Page images
PDF
EPUB

On page 2, line 9, after the colon, insert "(1)" and in line 12, before the period, insert a semicolon and the following: or (2) "That the does not favor the sale of the as recom

mended in the report of the Rubber Producing Facilities Disposal Commission.", the first blank therein being filled with the name of the resolving House and the other blank being filled with a description of the facility or facilities proposed to be sold.

On page 2, line 13, after the word "resolution", insert "with respect to a facility or facilities."

On page 2, line 14, after the word "all", insert "such."

On page 2, line 18, after the word "resolution", insert "with respect to a facility or facilities."

On page 2, line 23, after the word "resolution", insert "with respect to such facility or facilities."

On page 3, line 2, after the word "resolution", insert "with respect to the same facility or facilities."

On page 3, line 11, after the word "resolution", insert "with respect to the same facility or facilities."

On page 3, line 13, after the word "resolution", insert "with respect to a facility or facilities."

On page 4, line 5, after the word "resolution", insert "with respect to a facility or facilities."

On page 4, line 10, after the word "resolution", insert "with respect to a facility or facilities."

Mr. CAPEHART. The amendment becomes necessary as a result of the adoption of the Long amendment. If the plans ever come back to Congress we will have to pass on the individual plans. Therefore it becomes necessary to adopt the proposed amendment. I have no objection.

Mr. DOUGLAS. I thank the Senator from Indiana for his characteristically fair statement.

Mr. CAPEHART. It is a perfecting amendment.

The

The PRESIDING OFFICER. clerk calls the attention of the Chair to the fact that the line numbers and page numbers in the amendment refer to the House bill.

Mr. LONG. Mr. President, I ask unanimous consent that the clerks at the desk may correct any technical defect in the amendment, so as to make the language correspond to language in the Senate bill.

The PRESIDING OFFICER. Without objection it is so ordered.

Without objection, the amendment offered by the Senator from Illinois [Mr. DOUGLAS] is agreed to.

The question is on agreeing to the committee amendment, in the nature of a substitute, as amended.

The amendment as amended was agreed to.

Mr. CAPEHART obtained the floor. Mr. CAPEHART. I yield to the Senator from Tennessee.

Mr. GORE. Mr. President, in view of the amendments which have been adopted, and in view of the possibility of having to vote on 13 different plans, does the distinguished chairman believe that 30 days would be adequate for con

sideration of the plans? Would not the chairman of the committee consider 60 days to be more advisable?

Mr. CAPEHART. Does the Senator from Tennessee mean 60 days within which Congress could make a study in the case of each individual plant, and then take action?

Mr. GORE. Yes.

Mr. CAPEHART. I presume that would be better, because it might take even longer than 60 days if Congress is to go into the details regarding each of the plants. I would have no objection to such an amendment.

Mr. GORE. Then, Mr. President, I ask unanimous consent that I may now submit an amendment to provide that Congress shall have 60 days within which to adopt resolutions of disapproval, rather than 30 days.

The PRESIDING OFFICER (Mr. GRISWOLD in the chair). Is there objection to the unanimous-consent request of the Senator from Tennessee?

Mr. FERGUSON. Mr. President, let me inquire whether 60 days would be allowed in case Congress were not in session,

Mr. CAPEHART. Under the bill, Congress must be in session, for the plan must come to us by January 31, 1955.

Mr. GORE. Yes; in that way the bill takes care of that matter.

Mr. President, the amendment will provide that 60 days, rather than 30 days, be allowed as the period during which Congress may make whatever investigation it may feel is required, and then may take action.

Mr. FERGUSON. And the possibility that Congress might not then be in session would be taken care, would it? Mr. GORE. Yes.

The PRESIDING OFFICER. Is there objection to the request of the Senator from Tennessee that he be allowed to submit his amendment at this time?

Mr. MAYBANK. Mr. President, reserving the right to object, let me say that the chairman of the committee

agreed to accept an amendment providing that the Legislative Reorganization Act apply in this case.

as

Mr. CAPEHART. I said that personally I would have no objection to such an amendment. Inasmuch the change has been made, so that Congress will have to pass upon the individual sales, I wish to call attention to the fact that there are 29 plants, and offers might be made by 20 different persons. Thus a great deal of time would be required. In fact, perhaps 60 days would be insufficient.

[blocks in formation]

Mr. DOUGLAS. Am I correct in understanding that the Senate has not yet voted on the question of final passage of the bill?

The PRESIDING OFFICER. That is correct.

Mr. CAPEHART. Mr. President, I now ask unanimous consent that the Banking and Currency Committee be discharged from the further consideration of House bill 5728, and that House bill 5728 be considered at this time.

The PRESIDING OFFICER. Is there objection?

There being no objection, the Senate proceeded to consider the bill (H. R. 5728) to authorize the disposal of the Government-owned rubber-producing facilities, and for other purposes.

Mr. CAPEHART. Mr. President, I now ask unanimous consent that House bill 5728 be amended by striking out all after the enacting clause, and by inserting the text of Senate bill 2047, as amended.

The PRESIDING OFFICER. Without objection, it is so ordered.

The question now is on the engrossment of the amendment and the third reading of the bill.

The amendment was ordered to be engrossed and the bill to be read a third time.

The bill was read the third time.

The PRESIDING OFFICER. The bill having been read the third time, the question is, Shall it pass?

Mr. DOUGLAS. Mr. President, on this question I ask for the yeas and nays. The yeas and nays were ordered. Mr. MAYBANK. Mr. President, I suggest the absence of a quorum.

Clerk will call the roll.

The PRESIDING OFFICER.

The

[blocks in formation]

Clements Cooper

Humphrey
Hunt
Ives
Jackson
Jenner

Pastore

Payne

Potter

Cordon Daniel Dirksen

Johnson, Colo. Johnson, Tex.

Mr. MAYBANK. Mr. President, reserving the right to object, although I shall not object, I wish the RECORD to show clearly that the Legislative Reorganiza- Douglas tion Act is to be applied in connection with this matter; and under that act, 60 days would be available.

The PRESIDING OFFICER. Is there objection to the request of the Senator from Tennessee that he be allowed to submit his amendment at this time? The Chair hears no objection.

If there is no objection, the question now is on agreeing to the amendment of the Senator from Tennessee, on page 28, in line 10, to strike out "thirty" and in

Johnston, S. C. Kefauver Knowland

Purtell

Robertson
Russell
Schoeppel
Smathers

Smith, Maine
Smith, N. J.

Sparkman
Stennis
Symington
Thye

Tobey
Watkins

Dworshak Eastland Ferguson

Kuchel

Langer

Lennon

Long Magnuson Malone

Mansfield

Martin Maybank

Flanders Frear Fulbright Gillette Goldwater Gore Green

Welker

Wiley

Williams

The VICE PRESIDENT. A quorum is present.

The bill having been read the third time, the question is, Shall it pass?

On this question the yeas and nays have been ordered, and the clerk will call the roll.

The Chief Clerk called the roll.

Mr. KNOWLAND. I announce that the Senator from New Hampshire [Mr. BRIDGES] is absent because of illness, and the Senator from Massachusetts [Mr. SALTONSTALL] is absent by leave of the Senate.

The Senator from Nebraska [Mr. BUTLER], the Senator from Pennsylvania [Mr. DUFF], the Senator from Ohio [Mr. TAFT], and the Senator from North Dakota [Mr. YOUNG] are necessarily absent.

If present and voting, the Senator from Nebraska [Mr. BUTLER] would vote "yea."

Mr. JOHNSON of Texas. I announce I announce that the Senator from Virginia [Mr. BYRD], the Senator from New Mexico [Mr. CHAVEZ], the Senator from Louisiana [Mr. ELLENDER], the Senator from Georgia [Mr. GEORGE], the Senator from New York [Mr. LEHMAN], and the Senator from Nevada [Mr. MCCARRAN] are necessarily absent.

The Senator from Massachusetts [Mr. KENNEDY] and the Senator from Oklahoma [Mr. KERR] are absent on official business.

The Senator from West Virginia [Mr. KILGORE] is absent by leave of the Senate.

The Senator from Louisiana [Mr. ELLENDER] is paired on this vote with the Senator from Massachusetts [Mr. KENNEDY]. If present and voting, the Senator from Louisiana would vote "yea," and the Senator from Massachusetts would vote "nay."

the House of Representatives, and that
the Chair appoint the conferees on the
part of the Senate.

The motion was agreed to; and the
Vice President appointed Mr. CAPEHART,
Mr. BRICKER, Mr. IVES, Mr. BENNETT, Mr.
MAYBANK, Mr. ROBERTSON, and Mr. Doug-
LAS Conferees on the part of the Senate.

SMALL BUSINESS ADMINISTRATION

Mr. CAPEHART. Mr. President, earlier this afternoon conferees were aplier this afternoon conferees were appointed on the Small Business Administration bill, House bill 5141, to create the Small Business Administration and to preserve small-business institutions and free, competitive enterprise. At that time the Senator from Arkansas [Mr. FULBRIGHT] was appointed one of the conferees. I wish to have his name withdrawn as one of the conferees, and to have substituted the name of the Senator from Alabama [Mr. SPARKMAN]. Without obWithout ob

the National Farm Loan Associations Advisory Committee, to mention a few.

The principal purpose of the bill is to give farmer borrowers an increased voice in the management of the system commensurate with their increased ownership. The bill does this primarily by giving them a voice in the selection of a Federal Farm Credit Board, and by giving them a greater voice in the selection of the district boards. The bill also contains a great number of detailed and intricate improvements in the management of the system.

Under the bill the Administration would remain in the Department of Agriculture, but would be subject to a Federal Farm Credit Board, which would appoint the Governor and make all major policy decisions. Twelve members of the Board, one from each district, would be appointed by the President, with the advice and consent of the Senate after considering nominations from each of the three groups of local institutions in the district. These institutions are the national farm loan associations, the production credit associations, and the cooperatives that are stockholders in, or subscribers to the guaranty fund of, the bank for cooperatives. It is contemplated that the President would make his appointments from the nominations of these groups; but, in order to avoid a The VICE PRESIDENT. The bill will possible constitutional question, the bill be stated by title.

The VICE PRESIDENT. jection, it is so ordered.

CREATION OF FEDERAL FARM
CREDIT BOARD

I

Mr. KNOWLAND. Mr. President, move that the Senate proceed to the consideration of Senate bill 1505, Calendar No. 599.

The CHIEF CLERK. A bill (S. 1505) to increase farmer participation in ownership and control of the Federal Farm Credit System to make the Farm Credit Administration an independent establishment of the Federal Government; to The result was announced-yeas 65, create a Federal Farm Credit Board; to nays 16, as follows:

[blocks in formation]

abolish certain offices; to impose a fran-
chise tax on certain farm credit institu-
tions; and for other purposes.

The VICE PRESIDENT. The question
is on agreeing to the motion of the Sen-
ator from California.

The motion was agreed to, and the Senate proceeded ot consider the bill, S. 1505, which had been reported from the Committee on Agriculture and Forestry with amendments.

Mr. SCHOEPPEL. Mr. President, the distinguished Senator from Vermont [Mr. AIKEN], chairman of the Committee on Agriculture and Forestry, designated the senior Senator from Kansas and the senior Senator from Florida [Mr. HOLLAND] to pass on this measure, reported from the Committee on Agriculture and Forestry. I am, of course, happy to have been associated with the senior Senator from Florida in handling the bill.

Senate bill 1505 represents a natural development in the cooperative agricultural credit system operated by the Farm Credit Administration in the Department of Agriculture. As farmer ownership of the system has increased, the demand of farmers for a greater voice in the management of the system has likewise increased. Senate bill 1505 represents many years of work by numerous farm organizations, by Congress, and by others interested in agricultural credit. It has the sponsorship of the American Farm Bureau Federation, the National Grange, the National Council of Farmer Cooperatives, the National Advisory Committee atives, the National Advisory Committee of Production Credit Associations, and

does not require him to do so. A 13th member of the Board would be appointed by the Secretary of Agriculture.

The farmer borrowers, through their local institutions, would also be given a greater voice in district policy determinations. District boards are comprised of seven members. At present, 1 member is elected by each of the 3 groups of local institutions. The other four members are appointed by the Governor. The bill would provide for election of an additional director by the related group of local institutions whenever, roughly, the Government's investment represents less than a third of the total net assets of, respectively, the Federal land bank, the production credit associations, or the bank for cooperatives, for the district. Under present tives, for the district. circumstances, the bill would permit election of additional directors by the farm loan associations and the production credit associations in each district.

The bill makes no provision for the retirement of Government capital, other than requiring the Federal Farm Credit Board to make recommendations designed to accomplish that purpose. The Federal land banks and many of the production-credit associations have, of course, already retired all their Government capital under provisions of existing law. The bill does provide for payment of some return, designated as a franchise tax, on the Government's investment. This return is to be paid only out of net earnings, after deductions for reserves and other purposes, and is not to exceed the amount the Government is required to pay on its borrowing of an equivalent amount.

Mr. President, that is a short statement of the pending measure. The report, as those who have checked it will readily discern, is in much more detail and goes into various phases of the bill.

There has been sent to the desk of each Senator a comparison of the provisions of the proposed Farm Credit Act of 1953 with the provisions of the existing law. The comparison may be of some help to those who are desirous of knowing the differences between the present Senate bill and the legislation which it seeks to replace.

Mr. SCHOEPPEL. I am glad to have the Senator point that out, because the distinguished chairman of the Committee on Agriculture and Forestry made mention of the fact that certain changes were made in the bill, and they did, I am sure, relieve some of the misgivings of those who had been objecting to the bill. Mr. FREAR. Mr. President, will the

Mr. CASE. Mr. President, will the Senator from Kansas yield? Senator from Kansas yield?

Mr. SCHOEPPEL. I shall be glad to yield.

Mr. CASE. Is it fair to say that one purpose of the reorganization proposed by the bill is to facilitate and encourage the retirement of the Government's investment in Federal land banks?

Mr. SCHOEPPEL. The Government's investment in the Federal land banks is already retired. I think it is a fair statement to say that it is hoped that the improved management provided by the bill will place other units in a position to repay the Government's investment.

Mr. CASE. So that in that way and by the structure here proposed it will place the operation more in the hands of the actual owners and the farmers interested?

Mr. SCHOEPPEL. That is correct. That was the position which was taken by almost all the major farm groups who appeared before the committee.

Mr. LANGER. Mr. President, will the Senator from Kansas yield for a question?

Mr. SCHOEPPEL. I yield.

Mr. LANGER. Was there any farm organization that opposed the bill?

Mr. SCHOEPPEL. There was one farm organization that opposed the bill, through representatives who appeared before the committee. That was the National Farmers Union. I understand that there was some opposition manifested by the National Federation of Grain Cooperatives. I think that is a fair statement as to those who appeared in opposition to the bill.

Mr. SCHOEPPEL. I yield.

Mr. FREAR. I should like to ask the Senator from Kansas who pays the members of the new Federal Board. Are they paid through appropriations?

Mr. SCHOEPPEL. I will say to the distinguished Senator from Delaware that they are paid from assessments against supervised institutions.

Mr. FREAR. I notice that provision is made for appropriations, and I know the research department and perhaps the research department and perhaps some others will still have to be paid from appropriations, but to what extent from appropriations, but to what extent does the execution of the purpose of the four branches of the Farm Credit Administration depend upon appropriations, and what percentage depend upon assessments?

Mr. SCHOEFPEL. All the expenses
of the Farm Credit Administration are
paid by assessments.

Mr. FREAR. That will include the
services of the Governor, also, will it not?
Mr. SCHOEPPEL. That is correct.
I read from page 8 of the report:
Section 17 (b) authorizes the expenditure
of funds for certain specified services and
property, including those usually covered by
specific authorization in appropriation bills.
With the exception of a direct appropriation
from the Treasury each year for the opera-
tion of the Cooperative Research and Service
Division (which by the bill would be taken
out of the FCA) all the funds authorized by
the Congress to be expended by the FCA are
obtained from assessments against institu-
tions supervised by the FCA.

Mr. FREAR. May I ask the Senator
if it is not true that the franchise tax
on the earnings of the Federal interme-

Mr. AIKEN. Mr. President, will the diate credit banks is sufficient to take Senator from Kansas yield?

Mr. SCHOEPPEL. I yield.

Mr. AIKEN. May I point out that the bill was revised in a great many respects after certain witnesses objected to the original text. How far the bill went in meeting their objections I do not know. There are on record 100 to 125 production-credit associations and landbank associations favoring the bill. Up until June 19, there had been 14 individuals and concerns, I believe, who had registered opposition to it. Since that time there have been 2 or 3 more communications in opposition, and I would say 25 or 30 in favor of it. I cannot state the number exactly.

But,

care of the expenses? I realize that the
franchise tax money goes into a guar-
anty fund and then into the Treasury,
and then appropriations are made to
take care of certain central functions of
the Farm Credit Administration.
comparatively, is it not a fact that the
franchise tax about equals, if it does not
a little more than equal, the expenses of
the administration? In other words,
does not the franchise tax from the or-
ganizations equal the appropriations
made by Congress?

Mr. SCHOEPPEL. They pay an as-
sessment, but under the bill they would
pay a franchise tax in addition.

Mr. FREAR. Yes; but the assessment

Mr. CASE. Mr. President, will the is to take care of certain expenses, such Senator from Kansas yield?

Mr. SCHOEPPEL. I yield.

Mr. CASE. I may say that I understood that originally some of the officers of the Farmers Union expressed opposition to the bill. bill. However, since changes have been made which more clearly place control in the hands of farmers, I have received expressions from individual members of the Farmers Union indicating support of the bill as amended.

as salaries of the Governor, the Members
of the Board, and the supervisory ex-
penses, examinations, and so forth. But
there are other expenses, as I under-
stand, which are paid by appropriations
directly.

Mr. SCHOEPPEL. It is expected that
all expenses will be covered by assess-
ments from supervised units. The assess-
ment would be paid into the Treasury
and then appropriated to pay the ex-
penses.

Mr. FREAR. But the revenue from the franchise tax on the Federal intermediate credit banks reaches the Treasury directly, I believe. Is not that correct?

Mr. SCHOEPPEL. It goes into the Treasury directly, as a return on the Government's investment.

Mr. FREAR. Yes. Then the amount of appropriations and the amount received from the franchise tax are practically equal. If anything, there is probably a little excess balance in the Treasury. In other words, the operation and administration of the Farm Credit Administration, with perhaps the exception of the research department and the central bank cooperatives, involve no expense to the taxpayers of the United States.

Mr. SCHOEPPEL. That is what has been represented, and I am certain that is the case. There is no expense to the taxpayers and the bill would provide some return to the Government.

Mr. FREAR. I have one further question. The present membership of the district farm credit board is made up of three members appointed by the Secretary of Agriculture or the President, whichever it may be; 1 elected by each of the 3 units, and the seventh selected from among 3 proposed by the National Farm Loan Association for each district. In the pending bill, it is provided:

(A) Whenever, as determined by the Farm Credit Administration, the sum of the capital stock held by national farm loan associations, surplus, and reserves of a Federal land bank shall equal or exceed 6623 percent of the total of the capital stock, surplus, and reserves of such bank

The Farm Credit Association, Production Credit Association, and Bank for Cooperatives representatives can then have 2 members on each district board rather than 1.

Does that mean it will be necessary to wait until the total of those three, namely, the Federal land bank, the Production Credit Association, and the Bank Cooperative, each, individually, has 663 percent of the capital stock, or can that be done individually? I think now the national farm loan associations are totally farmer owned. In other words, there is no Government capital in them.

Will it be possible for the National Farm Loan Association to elect immediately after the bill is passed 2 members of each district board rather than 1?

Mr. SCHOEPPEL. It is my understanding, and I am informed, that it will be possible as soon as the bill is passed and the law becomes operative.

Mr. FREAR. Could the Production Credit Association as soon as they had 66 percent of the capital stock, elect two?

Mr. SCHOEPPEL. That is the case now in every district.

Mr. FREAR. I thank the able Senator from Kansas.

Mr. SCHOEPPEL. Mr. President, I shall now defer to the distinguished senior Senator from Florida [Mr. HOLLAND], who has joined with me in reporting the measure. He may have some other information which he desires to present at this time.

Mr. HOLLAND. Mr. President, I thank the Senator from Kansas. I be

lieve there is nothing material I can add, though, perhaps, there are three small points which I might call to the attention of the Senate.

One refers to the Division of Cooperative Marketing. That would not remain under the jurisdiction of the new Board setup, but, instead, would be transferred to the Department of Agriculture itself. That would be the only part of the agency which would still be a recipient of appropriations from Congress.

So far as the national setup, the regional organizations, and the local organizations, are concerned, they would all be operated upon the capital of the farmer.

The second point which I think should be made, because I did not catch it if it was made by my distinguished colleague, the Senator from Kansas, is that there is provided in the bill a Farm Credit Board of 13 members, to be selected as has been described by the Senator from Kansas. I think the membership of the Board is particularly interesting, in that each of the 12 members must come from 1 of the farm credit districts of the United States, of which there are 12. That would mean distribution of representation on the Board would be about as wide as possibly could be accomplished.

The 13th member of the Board would be named by the Secretary of Agriculture, to complete and continue direct contacts between the Federal Government as a whole, the Department of Agriculture, and the Board.

One of the differences between the House bill and the Senate bill as reported has to do with the 13th member. The House bill provided that the 13th mem

ber should be appointed by the Secretary of Agriculture, and should continue to function only so long as there was unretired capital of the United States in the various organizations, or any of them; and that when all Federal capital had been retired, the 13th Board member would cease to function.

It was the judgment of the Senate committee that there would be ample reason for the continuance of liaison and contact between the United States Department of Agriculture and the Board in its functioning after the retirement of Government capital, so the 13th Board member is provided on a permanent basis in the measure reported by the Senate committee.

There is one other respect in which there is a difference between the House bill and the Senate bill. The House bill provided a salary of $17,500 for the Governor. It was strongly recommended by the Department of Agriculture that the salary should be reduced to $15,000 because, as was pointed out by the Department of Agriculture, others serving in positions of similar importance were drawing salaries in the neighborhood of $15,000, such as, for instance, the Administrator of the Rural Electrification Administration, and 1 or 2 others of top rank.

In closing, I think it might be interesting to observe that the bill is the product of an able committee of representatives of various areas and various functioning organizations which make up the national, the district, and local systems, who have been working on the

program for a long time. However, they were not insistent or unreasonable in any sense upon the passage of the bill in the precise form in which they presented it, although it had been worked upon by them for a long time. They were quite responsive to suggestions for changes made by the Department of Agriculture, the Department of Justice, and the two committees.

I must say that there has been no matter of importance-and I think this bill is a matter of very great importance— which has been handled in the Senate Committee on Agriculture and Forestry, Committee on Agriculture and Forestry, since I have been a member, in which there seemed to be such complete unity of opinion on the part of many representatives who came before the committee, and the many from whom we heard, including farm organizations from literally all over the country, and representatives of the highest type of farm life all over the Nation.

If there be serious objection to the bill, I have heard of none. I think it is interesting to note that the bill was unanimously reported by the committee.

Mr. LANGER. Mr. President, will the Senator from Florida yield?

Mr. HOLLAND. I yield.

Mr. LANGER. The distinguished Senator from Kansas [Mr. SCHOEPPEL] said that the National Farmers Union objected. Does the Senator from Florida whether or not the provisions to which remember what the objections were, and they objected were corrected?

Mr. HOLLAND. I understand that after the first objection had been offered, some units of the National Farmers

Union withdrew their objection. I cannot say what the attitude of the national organization was, but I may say that compared with the very determined opposition or very determined advocacy which I have observed on the part of various members of that organization since I have been a Member of Congress, nothing approaching that feeling was

noticed in this case.

Mr. LANGER. I thank the Senator. Mr. FREAR. Mr. President, will the Senator yield?

Mr. HOLLAND. I yield.

Mr. FREAR. Does the Senator from Florida recall the amount of reserves of the 12 Federal intermediate credit banks?

Mr. HOLLAND. I believe that information is printed in the report. I will see if I can turn to it.

Mr. FREAR. That leads me to my second question. Perhaps I should ask second question. Perhaps I should ask that question first.

Is it proposed or intended by the bill that, sooner or later, the farm organizations will own completely the Federal intermediate credit banks?

Mr. HOLLAND. It is observed in the bill that all the capital of the Farm Loan Association has already been retired. All the Federal capital has been retired, and those institutions belong wholly to the farmers who have been their patrons farmers who have been their patrons and are now their patrons. The same observation applies to many of the production credit associations.

Mr. FREAR. About half the production credit associations have retired all Government stock.

Mr. HOLLAND. The Senator is correct. There is no effort in this bill to force or coerce the retirement of stock which the parties at interest may not desire to retire. However, it is sought to recognize the fact that there has already been a very large retirement, and that it is in the interest of democratic government for those who own stock-as they do own it exclusively in so many cases to now assume more and more of the powers of management.

Mr. FREAR. The Senator knows better than I that the Federal intermediate credit banks are totally owned by the Government, but the reserves have come from profits from the production credit associations and the national farm loan associations. That means that they come really from the interest paid by farmers. Therefore, this reserve actually belongs to the farmers who have been borrowing from those two associations.

Mr. HOLLAND. The Senator from Delaware is correct. If he will turn to page 26 of the record of the hearings, he will see interesting facts there set forth. In the case of the land banks and the national farm loan associations, which are combined for the purpose of this statement, the whole capital surplus, and reserves belong to the farmers, and they come to a total of $380,680,222.

Mr. FREAR. That I do not quite understand. The Senator says all of it. Does that include the reserves and surplus of the Federal intermediate credit banks?

Mr. HOLLAND. It is so stated in the record, if the Senator will refer to the hearings.

Mr. FREAR. I do not have a copy of the hearings before me.

Mr. HOLLAND. It is in the statement the Senator has before him, on page 26. The Senator will note that the last date shown in the statement is as of December 31, 1951, and that the figures quoted represent the capital, surplus, and reserves of the Federal land banks and national farm loan associations combined. He will note also that under the head of "Production Credit Associations," it is shown that the combined capital which belongs to the farmers as of that same date is $155,332,452, whereas the Government capital and surplus on that date in those same institutions was $11,370,500.

In the case of the banks for cooperatives, the Senator will see that the farmer-owned surplus and reserves amounted to $82,615,843, whereas the Government capital and surplus on that same date was $178,500,000. So the Senator will see that very rapidly, even in those latter two groups of institutions, the farmers are taking over the actual equity ownership of those two groups, that is, the production credit associations and the banks for cooperatives.

Mr. FREAR. In the case of the Federal intermediate credit banks and the production credit corporations, as distinguished from the production credit associations, where there is no farmer investment whatsoever, the capital and surplus are totally Government capital and surplus, some of which is free capital, as in the case of the production credit corporations, but not so with the

intermediate credit banks, because of the assessment.

Mr. HOLLAND. Yes.

Mr. FREAR. I assume that a part of the amount is capital and a part of it is surplus. In my opinion the surplus which has resulted from these two figures belongs to the farmers, because it had come from profits of the national farm-loan associations and productioncredit associations. I should like to see the owners of these total farm-credit associations given the opportunity to purchase those surpluses from the Government, at no loss to the Government. In reality, they belong to them anyway. Is it contemplated in the plan called for by the terms of the bill that can be done? Is there any provision or encouragement for it?

Mr. HOLLAND. That is left to be worked out in the future, I will say to the distinguished Senator. There is no objection to it whatsoever, though that has not been accomplished up to this time.

Mr. RUSSELL. the Senator yield? Mr. HOLLAND. I yield to the Senator from Georgia.

Mr. President, will

Mr. RUSSELL. I have listened to the discussion of this bill. In view of the fact that it came from such a distinguished committee by a unanimous vote, I have no reason for interposing an objection. But I am very much interested in certain phases of the bill.

I notice that in sections 10, 11, 12, and 13, the bill, which is a Senate bill, proposes to levy a tax. It is not disguised in any way. It is called a franchise tax. In view of the fact that section 7 of article I of the Constitution requires that all tax measures shall originate in the House of Representatives, I should like to have the distinguished Senator from Florida state what is the basis for believing that the bill would be considered constitutional, inasmuch as it is a tax measure originating in the Senate. I undertake to guard the prerogatives of the Senate as jealously as I can; but if there is any one thing that is clear under the Constitution, it is that all tax bills must originate in the House of Representatives. This bill proposes, in four separate paragraphs, to impose a franchise tax. I am sure the committee had some sound reason for that. It may be based on the fact that there is existing law on the subject, reenacted in the pending bill.

Mr. HOLLAND. In the first place, I will say to the distinguished Senator from Georgia that the House bill has been passed, and that the Senate bill represents a rewriting of the House bill.

In the second place while called a tax, this is nothing in the world but the payment of interest. If the Senator will look at lines 23, 24, and 25, at the bottom of page 16 and lines 1, 2, and 3 at the top of page 17, he will see that the amount of the franchise tax, so called, shall be calculated at a rate not in excess of the computed average annual rate of interest on all public issues of public debt obligations of the United States. If the Senator will look at lines 16, 17, and 18 on page 17, he will see that it is levied so as not to exceed the rate of return on Government capital. It is the

interest to be paid on any remaining investment of the Federal Government.

Mr. RUSSELL. If a House bill carried this tax provision, it would be constitutional; but I must say that I am not impressed with the argument of the Senator from Florida, that inasmuch as the tax is levied for a specific purpose and in a specific amount, it is constitutional for the Senate to originate the tax. If I correctly understand the Constitution of the United States, it matters not for what purpose a tax may be levied, the amount of the tax, or the manner in which it is handled. There is one constitutional prohibition with respect to the Senate. We cannot originate a tax.

I do not agree with the contention of the House that we have no right to inaugurate an appropriation bill, but if there is any one thing that is clear to me under the Constitution, it is the fact that whatever may be its purpose, or the manner of its imposition, or the rate of the tax, no tax bill can originate in the United States Senate.

Mr. HOLLAND. I appreciate the remarks of the distinguished Senator from Georgia. It may be that technically he is correct. I am disinclined to think so.

Let me say that this very matter has been cleared with the Department of Justice. But even if his statement were strictly correct, his objection is met by the very practical fact that the House bill is waiting here, and as soon as this bill is completed it will be substituted for the text of the House bill. As a matter of fact, there is very little difference between the two bills. The distinguished Senator will find this same franchise tax provision in the House bill, with the exception of the fact that the calculation of the rate is somewhat different, as shown by the stricken lines.

Mr. RUSSELL. Under my conception of the Constitution, if there is any form of tax in the House bill the Senate has a right to elaborate upon it in any way it sees fit by amendment. But when it comes to the question of originating a tax, I reiterate that if there is any one thing clear under the Constitution it is the fact that we do not have the right to originate any kind of tax measure.

Mr. HOLLAND. We shall certainly satisfy the complaint of the complaint of the distinguished Senator from Georgia by the course of action which will be taken in the enactment of this measure.

Mr. FREAR. Mr. President, I believe if the Senator from Georgia will refer to the statute which created the intermediate credit bank system in 1927 he will find that the same provision was contained in the original law and that the provision in the pending bill is taken from that part of the 1927 act, which at that time levied a franchise tax of 25 percent, and that certain deductions were permissible with respect to the profits of the 12 Federal Intermediate Credit Banks. The same statement applies also to sections 11, 12, and 13 with respect to the Farm Credit Administration and the other organizations. It is nothing new, I will say to the Senator from Georgia, and it does not originate in the bill. It refers to the statute of 1927.

Mr. HOLLAND. I thank the distinguished Senator from Delaware. At

any rate, the point, whatever validity there is to it-and there may be great validity to it-will be completely met by the course of action to be taken on the bill. I yield the floor.

THE LEGISLATIVE SCHEDULE OF THE SENATE

Mr. MORSE. Mr. President, I rise to discuss most respectfully, and without any personal criticism of anyone, a matter of Senate procedure.

It is now 10:20 o'clock. We are considering a bill which I believe to be of great importance. I say good naturedly that I would dislike to think what the average grade of the Members of the Senate would be if we were to hand out some blank sheets of paper and ask a few simple questions about the contents of the bill, and rated Senators on the basis of their knowledge of its contents at 10:20 o'clock at night.

I can fully appreciate the enthusiasm of the acting majority leader in seeking to complete a heavy schedule of legislation in what is supposed to be the closing days of this session of Congress. However, I wish to direct my attention to the responsibility which I believe the Senate owes to the American people. I believe we owe the American people the responsibility of passing legislation with adequate time to consider and study it, and to understand the subject on which we are voting.

It is important that we keep in mind the fact that we have been in session a good many hours today. Some of my colleagues are not so young as others of us. Some of my colleagues have told me in the last hour that they were going home because they were going to protect themselves.

I say it is not fair to them or to the people they represent to hold this body in session for a number of hours that cause some of our colleagues to feel that they must go home for their own health protection. I can stay here as long as anyone, as I think I have demonstrated. [Laughter.]

However, I am speaking without any rancor, and I am simply saying most respectfully that I do not believe this is the way to transact the business of the Senate.

I believe in fair-labor standards, too. It is one thing for Senators to sit here for these long hours, but I raise the question of whether it is in keeping with fairlabor standards to keep the Senate staff here for such hours, including these young pages.

We already have an understanding that we will meet tomorrow morning at 10 o'clock. Under that kind of schedule, we will have very important committees meeting at the same time. I raise the question again, Is it fair to the people of the country to pass legislation under that kind of schedule? Why the rush? Why the rush? get away on August 1?

Why must we

With the announcement of the legislative program containing a considerable list of "must" bills, I say, most respectfully and noncritically of anyone, that I do not believe we can consider that list of legislation between now and August 1 and do the deliberative job

« PreviousContinue »