the right to object, Mr. Speaker, I note that a rule has been granted on this proposed legislation. I therefore assume it will be programed at some later date. It is legislation that has rather far-reaching

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CONVEY LAND IN MARYLAND TO

THE AMERICAN RED CROSS The Clerk called the bill (S. 876) to authorize the Administrator of General Services to convey certain land in Prince Georges County, Md., to the American National Red Cross.

The SPEAKER. Is there objection to the present consideration of the bill?

Mr. GROSS. Mr. Speaker, reserving the right to object, I would like at least a brief explanation of this bill.

Mr. BROOKS. Mr. Speaker, will the gentleman yield?

Mr. GROSS. I am glad to yield to the gentleman.

Mr. BROOKS. I would be pleased to say, Mr. Speaker, that this bill authorizes the Administrator of General Services to sell 22 acres of surplus Federal land in Prince Georges County to the American National Red Cross at the fair

market value of such land at the time of sale. The Red Cross maintains a chapter house in Prince Georges County which has become inadequate for the performance of its public services in that area and due to large Federal land holdings they have had some difficulty in locating a site adequate for a new chapter house. Although the Red Cross is a nonprofit organization and is a corporation created by Congress for the purpose of rendering public services, technically it does not qualify under the provisions of law for any priority nor is the Administrator of General Services authorized to transfer or sell surplus Federal land to the Red Cross by negotiated contract.

Mr. GROSS. Let me ask this question: Is it understood that this Government land will command an appraised price of $50,000, or is it going to be lower when they get around to selling the land?

Mr. BROOKS. I believe you can be sure we will look at the appraisal. The preliminary appraisal has been in the neighborhood of about $50,000, and this

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Mr. GROSS. On page 3 of the report the Comptroller General says:

We also suggest for your consideration the desirability of providing that the purchase price, which is for repayment in the event of reversion, be made applicable to outstanding liens on the property at the time of reversion.

Does the bill contain language dealing with this subject? If so, will the gentleman point it out to me. I could not find the language in the bill.

Mr. BROOKS. It is not in the bill; no, sir. The bill is not involved in that argument. The bill provides for the sale of this land at the appraised fair market value which we anticipate to be in the neighborhood of $50,000 with the obligation of the Red Cross to build a chapter house there. If they do not do so they are not going to get to keep the land. The Senate had passed this bill. The House passed the bill last year.

Mr. GROSS. Then this provision is not contained in the bill?

Mr. BROOKS. No. However, in the committee report it is stated that

Provisos are included in the bill specifying that (a) the land shall revert to the Federal Government in the event that the Red Cross

has failed to commence construction of its chapter house within 2 years after the conveyance or (b) fails to complete construction thereof within a reasonable time after such construction begins; also, (c) in the event of such reverter, the cost of any damages to the property shall first be deducted before repayment of the balance of the purchase price is made to the Red Cross. It is the intent of the committee that the term "damages," as used in the legislation, shall include, but not be limited to, any outstanding liens on the property at the time of reversion, in the event such occurs.

Mr. GROSS. I refer the gentleman to page 2 of the bill and ask him what is meant by this language:

The Secretary of the Treasury is authorized funds of the Treasury to the American Naupon such reverter to pay from the general tional Red Cross the amount, without interest and less any damage to the land as determined by the Administrator, paid by the American National Red Cross to the United States for such property.

Does this mean that if the property reverts to the U.S. Government, the U.S. Treasury is going to pay the National Red Cross for some loss that may accrue to the National Red Cross because of their failure to take over and hold the property?

Mr. BROOKS. No. The interpretation would be better stated in accordance with the language, in saying that if it goes back to the Government the Red Cross would be able to get its money back, less any damages to the land, and the term "damages" would include outstanding liens on the land.

Mr. GROSS. I just do not want money to go out of the U.S. Treasury to pay the Red Cross for any damage or

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