hundreds of newspapers throughout the Nation.

It was just a month ago today that my assistant wrote a letter of documentation refuting the misrepresentations made against me. Because I believe the Members of the Senate will be interested in that letter, I ask unanimous consent that it be placed in the body of the RECORD at this point.

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

U.S. SENATE,

Washington, D.C., October 4, 1963. Mr. DREW PEARSON, Washington, D.C.

DEAR DREW: Over the years you have frequently praised Senator SMгTн in your column-and you have frequently condemned her. Your record of reaction to her, I think, is actually an unconscious tribute to her independence. For when you praised her on such matters as the declaration of conscience, her vote against Admiral Strauss, and her vote against CIA Director John McCone, others denounced her and impugned her motives on the very positions which you praised.

Over the years you have frequently made misrepresentations against Senator SMITH. Many of those misrepresentations were fed to you by those who wished to reap revenge against Senator SMITH and discredit her through your column. On one occasion you made a public statement that you had been in error and had been unfair to Sena

tor SMITH on a radio broadcast you had made 2 years prior.

There have

On the other hand, I know of occasions when some of her enemies have given you information and urged you to write against her on the basis of that information-but before doing so you have checked on such information and finding it to be untrue, you have refused to be a party to misrepresentations against Senator SMITH. been occasions when you called her office to check on facts before writing a column against her. For example, prior to writing your column of September 17, 1963, in which you were critical of Reserve members of the Preparedness Investigating Subcommittee, you called me and told me that you were writing such a column and wanted to check on whether Senator SMITH was in the Air Force Reserve. I confirmed that she was a lieutenant colonel in the Air Force, Reserve, retired (incidentally she does not and never will receive retired pay in that status). I think that the opinions that you expressed in that column were not justified but you are entitled to your own opinions.

It is when you are in error on facts and have not made an effort to be sure of your facts that I take issue with you. That is why I take issue with your column of September 28, 1963, which is replete with misrepresentations and on which you did not check with Senator SMITH or her office prior to writing that column as you had on the prior column of September 17, 1963, related to the same subject of the test ban treaty. Instead you accepted the misrepresentations given to you by Leo Goodman, whom you cast in a magnanimous forgiving role and Senator SMITH in the role of a political ingrate. You made no effort to check on the accuracy of the charges made by Goodman against Senator SMITH. Those charges were (1) the implication that Goodman had singlehandedly elected Mrs. SMITH in her first race for Congress and which you characterized as a struggle for her; (2) the charge that Goodman had "asked for an appointment with" Senator SMITH during the week of September 15-21; and (3) the charge that Senator SMITH had refused to give Goodman an appointment and that I had "bawled out"

Goodman "for trying to influence her vote." It is evident not only that Goodman sup

plied your story against Senator SMITH from he contacted you on Tuesday after the vote the manner in which you quote him but that that day and gave you the story with the false charges. It was a strange performance of forgiving on Goodman's part. Let me set the record straight on the Goodman charges against Senator SMITH.

1. That Goodman went to Lewiston, Maine, and singlehandedly elected Mrs. SMITH When she first ran for Congress.

In her first election to Congress, Mrs. SMITH WON by an 11 to 1 margin over her opposition. That is hardly a narrow margin for which any individual or any group could claim credit for singlehandedly electing Mrs. SMITH. As for whether Goodman's going to Lewiston was a decisive factor or not, let the record speak for itselfLewiston gave Mrs. SMITH a tremendous total of 303 votes in that election.

Goodman's labor affiliation is with the CIO, now the combined AFL-CIO. What is the record of the CIO? Is it one for which Senator SMITH has any political indebtedness? Hardly, for Goodman's CIO opposed Mrs. SMITH in 1944, in 1954, and in 1960.

For example, in 1954 her Democratic opponent officially reported that a majority of all his campaign funds came from the CIO'S Political Action Commiteee. And in 1960, although the 1960 COPE voting scorecard rated Senator SMITH 80 percent right (higher than its ratings for Senators Estes Kefauver and CLINTON ANDERSON whom COPE vigorously supported for reelection that year), the AFLCIO'S COPE was the largest source of campaign funds for Senator SMITH's opposition and COPE made an all-out effort to defeat Senator SMITH. If Goodman is the friend to Senator SMITH that he contends he is, then it would appear that his influence with his own CIO with respect to Senator SMITH is nil.

2. That Goodman had "asked for an appointment with" Senator SMITH during the week of September 15-21.

The truth is that Goodman did not ask for an appointment during the week of September 15-21 (the week he apparently represented to you). In fact, he did not ask for an appointment at any time. Instead he suddenly appeared in the reception room of Senator SMITH'S office at 10 o'clock the morning of September 24, 1963, just 30 minutes before the test ban treaty vote at 10:30-without any previous request by letter or by telephone call-and asked to see Senator SMITH immediately. The receptionist told Goodman that the Senate was convening at that very minute of 10 o'clock and that Senator SMITH had to be in her seat at 10:15 for the only time a picture has ever been taken of the Senate in session (for historical purposes-Senators had been warned the day before to be in their seats at that time-see page 17775 of the CONGRESSIONAL RECORD of September 23, 1963– and a call had been received by the receptionist at 9:30, before Goodman arrived, reminding of the necessity of being in the Senate at 10:15) and that she thought that Senator SMITH had already left the office for the Senate floor for the start of the session. The receptionist then buzzed Senator SMITH'S office and when there was no answer on the telephone, she informed Goodman that there was no answer. He then left the office.

3. That Senator SMITH had refused to give Goodman an appointment and that I had "bawled out" Goodman "for trying to influence her vote."

The truth is that Goodman had not sought an appointment as set forth above. As to whether I "bawled out" Goodman is a matter of interpretation. I would not in the slightest deny that I spoke to him very bluntly and that I expressed my resentment

that he would be so presumptuous that he would think that he could at the last minute come up and tell Senator SMITH how to vote.

The truth is that Goodman came up to me as I was standing in line with other senatorial staff assistants at the register door to sign for a pass to the Senate floor and said that he wanted to talk with me about her vote on the test ban treaty. In very blunt words, I told Goodman that he had had weeks before to come up and talk with Senator SMITH but had made no effort until at that last minute and that it was highly presumptuous of him to attempt to influence her vote at that time which was around 10:15. I have checked this with another senatorial staff assistant (of a liberal Democratic Senator who voted for the test ban treaty) who witnessed the entire exchange and who later termed Goodman's tactic as "incredible."

Inasmuch as Goodman has apparently misrepresented to you that he had tried unsuccessfully the week before for an appointment with Senator SMITH, it is relevant to point out that the truth is that the last time that Goodman contacted Senator SMITH or her office was on August 1, 1962, or more than a year before his sudden appearance on September 24, 1963. On August 1, 1962, Goodman called on Senator SMITH in her office and requested her to endorse him for appointment as an Atomic Energy Commissioner. Senator SMITH told him that she would be delighted to do so-but said that as a friend she wondered if her endorsement would not hurt more than help since it would be to Democratic President Kennedy whose personal dislike of her was evidenced in the fact that he was the only Democratic Senator who had agreed to go into Maine to That was in 1954 campaign against her. when Joe McCarthy attempted to have her defeated, as you well remember-and when Senator Kennedy refused to support the Massachusetts Democratic senatorial nominee against Senator SALTONSTALL but did go into Maine to campaign against Senator SMITH. Senator SMITH told Goodman to think it over and call her later if he still felt her endorsement would help that she would be delighted to do it if he still wanted her to after thinking it over. She never heard from him that time until his sudden appearance more than a year later on September 24, 1963, minutes before the test ban treaty vote.

Thus far, I have dealt with the major misrepresentations in your column that were apparently given to you by Goodman. In conclusion, I want to comment on your false charge in that column that Senator SMITH Voted her political ambitions instead of her conscience on the test ban treaty. You sought to indict her with a motivation of a 1964 Goldwater-Smith ticket because she voted the same as Senator GOLDWATER in voting against the treaty.

This is reminiscent of guilt by association and trial by accusation tactics that Senator SMITH denounced in her "Declaration of conscience" on June 1, 1950-tactics which you yourself have repeatedly denounced when criticizing those with whom you disagree. In indicting Senator SMITH with this guilt by association tactic on the grounds that she voted the same way that Senator GOLDWATER did in voting against the treaty, you conveniently omitted the fact that on the only direct vote with respect to Senator GOLDWATER on the test ban treaty-the Goldwater reservation-she voted against Senator GOLDWATER by voting against the Goldwater reservation.

Have you forgotten your column in which you alleged that Senator GOLDWATER said that she would not get a nickel from his Republican senatorial campaign committee (of which he was chairman) because she

voted against the confirmation of Admiral Strauss?

You have every right to disagree with Senator SMITH's vote on the test ban treaty. You have every right to criticize and attack her on that vote. But you have no right to make misrepresentations against her and impugn her integrity merely because you disagree with her.

Sincerely,

WILLIAM C. LEWIS, Jr., Executive Assistant to Senator Smith.

LOCAL SERVICE PROGRESSES AS INDUSTRY AND CAB WORK TOGETHER

Mr. BARTLETT. Mr. President, it was my pleasure to attend the quarterly meeting of the Association of Local Transport Airlines in Honolulu last weekend. The meeting, well and pleasurably hosted by Aloha and Hawaiian Airlines, had the largest attendance of any meeting in the association's history. One of the most thoughtful and encouraging of the addresses given at the convention was that of Joseph Minetti, a member of the Civil Aeronautics Board.

In his statement regarding the local service subsidy problem, Mr. Minetti made it clear that "the Board is not about to subsidize local carriers out of business." He emphasized the need for the Board, the carriers, and the communities they serve to work together to assure "a financially healthy local service industry, reasonable fares for the public, and sound subsidy reductions."

I ask unanimous consent that Mr. Minetti's speech be printed in the RECORD.

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

LOCAL SERVICE IN RETROSPECT AND PROSPECT (Address by Hon. G. Joseph Minetti)

I am delighted to be back with you in this hospitable city of Honolulu. Here, 5 years ago I had the pleasure of addressing your association. The years that have elapsed since that meeting have seen outstanding progress in Honolulu. Hawaii is now a State. There have been many advances in our way of living. In the field of air transportation, dynamic strides have been made.

Today marks another important milestone in the air transportation annals of the State of Hawaii. A new thrift class of air service between California and Hawaii was inaugurated this morning. Gov. John A. Burns, in his correspondence with the Civil Aeronautics Board, sized up the impact of Pan American's $100 new economy fare in these words: "Any reduction in the cost of transportation between our State and the mainland has important beneficial implications for Hawaii. The proposed $100 fare would bring substantial numbers of economyminded travelers into Hawaii's travel market. Equally important, it would encourage more frequent travel to the mainland by many island residents whose trips presently are limited to rare occasions because of financial considerations. It would appear the proposed lower rate could generate substantial new business to the economic advantage of this State and would indeed encourage prospects for development of our travel industry."

I am certain all of you here today agree with Governor Burns, and share my hope for the success of this new venture in low fare air transportation.

But let us talk for a little bit about your success-the success which you have achieved in the 5 years since we last met here. The figures on your performance are quite impressive. For the 12 months ended June 30, 1958, you carried 4 million passengers. In the 12 months ended June 30, 1963, you carried over 8 million passengers. In the same 1958 period the total revenue ton-miles of traffic carried was 80 million. In the year ended June 30, 1963, they had grown to 180 million. The year ended June 30, 1958, saw you obtain $55 million in commercial operating revenues. By June 30, 1963, that annual figure had almost tripled to nearly $145 million. Moreover, these impressive improvements in performance were not unattended by increases in profits. On the contrary, in 1958 the local service industry reported a net income of only $1.1 million. By June 30, 1963, your reported profits to

taled nearly $5 million.

One solid measure both of your success and of your improved ability to render good service to the public is the fact that in 1958 your total fleet consisted of 219 aircraft, of which only 23 could be characterized as modern. Today, you operate over 383 aircraft, ern, twin-engine types, providing service in the United States.

of which more than 211 are the most mod

I think we are both entitled to be proud of this performance. I recognize the substantial effort and considerable management skill which has enabled you to reach this high operating level, and I think you too recognize the very healthy and active part programs, has played in assisting the industry in reaching these goals.

which the Board, in both its route and rate

At the same time let us not lose sight of the great assistance and understanding given you by Members of the U.S. Congress, particularly those on the House Interstate

and Foreign Commerce Committee and the

Senate Commerce Committee.

We at the Board are entitled to be proud of the healthy and effective cooperation which has in the past and will in the future continue to exist between the Board and the Association of Local Transport Airlines. For example, in 1958 I made reference to a document containing some imaginative ideas, but representing a marked departure from past concepts in ratemaking. That document which had then been circulated for your comments and suggestions was the beginning of a project that 2 years later culminated in the first local service subsidy class rate. I think it is fair to say that without your cooperation and vision, it would have been difficult, if not impossible, to have made effective this significant contribution to the regulatory framework in which you operate. The record clearly indicates the advantages which have resulted from this great cooperative effort.

The local service industry did not have a single year, prior to 1961 and the adoption of the first-class rate, in which the carriers as a group reported satisfactory earnings. Indeed, as a result of the open subsidy rates subject to retroactive adjustment for the major portion of the time, the carriers' financial statements, generally speaking, added up to losses, rather than profits. Such losses, however, were not real, because they were ultimately offset by retroactive subsidy awards. You know far better than I what a serious impact the lack of final subsidy rate determinations had on your standing in the financial community and your ability to finance on reasonable terms.

The revitalization of your credit standing and investor confidence in the local service industry since 1961 has been as heartening to the Board as to you. The satisfactory results under the class rate have been all the more encouraging to the Board, because we were not unaware of the fact that the embarkation on a radically revised approach to

the local service subsidy rate determination— the class rate-was not without considerable risk.

In the first 2 calendar years under the class rate, 1961 and 1962, the local carriers as a group reported a rate of return on investment in excess of 11 percent. While aggregate earnings in the first half of 1963 have declined in both absolute and relative terms, we note that the rate of return on investment for the 13 local carriers in the 12 months ended June 30, 1963, approximated 10 percent.

There are several other healthy signs of financial improvement. Through the reinvestment of the bulk of earnings of recent years and a number of individual security issues, the equity base of the local carriers has grown substantially. By June 1963, the common equity of the carriers reached 35 percent of total capital with an encouraging, though modest, decline in the ratio of debt to total capitalization from roughly 75 percent to something below 65 percent.

Another encouraging factor and one that bodes well for the industry's ability to finance future capital requirements on reasonable terms is the relationship between the market value of your common stock and the book value of each carrier's stock. Data for a recent period this summer indicate that the common stock of 11 of the 12 local service carriers whose stock is traded publicly was selling above its book value and, in the majority of cases, the spread between market value and book value was quite substantial. In the sole instance in which a car

rier was selling below book value, the difference was only a few cents.

I think all of you will agree that the Board's approach in 1960 in instructing the staff to work with industry representatives toward the development of the best class rate that could be jointly devised was an eminently sound one.

Of course, we are not entirely satisfied with some of the quirks and disparities in the presently effective class rate. I know that there is a wide range of opinion among the 13 local service carriers as to both the good features and the apparent inequities in this rate structure. Nevertheless, I do not know of a single carrier or any one on the Board's staff, nor any one in the financial community, who is of the opinion that the abandonment of the class rate principle and a reversion to the individual subsidy rate concept would be either in the public interest or in your private interest. I would certainly like to express a note of optimism that the cooperative efforts and the intelligence of the carrier representatives and the Board staff should unquestionably assist the Board in formulating a far sounder class rate structure than either of the first two. And one, I am sure, which could be implemented within a relatively short time.

What I have said so far is strictly on the bright side. There are, of course, some disappointing trends. Subsidy payments more than doubled, from $33 million, in the annual period ending June 30, 1958, to $69 million in the 1963 period. On the other hand, we recognize that each dollar of subsidy bought more service in 1963 than it did in 1958. The really troublesome aspect from your standpoint, as well as the Board's, is the decline in load factor from approximately 46 percent to about 42.6 percent. It seems to me that the heart of any program for the reduction of subsidy requirements of the air carriers would be inevitably linked with load factor improvements.

The break-even load factor for the local service industry, which is now so far advanced in the DC-3 replacement program, has reached the approximate level of 60 percent before return on investment. Roughly 65 percent would be the break-even point including fair return on investment. The spread between your 43 percent recent load

factor and the 65 percent break-even, including return element, is a simple way to explain the industry's need for subsidy in the magnitude approximating one-third of total operating revenues.

For years, your association has been actively interested in the development of programs for subsidy reduction. Obviously, your objective was not to reduce subsidy payments to a level which would jeopardize your ability to perform the service required by the public convenience and necessity in an economic and efficient manner. Rather, your various pronouncements over the years have been pointed toward types of actions which were intended, in your opinion, to produce a significant decrease in subsidy without jeopardizing adequate service.

I think it is completely accurate to state that the Board's objective has been to move in a similar direction.

Let us reflect for a moment on the proggress already made, particularly in providing operating flexibility in the typical local service carrier certificates. Fifteen years ago, typical local service flights stopped at each intermediate point on a given route and the chief flexibility in a carrier's operations was the authority to turn around short of a terminal point on a particular route segment. I believe that a sound program in the direction of curtailing restrictions can further improve the economy of your operations and the service performed for the public. At the same time, we should not lose sight of the tremendous progress already made. In those instances in which sound, healthy subsidy improvements can be attained by route improvements, you have a real "selling job" to do. It is up to you to develop an adequate record in appropriate proceedings and to convince the Board that the specific route improvements you seek, which all too frequently have their highly controversial or competitive aspects, are in the public interest.

By now, I am sure, you are familiar with the Board's report to the President on the airline subsidy reduction program. I am not certain whether this report has produced more understanding or misunderstanding in

the months since its release.

Accordingly, at the outset I would like to comment very briefly about this delicate subject and make the position of the Board very clear. In a letter to Senators MAGNUSON and MONRONEY, the Board through our Chairman, stated, "I wish to assure you again that in line with our customary practice we intend to keep abreast of the subsidy needs of all carriers at all times so that if it should appear that these estimates are out of line with the carriers' requirements, we shall revise them at the appropriate time and if necessary, request a supplemental appropriation."

I believe this statement, more than anything else, should set at ease the minds of the local service industry. The Board is not about to subsidize local carriers out of business. Where there is an absolute need for subsidy, it will be paid.

On the procedural side, may I assure you that it was very expressly and specifically contemplated by the Board, in its discussions, that the report would not be considered more than a tentative program until the industry had an opportunity to analyze it, submit comments on it, and discuss it with the Board and its staff. This, of course, is aside from the tentative nature of the report pending the Board's receipt of comments from the executive branch, as well as any expressions or congressional action which may be forthcoming.

This assurance that the Board did not intend to finalize its thinking before it heard from you also encompassed the somewhat related problem of the development of a new class rate, which we hope will be made effective at the earliest possible date in 1964.

I am sure it is no breach of the confidential nature of internal Board discussions to reveal that not a single Board member expressed a view different than that the local carriers would not, could not, and must not be prejudiced in the negotiation of a new class rate by virtue of the Board's decision not to consult the local industry prior to submission of the subsidy reduction report to the President. I believe Chairman Boyd reaffirmed that at the meeting with the carriers on October 3, and, similarly, in his testimony before the Senate Appropriations Committee on October 14. I agree wholeheartedly with his statements assuring you of an opportunity to be heard, in an effective sense, before any new programs will be finalized to your possible prejudice.

On the substantive side, it is essential to bear in mind that the report does not indicate a value judgment by the Board as to a maximum subsidy level which the country can afford or which the Board believes can be justified by the public convenience and necessity. Nor does it contemplate arbitrary annual subsidy levels that must be attained year-by-year regardless of factual developments bearing on the actual subsidy requirements of the local carriers, individually and collectively.

The report, to a considerable extent, is a forecast of what various programs and factual developments, such as traffic growth versus inflationary cost changes, will have on the need of the carriers in the next 5 years.

Let us not forget, that the subsidy standards set forth in section 406 of the Federal Aviation Act have not been amended, and the need of the air carriers continues to be the basic statutory criterion for subsidy determination.

The Board has no thought of imposing arbitrary ceilings on an annual basis to keep

step with the forecast decline in subsidy

need. Moreover, the Board must determine each year, in light of the latest relevant factual data and the status of the various programs which could have an impact on the carrier's subsidy requirements, what it would estimate to be the subsidy requirements of the industry for each future year. Certainly, if the rate of traffic growth exceeds the rate of forecast in the report, subsidy should decline at a more rapid rate, all other things being equal. But conversely, if for some reason, we reach periods of declining traffic growth, this must necessarily be reflected in our determination of subsidy requirements prospectively.

Your association has quite properly always expressed great interest in programs for strengthening the routes of local service carriers by various means. One important method involves transfers of points or segments from trunklines to local service carriers. This is an area where I believe that the initiative of the local service carriers can accomplish a great deal. I believe the first step must be the preparation by each carrier of comprehensive, economic, and service studies aimed at bringing out the public service benefits and economic impact from the standpoint of the communities, the trunklines, and the particular local carrier in the specific areas where you believe a route transfer has a realistic potential.

Potential subsidy savings must be determined on a realistic basis and a reduction in subsidy must be shown. Here, too, you must do a selling job. You must pave the way for maximum acceptability and minimum resistance by the communities. This you can do through proper explanation of the advantages that a local service carrier can bring to a particular community in the way of improved and adequate service. Your selling job with the trunklines might well address itself to questions of impact of particular programs on trunkline control of long-haul traffic, possible joint sales programs, assurances of convenient trunk-local 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 service airlines by approximately $1.7 million annually.

I think the prospects of improving the local service share of interline tickets through a commission type of arrangement, or a modification of the present joint fare divisions, are sufficient to warrant further investigation by your association. I can assure you of the wholehearted cooperation of the Board's staff in pursuing this avenue. The objective should be to determine whether the local service share of joint tickets for interline sales is equitable.

Programs aimed at sound route strengthening of the local service industry and the promotion of efficient operations by the carriers can be expected to form the backbone of any long-range program of subsidy reduction geared to the subsidy requirements of the carriers. But in addition to route strengthening, the real key to subsidy improvement is tied to the load factor on existing flights as well as any newly authorized operations.

The waste inherent in a 43 percent load factor is a tragic one from the standpoint of management, the investor, and the taxpayer.

It is only through significant load factor improvement that the carriers and the public can share the benefits of the improved efficiency that goes with more economical

aircraft.

As President Kennedy said in his transportation message of 1962, "The troubles in our transportation system are deep; and no just and comprehensive set of goals *** can be quickly or easily reached. But few areas of public concern are more basic to our progress as a nation."

I hope that sound fare policies, route strengthening, hard work and constructive thought geared to load factor improvement will lead to a financially healthy local service industry, reasonable fares for the public, and sound subsidy reductions.

I said in 1958, and I repeat now, Association of Local Transport Airlines can be

proud of its record of cooperation in the

public interest, it has recognized that while we may disagree on method, our objective is a common one-the promotion of local air transportation in the public interest. at the Board look forward to a continuance of our good relationship in working toward this objective.

SALE OF WHEAT TO RUSSIA Mr. STENNIS. Mr. President, Mr. Charles Nutter, publisher of the Picayune Item of Picayune, Miss., has written a most thought provoking editorial regarding the recently announced plan to sell surplus American wheat to the Soviets.

This editorial is written by one of Mississippi's most able and objective newspaper publishers, a man who has had wide experience in journalism and business. He is a former Associated Press

correspondent and also a former official of the International House, a New

Orleans trade establishment.

I commend the editorial to the careful attention and reading by every Member of the Congress.

I ask unanimous consent that the editorial be printed in the RECORD. There being no objection, the editorial was ordered to be printed in the RECORD, as follows:

HERE WE GO AGAIN

Nicolai Lenin, father of modern communism in the world, was a master psychologist who understood human nature better than our modern-day leaders, es

pecially in the United States. With the complete and brutal cynicism which characterizes Communist thought, Lenin once remarked "When the time comes to hang the capitalists, they will be bidding against each other to sell us the rope."

Lenin died in 1924. If he was living now he could say of today's proposed wheat deal with Russia "you see what I mean." Since the beginning in 1917 the Communists have known and used the fact that trade was a weapon as effective as explosives or propaganda. They have benefited thereby when they chose to use this weapon.

Today's wheat deal brings back bitter memories to those who follow Communist progress. This is a return to the depression days when American industry, desperate for business, vied strongly to provide Russia with automobile and tractor factories, airplane and food industries, gold mining and petroleum know-how and any number of other industries needed by the Soviets in their first 5-year plan. These plants replaced and supplemented industries which had been seized by the Communists and destroyed, ruined, or badly run by the Reds.

American engineers accompanied American know-how and American capital to the Soviet Union by the thousands in the early thirties. So did German, British, French, and Italian engineers and capital. Slowly Russia began to get on its feet, saved by capitalism.

200 taxpaying wage earners who might otherwise have been on permanent relief rolls.

In my opinion, this cooperative venture of the Area Redevelopment Administration, the Anaconda Co., the Montana State Department of Education, the Montana State Employment Service, and local officials of Silver Bow and Deer Lodge Counties is helping to alleviate hardship and ease the difficult transition required of workers who face job changes because of technological advances.

Mr. President, I ask unanimous consent to insert in the body of the RECORD, immediately following these remarks, the Daily News article to which I have referred and the comments of the Area Redevelopment Administration.

There being no objection, the article and comments were ordered to be printed in the RECORD, as follows:

[From the Washington Daily News, Sept. 30,

1963]

TAXPAYERS BUILD SKI LIFTS-U.S. AREA REDEVELOPMENT HELPS FINANCE THE GOOD LIFE (By Robert Dietsch)

In the last 2 years, your tax money has been spent or loaned to:

Build motels, ski resorts, and other recreational facilities in a dozen States, on an Indian reservation and in Puerto Rico.

lion in Government loans.

Help buy snow-making machinery for several of those resorts and help build golf courses, cocktail lounges, and bowling alleys in others. Also train waitresses for the motel restaurants.

This was a repetition of what happened a decade earlier when Lenin took the Com- Builders or promoters have received $43 milmunist back to capitalism for a few years under the new economic plan, known as NEP, in order to save the country from starvation, and disaster to the Communists. The same thing happened in the early forties when we all pitched in to save the Communists again in the war. When the danger was past the Reds kicked us out with insults and calumny; it happened just like this is the twenties, the thirties, the forties, and to some extent in the fifties.

We are falling over ourselves now to rush

to Khrushchev's aid in his hungry country, ruined by false agricultural theories and practices. Already sensing our eagerness he has started the insults and terms under which he will accept our help. History teaches that history repeats itself. Here we go again.

U.S. AREA REDEVELOPMENT HELPS FINANCE THE GOOD LIFE

Mr. METCALF. Mr. President, on September 30, the Washington Daily News published an article by Robert Dietsch headlined "U.S. Area Redevelopment Helps Finance the Good Life." This article states:

Your tax money has been spent or loaned to help train copper workers in Montana for new jobs with Anaconda, the company which laid off the workers in the first place and which was looking for people with different skills to hire. [ARA] spent $10,000 to train 100 copper mine workers for Anaconda, a giant company with the capability to train

its own workers with its own money.

I asked the Area Redevelopment to comment on those statements. ARA wrote me as follows:

The Anaconda Co. has scrupulously adhered to its side of the agreement by bearing the entire cost of retraining the workers, paying them more than $18 a day during the 4-week training course and hiring them as hard rock miners, grade 3, upon completion of the training. The cost to the company for the training is certainly a great deal more than that to the Government for the 2-week orientation program. This cooperative venture has already created about

Train sightseeing guides in Hawaii. Build a summer theater in North Carolina. Build roadside handicraft display stands in Arkansas.

Study the feasibility of harvesting processing and marketing sea lions in Alaska.

Help train copper workers in Montana for new jobs with Anaconda, the company which laid off the workers in the first place and which was looking for people with different skills to hire.

FOR DEPRESSED AREAS

Loans or grants for all these projects came from the Area Redevelopment Administration, an agency set up by the Kennedy administration in 1961 to help business and employment in depressed areas.

Since then, the ARA has become one of the biggest subjects of controversy on the New Frontier.

Republicans dub it the "Area Reelection Administration."

Businessmen charge it is competing with private industry, making reckless loans and giving money to dubious enterprises, the type rejected as unfeasible and uneconomic by private experts.

Edwin P. Neilan, president of the U.S. Chamber of Commerce, has called ARA the "Christine Keeler" of an American scandal involving "wholesale buying and selling of public office."

TOO EAGER?

Other critics say ARA is overly eager to farm out its money. They say ARA supports new businesses even after local industrial developers refuse to contribute their 10 percent required by law.

(ARA can loan up to 65 percent of the cost of a project; the rest of the money must come from private financial sources, the local community booster group, and the project owners.)

ARA officials, understandably, argue their case with vigor.

Administrator William Batt says his agency goes into programs shunned by private businessmen.

"They aren't interested in creating employment," Mr. Batt said.

He defends the millions put into motels by pointing to overall tourist and recreation growth and its potential.

What's more, ARA claims it has created, or laid the basis for creating, 47,500 jobs and for training 23,500 persons.

PROBE

An investigation into all phases of ARA activity by the Scripps-Howard newspapers gives the edge to ARA's critics.

While the Agency has indeed acted to create some legitimate businesses in depressed areas (and even some not so depressed) and has created some employment, the investigation showed that ARA is overeager to farm out the $394 million given to it in 1961. For example, it pressed hard to lend $222,000 to developers of a ski resort between Altoona and Bedford, Pa., despite reluctance of the Altoona community development group to go along; the latter deemed the project too risky and thought it would create few jobs.

Not only did the resort owners get ARA's $222,000 but they also received $110,000 from the Rural Electrification Administration (REA).

In another case, a wealthy Detroit industrialist got almost $1 million to help build "one of the world's most luxurious resorts" in northern Michigan; he reported the other day, during a phone conversation, that "ARA was around suggesting I was eligible for more loans."

That many of the 222 technical assistance studies approved by ARA (at a cost of more than $7 million) have been done by others in the past year. The sea-lion study in Alaska is one; also grants to study better exploitation of Indian arts and crafts, uses of timber in various States, handicraft development in the Appalachians and marketing of peaches in Georgia.

That ARA job totals are exaggerated; far fewer than 47,500 positions have been created

or seem in prospect. A metal fabricating

firm in southwestern Pennsylvania, for example, carries a notation of "50 jobs" in ARA's directory; the firm now employs 11 persons and the president acknowledges it will be a long time before the total reaches 20. A candy manufacturer says his employment may even decrease after he uses ARA loan money to buy new machinery. He's on ARA's books for 50 jobs.

That some ARA loan recipients don't try very hard to seek private financing before going after Government money, as required by law. ARA loans carry 4 percent interest; private loans 6 percent or more.

"Sure, I would have expanded my plant

if ARA weren't around," conceded one industrial plant manager. "I would have used my working capital or gone after bank financing harder than I did. But I got together with ARA; after all, you don't find 4-percent money very often these days."

That some ARA training programs are of a dubious nature. There presumably are plenty of sightseeing guides in Hawaii but ARA nevertheless spent $5,000 to train 22 part-time farmers in that work. It spent $10,000 to train 100 copper-mine workers for Anaconda-a giant company with the capability to train its own workers with its own money. To this list can be added the waitresses trained with taxpayer funds for duty at a Michigan resort and others trained for

restaurant jobs in a motel at Paintsville, Ky. This motel, incidentally, is across the highway from a taxpayer-built handicraft stand.

HOW FAR?

Inherent in the ARA program, and in a growing number of other assistance programs initialed by the Kennedy administration, is the philosophical question of how far the Federal Government should go in seeking to create jobs and loan taxpayer money to private enterprise.

As Chamber President Neilan has pointed out and as the Scripps-Howard probe of ARA showed, even those who abhor the idea of Federal intervention solicit Federal money after programs are approved.

While a few local business groups across the country have spurned ARA help, most have accepted it and many have sought it.

The idea of having Uncle Sam help bring a new firm into town overshadows criticism of Federal intrusion into private enterprise. The Kennedy administration obviously thinks highly of ARA. It wants Congress to double the Agency's budget and extend its life.

The Senate has agreed but the House, in June, rejected the proposal by five votes.

The Democratic leadership now wants the House Rules Committee to send an amended ARA bill to the floor.

COMMENTS BY THE AREA REDEVELOPMENT ADMINISTRATION ON THE VOCATIONAL PRETRAINING PROGRAM OF OCTOBER 3, 1962, FOR THE BUTTE, MONT., DEVELOPMENT AREA OF SILVER BOW AND DEER LODGE COUNTRIES

As can be best judged from the copies of actual proposals submitted by local and State agencies, to the Departments of Labor, Health, Education, and Welfare, Commerce, and the Area Redevelopment Administration, automation in the Anaconda copper smelter in Butte, Mont., resulted in the employment termination of 300 or more smelter workers. The company had jobs for hard rock miners, but a month of intensive retraining would be required for men accustomed to underground work. However, because the smelter workers, faced with layoffs and perhaps permanent unemployment, had never worked underground, longer training would be required, and the company was reluctant to consider them. This is expensive training and the company's reluctance to experiment with totally inexperienced men standable.

was under

At the request of State and local officials together with the union and company officials, the Area Redevelopment Administration agreed to handle 2 weeks of pretraining orientation for the workers, and the Anaconda Co. agreed to conduct the actual training program at the company's expense. The

cost of the orientation, paid by ARA, was about $5,000 for the first 100 workers. The results were so successful that ARA was requested to repeat the orientation on another 100 which was done a similar cost and has been so successful that ARA has now been requested to repeat with the third 100.

The company has scrupulously adhered to its side of the agreement by bearing the entire cost of retraining the workers, paying them more than $18 a day during the 4-week training course and hiring them as hard rock miners, grade 3, upon completion of the training. The cost to the company for the training is certainly a great deal more than that to the Government for the 2-week orientation program. This cooperative venture has already created about 200 taxpaying wage earners who might otherwise have been on permanent relief rolls.

BACKGROUND COMMENTS BY AREA REDEVELOPMENT ADMINISTRATION

The economy of the cities of Butte and Anaconda is based on the mining and processing of nonferrous metals mined and smelted in the area. The Anaconda Co.,

due to technological advance in processing raw ore, is building a new ore concentration plant in the city of Butte and discontinuing concentrating ore in Anaconda. The new plant will be able to increase efficiency in processing low-grade ore and save transporting a low-value product 22 miles by rail. In addition, it will be able to operate more efficiently with considerably less manpower. It is estimated that approximately 250 men will lose their jobs in Anaconda as a result

of this application of advance technology in concentrating ore in Silver Bow and Deer Lodge Counties. In cooperation with the Anaconda Co. and local planning committees, the Montana State Employment Service is doing all it can to ease the effect of this change on workers and local business by helping them find other jobs.

One possibility is an offer by the Anaconda Co. to absorb 100 of these men into their mining operation in Butte. The Anaconda Co. has estimated an increase in activity in the deep mines will continue through 1964.

One of the drawbacks to transferring these men from smeltermen to miners is the training necessary to become a successful hardrock miner.

A number of men fail to make the grade underground because they have never had surface training and orientation prior to their starting actual mining work.

It is the purpose of this proposed ARA training course to give 2 weeks of concentrated training to give the men going into the underground mining enough knowledge to qualify them as grade 3. The Anaconda Co. will then hire those qualified at $18.48 per shift and give them 30 more days of student mining under actual mining conditions. Those successfully completing training will then be put on a contract basis with a $20.60 per day base rate while on contract.

REPORT BY NATIONAL FUELS AND ENERGY STUDY-TRIBUTE ΤΟ SAMUEL G. LASKY

Mr. HRUSKA. Mr. President, on October 13, 1962, I called to the attention of the Senate the report of the national fuels and energy study group on an assessment of available information on energy in the United States. The report, which had been submitted to the Senate Committee on Interior and Insular Affairs, is a complete and informative analysis of our national energy situation.

The study group found that competition within the fuels industries has provided oil, natural gas, coal, electricity, and other sources of power to the public at the lowest possible cost, and that while America's energy requirements will double by 1980, our domestic fuel resources can readily meet all requirements in the foreseeable future.

The Chairman of the Fuels Study Group was the Assistant Director of Mineral Resources in the Office of Coal Research of the Department of the Interior, Mr. Samuel G. Lasky. Mr. Lasky has completed 32 years of outstanding service to the Department of the Interior both as an unusually capable technician in geology and as a skilled administrator and manager. Because of this and because of his outstanding performance as Chairman of the study group, he is a recent recipient of the highest honor the Department can bestow, the Distinguished Service Award.

The contributions of such outstanding civil servants often go unrecognized. It is good, therefore, to note that suitable recognition has been accorded to a Government employee whose career has included a number of significant achievements in the broad area of minerals policy, a subject of vital and continuing interest to the entire Nation. I am privileged to add my own recognition to that Mr. Lasky has already been accorded by Secretary Udall.