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Mr. MILLIKIN. I believe that almost all the picture houses are affected. My own judgment is that the smaller picture houses are hurt worse than any others. Mr. JOHNSTON of South Carolina. It is generally true in any kind of business that the small ones fold up first. That is a clear indication that the others will follow in the wake,

Mr. MILLIKIN. Not every motionpicture house is in distress. The greatest distress is in the picture houses which do a gross business of around $25,000 a year. The middle bracket and the lower bracket motion-picture houses, so far as income is concerned, are especially hard hit.

I now yield to the distinguished Senator from Wyoming.

Mr. HUNT. Mr. President, does not the Senator from Colorado also believe that the very keen competition from the thousands of outdoor theaters is having a very serious affect on the revenues of the motion-picture houses?

Mr. MILLIKIN. I believe that the outdoor motion-picture theaters certainly compete with the indoor motion-picture theaters.

Mr. STENNIS. Mr. President, will the distinguished Senator yield?

Mr. MILLIKIN. I am glad to yield to the distinguished Senator from Mississippi.

Mr. STENNIS. Mr. President, the Senator mentioned a moment ago the distress of the small theaters, but does it not particularly apply to the theaters in the smaller towns which are hardest hit under the present distress conditions?

Mr. MILLIKIN. I would say that is entirely true.

Mr. STENNIS. I have a memorandum which sets forth the fact that more than half the theater seats in the entire Nation are in towns of 25,000 or less. Does the Senator consider that to be accurate?

Mr. MILLIKIN. I cannot confirm that exact figure, but I think it is entirely true that the small theaters in the small towns are the hardest hit.

dropping out, which is the situation in the neighborhood of Los Angeles, but that in a few months' time there would be no suburban movies at all. Mr. MILLIKIN. I thank the Senator I thank the Senator very much.

Mr. HUNT. In line with the fact that moving-picture theaters in the small communities are closing, it is not also true that the community theaters in the larger cities are also being very hard hit, and that many of those theaters are closing, too?

Mr. MILLIKIN. I would say so. Mr. BUSH. Mr. President, will the Senator yield?

Mr. MILLIKIN. I am glad to yield to I am glad to yield to the distinguished Senator from Connecticut.

Mr. BUSH.

I

I am glad the distinguished Senator from Colorado has reported the bill from his committee. happen to have had several conferences with theater operators in my State, and I confirm what the Senator from Wyoming has said, namely, that it is the large centers as well as the small centers which are being affected quite sharply. A tax which was imposed 11 years ago for war purposes has finally resulted in having a very serious effect on theaters in both the small and large centers. I am very happy the distinguished chairman of the committee has reported the bill, and I hope it will be passed.

Mr. LANGER. Suppose I went to Chicago and spoke at the Swedish celebration, when money was being raised for the Swedish old people's home. If at that time certain articles were being sold inside the grounds, would an admission tax have to be paid?

Mr. MILLIKIN. A tax would have to be paid on the concessions. I would assume that within the fair grounds there would be shows of various kinds, for which there would be a charge. If so, there would be a tax on those shows. Mr. LANGER. But would there be a tax on admission to the grounds?

Mr. MILLIKIN. No, not on admission to the grounds.

Mr. LANGER. I thank the Senator from Colorado.

Mr. HUMPHREY. Mr. President, will the Senator from Colorado yield to me? Mr. MILLIKIN. I yield.

Mr. HUMPHREY. I wish to express appreciation to the committee and to its chairman for having reported the bill. The theater operators in Minnesota have made representations to me, as one of their Senators, and to the entire Minnesota congressional delegation, regarding this matter.

Personally, I have examined the situation in the Twin Cities area and in some of the neighboring communities. I find there is no doubt that there is a serious economic plight in connection with this

Mr. MILLIKIN. I thank the Senator situation. I desire to emphasize that a very much indeed.

Mr. LANGER. Mr. President, will the Senator from Colorado yield to me? Mr. MILLIKIN. I yield.

Mr. LANGER. I wish to compliment the distinguished Senator from Colorado upon his action in regard to having the 20 percent admission tax on theaters removed. I have received, for months, numerous telegrams and letters, and I believe the Senator from Colorado will recall that a number of them have been forwarded to him and his committee.

Let me inquire whether public ball parks and other parks are covered by this bill.

Mr. MILLIKIN. It would not apply Mr. SMATHERS. Mr. President, will to baseball parks. If we can imagine a the Senator yield?

Mr. MILLIKIN. I am glad to yield to the distinguished Senator from Florida. Mr. SMATHERS. I may say to the distinguished Senator from Colorado that the junior Senator from Florida had the privilege of serving on a subcommittee of the Small Business Committee which was assigned to look into the question of motion-picture houses going out of business. We held hearings in Los Angeles, in New York City, and in Washington, D. C. It was demonstrated from the evidence which was presented to the committee that it was the small movingpicture house which was suffering not only from increasing costs of getting the films and operating, but from the competition of television and outdoor drivein movies. It was shown that the average independent-movie house, because of the tax and because of the other competitive conditions which have developed, and because of increased costs, could not stand the conditions any longer, and that unless they were relieved of the 20percent tax we would see not 10 a day

baseball park which had the showing of movies as its principal business, the bill would apply, but not otherwise.

Mr. LANGER. Would a little county fairground, in which a fair is held once or twice a year, have to pay the tax? Mr. MILLIKIN. I assume county fair would be a source of entertainment of all kinds.

Mr. LANGER. Yes.

that a

Mr. MILLIKIN. I would say that if the showing of movies in that connection had a separate identity within the whole, it would come within the bill. But the bill does not deal with the tax paid at the gate for admission to a county fair.

Mr. LANGER. I see.

Mr. MILLIKIN. My memory has been refreshed, and I now recall that last year we exempted the general admission tax on county fairs.

Mr. LANGER. Was the admission tax Was the admission tax to public parks also exempted? Mr. MILLIKIN. I am not prepared to I am not prepared to answer that question accurately, but I believe it was exempted in some cases.

number of theaters are not usable for other purposes; their architectural design is such that they cannot be converted to other use.

Furthermore, in many communities the theater is an integral part of the community; and a businessman whose place of business is located on the next street, although he has no relationship to the theater except as a neighbor, finds that if the theater goes out of business there is an adverse impact upon his trade

area.

So I wish to support the bill very strongly, and I thank the chairman of the committee very much for bringing it to the floor.

Mr. MILLIKIN. I thank the Senator from Minnesota.

Mr. LANGER. Mr. President, will the Senator from Colorado yield further to me?

Mr. MILLIKIN. I yield.

Mr. LANGER. Did the committee consider the matter of the tax on women's purses? After all, women's dresses do not have numerous pockets; and for that reason women are required to carry purses.

Mr. MILLIKIN. The House Ways and Means Committee has that matter as a subject for serious study in connection with the general tax revision bill which we hope to have before us next year. Mr. LANGER. I thank the Senator from Colorado.

Mr. MILLIKIN. Mr. President, I wish to emphasize the cost feature of the bill. It is estimated that there will be a net revenue loss of $100 million after giving effect to the gain in revenue which will result from removal of this tax. I mention that because it is important in and of itself; but it is especially important that we do not make amendments

or additions to the bill, so as to increase the revenue loss. I do not believe we could get through conference a bill which would involve an additional revenue loss. I doubt very much that a bill increasing the revenue loss would escape a veto. The revenue loss already provided for by this bill is a large one.

So I earnestly hope that amendments will be rejected.

Mr. LEHMAN. Mr. President, will the Senator from Colorado yield to me?

Mr. MILLIKIN. I yield.

Mr. LEHMAN. I wish to commend the chairman of the committee and the entire Finance Committee for the work they have done. Of course, I have not had an opportunity to study the problem as fully as has the committee, but I have met with a number of groups of motion-picture-theater owners in my city and in my State, who have presented their problems in such considerable detail as to convince me that they have been suffering serious losses, and that unless immediate relief is afforded, many of them will not survive for many survive for many months.

Mr. MILLIKIN. I thank the Senator from New York. Let me point out that if we were to load down the bill with amendments, which would have to go to conference, they might bog down the whole bill and there might not be relief for anyone. That is a very important point for us to keep in mind.

Mr. HUNT. Mr. President, will the Senator from Colorado yield to me?

Mr. MILLIKIN. I yield.

Mr. HUNT. Is it not true that the bill, when finally enacted, will be effective September 1, 1953?

Mr. MILLIKIN. That is correct.

Mr. HUNT. I thank the Senator from Colorado.

committee. I urge the committee to
committee. I urge the committee to
consider it very seriously again, when-
ever, next year we can consider the en-
tire problem.

Mr. MILLIKIN. Of course we shall
do so.

Mr. MARTIN. Mr. President, will the
Senator from Colorado yield to me?

Mr. MILLIKIN. I yield.

Mr. MARTIN. I understand very well the circumstances of the Senator from West Virginia, and I think he shows a fine spirit of cooperation in not submitting his amendment at this time. I know the merits of the situation he has in mind.

Ordinarily I should like to favor such an amendment; and I know he also would push for its adoption, and to that end would devote his unusual intelligence and great vigor. Certainly he is ligence and great vigor. Certainly he is to be commended for withholding the amendment at this time.

Mr. MILLIKIN. I thank the Senator from Pennsylvania.

by the clerk, and then I wish to make a brief statement about it, following which I shall make a personal request of the chairman of the committee.

The PRESIDING OFFICER. Does the Senator from Colorado yield for that purpose?

Mr. MILLIKIN. I yield.

The PRESIDING OFFICER. The clerk will state the amendment.

The CHIEF CLERK. After section 2, it is proposed to insert a new section, as follows:

SEC. 3. Section 1650 of the Internal Revenue Code is hereby amended by inserting a comma after the word "watches" in item 7 of the schedule in said section and striking the words "selling at retail for not more than $65.❞

It is further proposed to change the present section 3 to section 4, and, on line 19, after the word "for", to insert the words "retail sales or."

The PRESIDING OFFICER. The question is on agreeing to the amend

Mr. NEELY. Mr. President, will the ment of the Senator from Nebraska. Senator from Colorado yield?

Mr. MILLIKIN. I yield.

Mr. NEELY. Let me add to what the able Senator from Pennsylvania has said, that I have just talked to a prominent Pittsburgh lawyer who is well acquainted with the Senator [Mr. MARTIN], and is one of his devoted friends. I told him of a conversation the Senator and I had had earlier today to the effect that the adoption of my amendment in which the lawyer was very much interested, might make the enactment of the measure impossible at this session of the Congress.

Thereupon the distinguished attorney replied that in the circumstances he did not want the amendment offered.

Mr. BUTLER of Nebraska. Mr. President, will the Senator from Colorado

Mr. NEELY. Mr. President, will the yield to me? Senator from Colorado yield?

Mr. MILLIKIN. I yield.

Mr. NEELY. In view of the Senator's timely warning that additions to the bill might defeat it, I shall withhold the following important amendment which I previously prepared:

On page 1, in line 8, before the period, insert the following: "or to the amount paid for admission to an amusement device or facility in an amusement park." Amend the title to read as follows: "An act to provide that the tax on admissions shall not apply to moving-picture ad

missions or to admissions to an amusement device or facility in an amusement park."

This amendment, if adopted, would provide relief in the matter about which the distinguished Senator from North Dakota inquired a moment ago.

However, in view of what the Senator from Colorado has said, I shall refrain from offering this meritorious proposal and shall vote against all others that may be made because of my fear that any addition now made to the bill would defeat it.

Mr. MILLIKIN. I thank the Senator from West Virginia.

Mr. LONG. Mr. President, will the Senator from Colorado yield to me? Mr. MILLIKIN. I yield.

Mr. LONG. The Senator from Colorado knows that I raised that issue in the

Mr. MILLIKIN. I yield.

Mr. BUTLER of Nebraska. I have listened very attentively to the remarks made by a number of Senators who have amendments which they intended to submit to the bill, but who now have changed their minds because they fear that if the bill were to be loaded down with amendments, the result might be that the bill would fail to be enacted into law.

I wish to say that no one has been more anxious than I to have the bill passed. I submitted it as an amendment to other tax bills, several times, at other sessions of Congress. I. was also the author of the proviso, which now is in the law, regarding the tax on theaters. That tax was imposed during wartime, when times were flush, and I think at that time the theater owners would have been perfectly willing to pay a somewhat larger tax if they had been asked to do so.

However, times have changed. As several Senators have stated, the present situation is a particularly serious one, especially as it affects the small theaters throughout the United States. I know that very well.

However, there is another industry that is seriously injured and is in a serious situation. I have prepared an amendment dealing with that industry. I shall ask that the amendment be read

Mr. BUTLER of Nebraska. Mr. President, since this is a technical amendment, it will require an explanation, in order that Senators may understand the proposal. I shall therefore make a brief statement for that purpose.

The amendment is designed to give relief to a vital defense industry-the manufacture of watches-which is just as much of a hardship case as the motion-picture industry.

The amendment does not repeal the Federal excise tax on watches. It merely reduces the tax to a uniform 10 percent rate on all watches by abolishing the present arbitrary distinction between watches selling for more than $65 at retail and those selling for loss. Under present law, watches selling for more than $65 are taxed at 20 percent, while the rate on those selling for less than $65 is 10 percent. This amendment would make the rate uniform at 10 percent.

Because of the substantial tariff reductions which have been granted to Switzerland on the lower-priced watches, watches selling for more than $65 are now the only class where the domestic industry enjoys a substantial degree of protection from Swiss importation. The tax relief provided by this amendment would therefore go predominantly to the American industry. This class of watches selling for more than $65 corresponds roughly to those having more than 17 jewels.

Numerous official studies have demon

strated conclusively that the domestic jeweled watch industry is in a state of decline. For example, ir June 1952, the United States Tariff Commission reported that the domestic industry was threatened with serious injury and was able to supply only a smaller and smaller portion of the entire domestic market.

Their report indicated that the market for watches containing more than 17 jewels appears to be predominately in the hands of domestic manufacturers, while the market for watches containing 17 jewels or less has passed predominately into the hands of the importers of Swiss watches. The more expensive watches-the pensive watches-the class of watch

where American manufacturers hold the strongest position-must pay the higher tax. My amendment would correct that situation.

The Interdepartmental Committee established by the President to study the problem of maintaining essential manpower skills in the watch-making industry for reasons of national security has reported to the President that precision jeweled movements are essential to the security of the Nation in wartime and are produced uniquely by the jeweled watch segment of the watch and clock industry; that the nature of the skills and long training time required make it necessary to keep workers continuously producing these products; that this makes the usual "standby facilities" approach to the problem of maintaining a mobilization base unsuited to the requirements of this situation. The Interdepartmental Committee specified in the classified section of the report a minimum production range sufficient to maintain the required base of skilled workers for mobilization requirements and found that the annual level reported in 1952 had not yet fallen below this minimum.

Since that time, production has steadily declined. Although the minimum production range is confidential, it is believed that current production levels may be at or below safety levels for the maintenance of an adequate security base in this essential defense industry.

It is estimated that the revenue loss from this amendment would probably not amount to more than 5 to 8 million dollars a year. I obtained that estimate from the industry itself. I have checked the conditions as carefully as possible, and I have been unable to make the estimate any larger than that stated. I may say that in a committee conference the other day, the distinguished senior Senator from Georgia indicated that his estimate of the loss was only from three to four million dollars, which would result from the adoption of the amendment to the movie bill. It should be emphasized that a $65 watch is not necessarily a luxury; railroad watches, for example, today generally cost about $100 or more.

I believe that the jewelled-watch industry is badly in need of relief, and I hope the amendment may be adopted.

I wish to repeat the statement that no one is more interested in getting a movie tax bill passed than I, but I am going to

ask the chairman whether he will take this amendment to conference. He is thoroughly informed on the matter, and if he encounters opposition in the conference, we shall have to get along without the amendment.

Mr. MILLIKIN. Mr. President, I should like to say to the distinguished Senator that I do not care to hold out any hope. I think that if the amendment were to go to conference, it would be lopped off. But, on the understanding that it will not be allowed to jeopardize the main bill in any way, and considering the relatively small amount involved, I should be willing to take the amendment to conference.

Mr. KNOWLAND. Mr. President, with all due respect to the distinguished chairman of the Finance Committee, I must

ness Committee, which has conducted extensive hearings both here and in California, I have observed some of the major has heard more than a score of witnesses, most of them small, independent theater owners and operators from most of the States in this country.

Within a matter of days, our committee hopes to submit to the Senate its final report of this investigation and its recommendations. I shall not presume on the report, but it is a matter of record that the motion picture theater owners of this country are unanimous in their belief that the 20-percent tax on admissions has imposed an intolerable burden on their opera

ask the Senate to reject the amendment, and ask that it not be taken to conference. I think that if we start the practice of accepting amendments, we might problems of this industry. Our committee get into difficulty. The distinguished Senator from New York had an amendment, in support of which he made a very strong plea. He was at least supporting the amendment of the Senator from Colorado. I resisted the amendment of the Senator from Colorado, not on any merely personal basis because he was on the other side of the aisle, and I sat on this side. I would not feel that my position would be consistent if, having resisted the amendment of the Senator from Colorado on a previous bill, I should fail to take a similar position at this time. I must be consistent in my position regarding the pending bill, which I do not think would be the case if I were to remain silent while an amendment was offered and an agreement made to take it to conference. Whether the amendment were retained by the conference committee or not, I must respectfully say to the Senate that if we once open the door to this practice, I know of at least a dozen or more amendments which will be offered.

The distinguished Senator from West Virginia [Mr. NEELY] has mentioned an amendment in support of which he feels a very strong argument can be made. The Senator from Kansas has an amendment, and I could perhaps mention a dozen or two dozen Senators on both sides of the aisle who, if the door is once opened, will have amendments which they will decide to have taken to conference. So I must ask the Senate not to accept the amendment now offered, and I would want to have a quorum call before having the issue determined by the Senate.

Mr. BUTLER of Nebraska. Mr. Pres

ident, I have been in the Senate long enough to know that, in view of the statement of the majority leader, the amendment does not have a chance in the world of being taken to conference. Therefore, I shall not press it.

The PRESIDING OFFICER. The Senator from Nebraska withdraws his amendment. The bill is open to fur

ther amendment.

Mr. SCHOEPPEL. Mr. President, I had intended to address the Senate on the pending bill, but because of the shortness of the time, and because I am compelled to attend a committee hearing, I ask unanimous consent that there

be inserted in the RECORD at this point in my remarks a statement in writing which I have prepared in favor of the pending bill.

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

STATEMENT BY SENATOR SCHOEPPEL It is not my purpose to delay Senate action on the bill to repeal the tax on admissions to motion picture theaters. I feel, however, that I would be failing my duty if I did not point out to Members the importance and urgency of the enactment of this measure.

I speak on this measure today because I have been able to observe some dire consequences happening to the motion picture industry. As chairman of the Subcommittee on Monopoly of the Senate Small Busi

tions.

The Senate Committee on Finance, in its report on this bill, has correctly stated that the motion-picture industry is confronted by a serious economic situation. This economic difficulty stems from a number of factors, most of them beyond the control of the various segments of the industry. In the past decade, significant changes have taken place in the living habits and the leisure time vocations of great masses of the American people. Decentralization of industry and the move to the suburbs of large cities has taken people away from the larger in-town movie houses. The large increase in the young-family population with small children, their social and economic problems in securing babysitters if they go out, the difficulty and cost of parking facilities if they drive into town to see a picture, and the advent of television in the homes have all cut heavily into regular motion-picturehouse attendance. Concurrently, there has been a tremendous increase in the number of drive-in or outdoor theaters which afford cheaper and better family facilities. The result has been the shutting down of many thousands of picture houses in the larger and medium-sized cities, and sharply falling attendance in the houses in the smaller towns.

In my own State of Kansas, where we have relatively few large cities, the economic impact of reduced theater admissions has been felt in serious proportions in even the smallest country towns. And this is true even in areas which have not as yet felt the impact of home television.

In southern California, where our committee held hearings, we heard the same story, and here in Washington, theater owners and operators from Iowa, Minnesota, Louisiana, Nebraska, New Jersey, Connecticut, Virginia, North and South Carolina, Georgia, Tennessee, Oklahoma, Texas, and many other States appeared before our committee to explain their problems.

They have, of course, other complaints, which are part and parcel of their daily business operations. But the one big refrain is the size of the bite taken out of their revenues by the Federal Government in the shape of the 20-percent admissions tax.

I think it should be emphasized that the people who are suffering are not large corporations. Since the Paramount decree, theaters have been divorced from the large producing and distributing companies. With one exception where legal factors have delayed technical divorcement, motion-picture theaters in the United States are owned by independent operators. And while there are a number of rather large chain theater operations, the overwhelming majority of the 18,000 theaters in the United States are owned by individuals, most of whom own 1, sometimes 2 or 3, theaters in contiguous towns. For the most part, these are family operations. The father runs the machine, the daughter takes tickets, the sons are porters and ushers, and the mother keeps the books and does other chores. people are in serious financial shape. Many of them have been forced to the wall in

These

recent years. Men who have spent a lifetime in this business have been forced to close up shop.

There is another factor of special economic significance to be considered. Oftentimes, the theater is the focal point of social activity in a small country town. Businesses next door, the candy store, the shoeshine parlor, the bowling alley, the cigar store, all are affected by the closing of the theater. Our records show that the neighboring merchants of the theater owner are as concerned over these movie-house closings as is the theater owner himself. The repercussions of movie-house closings on many other lines of business, particularly in small towns, is a matter of serious consequence.

I can assure the Members that this is no cry of "Wolf, wolf." I am not a member of the Committee on Finance, but I commend the members of that committee and its distinguished chairman, the junior Senator from Colorado, for having seen the urgent problems in the motion-picture industry. Our committee has had the benefit of many months of hearings and study into the problems of the industry, and I reiterate that the big problem, the major problem, the compelling and urgent problem of these independent theater owners and operators is the excessive tax cut taken from their admissions.

I say quite frankly that in my personal opinion, as chairman of the subcommittee which handled the motion-picture study, that the remission of the admissions tax will be the most important action that can be taken in aiding this sick industry today. In my judgment, our report which will be submitted shortly, must and will emphasize that principal problem of this industry with which Congress and the Federal Government has a legitimate duty to concern itself with, which is the abolition of the 20 percent admission tax. I hope that the Senate will approve this bill promptly and bring this urgently needed relief to thousands of struggling, decent, small-business men throughout the country.

Mr. MCCARRAN. Mr. President, I am not at all certain that the misfortune which seems to have befallen the moving-picture industry is due to the tax which is about to be removed by the pending bill. When the League of League of Decency takes action against pictures which are being commonly shown, that is one reason why the moving-picture industry is taking the licking it is receiving in public opinion. When the moving-picture industry exhibits pictures such as When the Moon Is Blue, and a few others of that type, it can expect a fall in income.

Mr. President, I have at the desk an amendment which I desire to offer at this time.

The PRESIDING OFFICER. The clerk will state the amendment offered by the Senator from Nevada.

The LEGISLATIVE CLERK. It is proposed, on page 2, immediately following line 2, to insert a new section, as follows:

SEC. 3. Section 1650 of the Internal Revenue Code is amended by striking out, in the table contained in such section, the matter relating to cabarets, roof gardens, and so forth.

On page 2, line 3, strike out "3" and insert "4."

Mr. McCARRAN. Mr. President, when I gave notice of my intention to offer an amendment to eliminate the socalled cabaret tax, I stated my opinion that both the Government and the oper

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ators of restaurants and cabarets would benefit by elimination of the tax. I wish to expand on that thought just a little so that my colleagues may know that the opinion which I expressed has a sound basis.

Internal-revenue collections under the heading "Admissions to cabarets, roof gardens, etc."-and these are the collections from the 20-percent cabaret taxhave dropped from more than $72 million for the fiscal year 1946 to $45,489,000 for the fiscal year 1952. I have a table showing the amount collected under this heading for each of those 7 fiscal years, and I ask unanimous consent, Mr. President, that this table may be inserted in the RECORD at this point as a part of my remarks.

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

Internal-revenue collections from admissions

to cabarets, roof gardens, etc. (the 20-percent cabaret tax)

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Mr. MCCARRAN. Mr. President, it seems to me that this might be termed a "demonstration of the effects of the law of diminishing returns."

If the tax is removed, two results inevitably will follow. For one thing, the restaurants will do more business, take in more money, make more profit, and pay a larger tax on that profit. I cannot give the Senate an estimate on how much this will be; it involves too many factors to permit a reliable estimate. But I am entirely convinced that what I But I am entirely convinced that what I have predicted in this regard will come about.

The other result which I consider in

evitable, if the cabaret tax is removed, is the employment of thousands more of entertainers and musicians. The salaries of these entertainers and musicians would, of course, go to broaden the base for personal income-tax collections.

This increase in employment of entertainers and musicians has been estimated on the basis of a recent survey conducted by the National Licensed Beverage Association, which is composed of proprietors of restaurants, hotels, taverns, and cabarets. Five hundred and two proprietors in nine States were queried, as a part of the survey. Of this number, 346 were found to be not now using entertainment.

Of these 346, 220 stated that if the cabaret tax should be eliminated, they would hire musicians and entertainers.

Since only 156 of the 502 establishments contacted are now using entertainment, and since an additional 220 answered that they would hire musicians and entertainers if the cabaret tax should be eliminated, this survey indicates that present expenditures for entertainment would be more than doubled if the tax should be dropped.

In other words, at the cost of only $45 million in revenue, it will be possible by

the amendment which I have proposed to more than double the employment of entertainers and musicians in the restaurant, hotel, tavern, and cabaret field.

There is no question in my mind but that this result will be worth far more than the amount of Federal revenue involved.

Mr. President, I offer my amendment with no particular hope of its being agreed to. [Laughter.]

Mr. NEELY. Mr. President, will the Senator from Nevada yield?

Mr. MCCARRAN. I yield.

Mr. NEELY. May I inquire of the Senator from Nevada the meaning of the last three words in section 3 of his amendment to section 3, which are "and so forth."

Mr. MCCARRAN. That is the language of the statute.

Mr. NEELY. That still does not give me any information. Does the Senator know what is included?

Mr. MCCARRAN. It covers a multitude of sins. [Laughter.]

Mr. NEELY. I assumed that, but I thought that possibly we could have them specified.

The

The PRESIDING OFFICER. question is on agreeing to the amendment offered by the Senator from Nevada [Mr. MCCARRAN].

Mr. MILLIKIN. Mr. President, I simply wish to reemphasize what the Senator from Nevada has already said. The adoption of the amendment would cost our revenues $45 million. I feel quite sure that if that loss were added to the other losses mentioned, it would stymie the bill in conference and probably at the White House.

The PRESIDING OFFICER. The question is on agreeing to the amendment offered by the Senator from Nevada.

The amendment was rejected.

The PRESIDING OFFICER. If there

be no further amendment to be offered, the question is on the third reading of the bill.

The bill (H. R. 157) was ordered to a third reading, read the third time, and passed.

APPLICATION FOR OIL AND GAS LEASE-CONFERENCE REPORT

Mr. BUTLER of Nebraska. Mr. President, I submit a report of the committee of conference on the disagreeing votes of the two Houses on the amendment of the Senate to the bill (H. R. 1802) to amend the act of Congress approved March 4, 1915 (38 Stat. 1214), as amended. I ask unanimous consent for its present consideration.

The PRESIDING OFFICER. The report will be read for the information of the Senate.

The report was read, as follows:

The committee of conference on the disagreeing votes of the two Houses amendment of the Senate to the bill (H. R. 1802) to amend the Act of Congress approved March 4, 1915 (38 Stat. 1214), as amended, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate and agree to the same.

HUGH BUTLER,

HENRY C. DWORSHAK,
FRANK A. BARRETT,

JAMES E. MURRAY,

EARLE C. CLEMENTS,

Managers on the Part of the Senate.
A. L. MILLER,

WESLEY A. D'EWART,
JOHN P. SAYLOR,
CLAIR ENGLE,

KEN REGAN,

Managers on the Part of the House.

The PRESIDING OFFICER. Is there

objection to the present consideration of the report?

There being no objection, the Senate proceeded to consider the report.

Mr. HUMPHREY. Mr. President, what is the substance of the bill involved in the conference report?

Mr. BUTLER of Nebraska. The Senate and the House conferees were in agreement, with the exception of granting leases on three sections of land in Alaska.

Mr. HUMPHREY. I have no objection.

The PRESIDING OFFICER. The question is on agreeing to the report. The report was agreed to.

COMMISSION ON JUDICIAL AND
CONGRESSIONAL SALARIES

Mr. MCCARRAN. Mr. President, I should like very much to have the attention of the Senator from Illinois [Mr. DIRKSEN].

Yesterday, July 23, the Senate passed, with certain committee amendments, Senate bill 2417, providing for the creation of a Commission on Judicial and Congressional Salaries, and for other purposes. This was a bill which had been reported to the Senate on the preceding day, July 22. My reason for bringing it up at this time is to show what we can do in this body when we act in haste.

One of the provisions of this bill, as it passed the Senate, is to my mind clearly not in consonance with the Constitution of the United States. The provision in question was a committee amendment. Thus, this particular provision was available to Members of the Senate generally only for 1 day, before it came to a vote. Under the circumstances, it is easy to understand how Members of the Senate, who had not seen this provision before, failed to recognize it as an unconstitutional provision. Unquestionably, many Members of the Senate did not have an opportunity to examine the bill before it was passed. I am in that position myself, I am sorry to say. I knew about the bill, and I had examined a copy of the bill as introduced; but I did not know about this committee amendment, nor was it called to my attention, until after the bill had been acted upon.

This is, I think, an example of the evils which can result from too rapid action on any legislation. It simply is not right that a bill should be brought to the floor from a committee on one day, and brought up in the Senate for final action on the succeeding day.

The provision to which I refer is section 3 (a) of the Senate bill 2417. To understand the question involved, Senators should realize that the bill authorizes the establishment of a Commission to be known as the Commission on Judicial and Congressional Salaries. This Commission would be composed of 18 members, and its duty would be to determine the rates of salaries which should be paid to justices and judges of the courts of the United States, and the rates of the salaries and mileage which should be paid to the Vice President, the Speaker of the House of Representatives, and Members of Congress; and to report such rates, as determined by it, to the President, the Chief Justice of the United States, the President of the Senate, and the Speaker of the House of Representatives, on or before January 15, 1954.

Let us look at section 3 (a) of the bill as passed by the Senate. This section reads as follows:

SEC. 3. (a) From and after the date of the report of the Commission the salaries of justices and judges of the courts of the United States and the salaries and mileage of Members of Congress, including the Vice President and the Speaker of the House, shall be at such rates as shall be appropriated for by the Congress from time to time. Such rates shall not be less than those prevailing on the date of enactment hereof (including the amount of the expense allowances herein described) and shall not exceed those determined by the Commission.

Clearly, Mr. President, this is a provision for a flexible salary. There is a minimum-to wit, the salary now being paid, plus, in the case of Members of Congress, the amount of expense allowances presently authorized. There is a maximum, to wit, the amount determined by the proposed commission as the rate which should be paid in each case. Between this maximum and this minimum section 3 (a) provides, the rate shall be whatever Congress by appropriation provides. Clearly, this section contemplates that the Congress, within the prescribed minimum and maximum limits, can, through appropriations bills, raise or lower not only its own salaries and the salaries of the Speaker and the Vice President, but also the salaries of judges and justices of the United States. Leaving aside all questions of policy, Mr. President, this proposal might be all right with respect to Members of Congress, and the Speaker and Vice President; but it is an unconstitutional provision so far as it concerns judges and jus

tices of the United States.

Section 1 of article III of the Consti

tution of the United States provides that judges and justices of the United States

shall "receive for their services a compensation which shall not be diminished during their continuance in office."

This has been construed to mean not merely that the salary of a judge or justice may never be cut below the salary provided at the time he was appointed; but also that, when the salary of a judge or justice has once been increased, during his term, it cannot thereafter be ing his term, it cannot thereafter be reduced.

Constitutionally, therefore, the salary of a judge or justice could not be allowed to be moved back and forth, even within

a prescribed range, at the will of the Congress, expressed through appropriations bills.

It would be possible, of course, for Congress to grant itself the power, through appropriations bills, to raise the salaries of judges and justices at any time, either with or without a maximum limitation on the power to make such raises. But once such a raise had been provided, the salary could not thereafter be reduced; though, of course, it might be raised again at any later time.

There are thus two possibilities with regard to the language of section 3 (a) of Senate bill 2417. One of the possibilities is that the courts, if called upon to construe the section, would go to the lengths necessary to hold it constitutional, and would rule that its effect was the same as though it had provided that the rate of compensation for judges and justices, which might be fixed by the Congress through appropriations bills, should never be less than the highest rate In other words, the previously fixed. court might, in order to hold this provision valid, declare that it must be presumed to imply the constitutional provision with respect to the salaries of justices and judges, and so construe it merely as authority for Congress to raise the compensation of judges and justices at any time, within a fixed limit, by means of an appropriation bill.

The other possibility, of course, is that the courts might hold the provision unconstitutional and therefore invalid. If that should happen, the whole objective of the bill would be defeated, at least so far as judges and justices are concerned, and no raises would be provided thereby, or could be accomplished thereunder.

It seems to me, Mr. President, that since it will be necessary to construe this provision in consonance with the Constitution in order to hold it valid, it would be only prudent for Congress to bring the provision, by amendment, into consonance with the Constitution, before enacting the bill.

As I indicated, this bill passed the Senate yesterday. There is still time within which to file a motion to reconsider the action of the Senate. I do not desire to file such a motion unless it is necessary. There is always the possibility that the other body may amend the bill, with respect to section 3 (a), so as to bring it into harmony with the constitutional provision respecting the salaries of judges and justices of the United States. If that is to be done, I would not wish to delay the bill even for

the length of time required to bring it back to the Senate and to make the cor

rection here.

Accordingly, Mr. President, I propound this question to the leadership, on both sides of the aisle. I hope the majority and minority leaders will confer with regard to the situation which I have outlined, and, if necessary, with the leadership of the other body, and will conclude whether it is necessary to recall the bill in order to have the Senate make the indicated corrections in section 3 (a); or whether it would be better to rely upon the other body to make such corrections. I shall be willing to go along with whatever decision is reached by the

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