CONGRESSIONAL RECORD

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000200150005-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 10
• Document Creation Date: December 20, 2016
• Document Release Date: February 27, 2004
• Sequence Number: 5
• Publication Date: September 6, 1962
• Content Type: OPEN

Approved For Release 2006/09/27 : CIA-RDP64B00346R000200160005-2
1 96 ,2 CONGAESSIONAL RECORD ? SENATE
reational activities, and in the coopera-
tive work relationships that are neces-
sary to keep the institution going.
One might say about this new project
that it is difficult to single out one or two
components of the whole that are more
responsible than others for its success in
helping narcotics addicts regain a sure
footing. It is rather the particular com-
bination of the various elements that
seems to have produced this unique in-
stitution which has come to be described
as "the most significant attempt to help
addicts off drugs that has ever been
made."
The Synanon program was originated
by Charles E. Dederich, a former busi-
ness executive and past alcoholic, and
contains some of the functions of Alco-
holics Anonymous. He is aided by pro-
fessional people who give of their time
and energy in helping the addicts on
their long road back. One such indi-
vidual who should receive credit is Dr.
Lewis Yablonsky who brought this in-
stitution to my attention and to the at-
tention of the subcommittee.
Some of the participank in the Syria-
non program, both male and female,
have been drug addicts for as long as 20
years or more. ?These are hardened
addicts who now for the first time in their
lives have abstained from using heroin
and other drugs for 1 or 2 or even 3
years. Most of their former lives have
been spent in prisons and mental hos-
pitals without a cure and without hope
for a cure.
I heard the testimony of seven of these
brave young people who appeared before
the committee and told tales of human
degradation that would shock the aver-
age citizen beyond belief. I think I
should name these seven people, not as
"horrible examples" to to exploit their
difficulties but to praise them for hay-
11P,,,v the courage to bare their stories and
their struggles so that other suffering
human:: might draw inspiration from
their, exrieriences. They have no objec-
tions to repeating their personal his-
tories in public; in fact, part of their
treatment is to be able to "talk out" their
difficulties, and in so doing gain insight
,of and understanding of their own prob-
lems. I feel that by giving them recog-
nition for their achievements they will
be further encouraged to remain free of
the drug habit. I will name them, their
crimes, and their present adjustment
just as they submitted this informa-
tion?for the reeo47-at our recent hear-
ings:
Jack Hurst, age 31, from California.
Addicted to heroin 9 years. Off drugs
at Synanon: 31/2 years. Maintained ap-
proximately $25 a day habit through
burglary, shoplifting, bad checks, and
selling narcotics. Was in custody in the
'Los Angeles County Jail and Army hos-
pital. At Synanon, he is a member of
the Synanon board of directors.
Carmen Armstrong, age 29, from New
York City. Addicted to heroin 10 years.
Off drugs at Synanon: 1 year, 5 months.
Maintained approximately $25 a day
habit through ,prestitution and shoplift-
. Was in oustj It Lexington Fed-
'Tnspital and Bellevue Hospital in
New York City four times. At Synanon
she is one of the administrators at Syn-
anon nursery facility.
Herman Gayer, age 37, from Cali-
fornia. Addicted to heroin for 14 years.
Off drugs at Synanon: 3 years and 1
month. Maintained $25- to $50-a-day
habit through armed robbery, burglary,
selling narcotics, and procurement--
prostitution. Was in custody in the Los
Angeles County jail three times and in
San Quentin Prison for 36 months. At
Synanon he is a "third stager," which
means he works out in the community
as a salesman. He is a member of the
Terminal Island Prison project and re-
turns to Synanon frequently to counsel
newer members.
Jeanne Camano, age 29, from Cali-
fornia. Addicted to heroin for 3 years.
Off drugs at Synanon: 3 years. Main-
tained approximately $25-a-day habit
through prostitution, theft, and selling
narcotics. Was in custody at Langley
Porter Neuropsychiatric Hospital and
San Francisco General Hospital. At
Syna,non she is the coordinator in charge
of office files and has worked in the com-
munity for 1 year. ,
Ronald Pacific, age 22. Addicted to
marihuana 2 years and heroin 4 years,
total of 6 years' addiction. Off drugs at
Synanon: 7 months. Maintained ap-
proximately a $20-a-day habit through
burglary and robbery. At Synanon he is
in Charge of maintenance and the Syn-
anon motor pool.
petty Coleman, age 39, from 'Califor-
nia, Addicted for 9 years. Off drugs
at Synanon: 3 years. Maintained ap-
proximately $25 a day habit through
prostitution, selling narcotics, and work.
Was in custody at the County Jail, Ca-
marillo State Hospital, and Lexington
Federal Hospital. At Synanon she is a
member of the board of directors and
head of the finance department, chief
girls' counselor, and supervisor of Wom-
en's Terminal Island Prison project.
Frank Lago, age 1, from New York
City. Addicted for 12 years. Off drugs
at Synanon: 2 'years and 6 months.
Maintained approximately $25 a day
habit through robbery, selling narcotics,
and procurement?prostitution. Was in
custody at Danbury Federal Prison, Lex-
ington Federal Hospital three times, Bel-
levue Psychiatric Ward two times, and
Rikers Island, N.Y., Prison two times.
At Synanon he is a coordinator and plans
to attend city college art class under the
California vocational rehabilitation pro-
gram.
There we have it. Just seven young
people who have a total time of 63 years
as addicts and who have spent years in
_jails, penitentiaries, and hospitals; who
have committed an unbelievable range of
crimes from burglary, shoplifting, and
forgery, to robbery, armed robbery, sell-
ing narcotics, and prostitution.
They were considered hopeless cases
a few years ago. Today they can look
forward to a life free from the ravages of
drug addiction.
The program has survived now for sev-
eral_years in spite of mistrust and at-
tacks ,12y the public, by some profession-
als, and also by the State on several oc-
casions. The participants have organ-
ized into a foundation finally recognized
and incorporated as a nonprofit corpora-
tion and have maintained their existence
through public support, through dona-
tions of food, furniture, and other equip-
ment by business concerns in the com-
munity and through the faith in the
program of the members and the direc-
tors, most of whom were confirmed drug
addicts a few years ago.
Today they are productive members of
their small community. They all have
worked hard to turn the old armory
building into a home and they have
maintained themselves by organizing the
collection of food and clothing in the
larger community. Every day they send
a truck into the city to pick up unsold
bread from bakeries and other food items
that can no longer be sold by the stores
and restaurants for one reason or an-
other. Together they have built an in-
stitution as peculiar, but as courageous,
as the individual men and women who
live there. Because of this unique meth-
od of self-maintenance, Synanon can be
operated at a cost of some $60 per patient
a month. This is a fraction of what it
costs to maintain patients at one of the
Federal hospitals for drug addicts, and
the more than 200 addicts helped at
Synanon, that is individuals who have
not relapsed to drug use to date, compare
favorably with the 40 patients that, by
the hospital's own admission, were helped
in the Riverside Hospital in New York
City after an expenditure of $4 million.
I want to emphasize that the people at
Synanon as many other addicts at one
time used $25 to $50 worth of narcotics
per day. They often had to steal $100
worth of goods daily to support the habit,
and their crimes, together with the court
processes against them and their upkeep
In public institutions, cost the commu-
nity virtually millions of dollars.
Increasingly today the Synanon proj-
ect is being studied by criminologists
and sociologists, and it is my hope that
It will spread and expand with chapters
being organized in all parts of the coun-
try with high addiction rates. It is also
my hope that Federal agencies, such as
the President's Committee on Juvenile
Delinquency and the National Institute
Of Mental Health, will consider the pro-
gram as a source of study and as a source
of investment of some of the funds avail-
able for testing new ways of fighting
crime and delinquency.
I have recommended that the director
of Synanon, Mr. Dederich, apply for
funds to the National Institute of Mental
Health, so that he can expand his pro-
gram and introduce it in correctional
and other institutions throughout the
country. I propose also that social
scientists and heads of treatment insti-
tutions for addicts request funds to ex-
periment with the Synanon idea. It is
my belief that we have found something
new and workable in this project and we
must develop it to the fullest extent.
Mr. President, there is indeed a miracle
on, the beach at Santa Monica, a man-
made miracle_ that I feel can benefit
thousands of drug addicts.
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r68 CON9RESSIONAL RECORD ? SENATE September 6
In bringing this Project to the' atten=
tion of my colleagues here on the floor
of the Senate, I_ want to pay tifinite to
the founding members igthia new
iii-
tutlon and to give its:pieSerit and flittre
participants some Of the eric.onrale-
ment and recbgnitiOn-thichutlieY:haVe
often lacked in the
,
sEcRETAttv
OF
? 11ES TO THE
rumEN-1:6615tT,
I Was very -much, surprised to read in
'the :newspapers today of the "Pled-0e of
be Secretary 61 Agriculture the
, _ .
niteel Nations yesterday, whereby we
tgk_ _
e the first step in relinquishing our
-0Oritro1, over the diStribli,tion Of*OUr sur-
plusfood and agrieillturar Commodities.
In his speech yesterClaY delivered be-
fore the United Nations' he 'Said'.
1?Ift.e United States Pleagds- '$40 -
-Zillion in oornmoditids ani an additional $10
inilbon in cash, anSI,pa tortat1ou
liwylces on U.S. vessels. flils Isthd-Anierf-
pan, centribution_td t1ietojOb.mif1ion fol;
all botTritries taking Pirt-finhTS
-program: -
he U.S. con button rif
'on 0 .c.frimodRies _and
:transportation services writ be niard-e---Ihrougb
the Public Law 480 program, *Tire -the cash
'contribution, will come -ftdni tTi?.S. for-
.
eign assistance program. - In view df Our
intemal Procedures for annual -appkbpria-
_torsi, we are Plainitng tat the dash' Cdn:
triblitio.n be prOYidel.fierif.
th?a-
tions of $ . years Sep-,i-ate:IY, beginning:- yfitb
the one now before .the ConTgr:eig.
_ ?
1 am perfectlY-aWare of the -broad au-
thority contained- in Riblic Law 4110.
also aware of thilajet thatlait_year
-at.- the FA,0 .0oliferenc.ie In 'AO-nig Mr'.
Vkcjevern, then Diree or ofthe
food-
-for-peace proerani:-and.'otheri indicted
th the trnitea tates ,kiyadjitiCikqte
in such: a, prograrnihrotigh.the'llnited
Nations. Ent, I feel quite' Ceitaiii that
the Department of 'Aigr;eiiltUre
an sec-
z'eta,ry F'reeinan have steppeirfarheYOnel
'the intent of CorigreSsWith regard to
? -- _
.Lie
.4dirkinigrAi9.4..PresenteAto*ooh.-
?grtss - this year a yery comprehensive
program n C6ntaining over lob
es-and
.e of 0.,,2:786;- and the-edinPaiiinn
Thin in thellousep 1.007111,0..ealt:With
.
The AgriciiltnralTridebevelOOrientlet.
ZtleItof the,adtnincStr4tion:E411,firo=
'vided, among Other ithirigaa inafni
arriendinerit, tQ ,the WEiiienitiirat Traci&
peveIoRniefi,t and A'salsi;iini6161` of 1964.
It, proposed to add a ricW,
and provided ror se?ons fl,5-02:103;'
nd 565. tta4 :the :ciiiigreSs, aNroved
tie V, then the Secretary ? AiRCiiiiiire
Otld haye had sliffie:ent
lae-?,Ye entered into agreements With -the'
United:,1srations and make commit-merits
? eat ti:partieWitife.
-X call the attentiron ,the _gerilate:TO-
-*the fact that both-the:Sehate'tkiirrirdif7:'
'tee On Agriculture and The iteiriSe-Corri-
Xattee deleted- this rieW' title 0-na this
'Ae:/.7.0,110PritY?
? The agriciirtnial legislatiOn-is" nOw
coriaideratioil by the Conferees Of
'the Itouae and Seriatq. If'-p-uliTeS me
a
that the Secretary of Agriculttire would
commit the 'United States, Iii light of the
Clear rejection of this proposal by both
Aid-culture COmmittees.
think this is the first stet* in relin-
quishing 'U.S. control of the distribution
of our agricultural commodities. In my
estimalon, this is ifie first 'step toward
giving the Communists under the domi-
Miller of the 8O-fiet 'onion an equal
share as to the operation of our so-called
? food-for-peace program.
I raspe the question again?If the Sec-
retary had this authority under Public
Law 480, then why did he ask the Con-
Tress to give it to him in 1962? And,
striae both Houses have rejected the new
title 'V of Public Law 480, then why did a
? Cabin3t officer make such a far-reaching
commitment only yesterday, while the
agricultural legislation is still under ac-
tive consideration by both Houses of
Congress?
FEDERAL EMPLOYMENT
Mr. HICKENLOOPER. Mr. President,
one of' the areas of tremendous growth
within the structure_of our Republic is
ederl employment.
- President Kennedy, in the course of his
campaign, stated:
- ? I at hor the waste and incompetence of
? large-scale Federal bureaucracies in this ad-
ministration, as well as in others. (Liberal
party acceptance speech, New York City,
Sept. 14, 1960.)
And later, In his statement to Cabinet
oMceis and agency heads he declared:
I am also especially desirous that the nurn-
her of Government employees be limited to
the minimum consistent with getting the job
done. There is no question that employ-
ment can be held substantially below the
levels which would be possible under the
funds antorized by the Congress if strong
efforts are made to achieye increases in pro-
ductivity and efficiency, to use better tech-
nique? of management and production, and
to staff each activity with only the minimum
number of employees needed to carry out our
objectives. (Office of the White House, press
secretary, Oct. 26, 3961.)
The facts, nevertheless, show that in-
stead of reducing the Government pay-
roll the Kennedy administration, in addi-
tion to replacing the 452,553 who left the
Government service in calendar 1961, also
-hired 75,854 additional employees in cal-
endar 1961 for a total of 528,407 in 1
year alone.
There is an additional factor which
has gone largely unnoticed in both the
press and public comment. When you
add the 67,804 new employees for the
first 13 months of 1962, plus the 217,531
replacements for the first 6 months of
1962, you find the administration has
-hired an 18-month total of 813,742 Fed-
- eral employees since taking office.
If therefore, the Kennedy admin s-
tration is sincerely interested in positive
steps to reduce unneeded, unnecessary
and nonessential expenditures, the solu-
tion should he obvious not only to the
President but to the country as well.
Were the President to, declare a mora-
torium on all bit absollitelY essential
riOsitions, the- current nonmilitary at-
trition rate of TOW percent would re-
duce Pederal payrolls by half-a-million
employees per year. I do not advocate
Mass firing of Government employees,
merely not filling the vacancies when
they leave the Government service.
This means that current Federal
civilian payroll costs, including foreign
nationals, of $14.5 billion could be re-
duced by a potential V.9 billion per year,
a substantial saving in this day of stag-
gering Government debt and dwindling
gold reserves.
Mr. president, I ask unanimous con-
sent to have printed at this point in the
RECORD a letter received by the Republi-
can policy committee from the Civil
Service Commission, documenting the
employment reductions that could be
realized by a moratorium on nonessen-
tial hiring.
There being no objection, the letter
was ordered to be printed in the RECORD,
as follows:
- SEEVICE COMMISSION,
Washington, D.C., August 27, 1962.
MT. DAVID S. TEEPLE,
Secretary and Staff Director, Republican
Policy Committee, U.S. Senate, Wash-
ington, D.C.
DEAR Ms. TEEPLE: In reply to your letter
of August 17, 1962, the annual separation
rate for the U.S. Government during the
fiscal year 1962 in the United States was 20.93
percent. This includes all types of separa-
tions from Federal agencies. If we eliminate
transfers between agencies, terminations of
temporary or excepted appointments and
leave without pay, the rate would be 11.74
percent.
Rates for the component types of separa-
tions are:
8.24
TQruaintssfers 1.53
?
Discharge 58
Reduction-in-force .66
Termination 6.09
Displacement 02
Extended leave without pay 1. 57
Death, retirement, disability, etc 2.P_.
Sincerely yours,
Nicnor..?s J. Ows.brovic,
Deputy Executive Director.
SELF-EMPLOYED INDIVIDUALS TAX
RETIREMENT ACT OF 1961
The Senate resumed the consideration
of the bill (H.R. 10) to encourage the
establishment of voluntary pension plans
by self-employed individuals,
Mr. MANSFIELD. Mr. President,
what is the pending business?
The PRESIDING OFFICER. The
pending business is the committee
amendment in the nature of a substitute
for H.R. 10.
Mr. MANSFIELD. I thank the Chair.
\
PROPOSAL O
R U.S. F A
NAVAL-AERIAL
\ Mr. -AERIAL
. MILLER. Mr. President, David
L13, wrence, BLOCKADE in his column entitled "Cuba
,
and the Monroe Doctrine," published
in the Washington Evening Star of
Tuesday, September 4, 1962, suggests
that a world war might be prevented by
a naval-aenai blockade of Cuba. He
anparentlr spea'ks-of an unlimited brook'
fide. His arguments are cogen -
though I myself would no
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CONGRESSIONAL RECORD ? SENATE
more than a war materiel blockade at
this time.
Mr. President, I ask unanimous con-
sent to Ilave printed at this point in the
RECORD the article by Mr. Lawrence, to-
gether with an interesting eyewitness
report concerning Russians in Cuba,
which was published in the, Washington
Daily News of September 5, 1962.
There being no objection, the articles
were ordered to be printed in the REc-
ORD, as follows:
[From the Washington Evening Star,
Sept. 4, 1962]
CUBA AND THE MONROE DOCTRINE?U.S.
NAVAL-AERIAL BLOCADE TO FORCE EXPUL-
SION OF SOVIET MILITARY URGED
(By David Lawrence)
The Soviets have political control of Cuba
and now have openly acknowledged that
they are supplying Castro with military aid.
This action flagrantly violates and de-
nounces the Monroe Poctrine. rresident
Kennedy, however, said, in effect, 6 days ago
that he will not "invade" cubs, at this or ,
any other time. Does this mean that the
Soviet government can consider it has ob-
tained a free hand to take over any Central
American or South American country and
can assume there will be no opposition by
the military forces of the United States?
This is the dilemma , in which the Wash-
ington Government finds Itself today as
news dispatches from Moscow tell of the is-
suatce of a formal communique in which
the Soviets inform the world they have
agreed to comply with the request of the
Cuban Government to supply it with "help
by delivering armaments and sending tech-
nical specialists for training Cuban service-
men."
The Soviet government contends that "all
Cuba's true friends have every right to re-
spond to this legitimate request" and that
the Cuban Government has "every justifica-
tion for taking necessary measures to insure
its security and safeguard its sovereignty
and independence."
So the Soviet formula for conquest is at
last made clear. Th p Communists.infUtrate
a country, get possession of the government
there, and cause it to file with Moscow a re-
quest for military aid. This is supposed to
' be the legal justification for sending arma-
ment anckmilitary personnel to "train" the
local troops. It so happens that the Mon-
roe Doctrine, since the 1820's, has warned
the world that no European country would
be permitted to get? a military foothold
anywhere in this hemisphere.
President Kennedy may not realize it, but
what he said at his news conference last
Wednesday could be responsible for his
present embarrassment. Had he not re-
sponded at triFtime to an impromptu ques-
Von and ,had he consulted with the Secre-
tary of State before issuing any statement,
' it is doubtful whether Mr. Kennedy would
have given the reply he, did on the spur of
the moment. A correspondent had asked
the Presidentto comment On the suggestion
of Senator CAPEHART, of Indiana, that Cuba
be invaded by the United States. Here is
the verbatim reply as taken from the tape
recording:
"The President: I gm not for invading
Cuba g :this t1m. No, I don't?the words
do not have some secondary meaning. I
think it would be a mistake to invade
Cuba?
"Question.,yfr. President, the Soviets, as
you well know?
"The President: ?Aeqause. I think it would
lead to?that it shoulb,e very?an action
'like that, which could be very casually sug-
gested, could lead to very serious ,conse-
qUehcet for many people."
,No. 160-13
_
?
Just previously in the same news con-
ference, the President, in discussing pos-
sible action in Cuba, had referred to Amer-
ican "obligations all around the world, in-
cluding West Berlin and other areas, which
are very sensitive," and had added:
"Therefore, I think that in considering
what appropriate action we shnuld take, we
have to consider the totality of our obliga-
tions, and also the responsibilities which
we bear in so many different parts of the
world."
This comment could mean that the Presi-
dent is fearful that, if he takes action in
Cuba, it might lead to greater pressures in
West Berlin?a reaction which the Soviets
doubtless are trying to foster. The Soviets,
on the other hand, may be waiting to see
whether the United States is hesitant to
use military force even as. close as 90 miles
away from its shores. They could mis-
construe the President's reluctance as-imply-
ing that the United States might not even
fight to protect West Berlin or any part of
Europe when a showdown came.
The situation strangely parallels the 1930's
which Winston Churchill describes in his
book "The Gathering Storm," published in
1948. He speaks of the "milestones to dis-
aster" in the 1930's and of the series of
acquiescences in Hitler's aggressions in the
Rhineland, in Austria, and in Czechoslovakia,
until finally the climax came in Poland. Mr.
Churchill writes:
-"Here is a catalog of surrenders, at first
when all was easy and later when things
were harder, to the evergrowing German
power. * ? *
"Still, if you will not fight for the right
when you can easily win without bloodshed;
if you will not fight when your victory will
be sure and not too costly; you may come
to the moment when you will have to fight
with all the odds against you and only a
precarious chance of survival.
"There may even be a worse case: You
may have to fight when there is no hope of
victory, because it is better to perish than
live as slaves."
What could Mr. Kennedy really do now?
He could order a Complete naval and aerial
blockade of Cuba and demand that all Rus-
sian advisers brought in by the Cuban Gov-
ernment to train military forces in- that
country be expelled at once. He could pro-
claim that no further shipments of any
kind, either by air or by sea, military or
nonmilitary, will be permitted to enter Cuba
from any country until the Cuban Govern-
ment restores to American citizens the prop-
erties taken from them in the last few
years.
To apply this policy could lead to some
fighting. But whatever sacrifices are made
would achieve the patriotic purpose of pre-
venting any misunderstanding as to the
resoluteness of the West in and around Ber-
lin. It could prevent a world war.
[From the Washington Daily News, Sept. 5,
1962]
EYEWITNESS REPORT OF RUSSIANS IN CUBA
(By Andrew Fyall, London Daily Express)
(Nors.?A British newsman who has come
out of Cuba tells of the breadth of the Rus-
sian aid that is helping build a Communist-
style stronghold 90 miles off the coast of the
United States.)
MIAMI, September 5.?I have just returned
to Florida after a week in Fidel Castro's for-
tress island, where censorship and suppres-
sion are a part of life.
My dispatches from Havana last week were
all conveniently "lost" by the Cubans.
Now I can reveal what I saw in theisland.
In the fields around Havana I saw row after
row of canvas tents?the home of the Soviet
"technicians," all brawny young men tanned
17669
by the hot tropical sun, superbly fit and
constantly in training.
They glared at me suspiciously over a
barbed wire fence as I drove past their camp
near El Cano, 12 miles from Havana.
A radio mast was plainly visible from the
roadway.
SCORES OF TRUCKS
Several hundreds of yards away, in a
thicket of palm trees, scores of Russian mil-
itary vehicles and trucks were lined up.
But the only guns and uniforms in sight
were worn by Cubans.
At the gate of the camp, which could have
housed up to 3,000 men, Cuban soldiers car-
rying Czech submachineguns mounted guard.
A few miles away antiaircraft guns were
being hauled into position in a field adjoin-
ing a Cuban Army camp. All along the road
from El Cano to Havana troops were on the
move.
In Havana, the busiest place is the water-
front.
Every day sees the arrival of a new ship,
usually Russian, but often a British vessel
on charter to the Russians.
A few bring food urgently needed in Cuba.
But most bring Russians in baggy, ill-fitting
suits and army trucks which are quickly
whisked off to secret destinations.
Some ships are unloaded at night and no
one knows what comes off them.
I asked several prominent Cubans the rea-
son for this military buildup in a country
where eggs are rationed to five a month and
butter is almost a luxury.
AT WAR WITH UNITED STATES
Their replies were summed up in the words
of a young army officer who said: "We are not
just preparing for an invasion.
"We already consider we are at war with
the United States. Our people don't mind
some hardships while we are building up
our defense strength."
He claimed he was speaking for 90 percent
of Cuba's people, but in the absence of free
elections his words are clearly questionable.
From all parts of the world dedicated Com-
munists, like physics teacher, Trevor Mar-
shall from Birmingham, England, have
flocked to Cuba.
Marshall, who admitted he is a Communist,
has joined with Russians and Czechs in help-
ing to mould a new destiny for Cuba.
Like most instructors he is a privileged
person. With his wife and two children he
occupies two rooms in the Havana Libre
(once the Havana Hilton), his bill heavily
subsidized by the government.
Cuba's few tourists?a handful of Cana-
dians and British citizens from neighboring
Islands?are turned away by a gun-carrying
reception clerk.
TOURIST ON THEIR OWN
The "technicos" and instructors are all-
important. The tourists have to look after
themselves as beat they can. -
There is suspicion and distrust throughout
the island. I was well aware that my every
move was watched.
And when I left, a young army intelligence
officer at the airport insisted that I should
remove my shoes and socks so that he could
look between my toes for hidden valuables
or hidden plans.
He peered at my feet, stuck his hands in-
side my socks, withdrew them empty and
said: "All right, sir. Now you can leave
Cuba."
RELIGION IN SCHOOLS
Mr. MILLER. Mr. President, today's
Wall Street Journal contains an article
entitled "Jefferson's Thoughts on Re-
ligion in Schools," written by _the distin-
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C,ONGRESSIONAL RECORD ?SENATE Septairibel. 6
Sohn " diainberiain,
In
r Chamberlain discusses a
redernic book Mr.
"Jeff eirson: on "S.3e-
ligloii dilCaticin," -Written by
_ROliert 1q. 'Healey,- a-Me-fiber' Of the lac-
11UY at the'fniVefiitY-Of toubuque Theo-
giCal Serninary." -
:!Becatise??? Of the controversy
.oVere the :reeent tiiPrenie tafirt - se Cgille-d
prayer &ea-1'6117r 1661161W the article by
Mr. ChambOlain 'arid a:ESo the book by
Professor HealeY'merit'1'El-bit:et-Atoll of
_readers - of the Co*OREMORT1L' RECORD.
I .ask unantniThs obriSent that Me.?Cham-
berlain's art le' whited at this point
in the'rtscolin. ? ' ''"
There being-, no objection, the article
..Was ordered to be 'printed In the RECORD,
-follows:
" JEFI'ERSON' THOUGHTS' ON ttELLOYONS
- ,
:$cLIOOLq
. When the Fouriding_ Fathers put' into the
r?flyst. arnendnierit -it) the Conatitiition the
? clause rea014 that diningrress'alial1'pa"Ss no
law respecting eitabliihineht-of religion,
orlirbhibiting-the Tree ekertiae thereof," did
they medii to banigh pray0 frOni the public
? schools?
The answer; fit 11.-Oterf M."Ire-aley-rnaires
:plain. in his a:Jefferson ? Oh" Fiblic
is that they W'eferalhat definite.
qineeThamaS Jeffergoil Waa'theintWing Spirit
'behnid the ailoi4fori or Vie 13111 ?cif
; *Inch included the first arriefiriment, purely
-be must have had pomethrrig-iiiiriortatit to
:say'ion the secice of the iiiiglaiii-alanse to
.:*111Ch the founders a/Mild have given assent.
,Jefferstins Ofe-cilibtectplifaleaboilt
"build-
wall of separation betWencelitirch and
State" has been taken by a Majority of the
' ? present Supreme Court justices to m7an that
'he was: a Strietr very strict, constructionist
in the 'matter of the firai"dirterichnent. By
? stric-; constriictianiiin piiblia-Pen6617 Prayer
? woUld _be put.'BiirlitoTissOr Healey, Who
.teaelieS tiniVeraity"ICi Vabiicjiie
logiegSerinhary",'"ras diligently" 7Sea:feheri '
?? throlgli all of Jefferson's writings on the
0j?et of religion and 'kin-dation and found
Sl -
juStrfy. the -Siiprime-Court's most
,acen arld7
Lik:O, other ea the'Yiriertelf-MrevOlutiOriary
eneration,'J'e'ffeittni iidSEi-rto`have no Part
.State chiir'efi:7 On. the other-hand, Jef-
TersOn was, a relqiOna Man r.-Tielleir'ed.-11ia.t
the order: Or. 'the 'd4iS1gii,77-7of the Universe
-proved the existence orLod, and lb never
tired, of refc:rying to God-ha-the -"Giver of
' the 'af---goraTif,Y.'' the
V,Iinthor of OaTfifre;!'-ttie-"tielie-fhleift7GOVer
,Mor ' the :World," t`fie" l'"Creatbr",
- peryer; and piiprerne Ruiet' of the iiniveise."
?
' ctriiikVW1vii5aAt, tittle* " '
t ear s ?ucat ,
to he the' dlity Ortre714.ibli6-dehoois
'to tranc Chltaren 760 Mori en7dOwed
"su.qh'..14T- the '''reltor:7.-TE.hitif -Jefferson
eariSifieredlt ITentligi'fficialbre for atheists
.,to pave' a t.o:ba ihOrar'Sefigklie-Mixiself felt
:that '1,`PriiiiitIVe -CtirritinfiltYr7as exemplified
"by the life' 'or jealia,TliadTraliell to Say On the
? 'subjedt "of inOralitY. W-a7P -net for
thia'froixithe
The p.f6Omfl r,r6Ifesiok-rfealby finds' it in
4 x:ilipibpr prop-osals
:Mary;7"se'cOhtlail,-alid--iiiirvell-ity education
lok hie own. State.. VT:WI:ire- For exarn-
, -.pie; at One15-61ii'f,".fefferItai bring
4e -
-' "qolleal tai-n' Mary' -tinder
ate. e;9fitiNir?itC-c.;litifiirn'g a 'elirricullim
the'. "P`AVOCtifeCthat
4S o1 dr.iiThatk-Ve J.boIi5heC Rut
1.4,ge-c17 that tTie collc maintain "*a per,
tief; i al IS-ST.Oh-57.rid ire 7fi" F-Trid an.? tribes"
alribICA-Other" Wofild-"friStruet
in in the prine101 ea' 61 Thifatialift-f.-
'Again, in a proposed curriculum for the
Univers:tty of Virginia which was drawn sub-
stantially as Jefferson had written it, provi-
sion was made 'for the "professor of ethics"
to present "the proofs of the being of a God,
the Creator, Preserver, and Supreme Ruler
of the Universe, the Author of all the-rela-
tions 01 morality, and of the laws and obli-
gations these infer."
Thus it can be seen that Jefferson did not
interpret the first amendment to mean the
exclusion of references to God or Christianity
in State-supported schools. What Jefferson,
along with his friend and colleague James
Madison was worried about 'Was sectarian
domination of public education.
In a letter to Thomas Leiper, written
toward the end of his second Presidential
term, Jefferson said: "The moral branch of
religion which is the same in all reli-
gions * * * instructs us how to live well
and worthily in society."
A BENEVOLENT DEISM
Jeffeison, in short, was a man of his
times, which were favorable to the feeling
that the squabbling of the sects might give
way to a benevolent deism in religion in
which the things that were common to all
faiths Would be stressed and doctrinal dif-
ferences would be forgotten. Quite uncon-
scioushr, so Professor Healey says, Jefferson
wanted' to put -the force?and the money?of
the State behind the fostering of his own
"general religion" of "peace, reason and
morality." Inasmuch as this type of religion
called for no organized church, Jefferson did
not thlnk of its presence. in the schools as
having anything to do with "an establish-
ment of religion." ?
Since Jefferson's day the benevolent hopes
of the deists have been rudely shattered.
But ths still does not mean that the Found-
ing Frthers were averse to opening the
school day with a very general prayer, or
that they were against mentioning the fact
in school that morality can have a religious
base. On Professor-Healey's showing, the au-
thor of the Bill of Rights and his friends
were merely against making the priests of
any single sect into officers or favored bene-
ficiaries of the State.
JOHN CH
unity over the threat of world commu-
nism?a situation which might well have
precluded Mr. Herter from making an
effort to pursue my suggestion a year and
one-half earlier. The Alliance for Prog-
ress has been launched, without any
apparent effort to premise it on unified
action on the Communist takeover of
Cuba. President Kennedy has inti-
mated that we would go it alone, if nec-
essary, should the other members of the
O.A.S. persist in their apathy and should
the situation in Cuba become sufficiently
serious with respect to our security. A
Soviet-initiated crisis over Berlin has
arisen, and, despite the wishful think-
ing of some writers, has not cooled off,
but has continued to smoulder danger-
ously. Some 50,000 tons of war materiel
have poured into Cuba from Communist-
bloc nations, putting the international
Communist conspiracy in firmer control
than ever. And now we learn that since
June some 61 vessels have unloaded more
war materiel and some 5,000 Soviet tech-
nicians, including 3,500 Soviet bloc mili-
tary men, into Cuba. The President has
recognized the situation, by warning
Cuba against aggressive action in this
hemisphere, while at the same time say-
ing that this Soviet assistance was not
of an offensive character. Perhaps it
was intended that the American people
be reassured that there is nothing to
worry about over the Cuban situation;
but if this was the intention, one wonders
why it was necessary for a warning to
1.)e issued to Cuba. Also, one wonders
why no warning was issued to the other
nations involved in this penetration by
the International Communist conspiracy
of the Western Hemisphere.
The situation is further complicated
by the Berlin situation, for we all know
that the Communist-inspired crises
around the world are a part of an inte-
grated plan of aggression against the
free world.
The President has been silent over the
question of whether the Monroe Doc-
trine has been violated; if it has been,
what is to be done; and where the line
is to be drawn if, in his opinion, there
has as yet been no violation. Inasmuch
as the line between offensive and de-
fensive war materiel can be very fine?
especially if so-called defensive weapons
are to be transshipped to feed the fires
of revolution, infiltration, or guerrilla
warfare in Western Ilemis73liere coun-
tries, and inasmuch as it is officially rec-
ognized by our Government that the
Soviet bloc nations are part of the inter-
national Communist conspiracy to ag-
gressively overthrow the free world na-
tions, it would appear that merely to
split hairs over the question of the "of-
fensive" or "defensive" character of the
war materiel involved is of little practi-
cal use.
The question which thus arises is
whether a blockade of war materiel
should be invoked.
The answer should not be the easy-
way-out statement that such a blockade
would be an act of War: Nor is it any
response at all to say, as the President
did, that it would be a mistake to invade
Cuba at this time. It is partially re-
sponsive to suggest that such action
A WAR MATERIEL BLOCKADE OF
CUBA?
Mr. MILLER, Mr. President, over 2
years ago, reports were widely circulated
that 3ecret shipments were being re-
ceived at Havana from Soviet vessels,
and that some of the crates being un-
loaded were large enough to hold air-
craft assemblies or iflissile parts. At
that tiuke, the" Secretary "of State, Mr.
Christian Herter, 'was attending a meet-
ing of the Organization of American
States. I called upon him to urge that,
in concert with the Organization of
Amer can States, a blockade be imposed
upon Cuba with respect to war materiel.
1 suggest that all other items?food,
clothing, medical supplies, industrial
equipment, and the like?be exempt
from the blockade. It was to be a block-
ade, with no war materiel into Cuba and
no war materiel out of Cuba. Unfortu-
nately, my plea was apparently ignored.
In any event, I have received no infor-
matic n to indicate that the idea was ever
even proposed?formally or informally?
at the 'Meeting. -
Since that time, there have been sev-
eral developments. The meeting of the
O.A.S. at Punte del Este, Uruguay, last
January, revealed a deplorable lack of
_
? ,,
PP 0
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CONG1ESSIONAL RECORD ? SENATE 17671
might lead to reprisals by the Soviet
elsewhere?in Berlin, for example. But
Such a snggestion implies such a weak-
ness of the administration over Berlin
as woUld cause the Soviets to think that
these so-called reprisals would be tol-
erated. Furthermore, our position in
West Berlin bears no resemblance what-
soever, from the 'standpoint of agree-
ments and rights arising from conquest,
to the Soviet position in Cuba.
I think it is time, Mr. President, to
point out that a war materiel blockade
. of Cuba, now in control of the interna-
tional Communist conspiracy, is not an
act of war. Once this myth is cast aside,
the situation can be viewed in a more
realistic light.
pm imposition of a limited blockade
of war materiel under the clicuniStEmces
existing in Cuba raises the question of
the extent to which such a blockade
would be permissible under the Charter
of the United Nations. Article 2, para-
graph 3, of the charter provides that?
All members shall settle their interna-
tional disputes by peaceful means in such
a manner that interna,tional peace and se-
curity, and justice, are not endangered.
Paragraph 4 of the same article pro-
vides that?
All members shall refrain in their inter-
national relations from the threat or use
of force against the territorial integrity or
political independence of any state, or in
any other manner inconsistent with the
purpokes of the United Nations.
Offhand, it might be argued that a
so-called Pacific blockade is,a, threat of
force or use of force against the terri-
? torial integrity or political independence
of the state blockaded. However, inas-
much as Cuba is clearly under the con-
trol Of the international Communist
conspiracy, the answer could be given
that its political independence no longer
exists.
Article 51 of the U.N. Charter provides
as follows:
Nothing in the present charter shall im-
pair the inherent right of individual or col-
lective self-defense if an armed attack oc-
curs against a member of the 'United Na-
tio4s, until the Security Council has taken
measures necessary to maintain interna-
tional peace and security. _
It has been argued that it is an ex-
treme view to assert that "resort to force
by a member is unlawful, regardless of
any wrongs or dangers which provoked
It, and that if no collective United Na-
tions relief is available, the member may
still have to submit indefinitely without
redress to the continuance of these
wrongs and dangers," Stone, "Aggres-
sion and World Order 95, 1988." The
question, then, is whether a blockade
limited to way materiel?which is a use
of force under paragraph 4 of article 2?
Is a measure of self -defense under arti-
cle 51. It has been argued that "to ex-
clude action taken against _an imminent
danger but before an armed attack oc-
curs bears no relation to the realities of
a situation which may arise prior to an
actual attack and call for self-defense
Immediately if it is to be of any avail at
all. No state can be expected to await
an initial attack which, in the present
state of armaments, may well destroy
the state's capacity for further resist-
ance and so jeopardize its very exist-
ence," Bowett, "Self-Defense in Interna-
tional Law 191-92, 1958."
Here is where the fine line must be
drawn between what is "imminent" and
"not imminent," and between what are
"defensive" and "offensive" weapons. I
suggest that the installation of ground-
to-air missiles, the provisioning of MIG
fighters, and tons and tons of small arms
and ammunition cannot be justified as
necessary to the "defense" of Cuba.
Moreover, as long as the governing au-
thorities of Cuba represent the interna-
tional Communist conspiracy, the ag-
gressive character of that Government is
clear; and the "imminence" of the threat
of attack by such an aggressive Govern-
ment, especially as a mere agent for the
power of Moscow, is as "imminent" as
the power of Moscow decides to make it.
? Another point should be made with
respect to the excessive amount of war
materiel being shipped into Cuba. If it
4q riot to be used against the United
States?although only Soviet Russia will
make that determination?then it exists
as a ready source of supply for purposes
of revolution, infiltration, or guerrilla
activities in other nations in the Western
Hemisphere. This poses a threat of
armed attack which would be clearly in
violation of the Monroe Doctrine. In
1947, the United States took the view
that furnishing of war materiel by Al-
bania, Bulgaria, and Yugoslavia to guer-
rilla forces in Greece fighting against
the Greek Government constituted an
"armed attack" by those- states on
Greece?see Kelsen, "The Law of the
United Nations 798, 1951." I suggest
that a threat to do so falls within the
concept of "armed attack" as enunciated
by towett, previously referred to.
Another point that is to be made is
with respect to the provision in para-
graph 4 of article 2 against the use of
force against "the territorial integrity or
political independence" of any State. I
have already pointed out that Cuba, be-
ing under the control of the international
Communist conspiracy, no longer has
"political independence." The interna-
tional Communist conspiracy has already
violated paragraph 4 of article 2, insofar
as it has, through the use of force, taken
over control of the territory of Cuba.
Accordingly, the Soviets, representing
the headquarters of the international
Communist conspiracy, are in no position
to complain against a war materiel
blockade which would be calculated to
prevent them from continuing the vio-
lation of the territorial integrity of Cuba.
One, final argument should be made.
Professor Stone suggests that there may
be cases in which the failure of the col-
lective-measures procedures of the Char-
ter to successfully meet infringements
of the rights of States may give rise to
a right to use self-help outside article
51, to protect those rights. This would
seem to be particularly applicable to
cases involving a violation of the Mon-
roe Doctrine, and more particularly to a
violation by the international Commu-
nist conspiracy. Goodrich and Hambro
also support Professor Stone's position,
as follows:
The provisions of article 51 do not neces-
sarily exclude the right of self-defense in sit-
uations not covered by this article. If the
right of self-defense is inherent as has been
claimed in the past, then each Member re-
tains the right subject only to such limita-
tions as are contained in the Charter.
Goodrich and Hambro, "Charter of the
United Nations 301, 1949." The authors
caution, however, that abuses could arise
from unilateral action pursued under
this doctrine.
From what I have said, Mr. President,
I trust it is clear that a war materiel
blockade is not "an act of war" either
under the U.N. Charter or under the in-
herent right of self-defense. I empha-
size that this is particularly true when
we are dealing with a country that is
without political independence and has
become but a Mere subdivision of the
international Communist conspiracy.
It is time to recognize the interna-
tional Communist conspiracy for what it
is?an aggressive, ruthless, godless, mon-
olithic force bent on destroying the free
world, with the United States as its No. 1
target.
' It is time to realize that firmness,
backed by the necessary power, is the
only effective way to stop this aggressive
force.
And it is time to make clear that
whether our rights in Berlin or our rights
under the Monroe Doctrine are trans-
gressed, all necesary action to put a
stop forthwith to such transgressions
will be employed.
I yield the floor.
Mr. PROXMIRE. Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER (Mr.
SMITH of Massachusetts in the chair).
The clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. SMATHERS. Mr. President, I ask
unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without
objection, it is so ordered.
SELF-EMPLOYED INDIVIDUALS TAX
RETIREMENT ACT OF 1961
The Senate resumed the consideration
of the bill (H.R. 10) to encourage the
establishment of voluntary pension plans
by self-employed individuals.
Mr. SMATHERS. Mr. President, H.R.
10 relates to the retirement needs of self-
employed individuals. It would enable
self-employed individuals to establish
qualified retirement plans for their own
benefit and for the benefit of their em-
ployees if there are any. Under existing
law, since 1942, self-employed individuals
have been denied the benefits of quali-
fied retirement plans because technically
they are not employees, although cor-
porate owner-managers are permitted to
participate in retirement plans created
by their corporation. Enactment of this
bill will eliminate this discrimination
against more than 7 million self-em-
ployed individuals which has continued
for 20 years.
Legislation to correct this discrimina-
tion has been proposed in various forms
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17672 CONMESSIONAL RECORD ? SENATE Septem
a1nee1947; It has been_ the Subject Of
Mary hearings and considerable delib-
eration:hy the tax committees of-Con-
greSs OVer the last 10 years. Specifi-
cally, the Ways and Means Committee
held 'public hearings on the subject in
052, 1953, on and again in 1956. In
19r6,Panetdiscussions *eke heldbY the
Ways and Means 'Committee. The
Committee OnTiffiance lield.publie hear-
ings on this subject in -1959, `1960, and
In 1961. ?- In various forms, 11,1t. 10 has been
Ordered reported by the WAYS and
Means donimittee in four separate 'Con-
gresses, has passed the Ileirge three
times, and has been favorably reported
by the Committee on Itriance bri two
Oecisions. This brief ltOlative histo7
Is indicative not only of the-ConsidaraThle
attention Congress hae-kiVen-tlie
through the years btitalSb-Of the
tremendous work that :Ii-as._;_jetne_into
Writing this particular :Legislation.
The bill now, before the*enate is the
Culmination of Many years of- Work by
the tax cornmittees of the COngreSS. It
rePresents an acknowledged improve-
ment over Prior versions .of the
_
Before proceeding Cheseiiption
of the bill, I would like to make clear at
this point that the committee's hill Would
not affect, in any manner' corporate pen-
sion plans now in existence-, tier- would
it impose any keiticiationS:ori-beintilbii=
tions which may be made by:corporations
on behalf of their owner-riumagars or
their employees. This bill is restricted
in its application to self-erriplOYed 'indi-
viduals. While there may,, abuses in
the corporate pension area whiah-Should
be studied, it was the jUdginetit of' your
committee that the ecilTeeffori of those
abuses should be consideriedon their own
merit and not as part of this legkiation
which relates solely toself emPthyedin-
=, _
dividuals. - -
H.R. 10 treats self-employed individ-
uals as employees for retirement plan
purposes. By treating them as' em-
ployees, H.R. 10 permits them to be cov-
ered under a qualified emplOyees'-pen-
sion, profit-sharing or bond purehase
plan. However, to prevent these Plans
from becoming tax avoidance ;devices "for
the self -employed, limitations are Placed
upon amounts which they 'may con-
tribute for their, own benefit;' Penalties
are provided where t:neY make With-
drawals before retirement On peimanent
disability; and payout .:Ortheir benefits
under the plan _must payout,
by age
701/, thereby preventin accum-
Ulations which might escape ificorrie tax
altogether.
In addition, coverage of einplOyees Of
self -employed individuals is required and
ContribUtions for them Must be nondis-
criminatory and fully vested, 'thereby
providing _pension programs Tor fae6p1e
in retirement. A program Would be pro-
yided notonly,i'Or theragter-e-14,liv,M; bid
also for, the eninklyeeC Or the self-em-
Which r think number '?itt'Ie
_
Qv e :r i8 Million people.
The House bill treafed7-Self-eMplOYed
individuals under different ides depend-
ing bon Whether -thy had -three' Or
,fewer employees or more than three em-
ployees. It required a self-employed in-
dividual with more than three employees
to cover each of them with more than
yeat'S' service, under this plan. If
he had three or fewer employees, the
self-employed individual was not re-
' qTuiredtO include therriiii the retirement
program. The committee has simplified
the House bilhand also has made it more
equitable by requiring all self-employed
-Persons Who desire retirement plan cov-
erage for themselves to cover all their
employees under their retirement plan
regardless of the number of employees
they might have. this is a distinct im-
provement over the House bill.
The 'committee's bill also requires that
each employee of the self-employed be
granted nonfOrfeita,ble rights to contri-
hutior s.- The House-bill would have re--
quired vesting only where there were
more Wan- three employees of the self -
emPloyed. The Committee on Finance
felt it was unfair to deny employees a
vested right to contributions made for
them when their employer will always
have a vested right to contributions he
makes on his own behalf. Here again,
we have improved upon the House bill.
Tinder the House bill, contributions for
self-employed individuals were based
upon their self-employment earnings.
However, this made it possible for them
to receive retirethent benefits based upon
investment income rather than earnings
from oersonal services. The committee
felt this was unwise and we provided in-
stead that contributions for self -em-
ployee( be based upon their earned in-
come 'which the bill defines generally
to mean compensation for personal serv-
ices; however, special rules apply where
net income of the self-employed indi-
vidual is from a trade or business in
O which both capital and personal services
are material income-producing factors.
This 3hange not only places contribu-
-tons for self-employed persons on a
More -proper basis but also serves to
reduce substantially the revenue loss un-
der the bill.
The committee bill allows self-
employed persons to contribute to a
? qualifed retirement plan, on their own
behalf, 10 percent of their earned in-
come, up to $2,500. However, the amount
which may be deducted on a tax return
is limited still further. Although the
first $1,000 contributed may be deducted
in full, only one-half of contributions
between $1,0190 and $2,500 may be de-
ducted. Under this rule, a self-
employed individual who makes the max-
imum allowable contribution of $2,500
may actually deduct on his tax ret-urn
-c5F1-1 y $1,750. Moreover, the committee
bill definitely limits to $2,500 a year the
amount contributed for any self-
-emPloyed indliatial regardless Of-the
number of businesses or employees he
may have. The House bill, by contrast,
provided a basic limitation on contribu-
tions tor seIf-employed persons of 10 Per-
-dent of self-employment earnings or
$2,500, whichever was lesser, but- this
bake litnitatien could have been ex-
ceeded by self-erhployed Persons- with
more than three employees 'where con-
siderable amounts were actually con-
tributed for employees. In such a case
there was no dollar limit on deductible
contributions.
In other words, the H'ouse'bill had no
limitation in some respects, so long as
the retirement program which was set
up for employees -Was as generous and
as-beneficial to-the employees as it was
to the self-employed. In the Senate
committee bill we have added limitations
so that under no conditions can a self-
employed deduct from his income tax
return more than $1,750, irrespective of
what he might be doing for his em-
ployees. We further have required that
he not be permitted to set up a retire-
ment prograni for himself unless he also
sets- up a retirement program for his
emPloyees.
'The Committee on Finance felt that
this provision gave self-employed persons
who had diverse business interests and
large numbers of employees unwarranted
advantages over other self-employed
persons. For this reason, and to fur-
ther protect the revenues, the committee
bill has cut back substantially on the
tax deduction privileges of the House
bill.
Under the House bill, retirement plans
covering self-employed individuals with
three or more employees could be co-
ordinated with social security under spe-
cial rules which permitted the self-em-
ployed individual to take into account
only social security taxes actually paid
by him on behalf of his employees and
self-employment tax paid for himself.
Self-employed individuals with three or
fewer employees would have been per-
mitted to coordinate their plan for em-
ployees under the more beneficial rules
of existing law. The committee bill
adopts the more rigid coordination rule
of the House bill, but applies it to all
plans covering self-employed individuals
without regard to the number of em-
ployees. This not only simplifies the bill,
but makes it certain that no self-em-
ployed person can establish a plan under
which his employees ostensibly are cov-
ered, but where no contribution would
be made for them because their retire-
ment benefits would be provided through
social security.
The bill as approved by the Finance
Committee requires self-employed in-
dividuals to consent to be covered under
qualified employees' retirement plans.
There was no comparable provision in
the House bill. This consent require-
ment improves upon the House bill in
two important respects; First, it allows
existing plans covering employees of the
self-employed to continue to -ffinction
under the present law unless the self-
employed person chooses to participate
under the plan. If he does consent to
coverage, the plan would have to -be
modified to incorporate the new require-
ments of this bill. Second, without the
consent provision, a self-employed per-
son who is a minority partner in one
partnership and a controlling partner in
another would have to establish a plan
for employees of his controlled partner-
ship if the other partnership, in which
he is a minority partner, established a
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CONG SSIONAL RECORD ? APPENDIX
In Buenos Aires, he parlayed the interests
of two groups of Americans into his first
promotional success. One group was trying
to sell,slrywriting equipment, but had neither
plane nor pilot. The other group was looking
for someone with enough cash for advertis-
ing to take on the franchise to sell Sversharp
pencils.
Cournand had no cash, but he had access
to an airplane and was a pilot. He demon-
strated the skywriting, and by spewing Ever-
sharp across the sky got the pencil franchise.
"In a year, I was a millionaire in francs?
that was $80,000?and I returned home to
Show my family I was a success," he says.
He was 25 years old and in another year was
broke; officially, he lost the money in an
Unsuccessful venture to sell shoes to the
Russians, but a between-us-boys twinkle
says he enjoyed spending every centime of it.
manArfoisr
He wanted to get to the United States.
"France is too small for me. You cannot be a
young general in France." He talked the edi-
tor of a French trade magazine into paying
his traveling and living expenses to Canada
to write a series of articles on industry in the
Dominion and in the United States. When
he got to New York, he resigned his job and
leased Grand Central Palace for a French
trade fair. Then he went to the Franco-
American Board of Trade and got its backing
for the project.
He explains: "I had decided I wanted to
be the representative in this country for
some French business, and I thought the
way to find out what kind of business was
,to hold a fair and see which ,booth most
people were interested in. Then I would
ask that manufacturer to let me represent
him," The scheme worked, but not quite
that way. He told it unknowingly to the
head of Caron perfumes, who was so de-
lighted with Cournand'a enterprise that he
signed him up on the spot.
ME SCENT
? Cournand had to stray from the scent on
occasion since, but only reluctantly and by
force of elreUrasta.nces. In 1927 he married
the daughter of the founder of a large
architectural bronze business, and at her
father's insistence joined the company. "In
the bronze business I was very unhappy,"
? he recalls. After his wife died, he left Gen-
eral Bronze and took on the U.S. sales agency
for Celestine Vichy Water. In 1940, he got
the Lanvin franchise, but before he could
exploit it the war cut off supplies.
By this time he was an American citizen
and went to Washington to sign up with the
Army Air Corps. "My old friend Hap
Arnold (Gen. H. H. Arnold, head of the Air
Force) told me 'Edouard, you and I are too
old to fly in this war. You go back to New
York and figure out something to make for
"
What he figured out was the one-piece
plastic canopy for planes. He uses the expe-
rience to illustrate why he succeeded in the
perfume business: "Everyone else builds
from what existg, I look at what should be
the base and I build from what should be
there. I knew from aviation two things.
One was the dogfight. By the end of the
war It was a two-second affair. So I said
in this war it was going to be a split second
affair and everyone had to have visibility.
Two, if you are going to make a glass dome
and there's an engineering change it takes
weeks because you need a steel mold. I had
to find a material strong enough that could
'be shaped easier. When I offered it to Du
Pont they said I was crazy."
z4A..off MArMETING
When he got back to the perfume busi-
ness, nobody had ever successfully mass-
merchandised imported perfume. Coty had
tried it before the WaK, and ran into diffi-
elilties that would have swamped a com-
pany of lesser size and fewer products. Lan.
yin even now has only perfumes, toilet
waters, bath oils, dusting and talcum pow-
ders in seven fragrances?with Arpege and
lily Sin perfumes and toilet waters account-
ing for 90 percent of sales?and in 1947 the
product line was even narrower. (This sum-
mer, though, Lanvin added a suntan cream
and has plans for a full line of men's
toiletries.) 4*
"Everything in this business," says a man
who has made it his life, "tells us a com-
pany can't be mass and exclusive at the
same time." The giants of the business?
coty, Avon, Revlon?are mass merchan-
disers of all forms of cosmetics and toiletries.
Until Cournand, the other strictly fragrance
houses limited distribution to uppercrust
outlets. Says Leon Schulman, Lanvin ad-
ministrative vice president and treasurer:
"The industry had tried to cultivate the
American abroad, not here. It was snob
ajmeal."
Cournand hired 7 salesmen, giving each
a territory so that every city in the country
with a population of 50,000 or more was
covered. Eventually they signed up 7,500
retailers (drugstores, department stores, and
specialty shops), Lanvin backed them with
heavy advertising (Now $2.5 million a year) ,
and none of the 7 salesmen was making less
than $30,000 a year and 1 was drawing down
$90,000.
FRANCHISE PLAN
The business grew faster' than Cournand
thought his seven men could handle, so in
the midfifties he offered them a chance to
buy franchises; each would own a piece of the
husiness and set up his own distribution.
He's grieved that none took him up on the
offer because he had to expand his' field
force until now he has 43 sales representa-
tives.
Last year, when Lanvin went public, Cour-
nand used another device to make partners
of the people who sell his perfume. A special
offer of 145,000 shares was made to "asso-
ciates," including retailers and their em-
ployees, and about 3,500 bought Lanvin
stock. Since no other fragrance house has
stock on the market, an industry figure
comments wryly: "You know whose fra-
grance those people are going to push."
INHERITANCE
In a complicated recapitalization that pre-
ceded the public issue, Cournand gave up
control of Lanvin Parfums, Inc., to Lanvin
Parfums S.A., the French company that
originated the business. In good French
tradition, Cournand wants the business to
pass to Bernard Lanvin, son of the principal
owner of Lanvin-Parfums S.A., and to whom
Cournand has taught the business as though
he were his own son. Cournand and his
first wife had a daughter (now a noted bal-
lerina in France), but he and his second
wife are childless.
Anyway, at 65, Cournand wants to slow
down He sleeps at his New York apartment
only Monday and Tuesday nights, and Wed-
nesday evening drives to the estate, on a
promontory jutting into Long Island Sound
near Huntington. He pampers his gardens?
especially strong on tulips and roses?and
entertains friends engaged in almost every
endeavor except selling perfume.
FRONT MAN
He is the front man and creative thinker
et Lanvin; his puckishness takes wild turns
with "Hortense," a dummy dressed as a
French maid, which is posed in the window
of Lanvin's Fifth Avenue salon in any num-
ber of situations. His attractive blond wife
is ,executive vice president of the company
and In effect the general manager. "I can
analyze and see trends," he says, "but I
hate patchwork, I hate detail. But my wife,
she is well organized and will take care of
detail like nobody."
The purpose of Cournand's thinking, the
people he associates with, the salon On
A6655
Fifth Avenue?even the antics of Hortense?.,1
are all to create a certain atmosphere for
Lanvin fragrances. They should be not quite
aloof, but desirable; they should be reached
for, but by no means unreachable, for they
are in 7,500 stores across the country. "I
tell my wife," says Lanvin Executive Schul-
man, "sometimes I feel I'm pushing dope.
Once a wornan starts, you can't get her off
it.,,
Textile Imports Threaten Jobs
EXTENSION OF REMARKS
OF
HON. ROBERT W. HEMPHILL
OF SOUTH CAROLINA
IN THE HOUSE OF REPRESENTATIVES
Thursday, September 6, 1962
Mr. HEMPHILL, Mr. Speaker, under
leave to extend my remarks in the
RECORD, I include the following editorial
from the Clover, S.C., Herald of August
30, 1962:
TEXTILE IMPORTS THREATEN JOBS
(By Rose White)
We've been told that there are only two
things certain in this life: Death and taxes.
Well, there could be another certainty.
Unless something is done to curb the foreign
imports which are flooding this country,
thousands of men and women are going to
be without jobs.
This concern over the failure of the United
States to do something about this situation
is not new. In February of 1961, I received
a reply to a plea to do something about the
situation from Senator OLIN D. Joinsisrox.
He said: "During the past several years I
have contacted the President and the Secre-
tary of Commerce time and time again
urging that relief be brought about by ad-
ministrative action. The only answer I re-
ceived was that the dangers facing American
industries were brought about by competi-
tion and bad management. Whether the
new administration will take a new view-
point is difficult to say."
In August 1962 there can be little doubt
as to where the "new" administration stands.
Officials of the textile industries were told
that the Geneva Agreement would hold im-
ports of 1962 to the same level as those of
1961. Now indications show that imports
will be 30 percent above 1961.
The "new" administration's views are made
crystal clear in the Trade Ex pansion Act of
1962. It is based on the idea that it is proper
for the President by trade agreements to
grant eliminations or reductions of duties
which will necessarily injure American in-
dustry, agriculture, and workers and give the
President unprecedented power to eliminate
some duties completely. The State Depart-
ment has put constant pressure on the Presi-
dent's office to favor foreign economies at the
expense of the "home" economy.
You are no doubt aware of the situation
of the Sullivan-Southern Zipper Tape Plant
here in York. Mr. J. K. (Jack) Benfield has
been to Washington on many occasions in
behalf of his company versus foreign imports.
Cheap Japanese zipper tapes here in the
United States has closed factories in Penn-
sylvania, New Jersey, New York, and New
England.
Sulivan-Southern is not the only indus-
try which is watching with increased con-
cern. Mr. Charles Cannon, chairman of the
board of Cannon Mills recently stated that
the passage of this new trade bill in its
present form would "destroy the jobs of many
thousands of workers * * * particularly in
the textile and garment industries." Mr.
Roger Milliken, president of Deering-Milli-
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A6656 CONGRESSIONAL RECORD--- APPENDIX
Interested in literature and had his first
story published in the Ravenswood News. A
poor boy with sterling character, Goff left
the valley to work his way through college
and then to teach in the city. Throughout
the years he has continued writing periodi-
cally and has had many articles published
under various pen names. He has quite a
collection of sketches and stories of local
color. With an unusual scholastic back-
ground and a prodigious memory, he is par-
ticularly fitted for the writing profession.
But Goff has always considered writing just
a means of relaxation, or hobby. His theory
Is that everyone should have a hobby, some-
thing to continue in the halcyon years
when professional days are over. After re-
tirement he plans to return, like the sock-
eyed salmon, to his native hills, live there
with his family, and write a history of Jack-
son County.
;ken Mills, joins Mr. Cannon In his appraisal
of this most serious situation.
These industrial leaders have gotten to-
gether 'with Senators STiOlvI THURMOND slid
PRESCOTT Busit and six other bipartisan Sen-
ators a:ad have come: up With a vital revi-
sion to the Trade Expansion, Act. This re-
vision is called the "Bush amendments."
The Bush amendments would:
1. Require true reciprocity in concessiens
by fore:ign nations with provision for elimi-
nation of reductions in duties if foreign na-
tions vaolate the agreement and impose re-
strictions against U.S. exports.
2. Require other nations to apply the most-
forward-nation policy as the United States
does; that is, to grant to other nations the
same access to their Markets which the
United *States affords to Asiatic and other
free-world nations on reductions Of duties
made to the Common Market, '
8. Restore the authority of Congress weak-
ened by the proposed bill, to putinto effect
Tariff Commission recommendations When
such recommendations' are ignored or 'mkt-
- ruled by the President.
4. Strengthen the U.S. bargaining position
and export situation by reofiiring European
Common Market countries to receive our ex-
ports on terms as fair as we accord their ex-
ports.
5. Prevent complete elimination of duties
when Tariff Commission finds Satoh rectud-
tions Would injure domestic prOducera and
workers.
6. Restore and strengthen'therPreient peril
point and escape clause Procedures.'
7. Remove the option to the President to
put workers on the dole and give "adjust-
ment assistance" to domestic industries in-
jured by imports in place o enforcing -the
escape clause and restoring the duties.
8. Provide a solution to the problem of
- dories tic textile industriee-reaniting-'from
the glutting of U.S. markets"WAsiatfc arid
other producers by securing for them access
to European markets which -is now denied
and Which may Continue t3 'denied un-
der the provision of II.R. 11970.? "
A number of people, reilizing that our
industries are in jeopardy, have wiredSena-
tors STROM TrimiNcorm and HARRY' BYRD
(chairman of Senate Finirice-Coninalttee-
which completed hearings on the -erade-13111
last week) to offer full support of the Ilaish
, _ ,
amendments.
The time to act is not after the_Plaiate are
forced to close' but before. Mr. Ilalph_Voke,
superintendent of Cannot. Mille' add Mr.
Be/afield report that their respective plants
are' running well at the present. The vital
question is: 'What of tomoirow?"
- - ,
- '
A Hillbilly in the Lihrary of Congress
-
_
EXTENSION OF REMARKS
or
populations, but to one man-, at-least, it is
Still the fabulous river of the past. It is
the river -traveled by George Washington,
Daniel Boone, and George Rogers Clark?the
beautiful river of Indian and French voy-
agers.
- Known in Washington as Nathan and in
West Virginia as .Goff, the subject of this
sketch, Nathan Goff Carder, uses his full
name only when writing articles or stories
for publication. Born and reared on the
banks of the Ohio in Jackson County, Goff
Carder is :a graduate of Marietta College, Ohio
State University, and did graduate work
in Trinity College, Dublin, Ireland. His
varied experiences range from that of coal
miner to university professor. He is at
present employed in the U.S. Office of Edu-
cation. hobbies are writing and public
speaking.
Living within sight of the Library of Con-
gress, Mr. Carder is a familiar figure around
that inst tution. -Here he spends much leis-
ure time pursuing his favorite subject?his-
tory. Though of a rather studious and re-
tiring nature, he is a member of several or-
ganizations, including the American Legion,
Alma Shrine Temple, Toastmasters Interna-
tional, the West Virginia Society of the Dis-
trict of Columbia. "
The old maxim about taking a boy out of
the cour try is certainly true of this West
Virginian removed from the Ohio Valley, To
Goff Carter, the Ohio is not only the river
Of his childhood, but through his travels
and studies has become the river of the
ages, thr river that flows through the most
beautify:. country and has the handsomest
jade-green water, the river with the richest
bottoms, the greatest floods, and rocky hills
Indented by numerous tumbling streams
along the rugged border of West Virginia.
And to Goff it is a river of great historical
significance. He knows the lore of the val-
ley?of the renegade, Simon Girty; the sur-
veyor, Crawford; and the great Shawnee
Chief, F:lashuta, who spent an entire day
with Washington where Ravenswood now
stands. He is familiar with Christopher
Gist's Journal of 1765, the Adventures of
La Salle, and other early French explorers.
Mr. Carder's main interest, of course, is in
the 19th century and .the early steamboat
days, the days when river traffic -flourished
after Nicholas Roosevelt took the first
steamer to New Orleans back in 1811. This
age;Whan the river was the main artery of
commerce, he considers the natural beauty
of its shore lines and bottom lands.
Goff Carder's nostalgia for this mighty
river in America's industrial heartland is
equal to that of Mark Twain's for the Mis-
sissippi. The river was his boyhood, both
at work and at play. He earned his first dol-
lar at the age of 7 helping operate a hand
ferry, arid his only recreation was that af-
forded by the river. Before the locks and
dams were built, Many log rafts, shanty
boats, dish beats, and even "picture-gallery"
"oath floated down the open stream through
he summer months. People along river
towns thrilled to the sound of the steam
calliope as a showboat rounded the bend,
bringing fun, entertainment, and drama
from the city.' As a boy, Goff sat on such
famous boats as the Cotton Blossom, the
Majestic, Bryant's, and French's New Sensa-
tion. He witnessed, at an early age, the old
favoritcs?"East Lynn," "Ten Nights in a
Barroom," and "Uncle Tom's Cabin."
Mr. Carder is truly a West Virginian with
roots deep in our Mountain State. His an-
cestors crossed the Alleghenies to settle
along the Ohio in 1804, and one of them
built and operated a floating grist mill at
the foot of Buffington Island, the kind of
"novelty" mill which became so famous and
_necessary in the days of Indian warfare.
Long before West Virginia had county
schoolbuses, Goff Carder walked daily to
1 high school at: Ravenswood, some 5 miles
from his home. While a student he became
HON. CLEVELAND M. BAILEY t
?
Wksr itaCNIA,
IN THE HOUSE dP11.1'ItESENTATIVES
Thursday4Septemer 6, 1962
Mr. BAILEY Mr. S'-peaker, under
leave to extend my remarks in the SEC-
gre_p, I include the following news article
Wnich appeared in the West Virginia
under date of September 1:
A HILLBILLY IN THE LIERAIY OF CONGASS--
IF YOU WERE A HABITUE OF THE LIBRARY OP
CONGRESS, YOU WOULD HUN INTO NATHAN
OQFP CARDER, A 14/I,LB(LLY AMONG THE
BOOKS, BUT SINCE VOII AREN'T, YOU'LL HAVE
To BE SATISFIED HE9DINIrrIS WRITINGS IN
?I'll IS PAPER?
' '
(By Jame:. L. Creasy)
The mighty Ohio today rolls on past stee
furnaces inanufacturing cities and seething
September 6
Cuba Doctrine
EXTENSION OF REMARKS
OF
HON. PAUL G. ROGERS
OF FLORIDA
IN THE HOUSE OF REPRESENTATIVES
Thursday, September 6, 1962
Mr. ROG.r.AIS of Florida. Mr.
Speaker, all Americans look with grave
apprehension on the events taking place
in Cuba. The beaches of Florida are
only a short 90 miles from the Commu-
nist enclave.
Today I have called for a restatement
of the Monroe Doctrine to firm up our
policy toward Castro and the Russian
intervention in the affairs of the West-
ern Hemisphere. An editorial in the
Palm Beach Post, September 4, asks the
question, "Are we too firmly committed
to the doctrine of too little and too
late'?" This newspaper has been alert
to the problem of Castro from the be-
ginning, and has close ties to the Cuban
colony in Florida. I ask that this edi-
torial, "Cuba Doctrine" be printed at
this point in the RECORD.
The editorial follows:
(From the Palm Beach Post, Sept. 4, 19621
CUBA DOCTRINE
President Kennedy is not in favor of "in-
vading Cuba at this time."
However, he does support the Monroe Doc-
trine, under which the U.S. declares it will
regard as "an unfriendly act" any interfer-
ence with American Republics by a Euro-
pean nation.
President Kennedy has no information
that Soviet "troops" have moved into Cuba
recently, or that the country has received
Soviet antiaircraft missiles.
The President made those statements at
his news conference last Wednesday. They
are interesting, but not too enlightening.
Each statement opens a new question of
vital importance:
1. Does the President favor invading Cuba
at some future time?
2. If he supports the Monroe Doctrine, at
what point will he move to implement it?
8. When is a technician not a technician?
Or, more specifically, what differentiates
military technicians from "troops"?
It would appear that we are fighting a
battle of semantics. The President intimates
the presence of Soviet troops in Cuba would
be regarded as an unfriendly act, inimical to
the peace and security of the United States.
So long as such troops appear on the ros-
ter as "technicians," however, no unfriendly
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1962 CONGRESSIONAL RECORD ? APPENDIX A6657
has been cominittedand the Monroe Doc-
, , I include the fine articles referred to: the very best in the world. While the Bell
me is a mere scrap of paper.
Many reliable sources have confirmed that
military "technicians" have been arriving in
Cuba from Cozusauniet bloc .Countries in
large numbers. In one case the "techni-
cians" were even reported wearing Soviet
fatigue uniforms.
It can be assumed they are not in Cuba
to Cut cane. The evidence, in fact, points to
a sharply increased militaristic attitude by
the Castro regime in recent weeks.
Starting with a series of provocative
charges against U.S. violation of Cuban_ air
space and espionage from ships, the Cuban
Redd last Thuriclay fired an an unarmed
U.S. Navy plane in international waters.
Probably the best evaluation of this inci-
dent came from 8enator Holaga CarznART,
Republican, of Indiana, "Russia is feeling us
(nit," he said. "The only thing we can do
Is to retaliate if there are any more
incidents."
Such retaliation already had been ordered
by President Kennedy. But here again we
are following a policy of reaction against
the Communist policy of action.
Senator SAwi J. ERvirr, ..Ta., Democrat, of
North Carolina, declared; "I think we should
have ordered a naval blockade and stopped
the Russian ships before they got to Cuba.
But it is too late for that now."
' Certainly it's too late to stop the oneS
already there, but it's not too late to stop
additional ones from arriving.
If the Monroe Doctrine still is a living
policy, why should not our Government noti-
fy Russia that no further occupation of
( Cuba?by "technicians" or troops?will be
tolerated; and back up the notification with
ne,Val blockade?
' pr are we too firmly committed to the
doktrine of "too little and tap late"?
Telstar
EXTENSION OF REMARICS
HON. ROBERT W. HEIVIPHILL
Os' SOu'rit CAROLINA
IN THE HOUSE OP itHPRESENTATIVES
Thursday, September 6, 1962
Mr. HEavrPlinz. Mr. Speaker, under
leave to extend my remarks in the CON-
GRESSIONAL RECORD, I am happy to en-
close an editorial by David Lawrence,
noted patriot and columnist in America,
from the New York Herald Tribune of
August 22, 1962, and the Washington
Star of August 29, 1962. These editorials
point out the happy resolution by which
private enterprise was given the respon-
sibility to develop a communications sys-
tem through Telstar and other satellites
In outer space. I salute Mr. Lawrence
for his timely and decisive treatment of
'the subject, and agree with him as a citi-
zen and in my officialcapacity and thank
him for his comment.
When the Question of nationalization,
'for that is what it was, and private en-
terprtse was presented before ,the Com-
mittee opJptertate and Foreign Com-
merce of .g.,,Hoilse of Representa-
tives, I hastened to?sicle_with private
ownership. I knew private ownership
"Would be more efficient, speedier, would
render revenues and taxes, and had the
most use. I am happy that private en-
terprise won the victory because private
enterprise is the basis for a strong and
free America, past, present, and future.
[From the Washington (D.C.) Star, Aug. 29,
1962]
VICTORY FOR PEOPLE'S CAPITALISM?PRIVATE
ENTERPRISE TELSTAR OPERATION CALLED
STRONG ANSWER TO REDS
(By David Lawrence)
People's capitalism has just won a signif-
icant victory in the United States. It is
a triumph that negates the very basis of
4:tviet communism.
,For the Congress of the United States,
by an overwhelming vote and with the sup-
port of the President, has just given a
private corporation the opportunity to de-
velop a communications business through
Telstar and other satellites in outer space.
Had the vote in Congress gone the other
way, the Communists would have gloated.
For, in the Soviet Union, everything is owned
by the government. The Soviets are taught
that only the Government can really per-
form economic tasks and that a system of
private profit is wrong.
In the United States, by the latest vote in
C9ngress on the bill that provides regula-
tion for the whole Telstar operation as far
as, communications are concerned, Private
enterprise is selected because it is experi-
enced, more efficient and better trained
through its talented personnel to do an ef-
fective job.
Some of the champions of Government
ownership in their recent speeches in both
Houses of Congress declared that, since the
project was so big and since it might in-
volve relations with other governments in
the making of communications agreements,
the task should be wholly in the hands of
the American Government. The argument
was made also that, since the Government
had spent a good deal of money in develop-
ing the vehicle used to launch the Telstar
satellite, the "people" should own the whole
communications project.
tut there are many things in America for
which the Government has at one time or
another spent large sums, and yet this has
not led to Government ownership. Also, the
-Government once owned most of the land in
the West, but it virtually gave away home-
-steads to attract settlers? Likewise, during
wartime, enormous plants were built that be-
carne obsolete for military purposes. Alu-
minum plants and synthetic-rubber plants
which cost many millions were sold for rela-
tively low prices to private companies, some
-of which thereby got their chance to become
big and successful competitors of existing
companies in the same line of business.
The new measure, which has gone through
both Houses and shortly will be signed by
a sympathetic President, gives the public
an opportunity to invest in the new corpora-
tion. Only half the stock is to be held by
the American Telephone & Telegraph Co.-
-otherwise known as the Bell System?and
by other communications companies. The
other half of the stock is to be sold to private
investors at $100 a share.
The communications companies will elect
a third of the board of directors, and the
private investors will pick a third. The re-
maining third will be designated by the
-Federal Government?a very helpful method
Of keeping the Government posted on mat-
ters that come under the heading of Gov-
,ernment regulation, such as the fixing of
rates to the public. Monopoly is regulated
in America where it touches the matter of
rates to be paid by the public. Private com-
panies are allowed what is designated as
a -"fair return" on invested capital, but the
public interest is safeguarded against inor-
tlinate profitmaking.
-The communications companies, such as
A.T. & T., the Radio Corp. of America, and
the Western Union Co.?all of which are pri-
vately owned?have managed under this plan
to make America's communications facilities
System is the largest of the telephone sys-
tems, there are 3,040 independent telephone
companies in various parts of the United
States owning 15 percent of all telephones.
The Bell System, moreover, like the others
In the communications business, is not
owned by a single interest. It has more
than 2.2 million stockholders, and more than
850,000 of these are employees of the com-
pany.
In the last 20 years, the Bell System has
earned for the Government of the United
States in taxes a total of $9.5 billion and
for State and local governments a total of
$7.3 billion. This is the highest record of
tax money contributed by any corporation
in the world.
In other countries, where government
ownership prevails, the service to the public
is, by comparison, very poor. A private com-
pany has the incentive of profitmaking to
spur it on to efficiency. Government-oper-
ated projects are devoid of such motive, and
this is often revealed as a serious weakness.
The new Telstar project may or may not
yield profits to the investors. There is no
certainty that communication to other points
on earth through outer space will be as eco-
nomical as by cables under the seas or by
radio through the atmosphere. But that is
why the name "risk capital" has arisen. In-
vestors do take risks, but they may be re-
warded with good profits if the enterprises
are successful.
Efficiency of service and good dividends
usually have been a characteristic of private
enterprise, and today there are many mil-
lions of citizens who have put their savings
into enterprises of all kinds. This is "peo-
ple's capitalism," and, despite the tirades by
Nikita Khrushchev and other Communists
who inveigh constantly against "capitalistic"
countries, the system has proved successful
In bringing the maximum good to the maxi-
mum number of people.
[From the New York Herald Tribune, Aug.
22, 1962]
TODAY IN NATIONAL AFFAIRS?PUBLIC OWNER-
SHIP POLICY OF LIBERALS SEEN GROWING
(By David Lawrence)
WASHINGTON.?Shall the Government own
everything, regulate everything?including
prices and wages?and control the whole
national economy? For many decades the
-answer to such a question would have been
an emphatic negative, but today the Demo-
cratic Party has a substantial number of
Members in Congress who openly favor Gov-
ernment ownership as a public policy.
The recent filibuster on the bill covering
ownership of the space-satellite communi-
cations system?known as Teistar?revealed
several Democratic Senators of the so-called
liberal group as favoring Government own-
ership, despite the opposition of the ad-
ministration.
Also, some Democratic members ,of the
Senate Antitrust Committee now are de-
manding that the steel companies disclose
data on their internal operations, which
means that all competitors would see this
information. Apparently the drive is on to
increase Government control over the mak-
ing of prices. This is a short step away from
wage setting.
Proposed mergers, moreover, of railroads
and consolidations of airlines are before
governmental bodies today for approval or
disapproval. The prospect is that many
workers will lose their jobs because of such
mergers, though the companies predict that
the gain in efficiency will result in improved
service and eventually in more jobs.
LABOR RESPONSIBILITY
The labor union leaders would be the last
to admit it, but they must assume some
responsibility for the plight of those trans-
portation companies which are not able to
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665'8
get" high enough rates to absorb increased
wage Coats and to meet the expense of
"featherbeddinr?payment for work not
being done. This constitutes a form of sub-
sidy devised by labor unions to benefit their
otynyneMbers.
DOnipanies nowadays have to decide
Whett er to seek an alternative or to try to
gat along With fewer -employees and be con-
, tent with a smaller volume of specialized
products sold at a relatrvsly high price to
those Who must have .such goods no matter
what the cost. The alternative policy is
tiaual! y2 to endeavor to get a larger sales
vOltiineat lower prices. This is theoretically
senind approach, but it dspends on the use
Of automatic equipment and on the devel-
opment of greater efficiency. This is some-
thing to which labor Union policy custom-
arily refuses to give coopera non.
? Also, to build and modernize plants re-
quires mote capital. Investors do not like
to lend or invest money in enterprises that
are in trouble. So it's a vicious circle. Un-
less there are satisfactory esrnings, the funds
cannot be obtained to build better plants
to promote greater efficiency and to increase
earnings. Yet unless labor costs and work
rules can be held in line, employers will
soon find their earnings steadily diminished.
Economic principles, therefore, are coming
into Ooriflict more and inifn% today with the
pressures of groups which uncornpronlisingly
demand the Maximum and do not think of
the future of the whole econothic system.
Then there is the factor Of Government
competition with industry '?manifested by
the ?overrate/it invasion of the power in-
dustry through the cons truation of dams
and 1,he subsidizing of publicly owned power
plants, .instead of leasing these- facilities to
private companies that could competitively
bid on them.
Wnzr T 'refs !Mar-A
The whole system of free enterprise is one
of risk capital and hazards, but it neverthe-
less has managed to build America into the
Most powerful economic factor in the world
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ONGRESSIONkI. RECORD? APPENDIX September 6
tocay.
What is the reason for the einergence- of a
new faction in Congress which boldly
champions Government oWnefship? Do the
people really understand the fundamental
issues? Experience in other lands has shown
that when initiative is stilled, competition--
with its emphasis on skills and inventive
genius?is abandoned and there develops a
lazy reliance on the Government to do every-
thing. The result is inefficiency and poor
Service rendered to the people.
Thus, for example, not a Single Private tele-
phone or telegraph system exists in the larger
countries of the world except the United
States. They are all Government dwned.
America has not only the, largest system of
Private communication inywhere but one
that far excels any goverillnehltal system in
service and convenienee. To this fact any
one with experience hers and-tibroad can
_ _
testify.
Yet in Congress a fatal blow is being aimed
at the whole doctrine of ' "people's capital-
ism," which describes this system prevalent
in America todayr?where the people still
have a right to own private companies and
share in their earnings, even as the popula-
tion as a whole shares in- the benefits that
sete:aCe and research bring.? The United States now is going through et
critical period in its economic history. Will
'Government ownership come to America, as
it has in Communist Russia and in other
'countries? Or will AmeAca ietain its sys-
tem Of people's canitalisral' This is the issue
that seems certain to-eq.:nine before the Ameri-
can
' people in the liatiOri.ki eleetions in the
next few years.
Social Security: A Proposal for Action
EXTENSION OF REMARKS
OF
HON. JOHN B. B.ENNETT
OF MICHIGAN
IN TEE HOUSE OF REPRESENTATIVES
Thursday, September 6, 1962
Mr. BENNETT of Michigan. Mr.
Speaker, ever since it has been my
privilege to serve in the Congress, repre-
senting the 12th Congressional District
of Michigan, I have been greatly con-
cerned about improving our Federal
social security system. My aim has
always been to improve and strengthen
it, to make the system more meaningful
for the 17 million beneficiaries now on
the rolls and the untold millions of
people who will henceforth become
eligible for retirement, disability, and
survivor benefits. Now and then im-
provements have been made in this law
but I have repeatedly maintained that
the law is still not adequate to meet the
pressing needs of the retired, the dis-
abled, the widows, and the orphans. I
have proposed several helpful changes in
the system, some of which were accepted
and are now incorporated into the
social security system. However, some
very important proposals are still await-
ing action by the Congress. I trust that
action can be taken before the Congress
adjourns.
Our elder citizens are faced with diffi-
cult pioblems with respect to health, fin-
ances, housing, and employment. They
have the usual diseases associated with
age, diseases which are long in duration
and fr equently require expensive medical
care in hospitals and nursing homes. By
and is rge, they do not have the income
to pa N for such care. The census data
for the year 1960 show that 53 percent of
persons aged 65 and over had less than
$1,000 annual cash income. Another 24
percent had an annual cash income
ranging between $1,000 and $2,000, so
that '17 percent of our aged population
had less than $2,000 annual income.
Early this year, approximately 17 mil-
lion individuals were receiving benefits
under the old-age, survivors, and dis-
ability insurance program. The amount
of benefits paid to these beneficiaries in
1961 amounted to $12.7 billion. Expendi-
tures under this program will continue
to grow because of the growth in the
labor force, the higher benefit rates to
which people come on the benefit rolls,
and because of the disability benefit pro-
vision under the 1956 amendments. Fur-
thermore, the proportion of older people
In our population is increasing and when
the in surance program has been in oper-
ation for a longer period of time, more
Individuals will reach retirement age
each year and will qualify for these bene-
fits.
There are many retired people today
in every State of this Union whose social
security pensions are so small they must
seek assistance from various welfare and
charitable organizations to maintain the
barest type of existence. No sound rta-
son has been advanced for permitting
this lamentable situation to continue any
There are those who argue that we
cannot afford to increase social security
pensions and liberalize other benefits be-
cause of the great cost. But I feel cer-
tain most working men and women
throughout the country would be willing
to absorb a part of this cost if they were
assured they would receive a pension at
the time of retirement which would en-
able them to live decently and comfort-
ably without other assistance.
We have been very generous in our
aid to foreign countries to enable them
to improve their economies and provide
better living conditions for their people.
We can ill afford to neglect those at
home to whom we owe our first and pri-
mary duty.
Basically our social security system is
one of the soundest in the world. It is
consistent with our free enterprise sys-
tem where the worker, the employer,
and the Government all join together in
contributing to a plan which will assure
a high standard of living for those who
are no longer able to pursue gainful em-
ployment. Congress has made many im-
provements in this basic law since it was
first adopted some 27 years ago. But the
program cannot stand still. It must be
geared to changes in our economic
growth and progress in order to meet
constantly changing conditions and par-
ticularly to keep pace with increased
costs of living.
It is all very well to discuss the matter
and present theories for a solution?but
this is a slow and tedious process. The
time has come when we must do some-
thing practical about the problem.
Our social security system is based on
the sound principle that workers and
their employers should contribute a
share of earnings each year during their
working life toward a source of income
when they can no longer work. It rec-
ognizes that, for most American families
the paycheck represents a place to live,
adequate food and clothing, and neces-
sary medical care. When that paycheck
stops?because of death, retirement, or
disability?the social security benefit in-
deed becomes the difference between a
life of dignity and self-respect and one
of humiliating destitution.
Because I am concerned with main-
taining a sound and fair social security
system, I introduced.H.R. 11390, provid-
ing principally for hospital, nursing
home, and surgical services to all those
eligible for old-age and survivors insur-
ance benefits, facilitating retirement at
at an earlier age, and increasing benefits.
This bill is similar to the one I intro-
duced in the two previous Congresses.
My bill has seven principal points which
I now wish to explain.
First. Add a new program which will
provide for the cost of hospitalization,
surgery, and nursing home care for the
retired worker, his wife or widow when
they have reached retirement age, or
at any age for a worker retired on dis-
ability, providing his gross income did
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