I cannot help wondering why the junior Senator from New York spends so much time, not naming a single Communist, but in going about throughout the country and in taking the time of the Senate and States in the CONGRES SIONAL RECORD to criticize and condemn anyone who is talking out and is prosecuting the traitors to the United States.

I have given the record of the junior Senator from New York today, not because I am concerned with the Senator, for I think he is completely unimportant in this body, but I have done so in order that the country may better know why he springs to the defense of men like Alger Hiss, why he starts a prolonged program of character assassination against my very able staff, who are doing such an excellent job of digging out the truth.

Mr. LEHMAN. Mr. President, will the Senator from Indiana yield to me for half a minute?

Mr. CAPEHART. Yes, I yield for another half minute.

Mr. LEHMAN. I have already answered the Senator from Wisconsin. He has asked me the question why I am spending so much time in fighting much time in fighting "mc carthyism." I use the term "mc carthyism" deliberately and advisedly-and I spell it with a small m, not a large M.

I will tell the Senator why. It is because I believe in justice, because I believe in the Bills of Rights, because I believe in the Constitution of the United States. So long as I have the strengthI do not know how many more years I am going to have it-I am not as young as I was 30 years ago-but I am going to continue to fight against the things for which the Senator from Wisconsin stands, which I describe as "mc carthyism" with a small "m."

The PRESIDING OFFICER. All the time yielded has expired.

Mr. CAPEHART. Mr. President, I am more convinced than ever, after listening to the debate during the past hour, that our country is safe, because when we live in a country where two United States Senators can rise and debate as freely and openly as these two Senators have debated, and as the able Senator from Oklahoma [Mr. MONRONEY] has debated, we are safe.

Mr. LEHMAN. I thank the Senator from Indiana for yielding to me.

Mr. CAPEHART. When Senators can rise and talk about each other as these two Senators have done, I think it is an evidence of freedom.

SALE OF GOVERNMENT-OWNED RUBBER-PRODUCING FACILITIES The Senate resumed the consideration of the bill (S. 2047) to amend the Rubber Act of 1948, as amended, to provide for the sale of Government-owned rubberproducing facilities, to repeal and modify certain of its provisions affected thereby, and for other purposes.

Mr. DANIEL. Mr. President, will the Senator from Indiana yield for a question on the rubber bill? [Laughter in the galleries.]

The PRESIDING OFFICER (Mr. BENNETT in the chair). The Chair dislikes

to disturb the enjoyment of the occupants of the galleries, but it is necessary to remind them that they are here as guests of the Senate, and they are expected to observe silence. The Chair hopes they will correct their present attitude during the remainder of the debate.

Mr. DANIEL. Mr. President, the junior Senator from Texas has received several inquiries-and I am sure the senior Senator from Texas [Mr. JOHNSON] has received similar, inquiries-as to whether it is the intention of this proposed legislation that the purchasers of posed legislation that the purchasers of the rubber plants, in order to qualify, must show some proof of their purpose to continue to operate the plants for the manufacture of synthetic rubber.

Mr. CAPEHART. I would be 100 percent opposed to any sales plan which did not make it almost as certain as anything can be made-and nothing, of course, is 100 percent certain-that the plants would continue to operate. Under the terms of the bill the Board is required to write into the contracts a provision that the purchasers must maintain the plants under the national-security clause. By appropriate contractual relation they would have to be continued in operation to be readily available for production under the national-security production under the national-security clause.

Mr. DANIEL. Is it the Senator's understanding of the intention of the bill that the purchasers of the plants must maintain them and operate them for the manufacture of rubber?

Mr. CAPEHART. There is no question about it in the mind of the Senator from Indiana. Let me read from page 33, line 1:

That the prospective purchaser is acting in good faith, and actually intends to operate the facilities for the purpose of manufacturing synthetic rubber or its component materials.

I do not think there can be any question about it. When this plan comes back to the Congress, if the terms are not as positive as anything can be made, I shall be opposed to it.

Mr. DANIEL. Does the Senator see how the purchaser could comply with the recapture clause if he did not continue to operate the plant?

Mr. CAPEHART. The able Senator and I discussed this question a little earlier today. We talked about a recapture clause. There is no recapture clause except on the alcohol-butadiene plant leases. There is a national-security clause, which I think is even stronger than a recapture clause, because under the national-security clause, when it is written into the contracts, the purchasers must be in a position, within not more than 90 days, I believe, to produce synthetic rubber for the United States Government in case of an emergency.

Mr. LONG. The Senator mentioned that under the language of the bill the entire plan would have to be accepted, or turned down as a whole, which would necessitate starting all over again. It seems to me that it might be wise for the Congress to have it within its power to accept the parts of the plan which are believed to be desirable, and to set aside such parts as are believed to be undesirable.

Mr. CAPEHART. I think I can satisfy the able Senator in that respect. If we were to operate on the basis suggested, and if we were satisfied, let us say, with the sales price and all other conditions with respect to 6, 8, or 10 of the plants, we would proceed to sell them, and the remaining 22, 20, or 18 plants would be left in the hands of the Government to be either kept in standby or operated in competition with private plants if the Congress so provided. We would have a very bad situation.

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

Mr. CAPEHART. I yield.

Mr. LONG. It is entirely likely that, with regard to many of the plants, the price would be right, and everyone would agree that certain concerns should have those plants. For example, if at one particular place a concern owns a major refinery-as is the case in my home town-if that concern should make the best offer, and should be in the best position to operate in the community, it might be well to allow that part of the plan to stand. On the other hand, suppose the plan were such that small business did not get any share of this production. It would be wise to keep the good parts and disapprove the bad part.

Mr. CAPEHART. Another reason why I do not believe we could operate on the basis suggested is that if we were to plan to sell, say, 10 of the plants and the Government continued to operate 18, no one would want to buy 10 and compete with the Government operating the other 18, because the Government-operated plants would not pay a Federal income tax. As a practical matter, I do not believe that such a plan would work.

Mr. LONG. There would be nothing to prevent the Government, by subsequent legislation, from going forward and proceeding to dispose of all the remaining plants by selling them or disposing of them as we dispose of property in various other ways.

Mr. CAPEHART. I think we shall have better control over the entire program if we insist that we have the right to reject the entire plan, rather than to reject parts of it and to proceed with respect to other parts.

Mr. CAPEHART. I yield.

are good in order to be able to cast aside those which are bad?

Mr. CAPEHART. If we were to follow the plan suggested, I am fearful that what might happen would be this: Some of the plants are better than others.

Some are better located. The Government might sell at a very high figure 8, or 10, or 12 of the plants, and no one would bid on the others. So what we would be doing would be selling the best of the plants and retaining the others. I think they ought to be sold as a whole and considered as a whole. I think that would be to the best interests of the United States and the people, because if we were to follow the program suggested by the Senator, we might not get adequate production. Bear in mind that the bill requires that a sufficient number of these plants must be sold to produce 500,000 long tons of GR-S. The thing we must watch out for is that we maintain, even after we sell them to private industry, production of no less than 500,000 long tons of GR-S. We must make certain that small business concerns, such as those that make rubber heels and rubber goods of all sorts, are able to obtain synthetic rubber. I am fearful the Senator's plan would not work.

I am very glad the Senator brought up the point. We did give some thought to it and we did talk about it, but we finally gave up the idea, just as I am sure the Senator from Louisiana will give it up after he studies the subject very carefully over a long period of time, especially after he puts down all the pros and all the cons. If he does so he will find that there will be more pros for the disposition of the plants as a whole, than there will be pros in favor of disposing of them a part at a time.

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

Mr. CAPEHART. I yield.

Mr. LONG. Will the Senator from Indiana explain in more detail expressly what provision has been made to assure the independent producers of rubber that they will be able to have a continuing supply of rubber; and what provisions are contained in the bill to prevent all the rubber-producing facilities from gradually going into the hands of a few large concerns?

Mr. CAPEHART. I believe we have used the very best language that could possibly be used in that respect. I think the language in the bill is very clear on that point. We are all of the same mind in the committee, namely, that the small user must get his share. I read the language of the bill at page 32, line 8. The language reads:

(1) That the disposal program be designed best to afford small-business enterprises and users, other than the purchaser of a facility

I emphasize that point "other than the purchaser of a facility."

In other words, for this particular provision, we do not care about whether he gets any rubber for his own use as the owner of the plant.

the opportunity to obtain a fair share of the end products of the facilities sold and at fair prices.

I read the third paragraph on page 32: (3) That the recommended sales shall provide for the development within the United

States of a free, competitive, synthetic rubber industry, and do not permit any person to possess unreasonable control over the manufacture of synthetic rubber or its component materials.

I do not know how we could write stronger language than that.

Mr. LONG. Is there anything to prevent the five largest producers of rubber buying all of these plants?

Mr. CAPEHART. I do not think that would happen. However, let us assume it should happen.

Mr. LONG. Could it happen under the bill as now drawn?

Mr. CAPEHART. It could happen only if Congress approved the plan. If there was submitted a plan under which the facilities were to be sold to 4 or 5 of the largest producers, Congress would have a right to turn down the plan. Let us suppose we did not turn down the plan, and that it did happen. I am certain it will not happen. I would be against it. However, let us say it does happen. In that case the bill contains the finest kind of safeguarding language. Incidentally I wrote it. I insisted on it, because I have been in the manufacturing business. I believe this is the best language that could be used under the circumstances. I will read it again:

(1) That the disposal program be designed best to afford small-business enterprises and

users

I again emphasize that languageother than the purchaser of a facility.

I emphasize the words "other than the purchaser of a facility."

However, it seems to the junior Senator from Louisiana that it might be desirable to assure independent concerns, so far as it is practicable to do so, that they will have an opportunity to get together and purchase some of the rubber-producing facilities, and that some precaution will be taken to give such concerns an opportunity to purchase the plants.

Mr. CAPEHART. Such a provision is included in the bill. They have a perfect right to buy the plants. The Senator from Louisiana has a right to buy one of them. I have a right to buy one of them. Everyone in the United States has a right to bid on the plants. The Senator from Louisiana has a perfect right to buy them.

Mr. LONG. The junior Senator from Louisiana has proposed an amendment which would give the Commission the right to fix a price at which a certain amount of productive capacity, shall be sold. Having fixed the price, the Commission believes is the proper price, it would be in a position to sell a certain percentage of the productive capacity to corporations, which would include a general stock ownership representing independent concerns. The junior Senator from Louisiana hopes the Senator from

Indiana will seriously consider the amendment, and that he will favorably consider it, because it would guarantee the right of independent producer corporations to get together and acquire some of the productive capacity of the synthetic-rubber plants.

Mr. CAPEHART. I believe the able Senator from Louisiana is a lawyer. Is that correct?

Mr. LONG. That is correct.

Mr. CAPEHART. A contract is entered into. When the program comes back to Congress for approval there will be a written contract presented, and the contract will be between the United States Government, or the Commission, and the ultimate purchaser. Certain clauses will be included in the contract which will follow the intent or directions of Congress, one of them being the paragraph which I have just read. I do not know of any other way in which a per

son could enter into a contract. For example, the Senator from Louisiana and I can get together and agree to do certain things, and we sign our names to a contract. That contract is in force, and if I violate it the Senator from Louisiana can sue me and get judgment against me.

Mr. LONG. Who would enforce the contract? How would an independent producer, in time of scarcity of rubber, enforce his rights?

Mr. CAPEHART. I do not know how he could enforce his rights as an individual, but the United States Government could enforce his rights for him.

Mr. LONG. Of course, the Government can always, by a price-control act or an allocation law, protect the owner.

those plants?

Mr. LONG. I have in mind that they would buy 1 or 2 of the plants.

Mr. CAPEHART. They would have a perfect right to do so. They would be encouraged to do so.

Mr. LONG. There is no assurance that they could get a plant. That is why the junior Senator from Louisiana would like to suggest an amendment such as the one that is now at the desk, by which it would be made certain that a price would be set for a plant, which the Commission would believe to be a fair price, and thus make it possible for such corporations to purchase a plant.

Mr. CAPEHART. The bill gives the Commission the right to do what the Senator from Louisiana suggests.

Mr. LONG. Will the Senator from Indiana point to the specific language in the bill under which that could be done?

Mr. CAPEHART. Let me read to the Senator the definition of the term "person":

The term "person" means any individual, firm, copartnership, business trust, corporation, or any organized group of persons whether incorporated or not.

That includes the group to which the Senator from Louisiana has referred.

Mr. LONG. That would give them the right to make a bid. However, that would give them no assurance that they would be able to acquire a plant.

Mr. CAPEHART. It would depend on what they were willing to bid, of course.

Also it would depend on their ability to comply with what we hope will be written into the act, namely, that they will agree to sell to small users of rubber. I am not interested in having 25 corporations or individuals get together and buy 1 or 2 of the plants, so they will use all the output, and then say, "We will not sell any of the rubber to other persons.' That is what could be done under the Senator's plan.

Mr. LONG. The amendment of the junior Senator from Louisiana would give the commission the right to require that any organization or corporation, which purchased such facilities could be required to let other independent processors have a stock interest in it. In that way it would be made possible for independent producers, if they wanted to get together, to buy some of the plants. Mr. CAPEHART. They could do it under the pending bill.

Mr. LONG. They could make a bid. Mr. CAPEHART. It is impossible to write language giving a group such as the Senator is talking about any better way of acquiring one of the plants than under the language which is now contained in the bill.

Mr. LONG. The Senator would give them an opportunity to bid. However, if their bid did not happen to be the highest bid they would not be able to acquire the plant; or if they could not get the necessary credit, they would not be able to acquire the facility.

Mr. CAPEHART. Oh, no. The bill does not require that the plant go to the highest bidder. The primary purpose, in addition to the purpose of having a fair price paid, is to provide for competitive industry. The Commission will not be required to sell to the highest bidder. It will be compelled to sell to the highest bidder if it were convinced, and could convince the Congress, that by selling to the highest bidder, open competitive industry would be preserved or established. But if the highest bidder happened to be a large rubber company that wished to buy all the plants, the Commission would not sell the plants to the highest bidder.

Mr. LONG. If a company wished to obtain its fair share of the productive facilities, that might not be possible under the bill as it now stands. I have an amendment which, however, would guarantee that such a result could be attained.

Mr. CAPEHART. But the weakness of the amendment is that assistance would be given to perhaps 25 users who wished to purchase one of the plants for their own use; but there are many, many more users than that.

Mr. LONG. Mr. President, if the Senator from Indiana will study my amendment, he will see that it would make it possible for all those who fabricate rubber to have an opportunity to acquire stock ownership in at least one plant producing rubber.

Mr. CAPEHART. But one plant could not supply the needs of all the fabricators.

Mr. LONG. That is true; but some fabricators could purchase stock ownership in one plant, and other fabricators could purchase stock ownership in other plants.

Under the amendment, the Commission would have a right to require that a group that formed a corporation for the purpose of assuring themselves a supply of rubber should divide some of the stock among others who might be interested in acquiring stock ownership in such rubber-producing facilities.

Mr. CAPEHART: I assume the Senator from Louisiana means that every user of rubber in the United States would be able to buy such stock.

Mr. LONG. Yes; be able to buy stock in a corporation which, in turn, proposed to acquire certain of the producing facilities.

Mr. CAPEHART. But that situation would be no better than the situation under the bill as written, because there is only so much production. Who would Who would allocate it in that case?

Mr. LONG. I should like to prevent a situation similar to the one existing today in the case of the production of aluminum. There are many fabricators of aluminum. Yet there are only three producers of pig aluminum. Those who produce pig aluminum steadily raise their prices, but at the same time do not raise the price at their fabricating outlets. In some cases they have been raising the price of pig aluminum at the same time that they have been reducing the price at their fabricating outlets. The result is that the small operator has been caught in an impossible squeeze.

In fact, at one time there seemed to be a profit mark-up of approximately 25 percent, in the case of the fabrication of aluminum, while there was a profit of only 10 percent in the manufacture of pig aluminum. The trend seems to be toward a steady increase in the profit in connection with the production of pig aluminum, with the result that the former profit of 10 percent on such production has been shifting to perhaps 25 percent, in the case of the manufacture of basic aluminum, whereas in the case of the fabrication of aluminum, the trend has been to have the profit decrease from approximately 25 percent to perhaps 10 percent or 8 percent. In short, there would be a much greater profit in connection with the processing of pig aluminum, which requires an enormous investment.

So the little fellow is finding himself in more and more of a squeeze.

I hope we can prevent the development of such a situation in the rubber industry. My amendment is designed to prevent the development of a situation of that sort in the rubber industry.

Mr. CAPEHART. But I do not believe the Senator's amendment would do it. I think the plan we have worked out would assure the little fellow more rubber at a fair price, and with fairer distribution.

In any event, what the Senator from Louisiana has in mind can be done under the provisions of the bill. His amend

ment is not needed if he wishes to have done exactly what he has just stated. Mr. BUSH. Mr. President, will the Senator from Indiana yield to me? Mr. CAPEHART. I yield.

Mr. BUSH. Does the Senator from Louisiana feel that the independents have been under a handicap in acquiring

crude rubber in the open market during the past few years?

Mr. LONG. It is my feeling that, insofar as we can, we should try to assure that the independent producers of rubber will be in a position to protect themselves.

Having served on a committee which heard from the independent producers of rubber after the outbreak of the Korean war-at which time those producers explained their difficulties, and explained how many of them were being driven out of business-I am aware that at that time, at least, there was a law which was of help to them.

However, in the absence of such a law, there would have been no way by which the fabricators of rubber could have assured themselves a supply.

A similar situation existed in the case of aluminum. In that case, of course, the additional aluminum-producing facilities had been sold by the Government to two major concerns Kaiser and Reynolds. The law existing at that time did not contain a provision similar to the one I am advocating in the case of the rubber-producing facilities.

Let me state what I have in mind: In connection with the sale of certain of the rubber-producing plants to certain corporations, there would first be ascertained the percentage of the rubber the independent fabricators were using. Probably it would be found that that was about 30 percent. Then we should attempt to have set aside approximately 30 percent of the productive facilities, for sale to corporations whose major stock ownership would be among the independent fabricators of rubber-—either

those who owned stock in them or those who as individuals had been fabricating rubber. Such a corporation would be subject to the provision of my amendment which appears on page 2, beginning in line 10, as follows:

The Commission may further require that the voting stock of such corporations shall be made available to individuals, corporations, or stockholders of corporations engaged in the processing of rubber with a view to assuring, to the greatest extent that the Commission deems feasible, that the smaller independent fabricators of rubber products shall have a voting interest in the production of rubber from such copolymer facilities.

If such a provision had been a part of the law at the time when we disposed of the aluminum-producing facilities to Kaiser and to Reynolds, the independent fabricators of aluminum could have acquired for themselves some voting stock in the corporation.

Mr. CAPEHART. But suppose they did: Then what would they do? Suppose the Senator from Louisiana, for instance, owned 3 or 4 or 5 shares of the stock. Would that give him any assurance that he would be able to purchase rubber? The fact that he owned stock in the corporation would not give him any assurance that he could purchase rubber.

Mr. LONG. Of course, if the amendment required that the stock ownership be divided in that way, then no large concern would be able to control the rubber supply; but, on the contrary, ownership would be widely spread among

the independent producers, who thus would be able to protect themselves.

Mr. CAPEHART. Is it the idea of the Senator from Louisiana that the concern to which he refers would sell rubber only to its stockholders?

Mr. LONG. My purpose would be to do for the independents what the major concerns the big five-would do if they could. They would like to put them selves in a position to have an integrated operation, so that they could manufacture synthetic rubber and could process it to the point where it was sold to the public.

I believe that insofar as possible it is desirable to place the independent producers of rubber and the independent manufacturers of rubber in a similar desirable position.

Mr. CAPEHART. The bill as now written gives them every right the amendment of the Senator from Louisiana would give them.

Mr. LONG. It gives them the right to bid.

Mr. CAPEHART. That is all the amendment of the Senator from Louisiana would do.

Mr. LONG. But there would be no assurance that smaller independent concerns would acquire such facilities, unless my amendment is adopted.

The amendment for which I urge favorable consideration would assure that a certain percentage of the production, comparable to the amount the independent concerns would consume, would be definitely made available to them. In that event the Commission would fix the price. Of course, it could fix the price on the basis of what it expected to obtain from the large concerns for the plants on which they were bidding.

Mr. CAPEHART. Does the Senator from Louisiana refer to the price of the rubber being sold or the price of the facilities?

Mr. LONG. I refer to the price of the plants which would be sold.

Mr. CAPEHART. Then anyone who was not a stockholder would not be able to buy rubber from the corporation; is that the idea of the Senator from Louisiana?

Mr. LONG. No; they would run their corporation just as they chose to run it.

Mr. CAPEHART. Suppose that 50 of them buy it. Would the Senator want them to be obligated then to sell rubber from that facility to other users of rubber?

Mr. LONG. If there was such an obligation, that would be satisfactory to

But what I had in mind would put the independent producers in a position where they could protect themselves; and if they did not protect themselves, that, of course, would be their own fault. But my amendment would assure them that, if they wanted to protect their supply, they could do so.

Mr. CAPEHART. Will the Senator from Louisiana agree with me that under the bill as written a group of 50 independent rubber users could do exactly what the Senator is now asking for?

Mr. LONG. They could bid, but there would be no assurance that they would get any facilities.

Mr. CAPEHART. What is the able Senator trying to do? Is he trying to write into this measure something to the effect that if 50 people were to get together, the Commission must sell them one of these facilities at a greatly reduced price?

Mr. LONG. Oh, no. The Board would fix the price at which it would sell the facilities, and it then, having fixed the price, would—

Mr. BUSH. Would discriminate?

It

Mr. LONG. It would see that certain concerns, representing more or less independent producers, would have an opportunity to purchase their fair share of synthetic rubber production. might be regarded as discrimination in favor of small business; I think that is true; but I believe there should be such discrimination.

Mr. CAPEHART. Another effect of the amendment would be that the Senator's plan would have to come back to the Select Committee on Small Business in both the Senate and House. Is that correct?

Mr. LONG. Yes. That would give us an opportunity to take a look at it, in order to see exactly how the Commission was working it out.

Mr. CAPEHART. Why did the Senator pick out the Select Senate Committee on Small Business? The plan comes back for approval to the Congress as a whole.

Mr. LONG. It was the purpose of the junior Senator from Louisiana that before the Commission conclude this portion of the program, they should give the independent rubber producers an opportunity to work this matter out with them, and then the committee would have an opportunity to look into it. By that I mean the Committee on Small Business in both the Senate and the House. If independent concerns wanted to acquire a stock interest and were not given the opportunity, they would then have an opportunity to go where they could be heard. It was to provide such a forum that the Congress established the Select Committees on Small Busi

The Senator well recalls that when the Korean emergency arose, it was a Select Committee on Small Business that heard all the independent producers. We sat day in and day out, and whatever hardships were presented, were considered in an effort to provide aid to distressed rubber fabricators.

Mr. BUSH. Mr. President, will the Senator from Indiana yield, that I may Senator from Indiana yield, that I may ask a question of the Senator from Louisiana?

Mr. CAPEHART. I yield for that purpose, provided I do not thereby lose the floor.

Mr. BUSH. Does the Senator from Louisiana have any information indicating that the so-called independents whom he has in mind have had difficulty in the past few years in getting their share of the crude rubber available?

Mr. LONG. We remember what happened at the beginning of the Korean pened at the beginning of the Korean war. Those of us who were on the committee recall that for a while many of the small independents simply could not get any rubber at all, but that, after a while, they were again able to get it.

Mr. BUSH. The supply was shut off so far as they were concerned, was it not?

Yes.

Mr. LONG. Mr. BUSH. It is a fact, is it not, that the supply was also shut off to everyone who wanted to obtain a share of it?

Mr. LONG. We remember what happened, for example, in the case of the aluminum factories and the steel plants. The little fellows simply could not get a substantial supply of aluminum and steel until Congress passed a law providing for the making of allocations. Even then, for a while, they were unable to get their fair share.

Mr. CAPEHART. Let me say that if, based upon my experience, I thought the amendment of the Senator from Louisiana would help the small-business men, I would be for it. I am delighted the Senator offered the amendment and is discussing it, because it shows the great interest which the Senator from Louisiana has, and which he has always had, in the small-business men. I, too, am very much interested in the smallbusiness man. As I have said, if based upon my experience, I thought that it would help the small-business men, I would be for the amendment. However, I fear that it might have just the opposite effect to that which the Senator from Louisiana has in mind. I congratulate the able Senator from Louisiana upon his desire to look after the interest of the small-business men, but in my opinion, if the amendment of the Senator from Louisiana were adopted, it would work to the disadvantage of the small-business men.

Mr. LONG. I thank the Senator for his compliment. What I am fearful of is the trend that was pointed out to us by the Federal Trade Commission when I had the honor of heading a subcommittee to study monopolies last year. There was pointed out to us that there was a trend on the part of large concerns to make it increasingly difficult for small concerns to continue in business. The larger concerns are more and more acquiring the basic basic materials needed in production; and they are following the fabricated material right on down to the ultimate consumer. We observed that in connection with the steel industry, and also in connection with the aluminum industry. We have observed that an independent fabricator who did not have access, or some power to supply himself with the basic material, finds in short order that he is in difficulty, for the reason that he is competing with fabricators who own the concern that produces the basic material. My hope has been that we would be able to work something out here that would help solve that problem of the small-business man.

Mr. CAPEHART. I may say, as one who has had some experience in business, that it is not quite clear to me how it would be possible to put all the users of rubber together and let them run a plant, properly allocating the production to each of them, since each one of the group of 50 would compete with the others. I suggest that the Senator from Louisiana should get together sometime with the little-business men. I suppose

it might be possible, under the Senator's plan, to have half a dozen people making one thing and a half a dozen people making some other kind of thing, competing with each other. One small concern does not want its competitor to know how much rubber it is buying. In my judgment, the amendment simply would not work.

Mr. LONG. Of course, the small-business men have the problem of competing with the big five. If the big five had control of the supply of rubber, they would know how much the small-business men were acquiring.

Mr. CAPEHART. Possibly the best that could be done would be to get 25 of them together. They would be the larger independents. However, there might still be hundreds of other users of rubber who were still sitting out on the edge.

Mr. LONG. Under such an amendment as the one I propose, that the hundreds of whom the Senator speaks would be those most anxious to have a little stock ownership in the plants. The concerns which had the small blocks of stock would be most interested in seeing that those who directed the affairs of their corporation would be persons who would protect their interests.

Mr. CAPEHART. There might be directors who would protect their interests so far as possible, but not necessarily to the extent of being able to control the supplies of crude rubber.

Mr. LONG. If the stock ownership were sufficiently divided up, so that the small stockholders could get together and exert a collective influence on the voting within the corporation, they could protect themselves.

Mr. CAPEHART. I am just as anxious as is the Senator from Louisiana to do anything and everything that will insure a competitive industry, under which the little fellow will receive his fair share of rubber. I will accept any language which, in my personal opinion, based upon my experience as a manufacturer and a businessman, I think will have that result.

Mr. LONG. The proposal of the Senator from Indiana would make possible what I would hope would happen, but it would not assure its happening. For that reason I would hope that we could adopt the amendment I have offered, for the purpose of assuring that it would happen.

Mr. CAPEHART. I think what we have worked out would come nearer to assuring that result than would the amendment of the Senator from Louisiana.

Mr. LONG. I hope the distinguished chairman will be willing to take the amendment to conference, to see whether something can be worked out, in order that the small independents might be able to have an opportunity to get together, and perhaps be permitted to purchase at least a certain percentage of the plants.

Mr. CAPEHART. I wish to read again to the Senator from Louisiana certain language in the bill which was included as a result of my experience of over 30

During the delivery of Mr. CAPEHART'S speech,

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

Mr. CAPEHART. I yield to the Senator from Minnesota.

Mr. HUMPHREY. I ask unanimous consent that a statement by the Senator consent that a statement by the Senator from New York [Mr. LEHMAN] be printed in the body of the RECORD following the colloquy between the Senator from Louisiana and the Senator from Indiana. The Senator from New York found it necessary to leave, and I told him I would be glad to request permission to put his statement in the RECORD. The statement refers to the measure now under discussion; and I may point out that the Senator from New York, in his discussion, comments upon the argument that is now taking place, particularly in regard to the amendment proposed by the Senator from Louisiana.

The PRESIDING OFFICER. Is there objection?

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

STATEMENT BY SENATOR LEHMAN

As a member of the Senate Banking and Currency Committee I attended most of the hearings on the bill, S. 2047, which is now under consideration. During those hearings I formed the opinion that there perhaps was sufficient justification to consider now the sale of the Government's synthetic rubber plants. I agree that that disposal should take place if, as provided in the Rubber Act of 1948, such disposal would:

1. Strengthen the national security.

2. Develop within the United States a free competitive synthetic rubber industry.

Because of the provisions of the bill, S.

2047, there is some question in my mind that disposal as planned will lead to the development of a free, competitive industry. Moreover, if by a poorly planned disposal we contribute to the creation of a monopoly our actions will not strengthen national security.

My objections to the bill as reported are as follows:

1. There is no assurance that the Government will receive a fair return on its investments in these plants.

2. There is no assurance against creation of a monopoly in the synthetic rubber industry. The bill does not limit in any way the number of plants which may be purchased by an individual company.

3. There is little if any chance that newor small-business enterprises could bid suc

cessfully on these plants. In this respect I am hopeful that the invitation or bidding period can be lengthened beyond the 45 to 90 days presently contained in the bill.

4. In my opinion provisions in the bill are inadequate to assure that the fabricators, particularly the smaller independent fabricators, will obtain a sufficient supply of synthetic rubber once the Government has disposed of its plants. In this connection I would like to say that during the hearings

respect to the Government operation of these plants, either as to adequacy of supply or price, to the fabricators.

5. Closely connected with the adequacy of supply to the independent fabricators is the matter of price to the same fabricators.

The price of synthetic rubber sold by private owners will, according to testimony received by the committee, be higher than the same rubber sold by the Government. This is as it should be, since additional cost factors will enter into the final price under private management.

But if a monopoly or partial monopoly is created there could well be an increase in the price of synthetic rubber completely unjustified by equitable cost factors. Such an increase could effectively force small fabricators out of business and out of competition with other fabricators whose source of

supply and price is assured.

For these reasons I think that the Senate should closely examine the proposed legislation and should accept those amendments which are offered to correct the deficiencies of the bill. If properly amended this bill could achieve the dual objectives of the Rubber Act of 1948 to development of a free competitive synthetic rubber industry and to strengthen national security.

Mr. CAPEHART. Mr. President, I should like now to discuss the value of the facilities, because one thing in which our committee was very much interested was to make certain that the properties are not sold at anything less than their full fair going value. What we are disposing of is really a prosperous business. We are talking about disposing of 28 rubber plants which are in operation. They are physical properties, plus good will, plus a going business. On the very day they are taken over they will produce and make money.

In the report which I have in my hand and which I hope every Senator will read, some very pointed language is used. We say in the report that we do not, under any circumstances, want the Board which is to be given the authority to negotiate the sale of the plants to take into consideration their book value or their depreciated value. They cost the Government in excess of $500 million.

They have been depreciated to the

point that their book value at the moment is only approximately $167 million. We say in this report, and we mean it, that we do not want any consideration given to that sum of $167 million, because that is not the value of the plants. We want them to be sold as going concerns, and the book value has absolutely nothing to do with it. There was some testimony before the House committee showing a little sympathy by certain House Members in connection with book value. But the report of the Senate committee says, "No; we are not interested in the book value. These facilities are valuable. They are going concerns, and we must get a fair price for them."

So far as I am personally concerned, a fair price, unless there are some factors about which I do not know at the moment, is certainly going to be pretty close to, if not above, what the plants cost the Government originally. That is what I am thinking about. I say, in all fairness, that there may be some