Mr. MILLIKIN. The Senator from Alabama says that is not unusual.

Mr. SPARKMAN. I have seen it done many times.

Mr. MILLIKIN. Let us assume it is not unusual. However, the situation in the House over this very bill is unusual. I do not think the Senator will deny that.

Mr. SPARKMAN. No, but let me remind the distinguished Chairman of the Committee on Finance that what brought about the explosive situation in the House was the effort of the Rules Committee to take from the Ways and Means Committee, a bill that it was considering, but had never reported and to make it the order of business thus tending to destroy the committee system. But that situation does not prevail now. The bill is in the control of the House, not of the Committee on Ways and Means.

With respect to a measure before the House, it does not seem to me that the example of a room full of dynamite is quite appropriate. As I recall, there were only 77 votes against the bill in the House.

Mr. MILLIKIN. That is a very good reason why the Senate should vote for the bill.

Mr. SPARKMAN. I do not agree with the Senator from Colorado.

Mr. MILLIKIN. I suggest that is the best argument that could possibly be made for voting for the bill as it is.

Mr. SPARKMAN. I think if the House had had the privilege to vote on this amendment, it would have adopted it overwhelmingly.

Mr. MILLIKIN. The House did not have that privilege, because the amendment was defeated in committee by a vote of 22 to 3.

Mr. SPARKMAN. The House did not have the privilege, because in the House tax bills are always considered under a gag rule. I do not say that in criticism. That is the only way it could be properly done. I have always subscribed to that idea. The House membership had no opportunity to vote on the amendment. Had they had the opportunity, I believe they would have adopted the amendment overwhelmingly.

Mr. MILLIKIN. In light of the effort that is under way in the House to achieve peace again, does the Senator from Alabama really believe the House would take the matter out of the hands of the Committee on Ways and Means, and thus start the trouble all over again?

Mr. SPARKMAN. Let me say again that the matter is not in the hands of the Committee on Ways and Means. When the bill goes back to the House, it will go to the Speaker's desk.

Mr. MILLIKIN. It does not matter whether it is in the hands of the House. It is what will happen that counts. The normal procedure would be to send the bill to the Committee on Ways and Means, which would select conferees. That is what that committee would expect.

Mr. SPARKMAN. No, I differ with the distinguished chairman of the Committee on Finance. The normal procedure would not be to refer the bill to the Committee on Ways and Means. The

House would have to appoint conferees. The House would appoint conferees, not the committee.

Mr. MILLIKIN. I understand that. Mr. SPARKMAN. With reference to the peace efforts, I was under the impression that peace had been pretty well restored in the House.

Mr. MILLIKIN. I hope so. Mr. SPARKMAN. Yes, I think so. Mr. MILLIKIN. That, I may say to the distinguished Senator, should emphasize the impracticability and unwisdom of reopening the same wounds.

Mr. SPARKMAN. I do not believe there would be any reopening of wounds. My own opinion is that the bill would go to conference. I am not so certain that the House might not accept the amendment on its face. I am of the opinion the bill would be allowed to go to conference without anyone objecting to it.

Mr. MILLIKIN. I esteem the Senator's opinion.

Mr. SPARKMAN. I thank the Senator.

Mr. MILLIKIN. But I suggest he is probably the only man in the world who holds that opinion.

Mr. SPARKMAN. Sometimes it is good to be unique.

Mr. WILLIAMS. Mr. President, will the Senator from Alabama yield?

Mr. SPARKMAN. I cannot at the moment recall the term that was applied to the distinguished Senator from Colorado on a recent day that made him believe he was unique.

I yield to the Senator from Delaware. Mr. WILLIAMS. It was pointed out a moment ago that perhaps the Committee on Ways and Means had rejected a similar amendment in the committee by a vote of 22 to 3. If I am mistaken about it, I can be corrected, but I do not believe it was an amendment similar to the pending amendment. There was a vast difference in that the amendment on which the Committee on Ways and Means voted carried not only the exemption contained in the pending amendment, but also a provision making it retroactive to January 1. It was the retroactive provision to which the committee objected, not to the exemption as the amendment provides for it.

Mr. SPARKMAN. I certainly appreciate having that pointed out by the able Senator from Delaware. I may say that I had prepared to offer exactly the same amendment, not knowing whether the Senator from Delaware would offer his or not.

The amendment which he offered and the amendment I was proposing to offer would be applicable only to the last 6 months of this year, without any retroactive effect, whereas the amendment offered in the House committee would have covered the full 12 months.

Speaking about similar amendments, and the attitude of the House, even the amendment which was voted down in the Ways and Means Committee was the same amendment or the same proposal, or was in the proposal which the Rules Committee approved and voted to send to the floor of the House, namely, the so-called Sadlak bill. Furthermore, this is the same proposal that was publicly

offered as a compromise proposal by Mr. HALLECK, majority leader of the House of Representatives.

Whether the administration objects to it or not, of course, I have no way of knowing; but for the past week or so the newspapers have said that the administration would accept such an amendment. I take it from the statement of the able and distinguished chairman of the Finance Committee that the reason they have been hesitant about it now is that they have been afraid of what might happen in the House. I am not afraid of that, because I know that the matter can be handled without difficulty. Mr. MILLIKIN. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield.

Mr. MILLIKIN. First, it should be said that the so-called Sadlak bill in the House was the same bill, in principle, except that it had a double effect. It ran for a full year.

Mr. SPARKMAN. This proposal was in that bill. Of course, the Sadlak bill covered the extension of the excessprofits tax, but it had this amendment in it. The only difference was that it covered the full year.

Mr. MILLIKIN. I wished to make that clear.

Mr. SPARKMAN. That is correct.

Mr. MILLIKIN. I did not wish to leave the impression that it was exactly the same bill. With that matter before the House Rules Committee, it reported a rule which did not permit amendments.

Mr. SPARKMAN. But the Sadlak bill was before them.

Mr. MILLIKIN. Not before the House. Mr. SPARKMAN. This proposal was in the bill which the Rules Committee reported, namely, namely, the Sadlak bill. When the Ways and Means Committee reported the straight-out continuance, of course the Rules Committee gave a rule which did not permit amendment. That is invariably done. It is the uniform practice.

Mr. MILLIKIN. In that process the Sadlak bill died.

Mr. SPARKMAN. Certainly.

Mr. MILLIKIN. As I say, the vote in the committee was about 22 to 3, which would give a premonitory warning as to what would happen to the proposal if it went back to the House again.

Mr. SPARKMAN. I certainly do not agree with that statement, because I am certain, first of all, that the reason for the one-sided vote against the amendment was the very thing which the Senator has mentioned. There was an effort to iron out the difficulty. It has been ironed out, finally, on the basis of a simple extension, without amendment. I am just as certain as I can be that if the House had the opportunity to vote on the question there would be an overwhelming vote in favor of this amendment.

Mr. MILLIKIN. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield.

Mr. MILLIKIN. I should like to suggest that even if the House has control of the bill, as the Senator says it has, and even if action is taken without going back to the stage of formal submission to

a committee, the conferees are selected from the House Ways and Means Committee.

Mr. SPARKMAN. That is correct.

Mr. MILLIKIN. If the conferees were not selected in the usual and normal manner, the very sores which have plagued the House in connection with this particular matter would be reopened.

Mr. SPARKMAN. Certainly. The Senator from Colorado is correct. I suppose no one would have any idea of doing anything else. Suppose the bill Suppose the bill should go to conference, with the top ranking members of the Ways and Means Committee as conferees, Suppose they should be adamant in opposition to this amendment. Certainly the only duty of the Senate conferees is to

take the amendment to conference and do the best they can with it. If the House conferees should prove adamant and should absolutely refuse to accept it,

all the Senate conferees would have to do would be to drop the amendment. Personally, I do not believe the House conferees would be adamant.

Mr. MILLIKIN. I suggest to the distinguished Senator that such a situation might easily be reached that there would be no action at all.

Mr. SPARKMAN. I do not believe

the House conferees would be so ada

mant against it, or that the Senate conferees would be so adamant for it, that there could be no compromise.

Mr. MILLIKIN. The distinguished Senator is full of beliefs which he holds in good faith, as to what the gentlemen

on the other side of the Capitol would do; but I suggest to him that it would be entirely possible for nothing at all to happen.

Mr. SPARKMAN. Personally, Mr. President, I think we are unduly alarmed on the question of inaction on the part of the other House, provided this amendment is placed in the bill.

Mr. HUMPHREY. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield.

Mr. HUMPHREY. Can the Senator imagine a situation in which nothing would happen if the distinguished Senator from Colorado were the head of the Senate conferees? It seems to me that great things would be happening.

Mr. SPARKMAN. Certainly. Mr. HUMPHREY. I express my great respect for his leadership. I think the Senator from Colorado, with his persuasive qualities, his great logic, his knowledge of taxation, and all the other qualities he possesses, could put the amendment through. If the Senate will only cooperate with him this afternoon and place this amendment in the tax bill, the Senator from Colorado will deliver the mail. He will deliver the goods. Mr. SPARKMAN. I know he could do it.

Mr. MILLIKIN. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield.

Mr. MILLIKIN. If I had the powers ascribed to me by the fine Senator from Minnesota-and I wish I had-I could undoubtedly persuade the distinguished Senator from Alabama to withdraw from the position he has taken.

Mr. SPARKMAN. Mr. President, I stand in fear and trembling every time the Senator from Colorado rises to his feet. I am afraid he will say something which will persuade me to back down. I am glad to say that he has not said I am glad to say that he has not said it yet.

Mr. HUMPHREY. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield.

Mr. HUMPHREY. The distinguished Senator from Colorado may not be able to dissuade the Senator from Alabama. The Senator from Alabama holds his position with great fervor and strength. However, I am afraid the Senator from Colorado has already persuaded some other Senators. I wish his logic and eloquence could be held for the confer

ence with the House conferees. I can see the Senator from Colorado really doing the job which needs to be done in the conference committee. I have full confidence in him, and he knows it.

Mr. SPARKMAN. I share that confidence. I daresay that if the able Senator from Colorado had attended the same tax meetings which I attended and had heard small-business men, some of them with tears literally rolling down their cheeks, tell their stories of how they were losing their businesses, and how they were confronted with the prospect of losing, I believe we would not ment. I think it would be in the bill. I have to be here pleading for this amend

believe the able Senator from Colorado

would have placed it in the bill. I know

he would be advocating it.

New Jersey [Mr. HENDRICKSON], I believe My good friend, the able Senator from New Jersey [Mr. HENDRICKSON], I believe it was, stated a few minutes ago that he would ask small business to be patient for 6 months. Patience is a great quality. Patience is something that is difficult to exercise when one is confronted with hardships which he feels in his heart are undue. There are many small businesses in this country which are confronted with such hardships. They are, for the most part, businesses which were started by GI's returning from World War II. They are new businesses. They have not been in existence long enough to build up a historic record, or a base of operations which would enable them to withstand the storm, whatever it may be. Year after year these small-business mèn see their earnings taken away from them to the extent of 82 percent. They want to expand. They want to buy new equipment. They want to build up their business a little, as every normal American business has a right to expect to be built up. But they cannot do it. There is nothing left after the 82 percent is taken out as the result of the excessprofits tax.

All in the world this amendment seeks to do is to give to the small businesses of the country a little base on which to stand. Big business has such a base before the excess-profits tax takes effect. Little business does not have it. That is particularly true of the small business which has been started since World War II. We are simply taking from such businesses, every year, what they are making, and giving them no opportunity to build back.

Someone has said-and I suppose it is true that we do not have a great scourge of business failures among small businesses. That is true, Mr. President, because we are not in any great storm yet. But when the time comes-and apparently it is close at hand, as we read the storm warnings-when we start to cut back on defense contracts, that is when the small-business man, who in many instances is a subcontractor, will begin to feel the pinch.

Many small businesses must operate on borrowed money. They have not been able to build up a sufficient capital structure or to accumulate sufficient operating capital.

There are many of them in my State, and I am sure there are many all over the country. When they go to their banks, they are faced with a tightening up of credit. I know of two businesses in my State which have been operating on a favorable basis with the banks for a number of years. One of them, I recall, all through World War II did a very fine business in defense work, and since World War II it has also carried on. However, it has had to use bank credit. Both of the companies were called in by their bank not long ago. They were told they could not be carried any more. They were given the same reason, namely, the tightening of regulations. They were both sound businesses.

Both businesses applied to the RFC, and each one of them received a loan from the RFC. That cannot be done any more. The RFC has adopted a policy of lending which virtually cuts out small business, unless it is connected in some way with the defense program itself. Therefore, to the ordinary operating business in the average community of the United States the RFC is not making any more loans.

It is when the credit tightening comes about and when the cutbacks in defense contracts begin taking place that small business will feel the pinch. They need some reserve buildup to get them over the rough places. That is what the amendment would do.

Mr. President, I shall not take any more time. The pending amendment is a good amendment. It was thought out very carefully.

In April of this year I made a short statement on the floor of the Senate in which I made certain recommendations. At the time I called attention to the oppressiveness of the present tax structure on small businesses and referred to the fact that they were threatened when any kind of economic storm started to blow. I made certain recommendations. One of them was that the excess-profits tax should be allowed to expire on June 30 of this year. Then I said if it becomes apparent that we cannot afford to lose the revenues which come from that tax, and it becomes necessary to extend the excess-profits tax, we certainly ought to insist that the level be raised to $100,000 in order that small businesses may be able to weather the storm.

I believe, and I believe strongly, because of what I have heard from the mouths of small-business men in all

parts of the country, that the amendment should be adopted. Instead of costing the Government money, it will make money for the Government and will make for the economic strength of the Nation.

a total income of $22,803,000, and paid an excess-profits tax of only $43,000.

I yield.

Mr. HUMPHREY. I wish to join with the Senator from Alabama. I concur in the view he holds, and I wish to support him in the amendment. It was my privilege also to be a member of the Subcommittee on Taxation of the Small Business Committee. I joined in the support of the report which was filed by the subcommittee in behalf of the I believe it would be full committee. well for us to take note of the fact that many other industries get what are called The mining special tax concessions. industry, the oil-production industry, and certain other industries, such as television, get some recognition of their particular peculiarities or their particular economic development.

What the report of the Select Committee on Small Business has provedand I believe proved beyond a shadow of a doubt-is that a company which is a growing company, or one that is referred to as a growth company, when faced with the excess-profits rates, on top of the normal tax and surtax, finds it literally impossible to accumulate

capital,

I point out again what the Senator from Alabama has stated, namely, that the inability to get credit, because of the tightening up of credit, makes it all the more important that there be some equitable adjustment made in the tax rate. If on the one hand we continue the excess-profits tax without any exemption, such as is proposed by the pending amendment, and on the other hand raise the interest rate, thus tightening

up the availability of credit, we have placed an almost insurmountable obstruction in the path of small industry, which seeks to be a true competitor.

Of course the restrictions on small business show up in the bidding on contracts. After all, the Government wants efficient bidders on contracts. Many witnesses before the subcommittee testified that when a small business was denied a contract it was primarily due to the fact that it did not have the capital, or did not have the plant it could have developed with capital, and thereby was denied an opportunity to participate in the bidding.

As the Senator from Alabama has pointed out, much of the business handled by small-business men is in the field of subcontracting, in which the profits are not very high. If the opportunity to bid is to be lost because of the excess-profits tax, then, of course, there is not much hope for the small-business man.

There are a number of companies which favor the extension of the excessprofits tax, and for a very good reason. Let us take, for example, the M. A. Hanna Co., the former interest of the Secretary of the Treasury. According to Moody's Register, during 1952 the company had

tax.

The reason is their base period. When we come into the field of postwar industry, or new industry, which has a late base period, companies in that category feel the full impact of the excess-profits tax.

Mr. SPARKMAN. I suggest that many small businesses, with earnings of less than a quarter of a million of dollars, have paid more in excess-profits tax than some of the great industrial giants which the Senator from Minnesota has mentioned. A company with earnings of $200,000 would pay $164,000 in excessprofits tax. How much did Montgomery Ward make?

Mr. HUMPHREY. How much did they pay in excess-profits tax? Mr. SPARKMAN. How much did they earn?

Investors' Service, paid no excess-profits tax in 1952 were Continental Can Corp. and Anaconda Copper Co. They paid no excess-profits tax in that year because their earnings base was the year 1948, a year of high profits; and the excessprofits tax does not take effect until the profits base is exceeded.

Mr. SPARKMAN. That is correct. Mr. HUMPHREY. But, if a small company were to borrow $100,000 or $200,000 from the RFC, in order to make a start with a small machine-tool factory, its earnings base might be $25,000.

Mr. SPARKMAN. Or perhaps for 1 year it would operate in the red, and that would offset its $25,000 earnings base in the following year.

Mr. HUMPHREY. If thereafter that company obtained a Government contract, the final result would be that practically all the revenues of the company in excess of its expenses would have to be paid as its excess-profits tax.

Mr. SPARKMAN. Yes; for it would be taxed at 82 percent.

Let me ask whether the Senator from Minnesota has before him the earnings

Mr. SPARKMAN. Ninety-five million dollars; and they paid no excess-profits tax. Nevertheless a small business, .operating in my State, earning $200,000, would pay $165,000 of it in excess-profits tax. It is little wonder that small businesses cry out against the injustice and inequity of the law as it is applied.

has correctly stated, as I tried to say a Of course, the Senator from Minnesota

few minutes ago, the trouble is that the for many years and they have established industrial giants have been in business for many years and they have established a certain historical record, or a certain base on which to stand. The excessprofits tax does not take effect until a

company gets above a certain base on which it stands. A small business, which

started, say, at the end of the war, with perhaps two GI's getting together and of thousand dollars, and building up using their separation pay or a couple their business little by little, if the business earns as much as $100,000, pays in excess-profits tax more than the great Hanna Co. or Montgomery Ward, or some of the other large companies to which the Senator from Minnesota has referred.

Mr. SPARKMAN. That paid no excess-profits tax at all in 1952? Mr. HUMPHREY. It did not pay any excess-profits tax in that year.

earns more than any other American corporation; does it not?

Mr. HUMPHREY. Yes. I recall that its net profits were well in excess of $600 million.

Mr. SPARKMAN. I do not know

about that, but my understanding is that its earnings base is approximately $500 million, with the result that until it has have to pay an excess-profits tax. On a net profit of $500 million, it does not

the other hand, a small company in my State has to begin paying an excess-profits tax on any net earnings in excess of $25,000 a year; $25,000 is the total exemption it has for excess-profits-tax purposes; that provision is written into the law.

We are endeavoring to have the treat

ment of small corporations and companies made somewhat more comparStates Steel, General Motors, Contiable to the treatment accorded United nental Can, Hanna & Co., and the other large industrial concerns. We are merely trying to give the small corporations and companies a base of $100,000, if they succeed in earning that much.

Mr. HENDRICKSON. Mr. President, will the Senator from Alabama yield to me?

Mr. SPARKMAN. I yield.

Mr. HENDRICKSON. Did the Senator from Alabama vote for the excessprofits tax in its present form?

Mr. SPARKMAN. Yes, I did. Mr. HENDRICKSON. I thank the Senator from Alabama.

Mr. SPARKMAN. Let me say however, that approximately 21⁄2 years ago, I was one of those who advocated the

Mr. HUMPHREY. I do not have that figure, I regret to say; but its earnings were in the hundreds of millions of dollars.

Mr. were.

Mr. HUMPHREY. Other companies which, according to Moody's Standard

who then was chairman of the Finance Committee, I believe, and the distinguished Senator from Colorado [Mr.

MILLIKIN], who at this time is chairman of that committee, pointed out to us many times some of the bad features of an excess-profits tax. Certainly such a tax has bad features. No one has said a good word for it. I do not believe any Member of the Senate favors an extension of the excess-profits tax. Certainly no one in the executive agencies in Washington has had a kind word to say for the excess-profits tax.

I hope that when we get rid of the excess-profits tax, we shall devise a plan by which it will be possible to avoid ever again having to impose an excessprofits tax, because of the inability to avoid great injustices under such a tax. I have never been able to think of a way to write an excess-profits tax without doing the injustices and the inequities which have developed under the present excess-profits tax law.

Some of our experiences with the administration of the excess-profits tax and some of the developments under it were mentioned a few minutes ago by the senior Senator from Minnesota. For instance, the great United States Steel Corp., a splendid organization which has done an outstandingly fine job over many, many years, does not have to pay a penny of excess-profits tax. That is so simply because of the past record of that corporation. On the other hand, a GI who returns to New Jersey or Alabama or California or elsewhere in the United States, and who wishes to begin a little business-often by means of using his separation pay or the savings he was able to accumulate while he was in the service of his country-is required to pay an excess-profits tax on every dollar he earns in excess of $25,000.

I do not think it is asking too much to ask that his exemption, for excessprofits-tax purposes, be increased to $100,000. The cost of making such a change would be $32 million. I do not believe that is too much to request, when we consider the fact that 95 percent of our industrial concerns are properly classified as small businesses. Although such an amendment would cost $32 million, yet in the long run it would make money for the Government.

Mr. MURRAY. Mr. President, will the Senator from Alabama yield to me? Mr. SPARKMAN. I yield. Mr. MURRAY. Is it not true that a very large percentage of American businessmen eventually fail? A man who goes into business may be successful for a while, but eventually he is likely to fail. I think more than 75 percent of American small-business men fail eventually.

I remember that during the depression thousands and thousands of small-business men were closed out, although at that time the big businesses were able to continue to make profits and to declare dividends.

Mr. SPARKMAN. That was because over the years they had been able to build up reserves.

Mr. MURRAY. Yes.

Mr. SPARKMAN. But a small-business man, operating on a very small base, could not build up a reserve sufficiently large to protect him when the storm came.

Mr. MURRAY. The big businesses are also able to build up legal departments to look after their interests in ments to look after their interests in connection with the enactment of legisconnection with the enactment of legislation. They maintain such offices at the Capital of the Nation and the expenses of maintaining those offices are deductible from the incomes of those deductible from the incomes of those businesses when they make their incometax reports. As a result, the large businesses are able to take care of themselves very well.

On the other hand, the small-business men have not been able to do that. In the early days of the depression it was even difficult for them to obtain loans from the Reconstruction Finance Corporation.

Mr. SPARKMAN. The Senator from Montana is entirely correct.

Mr. MURRAY. I remember some businessmen in one of the smaller towns of Montana who were very successful over the years, but during the depression they got into debt. When they applied for loans the Reconstruction Finance Corporation thought it was remarkable Corporation thought it was remarkable that a businessman in a town with a population of 2,000 or 3,000 would request a loan of $50,000. The RFC did not think that was reasonable, whereas that businessman did business with the people living in an area of 100 square miles and he had to carry farmers on his books, and the farmers were broke. So during such periods the small-business men suffer very severely.

As the Senator from Alabama stated a while ago, when the war began many of the small-business men could not obtain Government contracts because they tain Government contracts because they did not have adequate facilities, and they did not have adequate facilities, and they could not develop them because they did not have sufficient funds.

It seems to me it would be a very serious blunder for the Senate to reject the amendment. amendment. Only yesterday we had before us a treaty for the purpose of bailing out speculators in German bonds. ing out speculators in German bonds. Under that treaty we provided for those who had speculated in those bonds and had bought them for a song. They will recover perhaps $500 million or $600 million. It seems to me that it would million. It seems to me that it would be a very serious mistake on our part to fail to make this exemption for the small-business men of the Nation, who over the years have suffered so severely and most of whom eventually go broke.

Mr. SPARKMAN. I appreciate very much the remarks of the distinguished much the remarks of the distinguished Senator from Montana.

Mr. President, I am about to yield to the distinguished Senator from New Hampshire [Mr. TOBEY], but first let me say that the Senator from Montana has pointed out that small businesses now are beginning to get into a difficult situation. The Senator from Montana spoke of the large number of casualties among small businesses in the days when the recession began. Of course, that is correct.

Mr. President, I may remind Senators that the great panic, which we usually speak of as having begun in 1929, started first with the farmers and second with the small-business people. They were the ones who were in the vanguard of the great depression. It closed in slowly

upon the big industries, for the very reason that the Senator from Montana has stated. It closed in slowly upon the financial institutions of the country. It was similar to a disease which gradually overcomes its victim. I call attention to the fact that a condition of that kind is already working in this country, first upon the farmers, exactly as happened before; and it is now threatening to take hold, indeed, is actually starting to take hold of small businesses. We ought to read the signs of the time and should profit by past experience.

Mr. MURRAY. Mr. President, if the Senator will yield, I believe the Wall Street Journal of yesterday or the day before contained an article, in which it was stated that for the third quarter of this year, there will be a considerable increase in unemployment.

Mr. SPARKMAN. Exactly, and I may. remind the Senator from Montana that, as the Senator Senator from Kansas [Mr. SCHOEPPEL] stated a few days ago Mr. David Lawrence wrote a very thoughtprovoking column which he began by saying, "Congress may be legislating the next depression." I am unwilling to accept that theory, but that is the view of Mr. Lawrence; and it certainly shows some of the signs that should be heeded. Dr. Nourse, who certainly is a sound, sensible economist, recently said, "The present has all the making of a depression." I think I have quoted his words exactly.

So I want to go on through with the amendment which is designed to afford relief to small business. I agree to follow Mr. HALLECK, Mr. SADLAK, and the Rules Committee, as well as the administration. And I agree to follow the pleas for relief by small-business men throughout the country.

Mr. TOBEY. Does the Senator from Alabama have his fingers crossed?

Mr. SPARKMAN. No. I say that meaningly-that is, as long as they are

right.

Mr. TOBEY. That is a qualifying clause.

Mr. SPARKMAN. Not at all. It is a safety provision.

Mr. TOBEY. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield to the Senator from New Hampshire.

Mr. TOBEY. I shall take only a few minutes. I shall not address the Senate at length on the subject of the rotten labor conditions which exist in New Orleans, but the members of a great colored union, and their leader, and a great white union of dockworkers, met with our subcommittee in a court room in New Orleans last week.

Mr. President, we are dealing with crooks and criminals, who are acting as labor leaders. There is proof today in a New Orleans newspaper that the workers are casting off the yoke of bondage. Now let them go ahead and kick Dave Dennis out.

In the New Orleans Item of July 14, 1953, there is an article headed "Dock Union Votes To End Assessment." I ask unanimous consent that the article be printed in the RECORD at this point in my remarks.

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

DOCK UNION VOTES TO END ASSESSMENT

A roaring voice vote Monday night ended the 5-percent salary assessment in the Negro longshoremen's local but left President Dave A. Dennis still in possession of his union office.

The vote took place as a result of a chain reaction inside the union-local 1419 of the International Longshoremen's Association. AFL following Tobey committee hearings in New Orleans.

The committee had charged that Dennis and his leaders had failed to account for about $287,000 in 5 percent collections during the past 4 years.

The meeting last night took place at the Common Laborers Hall, 201 Iberville.

It was limited to union members in good standing, which barred the press and also former local members who had fallen behind in 5 percent payments.

CHEERS AND BOOS

The sound of a spirited meeting going on inside rolled out to the street in waves of cheers and boos.

Leaders of the Dennis administration reported after the meeting that they had gone along reluctantly with a motion ending the 5 percent.

This motion was introduced by Joseph Pierre, a former vice president of the union. It was reported that Dennis and his group kept control of the meeting during efforts made before the 5-percent vote to oust Dennis as president.

Dennis administration leaders said they supported the Pierre resolution as a compromise to "satisfy the will of the membership and restore peace in local 1419."

They said about 2,400 members attended. Total membership on the books is about 3,400.

DENNIS PRESIDES

Dennis opened the meeting and presided, but the membership shouted him down at several points.

Speakers who attacked his record or introduced critical motions included Ernest James, Alvin Bocage, Cornelius Smith, and Leo Tankerson.

This group had called and led two earlier protest meetings against the Dennis administration.

They had also circulated petitions at meetings and along the waterfront asking the ILA to fire Dennis from the presidency and out of the union. They asked the ILA to hold a new election in the local. The rebel group claimed that more than 2,000 men signed the petitions.

The ILA conducted a formal hearing of the charges in New Orleans last week. Frank Yeager, of Galveston, ILA Gulf district president, presided at that session. After hearing charges by James Tankerson and others, Yeager said the protests would be taken under advisement.

"TO MAKE BEEFS"

Dennis is secretary of the ILA Gulf district and a vice president of the international union.

He had announced that last night's meeting was being called "to give anybody who wished a chance to get up and make his beefs."

Dennis opened the session still apparently backed by union's national and district officialdom. But his local leaders had indicated for a week that some compromise such as ending the 5 percent might be agreed to. There had even been some talk among his leaders that Dennis might resign.

He made vigorous denial that his group had misused or failed to account for union funds. He claimed that he gave strong lead

ership to the Negro longshoremen and served ership to the Negro longshoremen and served their interest.

After last night's meeting his leaders said:

"Dave has weathered the storm and he doesn't plan to resign." He was elected first in 1948 and again in 1952, and has 3 more years in office.

DUES $1 A MONTH

Regular dues in the local are $1 a month, payable quarterly. The extra 5 percent assessment was justified as a means of supporting the local's benefit program.

It provided each member with $1,000 life insurance. The local also ran a commercial funeral home, owns some rental property, a recreation center near Slidell, and a loan company in liquidation.

Several of the rebel group thought after the meeting that they had voted to up the

dues from $3 to $15 a quarter, while ending

the 5-percent assessment.

Dennis leaders said, however, that the dues were left at $3 a quarter "and any change in dues or payments was left to be decided later."

Mr. SPARKMAN. Mr. President, I do not know that the statement of the Senator and the newspaper article have any connection with small business.

Mr. TOBEY. I may say to the Senator they have this to do with the subject. The smallest-business man in the world is the shoemaker who has a small family. When excessive initiation fees are exacted from him and taken from his pay envelope, it is high time that we cried out against it and I am crying out.

Mr. SPARKMAN. The distinguished Senator may always be counted upon to cry out in the cause of the little man and any other person who needs help.

Now, Mr. President, I desire to yield to the Senator from South Carolina, who

I see is on his feet.

Mr. JOHNSTON of South Carolina. Mr. President, I believe the Senator from Alabama has already brought out what I wanted to ask him about. At the present time, it looks as if the small-business man may have a very hard time meeting his future obligations. If that be true, it would seem that the Senator from Alabama is endeavoring by way of an amendment to make it possible for the

small-business man to build up a modest surplus with which in the future to meet

a possible crisis with which he may be confronted.

Mr. SPARKMAN. That is exactly correct; and in the ordinary course of events we know he is going to have to meet such a crisis, because we know that

when the cutback in defense orders becomes effective, he is the one who is going to be hit first and hardest.

Mr. JOHNSTON of South Carolina. It is true that big business has already built up reserves.

Mr. SPARKMAN. That is correct. Mr. JOHNSTON of South Carolina. They have their reserves, and they have them even now, under the law that is now on the statute books.

Mr. SPARKMAN. That is correct; and I have no criticism of it. It is necessary that a point be established above which profits will be regarded as excessive. The problem is difficult. I am not criticizing the committee for having selected the particular formula it chose. I do not know how they could have se

lected a formula to take care of the new businesses that come into existence. But what I am pleading for, and all I am pleading for, is that the exemption be increased. Originally it did not exist, except, perhaps, to the extent of $10,000; but about 2 or 22 years ago it was increased to $25,000. The law has worked satisfactorily so far as the $25,000 exemption is concerned, except that it is simply not sufficient. I am asking that it be increased to $100,000.

Mr. LONG. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield to the Senator from Louisiana.

Mr. LONG. I am sure the Senator

from Alabama is aware of the fact that large concerns are able to borrow large sums of money, and that when they do it builds up their credits under the excess-profits tax. But the smaller concerns are unable to borrow such vast sums of money, and are therefore unable to get the additional credit which the large concerns obtain by borrowing money. The Senator from Alabama is, of course, familiar with the fact that many of the largest concerns in America, concerns which at the present time are making profits higher than they have realized for years, are not in excessprofits-tax bracket, and are not now paying excess-profits taxes.

Mr. SPARKMAN. Yes; I may say to the Senator from Louisiana, that was brought out a few moments ago. The distinguished Senator from Minnesota

read some of those on the list. I was

surprised to learn that United States Steel pays no excess-profits tax—at least

that it paid none in 1952.

Mr. JOHNSTON of South Carolina. Mr. President, will the Senator yield?

Mr. SPARKMAN. I yield to the Senator from South Carolina.

Mr. JOHNSTON of South Carolina. Pursuing the same line of inquiry, is it not also true that at the present time the Government is, so to speak, more or less pulling the carpet from under the small businesses, so far as the RFC is

concerned?

Mr. SPARKMAN. I mentioned a few moments ago one or two small companies in my State that had been making use

of a line of credit at the banks to the extent of perhaps $60,000 or $100,000 were called in by the banks when the hard-money policy came in, and were told, "We are sorry, but we cannot carry you any more." Those companies have been left stranded. Their officials came to Washington, and each one of them was successful in arranging with the RFC for a loan that would enable it to carry on.

But the RFC has now changed its policy, and an effort is being made by the present administration to abolish the RFC altogether. If that is done, there will be no place where such loans will be available.

Mr. JOHNSTON of South Carolina. Is it not true that the small-business man cannot obtain credit at the banks, for the reason that most of the banks have to meet their obligations annually?

Mr. SPARKMAN. Most of small banks are unable to do that. I am talking about the bank in the average small