SECURITY RISKS IN GOVERNMENT AGENCIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-03578A000400060009-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 12, 2016
• Document Release Date: February 6, 2002
• Sequence Number: 9
• Publication Date: March 25, 1954
• Content Type: OPEN

1954
Approved 2002/05/06: CIA-RDP78-0300 00600094
CONGRESSIONAL RECORD - SENATE
the mental health agency in each State to
assume responsibility for the coordination
of mental health training and research
within the State's jurisdiction. A technical
advisory committee, composed of scientists
and educators in the field of mental health,
cooperating with scientists in universities
and industry, should be established in each
State to advise and assist the mental health
agency and other State departments con-
cerned with the coordination of training and
research activities.
6. State institutions which are not accred-
ited for residency or as affiliate training cen-
ters for psychiatrists, clinical psychologists,
social workers, nurses, and other professional
groups should receive support from gover-
nors and legislatures in their endeavors to
raise the level of teaching and supervision
in their institutions to secure accreditation.
7. The States should provide stipends for
graduate training in. the psychiatric field,
should adjust salary scales, and should pro-
vide educational leaves of absence so that
State mental hospitals may compete effec-
tively for the limited personnel available to
fill treatment, teaching, and research posi-
tions.
8. One of the important obstacles to ade-
quate evaluation of procedures and thera-
pies is a lack of uniformity in statistical
methods in mental hospitals and clinics
throughout the country. All States should
cooperate with the United States Public
Health Service and the American Psychiatric
Association in the adoption of uniform ter-
minology for statistical reporting procedures
in the field of mental health.
9. Joint action by groups of States may
provide one of the most fruitful means of
attacking mental illness. This can be par-
tially achieved by periodic regional mental
health conferences, regional programs such
as that now sponsored by the Southern
Regional Education Board, and by active
participation in the Interstate Clearinghouse
now established through the Council of State
Governments by request of the Governors'
Conference. The clearinghouse, in coopera-
tion with existing public and private agen-
cies, will provide a medium for exchange of
pertinent information among the States, will
assist the States in organizing more effective
mental health programs, and will help in
developing interstate agreements so that
groups of States can utilize to the fullest ex-
tent existing training and research facilities.
10. State and community mental health
organizations should play important roles in
educating the public to the problems of
mental health and to the methods of im-
proving psychiatric services. The States
should encourage and support mental health
education in the schools, good relationships
between hospitals and their surrounding
communities, and the provision of adequate
community psychiatric services. These may,
in the long run, be most important in deter-
mining the mental health of the Nation.
Govs. C. Elmer Anderson, Minnesota;
Edward F. Arn, Kansas; Frank G.
Clement, Tennessee; George N. Craig,
Indiana; Frank J. Lausche, Ohio; Wil-
liam C. Marland, West Virginia; Rob-
ert B. Meyner, New Jersey; Johnston
Murray, Oklahoma; William G. Strat-
ton, Illinois; G. Mennen Williams,
Michigan.
BIPARTISANSHIP IN THE FORMULA-
TION OF MILITARY AND FOREIGN
POLICIES
Mr. LEHMAN. Mr. President, the
Milwaukee Journal, one of America's
great newspapers-a politically inde-
pendent paper-published on March 21
military and foreign policies. This is a
matter to which too little attention has
been paid in recent months. Because of
the importance of this editorial I ask
that it be printed in the body of the
RECORD.
There being no objection, the editorial
was ordered to be printed in the RECORD,
as follows:
IF IKE WANTS BIPARTISAN POLICY, HE BETTER
CONSULT DEMOCRATS
Both major political parties have consist-
ently pledged that "politics stops at the
water's edge"-that foreign policy must be
bipartisan.
Two things, however, currently threaten
bipartisan foreign policy, and therefore
weaken the country in facing its world
problems :
1. There have been consistent attacks by
administration speakers on past policy,
which in fact was largely bipartisan and
which remains basically the policy of today.
2. The Eisenhower administration has vir-
tually ignored the Democratic Party in the
field of foreign policy and military policy,
which today is an inseparable adjunct of
foreign policy.
Attacks on past policies are, by Implica-
tion, also attacks on top Republicans who
helped create or carry out those policies. In-
cluded in this group are President Eisen-
hower himself and secretary of State Dulles,
who were identified with the foreign policy
of the previous administration. Yet attacks
are made not just by the rabid fringe of the
Republican Party. Vice President Nixon, for
instance, charged the other night that Tru-
man-Acheson policies resulted in turning
600'million persons over to the Communists
(nobody has shown how it could have been
prevented).
Even the President has at times gone
political to say nasty things about past
policies in which Republicans played a big
part. An example is the President's im-
plication the other day that former Presi-
dent Truman should have gone to Congress
before fighting to save South Korea. There
.was no time to go to Congress and Eisen-
hower himself praised the decision at the
time.
3637
under the Truman administration after the
war. Truman usually rose above partisan-
ship where defense and foreign policy were
concerned.
Under the administration preceding Eisen-
hower's, Republicans held many of the Na-
tion's top posts. Dulles, present Secretary
of State, was ambassador at large and nego-
tiated the Japanese peace treaty. Dwight
Griswold, of Nebraska, headed the American
mission to Greece. Warren Austin headed
the United States delegation to the United
Nations.
Paul Hoffman headed the Marshall plan.
Robert Lovett was Secretary of Defense,
William Foster was Economic Cooperation
Administrator, Walter Gifford was Ambassa-
dor to Great Britain, John J. McCloy was
German High Commissioner, Senator Van-
denberg was a bulwark of strength behind
foreign policy.
There are many other names-Henry Cabot
Lodge, John Sherman Cooper, Charles P.
Taft, George W. Perkins, Charles M. Spof-
ford, Paul H. Nitze, Thomas D. Cabot,
Charles A. Coolidge high among them.
In 1949 the late Senator Vandenberg said:
"During the last 8 years, certainly, there has
been a clear disposition on the part of the
Executive to work in far more intimate co-
operation and liaison with his constitutional
partners in the Congress in respect to for-
eign policy."
There was consultation constantly with
Congress. In some few instances, Republi-
cans did not agree with subsequent policy,
and in even fewer instances felt they had
not been consulted enough. But, by and.
large, they had full voice in both shaping
and execution of policy.
Today neither participation nor consulta-
tion.exists. That lies at the base of current
squabbling. It is responsible for the feeling
of top Democrats that they are being ig-
nored in foreign affairs and defense poli-
cies-areas vital to them not as Democrats,
but as Americans. It is responsible for
growing cries for fuller explanations.
The President is, as he says, President of
all the people. He will succeed in foreign
and military affairs only if he-consults with
the representatives of all the people. He
will succeed only if he returns to that old
The President has appointed far fewer and sound thesis that in foreign and military
of the opposition party to share the ad- affairs, policy must be bipartisan-in forma-
ministration responsibility of policymak-\ ?tion as well as in execution.
ing in foreign affairs and defense thaii/
Roosevelt and Truman did. The few Demur=
crats Eisenhower has appointed are largely
those who deserted their party in tie last
election-such as Governor Byrnes, df South
Carolina, who holds a United Natidns assign-
ment as a Democrat.
Further, the President has not consulted
Democratic leaders-including those in Con-
gress-in shaping major defense and for-
eign policies. No Democratic Senators ac-
company Dulles to international meetings, as
Republicans used to accompany Dean Ache-
son. No Democrats sat in on the New Look
defense policy or Secretary Dulles' massive
retaliation policy.
The administration demands support for
these policies-but apparently it must be
blind support. When Adlai Stevenson ques-
tioned the New Look, Defense Secretary Wil-
SECURITY RISKS IN GOVERMENT
AGENCIES
Mr. CARLSON. Mr. President, I ask
unanimous consent to have printed in
the body of the RECORD a letter which
I have received from Hon. Philip Young,
Chairman of the Civil Service Com-
mission, with reference to an article
which appeared in the Washington Eve-
ning Star of Last Tuesday. I also ask
unanimous consent that the article it-
self be printed.
There being no objection, the letter
and article were ordered to be printed
in the RECORD, as follows:
son brushed the questions aside with "I'm UNITED STATES
too busy," and the statement that he saw no CIVIL SERVICE COMMISSION,
reason to listen. Washington, D. C., March 25, 1954.
The President has irritably brushed Demo-
cratic questions aside and the Vice; Presi-
dent has called them divisive. If there had
been bipartisan consultation, these ques-
tions would have been more or less auto-
matically' answered. Yet to date neither the
Democrats nor the Nation have been given
clear explanations of what New Look or mas-
Hon. FRANK CARLSON,
Chairman, Senate Committee on Post
Office and Civil Service,
United States Senate.
DEAR SENATOR CARLSON: The Evening Star
for Tuesday, March 23, carried an article
written by Mr. L. Edgar Prina, which in-
dicated that the General Services Adminis-
tration in testimony before the House
a lead editorial calling for a return to This ignoring of the opposition party, Appropriations Committee listed a total of
bipartisanship in tl eWeWF I l~,[AERP 0857 1O&OOO4hat these were in-
No. 56-7
 3638
Approved r R*e 2002/05/06: CIA-RDP78-0 JWV
CONGRESSIONAL RECORD -SENATE March 25
eluded in the total of 2,486 security risks
which I submitted to your committee.
You will recall that when I appeared be-
fore the Senate Committee on Post Office
and Civil Service I furnished to that com-
mittee figures for each department and
agency of the Government showing the num-
ber of security risks that had been fired and
the dumber which had resigned where there
was derogatory information in the hands of
the agency pursuant to section 8 (a) of Ex-
ecutive Order 10450. That agency break-
down shows for the General Services Ad-
ministration 100 terminations and 50 resig-
nations. The additional 18 which made up
the total GSA figure of 168 were other types
of separations, including deaths. These 18
were not included in the figures submitted
to your committee or in the total of 2,486.
I called this to the attention of the Eve-
ning Star and on Wednesday, March 24, the
Star printed a retraction and regretted its
error. I attach a copy of the original story
and the retraction for your information and
that of your committee.
Sincerely,
PHILIP YOUNG,
Chairman.
DEAD PERSONS FOUND IN TOTAL OF 168 GSA
SECURITY RISKS- ONE on Two DIED DURING
INVESTIGATIONS-SUBVERSION HELD ISSUE IN
10 CASES
(By L. Edgar Prina)
General Services Administration's security
risks include dead persons.
This was revealed today with the release
of testimony given by the GSA security chief
to the House Appropriations Subcommittee
on Independent Offices last month.
Thus, 'a charge first made by the Star on
January 3 and subsequently denied by Chair-
man Young, of the Civil Service Commission,
has been confirmed.
In explaining to Democratic members who
were digging into the 1953 GSA figure of 168
security risk separations, Baron Shacklette,
Director of the agency's Compliance Division,
said :
"Those who were not terminated either
voluntarily resigned or died or were caught
In a reduction in force, or something of that
nature."
Representative COTTON, Republican, of New
Hampshire, interrupted: "You aren't count-
ing traffic violations in that total, are you?"
"No, sir," Mr. Shacklette replied. "Arson,
assault, burglary, crimes against the family
and children, aggravated disorderly conduct,
embezzlement, falsification of Government
documents, forgery, gambling, homicide, lar-
ceny, narcotic offenders, robbery, sexual per-
version. At the end of December we had 17
cases of sexual perversion against whom we
had issued security restrictions. Five rape
cases."
CORRECTION-YOUNG'S 2,486 TOTAL OF SECU-
RITY RISKS INCLUDED No DEATHS
Chairman Philip Young, of the Civil Serv-
ice Commission, in a letter to the Star has
pointed out that in testimony before the
Senate Post Office and Civil Service Commit-
tee concerning 2,486 security risks among
Government employees he did not include
dead persons in the 100 discharges and 50
resignations credited to the Government
Services Administration.
In a story printed in the Star yesterday it
was stated that General Services Administra-
tion security risks included dead persons and
that this charge previously had been denied
by Mr. Young. Yesterday's account quoted
Baron Shacklette, Director of GSA Compli-
ance Division, as testifying in response to
this question from Representative YATES,
Democrat, of Illinois:
"You mean of the 168 there is included
those who died while the investigation was
going on?"
"There were 100 terminations, 50 resigna-
tions for their own reasons, and 18 separa-
tions for other causes, among which there
would be reduction in force and 1 or 2
deaths."
Mr. Young in his testimony before the
Senate committee stated that the 2,486 secu-
rity risks included only those persons dis-
charged or those who resigned where deroga-
tory information was at hand. He presented
a breakdown of the figures which included
for GSA 100 discharges and 50 resignations.
The 18 other separations referred to by Mr.
Shacklette were not included.
The Star regrets the error.
ONE OR TWO DEATHS NEW MEXICO SENATORIAL
Representative YATES, Democrat, of Illi- ELECTION
nois, asked:
"You mean, of the 168 there is included Mr. ANDERSON. Mr. President, dur-
those who died while the investigation was ing the past few days I have received a
going on?" - great many requests from New Mexico
"There were 100 terminations, 50 reslg- for copies of the minority views dealing
nations for their own reasons, and 18 sepa- with the Chavez-Hurley election con-
rations for other causes, among which there test. So far as it is possible for me- to
would be reduction in force and one or two do so, I intend to comply with the re-
deaths," Mr. Shacklette replied. "I don't
know exactly how many." quests and to send to all persons
In testifying before the Senate Civil Serv- throughout New Mexico who request
ice Committee earlier this month, Chairman them copies of the minority views. The
Young denied that any deaths were included people of New Mexico have been very
in the 2,486 risks separated last year through- much interested in the matter, and they
out the Government. appreciate the thorough attention which
In 10 of the 168 GSA cases there was "an was given to it by Members on both sides
issue of disloyalty * * * or an issue of sub- of the Senate. I am going to send to res-
version," Mr. Shacklette testified. He said idents of New Mexico, so far as it is pos-
he did not think any one of the 10 was a Bible for me to do so, copies of the excel-
excel-
member of the Communist Party. lent brief prepared by the minority
ARREST RECORDS CITED member of the subcommittee, the distin-
Mr. Shacklette told the subcommittee that guished senior Senator from, Missouri
583 other persons had de ry information [Mr. HENNINGS]. I think it will be eos-
in their files as of December mber 31 and 144 of
the cases involved charges of disloyalty. All sible for the people of New Mexico who
were pending further investigation or ad- read that fine report to obtain a very
judication. satisfactory idea of the work which he,
The security officer gave this explanation together with other persons, did in the
of the high number.of security risk cases in preparation of the document.
GSA, which employs same 27,000 persons: 1 t f 1 I hope the people of New Mexico will
4 th
In B 1 a borin
h
REDUCTION OF EXCISE TAXES
The ACTING PRESIDENT pro tem-
pore. The Chair lays before the Senate
The Senate resumed the consideration
of the bill (H. R. 8224) to reduce excise
taxes, and for other purposes.
Mr. JOHNSON of Texas. Mr. Presi-
dent, the Senator from Georgia [Mr.
GEORGE] has asked me to announce to the
Senate that he desires to be recorded
against all amendments which may be
offered to the pending measure except
those which may be accepted by the
chairman, the distinguished Senator
from Colorado [Mr. MILLIKIN].
The PRESIDING OFFICER (Mr:
SCHOEPPEL in the chair). The bill is
open to further amendment.
Mr. KEFAUVER. Mr. President, I
want to speak briefly today with refer-
ence to a problem which is becoming
acutely serious in my home State of
Tennessee. It is concerned with the
dairy-farm situation.
Mr. MILLIKIN. Mr. President, will
the Senator from Tennessee yield?
Mr. KEFAUVER. I yield.
Mr. MILLIKIN. Is the Senator ad-
dressing himself to an amendment to the
excise-tax bill, or to another subject?
Mr. KEFAUVER. To another subject.
Farmers in my State are experiencing
the most drastic cut in income on rec-
ord. Let me give the Senate an example.
In January 1952 the farm value of a
milk cow in Tennessee was $181. In
January 1954 the farm value of that
same cow had dropped to $96.
Between those 2 periods total dairy
herds in Tennessee had increased, in
round numbers, by about 68,000 animals.
But the total value of those herds had
dropped by about $50 million.
Thus, the total investment of the dairy
farmers of Tennessee in herds alone has
dropped $50 million in a 2-year period.
That is the investment drop. What
about day-to-day income? Here the
picture is just as dark.
. In 1952 condensery milk was selling at
$4.98 per hundredweight. In 1954 the
prospective price is $3.57 per hundred-
weight.
In the Knoxville market class I milk is.
down '$1.40 per hundred pounds; in
Memphis the drop is $1.28; in Knoxville
it is $1.47; and in Chattanooga the drop
-has been $1.29.
Mr. President, this picture itself would
be serious enough-a drop in inventory
value of $50 milion in 2 years and a
20-percent drop in milk prices-but an
even more serious blow is aimed at the
dairy farmers of Tennessee-scheduled
for April 1, in fact.
The Secretary of Agriculture has an-
nounced a drop in support prices from
90 percent of parity to 75 percent of
parity as of that time.
Mr. President, this amounts to an ad-
ditional drop of 60 cents per hundred
pounds of milk to the farmers.
Mr. President, if anyone thinks the
g
ave a o o peop a
We
force. A large number of those people have be as interested in reading that report as dairy farmers of Tennessee are not con-
arrest records." Approved For Release cerned It the problem, they should
68 %W5/06 : CIA-RDP78-03578A000400060009-4
 Approved FS V2002/05/06': CIA-RDP78-0357 0c60009r4
CO GRESSI
N ONAL RECORD - HOUSE 3771
In their April 28, 1948, report to the to Panhandle Eastern $165 million and $330 Commission in a dilemma from which the
Senate and House, Commissioner Olds million. Court's January 18 change of mind has ac-
and Claude. L. Draper summarized this Assuming that the fields will sustain pro- corded them at least temporary relief. Ac-
control in these words: ' duction for 25 years, the group of 25 big cording to the Wall Street Journal of Janu-
holders of the acreage could count on an, ary 19, 1954:
1. Phillips Petroleum Co. Is the largest additional $60 million a year, with a 5-cent `The Supreme Court's decision to grant
holder of natural-gas acreage in each of the -increase and $120 million a year with a 10- a rehearing of the Phillips case brought a
fields, with 20 percent of the Panhandle field cent increase, and this does not include fig- feeling of relief not only to the company and
total and 15 percent of that in the Hugoton ures'for the much larger reserves in the the natural-gas industry generally, but also
field. It holds nearly one-sixth of the com- gulf coast area of Louisiana and Texas, in to the Federal Power Commission. The FPC
bined gas acreage in the two fields. which such corporations as Standard Oil of has been arguing all along that Phillips' sales
2. Stanolind Oil & Gas Co., a subsidiary New Jersey's Humble Oil, Electric Bond & should be regulated by the States, not the
of Standard Oil Co. of Indiana, comes second Share's United Gas Co., and- the Chicago Federal Government, and it had been reluc-
in the Hugoton field with 14 percent of the corporation have annexed great blocks of tantly preparing to take over a big new
acreage, and Panhandle Eastern Pipe Line natural-gas acreage. regulation job.'
Co. third with just under 10 percent. "This is a lifesaver for us," one high FPC
t"`.`".:""
As far as Tea d
e
River Gas Co.) control more than half of
the Panhandle field and, adding Texoma
Natural Gas Co. and Cities Service Gas Co.,
we find five companies controlling nearly
three-quarters of the acreage.
4. Seven companies (Phillips Petroleum,
Stanolind, Panhandle Eastern, Republic,
Cities Service, Northern Natural, and Skelly
Oil Co.) control considerably more than half
of the total Hugoton field, and, with the
addition of 3 others, we have 10 companies
in control of approximately two-thirds of
the enormous acreage in that field,
5. Considering the combined acreage of
the 2 fields, we find well over three-fifths
of the acreage controlled by 10 companies
(Phillips Petroleum, Stanolind, Cities Ser-
vice, Canadian River, Shamrock Oil, Repub-
lic, Northern Natural, Hagy, Harrington &
March, and Skelly Oil.).
It should be borne in mind that this
analysis does not include acreage which sonde
of these companies may control under long-
term contracts, being limited to ownership
of fee or leasehold.
The table has been extended to show what
increasing field prices will mean to the own-
ers of these very large acreages. This ex-
tension also gives some idea of what such
increases will cost the gas-consuming areas
over the life of the reserves. The extension
of the table is based on the arbitrary as-
sumption that the reserves are distributed
throughout the acreage at about 7,500,000
cubic feet per acre which produces total re-
serves closely approximating those presently
estimated for the 2 fields. The probabil-
ity is that these larger owners have taken
up the better acreage so that the figures,
if anything, probably underestimate the ad-
vantages which will flow to them.
On this'basis, the figures show that an
increase of 5 cents per thousand cubic feet
would add $2,100,000,000 to the potential
income from the fields over their-life. Of
this total, $1,616,450,000 would go to the
dominant interests listed in the table.
Similarly, an increase of 10 cents per thou-
sand cubic feet would provide additional
revenue over the life of the 2 fields totaling
$4,200,000,000, of which $3,232,900,000 would
go to the group of 25 large holders shown in
the table. These amounts are without ad-
justment for income taxes. For the pipe-
line companies alone this would mean an
increased take over the life of the fields of
more than $1 billion. Small wonder that
they have done their best to mobilize roy-
alty owners, small producers, and representa-
tives of the producing States in favor of a
change in the Federal Power Commission's
regulatory practice which will enable them
to gather in such a rich reward for having
bought gas reserves and leases at distress
prices from-people who otherwise had no
outlet for the gas.
To the Phillips Petroleum Co. alone a 5-
cent increase would mean ultimately about
$390 million and -a 10-cent increase $780
million. To Stanolind the corresponding
gains would be $225 million and $450 million;
rates. The present Commission has
been busy granting rate increases as fast
as ti can handle them. Barron's maga-
zine said last November 16:
Another significant development during
the third quarter of 1953 was the breakup
of the log jam of rate increases pending be-
fore the Commission, which at one time
exceeded $200 million. In a recent speech
FPC Chairman Kuykendall noted that the
Commission as of October 19 had 51 rate
cases still pending.
One significant feature of the settlement
of recent rate cases has been the evolution
of the conference methdd of reaching an
agreement, rather than long, drawn-out for-
mal hearings. The negotiation, or confer-
ence method was successfully used in recent
rate cases involving 'texas Eastern Gas
Transmission, which received two rate in-
creases amounting to $30.8 million; Ten-
nessee Gas Transmission for $77.9 million;
and Texas Gas Transmission for $10.5
million.
This brings me to the Phillips Petro-
leum case and the following section from
a Public Affairs Institute report:
The case arose out of petitions by the cities
of Detroit and Milwaukee, the county of
Wayne, Mich., and the State of Wisconsin
for an investigation by the Federal Power
Commission of the reasonableness of rates
at which Phillips Petroleum was delivering
gas to Michigan-Wisconsin Pipeline Co. for
resale to distributing companies in?Michigan
and Wisconsin. The Commission, as a pre-
liminary, undertook an investigation to de-
termine whether it had jurisdiction to regu-
late these rates.
The case was undertaken at the time\yhen,
following the United States Supreme Court
decision in the Interstate Natural Gas 'Co.
case, the natural-gas industry was moving' o
amend the Natural Gas Act to excl
d
u
e suc 15 minutes to the gentleman from Cali-
sales from Federal Power Commission regu-'
lation. The Commission
with Chair- \fornia fMr. MOsS].
in 1951
,
,
man Buchanan dissenting, decided, after con- v, MOSS asked and was given per-
tinued attempts to amend the act had failed, ssion to revise and extend his remarks
that Phillip
s Petroleum sales were a part of, ,and include extraneous matter.)
or incidental to, its production and gather-
ing of gas and, therefore, not subject t its
regulatory jurisdiction.
The Commission's decision was apjSealed by
the representatives of the consuming areas
and was reversed by the Circuit Court of
Appeals for the District of Columbia. The
United States Supreme Court first refused to
grant a writ of certiorari but has since re-
versed itself and agreed to hear argument in
the matter. This will lead to a final deci-
sion as to whether, under the Natural Gas
Act, sales of natural gas to interstate pipe-
lines by Phillips Petroleum and other inde-
pendent producers are subject to Federal
Power Commission regulation.
The Supreme Court's initial refusal to hear
further argument in the case, thereby affirm-
ing the decision of the lower court, was re-
ported to have placed the majority of the
was a horrible decision because it didn't give
us any guideposts. Now we can hope for a
ruling that'll give us some ground rules in
the event we still end up regulating these
sales."
"Successful conferences" and "life-
saver" announcements by the Supreme
Court of the United States are words
-that should be put down alongside those
by Senator DOUGLAS, of Illinois. He told
the other body on March 12 that it
would be hard to tell whether the de-
mise of the FFC's gas-regulatory power
was a case of murder or suic}de.
Any change from a cost to a fair field
price base would make regulation of nat-
ural-gas rates by the FPC an expensive
fraud. It would be expensive for all tax-
payers-note that the Commission is ask-
ing $1,680,000 for regulation and surveys,
natural-gas industry, this coming fiscal
year. It would be expensive for natural-
gas consumers-part of the money they
pay for natural gas would be used by the
pipeline companies to join in a little
ritual before the FPC. It would be a
fraud because there would be no regu-
lation of rates if they were based on the
fair field price, the highest monopoly
price the traffic will bear.
Far better we should discontinue the
pretense that the FPC is regulating
natural-gas rates. The consumer then
would not be suffering the delusion
that he is being protected against
exploitation at the hands of natural-gas
companies. Nor would we be calling
upon our taxpayers to foot a $1,680,000
bill for meaningless little rituals next
fiscal year.
Mr. ANDRF,S. Mr. Chairman, I yield
ing bill asks more than 151/2 millions
for the Civil Service Commission. Of
this amount, almost $3 million is for
the Commission's work in carrying out
the so-called employee-security program
set up by Executive Order No. 10450 last
year.
Let me make it clear that I believe-
and I am sure every Member of this body
agrees with me-that we should have
only loyal and trustworthy individuals
in our Government service. I would not
hire a Communist or a drunk to work
for me, and I do not think the United
States Government should employ such
individuals either. The necessity of an
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3772 CONGRESSIONAL RECORD - HODS March 29.
adequate program to secure that objec- immediate legislative action to prevent Throughout he showed a complete de-
tive is not and must not become a par- a recurrence of such infiltration. sire to frustrate me in the information
tisan issue. I am confident that no one Mr. McCORMACK. Mr. Chairman, - I was seeking. Before other committees
in this House-on either side of the will the gentleman yield there? I think probably witnesses who refused
aisle-will question the honest desire of Mr. MOSS. I yield to the distin- to give testimony have been accused of
Members to thoroughly examine such a guished gentleman from Massachusetts. resorting to the fifth amendment. I
vital program for the purpose of insur- Mr. McCORMACK. As I remember, wonder whether or not a similar com-
ing its effectiveness and improving its the gentleman in the White House parison could be made with respect to
procedures; and above all, keeping it frankly apologized to the American peo- Mr. Young.
from becoming a political football. ple, admitting that he made a serious tlem Mr. MOSS. Ia would sabefory th Hg n.
The previous administration set up the mistake.
original Federal loyalty program in 1947 Mr. MOSS. I think it is to his great Committee on the Civil Service, if it had
under Executive order No. 9835. In 1950, credit. He is the only one who has been before some committees of this
the 81st Congress set up procedures for apologized. Congress, might well earn him that label.
removing security risks from sensitive Mr. McCORMACK. It was the per- His first reaction to requests for infor-
agencies such as the Defense and State sonal counsel of the President. mation was the astonishing statement
Departments. The main feature of Ex- Mr. MOSS. That is correct. that he was "not interested in whether a
exutive order 10450 was to extend the If it were not true, then equally vig- person was discharged for being disloyal
security risk removal provisions of the orous action was needed to prevent con- or for being drunk." He next took the at-
1950 law to nonsensitive agencies such tinuation of a slur which was,reflecting titude that the Civil Service Commission
as the post office. Since there was little unjustly on the loyalty of thousands of had neither the responsibility nor the
new in this, we might have expected the patriotic Government workers. We authority to furnish information about
the program to Congress. He implied in
security program to continue working as have been trying for months to find out letter that no breakdown report on the
quietly and effectively as it had done in whether any suspected. spies, saboteurs, a been made breakdown the National
the past. traitors, or Communists have been un- aproogrityram had ad bebee but after National
The announced objectives of Executive earthed in our Government and, if so,
Order No. 10450 were to insure loyal and what has been done to remove them. questioning admitted under oath that a
trustworthy employees in the Govern- To this day, the officials in charge of report and breakdown had been fur-
ment, and to provide fair, impartial and the security program have been either nished to that agency as far back as
equitable treatment for Government em- unwilling, unable, or under orders not October 22, 1953. He continually praised
ployees. to furnish this information to the Mem- provisions in the 1950 law for protection
No one could quarrel with the stated bers of Congress. of employees, without mentioning that
goals of the President's security pro- under his administration very few, if
Philip Young, Chairman of the Civil any, of those involved had been given an
gram. But the noblest statement of Service Commission, is charged with a opportunity to use the provisions or even
purposes is meaningless unless trans- major share of responsibility for the knew they were being charged with any-
lated into action. And, unfortunately, operation of this program. He has been thing.
in this case performance falls far short a particularly uncooperative and evasive Congress got practically no coopera-
of promises. source of information. tion from the administration in its ef-
rit is obvious by now that to d date, new secu- Mr. YATES. Mr. Chairman, will the forts to learn the truth, but many of the
has utterly da administered aheve its a , gentleman yield? country's newspapers-many Republi-
and Mr. MOSS. I yield to the gentleman can-performed a notable public service
tised has y of failed t assuring to o fair, achieve impartial, and
equitable treatment to Government em- from Illinois. in digging up the facts. And the facts
ployees. And after months of effort, Mr. YATES. I should like to point show very plainly why the officials re-
committees of this Congress have been out, in confirmation of what the gentle- sponsible for this "numbers game" do not
unable to obtain the simplest and most man is saying, certain portions of the want it exposed to the light.
basic information to reassure them that hearings on the Civil Service Commis- The fact is that supposedly responsi-
the national security has been receiving sion before our Appropriations Subcom- ble administration officials have perpe-
any better protection than have the rep- mittee; for dxample, on page 1018. I trated what, in my opinion, amounts to
utations of our Federal workers. asked Mr. Young, who is Chairman of a deception upon the Congress and the
The demoralization of the security the Commission, how many of the em- people. All the totals so far released of
program had, its inception in the an- ployees who were considered security alleged "security risks" are inaccurate
nouncement by the White House last risks had been investigated. He said he and entirely meaningless.
October that 1,456 security risks had been did not know, his records did not indi- Executive Order No. 10450 and Public
separated from Government under the cate. I asked him whether he would Law No. 733 provide mandatorily that
new program, with the added statement supply it for the record and he said: persons accused as security risks must be
that all but 5 were holdovers from- the I believe we would prefer not to, Mr. YATES, notified of the charges against them and
previous administration. as part of the breakdown under this security given an opportunity to reply. If an in-
I will not evaluate the intentions of order. dividual is a security risk, then he must
those who made that announcement, but I asked the same thing on page 1024, be evaluated and removed under the pro-
the Washington Daily News said edi- and he said that he did not have that cedures of the order. That is the only
torially that "there can be no doubt that information compiled. possible way in which an individual can
the idea was to use the security program I said: legally be declared a security risk.
for political purposes." Can you supply it for the record? Philip Young has admitted under oath
Spokesmen for the majority party that the great bulk of persons he calls
promptly seized upon this announce- And again he said : security risks were never evaluated as
ment as proof that 1,456 Communists or We would prefer not to, security risks at all, but left the Govern-
traitors or subversives had been removed I asked him the same question sub- ment under normal civil-service proce-
from Government jobs. Among their sequently in the record. I said: duets. As an example, Mr. Young claims
spokesmen making this interpretation of that during 1953 he found 117 security
the number 1,456 were a member of the Is there a relationship between the 3,200 risks in the State Department, 52 in the
figure and the 2,200-figure announced by the Treasury Department, and 150 in the
White House staff, a Governor, and at President of the United United States? ${1
least one Cabinet member. General Services Administration. t
Like other Members of Congress who And Mr. Young replied: responsible officials from each of those
are concerned with problems of our civil There might or might not be. agencies have testified during appropria-
service, I was deeply disturbed by the I asked : tion hearings in direct contradiction that
1,456 announcement. If it were true ram asking now whether there is. during the same period they did not sep-
that 1,456 spies or disloyal persons had arate one single individual as a security
been found in our Government, then we And Mr. Young replied: risk under the full procedure set up by
had a very serious sitt f.(5Vf Refed?SV ' 105/06 : CIA-RDP78-03 fiW86b?6V6 b0"9 -
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1954 ONGRESSIONAL RECORD -HOUSE
Many so-called security risks do not
know to this day that they have been so
tagged by-Mr. Young. Some are still
working for the Government. The State
Department security officer admitted
that he reported as security risks 291
persons who merely transferred to an-
other agency.
Charges that the numbers 1,456 and
2,200 represented mostly spies or traitors
have been completely refuted. If Mr.
Young has turned up even one actual
subversive he has presented no evidence
of it. But of all the prominent majority
party spokesmen who made these false
accusations, to my knowledge only one
has been man enough to apologize
publicly.
Now, in response to months of de-
mands for basic information ? on the
security program, Mr. Young has come
up with another meaningless figure. His
intention, of course, can only be to at-
tempt to further confuse the Congress
and the public in the hope that he can
hide his errors by further use of mean-
ingless and worthless totals.
Mr. Young has given us no informa-
tion showing how many people, if any,
have actually been declared security risks
under proper legal procedures. He will
not tell' us whether we have any spies,
subversives, or Communists in govern-
ment.
But he has come up with another in-
stallment in the numbers game. He has
picked the number 429 from somewhere
and he says it represents individuals who
left the Government in whose files he
was able to locate "information indicat-
ing, in varying degrees, subversive activ-
ities, subversive associations, or member-
ship in subversive organizations." To
understand the significance of this figure
we might compare it to courtroom pro-
cedure. If he were a district attorney,
Mr. Young would be announcing that
he had secured 429 convictions, when,
in fact, he did not have 429 convictions
or even 429 indictments, but only 429
charges on which action might or might
not be taken, ranging all the way from
serious accusations to idle gossip.
As an example, unsubstantiated accu-
sations of subversive association have
been made against former Ambassador
Arthur Dean, and presumably went into
his file. Mr. Dean has since resigned.
I do not believe Mr. Dean is a security
risk, but with that information in his
file I can only assume that Mr. Young
has him so listed. And if Secretary of
State Dulles ever resigns, his former
associations with Alger Hiss would like-
wise undoubtedly win him a place on
Mr. Young's list of totals.
The most serious part of the whole
business is that Mr. Young, with a large
backlog of present employees not yet in-
vestigated, has had security officers neg-
lecting the important work to search
dead personnel files for information
which is useless for any purpose except
an attempt to save face and becloud the
real facts.
Apparently it is going to be official pol-
icy to continue to play this "numbers
game." Mr. Young told the Congress re-
peatedly that no one knew how many of
the alleged security risks were holdovers
from the previous administration. But
only a few nights later, on TV, the offi-
cial spokesman of the majority party
said that, the majority of the 429 were
holdovers. Must we assume that Mr.
Young is furnishing, for political pur-
poses, information he will not give to
the Congress for the protection of the
national security?
The Congress has a right to know what
is being done to protect our national se-
curity by insuring loyal and trustworthy
Government employees. I, for one, am
serving notice that I do not intend to
rest until we get some responsive and
meaningful answers.
Under the present security program,
the Civil Service Commission is charged
with grave responsibilities for protection
of the national security for maintaining
employee morale. It is obvious that the
Commission, under Mr. Young's guid-
ance, is devoting a great deal of time and
effort to playing questionable politics
with the security program.
Congress has been unable to obtain
any information which would reassure it
that such preoccupation has not injured
the national security. Unless there is a
marked change in the present unwilling-
ness of the Civil Service Commission to
cooperate in trying to insure the effec-
tiveness and improve the procedures of
the security program; I respectfully sug-
gest that the Congress should give seri-
ous consideration to transferring the
Commission's duties under the program
to some other agency which will take a
more responsible attitude.
WHITE HOUSE ANNOUNCEMENTS
Excerpt from President Eisenhower's
state of the Union message on Febru-
ary 3, 1953, outlining the purposes of the
security program he intended to propose:
All these measures have tvJb clear pur-
poses: Their first purpose is to make certain
that this Nation's security is not jeopardized
by false servants. Their second purpose is
to clear the atmosphere of that unreasoned
suspicion that accepts rumor and gossip as
substitutes for evidence.
October 23, 1953:
White House announced that 1,456 Gov-
ernment workers either had been dismissed
or had resigned while facing action against
them in the new Federal employee security
program which became effective May 27.
The announcement said that 863 employees
were dismissed up to September 30 and that
593 resigned.
"In all of the resignation cases," it was
announced, "the agencies and departments
had unfavorable reports on these employees."
James C. Hagerty, press secretary, added the
information that only 5 of the 1,456 were
persons given jobs under the Eisenhower ad-
ministration on an interim basis pending
investigation. Mr. Hagerty said he thought
individual agencies might announce their
part of the total later. (Washington Post,
Oct. 24, 1953.)
January 7, 1954: President Eisenhower
announced in his state of the Union
message:
Under the standards established by the
new employee security program, more than
2,200 employees have been separated from
the Federal Government. (From the official
text.)
3773
EXAMPLES OF MISUSE OF FIGURES
November 7, 1953: The New York
Times carried this headline at the top
of its back'page: "United States Aide
Reports-One Thousand Four Hundred
and Fifty-six Reds Ousted."
Under a Newark dateline from.a spe-
cial correspondent, this lead paragraph
followed:
NOVEMBER 6.-Bernard M. Shanley, special
counsel to President Eisenhower, deviated
from the text of a prepared address today to
observe that "1,456 subversives had been
kicked out of Government jobs since the
President assumed office."
November 25, 1953: Senator JOSEPH R.
MCCARTHY, Republican, Wisconsin, spoke
on a nationwide radio hookup. One
paragraph of the text was as follows:
For example, the new administration in
the first 10 months in office, has gotten rid
of 1,456 Truman holdovers who are all secu-
rity risks, and over 90 percent of the 1,49
security risks were gotten rid of because of
Communist connection and activities or per-
version. One thousand four hundred and
fifty-six, I would say, is an excellent record
for the time President Eisenhower has been
in office. (From full text in U. S. News &
World Report.)
On a later Meet the Press program;
December 13, Senator MCCARTHY again
said that 90 percent of the number dis-
charged "for Communist activities and
perversion" ran "over 90 percent"-from
NBC transcript.
December 16, 1953: Gov. Thomas
Dewey, in a speech at a $100-a-plate
Republican dinner at Hartford, Conn.,
referred to the issue in this paragraph:
The Democrats are also afraid that the
American people will discover what a nice
feeling it is to have a Government which is
not infested, with spies and traitors. In less
than 11 months the Department of Justice
has discovered and dismissed 1,456 security
risks planted in the Government of the
United States under Democratic administra-
tions. (From New York Times text.)
January 21, 1954: Postmaster General
Arthur Summerfield, addressing the
New York City Industrial Conference
Board, declared:
Almost 2,200 people who were security
risks are no longer using up your tax money.
I am here to tell you we are not hiring any
new ones. Somehow I do not feel too ami-
ably inclined toward people who make
treason a preoccupation. (From the Post
Office Department release.)
[The Eisenhower team has] "gotten rid
of nearly 1,500 Communists, fellow travel-
ers, and ther ilk, whom the Trumanites had
left in office."
"Under Truman, American taxpayers were
providing salaries and expense accounts for
hordes of spies, saboteurs, and fellow travel-
ers. Now they are not." (From leaflet put
out by Carlton G. Ketchum, national finance
director of the Republican National Com-
mittee.)
GOOD WORK BY THE PRESS
December 21, 1953: The Washington
Daily News began a series of eight articles
disclosing individual cases of persons
fired or charged under the security pro-
gram. The cases described included a
woman charged with bearing a baby less
than 9 months after marriage, 10 years
ago to her present husband, a man who
failed to note on his job application that
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3774
CONGRESSIONAL RECORD - HOU March 29,
he was in an Army psychiatric ward dur-
ing the war, and a man who had not yet
gotten his job back although he had
been cleared by his hearing board and
ordered reinstated. The author's con-
clusion was that the system was "not
working perfectly" for the individual or
the Government.
January 1, 1954: The Washington
Post, in a column by Murrey Marder,
declared that the administration, "in its
zealousness to show that it has been
cleaning security risks out of Govern-
ment," has prpduced "a set of statistics
which has been transformed into a seri-
ously distorted political issue."
January 5, 1954: The Washington
Evening Star declared editorially that
the Civil Service Commission "owes the
public a full explanation of how this
total was arrived at and what it covers."
January 3, 1954: The Washington
Evening Star, in a three-column review
of its efforts to analyze what its reporter,
L. Edgar Prina, called "an almost mean-
ingless figure," said that it appeared
that the figure, 1,456 included persons
who never were fired or forced to resign,
as the White House announcement im-
plied, but who instead were separated
through voluntary resignations, reduc-
tions in force-even by death-without
ever knowing they had been accused of
anything.
The Star story also reported that the
Navy had originally prepared a release,
announcing 8 persons fired and 12 sus-
pended as security risks, but after learn-
ing that the Civil Service Commission
had counted the Navy for 192 of the
1,456, the Navy announced the separa-
tion of 192 persons "against whom a se-
curity question existed."
The Star said the Air Force rebelled
against conforming to the "official" fig-
ure and canceled a release on the sub-
ject.
January 17, 1954: A Washington Post
editorial declared that-
These 2,200 separations thus do not afford
any meaningful index to the administra-
tion's security vigilance.
It looks- -
The editorial continued-
as if the President has been handed a phony -
figure. We wish he would' demand a break-
down of it and give the results of that break-
down to the public.
January 28, 1954: Regarding President
Eisenhower's expressed concern over an
unjustified stigma on persons dis-
missed, the Washington Post declared
editorially:
One reason the administration is reluctant
to break down the figures, it may be inferred,
is that few of the 2,209, cases -involve actual
or suspected disloyalty (and that the total
includes some perfectly routine departures).
* * * The stigmatizing which worries the
President has been intensified by the admin-
istration itself, and disclosure, rather than
buckpassing, is the way to correct it.
rooting them out under the [new] security
program * * * that this no longer can be
considered a serious menace. - Asyou already
know, about 1,500 persons who were security
risks already have been removed."
Others went much further. Some of their
statements are detailed in Anthony Lewis'
article on this page. There can be no doubt
that the idea was to use the security pro-
gram for political purposes.
That was a bad idea for the country, and
in the end for the politicians themselves.
With one exception none of the Republi-
cans who made the false political claims has
been man enough to admit that he was, to
put it charitably, mistaken.
But by now everyone from the White House
down must realize that the full truth would
have been best from the start, which is what
this newspaper has been hammering at since
our story on December 7, 1953, the first in
any newspaper to call attention to the dis-
crepancies in party leaders' statements.
Of course, even one subversive in Gov-
ernment is one too many, but it isn't neces-
sary to smear the entire Federal service with
deliberately distorted versions of its condi-
tion in order to clean up the dirty spots,
and keep the service clean.
[From the Washington Star of March 10,
19541
YOUNG CAN'T ACCOUNT FOR HAGERTY FIGURES
ON SECURITY OUSTERS
Chairman Young, of the Civil Service Com-
mission, today said he has no idea where
White House Press Secretary James C. Hager-
ty got his information that all but 5 of the
first 1,456 security risks separated were Tru-
man administration holdovers.
Under questioning by Democratic mem-
bers of the Senate Civil Service Committee,
Mr. Young stated that the CSC never sup-
plied such information at any time. He
added that statistics on who hired the se-
curity risks have not been kept by the Com-.
mission.
[From the Washington Star of March 11,
1954
ADMINISTRATION DOESN'T KNOW SCORE IN ITS
"NUMBERS GAME"
The security risk "numbers game" was in
such a state of confusion today that admin-
istration spokesman found themselves at
odds even as to who had told what and to
whom.
Testifying at a Senate hearing yeesterday,
Chairman Philip. Young of the Civil Service
Commission said that he had no idea where
James Hagerty, White House press secretary,
got his information that all but five of the
first 1,456 Federal employees dropped as se-
curity risks were Truman holdovers.
He added that such information definitely
did not come from Civil Service Commission
because no such statistics had ever been kept
there.
TWO VERSIONS
In answer to a query from the Star, on the
other hand, Mr. Hagerty said he got his data
from the Civil Service Commission. In-
formed of Mr. Young's statement, he said
that still was his best recollection.
"I didn't pick the figure out of the air, I
know that," he said.
Mr. Young could not be reached immedi.
ately for further comment.
Mr. Hagerty made his original statement
about Truman holdovers at a press confer-
ence last October 23 when the White House
announced results obtained in the first 4
months of the security program.
MR. YOUNG'S COMMENT
net member," and "a Communist-hunt- the 1954 elections. - Long before then, this The Washington Daily News, in John
ing Senator" with the observation: administration will have made such progress Cramer's column on January 15, quoted
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The facts do not support or provide any
excuse for these exaggerations. They are
careless, irresponsible, and purposeful. Most
who indulge in them are too bright not to
know what they are doing.
February 3, 1954: Joseph C. Harsch,
special correspondent to the Christian
Science Monitor discussed the risk situa-
tion and commented:
The administration is caught between the
presidentially recognized injustice to many
innocent individuals and the presidentially
recognized monstrosity of a Republican ad-
ministration clearing Democrats of charges
pinned on them by Republicans.
February 4, 1954: the Washington
Post, in an editorial, said that an ad-
ministration breakdown of its security
program figures, if it comes, should pro-
vide the following information: .
The number of cases in which charges
relating to loyalty were presented to the
employees; the number in which adverse
findings were made after hearings held in
accordance with procedures prescribed under
the new security program; the number
cleared after hearings; the number who re-
signed without having any charges filed
against them and without any knowledge
that they were the subjects of suspicion;
the number whose dismissal or resignation
entailed allegations of unreliability or un-
suitability on grounds .vbolly unrelated to
loyalty.
[From the Washington Daily News of March
5, 19541
CLEANING THE RECORD
The murky tabulations of security risks
issued by the administration were not fully
explained by the several statements of Civil
Service Chairman Philip Young to congres-
sional committees this week. But Mr.
Young did clear up two important miscon-
ceptions about the risks:
The false idea that most or all of the
security risks listed by the administration
so far were traitors, subversives, Commu-
nists, or something of the kind.
Mr. Young's figures show that only about
17 percent of those rated as security risks
by the administration had any substantial
information relating to subversion in their
personnel files when they left the Govern-
ment.
Even that does not mean all 17 percent
were subversives, Mr. Young emphasized.
Many resigned without knowing of the
charges and having a chance to explain;
others were fired for entirely different rea-
sons. Few, it is clear, wept through all ap-
peal procedures and were finally dismissed as
subversives.
The false idea that the new administration
security program was responsible for remov-
ing all the listed risks, whether they were
subversives or merely alcoholics or blabber-
mouths.
W. Young's figures show that more than
half of some 2,429 persons listed as risks
resigned, many voluntarily and without hav-
ing been informed of the charges. And of
those fired, Mr. Young said, "the great bulk
were separated under regular civil-service
procedures"-not the new security program.
These two misconceptions developed es-
sentially from some-not all- Republicans'
attempt to make political capital out of the
situation.
February 1, 1954: Roscoe Drummond, President Eisenhower himself left an er-
of the New York Herald Tribune, quoted roneous impression in a prepared statement
the statements on security risks by "a (doubtless prepared for him by somebody
politically minded member of the White else) at his December 2 press conference:
House staff," "a Fear of Communists actively politically minded Cabi- ing our Government will not be an issue in
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1954. NGRESSIONAL RECORD - HOUSE
Chairman Philip Young, of the Civil
Service Commissions
I, as a taxpayer, am not interested in
whether a person was discharged for being
disloyal or for being drunk, and I don't think
the average person is. They just want to
know that we are getting rid of this type of
person on the Government payroll.
CORRESPONDENCE WITH MR. YOUNG
After more than 2 months, the ques-
tions asked still remain unanswered.
JANUARY 15, 1954.
Hon. PHILIP YOUNG,
Chairman, Civil Service Commission,
Washington, D. C.
DEAR MR. YOUNG: As you are no doubt
aware, wide publicity has been given to fig-
ures from the Civil Service Commission indi-
cating 1,436 Government employees had
been removed as security risks under the new
personnel security program. Recently this
number has been raised to 2,200.
The Executive order setting up the new se-
curity program defines as "security risks" all
Government employees guilty of espionage,
subversive activities, or unauthorized dis-
closure of security information as well as
those who are members of subversive organ-
izations or associated with subversive persons.
In addition, under the new order, Govern-
ment employees may be classed as security
risks if their behavior is unreliable or un-
trustworthy, if they have had personal
habits such as immoral conduct or addiction
to alcohol, if they are sex perverts, or if there
is any reason to believe they may be subject
to coercion or pressure from those attempting
to undermine our national security.
No breakdown has been made showing the
number of employees discharged because of
questionable loyalty and the number classed
as security risks for other reasons. The total
number of discharged employees has been
used by many persons in a manner that sug-
gests all, or nearly all, of these employees
were discharged because of disloyalty to the
United States.
If we had 2,200 spies or unquestionably dis-
loyal persons in our Government last year, it
is a very serious situation calling for legis-
lative action amending civil service laws on
hiring and firing of security risks. We must
make sure our laws are strong enough to pre-
vent a recurrence of the deplorable situation.
If, however, the majority of the 2,200 per-
sons classed as security risks are loyal Amer-
icans, we need to take equally vigorous action
to prevent repetition of a slur which reflects
unjust doubt on the loyalty of thousands of
patriotic Government employees.
As a member of the House Committee on
Post Office and Civil Service, which has the
duty of considering legislation affecting Gov-
ernment workers and the civil service system,
I wish a thorough report on the Government
loyalty question. Therefore, I request that
you furnish to me as soon as possible the
following information regarding the 2,200
persons removed from Government employ-
ment as security risks:
1. How were the figures compiled showing
1,456, and later 2,200, security risks were re-
moved from Government employment?
(a) Were all of the 2,200 persons involved
informed of the charges against them and
given an opportunity to appeal before being
removed?
(b) How many of the 2,200 persons were
discharged and how many, if any, resigned?
(c) Are any of the 2,200 persons still em-
ployed by the Government?
2. How many of the 2,200 persons were
removed because of questionable loyalty?
(a) How many, if any, had committed es-
pionage, sabotage, or treason?
(b) How many, if any, were members of
the Communist Party?
(c) How many were removed on other
loyalty grounds such as associating with sub-
versive persons?
3. How many of the 2,200 persons were
removed for reasons not involving loyalty,
such as bad personal habits, excessive drink-
ing, or the possibility of being subject to
coercion?
4. How many of the 2,200 persons had
been cleared by a previous loyalty board?
I am sure you will agree Congress must be
fully informed in order to carry out its duty
of enacting necessary legislation.
I would appreciate immediate acknowl-
edgment of this letter informing me
whether I will receive the information re-
quested and when it will be forthcoming.
Thank you very much.
Sincerely,
UNITED STATES CIVIL
SERVICE COMMISSION,
Washington, D. C., January 19, 1954.
Hon. JOHN E. Moss, Jr.,
House of Representatives.
DEAR MR. Moss: I have received your letter
of January 15 inquiring about the employees'
security program and asking various ques-
tions with respect to it.
Under the provisions of Executive order
10450 establishing this program the heads of
the individual departments and agencies are
specifically responsible for the matter of se-
curity in their own agencies. In addition,
the Civil Service Commission has certain
responsibilities enumerated in the order con-
cerning the maintenance of a security index,
compilation of lists of employees to partici-
pate as members of hearing boards, as well as
certain reporting functions given in section
14 requiring the Commission to render in-
formation to the National Security Council.
The Civil Service Commission has neither
the responsibility nor the authority to re-
lease any information that it may possess
concerning the employees' security program.
It expects to render a report to the National
Security Council in a few weeks and I would
assume that, at that time, the National Se-
curity Council and the White House would
arrive at some determination as to what in-
formation might be released on the details
of the program.
Please be assured of our very sincere in-
terest in your inquiry, and I shall be very
glad to sit down and talk with you about
this further if you so desire.
Sincerely,
PHILIP YOUNG,
Chairman.
JANUARY 26, 1954.
HOIn. PHILIP YOUNG,
Chairman, Civil Service Commission,
Washington, D. C.
DEAR MR. YOUNG: Your letter of January 19,
if I understand it correctly, takes the posi-
tion that the Civil Service Commission has
the information I requested but is not au-
thorized to furnish it to me.
I do not understand your contention that
the Civil Service Commission has no author-
ity to furnish the information requested. I
know of no law or executive order prohibit.
ing an executive department from furnish-
ing such information to a Member of Con-
gress, and you do not cite any such law or
Executive order in your letter.
I am aware of the Presidential directive
of March 13, 1948, forbidding release of con-
fidential files relating to loyalty investiga.
tions without express permission of the Pres-
ident. I agree with this order and recog.
nize its necessity in order to protect Gov-
ernment personnel against the dissemination
of unfounded or disproved allegations. This
order does not, of course, apply to the pres-
ent situation. I have not asked for confi-
dential files of investigative reports. I do
not seek the names of individuals nor the
identity of informants. With one excep-
tion-a request for an explanation of the
manner in which the total was compiled-
every question I asked could be answered
by a simple yes or no, or by a number.
Under section 13 of Executive Order 10400,
the Attorney General is charged with advis-
ing departments and agencies on the em-
ployee-security program. According to press
reports, the Attorney General stated on Jan-
uary 21 that it is up to the Civil Service
Commission to decide if any breakdown of
the security-risk figure should be released.
In my letter of January 15, I stressed the
fact that Congress must be fully informed
so that it may enact whatever legislation is
needed to protect the national security. The
need for a clarifying statement on loyalty
firings and on dismissals for other reasons
is obvious to me. There is a great differ-
ence between dismissing 2,200 persons for
drunkeness, which would call for an exten-
sive temperance program in the Federal
service, and the dismissing of 2,200 Govern-
ment workers for acts of disloyalty which
should call for drastic action to counteract
a major threat to the security of our country.
There is another compelling reason for
prompt clarification of previous statements
on the employee-security program. The ad-
ministration has already made public an-
nouncement of the number of security risks
removed from the Government. The num-
bers 1,436 and 2,200 have been repeatedly
used in ways suggesting all, or nearly all, of
these persons were disloyal to the United
States. The responsible officials have refused
to give further information to either refute
or confirm those charges. This attitude has
helped to foster unjust and entirely unwar-
ranted suspicion of many persons who left
the Government voluntarily or were dis-
charged for economy reasons. The whole sit-
uation inevitably injures the morale of civil
service workers and undermines public con-
fidence in our Government.
In your capacity as Chairman of the Civil
Service Commission-the agency most direct-
ly concerned with assuring fair play to career
Government workers-I should think you
would feel some responsibility for repairing
the damage caused by misunderstanding and
distortion of information furnished by the
Commission. I frankly do not understand
your apparent reluctance to take corrective
action.
You refer in your letter to the possibility
of information being available after the next
report by the Civil Service Commission to the
National Security Council. In view of the
fact that the first report was made on Oc-
tober 22, 1953-3 months ago-it is reason-
able to assume you should be in a position
to decide policy at least to the extent it ap-
plies to that original report and take im-
mediate steps to release the requested break-
down. Failure to do so must force me to the
conclusion that your policy is to withhold
these facts from the public and the Con-
gress as well.
Sincerely,
UNITED STATES
CIVIL SERVICE COMMISSION,
Washington, D. C., February 18, 1954.
Hon. JOHN E. Moss, Jr.,
House of Representatives.
DEAR MR. Moss: I refer to our previous cor-
respondence concerning a breakdown of sep-
arations of Federal employees under Execu-
tive Order 10450.
Yesterday I called upon the heads of the
departments and agencies to furnish infor-
mation concerning these cases as outlined in
the attached statement.
Sincerely,
PHILIP YOUNG,
Chairman.
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CONGRESSIONAL RECORD - HOT March 29
[Press release, United States Civil Service It should be pointed out again that no it 'should' not be necessary to point out to
D C Wednes individual has a right to a Government job. you that these files often contain anonymous
t
on, . .,
Commission, Washing
day, February 17, 19541 Working for the Government is a privilege accusations which have no basis in fact
STATEMENT BY PHILIP YOUNG, CHAIRMAN, that a citizen must earn. He must meet whatever. This was strongly demonstrated
CIVIL SERVICE COMMISSION, CONCERNING IN- the standards required for his particular recently in some shocking and wholly
FORMATION ABOUT EMPLOYEE SECURITY PRO- assignment, whether under Civil Service, the groundless charges against Chief Justicb Earl
GRAM THAT WILL BE FURNISHED TO NATIONAL security program or any other criteria estab- Warren. Your request for the number of files
lished for and on behalf of the American having derogatory information in them
SECURITY COUNCIL people. might be helpful in showing how many per-
The basic objective of the employee secu- sons wrote anonymous letters accusing Gov-
rity program is to make sure that there is FEBRUARY 24, 1954. ernment workers, but it is of no value what-
no employee on the Federal payroll nor any DEAR MR. YOUNG: Thank you for your let- ever in showing what action the agencies
applicant appointed who can, because of ter of February 18. It does not answer the took on those accusations under Executive
his position, endanger the national security. questions asked in my previous correspond- Order 10450.
The American people must be assured that ence-in fact, it raises additional questions. It would almost appear that you are now
Federal employees are persons of integrity, I am pleased to note that you apparently trying to find something in enough files to
high moral character, and of unswerving loy- no longer contend as you did in your letter back up the figures which have been so
alty to the United States. This we have of January 19 that you are not authorized widely publicized and so strongly attacked
attempted to do. Today the head of each to release information on the employees' se- as erroneous.
department and agency is responsible for curity program. However, you still have not Your request for information Is so worded
the security of his agency. stated that you intend to release any infor- as to permit classifying in the same cate-
There are many criteria for determining mation. May I suggest that you make a gory persons guilty of treason and persons
the security reliability of employees. A per- prompt announcement stating just what in- who are unquestionably loyal but are unfor-
son not measuring up to those standards may formation you are going to release and when tunate enough to have a relative living be-
have voluntarily resigned his position or may you are going to release it. hind the Iron Curtain. I can assure you that
have been discharged. In either case he is no I am disturbed by your indication that you any breakdown which classifies actual sub-
longer on the Federal payroll in a job in called upon the heads of departments only versives with loyal citizens whose only fault
which he might endanger the national se- last week to furnish information concerning is having a suspected relative will neither
curity. To attempt a classification of these security cases. Executive Order 10450 be- satisfy nor deceive Congress.
persons by assigning a specific reason in came effective in May 1953, more than 9 You state in your press release that "To
each case for regarding the individual as months ago. Surely you are ad'are that sec- attempt a classification of these persons by
a security risk would be futile and mean- tion 9 (a) of that order directs the Civil assigning a specified reason in each case for
ingless. The criteria in section 8 (a) of Service Commission to establish and main- regarding the individual as a security risk
Executive Order 10450 are many and are tain "a security-investigations index cov- would be futile and meaningless." I find it
broadly stated. It is only the rare case ering all persons as to whom security inves- impossible to reconcile this statement witn
where any single criterion would be control- tigations have been conducted by any de- the procedures established by law for re-
ling. Many things must be and are taken partment or agency of the Government un- moval of security risks. The law (title 5,
into account, including in many cases the der this order." It also states that "the section 22-1 of the United States Code) pro-
job held and its relationship to the national security-investigations index shall contain vides: "That any employee having a perman-
security. the name of each person investigated" and ent or indefinite appointment, who is a citi-
The American people have been Informed "adequate identifying information concern- zen of the United States whose employment
from time to time that this program has ing each such person." In addition, section is suspended * * * shall be given after his
been making progress. Many hundreds of 9 (b) states that "the heads of all depart- suspension and before his employment it
persons whose files contained information ments and agencies shall furnish promptly terminated * * * a written statesment
giving cause for belief that such persons did to the Civil Service Commission informa- within 30 days after his suspension of the
not measure up to the security standards tion appropriate for the establishment and charges against him * * * which shall be
are no longer on the Federal payroll. Some maintenance of the security-investigations stated as specifically as security considera-
were discharged, and some resigned. Some index." tions permit."
of those who resigned undoubtedly knew of you must also know that section 14 (a) If the departments do not know the spe-
the derogatory information concerning of Executive Order 10450 directs the Civil cific reasons for classifying an individual as
them: others doubtless did not. Service Commission to "make a continuing a security risk, how can they notify that
A short time ago it was indicated that study of the manner in which this order is individual of the charges against him? And
a study would be undertaken to determine being implemented by the departments and if the departments are giving proper notice
whether it was feasible to make any class'- agencies of the Government" in order to to individuals of the specific charges against
fication of those who did not measure up to ascertain deficiencies in the program which them, why is that information not readily
the security standards. That study indi- tend to weaken the national security or deny available?
cates that a classification according to the individual employees fair, impartial and You are no doubt aware that a number of
particular reasons for regarding these indi- equitable treatment. Section 14 (b) directs persons in high positions have used the fig-
viduals as security risks would be neither all departments and agencies of the Govern- ures 1,456 and 2,200 in such a manner as to
feasible nor in the public interest. How- ment to cooperate with the Civil Service indicate that all or nearly all of these per.
ever, a classification according to broad cate- Commission in accomplishing this study. sons were discharged for disloyalty to the
gories of information in the individuals' files If you have complied with these provisions United States. Some of the persons making
is feasible. Accordingly, in order to make of Executive Order 10450, why is it neces- those charges are officials of the administra.
available to the National Security Council sary now to ask the agencies for this infor- tion itself.
as much information as can feasibly be as- mation? If you did not have this informa- As Chairman of the Civil Service Commis-
sembled about the program, I have called tion, how could you or any other official com- sion you have a definite responsibility for
upon the heads of the executive depart- pile the figures 1,456 and 2,200 which were dealing with problems affecting our Govern-
ments and agencies to analyze their security publicly announced? ment workers. It is hard to imagine any-
cases on the basis of the following types of As a member of the House Committee on thing more damaging to the morale of the
information contained in the files: Post Office and Civil Service, I believe it is my Government service than the present accusa-
l. Number whose files contained informa- duty to try to ascertain whether the new tions of widespread treason being made by
tion indicating, in varying degrees, subver- employee security program is properly safe- supposedly responsible officials.
sive activities, subversive associations, or guarding the national security and affording It is because of widespread misuse of these
membership In subversive organizations. individual employees fair and equitable
2. Number whose files contained informa- treatment. For this purpose, I asked ques- questionable figures that I now feel the facts
publi-
must be
tion indicating sex perversion. tions carefully drawn up to bring out the made known and be as widely
may
3. Number whose files contained informa- number of persons, if any, removed from sized in order that the American people e may
know how very few
tion indicating conviction of felonies or mis- Government jobs as spies, traitors or sabo- of their employees merit
demeanors. teurs under section 8 (a) 2 of Executive Or-
4. Number whose files contained any other der 10450 and to show whether the persons COUNTING TRANSFERS AS SECURITY RISKS
type or types of information falling within classed as security risks had been notified Excerpts from the testimony of Robert
the purview of Executive Order 10450, as of the accusations against them and given W. S. McLeod, Administrator, Bureau of
amended. an opportunity to defend themselves. Your Security and Consular Affairs, State De-
Heretofore the statistical data that the request to the departments for information
various departments and agencies have been seems to carefully avoid both of these vital copartment, House mmittee on Department Appropriations JSub US-of State,
furnishing to the Civil Service Commission questions. I hope this is not your intention. time and Commerce, January 25, 1954,
concerning the employee security program I note with interest that you do not ask 44
has not included any classification of cases the departments how many employees they page
either according to causes for regarding the have separated under the new security pro- Mr. McLEOD. ? * ? we have had a total of
individuals as security risks or according to gram. Instead you merely ask what kind of 590 separations on which a security question
Information about them. information is contained in personnel files. existed. That was from January 1, 1953, to
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1954 NGRESSIONAL RECORD - HOUSE
down as follows.
Transferred to other agencies, 291.
PROCEDURES OF 10450 NOT USED
Excerpt from testimony of Philip
Young, Chairman of the Civil Service
Commission, before the Senate Commit-
tee on Post Office and Civil Service,
March 10, 1954:
The third point I would like to make deals
with the protection granted to employees
under this program. For those persons whom
an agency head proposes to terminate under
the provisions of Executive Order No. 10450
the procedure calls for a statement of charges
and an opportunity to answer. A hearing
may be granted, if the employee so desires,
before a security hearing board composed of
three employees of other Government agen-
cies. The sample regulations, furnished to
all agencies by the Justice Department, and
adopted by agencies with some minor modi-
fications, provide that when a hearing is held
the employee will have the right to present
witnesses on his behalf and may cross-exam-
ine any witnesses offered in support of the
charges. The hearing board reports Its deci-
sion to the head of the agency who makes
the final decision. If the employee is termi-
nated, there is also provision for a determi-
nation by the Civil Service Commission, upon
the employee's request, as to whether the
former employee may be employed in another
agency.
Excerpt from the testimony of Robert
W. S. McLeod, Administrator, Bureau of
Security and Consular Affairs, State
Department, House Appropriations Sub-
committee on Departments of State,
Justice, and Commerce, January 25, 1954,
page 45:
SECURITY RISKS
Mr. McLEOD. * * * So far we have not
successfully finally completed the procedure
in a single case under this order.
On January 12 and February 8, 1954,
Elbert P. Tuttle, General Counsel of the
Treasury Department testified before
the House Appropriations Subcommittee
on the Treasury-Post Office Departments
to the effect that there had been 130 dis-
missals of security risks during 1953.
All 130 had been removed under Execu-
tive Order No. 9835. No security risks
had been removed under Executive
Order No. 10450.
Excerpt from testimony of Baron
Shacklette, compliance officer, General
Services Administration, House Appro-
priations Subcommittee on Independent
Offices, February 24, 1954, page 1646:
Mr. SHACKLETTE. * * * There have been
no separations after a'full hearing to date
in GSA. None of them has gone the full
route as provided in the Executive order.
WHERE DID THE VICE PRESIDENT GET HIS FACTS?
Excerpts from testimony of Philip
Young, Chairman of the Civil Service
Commission, before the Senate Com-
mittee on Post Office and Civil Service.
March 10, 1954:
Senator JOHNSTON. How many of this 2,400
that you are talking about have been hired
in Government since January 1, 1953?
Mr. YOUNG. I can't tell you that, Senator,
because i don't know how many have been.
* * * It would be an extremely difficult
figure to try to break out, because, again,
it means going back and looking at every
single individual case.
Senator JOHNSTON. I want you to give me
that, plus this: I want the percent that you
fired for that reason, that you have hired
since February 1, 1953-the percent. And I
want to know the percent that was working
for the Government prior to that time, and
the percent you have let go.
Mr. YOUNG. That would be a practically
impossible figure to get, Senator, without a
terrific amount of time and work, to attempt
to find out when each one of these indi-
viduals came on the payroll.
* * * *
Mr. YOUNG. As I have been pointing out,
Senator, it would be extremely difficult to
attempt to break down to 2,486 cases from
the point of view of determining as of what
date they actually came on the Federal pay-
roll. * * * It means going back through 2486
Individual files, which are scattered all over
the country, and in some cases, in other
parts of the world.
* * * * *
Senator COOPER. * * * Can you say
whether or not those 429 were in the Gov-
ernment at the time of Issuance of the Exec-
utive order? Is that known?
Mr. YOUNG. It is not known, Senator-
the date when any one of these individuals
was put on the payroll.
Excerpt from speech made by Vice
President NIXON as official spokesman of
the Republican Party, March 13, 1954:
Now, how has this policy worked?
Well, since May, when the policy was
adopted, fairly and effectively under this
program we have been weeding out indi-
viduals of this type; and to give you an idea
I have here a breakdown of the files of over
2,400 people who have left the Federal pay-
roll either by resignation or discharge under
this program since May, and the great ma-
jority of these, incidentally, were inherited
from the previous administration.
CONCLUSION
To any rational individual, the docu-
mentation above can lead only to com-
plete confusion. It is the best possible
evidence of the necessity for giving the
facts to the Congress and the public.
Mr. ANDREWS. Mr. Chairman, we
have no further requests for time.
Mr. PHILLIPS. Mr. Chairman, I yield
such time as he may desire to the gen-
tleman from West Virginia [Mr. NEAL].
(Mr. NEAL asked and was "given
permission to revise and extend his
remarks.)
Mr. NEAL. Mr. Chairman, I am in
hearty accord with the position taken
by the committee-that money advanced
by the Government for completing con-
struction of Tennessee Valley Authority
facilities should bear the same rate of
interest that the Government is required
to assume on bonds sold to the public,
since this is the only source of Govern-
ment's borrowed funds.
TVA power consumers have always en-
joyed cheaper power rates than those
prevailing in other areas of the Nation
whose taxpayers have borne the brunt
of the creation and maintenance of TVA
facilities.
Even now there is pending a commit-
ment of Government funds for the pur-
pose of canalizing the Green River in
Kentucky solely for the purpose of sub-
sidizing TVA's coal supply to fuel its
steam plants.
The Atomic Energy Commission's op-
erations at Oak Ridge may require more
power from time to time. If that is so,
3777
Government should encourage the crea-
tion of productive capacity to supply this
power for defensive purposes, but power
so supplied by this facility will be amply
paid for out of AEC funds furnished by
the taxpayers who reside in all parts of
the United States.
It is, therefore, only fair to the general
public that TVA assume the interest on
funds advanced by the Government at
the same rate paid by Government for
the purpose of securing moneys to be
loaned in this manner.
Mr. PHILLIPS. Mr. Chairman, I have
no further requests for time, and I sug-
gest the Clerk read the first paragraph
of the bill.
The Clerk read the first paragraph of
the bill.
Mr. PHILLIPS. Mr. Chairman, I
move that the Committee do now rise.
The motion was agreed to.
Accordingly the Committee rose; and
the Speaker having resumed the chair,
Mr. GRAHAM, Chairman of the Committee
of the Whole House on the State of the
Union, reported that that Committee,
having had under consideration the bill
(H. R. 8583) making appropriations for
the Executive Office and sundry inde-
pendent executive bureaus, boards, com-
missions, corporations, agencies, and of-
fices, for the fiscal year ending June 30,
1955, and for other purposes, directed
him to report it had come to no reso-
lution thereon.
ESTABLISHMENT OF THE UNITED
STATES AIR FORCE ACADEMY
Mr. SHORT. Mr. Speaker, I call up
the conference report on the bill (H. R.
5337) to provide for the establishment
of the United States Air Force Academy,
and for other purposes, and I ask unani-
mous consent that the statement on the
part of the managers be read in lieu
of the report.
The Clerk read the title of the bill.
The SPEAKER. Is there objection
to the request of the gentleman from
Missouri?
There was no objection.
The Clerk read the statement.
(For conference report and statement,
see proceedings of the House of March
25, 1949.)
The SPEAKER. The question is on
agreeeing to the conference report.
The conference report was agreed to,
and a motion to reconsider was laid on
the table.
RESIDENTIAL PROPERTY AT OAK
RIDGE, TENN.
(Mr. BAKER asked and was given
permission to address the House for 1
minute, to revise and extend his remarks,
and to include therein a telegram from
the president of the Oak Ridge, Tenn.,
Chamber of Commerce, and an editorial
from the Oak Ridger, the daily news-
paper published in Oak Ridge, Tenn.,
issue of Tuesday, March 16, 1953, en-
titled "Panama-Ridge Parallel.")
Mr. BAKER. Mr. Speaker, I have been
a Member of Congress a little over 3
years. During that time I have fre-
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3778 CONGRESSIONAL RECORD - HO March -29
quently urged upon the floor of the House
that the Atomic Energy Commission get
out of the business of being the landlord
to the thousands of residents of the
atomic city, Oak Ridge, Tenn.
As I stated here just a few days ago,
there have been many promises of a
disposal program for Oak Ridge, but so
far no performance, no-plan or draft
of a bill granting home ownership to
these thousand of citizens at Oak Ridge
and removing the stigma of a company
town from Oak Ridge has yet been
presented to Congress or made public.
I have received thousands of letters
and telegrams urging home ownership
for Oak Ridge. The following is a tele-
gram from the President T. L. Clines, of
the Oak Ridge Chamber of Commerce, of
March 25, 1954:
Oak Ridge Chamber of Commerce finds it
hard to reconcile delay in presenting prop-
erty disposal bill to Congress with the many
assurances received over past year. Greatly
concerned that further delay will block all
chances of passage this year. Every day's
postponement will make it just that much
harder to achieve your often expressed desire
for normalcy in city of Oak Ridge. Respect-
fully urge immediate presentation of pro-
posed legislation.
These fine citizens are justifiably im-
patient. I cannot too strongly urge the
Atomic Energy Commission, Bureau of
the Budget, and all other Government
agencies responsible for action to give us
immediate action so that these thou-
sands of fine persons who are working
tirelessly to save the United States from
destruction may be first-class citizens
and not tenants at sufferance of a Gov-
ernment landlord in a company town.
The following editorial from the Oak
Ridger, of March 16, 1953, portrays the
situation:
PANAMA-RIDGE PARALLEL
The current issue of Reader's Digest con-
tains an article about the Panama Canal.
It tells of the various factors that make the
canal extremely vulnerable to enemy attack
and reports on conditions about the canal
in general.
A part of the article struck home with us
particularly. It seemed, from this account,
that there's quite a parallel between the
canal government community and Oak
Ridge.
For example, consider these excerpts de-
scribing conditions there:
"When the first Americans went down to
the jungle in 1904 to dig the canal they
faced incredible dangers and hardships.
Special inducements such as free hospitali-
zation, 25 percent more pay than similar
Government employees in the United States
get, and the advantages of living in a tax-
free area were held out to lure these men
from the safety of their homes and jobs up
North. They were given to believe they were
establishing ndw homes where the oppor-
tunities they created would pass on to their
children.
"What has happened? At first they were
charged reasonable rents for the shacks they
inhabited-but rentals have been raised to
exorbitant levels. Today these termite-rid-
den barracks, neither modernized nor main-
tained in decent reg~~yn~}oq$ the visitor
from the North. Fre alffl Ition has
been taken away, and not long ago the
United States Government announced that
the 25 perAl fd4iffirential would also be
abolished rw
The Caes Y#Othin~ ~el er
which the American flag flies. rt is n( a
State, a Territory, a possession, a mandate,
or even a district, like the District of Co-
lumbia. You might say it is a kind of Indian
reservation where the inhabitants pay Amer-
ican taxes but have no vote; where the land-
lord owns all the tepees and the trading
posts-but the inhabitants can live there
only so long as they have jobs. If you are
retired or fired, you and your family are
shipped out immediately like refugees. You
are not permitted to buy or own a place to
live, and it doesn't matter how long or faith-
fully you have worked there, when your use-
ful days are over-out you go. * * *
"One oldtimer, recently retired after 45
years of faithful service, told me: 'The Canal
Zone was the only home I knew. But as
soon as my retirement papers came through
I was practically deported.' He added: 'We
oldtimers remember the ringing speeches of
Teddy Roosevelt, General Goethals, and
other great American leaders who assured
us that we were building a new homeland
for our children and our children's children.
Now there is sadness-even bitterness-in
our hearts. We oldtimers have a name for
this: Betrayal at the Ninth Parallel.' "
Reading this, and then glancing at the
calendar, makes us all the more impatient
that the Atomic Energy Commission, the
Bureau of the Budget, and Congress tell us
something positive quickly about the long-
long-promised property disposal program.
How much longer are we expected to be
patient? We don't want our similarities to
the Panama Canal to go any further than
they already have.
SPECIAL ORDER GRANTED
Mr. WILLIS asked and was given per-
mission to address the House today for
12 minutes, following any other special
orders heretofore entered.
THE HOUSING PROGRAM
(Mr. PATMAN asked and was given
permission to address the House for 1
minute, to revise and extend his remarks
and include his own individual minority
view on H. R. 7839.)
Mr. PATMAN. Mr. Speaker, the hous-
ing bill has been under consideration by
the Committee on Banking and Currency
for several weeks. The bill was reported
out last Friday night. When the bill
comes before the House on Wednesday
or whenever it shall be appropriate to
consider it, I expect to offer an amend-
ment to strike out all of title II which is
the title which would permit the raising
of interest rates from the traditional
spread of 11/2 percent above the long-
term rate to 21/2 percent, and also strike
out controls which would be reinstating
regulation (S).
INDIVIDUAL MINORITY VIEWS OF REPRESENTA-
TIVE WRIGHT PATMAN ON H. R. 7839
This housing bill As reported has more
harm in it than good. It would be better
to have no bill at all than to pass this bill
with all of its bad features.
The interest rate increase of 1 percent on
home mortgage loans is indefensible. On a
25-year home mortgage for $9,600, an increase
of one-half of 1 percent in interest means
$814 the borrower must pay, or 15 percent
more. This illustration is for an increase
of one-half of 1 percent, whereas the bill
provides for an increase of twice that much.
The financing plan of this housing bill
was referred to as a fraud and a hoax by an
important housing official, who stated it is
"completely and absolutely unworkable."
We have 12 million substandard dwelling
units in the United States. One-third of
our Nation is ill-housed. We need to build
2 million new homes each year for the next
10 years to provide decent housing in Amer-
ica. The administration has pr'ogramed less
than 1 million new starts for this year. The
home builders want to build 1,400,000 -homes
and recondition 500,000 more this year. The
mortgage bankers and landlords-who profit
from housing shortages-naturally want the
smallest number started this year.
CONGRESS DELEGATED MORE POWERS THAN
RETAINED
Twelve powerful men who have more con-
trol over the economic affairs of our country
than the United States Congress or the Ex-
ecutive were not brought before the com-
mittee or consulted on this important bill.
Their actions will determine whether this
bill or any other bill involving credit or
money will work.
Congress in delegating such enormous
powers to a small group has delegated more
powers that are necessary for an expanding,
dynamic, progressive economy than it has
retained for itself.
The cost and availability of credit and
money are determined in our national econ-
omy by the Federal Open-Market Committee.
This Committee,- operating under powers
granted by Congress, makes it possible for
money to be easy ar hard; to make interest
rates high or low; or to create a climate
that causes our Nation to progress or suffer
a depression.
The 12 men composing the Federal Open-
Market Committee consist of the 7 members
of the Board of Governors of the Federal
Reserve System and 5 representatives of the
Federal Reserve banks, each of whom is se-
lected by a board of 9 directors of the Fed-
eral Reserve bank he represents. The 9
directors consist of 6 members named by
the private commercial banks and 3 named
by the Board of Governors. A more correct
statement is the Federal Open-Market Com-
mittee consists of the 7 members of the
Board of Governors and 5 presidents of Fed-
eral Reserve banks who are obligated to the
private bankers for their selection.
A comparable situation would be created
if the railroad owners helped to fix freight
rates by having their representatives mem-
bers of the Interstate Commerce Commission.
The Federal Open-Market Committee can
hold interest rates short- or long-term at
any rate it desires.
Mr. Marriner S. Eccles was Chairman of
the Federal Reserve Board longer than any
other person. He was doubtless more fa-
miliar with every detail of the operations
of the Federal Reserve System than any
other person.
Mr. Eccles, in answer to questions-when
he was before congressional committees-
often stated that the Federal Open-Market
Committee had the power to determine the
availability of credit, interest rates, prices
of Government bonds, and other important
matters.
When Mr. Eccles was testifying before the
House Committee on Banking and Currency,
in March 1947-and while Senator - MIKE
MoNRONEY was then a Member of the House
and a member of the Banking and Currency
Committee of the House-a question was
asked by Mr. MONRONEY and an answer given
by Mr. Eccles, as follows:
"Mr. MONRONEY. Do you mean to say that
with your present Open-Market Committee,
and the operation of the Federal Reserve,
as it now stands, that, regardless of what
the national income is, or other economic
factors, you can guarantee to us that our
interest rate will remain around 2.06 per-
cent?
"Mr. ECCLES. We certainly can. We can
guarantee that the interest rate, so far as
the public debt is concerned, is where the
Open-Market Committee of the Federal Re-
serve desires to put it."
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