CORRECTION OF CERTAIN ERRORS IN THE TARIFF SCHEDULES OF THE UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP75-00001R000400230025-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: November 11, 2016
• Document Release Date: March 16, 1999
• Sequence Number: 25
• Publication Date: September 30, 1964
• Content Type: OPEN

1964
5=0OI R000400:0@W5-2
Sanitize4o*W9W *X-PrR9,e e_: P
Estimated distribution of legislative authorizations National Defense Education Act of 1958, title V, pt. A, sec. 501, as proposed to be
amended'by Senate-House conference, Sept. 24, 1964
GUIDANCE COUNSELLING AND TESTING
State
Fiscal year
Fiscal you
Fiscal year
Fiscal year
State
Fiscal year
Fiscal year
' Fiscal year
Fiscal year
1965
1968
1967
1968
1965
1968
1967
1968
United States and out-
i
Nevada________________________
N
6~pp 000
60, 000
52,527
52,527
ly
ng parts--------------
$24,000,000
$24,500,000
$30, 000, 000
$30, 000, 000
ew Hampshire- --__----------
New Jerse
!6, 376
140
087
77,977
7
95,561
95,661
60 States and District of
y- -------------------
Now Mexico-------------------
,
148,705
64, 793
151,822
937,253
186,068
037,253
186,058
Columbia--------------
23, 616, 000
24,108,000
2D,520,000
29, 620,000
Now York_ _ ___________--__-_-_
North C
li
- 1, 079, 895
649
445
2, 021, 201
2,476,082
2,476,982
Alabama_______________________
465,334
475,091
682,223
582,223
aro
na----------------
North Dakota _-____--_----_--
,
88,515
663,061
90
371
812,581
110
749
812, 581
110
749
Alaska__...--.?_______________
50,000
60,000
50,000
50,000
Ohio --------- .?_..?...
1,292,314
,
1,319,410
,
1,616,936
,
1,616,936
Arizona------------------------
204,342
208,627
265,672
1255,672
Oklahoma ----
---
306,514
312,940
383,508
383,508
Arkansas-----------------------
_ 294,301
249 423
306,607
306,607
Oregon________________ -------
233,679
233,678
292,377
292,377
Californie__________
2, 090 971
2,134, 810
2, 616, 209
2, 618, 209
Pennsylvania--___--- _ --_____
1, 372, 736
1, 401, 518
1, 717, 559
1, 717, 559
Colorado -----------------,______
247,335
252,521
309,464
309,464
Rhode Island_-..__ _____---__
101,665
103,797
127,203
127,203
Connecticut________
315,112
321, 719
394,267
394,267
South Carolina___ ---_---_----
361,140
368, 712
451,866
451, 856
Delaware-----------------------
69,684
60,930
74,676
74,676
SouthDakota___ ________----__
98,631
100,609
123,406
123,406
Florida------------------------.
650,456
664,004
813,847
813,847
Tennessee-____ ---------------
481,014
491.009
601,842
601,842
(Jcorgia-------------------------
559,910
571,668
700,667
700,567
Texas________ --------------_
1,355, 033
1,383,444
1,695,409
1,605,409
[3awaii-------------------------
93,067
95,018
116,445
116,445
Utah_______ ---------_-_
142,129
145,100
177,881
,
177 831
Idaho---------------------------
99,136
101,215
124,039
124,039
Vermont __ _____-_.-__-_-----_.
60,074
51,124
62
662
62,652
Illinois_________________________
I
di
1,217,062
4
0
1,243,498
4
1,623,907
1,523,907
3
Virginia- _____.._------------
hl
W
662,837
664,428
6991,707
691,707
n
ana________________________
4
005,
618,13
757,523
757,52
as
n on________.
387,441
395,565
484,764
484,764
Lows---------------------------
355,576
363,031
444,806
444,895
West ginia----------_-__----
246,324
251,468
308,199
308,199
Kansas -------------------------
280,212
286,087
350,600
350, 600
Wis sin--?---?---???..__
522,995
533, 961
654,369
664,369
Kentucky----------------------
L
i
i
412 731
7
421,385
516,407
610,407
Wy ing___________.
60,000
60,000
56,957
68,967
ou
s
ana______________________
Main
_
4
6,968
124
426
486,968
127
036
596,779
155
681
596,779
681
155
D rictofColumbia--------.._
78,399
80,042
98,092
98,092
______________
___________
Maryland
,
418
801
,
427
682
,
001
624
,
001
524
/ Outl
ing parts
384
000
392
0
0
480
000
480
0
----------------------
Massachusetts
,
610
498
,
623
298
,
763
852
,
852
763
y
-----------
,
,
0
,
,
00
__________________
143cbigan_______________________
,
1,074,815
,
1,098,840
,
1,344,177
,
1,344,177
American Samoa..
20,000
20,000
20,000
20,000
Minnesota ---------------------
459,265
468,804
574,629
574,629
Canal Zone -------- _____________
20000
20,000
20,000
20,000
lliss
iipl
330,286
518
44
837,211
413,252
48
73
413, g52
7
4
P
e
t
-
-------
----
-
,
our
_
,
3
629,313
6
,6
6
8,
3
u
r
o Rico
-
-___------
-
----____
304,000
312
000
400,000
400,000
9fontana___
v
b
k
95,0D0
181
58
97,084
8
118,976
27
4
7
Virgin Islands ------------------
20,000
20,000
20, 000
20,000
ras
e
a-----------------------
2
,
1
5,389
2
,19
,170
NOTE.-Distribution of all amounts estimated on the basis of school-a;6 (5 to 17) population as of July 1, 1902, for the 50 State ,'District of Columbia, and Puerto Rico,
and as of Apr. 1, 1960, for the other outlying parts.
"THE ELECTION: WHAT'S GOOD
FOR HOUSING?"
Mr. DOUGLAS. Mr. President, I ask
unanimous consent that there be printed
in the RECORD an editorial published in
the October Issue of House & Home, which
subscribers are receiving today. House
architects, lenders, and so forth Ao
make up the giant housing industry it
is by all odds the most important bli-
cation in its field. Until Augu this
year, it was published by Time, I .: it is
now published by another giant he Mc-
Graw-Hill Publishing Co. Thi editorial,
by Editor Richard O'Neill, s a land-
mark, for the magazine has never before
openly supported a candidate for Presi-
I believe that this a torial is both
forthright and an outs nding service to
the homebuilding in stry; and I am
glad this magazine i endorsing Lyndon
Johnson for electio to the Presidency.
There being no jection, the editorial
was ordered to be ranted in the RECORD,
as follows:
THE ELECTION: HAT'S GOOD FOR HousING?
(By chard W. O'Neill)
In Its prop als to both Republican and
Democratic latform committees, NAHB
urged that the Government-industry part-
nership sh Id try to achieve a decent home
for all ericans. "industry & Home agrees.
"Govern ent-industry partnership," always
basic to ousing, takes on added importance
this ye .
Like it or not, the Federal Government is
inext cably and inevitably involved in hous-
ing. oth parties have good records in hous-
ing egislation. And in both there are many
m and factions who understand both the
need for housing and the ability of our in-
dustry to provide it.
Except' in the war years, housing has pros=pered nder every administration since 1984.
In tl past 81/2 years 5.3 million new housing
uni have been built, and we are now build-
In at an annual rate of almost 1.8 million
good business, the housing industry tryfist
now look hard at the choice to be made ext
month. President Johnson's recor and
philosophy-is written into the 1964 using
Act for all to see. His opponent is far less
Lacking any assurances from Sen r GOLD-
WATER, we can only judge him on/his voting
Since 1954 GOLDWATER has ted against
every congressional measure t t would have
created more housing and fo every measure
that would have curtaile housing. We
cannot judge his understa ing of housing's
problems and responsibilit s, since he has so
rarely discussed them -e her on the Senate
floor or in public speec es. But if the Re-
publican platform I. a criterion, his under-
standing is sketchy nd confused. Items:
The platform bla es the Democrats for
urban renewal pro ams that "created new
slums by forcing t e poor from their homes
to make room for
++++ luxury apartments." The
,,
fact Is urban re has not created new
slums. What's 1ore, both major parties have
supported renewal ever since its inception
in the 1949 Dousing Act-and as recently as
last month 19 the 1964 Housing Act.
The platf
istration q~
capital to cent of
vate c Ital
bea `
In
lag
in
rm accuses the Johnson admin-
failing to attract more private
would play in housing-what laws he would
enact and what laws he would repeal. True,
the o ce of the Presidency might change
GOL ATER's attitude toward housing as it
hag/changed the attitudes of other Chief
Executives.
in urban growth-and hence housing-that
lie just ahead? The United States is under-
going a process of urbanization that will, in
a few years, have 8 out of 10 Americans living
in and around our cities. Bgtore 1999 we
The forces behind intensifie
migrating populations, ind~
t
f
g
d
local control. The ede
d
e
should take a more al rc
providing monetary ._
t
d
e Nor regional economic char cat
private industry nest a to ha:
n/it and beyond lots
m
h
a
problems created
f
h
the face of these
of Federal with
be bad news fo housing.
1
n
h
The recor of both can
h
b
e
n
GOLDWATER J
uld curtail Fed
in housin
There is no
tood nderstood by every
Johnson
ands, His appr
problems is one
and urb problems is one
readily
y
sional ? '
notr
ton.
res rces, of local authoritie
us / o create new concepts
v
a
eral involvement
question where
oach to housing
that should be
pital and the leaders of local communities.
further morning business? If not, morn-
ing business is closed.
Is closed,
CORRECTION OF CERTAIN ERRORS
IN THE TARIFF SCHEDULES OF
THE UNITED STATES
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that the unfin-
ished business be laid before the Senate.
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 p@6 AJ% X 0001 R0004% pg --230
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The PRESIDING OFFICER. With-
out objection, the Chair lays before the
Senate the unfinished business, which is
H.R. 12253.
The Senate resumed the consideration
of the bill (H.R. 12253) to correct cer-
tain errors in the tariff schedules of the
United States.
The PRESIDING OFFICER. The bill
is open to further amendment.
Mr. MANSFIELD. Mr. President, I
suggest the absence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. LONG of Louisiana. Mr. Presi-
dent, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
FRANK B. ROWLETT
Mr. LONG of Louisiana. Mr. Presi-
dent, I ask unanimous consent that the
pending business be temporarily laid
aside, and that the Senate proceed to
consider Calendar No. 1494, H.R. 7348.
The PRESIDING OFFICER. With-
out objection, it is so ordered; and the
bill will be stated by title for the infor-
mation of the Senate.
The LEGISLATIVE CLERK. A bill (H.R.
7348) for the relief of Frank B. Rowlett.
Mr. LONG of Louisiana. Mr. Presi-
dent, I call up my amendment at the
desk and ask to have it stated.
The PRESIDING OFFICER. The
amendment will be stated.
The LEGISLATIVE CLERK. On page 1,
it is proposed to strike out line 6 and
insert the following: "which sum shall
be considered a payment in considera-
tion of a transfer by Frank B. Rowlett
of property consisting of all substantial
rights to a patent within the meaning
of section 1235 of the Internal Revenue
Code of 1954, in full settlement."
Mr. LONG of Louisiana. Mr. Presi-
dent, this amendment is offered to meet
Treasury Department objection to the
bill. It is my opinion that the bill is
meritorious and should be passed. How-
ever, the Treasury Department objects
to the tax principle involved in one pro-
vision, and it may be compelled to ad-
vocate a veto of the bill because of this
tax principle involved, although the bill
in other respects is meritorious.
I move adoption of the amendment, in
order to meet the Treasury Department's
objection, and I trust that the bill will be
enacted into law.
Mr. DIRKSEN. Mr. President, this is
a bill which provides for an award to
Mr. Frank B. Rowlett of $100,000 for the
contributions he has made in the field
of erypto-analysis and cryptography. He
was associated with a Mr. William F.
Friedman in this work, which goes back
many years. About 8 years ago Mr.
Friedman was awarded a like sum. The
Defense Department felt that Mr. Row-
lett was fully entitled to this amount for
the contributions he has made and the
inventions which he has sponsored in the
field of cryptography. Mr. Rowlett is
still in Government service with a rating
of GS-18.
This question was considered at length techniques, and devices which established
by the Judiciary Committee of the Sen- the practicality of applying computerlike de-
ate, but one objection was raised with vices to the general field of cryptography.
During this same period he also conceived
respect to the tax feature. the basic principles underlying the inven-
I join in the amendment of the dis- tions cited in the proposed bill, and jointly
tinguished Senator from Louisiana to with Mr. William F. Friedman invented
make this amount subject to a capital methods for the practical application of
gains tax; although, I must say that it these principles. In 1935 he was listed in
runs a little against the grain. If the official memorandums as principal assistant
man has done outstanding work and the to Mr. Friedman, chief cryptanalyst for the
Government itself wants to reward him Office of the Chief Signal Officer since 1921.
The and give him an award for work well to assistant t cryptanalyst, following year, 1936, he was promoted
to astP-2. Just t prior to
done, let us give it to him, and not try World War II he was responsible for the spe
to let the heavy hand of the Treasury trot direction and coordination of U.S. Army
reach out and pull away $25,000 of the activities which culminated in the success-
$100,000. That sounds too much like ful breaking of a Japanese cipher machine of
Indian giving to me. I would rather major importance. When he was furloughed
have it across the board. When Gov- for military duty on February 16, 1942, Mr.
e1?nnlellt does that, one must assume Rowlett had advanced to the position of sen-
sor cryptanalyst, P-5. Commissioned as a
that somehow the heart is not quite in second lieutenant in the Signal Corps, U.S.
it. As recited in "The Vision of Sir Army, he was assigned the MOS of crypt-
Launfal": analytic officer. During his military service,
For the gift without the giver is bare.
I believe that in this case the Govern-
ment, as the giver, is just a little bare
when it comes to fully expressing its ap-
preciation. But if this measure is in
danger of a veto, or if it is in danger of
opposition by the Treasury-I learned
long ago that three-fourths of a loaf is
much better than no bread at all-I shall
concur in it under circumstances in which
I have no other choice to pursue.
Mr. LONG of Louisiana. Mr. Presi-
dent, the Senator was much more gen-
erous in compromising last night. CIA, he served as a senior staff officer in
He had the votes to defeat the amend-grades GS--16 and OS-17 and was awarded
ment last night. I believe he is making the Distinguished' Intelligence Medal. On
a very fine compromise. He feels that July 12, 1958, he returned to the National
without the amendment, the bill would Security Agency as Special Assistant to the
be vetoed, and there would be no bill. Director, GS-18, a position he still holds.
I believe he is making an exceedingly He has continued to make significant con-
tributions to the M
i n f
s e ce
h
good compromise. I believe it would be
a fine thing to pass the bill in this form,
in view of the fact that the Treasury is
very much concerned about the princi-
ples involved because of the tax features.
Mr. DIRKSEN. Mr. President, I ask
unanimous consent that the statement of
the committee, beginning on the first
page of the report, be printed at this
point in the RECORD in its entirety. It
is in some detail.
There being no objection, the state-
ment was ordered to be printed in the
RECORD, as follows:
STATEMENT
The facts surrounding this legislation are
set forth in House Report 1689 on H.R. 7348,
as follows:
"In its report to the committee on the bill,
the Department of Defense stated that is
had examined the merits of the case and
strongly recommended that Mr. Rowlett be
granted relief. The Department further
stated that Mr. Rowlett has had a long and
distinguished career in the field of cryptol-
ogy. According to its records, he conceived
fundamental principles which adsured the
high security capability of major cryptogra-
phic systems and equipment used so success-
fully by the United States during World War
II. These are still in use and held in a clas-
sified status, and have significant commercial
potential value which is probably greatly in
excess of the payment proposed by the bill.
"Mr. Rowlett began his Government serv-
ice on April 1, 1930, as a junior cryptanalyst,
P-1, in the Office of the Chief Signal Officer,
Signal Corps, U.S. Army. Between 1930 and
1935 Mr. Rowlett, still a junior cryptanalyst,
pioneered in the development of concepts,
he was awarded the Legion of Merit (United
States) and the Order of the British Empire
(British). He was separated from the serv-
ice as a colonel. On May 2, 1946, Mr. Rowlett
returned to his civilian employment with the
Office of the Chief Signal Officer as a research
analyst (oryptanalytic), P-8. He continued
to serve with this agency until September
30, 1949, when he transferred to the newly
created Armed Forces Security Agency (the
predecessor of the National Security Agency)
and assumed a key position, Technical Di-
rector, Operations. On February 15, 1952, he
resigned his position with NSA and accepted
an appointment with the Central Intelli-
cryp ograp
y,
and in April 1960 received the National Se-
curity
Agency Exceptional Civilian Service
Award.
"Patent applications for the two inven-
tions cited in the proposed bill were filed by
the Army in 1936 (serial No. 70,412) and
1942 (serial No. 443,320), respectively. Mr.
Friedman and Mr. Rowlett, then principal
assistant to Mr. Friedman, were listed as co-
inventors in both applications. It is these
two inventions that have resulted in the
high degree of security capability for U.S.
communications beginning before World
War II and continuing to the present. A
memorandum written to the Signal Corps
Patent Office by Mr. Friedman and Mr. Row-
lett on August 31, 1935, credits Mr. Rowlett
with contributing the fundamental prin-
ciple and three of the five subsidiary prin-
ciples and Mr. Friedman with contributing
two of the five subsidiary principles. With
respect to the first invention, it appears that
Mr. Rowlett's contribution was the greater.
A Navy document entitled 'The Contribu-
tion of the Signal Corps,' dated November
2, 1943, and prepared by Capt. L. S. Stafford,
U.S. Navy, states in part:
"'Rowlett is entitled to full credit for his
discovery of the principle ? ? and Fried-
man and Rowlett jointly are entitled to full
credit for their joint invention of methods
of applying and reducing his principle to
practical form.' (NoTE.-Classified portions
deleted.)
"The respective contributions of the two
men to the second invention are not official-
ly recorded. Since Mr. Rowlett and Mr.
Friedman were joint inventors in both in-
ventions, however, they have equal rights in
these inventions and their losses due to the
imposition of secrecy by the Government
would be the same.
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 1964 San itiz&VD4W$AFLoR e-sC. P75-00001 R000400 25-2
"In the early 1950's several private bills opposes, however, the provision in H.R. 7348 The Bureau of the Budget advised there
were introduced in behalf of Mr. Friedman, which would exempt the award to Mr. Row- would be no objection to the submission of
each proposing an award to compensate him lett from taxation for the reasons expressed this report from the standpoint of the admin-
for his loss of commercial rights to crypto- in the enclosed copy of a letter of February istration's program.
logic Inventions covered by applications for 17, 1964, from the Assistant Secretary of the Sincerely,
patents held in secrecy by the Government. Treasury to the Director of the Bureau of ROBERT E. GILES.
In 1956 one of these bills was enacted and the Budget.'
became Private Law 625, 84th Congress. Al- "The Treasury Department in a letter GENERAL COUNSEL
though two of the inventions for which Mr. which accompanied the Defense Department OF THE DEPARTMENT OF DEFENSE,
Friedman received his award are the same report took the view that this payment is Washington, D.C., March 19, 1964.
inventions upon which the present bill is compensatory in nature' and that this fact Hon. EMANUEL CELLER,
founded, Mr. Rowlett did not become a party supports subjecting it to taxation. The com- Chairman, Committee on the Judiciary,
of any of the private bills which sought to mittee has considered the arguments ad- House of Representatives, Washington, D.C.
compensate Mr. Friedman.. In the memo- vanced by the Treasury Department, but is of DEAR M. CHAIRMAN: You have requested
randum he prepared on September 20, 1962, the opinion that the tax exemption feature the views of the Department of Defense on
when he formally sought the Department's should be retained in the bill. The payment H.R. 7348, 88th Congress, a bill for the relief
permission to seek legislative relief, Mr. Row- in this instance could be said to be based of Frank B. Rowlett, who is presently em-
lett explained in paragraph 3: upon the years of service and outstanding ployed by the National Security Agency.
"'I was asked by Mr. Friedman sometime contributions of Mr. Rowlett, as well as upon The specific purpose of the bill is to author-
prior to 1952 to join him in presenting his a moral obligation on the part of the United ize a lump-sum payment to Mr. Rowlett as
-case to Congress. I declined, pointing out to States to pay equitable compensation for in- equitable compensation for his loss of oppor-
liim that I thought the Government should ventions subject to security restrictions. In tunity to realize benefit from his commercial
take the initiative in recognizing our con- this sense, it can be stated that the award is rights to cryptologic inventions which the
tributions if they were worthy of monetary for meritorious service. in this connection, Government uses and holds in classified
sward. While I still feel the Government the committee feels that it is relevant to status.
should take the initiative, enough time has note that the income tax law itself contains The Department has examined the merits
elapsed since Friedman received his award an exemption for amounts received as prizes of the case and strongly recommends that
to cause me to conclude it Is most unlike- and awards made primarily in recognition of Mr. Rowlett be granted relief. Mr, Rowlett
ly that my contributions will be recognized scientific achievement (26 U.S.C. 74(b) ). has had a long and distinguished career in
unless I take positive steps to bring their The exemption of section 74(b) is made the field of cryptology. According to our
merits to the attention of the Congress.' subject to the conditions that the recipient records, he conceived fundamental principles
"The records of 'the Department of De- was selected without any action on his part which assured the high security capability of
Sense disclose that, in his appeal for relief, to enter a contest or proceeding and is not major cryptographic systems and equipment
Mr. Friedman stressed the importance of the required to render future services as a con- used so successfully by the United States
7wa inventions of which he was coinventor dition to receiving a reward, Also, it should during World War II. These are still in use
with Mr. Rowlett over the five additional in- be noted that Private Law 87-578 providing and held in a classified status, and have sig-
sentions to which he held sole patent rights, for an award to the estate of an inventor was nificant commercial potential value which is
and that he associated his loss mainly to his amended on August 15, 1963, to extend tax probably greatly in excess of the payment
_nability to exploit these two inventions. Of exemption to the award authorized by the proposed by the bill.
she seven inventions he stressed the im- private law. In view of this precedent and Mr. Rowlett began his Government service
Jortance of the 1986 invention (patent ap- in view of the particular circumstances of on April 1, 1930, as a junior cryptanalyst,
:)lication serial No. 70,412) above all oth- this case, it is recommended that the tax P-1, In the Office of the Chief Signal Officer,
-rs and placed the 1942 invention (patent exemption be retained and that the bill be Signal Corps, U.S. Army. Between 1930 and
application serial No. 443,320) next in impor- considered favorably, - 1935 Mr. Rowlett, still a junior cryptanalyst,
-ance. He then developed detailed evidence "The committee is advised that an attorney pioneered in the development of concepts,
which convinced the Department and the has rendered services in connection with techniques, and devices which established
Jongress that, if he had been able to exploit this matter. The bill, therefore, carries the the practicality of applying computerlike
-hese two inventions domestically and usual 10-percent limitation upon attorney's devices to the general field of cryptography.
.mong allied foreign governments, he would fees." During this same period he also conceived
nave obtained amounts of money far in ex- The committee has received a supplemen- the basic principles underlying the inven-
ess of the sum of money he sought from tal report from the Treasury Department, tions cited in the proposed bill, and jointly
longress. which is hereto attached. After considera- with Mr. William F. Friedman Invented
"In its report to the committee on the bill, tion of the report the committee believes that methods for the practical application of
lie Department of Defense stated that the circumstances warrant the same treatment these principles. In 1935 he was listed in
iepartment's views today are properly re- as was given in Private Law 87-578, as Official memorandums as principal assistant
_ected by the following extract from a letter amended by Private Law 88-32, in regard to to Mr. Friedman, chief cryptanalyst for the
_ated July 6, 1953, which the Honorable the tax exemption. Office of the Chief Signal *obert T. Stevens, Secretary of the Army, Officer since The following d 1921.
to
ant to the Honorable Chauncey W. Reed, After a review of the foregoing, the com- year, 1936, he was promoted to
hen chairman of the House Committee on mittee concurs in the action of the House of World assistant
War II he rryptanaly was res res Just prior to
lie Judiciary, with respect to H.R. 1152, 83d Representatives and recommends that the ponsible for the
ongress, a bill for the relief of William F. bill, H.R. 7348, be considered favorably, specific direction and coordination of U.S.
~iedman: Attached hereto and made a part hereof cessful Army breaking activities of a culminated in the ma-
are re of a Japanese cipher
"'When the fruit of an inventor's labor ports submitted by the Department of chine hine of major importance. When he w he was
as been of substantial benefit to his govern- Commerce, the Department of Defense, and furloughed for military duty on February 16,
^ent and his right to seek reward for his the Treasury Department on H.R. 7348. 1942, Mr. Rowlett had advanced to the osi-
lforts is impaired for so great a period of GENERAL COUNSEL, tion of senior cryptanalyst, P-5. Comnils-
-me for security reasons, it is equitable that OF THE DEPARTMENT OF COMMERCE, sioned as a second lieutenant in the Signal
e be compensated for his loss. This view is Hon. Washington, EMANUEL D.C. September 17, 1963. Corps, U.S. Army, he was assigned the MOS
a accord with the policy of the Department of crytanalytic officer. During his military
encouraging technological advancement. Chairman, Committee on the Judiciary, Service he was awarded the Legion of Merit
o deny an inventor the right to seek gain House of Representatives, Washington, (United States) and the Order of the British
-om his inventions merely because they are D.C. Empire (British). He was separated from
_tai to our national defense and the security DEAR MR. CHAIRMAN: This letter is in reply the service as a colonel. On May 2, 1946, Mr.
the Government, while permitting such to your request for the views of the Depart- Rowlett returned to his civilian employment
irsuit by inventors in other fields where ment of Commerce with respect to H.R. 7348, with the Office of the Chief Signal Officer as a
-curity interests are not paramount, would a bill for the relief of Frank B. Rowlett. research analyst (c
a discriminatory and would discourage ad- You are advised that while the language continued to with this agency He
serve thency until
ancement in matters vital to our national of H.R. 7348 undertakes to identify certain in September 30, 1949, when he n age transferred to
fense.' patent applications involved and although the newly created Armed Forces Security
"In recommending favorable consideration the administration of the patent law relat- Agency (the predecessor of the National
the bill while opposing the tax exemption ing to issuance of patents is a responsibility Security Agency) and assumed a key posi-
-ovision, the Department of Defense stated: of the Department of Commerce, the merits tion, Technical Director, Operations. On
" `The Department of Defense considers of the issue presented by the bill-whether a February 15, 1952, he resigned his position
at, in view of the available evidence, Mr. payment, as compensation for services ren- with NSA and accepted an appointment with
:)wlett is equitably entitled to compensation dered to the Government, in the proposed the Central Intelligence Agency. During his
lual to that of Mr. Friedman. Accordingly, amount or otherwise, is appropriate-is a employment with CIA he served as a senior
is Department favors the grant of an award matter concerning which this Department staff officer in grades GS-16 and GS-17 and
$100,000 to Mr. Rowlett in full settlement is not informed. We defer in this matter to was awarded the Distinguished Intelligence
r his rights in the inventions which are the agencies which may have been benefited Medal. On July 12, 1958, he returned to the
[erred to in H.R. 7348, The Department from the activities of Mr. Rowlett. National Security Agency as Special Assist-
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 22506 Sanitized - PqgffGrddg?]KI I eRi3 A- 9 IS 00001 R00042340254
ant to the Director, GS-18, a position he Still
holds. He has continued to make significant
contributions to the science of cryptography,
and in April 1960 received the National Secu-
rity Agency Exceptional Civilian Service
Award.
Patent applications for the two inventions
cited in the proposed bill were filed by the
Army in 1936 (serial No. 70,412) and 1942
(serial No. 443,320) respectively. Mr. Fried-
man and Mr. Rowlett, then principal assist-
ant to Mr. Friedman were listed as co-inven-
tors in both applications. It is these two
inventions that have resulted in the high de-
gree of security capability for U.S. com-
munications beginning before World War II
and continuing to the present. A memoran-
dum written to the Signal Corps Patent Of-
fice by Mr. Friedman and Mr. Rowlett on
August 31, 1935, credits Mr. Rowlett with
contributing the fundamental principle and
three of the five subsidiary principles and
Mr. Friedman with contributing two of the
five subsidiary principles. With respect to
the first invention, It appears that Mr. Row-
lett's contribution was the greater. A Navy
document entitled "The Contribution of the
Signal Corps," dated November 2, 1943, and
prepared by Capt. L. S. Safford, U.S. Navy,
states in part: "Rowlett is entitled to full
credit for his discovery of the principle * * *
and Friedman and Rowlett jointly are en-
titled to full credit for their joint invention
of methods of applying and reducing this
principle to practical form." (NoTE.-Classi-
fled portions deleted.) The respective con-
tributions of the two men to the second
invention are not officially recorded. Since
Mr. Rowlett and Mr. Friedman were joint
inventors In both inventions, however, they
have equal rights in these inventions and
their losses due to the imposition of secrecy
by the Government would be the same.
In the early 1950's several private bills
were introduced in behalf of Mr. Friedman,
each proposing an award to compensate him
for his loss of commercial rights to crypto-
logic Inventions covered by applications for
patents held in secrecy by the Government.
In 1956 one of these bills was enacted and
became Private Law 625, 84th Congress. Al-
though two of the inventions for which Mr.
Friedman received his award are the same
inventions upon which the present bill is
founded, Mr. Rowlett did not become a party
to any of the private bills which sought to
compensate Mr. Friedman. In the memo-
randum he prepared on September 20, 1962.
when he formally sought the Department's
permission to seek legislative relief, Mr. Row-
lett explained in paragraph 3:
"I was asked by Mr. Friedman sometime
prior to 1952 to join him in presenting his
case to Congress. I declined, pointing out to
him that I thought the Government should
take the initiative in recognizing our con-
tributions if they were worthy of monetary
award.. While I still feel the Government
should take the initiative, enough time has
elapsed since Friedman received his award
to cause me to conclude it is most unlikely
that my contributions will be recognized
unless I take positive steps to bring their
merits to the attention of the Congress."
The Department's records disclose that, in
his appeal for relief, Mr. Friedman stressed
the importance of the two inventions of
which he was coinventor with Mr. Rowlett
over the five additional inventions to which
he held sole patent rights, and that he
associated his loss mainly to his Inability
to exploit these two inventions. Of the
seven inventions he stressed the importance
of the 1936 invention (patent application
serial No. 70,412) above all others and placed
the 1942 invention (patent application serial
No. 443,320) next in importance. He then
developed detailed evidence which convinces
the Department and the Congress that, if
he had been able to exploit these two in-
ventions domestically and among allied for.
governments, he would have obtained
amounts of money far In excess of the sum
of money he sought from Congress.
The Department's views today are proper-
ly reflected by the following extract from
a letter dated July 6, 1953, which the Hon-
orable Robert T. Stevens, Secretary of the
Army, sent to the Honorable Chauncey W.
Reed, then chairman of the House Commit-
tee on the Judiciary, with respect to H.R.
1152, 83d Congress, a bill for the relief of
William F. Friedman:
"Where the fruits of an inventor's labor
has been of substantial benefit to his Gov-
ernment and his right to seek reward for
his efforts is impaired for so great a period
of time for security reasons, it is equitable
that he be compensated for his loss, This
view Is in accord with the policy of the
Department of encouraging technological
advancement. To deny an inventor the right
to seek gain from his Inventions merely be-
cause they are vital to our national de-
fense and the security of the Government,
while permitting such pursuit by inventors
in other fields where security interests are
not paramount, would be discriminatory and
would discourage advancement in matters
vital to our national defense."
The Department of Defense considers that,
In view of the available evidence, Mr. Row-
lett is equitably entitled to compensation
equal to that of Mr. Friedman. According-
ly, the Department favors the grant of an
award of $100,000 to Mr. Rowlett in full
settlement for his rights in the inventions
which are referred to in H.R. 7348. The
Department opposes, however, the provision
in H.R. 7348 which would exempt the award
to Mr. Rowlett from taxation for the rea-
sons expressed in the enclosed copy of a
letter of February 17, 1964, from the As-
sistant Secretary of the Treasury to the
Director of the Bureau of the Budget.
The Bureau of the Budget advises that,
from the standpoint of the administration's
program, there 1s no objection to the sub-
mission of this report for the consideration
of the committee.
Sincerely,
L. NIEDERLEHNER
(For John T. McNaughton).
TREASURY DEPARTMENT,
Washington, D.C., February 17, 1964.
Hon. KERMIT GORDON,
Director, Bureau of the Budget,
Washington, D.C.
DEAR MR. GORDON: You requested the
views of this Department on the fact that
H.R. 7348, a bill for the relief of Frank B.
Rowlett, provides that the sum which will
be paid to Mr. Rowlett shall be exempt
from all taxation.
The specific purpose of H.R. 7348 is to
authorize a lump sum payment to Mr. Row-
lett as equitable compensation for his loss
of opportunity to realize benefit from his
commercial rights to cryptologic inventions
which the Government uses and holds in
a classified status. The Department of De-
fense has examined the merits of the case
and strongly recommends that Mr. Rowlett
be granted relief.
We have considered the general question
of whether private relief bills should exempt
the payments made by their terms from
taxation. Of course, exemption, even If
proper in cases like the present one where
the award is compensatory in nature, would
not be appropriate where actual compensa-
tion to the recipient of relief is not involved,
as, for example, where the private bill
lengthens the period of a statute of limita-
tions.
Several reasons have been advanced to
justify an exemption from taxation for com-
pensatory awards in private relief bills, but
we believe these reasons are not overly per-
suasive.
It has been argued that it Is difficult in
Some cases for Congress to form a sound
judgment on whether an award was ap-
propriate in light of the taxes which would
be payable upon it. This is because of prob-
lems in determining how the award should
be taxed and the fact that the amount of
tax imposed upon the award will frequently
depend upon the other taxable income of
the individual receiving relief. It has also
been urged that if such awards are to be
subject to tax, Congress, despite the dif-
ficulties mentioned above, may increase the
amount of such awards to allow for the tax.
However, these arguments overemphasize the
difficulties in reaching a fair determination
of appropriate compensation where an
amount is to be subject to tax.
In addition, It has been urged that such
awards frequently provide for lump sum
payments to compensate for a loss of income
which would have been received over a
number of years. Thus, the taxation of
such awards may be excessive because the
lump payment is taxed in 1 year. However,
assuming the enactment of the Revenue Act
of 1964, the averaging provision adopted
therein will operate to mitigate any unfair
tax consequences which might result from
the receipt of a compensatory award in a
lump sum.
Where an award is compensatory in nature,
that fact alone strongly supports subject-
ing it to taxation. The President of the
United States, In approving H.R. 3662, for
the relief of Mrs. Margaret Patterson Bartlett,
expressed the hope that provisions exempting
awards under private relief bills from taxa-
tion would not find their way into future
private legislation and outlined some of the
reasons why such exemptions are not proper.
The President stated that the moral and
equitable considerations supporting these
awards argue strongly in favor of making
them subject to the income tax laws. He
stated that there was no valid reason for
treating recipients of these compassionate
awards more favorably than the taxpayers
who must finance them and who receive no
special treatment in meeting comparable tax
obligations. The President expressed the
view that the adjustment of the amount of
the award by Congress did not provide an
adequate basis for tax exemption since such
action was inconsistent with the sound, pre-
vailing practice under which an individual
receives compensation or other payments and
then has his tax liability computed under
general tax law and, among other things, in
relation to other sources of Income,
For the foregoing reasons, the Treasury
Department opposes exempting such awards
from taxation. Therefore, It opposes such a
provision In H.R. 7348.
Sincerely yours,
STANLEY S. SURREY,
Assistant Secretary.
TREASURY DEPARTMENT,
Washington, D.C., September 10, 1964.
Hon. JAMES O. EASTLAND,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: This letter supple-
ments the Treasury Department's views on
H.R. 7348, a bill for the relief of Frank B.
Rowlett, which Is now being considered by
your committee. Our previous expression of
views is set forth in the report of the House
Committee on the Judiciary on this bill.
H.R. 7348 would pay $100,000 to Frank B.
Rowlett in full settlement of all rights in re-
spect to his cryptologic inventions which
have been placed In secrecy status by the
Department of Defense. The Treasury De-
partment is opposed to the provision in this
bill which would exempt the $100,000 pay-
ment from all taxation.
The report of the House Committee on the
Judiciary, in approving the exemption from
tax, implies that section 74(b) of the In-
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 1964 San itiz1 -vommwae-SE WMP75-00001 R000400J 25-2
r~~i Revenue Code is a precedent for the message would, if enacted, accord relief for Mr. LONG of Louisiana. Mr. Presi-
exemption.
The committee noted that "the the e rebunched taxpayers in situations where
dent, I move to reconsider the vote by
income tax law itself contains an exemption income amounts received as prizes and award duced rates of income taxation then being which the bill was passed,
made primarily in recognition of scientific considered by Congress would provide addi- Mr. DIRKSEN. Mr. President, I move
achievement (26 U.S.C. 74(b)). The exemp- tional relief. Your committee's report on the to lay that motion on the table.
tion of section 74(b) is made subject to the Kessenich bill further stated that your The motion to lay on the table was
conditions that the recipient was selected "committee does not approve of a tax-free agreed to.
without any action on his part to enter a amount as amatter of policy generally in bills
contest or proceeding and Is not required to for payments to individuals, but on occasion
render future services as a condition to re- there are special circumstances which indi- CORRECTION OF CERTAIN ERRORS
ceiving a reward." cate that such a freedom from tax liability IN THE TARIFF SCHEDULES OF
The Department believes that the congres- should be recognizerd " V-1,----1- t
t
rovi
be nva general u -
only does not support `
exemption from tax plicability were e then being considered by Mr. LONG of Louisiana. Mr. P esi-
for the $100,000 payment to Mr. Rowlett, but Congress was a significant factor in your dent, I move that the unfinished usi-
Is contrary to such exemption. Section 74 commtttee's departure from it
--- __ . . . _ _ _
s
s
"`s
en case
certain cases which held that some prizes Your committee's general policy of not an_ The PRESIDING OFF'IGER,! The
rnenta to
-J--y a December eludes amounts received as prizes and awards.
President Johnson in a December ber The motion was agreed to d the dorsed The narrow exemption in section 74(b) was 1963 when, in approving H.R. 3663 for the Senate resumed the consideratio of the
intended to exempt such awards as the Nobel relief of Mrs. Margaret Patterson Bartlett, bill (H.R. 12253) to dorrect certa errors
-and Pulitzer Prizes. However, the reports he expressed the hope that provisions ex- in the tariff schedules of th United
of the congressional tax committees spe- emptintr from taxation awards under
iv
t
pr
a
e
-
-weir way into Mr. LAUSCHE. Mr. Presid41t, I send
-tended to exclude prizes or awards from an future private legislation and outlined soma ~- ~,_ _ ?. _
bat
employment." This rule is also set forth moral and equitable considerations support- - The PRESIDING OFFI ER. The
In the Treaanrv Tlpnartman+
Va -^?- war wut &iu
Therefore, even if one could view the pay- making them subject to the income tax laws. The LEGISLATIVE CLERK. It S proposed
-Went to Mr. Rowlett as not being of a com- He stated that there was no valid reason for by the Senator from Ohio C . LAUSCHEI,
pensatory nature, which view the Treasury treating recipients of these compassionate on behalf of himself, the 3 or Senator
Department does not share, the payment awards more favorably than the taxpayers
an awara from an employer to an employee special treatment in meeting comparable tax from ulotlana [Mr. BAYH.,IInd the Sen-
n recognition of an achievement connected obligations. The President expressed the ator from Michigan [Mr. ARTI as fol-
with
_n gross income, the award by Congress did not provide an On page 15, strike out fin s 1 through 17
The Treasury Department believes that a adequate basis for tax exemption sinc
h
ti
e suc
(sec
on 21 of the bill)
.
-ax exemption for this $100,000 payment to action was inconsistent with the sound, pre- Renumber the succeedin sections.
.Sr. Rowlett would discriminate against other vailing practice under
hi
h
w
c
an individual
axpayers similarly situated. For example, receives compensation or other payments and Mr. LAUSCHE. Mr. President, my
in 1956 Congress awarded $100,000 to Mr. then has his tax liability computed under amendment would strik from the bill a
'riedman, Mr. Rowlett's colleague, for his general tax law, and, among Other things, in provision that remove the 20-percent
ontribution to the two inventions for which relation to other sources of income. duty now imposed ago st the importa-
-Ir. Rowlett now seeks compensation. (Pri- In summary, the Treasury Department be
- tiori of Cdi li
anaanra Stone chips and
-ate Law 625, 84th Cong.) No tax exemp- lieves that exempting from tax the $100,000 spalls. A bill on this subject has been
ton was provided for Mr. Friedman who did payment to Mr. Rowlett would discriminate
Sr. Rowlett in the form of the recently and particularly against Mr. Rowlett's~col- Mr. LONG of Lo siana. Mr. Presi-
nacted reduced rates of Federal income tax league, Mr. Friedman, as well as other invent- dent, will the Senat r yield?
aid the provision for income averaging. ors whose $100,000 awards were subject to Mr. LAUSCHE. yield.
Jmilar awards of $100,000 also were made tax. The Department also believes that the Mr. LONG Of ulsiaria. I suggest
a the 85th Congress to Mr. Lawrence F. recent enactment by Congress of reduced that if the Sena wishes to offer the
nfrord for cryptographic systems developed rates of income tax and the income-averag- am endment, we uld s
y him, and in the 86th Congress to Col. raovisions remove any special circum- Sense of a quor in order ghat Senators
z)hn A. Ryan, Jr., for his development of a stances justifying freedom from tax liability
w bombing system (Private Law 494, 85th in cases such as this,
e who are interested in supporting the
ong.; Private Law 492, 86th Cong.). No For the 'foregoing reasons, the Treasury amendment an those who are particu-
aemption from tax was provided by Con- Department opposes the tax exemption pro- larly affected it might be present to
-ess for these taxpayers. visions contained in H.R. 7848, speak for the position,
The discrimination inherent in a tax ex- The Bureau of the Budget has advised the Mr. LAUS I merely send the
option provision can be more fully appre- Treasury Department that there Is no ob- amendment 14 the desk at this time.
~,ted by noting that, to have provided Mr. jection from the standpoint of the admin- Mr. LON of Louisiana. The Senator
uwlett's colleague, Mr. Friedman, with istration's program to the presentation of
-00,000 of disposable income, after Federal this report. Is not Celli the amendment up at this
aired an award in excess of $500,000. This STANLEY S. SURREY, Mr. LAT;SCHE. No.
-timate assumes that Mr. Friedman's tax- Assistant Secretary. Mr. LO G of Louisiana. Very well.
.1e incom
o
ld h
e w
u
ave equaled the amount
- The PRESIDING OFFICER. The Mr. USCHE. Mr. President, the
the award and that he filed a Joint return.
Sttee also notes that Private Law -87-578 , merit of the Senator from Louisiana [Mr. wnum ee, out wn1Ch was not In the
itch provided an award of $100,000 to the LONG]. origin bill, would remove the 20-percent
s
d
t
wa
agree
wended to extend tax exem tion to the P__ S- -v
w. R Great Lakes States of Minnesota,
p The PRESIDING OFFICER. The bill
ward. (Private Law 32
Bath Con
) Th
,
g
e i Mid gap Wii Illii
.s open to further amendment. If there,sconsn,nos, Indiana,
-partme believes that the tax exemption and
o Ohio are vitally affected by the
vided by y Private Law 88-32, for the relief be no further amendment to be offered, am dment that was adopted by the
the estate of Gregory J. Kessenich, should the question is on the engrossment of the
Cora ti W hd k
-t be
es.ea nonowledge of the
m the relied upon as a precedent to deviate amendments and third reading of the fact that this amendment was to be taken
prior uniform congressional prat- bill.
^ards of this nature. As set forth in your The amendment were ordered to be W have not had an opportunity to
anmittee's report on the Kessenich bill, a engrossed, and the bill to be read a third mak inquiry about what the real im-
easury Department etas memorandums
tf th dt
pac oeuy would be. I have tried
ted that the income-averaging proposal The bill (H.R. 7348) was read the third to consult Senators from the Great Lakes
ntained in President Kennedy's 1968 tax time, and passed. area of the country. I have learned
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 22508 Sanitized - d iKRBIRaseiziClA-R6tRti-00001 R0004Q Q 6 '
extra 1964 marketings as the admint "'
tion recommended. It places the limits
that I have mentioned, 275,000 tons for
mainland beet, and 225,000 tons for
mainland cal ,e' marketings.
Under the; proposed amendment even
from them that the Industry would be
greatly harmed by the committee amend-
ment to the bill.
I intend to make further inquiry con-
cerning the real impact of the removal
of this duty upon industries in Ohio,
which are vitally interested. I shall later
determine whether I shall press for the
adoption of the measure.
Mr. President, I ask that the RECORD
show that the amendment is cospon-
sored by my colleague, the junior Sen-
[Mr. CARLSON], the Senator from Wy-
oming [Mr. SIMPSON], the senior Senator
from Colorado [Mr. ALLOTT], the Senator
gan [Mr. HART], the junior Senator from
Indiana [Mr. BAYH], the senior Senator
junior Senator from Kansas [Mr. PEAR-
SON], the senior Senator from Iowa [Mr.
amendment will be stated.
The LEGISLATIVE CLERK. At the end
of the bill, it is proposed to insert a new
section, as follows:
Act of 1964.
The amendment is as follows:
1948, as amended (relating to quota 'for for-
eign countries) is amended by str ing out
the annnual quantities provded for in the
other subparagraphs of thisf subsection (c).
"(b) Section 213 of such Act is amended
(1) by striking from section 213(c) the lan-
guage 'during the years 1962, 1963, and 1964,
which fee in each such year shall be respec-
tively 10, 20, and 30 per centum' and insert-
ing in lieu thereof 'during the years 1982,
1963, and 1964 and the first six months of
1965, which fee shall be 10 per centum in
1962, 20 per centum in 1963 and 30 per
centum In 1964 and the first six months of
1965'; and (2) by striking from section 213
(c) the language 'during the years 1962, 1963,
and 1964 shall be respectively 0.1, 0.2, and
0.3 of one cent per pound' and inserting in
lieu thereof 'during the years 1962, 1963,
1964 and first six months of 1965 shall be in
1962 0.1 of one cent, in 1963 0.2 of one cent,
and in 1964 and the first six months of 1965
0.3 of one cent per pound'.
"(c) The following new paragraph (3) is
added at the end of section 202(a) of such
Act.
"'(3) Notwithstanding any other provi-
sion of this Act, the domestic beet sugar area
and the mainland cane sugar area may be
permitted to market in 1964, as determined
by the Secretary, in addition to the quota,
Michigan [Mr. HART], and the
hm Wisconsin [Mr. NELSON].
E DING OFFICER. With-
n t7 s ordered.
is Ope further amendment.
is en
Sr. President, I send
a r
~' lesk on behalf of
om Minnesota
.ie Senator 'ARTHY1, the for Senator
D the junior
ATHERS],
Senator from Indi a [Mr.
the senior Senator fr ,n Ne-
'r. HRUSKA1, the ator
-aska [Ur. CURTIS], the se for
from North Dakota I .
QA
Ju
in a etter dot d September 25, 1964,
from t Unde Secretary of the Depart-
ment of grit Iture, Mr. Murphy. This
letter was essed to the President of
the Senate d the Speaker of the House.
The seco rovision would leave the
fee on th glol sugar quota intact at
the full te, an keep the fee on statu-
tory su r )kpplicable from Janu-
/an
ary 1 t June 30, 145, at 30 percent of
the fu rate on global sugar.
, too, was recommended by Under
Seer tary Murphy in hff letter of Sep-
te er 25, and in the let r dated Sep-
te ber 28 from the State D artment to
irman Cooley, of the Hou Commit-
on Agriculture, It was rec mend-
that any change in the fee a de-
ferred for the time being.
The third purpose of the amen nt
is to permit domestic beet and mainla
cane sugar areas to market up to 275,00
tons of beet and 225,000 tons of cane,
respectively, of the extra sugar produced
at Government request in 1963, but
which they are now unable to market
without congressional action.
This represents only a small part of
the extra sugar which these two areas
produced at Government request from
the 1963 crops, and which are now be-
ing produced from the 1964 crop.
The fact that the Government urged
these two areas to produce the extra
sugar is well documented. The admin-
istration is also firmly on record as
favoring congressional action to permit
the marketing of the extra sugar. The
administration has recommended that
the 1964 domestic marketings be com-
pletely unlimited. This was done by the
Secretary of Agriculture in December of
1963, and by the President himself in
his message on the agricultural program
in January of this year.
In the interest of orderly marketing,
the bill does not go as far in regard to
Mr. BENNETT. Mr. P
purpose of this amendmeia
shes that the
over the past
the Sugar Act until
ommended this week
from the unallocated portion of the
global quota. The remaining portion of
reserved by the Department of Agricul-
ture earlier this year for the specific pur-
pose of permitting some extra domestic
marketings this year. Our American
farmers desperately need the marketing
relief which the bill would provide, mod-
est as it is. In the absence of such re-
lief, they would be forced to store sugar
at great expense to themselves, even
though the Government had urged them
to produce it to sell and not to store.
Mr. President, in my opening state-
ment I referred to certain expressions
of policy by the administration. I ask
unanimous consent to have printed In
the RECORD a copy of the U.S. Depart-
ment of Agriculture Release No. 848-63,
dated March 14, 1963.
There being no objection, the release
was ordered to be printed in the RECORD,
as follows:
No SUGARBEET ACREAGE RESTRICTIONS IN 1964
Secretary of Agriculture Orville L. Free-
man announced today that there will be no
acreage restrictions (proportionate shares)
on the 1964 crop of sugarbeets.
The 1963 domestic beet sugar marketing
quota is approximately 2,700,000 tons. Stocks
of beet sugar on hand January 1, 1963,
amounted to 1,368,000 tons and it is antici-
pated that 616,000 tons will be produced
from 1962-crop beets to be harvested In 1963.
This provides a supply of 1,984,000 tons of
beet sugar to meet requirements until new-
crop sugar reaches the market next fall.
Marketings of beet sugar In the last quarter
of the year will be heavy. A 1 ger quantity
of old-crop sugar would have promoted more
of be had been estimated at 2,580,000 tons
by the et sugar industry. Even a large
increase I R,4963 production would not result
in excessive rve supplies.
The U.S. Dep tment of Agriculture indi-
cated it is too a ky to determine whether
restrictions will be pecessary on the 1965
crop. However, it observed that production
will have to exceed marketings sufficiently
to create safe and reasonable stocks before
acreage restrictions could be reimposed.
It Is assumed that the industry will at-
tempt in 1963 to produce at the maximum
capacity of its plants. Today's action is ex-
pected to encourage plant expansion.
First, it should encourage existing plants
to modernize and expand their facilities
since they can now be assured of at least
2 years of unrestricted operations.
Second, new plants under construction for
operation In 1963 and 1964 could be expanded
Immediately to their ultimate capacity so as
to take advantage of this opportunity for
full production and the building of produc-
tion and marketing history in excess of the
Sanitized - Approved For Release : CIA-RDP75-00001 R000400230025-2