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hundreds of newspapers throughout the Goodman "for trying to influence her vote.” that he would be so presumptuous that he Nation.
It is evident not only that Goodman sup- would think that he could at the last minute
come up and tell Senator SMITH how to It was just a month ago today that my plied your story against Senator SMITH from assistant wrote a letter of documenta
the manner in which you quote him but that vote. tion refuting the misrepresentations that day and gave you the story with the he contacted you on Tuesday after the vote The truth is that Goodman came up to
me as I was standing in line with other senamade against me. Because I believe the false charges. It was a strange performance torial staff assistants at the register door to Members of the Senate will be interested of forgiving on Goodman's part. Let me set sign for a pass to the Senate floor and said in that letter, I ask unanimous consent the record straight on the Goodman charges that he wanted to talk with me about her that it be placed in the body of the against Senator SMITH.
vote on the test ban treaty. In very blunt RECORD at this point.
1. That Goodman went to Lewiston, Maine, words, I told Goodman that he had had There being no objection, the letter and singlehandedly elected Mrs. SMITH when
weeks before to come up and talk with Senwas ordered to be printed in the RECORD, she first ran for Congress.
ator SMITH but had made no effort until at
In her first election to Congress, Mrs. that last minute and that it was highly preas follows:
SMITH won by an 11 to 1 margin over
sumptuous of him to attempt to influence her opposition. That is hardly a narrow her vote at that time which was around Washington, D.C., October 4, 1963.
margin for which any individual or any 10:15. I have checked this with another Mr. DREW PEARSON,
group could claim credit for singlehandedly Washington, D.C.
senatorial staff assistant (of a liberal Demoelecting Mrs. SMITH. As for whether GoodDEAR DREW: Over the years you have fre
cratic Senator who voted for the test ban man's going to Lewiston was a decisive fac
treaty) who witnessed the entire exchange quently praised Senator SMITH in your coltor or not, let the record speak for itself
and who later termed Goodman's tactic as umn-and you have frequently condemned Lewiston gave Mrs. SMITH a tremendous
"incredible.” her. Your record of reaction to her, I think, total of 303 votes in that election. is actually an unconscious tribute to her in
Inasmuch as Goodman has apparently mis
Goodman's labor affiliation is with the dependence. For when you praised her on
represented to you that he had tried unsucCIO, now the combined AFL-CIO. What is such matters as the declaration of con
cessfully the week before for an appointment the record of the CIO? Is it one for which science, her vote against Admiral Strauss,
with Senator SMITH, it is relevant to point Senator SMITH has any political indebted
out that the truth is that the last time that and her vote against CIA Director John Mc
ness? Hardly, for Goodman's CIO opposed Cone, others denounced her and impugned Mrs. SMITH in 1944, in 1954, and in 1960.
Goodman contacted Senator SMITH or her her motives on the very positions which you
office was on August 1, 1962, or more than a
For example, in 1954 her Democratic oppraised.
year before his sudden appearance on Sepponent officially reported that a majority of Over the years you have frequently made
tember 24, 1963. On August 1, 1962, Goodall his campaign funds came from the CIO's misrepresentations against Senator SMITH. Political Action Commiteee. And in 1960, al
man called on Senator SMITH in her office Many of those misrepresentations were fed
and requested her to endorse him for apthough the 1960 COPE voting scorecard rated to you by those who wished to reap re
pointment as an Atomic Energy CommisSenator SMITH 80 percent right (higher than
sioner. venge against Senator SMITH and discredit
Senator SMITH told him that she its ratings for Senators Estes Kefauver and her through your column. On one occasion
would be delighted to do sombut said that CLINTON ANDERSON whom COPE vigorously you made a public statement that you had supported for reelection that year), the AFL
as a friend she wondered if her endorsement been in error and had been unfair to Sena
would not hurt more than help since it CIO'S COPE was the largest source of camtor SMITH on a radio broadcast you had made paign funds for Senator SMITH's opposition
would be to Democratic President Kennedy 2 years prior.
whose personal dislike of her was evidenced and COPE made an all-out effort to defeat On the other hand, I know of occasions
in the fact that he was the only Democratic Senator SMITH. If Goodman is the friend when some of her enemies have given you to Senator SMITH that he contends he is,
Senator who had agreed to go into Maine to information and urged you to write against
campaign against her. That was in 1954 then it would appear that his influence with her on the basis of that information—but his own CIO with respect to Senator SMITH
when Joe McCarthy attempted to have her before doing so you have checked on such is nil.
defeated, as you well remember-and when information and finding it to be untrue, you
Senator Kennedy refused to support the
2. That Goodman had “asked for an aphave refused to be a party to misrepresenta- pointment with” Senator SMITH during the
Massachusetts Democratic senatorial nomitions against Senator SMITH. There have
nee against Senator SALTONSTALL but did go week of September 15-21. been occasions when you called her office to
into Maine to campaign against Senator The truth is that Goodman did not ask
SMITH. Senator SMITH told Goodman to check on facts before writing a column for an appointment during the week of Sepagainst her. For example, prior to writing tember 15–21 (the week he apparently rep
think it over and call her later if he still your column of September 17, 1963, in which resented to you). In fact, he did not ask
felt her endorsement would help
that she you were critical of Reserve members of the
would be delighted to do it if he still wanted for an appointment at any time. Instead Preparedness Investigating Subcommittee,
her to after thinking it over. She never he suddenly appeared in the reception room you called me and told me that you were
heard from him that time until his sudden of Senator SMITH's office at 10 o'clock the writing such a column and wanted to check morning of September 24, 1963, just 30 min
appearance more than a year later on Sepon whether Senator SMITH was in the Air
tember 24, 1963, minutes before the test ban utes before the test ban treaty vote at Force Reserve. I confirmed that she was a
treaty vote. 10:30—without any previous request by lieutenant colonel in the Air Force, Reserve,
Thus far, I have dealt with the major letter or by telephone call—and asked to retired (incidentally she does not and never
misrepresentations in your column that were see Senator SMITH immediately. The recepwill receive retired pay in that status). I
apparently given to you by Goodman. In tionist told Goodman that the Senate was think that the opinions that you expressed
conclusion, I want to comment on your convening at that very minute of 10 o'clock in that column were not justified but you and that Senator SMITH had to be in her
false charge in that column that Senator are entitled to your own opinions.
SMITH voted her political ambitions instead seat at 10:15 for the only time a picture It is when you are in error on facts and
of her conscience on the test ban treaty. has ever been taken of the Senate in session have not made an effort to be sure of your
You sought to indict her with a motivation (for historical purposes-Senators had been facts that I take issue with you. That is
of a 1964 Goldwater-Smith ticket because warned the day before to be in their seats why I take issue with your column of Sep
she voted the same as Senator GOLDWATER at that time-see page 17775 of the CONtember 28, 1963, which is replete with mis
in voting against the treaty. GRESSIONAL RECORD of September 23, 1963— representations and on which you did not
This is reminiscent of guilt by association and a call had been received by the recepcheck with Senator SMITH or her office prior tionist at 9:30, before Goodman arrived, re
and trial by accusation tactics that Senator to writing that column as you had on the minding of the necessity of being in the
SMITH denounced in her “Declaration of conprior column of September 17, 1963, related Senate at 10:15) and that she thought that
science” on June 1, 1950-tactics which you to the same subject of the test ban treaty. Senator SMITH had already left the office for
yourself have repeatedly denounced when Instead you accepted the misrepresenta- the Senate floor for the start of the session.
criticizing those with whom you disagree.
In indicting Senator SMITH with this guilt tions given to you by Leo Goodman, whom The receptionist then buzzed Senator
by association tactic on the grounds that she you cast in a magnanimous forgiving role SMITH's office and when there was no answer and Senator SMITH in the role of a political on the telephone, she informed Goodman
voted the same way that Senator GOLDWATER
did in voting against the treaty, you coningrate. You made no effort to check on that there was no answer. He then left the the accuracy of the charges made by Good
veniently omitted the fact that on the only office. man against Senator SMITH. Those charges 3. That Senator SMITH had refused to give
direct vote with respect to Senator GOLDwere (1) the implication that Goodman had
WATER on the test ban treaty—the GoldGoodman an appointment and that I had singlehandedly elected Mrs. SMITH in her
water reservation-she voted against Senator "bawled out” Goodman "for trying to influfirst race for Congress and which you char- ence her vote.”
GOLDWATER by voting against the Goldwater acterized as a struggle for her; (2) the charge The truth is that Goodman had not sought
reservation. that Goodman had “asked for an appoint- an appointment as set forth above. As to Have you forgotten your column in which ment with” Senator SMITH during the week whether I “bawled out" Goodman is a mat- you alleged that Senator GOLDWATER said of September 15-21; and (3). the charge that ter of interpretation. I would not in the that she would not get a nickel from his Senator SMITH had refused to give Goodman slightest deny that I spoke to him very Republican senatorial campaign committee an appointment and that I had "bawled out” bluntly and that I expressed my resentment (of which he was chairman) because she voted against the confirmation of Admiral But let us talk for a little bit about your the local service subsidy rate determinationStrauss? success the success which you have achieved the class rate
was not without considerable You have every right to disagree with in the 5 years since we last met here. The risk. Senator SMITH's vote on the test ban treaty. figures on your performance are quite im- In the first 2 calendar years under the class You have every right to criticize and attack pressive. For the 12 months ended June 30, rate, 1961 and 1962, the local carriers as a her on that vote. But you have no right to 1958, you carried 4 million passengers. In group reported a rate of return on investmake misrepresentations against her and the 12 months ended June 30, 1963, you car- ment in excess of 11 percent. While aggreimpugn her integrity merely because you dis- ried over 8 million passengers. In the same gate earnings in the first half of 1963 have agree with her.
1958 period the total revenue ton-miles of declined in both absolute and relative terms, Sincerely,
traffic carried was 80 million. In the year we note that the rate of return on investWILLIAM C. LEWIS, Jr.,
ended June 30, 1963, they had grown to 180 ment for the 13 local carriers in the 12 Executive Assistant to Senator Smith. million. The year ended June 30, 1958, saw months ended June 30, 1963, approximated
you obtain $55 million in commercial oper- 10 percent.
ating revenues. By June 30, 1963, that an- There are several other healthy signs of LOCAL SERVICE PROGRESSES AS nual figure had almost tripled to nearly financial improvement.
financial improvement. Through the reinINDUSTRY AND CAB WORK TO- $145 million. Moreover, these impressive im- vestment of the bulk of earnings of recent
provements in performance were not un- years and a number of individual security GETHER
attended by increases in profits. On the con- issues, the equity base of the local carriers Mr. BARTLETT. Mr. President, it trary, in 1958 the local service industry has grown substantially. By June 1963, the was my pleasure to attend the quarterly reported a net income of only $1.1 million. common equity of the carriers reached 35 meeting of the Association of Local By June 30, 1963, your reported profits to- percent of total capital with an encouragtaled nearly $5 million.
ing, though modest, decline in the ratio of Transport Airlines in Honolulu last
One solid measure both of your success debt to total capitalization from roughly 75 weekend. The meeting, well and pleas- and of your improved ability to render good percent to something below 65 percent. urably hosted by Aloha and Hawaiian service to the public is the fact that in 1958 Another encouraging factor and one that Airlines, had the largest attendance of your total fleet consisted of 219 aircraft, of bodes well for the industry's ability to fiany meeting in the association's history. which only 23 could be characterized as mod- nance future capital requirements on reaOne of the most thoughtful and ern. Today, you operate over 383 aircraft, sonable terms is the relationship between
of which more than 211 are the most modencouraging of the addresses given at the
the market value of your common stock and ern, twin-engine types, providing service in the book value of each carrier's stock. Data convention was that of Joseph Minetti, the United States.
for a recent period this summer indicate that a member of the Civil Aeronautics I think we are both entitled to be proud the common stock of 11 of the 12 local Board.
of this performance. I recognize the sub- service carriers whose stock is traded publicly In his statement regarding the local stantial effort and considerable management was selling above its book value and, in the service subsidy problem, Mr. Minetti skill which has enabled you to reach this majority of cases, the spread between marmade it clear that “the Board is not high operating level, and I think you too
ket value and book value was quite subrecognize the very healthy and active part stantial. In the sole instance in which a carabout to subsidize local carriers out of recognize the very healthy and active part
which the Board, in both its route and rate rier was selling below book value, the differbusiness.” He emphasized the need for
programs, has played in assisting the indus- ence was only a few cents. the Board, the carriers, and the com- try in reaching these goals.
I think all of you will agree that the munities they serve to work together to At the same time let us not lose sight of Board's approach in 1960 in instructing the assure "a financially healthy local sery- the great assistance and understanding giv- staff to work with industry representatives ice industry, reasonable fares for the en you by Members of the U.S. Congress, toward the development of the best class rate public, and sound subsidy reductions." particularly those on the House Interstate
that could be jointly devised was an emiand Foreign Commerce Committee and the nently sound one. I ask unanimous consent that Mr.
Senate Commerce Committee. Minetti's speech be printed in the
Of course, we are not entirely satisfied
We at the Board are entitled to be proud with some of the quirks and disparities in RECORD.
of the healthy and effective cooperation the presently effective class rate. I know There being no objection, the speech which has in the past and will in the future that there is a wide range of opinion among was ordered to be printed in the RECORD, continue to exist between the Board and the the 13 local service carriers as to both the as follows:
Association of Local Transport Airlines. For good features and the apparent inequities LOCAL SERVICE IN RETROSPECT AND PROSPECT
example, in 1958 I made reference to a docu- in this rate structure. Nevertheless, I do
ment containing some imaginative ideas, but not know of a single carrier or any one on (Address by Hon. G. Joseph Minetti) representing a marked departure from past
the Board's staff, nor any one in the finanI am delighted to be back with you in this concepts in ratemaking. That document cial community, who is of the opinion that hospitable city of Honolulu. Here, 5 years
which had then been circulated for your the abandonment of the class rate prinago I had the pleasure of addressing your comments and suggestions was the begin ciple and a reversion to the individual subassociation. The years that have elapsed ning of a project that 2 years later culmi- sidy rate concept would be either in the since that meeting have seen outstanding
nated in the first local service subsidy class public interest or in your private interest. progress in Honolulu, Hawaii is now a State. rate. I think it is fair to say that without I would certainly like to express a note of There have been many advances in our way your cooperation and vision, it would have optimism that the cooperative efforts and of living. In the field of air transportation, been difficult, if not impossible, to have made the intelligence of the carrier representatives dynamic strides have been made.
effective this significant contribution to the and the Board staff should unquestionably Today marks another important milestone regulatory framework in which you operate. assist the Board in formulating a far soundin the air transportation annals of the State The record clearly indicates the advantages er class rate structure than either of the first of Hawaii. A new thrift class of air service which have resulted from this great coopera- two. And one, I am sure, which could be between California and Hawaii was inaugu- tive effort.
implemented within a relatively short time. rated this morning. Gov. John A. Burns, The local service industry did not have a What I have said so far is strictly on the in his correspondence with the Civil Aero- single year, prior to 1961 and the adoption bright side. There are, of course, some disnautics Board, sized up the impact of Pan of the first-class rate, in which the carriers appointing trends. Subsidy payments more American's $100 new economy fare in these as a group reported satisfactory earnings. than doubled, from $33 million, in the anwords: “Any reduction in the cost of trans- Indeed, as a result of the open subsidy rates nual period ending June 30, 1958, to $69 milportation between our State and the main- subject to retroactive adjustment for the lion in the 1963 period. On the other hand, land has important beneficial implications major portion of the time, the carriers' fi- we recognize that each dollar of subsidy for Hawaii. The proposed $100 fare would nancial statements, generally speaking, added bought more service in 1963 than it did in bring substantial numbers of economy- up to losses, rather than profits. Such losses, 1958. The really troublesome aspect from minded travelers into Hawaii's travel mar- however, were not real, because they were your standpoint, as well as the Board's, is ket. Equally important, it would encourage ultimately offset by retroactive subsidy the decline in load factor from approximatemore frequent travel to the mainland by awards. You know far better than I what a ly 46 percent to about 42.6 percent. It many island residents whose trips presently serious impact the lack of final subsidy rate seems to me that the heart of any program are limited to rare occasions because of determinations had on your standing in the for the reduction of subsidy requirements financial considerations. It would appear financial community and your ability to fi- of the air carriers would be inevitably linked the proposed lower rate could generate sub- nance on reasonable terms.
with load factor improvements. stantial new business to the economic ad- The revitalization of your credit standing The break-even load factor for the local vantage of this State and would indeed en- and investor confidence in the local service service industry, which is now so far adcourage prospects for development of our
industry since 1961 has been as heartening vanced in the DC-3 replacement program, travel industry.”
to the Board as to you. The satisfactory has reached the approximate level of 60 perI am certain all of you here today agree results under the class rate have been all the cent before return on investment. Roughly with Governor Burns, and share my hope more encouraging to the Board, because we 65 percent would be the break-even point infor the success of this new venture in low were not unaware of the fact that the em- cluding fair return on investment. The fare air transportation.
barkation on a radically revised approach to spread between your 43 percent recent load factor and the 65 percent break-even, includ- I am sure it is no breach of the confidening return element, is a simple way to explain tial nature of internal Board discussions to the industry's need for subsidy in the mag- reveal that not a single Board member exnitude approximating one-third of total op- pressed a view different than that the local erating revenues.
carriers would not, could not, and must not For years, your association has been ac- be prejudiced in the negotiation of a new tively interested in the development of pro- class rate by virtue of the Board's decision grams for subsidy reduction. Obviously, not to consult the local industry prior to your objective was not to reduce subsidy submission of the subsidy reduction report payments to a level which would jeopardize to the President. I believe Chairman Boyd your ability to perform the service required reaffirmed that at the meeting with the carby the public convenience and necessity in riers on October 3, and, similarly, in his testian economic and efficient manner. Rather, mony before the Senate Appropriations Comyour various pronouncements over the years mittee on October 14. I agree wholehearthave been pointed toward types of actions edly with his statements assuring you of an which were intended, in your opinion, to opportunity to be heard, in an effective produce a significant decrease in subsidy sense, before any new programs will be finalwithout jeopardizing adequate service. ized to your possible prejudice.
I think it is completely accurate to state On the substantive side, it is essential to that the Board's objective has been to move bear in mind that the report does not indiin a similar direction.
cate a value judgment by the Board as to a Let us reflect for a moment on the prog- maximum subsidy level which the country gress already made, particularly in providing can afford or which the Board believes can operating flexibility in the typical local sery- be justified by the public convenience and ice carrier certificates. Fifteen years ago,
necessity. Nor does it contemplate arbitypical local service flights. stopped at each trary annual subsidy levels that must be atintermediate point on a given route and
tained year-by-year regardless of factual dethe chief flexibility in a carrier's operations velopments bearing on the actual subsidy was the authority to turn around short of requirements of the local carriers, individa terminal point on a particular route seg- ually and collectively. ment. I believe that a sound program in the
The report, to a considerable extent, is a direction of curtailing restrictions can fur
forecast of what various programs and facther improve the economy of your opera
tual developments, such as traffic growth vertions and the service performed for the
sus inflationary cost changes, will have on
the need of the carriers in the next 5 years. public. At the same time, we should not lose sight of the tremendous progress al
Let us not forget, that the subsidy standready made. In those instances in which
ards set forth in section 406 of the Federal sound, healthy subsidy improvements can
Aviation Act have not been amended, and be attained by route improvements, you have
the need of the air carriers continues to be a real “selling job” to do. It is up to you to the basic statutory criterion for subsidy
determination. develop an adequate record in appropriate
The Board has no thought of imposing arproceedings and to convince the Board that the specific route improvements you seek, bitrary ceilings on an annual basis to keep which all too frequently have their highly step with the forecast decline in subsidy controversial or competitive aspects, are in
need. Moreover, the Board must determine
each year, in light of the latest relevant the public interest.
factual data and the status of the various By now, I am sure, you are familiar with
programs which could have an impact on the Board's report to the President on the
the carrier's subsidy requirements, what it airline subsidy reduction program. I am not
would estimate to be the subsidy requirecertain whether this report has produced ments of the industry for each future year. more understanding or misunderstanding in certainly, if the rate of traffic growth exthe months since its release.
ceeds the rate of forecast in the report, subAccordingly, at the outset I would like to
sidy should decline at a more rapid rate, all comment very briefly about this delicate
other things being equal. But conversely, if subject and make the position of the Board
for some reason, we reach periods of declinvery clear. In a letter to Senators MAGNUSON ing traffic growth, this must necessarily be and MONRONEY, the Board through our
reflected in our determination of subsidy Chairman, stated, “I wish to assure you
requirements prospectively. again that in line with our customary prac- Your association has quite properly altice we intend to keep abreast of the sub- ways expressed great interest in programs sidy needs of all carriers at all times so that
for strengthening the routes of local service if it should appear that these estimates are
carriers by various means. One important out of line with the carriers' requirements, method involves transfers of points or segwe shall revise them at the appropriate time ments from trunklines to local service carand if necessary, request a supplemental ap- riers. This is an area where I believe that propriation.”
the initiative of the local service carriers I believe this statement, more than any- can accomplish a great deal. I believe the thing else, should set at ease the minds of first step must be the preparation by each the local service industry. The Board is carrier of comprehensive, economic, and not about to subsidize local carriers out of service studies aimed at bringing out the business. Where there is an absolute need public service benefits and economic impact for subsidy, it will be paid.
from the standpoint of the communities, the On the procedural side, may I assure you trunklines, and the particular local carrier that it was very expressly and specifically in the specific areas where you believe a contemplated by the Board, in its discuss route transfer has a realistic potential. sions, that the report would not be con- Potential subsidy savings must be detersidered more than a tentative program until mined on a realistic basis and a reduction in the industry had an opportunity to analyze subsidy must be shown. Here, too, you must it, submit comments on it, and discuss it do a selling job. You must pave the way for with the Board and its staff. This, of course, maximum acceptability and minimum reis aside from the tentative nature of the re- sistance by the communities. This you can port pending the Board's receipt of com- do through proper explanation of the adments from the executive branch, as well as vantages that a local service carrier can any expressions or congressional action bring to a particular community in the way which may be forthcoming.
of improved and adequate service. Your This assurance that the Board did not in- selling job with the trunklines might well tend to finalize its thinking before it heard address itself to questions of impact of parfrom you also encompassed the somewhat ticular programs on trunkline control of related problem of the development of a new long-haul traffic, possible joint sales proclass rate, which we hope will be made effec- grams, assurances of convenient trunk-local tive at the earliest possible date in 1964. connecting services, integration of reserva
tion facilities, and even means of absorbing surplus trunk equipment.
In formal proceedings the support of the communities and trunklines is not essential in the determination of public convenience and necessity. However, it is only realistic to assume that the support of the interested communities and competitive carriers can go a long way toward eliminating major obstacles in the path you wish to pursue.
In this connection, perhaps your association can be helpful in making available information of utility to the individual carriers as to the success of various transfers of points on route segments from trunklines to local service carriers. This is particularly true in terms of service improvements and greater traffic generation following such transfers.
The inclusion of the type of economic studies of route transfers along the lines I have discussed should be of great assistance in enabling the Board to determine the hearing priority to be given a particular proposal. Conceivably it could also determine the type of procedure to be used to process the application, such as, the advisability of employing the show cause technique. An extremely important factor, not only as to the ultimate merits of the Board's decision, but also in the determination of priority, would be the factual demonstration of the potential subsidy impact involved. Where there is a reasonable likelihood of a favorable subsidy impact under the previously announced Board policies for priorities in hearing cases, such applications would normally be accorded priority treatment.
It is premature to draw any conclusion as to the effect of a compact air transport as a successor to the DC-3 until there is some clarification in the near future as to where that program is headed. Nevertheless, this aspect of the problem might well be borne in mind by the carriers from the standpoint of looking for types of situations in which a route transfer would be enhanced in its attractiveness to the public, as well as to the industry.
Promotional fares, such as Pan-Am's thrift fare and your own “Visit U.S.A.” fare, have been occupying the increasing attention of the industry and the Board in recent years. I believe that continued careful attention of the local carriers in the search for economic promotional fares is even more essential for the locals than the trunklines. I call your attention to the following factors, equally applicable to both segments of the industry, which, I believe, emphasize the need for your diligent efforts to maximize traffic development through promotional fares:
1. The sharp increase in the general fare level in the past 5 years.
2. In view of the current industry load factor of less than 43 percent, it is possible for a major part of future revenue growth to flow directly to an improvement in your subsidy or net income position.
3. The success of a number of local carriers with programs for the development of promotional fares.
4. The anomaly of DC-3 fares which are invariably first-class fares under published tariffs but which, accordingly, sometimes are in marked contrast to lower fares for jet coach operations in the same areas.
I am still convinced, as I was back in 1958, that something can be accomplished in developing an equitable arrangement for commissions to be paid by the trunk and local carriers on the sale of interline tickets. I know many studies have been made of possibilities in this area. A preliminary staff study indicates that if the prorate system on joint tickets were modified to provide that the originating carrier-trunkline or local service-retain $3 on each ticket and the remainder allocated on a mileage basis, it would increase the revenue of the local serv- pecially in the United States. With the 200 taxpaying wage earners who might othice airlines by approximately $1.7 million complete and brutal cynicism which char- erwise have been on permanent relief rolls. annually.
acterizes Communist thought, Lenin once re- In my opinion, this cooperative venI think the prospects of improving the marked "When the time comes to hang the ture of the Area Redevelopment Adminlocal service share of interline tickets capitalists, they will be bidding against istration, the Anaconda Co., the Monthrough a commission type of arrangement, each other to sell us the rope.” or a modification of the present joint fare Lenin died in 1924. If he was living now
tana State Department of Education, the divisions, are sufficient to warrant further in- he could say of today's proposed wheat deal Montana State Employment Service, and vestigation by your association. I can as- with Russia "you see what I mean.” Since local officials of Silver Bow and Deer sure you of the wholehearted cooperation the beginning in 1917 the Communists have Lodge Counties is helping to alleviate of the Board's staff in pursuing this avenue. known and used the fact that trade was a hardship and ease the difficult transition The objective should be to determine weapon as effective as explosives or propa- required of workers who face job changes whether the local service share of joint tick- ganda. They have benefited thereby when ets for interline sales is equitable. they chose to use this weapon.
because of technological advances. Programs aimed at sound route strength- Today's wheat deal brings back bitter
Mr. President, I ask unanimous conening of the local service industry and the memories to those who follow Communist sent to insert in the body of the RECORD, promotion of efficient operations by the progress. This is a return to the depres- immediately following these remarks, the carriers can be expected to form the back- sion days when American industry, desperate Daily News article to which I have rebone of any long-range program of subsidy for business, vied strongly to provide Russia ferred and the comments of the Area reduction geared to the subsidy require- with automobile and tractor factories, airments of the carriers. But in addition to plane and food industries, gold mining and
Redevelopment Administration. route strengthening, the real key to subsidy petroleum know-how and any number of There being no objection, the article improvement is tied to the load factor on other industries needed by the Soviets in and comments were ordered to be printed existing flights as well as any newly author- their first 5-year plan. These plants replaced in the RECORD, as follows: ized operations.
and supplemented industries which had The waste inherent in a 43 percent load been seized by the Communists and de
[From the Washington Daily News, Sept. 30,
1963) factor is a tragic one from the standpoint of stroyed, ruined, or badly run by the Reds. management, the investor, and the taxpayer. American engineers accompanied Ameri
TAXPAYERS BUILD SKI LIFTS-U.S. AREA REIt is only through significant load factor can know-how and American capital to the
DEVELOPMENT HELPS FINANCE THE GOOD LIFE improvement that the carriers and the pub- Soviet Union by the thousands in the early
(By Robert Dietsch) lic can share the benefits of the improved thirties. So did German, British, French, In the last 2 years, your tax money has efficiency that goes with more economical and Italian engineers and capital. Slowly
been spent or loaned to: aircraft. Russia began to get on its feet, saved by
Build motels, ski resorts, and other recreAs President Kennedy said in his trans- capitalism.
ational facilities in a dozen States, on an portation message of 1962, “The troubles in This was a repetition of what happened a
Indian reservation and in Puerto Rico. our transportation system are deep; and no decade earlier when Lenin took the Com
Builders or promoters have received $43 miljust and comprehensive set of goals * * * munist back to capitalism for a few years
lion in Government loans. can be quickly or easily reached. But few under the new economic plan, known as
Help buy snow-making machinery for sevareas of public concern are more basic to NEP, in order to save the country from star
eral of those resorts and help build golf our progress as a nation.” vation, and disaster to the Communists. The
courses, cocktail lounges, and bowling alleys I hope that sound fare policies, route same thing happened in the early forties
in others. Also train waitresses for the mostrengthening, hard work and constructive when we all pitched in to save the Commu
tel restaurants. thought geared to load factor improvement nists again in the war. When the danger
Train sightseeing guides in Hawaii. will lead to a financially healthy local serv- was past the Reds kicked us out with insults
Build a summer theater in North Carolina. ice industry, reasonable fares for the public, and calumny; it happened just like this is the twenties, the thirties, the forties, and
Build roadside handicraft display stands in and sound subsidy reductions.
Arkansas. I said in 1958, and I repeat now, Associa- to some extent in the fifties.
Study the feasibility of harvesting processtion of Local Transport Airlines can be We are falling over ourselves now to rush proud of its record of cooperation in the to Khrushchev's aid in his hungry country, ing and marketing sea lions in Alaska. public interest, it has recognized that while ruined by false agricultural theories and
Help train copper workers in Montana for we may disagree on method, our objective practices. Already sensing our eagerness he
new jobs with Anaconda, the company which is a common one-the promotion of local air has started the insults and terms under
laid off the workers in the first place and transportation in the public interest. which he will accept our help. History
which was looking for people with different at the Board look forward to a continuance teaches that history repeats itself. Here we skills to hire. of our good relationship in working toward go again.
FOR DEPRESSED AREAS this objective.
Loans or grants for all these projects came
from the Area Redevelopment AdministraU.S. AREA REDEVELOPMENT HELPS tion, an agency set up by the Kennedy adSALE OF WHEAT TO RUSSIA
FINANCE THE GOOD LIFE
ministration in 1961 to help business and
employment in depressed areas. Mr. STENNIS. Mr. President, Mr. Mr. METCALF. Mr. President, on
Since then, the ARA has become one of the Charles Nutter, publisher of the September 30, the Washington Daily biggest subjects of controversy on the New Picayune Item of Picayune, Miss., has News published an article by Robert written a most thought provoking edi- Dietsch headlined “U.S. Area Redevelop- Republicans dub it the "Area Reelection torial regarding the recently announced ment Helps Finance the Good Life.”
Administration.” plan to sell surplus American wheat to This article states:
Businessmen charge it is competing with the Soviets.
private industry, making reckless loans and Your tax money has been spent or loaned giving money to dubious enterprises, the This editorial is written by one of Mis- to help train copper workers in Montana for type rejected as unfeasible and uneconomic sissippi's most able and objective news- new jobs with Anaconda, the company which by private experts. paper publishers, a man who has had laid off the workers in the first place and Edwin P. Neilan, president of the U.S. wide experience in journalism and busi- which was looking for people with different Chamber of Commerce, has called ARA the ness. He is a former Associated Press skills to hire. [ARA] spent $10,000 to train “Christine Keeler” of an American scandal correspondent and also a former official 100 copper mine workers for Anaconda, a involving “wholesale buying and selling of of the International House, a New giant company with the capability to train public office." its own workers with its own money.
TOO EAGER? Orleans trade establishment.
I commend the editorial to the careful I asked the Area Redevelopment to Other critics say ARA is overly eager to attention and reading by every Member comment on those statements.
farm out its money. They say ARA supports of the Congress. wrote me as follows:
new businesses even after local industrial
developers refuse to contribute their 10 perI ask unanimous consent that the edi- The Anaconda Co. has scrupulously ad- cent required by law. torial be printed in the RECORD.
hered to its side of the agreement by bear- (ARA can loan up to 65 percent of the There being no objection, the editorial ing the entire cost of retraining the work- cost of a project; the rest of the money must was ordered to be printed in the RECORD, ers, paying them more than $18 a day during come from private financial sources, the local as follows:
the 4-week training course and hiring them community booster group, and the project
as hard rock miners, grade 3, upon comple- owners.) HERE WE GO AGAIN
tion of the training. The cost to the com- ARA officials, understandably, argue their Nicolai Lenin, father of modern com- pany for the training is certainly a great case with vigor. munism in the world, was a master psy- deal more than that to the Government for Administrator William Batt says his agenchologist who understood human nature the 2-week orientation program. This co- cy goes into programs shunned by private better than our modern-day leaders, es- operative venture has already created about businessmen.
"They aren't interested in creating employ- As Chamber President Neilan has pointed of this application of advance technology in ment,” Mr. Batt said.
out and as the Scripps-Howard probe of ARA concentrating ore in Silver Bow and Deer He defends the millions put into motels showed, even those who abhor the idea of Lodge Counties. In cooperation with the by pointing to overall tourist and recreation Federal intervention solicit Federal money Anaconda Co. and local planning commitgrowth and its potential. after programs are approved.
tees, the Montana State Employment SeryWhat's more, ARA claims it has created, or While a few local business groups across ice is doing all it can to ease the effect of laid the basis for creating, 47,500 jobs and the country have spurned ARA help, most this change on workers and local business for training 23,500 persons.
have accepted it and many have sought it. by helping them find other jobs.
The idea of having Uncle Sam help bring One possibility is an offer by the Anaconda PROBE
a new firm into town overshadows criticism Co. to absorb 100 of these men into their An investigation into all phases of ARA of Federal intrusion into private enterprise. mining operation in Butte. The Anaconda activity by the Scripps-Howard newspapers
The Kennedy administration obviously Co. has estimated an increase in activity in gives the edge to ARA's critics.
thinks highly of ARA. It wants Congress to the deep mines will continue through 1964. While the Agency has indeed acted to cre
double the Agency's budget and extend its One of the drawbacks to transferring these ate some legitimate businesses in depressed life.
men from smeltermen to miners is the areas (and even some not so depressed) The Senate has agreed but the House, in training necessary to become a successful and has created some employment, the inves- June, rejected the proposal by five votes. hardrock miner. tigation showed that ARA is overeager to The Democratic leadership now wants the A number of men fail to make the grade farm out the $394 million given to it in 1961. House Rules Committee
send an underground because they have never had For example, it pressed hard to lend $222,000 amended ARA bill to the floor.
surface training and orientation prior to to developers of a ski resort between Altoona
their starting actual mining work. and Bedford, Pa., despite reluctance of the COMMENTS BY THE AREA REDEVELOPMENT AD- It is the purpose of this proposed ARA Altoona community development group to MINISTRATION ON THE VOCATIONAL PRE- training course to give 2 weeks of concengo along; the latter deemed the project too TRAINING PROGRAM OF OCTOBER 3, 1962, FOR
trated training to give the men going into risky and thought it would create few jobs.
THE BUTTE, MONT., DEVELOPMENT AREA OF
the underground mining enough knowledge Not only did the resort owners get ARA's SILVER BOW AND DEER LODGE COUNTRIES
to qualify them as grade 3. The Anaconda $222,000 but they also received $110,000 from the Rural Electrification Administra
As can be best judged from the copies of Co. will then hire those qualified at $18.48
actual proposals submitted by local and State per shift and give them 30 more days of tion (REA).
agencies, to the Departments of Labor, student mining under actual mining condiIn another case, a wealthy Detroit indus
Health, Education, and Welfare, Commerce, tions. Those successfully completing traintrialist got almost $1 million to help build
and the Area Redevelopment Administration, ing will then be put on a contract basis "one of the world's most luxurious resorts"
automation in the Anaconda copper smelter with a $20.60 per day base rate while on in northern Michigan; he reported the other
in Butte, Mont., resulted in the employment contract. day, during a phone conversation, that "ARA
termination of 300 or more smelter workers. was around suggesting I was eligible for more
The company had jobs for hard rock miners, loans."
but a month of intensive retraining would be REPORT BY NATIONAL FUELS AND That many of the 222 technical assistance required for men accustomed to underground studies approved by ARA (at a cost of more
ENERGY STUDY-TRIBUTE TO work. However, because the smelter workers, than $7 million) have been done by others faced with layoffs and perhaps permanent
SAMUEL G. LASKY in the past year. The sea-lion study in unemployment, had never worked under- Mr. HRUSKA. Mr. President, on Alaska is one; also grants to study better ex
ground, longer training would be required, October 13, 1962, I called to the attention ploitation of Indian arts and crafts, uses and the company was reluctant to consider of the Senate the report of the national of timber in various States, handicraft de
them. This is expensive training and the velopment in the Appalachians and market
company's reluctance to experiment with fuels and energy study group on an asing of peaches in Georgia.
totally inexperienced men was
under- sessment of available information on That ARA job totals are exaggerated; far standable.
energy in the United States. The report, fewer than 47,500 positions have been created
At the request of State and local officials which had been submitted to the Senate or seem in prospect. A metal fabricating
together with the union and company offi- Committee on Interior and Insular Affirm in southwestern Pennsylvania, for ex
cials, the Area Redevelopment Administraample, carries a notation of “50 jobs” in tion agreed to handle 2 weeks of pretraining analysis of our national energy situation.
fairs, is a complete and informative ARA's directory; the firm now employs 11
orientation for the workers, and the Anapersons and the president acknowledges it conda Co. agreed to conduct the actual train
The study group found that competiwill be a long time before the total reaches
ing program at the company's expense. The tion within the fuels industries has pro20. A candy manufacturer says his employcost of the orientation, paid by ARA, was
vided oil, natural gas, coal, electricity, ment may even decrease after he uses ARA
about $5,000 for the first 100 workers. The and other sources of power to the public loan money to buy new machinery. He's on
results were so successful that ARA was re- at the lowest possible cost, and that while ARA's books for 50 jobs.
quested to repeat the orientation on another That some ARA loan recipients don't try 100 which was done a similar cost and has
America's energy requirements will douvery hard to seek private financing before been so successful that ARA has now been
ble by 1980, our domestic fuel resources going after Government money, as required requested to repeat with the third 100.
can readily meet all requirements in the by law. ARA loans carry 4 percent interest;
The company has scrupulously adhered to
foreseeable future. private loans 6 percent or more. its side of the agreement by bearing the
The Chairman of the Fuels Study "Sure, I would have expanded my plant entire cost of retraining the workers, paying Group was the Assistant Director of Minif ARA weren't around," conceded one in
them more than $18 a day during the 4-week eral Resources in the Office of Coal Redustrial plant manager. “I would have used training course and hiring them as hard rock search of the Department of the Interior, my working capital or gone after bank fi
miners, grade 3, upon completion of the Mr. Samuel G. Lasky. Mr. Lasky has nancing harder than I did. But I got to
training. The cost to the company for the completed 32 years of outstanding service gether with ARA; after all, you don't find
training is certainly a great deal more than 4-percent money very often these days." that to the Government for the 2-week orien
to the Department of the Interior both That some ARA training programs are of a tation program. This cooperative venture
as an unusually capable technician in dubious nature. There presumably are has already created about 200 taxpaying wage geology and as a skilled administrator plenty of sightseeing guides in Hawaii but
earners who might otherwise have been on and manager. Because of this and beARA nevertheless spent $5,000 to train 22 permanent relief rolls.
cause of his outstanding performance as part-time farmers in that work. It spent
Chairman of the study group, he is a $10,000 to train 100 copper-mine workers for
BACKGROUND COMMENTS BY AREA REDEVELOPAnaconda—a giant company with the capa
recent recipient of the highest honor
MENT ADMINISTRATION bility to train its own workers with its own
the Department can bestow, the Distinmoney. To this list can be added the wait
The economy of the cities of Butte and guished Service Award. resses trained with taxpayer funds for duty Anaconda is based on the mining and proc
The contributions of such outstanding at a Michigan resort and others trained for essing of nonferrous metals mined and restaurant jobs in a motel at Paintsville, Ky. smelted in the area. The Anaconda Co., civil servants often go unrecognized. It This motel, incidentally, is across the high- due to technological advance in processing is good, therefore, to note that suitable way from a taxpayer-built handicraft stand. raw ore, is building a new ore concentra- recognition has been accorded to a Gov
tion plant in the city of Butte and discon- ernment employee whose career has inHOW FAR?
tinuing concentrating ore in Anaconda. The cluded a number of significant achieveInherent in the ARA program, and in a new plant will be able to increase efficiency ments in the broad area of minerals polgrowing number of other assistance pro- in processing low-grade ore and save trans- icy, a subject of vital and continuing grams initialed by the Kennedy administra- porting a low-value product 22 miles by rail.
interest to the entire Nation. I am prition, is the philosophical question of how In addition, it will be able to operate more far the Federal Government should go in efficiently with considerably less manpower.
vileged to add my own recognition to seeking to create jobs and loan taxpayer It is estimated that approximately 250 men that Mr. Lasky has already been acmoney to private enterprise.
will lose their jobs in Anaconda as a result corded by Secretary Udall.