AMENDMENT OF FOREIGN ASSISTANCE ACT OF 1961

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000300070017-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 19
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2014
• Sequence Number: 17
• Publication Date: September 16, 1964
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300070017-5
21548 CONGRESSIONAL EECOED ? SENATE.
tion, adequate heating facilities and a cool-
ing system.
"The landowner who sits down with his
employee to discuss building a modern house
often backs away when be realizes the size of
the investment and the discouragingly slow
rate of depreciation," Fitzhugh wrote.
He suggested that part of the problem
might be solved by giving the landowner an
opportunity to depreciate the building in a
relatively Wort time. The fast writeofl has
been used repeatedly to stimulate capital in-
vestment in industry and Fitzhugh thinks
the same approach could be used in agricul-
ture. He said the accelerated depreciation
should be allowed only if the house was
used for employees or tenants and the rate
should not be permitted for structures built
for the farmer's immediate family.
SATS PLANS NEE=
The other suggestion called for the Gov-
ernment, through some of its appropriate
agencies, to offer plans and specifications for
adequate housing of this type. He men-
tioned concrete masonry (blocks) as a pos-
sible building material that might meet the
needs of landowners and tenants but he
noted that few farmers knew how to use this
building method effectively.
Fitzhugh and many other farmers know
that the shotgun house no longer is accept-
able shelter. The reasons are economic as
well as humanitarian and the volution must
be found.
PARSE= AND HIS NOME
While the industry-tested trick of the fast
writeoff, coupled with good planning and
engineering, may help solve the housing
problem of the east Arkansas tenant or farm-
worker, it will do nothing for the man who
operates his own farm and is unable to find
a lender who will finance his new house.
Neither will it help the man who has a job
in town (because his little fann no longer
will produce a living) but lives in the
country.
Here, then, are three tools that could help
provide rural housing: Fitzhugh's teeter
the setts:aim of FHA authority so
that loans on rural property can qualify for
Insurance, and an edema?, supply of funds
for direct loans by the Farmers Home Ad-
ministration.
The Nation has the raw materials and po-
tential borrowers have demonstrated ability
and willingness to repay the loans. The
whole economy would benefit from a fuller
use of our resources. ,
PaOPOIDALS ST Mawr SI= To BSOADLN WATS:R-
?OHM PIDOORAA1
? (By Lateral Detre')
The tendency to waste natural resources--
minerals, son, water and timber are exam-
ples?is inherent In a free economic system
where supplies seem to exceed all possible
demand. The United States went through
this evolutionary phase in the early years of
its history but the 20th century brought a
realization that the Nation, with all of It.
assets, could not continue to destroy its In-
herent bounty and still feed the growing
population. .
The first Roosevelt was an evangelist of
conservation but the situation had to grow
worse before the country would accept the
kind of reforms that would change the direc-
tion. By the time Prankrin D. Roosevelt be-
came President, the myth of superabundance
had disappeared and virtually everyone who
had studied the inventory Of natural re-
?ources knew that the stooks had been de-
pleted to.* dangerous level.
Conservation, once regarded as a violation
of the free enterprise system, became a word
that could be used In the beet circles. The
petroleum Industry, stimulated by the threat
that the Federal Government might insist
that It halt the waste that resulted from
uncontrolled pumping, put together its. In-
terstate Oil Compact Commission. In the
name of conservation, the Commission
worked out a program under which com-
panies in the major producing Siete* pumped
only the amount of petroleum that would
find a market. Lumber companies formerly.
solved their supply problem by moving their
mills when the Umber was cut out. When
they saw the other side of the woods they
realized that future supplies could be ob-
tained only by growing the trees they would
need. Forest conservation became an Im-
portant phase of the business?with the Fed-
eral Government providing major assistance.
Despite the fact that no shortages of agri-
cultural commodities actually developed, soil
and water conservation programs were es-
tablished as part of a plan to assure a con-
tinuing supply of food an fiber. The work
moved slowly at first because fanners had
acquired a well-established habit of land
waste. In the early years of the Nation,, a
man could homestead and dear a new farm
at less expense than would be required to
save the old land.
The small watershed program, as author-
ized by Public Law 566, has become one of
the more popular approaches to soil and
water conservation. It provides for complete
conservation on a stipulated area (water-
shed) through the combined efforts of local.
State, and Federal organizations and agen-
cies. In a report on the status of watershed
applications in Arkansas, the Soil Conserva-
tion Service has released this scorecard: ,
Applications have been received for es proj-
ects; 35 of them have been authorized for
planning; 22 have been authorized for op-
erations, and construction has been com-
pleted on 5.
Perhaps the key, to the success of the
small watershed program has been the fact
that individual projecta are started at the
local level. Appropriate State agencies and
the Soil Conservation Service provide their
we/stance on invitation.
Here, as in other developing programs, the
needs change constantly. Despite NS sue-
caws the small watershed program needs ba-
be altered from time to time If It is to serve
its purpose.
Representetive Warms D. Ignie. Democrat.
of Arkansas, outlined some of the needed
legislative changes at a recent meeting of the
east central area of the Arkansas Associa-
tion of Soil and Water Conservation Die'
tricta. Some of his suggestions have been
written into proposed legislation that, Is In
various degrees of magmas Nitta listed
these needs:
Authority for the Federal Government to
administer watershed construction otertrects.
If requested by looal sponsoring organisa-
tions to do so. '
Authority at the State level to provide es-
edstance to local organizations in obtain-
ing land, easements and rights-et-Way for
watershed project:.
An amendment to Public Law 506 that
yould permit the use at funds authorised tor
community improvement to acqUire land
rights in the watershed program, "
Federal appropriations for watershed plan-
ning should be increased.
Installation of land treatment emenree
should be speeded. . .
Under the present arrangement construc-
tion maltreats on mall watershed projects
must be administered at the local level and
only the sponscring oiowasetien (UMW*
a district formed for the purpose) can sign
the pact. Amu explained that, In many
cases, these districts lacked experience in
negotiating contracts and had no permanent
staff that could do the Ma Ma proposal-
would leave the authority at the local Neva
if the sponsors preferred this effacement
but the Government agency would have an-.
thorny to make the contract It the aponisors,
asked for andetaziee.
September 16
The law, as it now stands. prohibits the use
of funds appropriated under Public Law 566
for obtaining land, easements, or rights-of -
way kinass agreed that there was nothing
wrong with the arrangement but he said it
might be possible to use other Federal funds
for this purpose. Several programs offer
Federal funds for community improvement
projects such as water systems. Sometimes
the beet source of water is a reservoir created
as part of a arnaU watershed program. Ac-
cording to lariis, the community should be
authorized to use some of this Federal money
to help obtain land needed for the water-
shed work.
The popularity of the watershed program
has created a need for additional funds to be
used ln the planning stages but the Budget
Bureau has succeeded in holding down the.
appropriation. Mrita believes it should be
Increased.
Maas also believes the maximum size of an
Impoundment should be increased from the
present 5,000-acre feet to 12,a00-acre feet.
The House approved an amendment that
would have provided for the increase but the.
Senate failed to go along with the proposal.
These proposed changes would broaden the
scope of the small watershed program and
make a, major contribution to conservation
in the United States. One other suggested
change is essential.
If a watershed project is to serve its pri-
mary purpose (conservation of soil and water
resources) land in the drainage arses must'
be managed rarely. Local organizations are
required to carry out conservation treatment?
on at least half the land in the drainage.
areas but this part of the program is ham-
pered by a lack of long-term planning. The
Great Plains conservation program, where
cost-share contracts are based on complete
farm conservation plans, could serve as a
model for agreements with owners of land In
the drainage areas. The plan apparently la
working well and could be extended to cover:
the small watersheds.
The PRESIDING OFFICER. Is there
further morning business, If not. Marri-'
trig is cies&
404
OF EQ,H12-(5-ASSIBT-
ANCE ACT OF 1261
The PRESIDING OFFICER. The
Chair lays before the Senate the unfln-:
ished business, which the clerk will state:
The Um:sums CLERK. A bill (fl.R.
11380) to amend further the Foreign'
Assistance Act of 1961, as amended, and.,
for other purposes.
TheSenate resumed the consideration
of the bill (HR. 11380 ) .
Mr. PROXMIRE. Mr. President, I
suggest the absence of a quorum
The PRESIDING OFFICER The
clerk will call the roll.
The legislative clerk proceeded tq call
the roll.
Mr. SPARKMAN. Mr. President, t
ask unanimous consent that the order for'
the quorum call be rescinded.
The PRESIDING OFFICER. With-
out oblection, it is so ordered.
? Under the order of yesterday, the lien-
star from Michigan [Mr. McNaussa] Is
entitled to the floor.
Mr. SPARKMAN, Mr. President, win
the Senator from Michigan yield to me
for a few minutes without his losing th*
floor? I make that request.
Mr. McNAMARA. I yield for that
purpose.
The PRESIDING OFFICER. With-
out objection. it is so ordered.
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1964 CONGRESSIONAL RECORD? SENATE 21549
SMALL BUSINESS. CAPITAL. BANK rather than authorizing direct Federal cation provided by the Bank and the
Mr. SPARKMAN. Mr. President, I am
today introducing for appropriate refer-
ence a bill which would authorize the
establishment of a Small Business Capi-
tal Bank.
This new financial institution is de-
signed to buttress the small business in-
vestment company program and to make
available for independent businesses
vitally needed equity capital and long-
term credit.
I think all of us have followed closely
the operations of the SBIC program in
?
the 6 years since we established it by
legislation in August 1958. Most of us
feel that this new industry has made
some significant progress during this pe-
riod; on the other hand, we are aware
that the 700 SBIC's currently in opera-
tion have not come close to filling the real
needs for these funds on the part of qual-
ified small business firms.
When we passed the Small Business
Investment Act of 1958, we recognized
that it would be a pioneering venture and
that changes would have to be made in
the structure of the program. Through-
out these intervening years, we have
made a number of amendments to the
basic act and to the various provisions
of the Internal Revenue Code touching
upon SBIC's.
The bill which I am introducing today
is a further step to strengthen the pro-
gram and to help SBIC's render greater
financial support to worthy business
firms.
Briefly stated, I propose the establish-
ment of a Small Business Capital Bank
which would raise funds through the sale
of debenture bonds to the, public and
would channel these resources to SBIS's.
Thus, the Capital Bank would be a sec-
ondary source of funds for SBIC's and
would increase the resources they have
available for lending to and Investing in
small businesses.
I believe that this proposal follows
sound precedents set in other areas
where the Federal Government has
found a strong public interest involved.
For example, the Bank for Cooperatives
has been effective for over 30 years in
directing private dollars into farm coop-
erative associations. Similarly, the
Federal National Mortgage Association
has been a mechanism for providing sec-
ondary markets for mortgages insured
under FHA or VA programs. As a matter
of fact, the recently passed 1964 Hous-
ing Act specifically brings Fanny Mae
closer to the Capital? Bank concept by
giving authority to the Association to
pool all its mortgages and sell general
securities based upon the collateral of
these mortgages.
Therefore, there are sound precedents
for the action I am proposing in this
legislation.
I also think that the establishment of
a Small Business Capital Bank is wise
Federal policy in that it would reduce the
the dependence of the SBIC program
upon Federal funds and curtail direct
dealings with the Federal Government:
Just as the SBIC program itself has set
up privately organized, privately man-
aged, and largely privately financed
SBIC's to assist small business firms?
dealings with those companies?so the
Small Business Capital Bank would sub-
stitute largely nongovernmental funds
for many of the present transactions be-
tween SBIC's and the Small Business
Administration. -
As I will explain later, there will be
no need for further expenditures to
establish the new Small Business Capi-
tal Bank. Furthermore, a section in my
bill specifically calls for an end to Gov-
ernment loans to SBIC's 5 years after the
new secondary source of funds is author-
ized by the passage of this legislation. -
Initial capitalization of the Capital
Bank would come from the sale of $50
million of preferred stock to the Secre-
tary of the Treasury. The Treasury will
draw these funds from the revolving
fund in the Small Business Administra-
tion already approved for the use of the
SBIC program. Common stock in the
Bank will be sold to SBIC's which will be
required to purchase such stock with a
Portion of the funds they receive from
the Bank. The preferred stock will
gradually be retired and, as has been the
case with the Federal Reserve System
and the Bank for Cooperatives, Federal
funds will be repaid from the earnings
of the Capital Bank.
Although I have named only two gov-
ernmental agencies, several others which
have followed a somewhat similar pat-
tern come to mind and could be named.
The Bank would be authorized to raise
additional funds through the sale of
debenture bonds to the public.
The new Bank would be directed by
a nine-man Board of Governors named
by the President, with the Secretary of
the Treasury, the Small Business Ad-
ministrator, and the Deputy Administra-
tor for Investment of the SBA as three
of the members.
The nominations of members would be
subject to confirmation by.the Senate.
The Bank will set standards of eligibil-
ity for SBIC's requesting Bank funds.
When an SBIC meets these standards,
the Bank may either purchase stock in
that SBIC Or make a loan to it. Thus,
the resources of the Small Business
Capital Bank will augment those of the
SBIC and allow the licensee to provide
greater financial assistance to the small
business community.
As I visualize the ideal situation, this
Small Business Capital Bank will eventu-
ally stand on its own feet without any
financial backing from the Federal Gov-
ernment. Through its capital structure
and from borrowings from the public and
from institutional lenders, it will make
-
available to SBIC's large amounts of
funds for investing in worthy small busi-
ness concerns. This could remove, coin-
pletely or in large part, the call SBIC's
may presently make upon the Federal
Government through borrowing from the
Small Business Administration.
My preliminary study of this proposal
leads me to believe that such large insti-
tutional lenders as insurance companies
and pension trusts, will be much more
likely to purchase debenture bonds from
this capital bank than they would to
provide funds to any one particular SBIC.
The principle of safety through diversifl-.
economies possible through a single
transaction with one borrower make this
a logical conclusion.
Let me say at this point that I am not
wedded to the particulars of this legisla-
tive proposal. I submit it now so that it
may be studied and improved upon dur-
ing the coming months.
In closing, let me summarize the rea-
soning behind this bill:
First. The SBIC program has demon-
strated beyond doubt that worthy and
well-qualified small businesses do need
equity capital and long-term capital.
The present resources of the program
fall far short of the demonstrable need.
Second. SBIC's have shown themselves
to be effective instruments for providing
these funds. As all of us expected, some
SBIC's have done very well; others have
not. Some have been conservative; oth-
ers liberal in their investment policies.
Some have specialized in certain indus-
tries or situations; others have not.
Taken overall, however, many SBIC's
have shown imagination and the ability
to prosper.
Third. The most basic problem facing
the industry today is the problem of ob--
taining sufficient resources. To make a
decent ?return on their, capital, SBIC's,
like all financial institutions,, must have
enough funds to carry their costs and
allow a profit.
Fourth. The establishment of a Cap-
ital Bank is the best way I know to pro-
vide additional resources to SBIC's. An
alternative; which I find far less palat-
able, would be to increase SBA's ability
to lend directly to SBIC's.
For these reasons, I recommend to the
attention of my colleagues in the Con-
gress, interested officials in the execu-
tive branch, and the business and finan-
cial community this proposal for the es-
tablishment of a Small Business Capital
Bank.
I have discussed it with members of
the industry and with the NASBC, which
is the trade association dealing with
small business investment companies. I
have given some thought to it, so I realize
that there are details and particulars
that may be varied. I realize that at this
late point of this session of Congress,
there will not be time to get action on
the bill this year. I am not introducing
it for that purpose. I am introducing it
now so -that it may be studied and dis-
cussed preparatory, possibly, to holding
hearings and taking action during the
next Congress.
Mr. PROXMIRE. Mr. President, will
the Senator from Alabama yield?
Mr. SPARKMAN. I am glad to yield
to the Senator from Wisconsin, who is,
as everyone knows, chairman of the Sub-
committee on Small Business Legislation
of the Committee on Banking and Cur-
rency. .
Mr. PROXMIRE. This could be a
significant day for small business. The
Senator from Alabama is introducing an
extremely important measure. Can he
indicate how big a capital bank he has in
mind? How much, in terms of deben-
tures, would the authorization permit for
sale to the public?
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21550 CONGRESSIONAL RECORD ----,:SENATE
Mr. SPARKMA.N. That is not Spelled
out; at least, I do not have the amount
In my notes. 'If the Senator will permit,
shall be glad to see if a limitation is
provided.
The involvement of the Government
would be $50 million. The Senator un-
derstood me to say that. It would simply
be a substitute.
Mr. PROXMIRE. That would be held
by the Treasury?
? Mr. SPARKMAN. Yes; and it would
be a substitute for the $50 million re-
volving fund that is in the Small Busi-
ness Administration now for SBIC's:
Mr. PROXMIRE. In addition, the de-
bentures that would be sold to the public
might be on the order of $1 billion or
$500 million? At any rate, the amount
would be far larger than the Government
contribution.
Mr. SPARKMAN. It would have to be
In order to provide ready capital.
Mr. PROXMIRE. Would the deben-
tures be guaranteed by the Government?
Mr. SPARKMAN. I do not believe,
there is any guarantee provision in the
bill.
Mr. PROXMIRE. At the present time.
Mr. SPARKMAN. Yes. The purpose
of the proposal is to organize the bank
along the lines that other Government
agencies have been organized, in which
debentures are made available or are
purchased. As I stated, a part of the
money obtained would have to be used?
I am getting back to the capital stock?
for the purpose of drawing in capital
funds. The purpose of the debentures
would be to draw in capital funds that
could be used. They would be for sale to
private investors. For the moment, I am
sorry I have not inquired into this ques-
tion more thoroughly. I do not see a
reference to limitations on debentures,
but I should think there would be a
limitation.
Mr. PROXMIRE. As I understand,
. what would happen would be that the
Small Business Investment Company
would go to the capital bank to borrow.
It would be in a position to borrow a sub-
stantial amount, so that it could have
investment leverage that would give it an
Incentive to function. One of the disap-
pointments of the SBIC program?al-
though the program has been a good
one?is that those who now operate
? SBIC's say they cannot get leverage?the
borrowed capital; that when they make a
7-percent or an 8-percent loan, there is
not sufficient incentive or sufficient mar-
gin for them to cover their costs.
Mr. SPARKMAN. That is correct.
Mr. PROXMIRE. All the financial in-
stitutions of this country that have been
successful have functioned on the basic
principle of leverage, of borrowing capi-
? tal, paying 5 or 6 percent, and then in.
vesting the money at 7, 8, or even 10 per-
cent, thus securing 'a profit, an incentive,
and a basis for operations. Is not that
correct?
_ Mr. SPARKMAN. That is correct.
I wish to correct a statement I made a
moment ago. The amount of the de-
bentures would be $1 billion. I knew the
amount was in that neighborhood, but I
did not recall whether it was $1 billion
or $1,500 million. One billion dollars
would be authorized.
This is the correction I wish to make:
The debentures or bonds of the bank,
when duly authorized and issued by the
Board, shall constitute obligations altar-
anteed as to principal and interest by the
United States.
Mr. PROXMIRE. They will be guar-
anteed?
Mr. SPARKMAN. That is correct.
Mr. PROXMIRE. There will be a
Government guarantee?
Mr. SPARKMAN. Yes.
Mr. PROXMIRE. Is there any limita-
tion on the amount that any SBIC could
borrow in relationship to its capital and
surplus? This is a good principle.
There should be leverage. But I wonder
if there is a limitation, such as there is
upon banks?a limitation of 8 to 1 or 10
tolor 5 tol.
Mr. SPARKMAN. I am quite certain
that before a bill was reported, such a
provision would be included. I am not
sure whether it is spelled out in this bill.
The bill represents almost entirely the
handiwork of representatives of the in-
dustry itself. I have discussed it with
them. I understand that they have dis-
cussed it to some extent with the Senator
from Wisconsin, too.
Mr. PROXMIRE. Yes, indeed.
Mr. SPARKMAN. I am not so famil-
iar with the measure as I would be if I
had drawn it myself. I am introducing
it for the purpose of study, and I am
sorry I cannot give the Senator from
Wisconsin the details that he seeks.
Mr. PROXMIRE. One more question.
The usefulness of introducing the bill
now is that it will enable the agencies
concerned to provide reports between the
sessions of Congress. One of the most
serious criticisms of the SBIC program
has been that small businesses?and I
underline the word "small"?businesses
that most people visualize as small?
have received relativey little benefit from
the program. In my judgment, one of
the finest things that SBIC has done re-
cently is to inaugurate a pilot program
in cities like Philadelphia, a program
that permits modest loans, with little or
no collateral, based on a repayment
record.
I am wondering if any consideration
has been given as to how the SBIC pro-
gram can be designed so that genuine
small businesses will have an opportunity
that they do not now have to take part
In the program, and to get the capital
they need for growth. I realize that it
Is difficult to plan such a program. At
the same time, this is a massive exten-
sion of Government in behalf of SBIC.
After all, it $1 billion guarantee is a sub-
stantial assignment, in view of the fact
that the basic legislation, as the Senator
from Alabama knows so well, provided
for the termination of Government par-
ticipation after-a few years. Now we are
apparently shifting to more Government
assistance on the basis of a Government
guarantee to the extent of $1 billion to
get the SBIC program moving. That is
a vast amount of money. I am wonder-
ing if a part of the program could be
designed to help small businesses that
need additional capital to obtain capital
without great difficulty under the SBIC
program.
September 16 1
Mr. SPARKMAN. I am in sympathy
with the point the Senator from Wis-
consin makes. I have recognized it as
one of the weaknesses of the present
system.
The point the Senator is speaking
about?the requirement, let us say, that
these small businesses be taken care
of?is a matter to be controlled by regu-
lation.
There is another point that I should
certainly stress in any proposed legisla-
tion such as this?which will be, of
course, subject to Federal regulation?I
would insist that the regulations be such
as to cover the board. It would be much
easier for the individual SBIC to do this,
because therewould be more elasticity in
the amount of funds which might be
available.
The trouble now is that there is a limi-
tation of funds which can be spent. So
long as that limitation applies, they have
to spread their loans out in such a way
as to make a reasonable profit. That
means that the little business, the small,
small business, upon which there might
actually be a net loss, often would go
without its loan.
I recall the days of the Reconstruction
Finance Corporation, the agency which
made loans not only to small businesses,
but also to businesses across the board.
A great many people used to complain
that they made too many large loans?
large loans to railroad companies, and
to industries of that kind. The defense
of the RFC representatives was, as I re-
member it?when they came before our
committee back in the days when the
RFC was functioning?that the RFC
made a great many very small loans.
They brought out the point that they
could not possibly make any profit on
those very small loans, that they could
not even afford to carry such loans, if
they had not been able to carry the large
loans.
The trouble with the SBIC so far has
been that it has not had sufficient funds
available- to make the spread such as
RFC used 'to do. I should think that a
central bank arrangement would give
them more nearly adequate funds.
Mr. PROXMIRE. What I have in
mind, as the Senator from Alabama will
recall, is that when the head of the big-
gest SBIC In, the country, with assets of
between $20 and $30 million, came be-
fore the Banking and Currency Commit-
tee last year, I asked him, if we removed
the limitation of $500,000 on the size of
investments by the SBIC, whether he
would still make the more modest invest-
ments..
Mr. SPARKMAN. I recall that.
Mr. PROXMIRE. He stated that if
Congress removed the $500,000 limita-
tion on investments, every single loan
;they made would exceed $500,000 and
almost all of them would exceed $1 mil-
lion.
Mr. SPARKMAN. Yes.
Mr. PROXMIRE. That is understand-
able. It is easier to make money if one
makes a few big loans in terms of making
a study of the soundness of each com-
pany, and so forth; so I wonder, in view
of the significant impact of the proposed
legislation of the Senator from Alabama,
and the fact that it does provide a bil-
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1964
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CONGRESSIONAL RECORD ? SENATE ? 21551
lion-dollar guarantee, if it means a great
opportunity for the SBIC's to have the
leverage which they have not had be-
fore, whether it 'Would not be wise?per-
haps during the period before we hold
hearings next year on this question?to
consider something analogous to the fine
program the SBA now has for very small
businesses, where they make modest
loans of $10,000 to $15,000 without col-
lateral, and make them on the basis of a
repayment record. Perhaps some incen-
tive system along that line could be de-
vised.
Mr. SPARKMAN. I should be very
glad to do that.
Mr. PROXMIRE. It would be an en-
couraging thing.
Mr. SPARKMAN. I join the Senator
from Wisconsin in expressing pleasure
over the recent change in the SBA. One
complaint I have heard has been that
the very small businesses which really
needed help could not get it. Many small
businessmen have said to me, "If I had
the collateral which SBA demands, I
would not have to go to SBA to get a
loan." I know that the Senator from
Wisconsin has had the same experience.
/ am glad they are loosening up on small
loans.
There is an experimental program go-
ing on in the District of Columbia at the
present time, called the "Six by Six."
These are loans not to exceed $6,000,
over a period of time not to exceed 6
years. That is quite liberal as far as
those terms are concerned.
Mr. PROXMIRE. In a recent article
published in one of the leading Philadel-
phia newspapers, it was stated that after
a very careful study, this was the most
successful and most popular Government
program of any kind in many years.
It has been working very well. The re-
payments have been good. Small busi-
esses can take part in it, and they
are obtaining the loans. This is a point
which needs to be encouraged. I hope
that the legislation which the Senator
from Alabama is introducing today might
In some way embrace the success which
has been attained in this other field.
Mr. SPARKMAN. I would join the
Senator in trying to have such a meas-
ure enacted into law and into regula-
tions?one or the other, wherever it
would properly belong.
Mr. President, I ask unanimous con-
sent that the bill may be printed at the
conclusion of my remarks.
The PRESIDING OFFICER (Mr. Buil-
DICK in the chair) . The bill will be
received and appropriately referred; and,
without objection, the bill will be printed
in the RECORD.
The bill (S. 3192) to create a Small
Business Capital Bank, and for other
purposes, introduced by Mr. SPARKMAN,
was received, read twice by its title, re-
ferred to the Committee on Banking and
Currency, and ordered to be printed in
the RECORD, as follows:
Be it enacted by the Senate and House of
Representatives' of the United States of
Anterica in Congress assembled,
TITLE I?SHORT TITLE, STATEMENT OF PURPOSE,
AND DEFINITTONS
Short title
Szc. 11. This Act, divided into titles and
sections according to the following table of
contents, may be cited as the "Small Busi-
ness Capital Bank Act".
Table of contents
Title I?Short title, statement of purpose and
definitions
Sec. 11. Short title.
Sec. 12. Statement of purpose.
Sec. 13. Definitions.
Title II?Establishment of Small Business
Capital Bank
Sec. 21. Establishment of the Bank.
Sec. 22. Board of Governors.
Sec. 23. Executive Director.
Title M?Incorporation and funding of
Small Business Capital Bank
Sec. 31. Incorporation.
Sec. 32. Capitalization.
Sec. 33. Borrowing power.
Sec. 34. Operating funds.
Sec. 35. Curtailment of Government obliga-
tions.
Title IV?Provision of assistance to small
business investment companies
Sec. 41. Use of Bank's funds.
Sec. 42. Standards of eligibility for assist-
ance.
Sec. 43. Provision of equity capital to small
business investment companies.
Sec. 44. Provision of loan funds to small
business investment companies.
Sec. 45. Purchase of Bank stock by small
business investment companies.
Statement of purpose
Bac. 12. (a) The Congress hereby finds
that there is an increasing need among small
business investment companies for funds to
increase their operations to the end of pro-
viding additional funds to the small business
concerns of this Nation in order to promote
and facilitate their growth, expansion, and
modernization; that this need must be met
in the interest of a sound national economy;
and that the funds which are presently avail-
able to small business investment companies
from the Federal Government and from other
public and private sources are insufficient to
meet this need.
(b) It is therefore declared to be the pol-
icy of the Congress and the purpose of this
Act to improve and stimulate the national
economy in general and the small business
segment thereof in particular by establishing
a Small Business Capital Bank to serve as a
secondary source for funds for small business
Investment companies in order to enable such
companies to provide to the small business
concerns of this Nation the equity capital and
long-term loan funds which they need for
the sound financing of their business opera-
tions and for their growth, expansion, and
modernization.
Definitions
SEC. 13. As used in this Act?
(1) the term "Bank" means the Small
Business Capital Bank established under
section 201 or any branch thereof;
(2) the term "Board" means the Board of
Governors of the Small Business Capital
Bank;
(3) the term "small business investment
company" means a company licensed by the
Small Business Administration and operat-
ing under the Small Business Investment Act
of 1958, as amended; ?
(4) the term "small business concern"
shall have the same meaning as in the Small
Business Investment Act of 1958, as amended,
and in the regulations promulgated there-
under by the Small Business Administration.
TITLE II?ESTABLISHMENT OF SMALL BUSINESS
CAPITAL BANK
Establishment of the Bank
SEC. 21. There is hereby established, as an
Independent agency of the Government of
the United States, a Small Business Capital
Bank. The principal office of the Bank shall
be located in the District of Columbia, but
the Bank may establish such district and
branch offices throughout the United States
as it deems necessary and appropriate.
Board of Governors
Sec. 22. (a) The management of the Bank
shall be vested in a Board of Governors con-
sisting of nine members. The Secretary of
the Treasury, the Administrator of the Small
Business Administration, and the Deputy
Administrator for Investment of the Small
Business Administration shall serve as mem-
bers of the Board. The remaining six mem-
bers of the Board shall be appointed by the
President by and with the advice and con-
sent of the Senate. In making such appoint-
ments, the President shall have due regard
to a fair representation of the public inter-
est as well as of the particular inter-
ests and needs of small business investment
companies and the special contributions
which can be made by such companies to
the sound development of the national
economy.
(b) Each member of the Board appointed
by the President shall be appointed for a
term of six years; except that i1) of the six
members first appointed by the President,
two shall be appointed for terms of two years,
two for terms of four years, and two for terms
of six years, as designated by the President
at the time of appointment, and (2) any
member appointed to fill a vacancy shall be.
appointed only for the unexpired portion of
his predecessor's term.
(c) Each member of the Board shall be
a citizen of the United States and shall
receive the sum of $100 for each day or part
thereof spent in the performance of his of-
ficial duties; provided, however, that such
per diem compqnsation shall not be paid to
the Secretary of the Treasury, the Admin-
istrator of the Small Business Administra-
tion, nor to the Deputy Administrator for
Investment of the Small Business Adminis-
tration. In addition to receiving such per
diem compensation, each member of the
Board, including the Secretary of the Treas-
ury, the Administrator of the Small Business
Administration, and the Deputy Administra-
tor for Investment of the Small Business
Administration, shall be reimbursed for
necessary travel, subsistence, and other ex-
penses actually Incurred in the discharge
of his duties as such member, without re-
gard to any other laws relating to allowances
for such expenses.
(d) As soon as practicable after the first
members of the Board have been appointed
as provided in subsection (a) , the members
shall meet, subscribe to the oath of office,
and organize by electing from among the
membership a Chairman. a Vice-Chairman
and a Secretary. The Chairman, Vice-
Chairman, and Secretary shall be elected an-
nually for terms of one year, and shall serve
until their respective successors are elected
and take office. The Chairman shall preside
at all meetings and the Vice-Chairman shall
preside in the absence of disability of the
Chairman. The Board may, in the absence
or disability of both the Chairman and Vice-
Chairman, elect any of its members to act
as chairman pro tempore. Five members
shall constitute a quorum of the Board for
the transaction of business, and the Board
may function notwithstanding vacancies pro-
vided a quorum is present. The Board shall
meet at such times and places as it may
fix and determine, but shall hold at least
six regularly scheduled meetings a year; and
special meetings may be held on call of the
Chairman or any three members.
(e) Notwithstanding subsection (b) , any
member of the Board may at any time be
removed from, office for cause by the Presi-
dent or, if cause exists but the President
does not act, by the Congress through im-
peachment proceedings.
Executive Director
SEC. 23. (a) The Board shall appoint an
Executive Director, who shall serve at the
pleasure of the Board and shall, subject
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21552 CONGRESSIONAL RECORD ? SENATE
to the general supervision and direction of
the Board as to matters of a broad and gen-
eral supervisory, advisory or policy nature,
and, except as otherwise specifically pro-
vided in this Act, be responsible for the ex-
ecution of the functions of the Board.
(b) The Board shall fix the compensation
of the Executive Director, but his annual
rate of basic compensation shall not ex-
ceed $ . In addition to receiving such
compensation, the Executive Director shall
be reimbursed for necessary travel, subsist-
ence and other expenses actually incurred
in the discharge of his duties without re-
gard to any other laws relating to allowances
for such expenses.
(c) The Executive Director shall comply
with all orders and directions which he re-
ceives from the Board; but as to all third
persons his acts shall be presumed to be in
compliance with the orders and directions
of the Board.
(d) The Executive Director, subject to the
approval of the Board, shall employ such
personnel (including attorneys, economists,
accountants, experts, assistants, clerks, and
laborers) as may be necessary to carry out
the functions, powers and duties vested in
the Board, and fix their compensation, with-
out regard to the civil service laws or the
Classification Act of 1949, as amended. All
functions, powers, and duties of the Board,
except those specifically reserved to the
Board itself by this Act, shall be exercised
and performed by the Executive Director and
may be exercised and performed by him
through such employees of the Board as he
may designate.
Begulations
SEC. 24. The Board shall prescribe and
publish such regulations, and take such
other actions, as may be necessary and ap-
propriate in carrying out this Act and in
effectively exercising the functions expressly
and impliedly vested in it under this Act.
TITLE III?INCORPORATION AND FUNDING OF
SMALL BUSINESS CAPITAL BANK
Incorporation
SEC. 31. (a) The members of the Board of
Governors shall, under their hand, forthwith
execute and file with the Secretary of the
Senate and with the Secretary of the House
of Representatives articles of incorporation
which shall specifically state the amount of
the Bank's authorized capital stock and the
number of shares into which such stock is
to be divided, and all other matters necessary
or appropriate to the organization of the
Bank and the accomplishment of the pur-
poses of this Act.
(b) The Board is authorized to direct such
changes in or additions to any such articles
of incorporation not inconsistent with this
Act, as and when it may deem- necessary or
expedient.
(c) Upon the Board's duly making and
filing the articles of incorporation, the Bank
shall become, as of the date of the filing of
such articles, a body corporate, and as such,
it shall have power?
(1) to adopt and use a corporate seal;
(2) to have succession until it is dissolved
by Act of Congress or under the provisions
of this Act;
(3) to make contracts;
(4) to sue and be sued, complain, inter-
plead, and defend, in any court of law of
equity, as fully as a natural person;
(5) to elect, by its Board of Governors, a
Chairman, a Vice-Chairman and a Secretary,
and to appoint an Executive Director and
other officers and employees, define their,
duties, require bonds of them and fix the
penalty thereof, and dismiss any such officers
and employees at pleasure and appoint others
to fill their places;
(6) to prescribe, by its Board of Gover-
nors, bylaws not inconsistent with law, reg-
ulating the manner in which its stock shall
be issued, held, and disposed of, its officers
elected, its staff appointed, its property
transferred, its general business conducted,
and the privileges granted to it by law exer-
cised and enjoyed; and
(7) to exercise, by its Board of Governors
or its duly authorized officers or agents, sub-
ject to law, all such incidental powers as
shall be necessary to-carry out its functions
under this Act.
Capitalization'
SEC. 32. (a) The Bank shall be established
with an authorized capitalization of $150,-
000,000, of which $50,000,000 shall be paid-in
capital subscribed for by the Secretary of
the Treasury On behalf of the United States,
and the remainder shall be provided through
purchases of capital stock of the Bank by
small business investment companies pur-
suant to Sec. 45.
(b) The capital stock of the Bank shall
consist of two classes, common and pre-
ferred, the rights and preferences of the
separate classes to be as specified in the
articles of incorporation of the Bank; pro-
vided, however, that the authorized capital
to be subscribed through the issuance of
common stock shall not exceed $100,000,000,
and the authorized capital to be subscribed
through the issuance of preferred stock shall
not exceed $50,000,000.
(c) The common stock shall be available
for purchase only by small business invest-
ment companies pursuant to section 45.
(d) The preferred stock shall be issued
only to the Secretary of the Treasury in
exchange for the contribution to the paid-in
capital of the Bank pursuant to section 32
(a), and such preferred stock shall be re-
deemed and retired by the Bank from earn-
ings available therefor at any time after the
Bank has received a minimum of $50,000,000
in exchange for its common stock.
Borrowing power
SEC. 33. (a) In addition to its authorized
capitalization, the Bank shall have authority
to obtain funds through the sale to the
public of its debenture bonds, which shall
bear interest at such rate and contain such
other terms as the Board May fix.
(b) The aggregate amount of obligations
which may be outstanding at any one- time
pursuant to section 33(a) shall not exceed
$1,000,000,000. The proceeds of the issues of
such obligations shall be used only for the
purchase of obligations of small business
investment companies as provided in section
43 and section 44.
(c) The debenture bonds of the Bank,
when duly authorized and issued by the
Board, shall constitute obligations guar-
anteed as to principal and interest by the
United States. Said debenture bonds shall
be a lawful investment for all fiduciary and
trust funds, and may be accepted as security
for all public deposits.
Operating funds
SEC. 34. The Small Business Administra-
tion shall lend to the Bank, upon applica-
tion by the Board, a sum not to exceed $?
in each fiscal year, to defray the operating
expenses of the Bank. Such loans shall be
made from the revolving fund of the Ad-
ministration devoted to operations under
the Small Business Investment Act of 1958,
as amended, shall bear interest, and shall
be subject to repayment from earnings of
the Bank available therefor.
Curtailment of Government obligations
SEC. 85. For the purpose of curtailing Gov-
ernment obligations under the small business
investment company program--
(1) Effective on the date of the enactment
of this Act, funds authorized under any other
law for the revolving fund of the Small
Business Administration for purposes of the
small business investment company program
shall be reduced by $50,000,000; and
(2) Effective five years from the date of
the enactment of this Act, section 303(b) of
September 16
the Small Business Investment Act of 1958,
as amended, is hereby repealed.
TITLE IT?PROVISION OF ASSISTANCE TO SMALL
BUSINESS INVESTMENT COMPANIES
Use of Bank's funds
SEC. 41. It shall be the primary function
of the Bank to use any funds available to
it from its capital account or from any of
its other accounts?
(1) to provide capital to small business
investment companies as provided in sec-
tion 43; and
(2) to make direct loans to small business
investment companies as provided in section
44,
Standards of eligibility for assistance
SEC. 42. The Board shall promulgate
standards to determine the eligibility of
small business investment companies for the
assistance provided by this Act. In promul-
gating such 'standards, which may differ
according to the type of assistance involved
and any other relevant factors, the Board
shall give consideration to?
(1) the need to promote the development
and growth of small business investment
companies so as to enable them to make
their maximum contribution to productive
investment and employment and to the eco-
nomic stability and growth of the Nation;
(2) the need to make capital and loan
funds for such concerns more readily avail-
able in adequate amounts and on reasonable
terms;
(3) the need to facilitate maximum par-
ticipation of private financial institutions
and investors in financing small business
investment companies and eligible small
business concerns; and
(4) the need to supplement the existing
facilities of the United States Government
and of banks and other private financial in-
stitutions through the program of assistance
provided under this Act.
Provision of equity capital to small business
investment companies
SEC. 43. (a) It shall be a function of the
Bank to provide a source of needed equity
capital for small business investment com-
panies which meet the standards of eligibil-
ity promulgated by the Board wider section
42, by advancing funds to such concerns
in the manner and subject to such terms and
conditions as may be prescribed by the
Board.
(b) The Bank is authorized to supply
equity capital to any eligible small business
investment company through the purchase
of either the common stock or the preferred
stock issued by such small business invest-
ment company.
(c) The aggregate amount of stock of any
one small business investment company
which may be acquired and held by the
Bank at any one time shall not exceed the
lesser of 5 per centum of the paid-in capital
of the bank or 25 per centum of the issued
and outstanding voting stock of such small
business investment company.
Provision of loan funds to small business
investment companies
SEC. 44. (a) The Bank is authorized to
make loans, in the manner and subject to
such terms and conditions as may be pre-
scribed by the Board, to small business in-
vestment companies which meet the stand-
ards of eligibility promulgated by the Board
Under section 42, in order to provide such
concerns with funds needed for their financ-
ing activities.
(b) Loans made under this section may
be made directly, or in cooperation with
banks or other lending institutions, through
agreements to participate on an immediate
or deferred basis.
Purchase of Bank stock by small business
investment companies
SEC. 45. (a) Whenever the Bank advances
funds to a small business investment corn-
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1964 CONGRESSIONAL RECORD ? SENATE
pany under section 43 or section 44, such
small business investment company shall be
required to become a stockholder of the Bank
by investing in the common stock of the
Bank.
(b) A small business investment company
receiving equity capital from the Bank pur-
suant to section 43 shall be required to be-
come a stockholder of the Bank by investing
in the common stock of the Bank 5 per
centum of the amount of the capital so
provided by the Bank.
(c) A small business investment company
receiving loan funds from the Bank pur-
suant to section 44 shall be required to be-
come a stockholder of the Bank by investing
in the common stock of the Bank an amount
equal to 1 per centum per annum of the
amount of the loan funds so provided by
the Bank; provided, however, that the maxi-
mum funds so invested by the small business
investment -company shall. not exceed
per centum of the loan funds so prov
Q:.y. the Bank.
AMENDMENT OF FOREIGN
ANCE ACT OF 1961
The Senate resumed the consideration
of the bill (H.R. 11380) to amend fur-
ther the Foreign Assistance Act of 1961,
as amended, and for other purposes.
Mr. McNAMARA. Mr. President, a
parliamentary inquiry.
The PRESIDING OFFICER. The
Senator from Michigan will state it.
Mr. McNAMARA. What is the pend-
ing business?
The PRESIDING OFFICER. The
pending business is the Dirksen-Mans-
field amendment to the foreign aid bill.
Mr. MANS.KIELD. Has the pending
business been laid before the' Senate?
The PRESIDING OFFICER. It has.
Mr. McNAMARA. Mr. President, yes-
terday I started to make some remarks,
and by unanimous consent I relinguished
the floor. s Since I had not gotten very
far in my remarks, I shall start from the
beginning again.
Mr. President, in an earlier speech op-
posing the various efforts in Congress to
nullify the Supreme Court decision on
legislative apportionment, I devoted a
considerable portion of my remarks to
the situation in Michigan.
I cited numerous examples of how a
rural-dominated, minority-controlled
Michigan State Senate consistently?
over the years?vetoed progressive leg-
islation both needed and wanted by a
majority of the people of the State.
Further, I pointed out how this tyran-
nical minority usurped the appointive
powers of the Governor and indulged in
the most outrageous gerrymandering of
legislative and 'congressional districts for
partisan advantage.
Today, I intend to deal with this issue
of equal representation in a more gen-
eral sense and discuss some of its national
implications.
In my view, this is perhaps the most
vital issue to come before the Congress
In this century. Certainly, it is the most
important matter to come before the
Senate during the 10 years I have served
in this body.
Why do I say that?
Because for the first time in the his-
tory of this Republic, the United States
stands on the threshhold of achieving
a truly democratic and fairly representa-
tive government at the State level.
This is due entirely?in my mind?to
the historic apportionment decision of
the Supreme Court?first, in Baker
against Carr, and second, in Reynolds
against Sims.
There is no question in my mind?
and there seems to be substantial agree-
ment on all sides?that fair apportion-
ment of our State legislatures and in our
congressional districts would still be a re-
mote probability in the distant future?
were it not for the one-man, one-vote
principle established by the Supreme
Court.
In my previous remarks, I cited the
Michigan experience as an example of
the impossibility of obtaining equal rep-
resentation through the legislative route.
experiences of many other States
nfirms this.
Many years ago?back in the 1920's?
H. L. Mencken?who was an implacable
foe of what he described as "barnyard
government" asserted that the strangle-
hold maintained on most State legisla-
tures by rural minorities was "not only
unjust and undemocratic; it is absurd."
He predicted that it "could not last."
But Mencken was wrong. What he
called "barnyard government" has not
only lasted, it has become even more ab-
surd as the population of the country
shifted from countryside to city and from
central city to suburb.
Until these landmark Supreme Court
-decisions in the 1960's, malapportion-
ment and minority control have repulsed
all efforts by the downtrodden urban
majority to obtain relief.
A major reason for this is that the
bias, once built in, is almost impossible
to remove by political means because the
politicians simply will not vote them-
selves out of office.
Legislative apportionments, no matter
how outrageously unfair, have been
"frozen" into State constitutions by
amendment with no provision for change.
Rural minorities have further protected
themselves with cunningly devised pro-
cedures to make change extremely diffi-
cult; if not practically impossible.
And now we have serious efforts in
both Houses of Congress to nullify the
Supreme Court apportionment decisions
and, in effect, deny forever, the one
chance that the urban majority of this
country has for fair and equal represen-
tation in both the State legislatures and
in the House of Representatives.
Since I last spoke on this issue in the
Senate, the House of Representatives
approved the so-called tuck bill. We
debate here the Dirksen amendment to
the foreign aid bill. ,
The Dirksen amendment and the Tuck
bill have the same intent and are equally
dangerous because the purpose of both
is to remove the issue of legislative ap-
portionment from Supreme Court juris-
diction.
The Tuck bill would accomplish this
by a law of dubious constitutionality.
The Dirksen amendment?which I
think is even more dangerous?would
"buy time" so that an effort could be
made to deny the Supreme Court juris-
SIS
21553
diction in apportionment cases by a con-
stitutional amendment.
Presumably, malapportioned legisla-
tures that the Supreme Court already
has held to be illegally constituted in
several States would be allowed to par-
ticipate in this effort to legalize them-
selves.
The logic of this escapes me.
I am opposed to all efforts to nullify,
delay, cancel, repeal, or postpone the
Supreme Court decisions on apportion-
ment?be they in the form of a separate
bill, a rider on the foreign aid bill, or a
proposed amendment to the Constitu-
tion. I intend to oppose them with all
resources at my command and that in-
cludes voting against the foreign aid bill
if this noxious proposal is a part of that
measure.
I am opposed to removing apportion-
ment from Supreme Court jurisdiction
for the following reasons:
First. It is undemocratic in its pur-
pose and intended result.
Second. It is a reactionary attempt to
stem the tide of history that has enor-
mous potential for bitter, divisive strife.
Third. It is based on the indefensible
premise that an American citizen living
in a rural area is superior or to an Ameri-
can citizen lying in a city or suburb, and
thus should be given control of the Gov-
ernment.
Fourth. It is a dangerous intrusion up-
on the principle of separation of powers
in our Government and would establish
a perilous legislative precedent.
Fifth. It would prolong minority con-
trol in the House of Representatives and
thus make the Congress less responsive
to the national will.
Sixth. It would further weaken the
role of the State government.
Seventh. It would further enfeeble the
principle of political party responsibility
and accountability which is essential to
the successful operaton of a representS-
tive democracy.
I now propose to examine these seven
points in some detail: --
First, why is it undemocratic? -
It is undemocratic because it seeks to
preserve a system of minority rule, while
democracy requires equality of repre-
sentation.
The very word "democracy" was cre-
ated to distinguish government by the
people from government by kings or aris-
tocrats.
In democratic countries, the people
elect representatives who are continued
in office by reelection so long as they car-
ry out the will of the people.
It is a fundamental premise of democ-
racy that "all men are created equal"?
as we so proudly asserted in our Declara-
tion of Independence.
This means that all citizens must have
equal political rights. And the most im-
portant political right, if "government of,
by, and for the people" is to endure, is
equality of representation according to
the principle of "one man, one vote."
If a minority of the people, with over-
weighted voting power in a legislature,
can continually frustrate the will and
desires of a majority of the people, this
principle is violated.
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21554 CONGRESSIONAL RECORD ? SENATE
An argument made by those who favor
the malapportioned status quo is that,
even in a democracy, the rights of the
minority must be protected. I agree.
The rights of the minorities should be
protected?and they are?but not by
giving them the power to rule the ma-
jority.
Minorities are protected by the Bill of
Rights, enforced through the courts,
through rules of legislative procedure,
? and other methods.
The right of protection, however, does
not include the right to determine policy
for the majority.
Those who would perpetuate minority
rule express horror at the prospect that
one or two large counties would dominate
the government of a State.
To me, this is a specious argument
because it assumes that all residents of
these large counties have identical in-
terests that are in conflict with the rest
of the State.
We all know that many different oc-
cupational, religious, ethnic, and polit-
ical groups live within every metropoli-
tan area.
I do not believe there is any way to
identify interest groups, as such, for pur-
poses of special representation, without
violating the principle of equal repre-
sentation of each citizen, as an individ-
ual.
Second, I contend that this effort to
repeal or nullify the Supreme Court's re-
apportionment decision is a reactionary
attempt to stem the tide of history.
What is more, it has a great potential
for bitter, divisive strife.
The entire thrust of history in the
Western World, with few exceptions, has
been toward a more direct translation of
the desires of the people into the policies
of the Government. This in turn, has
led to a willingness to experiment with
reforms in hopes of solving the problems
of a changing world.
? In general, there has been a broaden-
ing of the franchise?the right to vote?
both in the United States and elsewhere.
As inequalities in representation were
eliminated, democracy flourished. The
rise of democratic institutions in the
West is the history of the removal of
class privilege from government.
The first to win representation in gov-
ernment from the kings and the emperors
were the lords and the princes who
claimed that noble birth entitled them to
special political rights.
As democracy grew, the right to rep-
resentation in the Government was ex-
tended to the "commoners." A whole
series of historic struggles have been
fought to eliminate special qualifications
for voting based upon ancestry, Property,
religion, race, sex, and colonial status.
Extension of the democratic processes
in the United States has been a some-
what gradual process even though the
direction has mostly been forward. It
took time before constitutional limita-
tions on popular government were
removed.
The direct election of U.S. Senators,
and the initiative, referendum, and recall
of public officials are relatively recent
changes.
Conversely, the argument has been
made by opponents of equal representa-
tion that we should not "upset tradition."
I am indebted to a Michigan con-
stituent, Mr. Maurice Waters, an assist-
ant professor of political science at
Wayne State University, for an eloquent
rebuttal to this argument.
In a recent letter to me, urging opposi-
tion to the Dirksen amendment, Mr.
Waters said in part:
As for the argument that historically we
have had a malapportionment system and
that therefore we ought not upset tradition,
one need only reply that any tradition which
encompasses injustice is not worth citing as
a ground for its continuation.
We have long since recognized this by
virtue of having freed the slaves, given
women the right to vote, and, in the past
several years engaged in efforts to supple-
ment our ideals of civil rights.
In every instance cited, tradition had to
be overcome, but it is equally true that those
who had a deep appreciation for the lack
of justice which those traditions represented,
saw fit to take appropriate action.
My dismay and concern regarding the
present moves to thwart the Supreme Court's
decision is deep, because I feel that many
basic needs confronting the American
people have been partially or totally ignored,
In large measure because millions have been
Inadequately represented * ? *.
Mr. President, it is in this area of
ignored needs that there exists a great
potential for bitter division and strife
among the American people.
To millions of, city-dwelling Americans
concerned with an equal voice in their
State legislatures, the Supreme Court
has, indeed, beeen "the court of last re-
sort". Frustrated by constitutionally
frozen districts and defeated in their
efforts to change matters at the polls,
they have turned finally to the Supreme
Court for relief.
And now it is proposed to bar them
from this last avenue of assistance.
One of the compelling arguments for
passage of the Civil Rights Act of 1964
was that it would take the issue of equal
treatment out of the streets and put it
In the courts, where it belonged.
Mr. PROXMIRE. Mr. President, will
the Senator yield?
Mr. McNAMARA. I yield.
Mr. PROXMIRE. A most convincing
argument on the side of supporting what
the Senator has been saying about
ignored needs and about how malappor-
tioned legislatures have prevented the
people from getting the kind of relief
and legislation which they want was
made by the senior Senator from Mich-
igan. Indeed, by far, the best exposition
on that subject was given by the senior
Senator from Michigan earlier in a
speech which he delivered. In that
speech the Senator cited case after case
in which, as I understood, State senators
who constituted a minority in the Mich-
igan State Senate but represented a very
big majority of the Michigan people
voted for reforms and for badly needed
programs, but were frustrated by those
senators who constituted a majority of
the State senate but a minority of the
People. Those . senators voted against
the measures.
September 16
Is it not true that under those circum-
stances, unless the decision of the Su-
preme Court is honored, this inability of
the State legislatures and State govern-
ments to meet the needs of the people
will continue, be expanded, and be mul-
? tiplied throughout the country by the
number of States that we have?
Mr. McNAMARA. That certainly is
true. I thank the Senator for referring
to my previous remarks. I documented
and provided irrefutable evidence, nam-
ing the incidents involved, in which a
portion of the Senate that represented
the minority of the people of the State
of Michigan was able to thwart the will
of the representatives of the majority.
Mr. PROXMIRE. It seems to me that
that is the kind of argument which has
been very telling. It is true that when
we have spoken on the subject, the num-
ber of Senators in the Chamber has been
small?perhaps very few. Nevertheless,
the debate is reported to the country. It
is read in the CONGRESSIONAL RECORD.
The speech delivered by the Senator
from Michigan a few weeks ago was obvi-
ously considered by other Senators.
I wish to call attention to the fact that
probably the most dramatic switch in
congressional sentiment that has taken
place in a long time was demonstrated
Yesterday when the Tuck bill, which
passed the House by 40 or 50 votes?not
an overwhelming number, but a decisive
victory?was brought up in the Senate.
Judging from the performance in the
House, if that bill had come up in the
Senate without any debate a month ago,
it is clear that it would have passed. But
what happened after our debate? It did
not pass the Senate. It was defeated
crushed by a vote of 56 to 21, which was
about as bad as beating as any proposal
that has passed this House has received
here in a long time.
What the Senator from Michigan is do-
ing today is making his carefully rea-
soned and persuasive speech is not merely
passing time but, it seems to me, he is
winning people who have open minds and
are willing to consider the issue and the
merits of the argument, winning people
to our side. Debate has done this and
it is being done every day the debate
continues.
Mr. McNAMARA. I thank the Sen-
ator from Wisconsin for his complimen-
tary remarks. I assure him that every-
thing he has said about my feeble efforts
In this case could be said for him, but
to a much greater degree, because he
has been a real leader in this effort to
support the decision of the Supreme
Court.
Mr. President, the proponents of
status quo malapportionment now pro-
pose to take the question of equal voice
at the ballot box out of the courts and
leave the aggrieved citizens only the re-
course of the streets.
I do not suggest that nullification of
the Supreme Court "one man, one vote"
decision would result in immediate street
riots of protest.
But I think perhaps that a good case
could be made for the argument that
some of the unfortunate rioting we are
experiencing this summer is caused?in
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196.4 CONGRESSIONAL RECORD ? SENATE
part?by the failure of malapportioned,
rural-dominated State legislatures to
make any attempt at all to solve the
urgent social and economic problems of
the big cities within their jurisdiction.
And if we confirm this minority con-
trol for years to come, the ignored prob-
lem of the big cities and the suburbs
will become even more explosive, and the
desperate efforts to solve them even more
violent.
They will be aggravated even more by
the continuing shift of population from
the farm to the city?a movement that
is inevitable.
This massive population shift that al-
ready has changed our country from a
rural, smalltown society to an urban,
highly industrialized nation makes in-
evitable the eventual defeat of the effort
to deny equal voting privileges to the
city-dwelling majority.
It might well be said that the longer
this justice is denied and delayed, the
more drastic will be the reaction when
equality is finally achieved and the
majority does indeed govern.
My third basic criticism of malappor-
tionment?and the efforts to perpetuate
it?is it is based on the indefensible pre-
mise that an American citizen living in
a rural area is somehow superior to an
American citizen living in a great city
or suburb.
This is an inherent, though often un-
spoken argument of the malapportion-
ers?that only those who live in the wide
open spaces can be entrusted with self-
government and that there is something
inherently wicked and evil in city and
suburb, that disqualifies those who live
there from exercising equal power at
the ballot box.
This viewpoint was never true?even
? during the pioneer days when it received
its widest credence, and it is preposterous
that it would continue to survive in our
urban society today.
The overwhelming majority of mail
I am receiving on this issue from Michi-
gan is in opposition to the Dirksen
amendment and the Tuck bill.
At the latest count, I had received only
five letters urging me to support status
quo malapportiornnent, compared to
more than 100 in opposition. And two
of the five "pro" letters were from the
Farm Bureau and the Lumbermarfs As-
sociation.
My fourth major objection to the Dirk-
sen-Tuck proposals is that they consti-
tute a dangerous intrusion upon the
principle of separation of powers in our
Government and would establish a peril-
ous legislative precedent.
- As a resident of Jackson, Mich., wrote
me recently:
For if Congress passed an unconstitutional
law, it could simultaneously pass a provision
'withdrawing the jurisdiction of the Court
on that law. Obviously, this precedent
would gravely endanger the people.
The basic question here may be broken
down into three parts: '
First. Can Congress withdraw juris-
diction of the Federal courts over State
legislative apportiontrient?
Second. Can Congress prohibit judi-
cial review in any Federal court of a
No. 177-5
question concerning a violation of the
U.S. Constitution, and
Third. Can Congress withdraw juris-
diction over such a question from the
inferior Federal courts and at the same
time deny appellate review by the
Supreme Court over such decisions by
the highest courts of the various States?
If apportionment jurisdiction is taken
from the Supreme Court, a dangerous
precedent will have been established.
This precedent?withdrawal of jurisdic-
tion?would in effect destroy the system
of checks and balances?the check of the
Supreme Court to invalidate an uncon-
stitutional statute?and result in a radi-
cal change in constitutional structure.
These specific questions have not been
finally disposed of by the Supreme
Court.
The celebrated McCardle case of? Be-
construction days is often cited as prece-
dent for congressional withdrawal of
jurisdictional authority from the Su-
preme Court.
William H. McCardle, it will be re-
called, was editor of the Vicksburg, Miss.,
Times during the Reconstruction period
after the Civil War. He was outspoken
In his editorial criticism of the Union
troops, and the officer in charge of the
occupation forces had him arrested and
held for trial on charges of what
amounted to sedition.
McCardle, alleging unlawful restraint
? and challenging the validity of the Re-
? construction Acts which were the au-
thority for his arrest, filed a petition for
a writ of habeas corpus in the Federal
Circuit Court of southern Mississippi.
The writ was issued, but after a hear-
ing, McCardle was returned to the cus-
tody of the military authorities. He
then appealed to the Supreme Court, and
- it looked very much like he might win,
since the Court had previously held un-
constitutional the Reconstruction Act
requiring test oaths from southerners.
Arguments were heard on the case, but
before the Justices could hold conference
and reach a decision, the Congress in
1868 intervened, enacting a statute with-
drawing appellate jurisdiction from the
Supreme Court in habeas corpus cases.
The issue then became whether the
Court had jurisdiction, in light of the new
law, and the Court held that it did not,
dismissing the case.
A few years later, the Congress evi-
dently regretting what it had done, re-
pealed this ill-advised la*.
Although the McCardle case is cited
as a- precedent, there is some question
whether it would be applicable in the
present instance.
It is worth noting that the Court was
not faced with the question of total
denial of Federal judicial review of Fed-
eral constitutional questions, as is pro-
posed in the Tuck bill and?eventually?
by the Dirksen amendment.
It is extremely doubtful whether the
Court would sustain as constitutional,
legislation denying both original juris-
diction and judicial review by the Su-
preme Court of State court decisions on
matters of legislative apportionment.
As Anthony Lewis stated in the New
York Times of August 16, 1964:
21555
Foreclosing enforcement of the right to
equal representation would be a precedent
for picking out any other constitutional
right that Congress did not like at the mo-
ment and excluding it from the courts.
In other words, denial of equal voting
rights today could be followed by denial
of freedom of speech, press, or worship
tomorrow, given the, appropriate emo-
tional and political climate.
My fifth point in opposition to freez-
ing the status quo on legislative malap-
portionment is that it would prolong
minority control in the House of Repre-
sentatives and thus make the Congress
less responsive to the national will.
Malapportioned State legislatures have
a habit of stamping their distorted image
upon congressional districts within
their own State, as we know from bitter
experience in Michigan.
And while the Constitution requires
that the States be represented in the
House of Representatives according to
the population of the several States, the
distribution of that representation with-
in the State is determined by the State
legislature.
Mr. CLARK. Mr. President, will the
Senator yield?
Mr. McNAMARA. I am glad to yield
to the Senator from Pennsylvania.
Mr. CLARK. The Senator is making a
most important address on the matter of
reapportionment, and, needless to say,
I am in complete accord with the posi-
tion he has taken, which I think is com-
pletely sound both legally and from the
point of view of justice and equity.
I had called to my attention by a
rather prominent member of the Johnson
administration the other day an article
which appeared in the San Francisco
Chronicle a couple of weeks ago. I won-
der if my friend from Michigan saw it. I
thought I would put it in the RECORD.
It is written by a columnist named
Arthur Hoppe, and it is entitled "Fair-
play for Rocks."
Does the Senator recall having seen it?
Mr. McNAMARA. I do not recall hav-
ing read it.
Mr. CLARK. The article points out:
Our Supreme Court says we have to re-
arrange our State legislatures to conform to
the conservative doctrine of "one-man, one-
vote." And naturally this has deeply an-
gered all liberals committed to the truly
democratic concept of equal representation
for all?for all rocks, trees, gravel pits, wheat-
fields, gold mines, and oil wells.
Mr. Hoppe intends to organize a spe-
cial committee to see to it that the rocks
get fair treatment. He points out that
the fervor of those who want to see every
rock have a vote must bring a lump to
one's throat:
And if we can just stir up our brothers,
the rocks, to seek their freedom now, we
shall win our rightful place in our society.
In a landslide.
Mr. President, 'if the Senator from
Michigan is agreeable, I ask unanimous
consent to have the article from the San
Francisco Chronicle printed in the Rao-
ORD at this point.
Mr. McNAMARA. I have no objec-
tion. I thoroughly agree with the senti-
ment expressed. Whether it is measured
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21556 CONGRESSIONAL RECORD ?SENATE
in terms of rocks or trees or acres, or by
whatever yardstick, it all comes to the
same conclusion: There is no justifica-
tion for it.
There being no objection, the article
was ordered to be printed in the RECORD,
as follows:
FAIRPLAY FOR ROCKS
(By Arthur Hoppe)
'Our Supreme Court says we have to re-
arrange our State legislatures to conform to
the conesrvative doctrine of "one-man, one-
vote." And naturally this has deeply angered
all liberals committed to the truly demo-
cratic concept of equal representation for
all?for all rocks, trees, gravel pits, wheat-
fields, gold mines, and oil wells.
"Are these great, economically important
land areas to go unrepresented," cries our
State chamber of commerce, "just because
they are low in population?" "Would that
be democratic? Of course not. It's rank dis-
crimination by those narrow-minded bigots
who believe in human supremacy.
So to coordinate the efforts of all us fight-
ers against intolerance and injustice, I'm
forming the National Association for the Ad-
vancement of Rocks. Let us march forward
together under the ringing battle cry: "One
rock, one vote." _
And if we must? reapportion our State
legislature, let us do so fairly. Look at the
sorry mess it is now. We have 80 assembly-
men in the lower house, each elected on the
basis of populaton. Fair enough. Humans
should have a voice, too.
But our State senate is a complete hodge-
podge. As is often pointed out, the State
senator from Los Angeles, the able Mr. Tom
'Rees, represents 7 million people. But who
cares that most rural senators must struggle
against overwhelming odds to guard the
legislative interests of at least six times that
many rocks? Is this fair?
Worse, several of our State senators repre-
senting oil wells also have people in their
districts. One can scarcely imagine the diffi-
culties this causes. For no man can serve
?two masters. And consequently our oil wells
are definitely not receiving the full-time
legislative representation they deserve. ?
There is obviously only one equitable
method of bringing order out of this chaos:
Let our assemblymen continue to represent
people and allow our distinguished State
senators to represent rocks. Not only rocks,
of course, but trees, gravel pits, oil wells, and
the like. A senator for each, I say?a dedi-
cated statesman who could devote full time
to whatever special interest he represents.
Instead of.part time, as he does now.
Yes, rock lovers, we must end this taxation
of oil wells without adequate representation.
We must put a stop to this exploitation of
our resources by revenue agents. We must
? lift up our downtrodden gravel.
Ah, the fervor of us upholders of true
democracy brings a lump to your throat.
And if we can just stir up our brothers, the
rocks, to seek their freedom now, we shall
win our rightful place in our society. In a
landslide.
Mr. McNAMARA. Mr. President, a
legislature controlled by a rural minority
. usually ties itself into gerrymandering
knots in order to give a rural, conserva-
tive weighting to its congressional dele-
gation, at the expense of the under-
represented cities and suburbs.
As a result, the city dweller is denied
equal voice in both his State and National
legislatures.
A Congress that is heavily weighted in
favor of the Nation's rural and conserva-
tive community has difficulty in respond-
ing to the needs of a rapidly-growing,
urban-centered society.
A recent study by Congressional
Quarterly indicates that of the 435 Rep-
resentatives, 250 came from districts that
were rural-based. Furthermore, most
congressional districts of this type are
fairly "safe" politically. According to
the Quarterly study, about 300 congres-
sional seats almost never change party
hands, leaving only 125 seats that are
genuinely competitive.
As a result, conservatives of both
parties become entrenched in dominant
positions on the all-important commit-
tees. They tend to become more and
more preoccupied with the narrow con-
cerns of their districts at the expense of
national needs.
Most of the opposition to such needed
programs as aid to depressed areas, man-
power training, urban renewal, mass
transit, slum clearance, air and water
pollution control and juvenile delin-
quency comes from the over-represented
rural areas.
The fact that many of these programs
? have managed to scrape through the
Congress in recent years?often in di- .
luted and inadequate form?is no argu-
ment for continuing malapportionment.
It merely emphasizes the need? for
correction.
Mr. Justice Black, in writing the ma-
jority opinion in the landmark case of
Wesberry against Sanders, in October
1963, that struck down a Georgia con-
gressional districting law, stated in part:
We agree with the district court that the
1931 Georgia apportionment grossly dis-
criminates against voters in the Fifth Con-
gressional District.
If the Federal Constitution intends that
when qualified voters elect Members of Con-
gress, each vote be given as much weight as
any other vote, then this statute cannot
stand.
We hold that, construed in its historical
context, the command of article 1, section
2, that Representatives be chosen "by the
people of the several States" means that as
nearly as is practicable one man's vote in a
congressional election is worth as much as
another's.
A fifth basic objection to continuation
of legislative malapportionment is that
it would further weaken the role of State
government in our sof.iety.
It is somewhat ironic that the most
vociferous proponents of States rights
are most prominently identified in the
campaign to cancel the Supreme Court's
' jurisdiction over legislative apportion-
ment, since it is the rural-dominated
State legislatures that have ignored the
20th century problems of their metro-
politan areas that are Most responsible
for their own decline.
In my earlier remarks I described how
a rural minority controlled State senate
in Michigan had exercised a ruthless
series of legislative vetoes over progres-
sive programs proposed by a popularly
elected Governor and favored by a clear
majority of the people of the State.
I do not believe that the Michigan ex-
perience is unique. It has been dupli-
cated in many States in all sections of
the country.
The fact is that the legislatures of this
country have remained citadels of con-
conservatism during the past 50 years
at a time when the liberal sentinients
?
Septembr 16
have been confined to the executive and
judicial branches of Government.
Despairing of assistance from their
State capitols in solving the severe prob-
lems of industrial development and
urban growth, the great cities of the
country have been forced to turn to the
Congress for Federal help?in slum clear-
ance, urban renewal, mass transit, hos-
pital construction, and other critical
areas.
By placing undue emphasis on econ-
omy at the expense of social need; by
making niggardly appropriations for ed-
ucation, welfare, mental health; by
shortchanging the cities in the distri-
bution of tax moneys, the rural-domi-
nated legislatures have been a primary
cause of the drastic decline of the role
of the State government.
I believe?as I have said previously?
that when and if the States achieve truly
representative government much of the
noisy arguments over States rights versus
concentration of power in Washington
will disappear.
Truly representative State govern-
ments?working in harmony with Fed-
eral and local governments to meet the
problems of America that confront us in
the 1960's?will win back the prestige
and esteem they once had.
But if we seek to perpetuate the mal-
apportionment that has brought about
their present state of ineffectiveness and
public disrepute, State government will
continue to wither and decline.
Finally, to prolong legislative malap-
portionment would be to further enfeeble
the principle of political party responsi-
bility and accountability which I believe
is essential to the successful operation
of a representative democracy.
Political scientists, generally, are in
agreement that inequal apportionment
handicaps political party responsibility;
that modern democracies depend upon
political parties to make representative
institutions work.
An urban, industrial society such as
ours needs the help of political parties
to narrow down the field of potential
candidates; to find a simple, short-hand
way of knowing what .candidates stand
for, and to take on the chores of orga-
nizing and financing election campaigns.
Within the legislatures, too, the parties
should perform the necessary functinns
of organizing committees and acting
upon legislation to carry out the pro-
grams they have promised in their cam-
paign platforms.
Most important, the two-party system
provides?or should provide?the voters
with records on which they can judge
the candidates.
But this rational and logical system
of political accountability is frustrated
and defeated by unrepresentative appor-
tionment. Too often we have the situa-
tion where one party with broad popular
appeal elects a Governor by a substan-
tial majority.
But through malapportionment he is
forced to deal with a legislature con-
trolled by senators and representatives?
usually of the other party?that have
been elected by a minority of the voters.
As an example of this, I cite the 1958
election in Michigan where Gov. G. Men-
nen Williams was reelected to an un-
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1964. CONGRESSIONAL ? RECORD:- SENATE
precedented sixth term by a handsome
plurality of nearly 150,000 votes.
But in the same election, the Demo-
crats and Republicans each got the same
number of seats in the house of repre-
sentatives, even though the Democratic
house candidates received 627,000 more
votes statewide.
In the State senate, where malappor-
tionment was even more flagrant, Re-
publicans won 10 more seats than the
Democrats, despite the fact that the
Democratic senatorial vote?statewide?
was 45,642 votes higher than the Repub-
lican.
?
Mr. PROXMIRE. Mr. President, will
the Senator yield?
Mr. McNAMARA. I yield.
Mr. PROXMIRE. What was the di-
vision of the Michigan State Senate?
Did the Senator say that there were 10
more Republican State senators than
Democratic senators in the 1959 legisla-
ture?
Mr. McNAMARA. I repeat?in the
State senate, where malapportionment
was even more flagrant, Republicans won
10 more seats than the Democrats, de-
spite the fact that the Democratic sena-
torial vote, statewide, was 45,642 votes
higher than the Republican.
Mr. PROXMIRE. That is a dramatic
demonstration of the frustration of the
popular will. We have a situation in
which a majority of the people vote for
representatives of one party. But they
do not get a majority in the State senate.
Instead, they get a relatively small mi-
nority. Ten senators in a body the size
of the Michigan State Senate would be
a very clear and decisive?in fact, almost
overwhelming?majority. It would be in
the Wisconsin State Senate. I believe
that it is true also of the Michigan State
Senate.
Mr. McNAMARA. As I recall, it was
22 to 12.
Mr. PROXMIRE. Almost 2 to 1.
Mr. McNAMARA. That is correct.
Mr. PROXMIRE. I believe that is a
dramatic demonstration of the evils of
the malapportionment of the rotten bor-
ough system.
Mr. McNAMARA. I thank the Sena-
tor for emphasizing that point. It im-
pressed me in that manner.
Thus, unequal apportionment of the
legislature made it impossible for the ma-
jority party in the State to assume its
proper responsibility for the conduct of
the State government.
The result in Michigan, and in a host
of other States with similar situations, is
governmental stalemate and political
frustrations.
I have spoken here today, as I did on
August 17, with what is unusual length
for me.
I do so because I feel that legislative
apportionment is the most important is-
sue facing this Congress.
I believe that we have been acting
with undue haste in considering these
measures without public hearing and
without proper deliberation.
For that reason, I think it is essential
that we have extended discussion of this
vital matter so that public opinion will
have time to mobilize and make itself
known to the Congress.
?
Therefore, I have spoken twice at
length and am prepared to do so again
in the, future should that prove neces-
sary.
Mr. DOUGLAS. Mr. President, will the
Senator yield?
Mr. McNAMARA. I yield.
Mr. DOUGLAS. I congratulate the
Senator from Michigan for the very able
address which he has just delivered.
While I did not hear all of it, I read it
all. I believe it is one of the clearest and
most forthright statements that have
been made. It is characteristic of the
Senator from Michigan, who is always
forthright in his statements and' in his
attitude.
I believe it can be said of the Sena-
tor from Michigan: "Behold .a Senator
in whom there is no guile." Everyone
always knows where he stands. He does
not make any ambiguous statements. He
does not cast any ambiguous votes. His
statement will have a real effect on pub-
lic opinion.
I was especially interested in the open-
ing part of the Senator's address. It
sketched some of the historical develop-
ments. As I study the pattern of legis-
lative representation, it appears that the
rough outlines of the pattern of repre-
sentation in most of the States was laid
either by 1900 or in the years around
.or before 1900. In Vermont, the pattern
in the lower house follows the Constitu-
tion of 1793. That is 171 years in the
past. I believe that in most of the States
the legislative districts were laid out in
the years around 1900, or in the years
preceding 1900.
At that time, the United States was
a country consisting primarily of farms,
small towns, and small cities, and the
representation in 1900 was approximate-
ly correct. It was not precisely correct,
for in such States as Vermont, New
Hampshire, and Connecticut there were
grave disparities in the lower houses, and
in States_ such as Rhode Island, grave
disparities in the composition of the
State senates, but in many States it bore
a rough approximation to the population.
Indeed, in the constitutions of many
States?probably in most of the States?
there was an injunction that there should
be periodic apportionment after the de-
cennial census according to population.
What has happened recently has been
the burgeoning of cities and then of the
suburbs.
I believe that some figures I had
printed in the RECORD several weeks ago
are very appropriate. As late as 1910,
only 31 percent of the population lived
in what might be termed metropolitan
districts; that is, cities and suburbs.
In 1960, 63 percent of the population
lived in those districts. So we had
changed from a nation in which less
than one-third of the population were
residents of metropolitan areas to a na-
,tion in which nearly two-thirds of the
population were residents of metropoli-
tan areas.
In the years since 1960, this protess
has been accelerating. I believe it is
safe to say that now two-thirds' of the
population live in the cities and suburbs,
with the Suburbs becoming a constantly
increasingly factor. Ten years from now,
21557
probably 70 or 75 percent of our popu-
lation will live in those areas. And yet,
in the main, until the Supreme Court
decision was handed down, we were con-
fined to a pattern of representation that
was laid down around 1900, or, at the
latest, 1910.
As the Senator has said, the State leg-
islatures refused in the main to appor-
tion themselves. The Supreme Court de-
cision therefore liberated the cities and
suburbs and offered, for the first time,
hope that the legislatures might bear
some pattern to population, with all the
great possibilities that this decision
opened up; namely, that the cities and
suburbs would now have, at least, a
larger degree of home rule and not be
subject to the domination of a rural
minority.
If this process were allowed to con-
tinue, we could have legislatures which
would correspond to the relative dis-
tribution of population. If this process
were denied, or arrested, and a consti-
tutional amendment were put through
which would prohibit the courts from in-
tervening, there would be very little pros-
pect that the legislatures would redis-
tribute the seats. The situation would
be frozen with a 1900, or earlier, pattern
of reapportionment in the face of a
changing population.
That is the historic situation which is
created. The Senator from Michigan put
his finger on it in his usual forthright
fashion, without any dOubletalk. He
made his position clear.
I thank the Senator from Michigan for
his very clear exposition. There may not
be many Senators in the Chamber who
have heard the Senator speak. But
there are approximately 50,000 subscrib-
ers- to the CONGRESSIONAL RECORD. A
goodly percentage .of those subscribers
read the RECORD every day. The Corr-
crlEssromm. RECORD has an influence on
newspapers, magazines, and thoughtful
attorneys in small towns and cities and
those interested- in government. So the
words of the Senator will go out across
the country through the medium of the
printed page. They will have a tremen-
dous influence on public opinion. Again,
I thank the Senator from Michigan for
once again putting us all in his debt.
Mr. McNAMARA. I thank the dis-
tinguished Senator from Illinois, who
time and again has expressed his deep
concern, his dedication, and?his desire to
support the Supreme Court decision.
I point out, however, that the Sena-
tor talked about malapportionment that
has dated back for a great many years.
'We recently heard of the constitutional
convention that was held in Michigan.
Governor Romney and those in control
of that constitutional convention came
forth with a proposal based 80 percent
on population and 20 percent on- geog-
raphy.
Mr. 'DOUGLAS. Namely, our trees,
acres, and cows, as well as people.
Mr. McNAMARA. That is 'correct.
Even as late as a year ago, this was the
thinking in a great many areas of the
country. So we do not have to go back
as far as the Senator goes in order to
shocir the injustices that have existed and
do exist, and would have continued to
?
?
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21558
:CONGRESSIONAL RECORD -SENATE September 16
exist in the future, as the Senator from
Illinois correctly concluded, if it were not .
for this great landmark decision of the ?
Supreme-Court.
I thank the Senator from Illinois very..
much.
Mr. McGOVERN. Mr. President, 'I
-take-this-opportunity to express my own
personal appreciation and, admiration to
the Senator from DOUGLAS],
the Senator from Wisconsin [Mr. PROX-
MIRE], the -Senator from Michigan " [Mr. -
McNAmAaal, the Senator from Pennsyl-
vania [Mr. CLARK], and the others for
the courageous and effective fight they
have waged here on the Senate floor for
the past few weeks in connection with
? the so-called Dirksen amendment.
I say quite frankly that when this
amendment was first offered,. I did not
fully realize all of inherent dangers in
the proposal. But, after reading the
scholarly presentations that have been
made on the floor of the Senate by these
Senators I have just named, I have come
to the conviction that this is indeed a
dangerous and ill-advised proposal. I
am happy to join my colleagues in op-
posing it here today.
I am strongly opposed to the amend-
ment of the Senator from Illinois [Mr.
Draxszu] which seeks to set aside a his-
toric ruling of the Supreme Court rela-
tive to the apportionment of our State
legislatures. The weaknesses of the Dirk-
sen amendment are many. The proposal
is not only subject to fundamental proce-
_ dural objections; it is ill-conceived in
substance. The seriousness of the issues
raised by the amendment and the dan-
gerous precedent which would be set by ?
its passage cannot be ignored. We may ,
be facing here the most far-reaching,
historic decision of this Congress. Let no
one fail to realize that our decision on
this amendment will profoundly influ-
ence the future course and --development
of the American constitutional system.
The amendment poses a grave blow to
the traditional constitutional principle of
judicial review; it is procedurally
unsound.
On procedural grounds, the proposal
Is ill-advised at the outset because it of-
fers no opportunity for careful commit-
tee examination. There have been no
hearings on this amendment although
the problem of reapportionment of State
legislatures raises legal and constitu-
tional issues of grave importance.
These complicated legal issues ought
to have been carefully explored in hear-
ings before the Judiciary Committee.
Instead they were pushed without care-
ful and deliberate consideration onto the
floor of this body in the closing days of
the session.
As a consequence, the Senate has not
been able to give this questiOn the care-
ful examination it deserved and that it
received by the Supreme Court. . To set
aside what our highest judicial tribunal
has declared to be an individual con-
constitutional right is bad enough. But
to do so in haste,- without proper legal,
analysis and attention, is excessive legis-
lative license.
The U.S. Senate has often been re-.
ferred to as the most deliberative body
in the world; from its treatment of the
Important question now before us ,-one
wonders whether such a lofty description
is always merited. As Dean Rostow of
the Yale Law ?School pointed out in 'his
brilliant article recently in the Washing-
ton Post, criticism of the Supreme Court
ought to be offered carefully and
thoughtfully. Yet, only because of. the
determined efforts of several Senators,
most notably Senators DOUGLAS, PROX-
MIRE, CLARK, and METCALF has public
opinion been alerted to the serious
danger posed by passage of the Dirksen
amendment. Haste is never a soundpro-
cedure for fundamental changes in con-
stitutional law.
Secondly, on procedural grounds, the
foreign aid bill is a strange vehicle for
an amendment on the reapportionment
of State legislatures. The practical ef-
fect of this technique is all too clear. We
are all aware that the likelihood of a
Presidential veto of the foreign aid bill
is slim. By attaching the Dirksen
amendment to this vital oversea pro-
gram a way is sought to circumvent the
President's constitutional veto power.
It seeks to avoid executive considera-
tion of the merits of the Dirksen amend-
ment by attaching it to foreign assistance
and American foreign policy.
A further objection to this amendment
is that it is not geared to the specific
needs and problems of reapportionment
in each individual State. In legislative
reapportionment cases the Supreme
Court has given great weight to the vary-
ing problems of the several States. Its
orders have taken into account special
needs and circumstances. The proposed
amendment, on the other hand, orders
a blanket Stay of all judicial proceedings.
The current proposal is a broad and
sweeping one, very unlike the particular-
ized opinions of the Court. Inherent in
this 'attack on the independence of the
courts is a stifling of judicial discretion.
It has been urged in support of this
amendment that it is intended to bring
relief from the disruption caused by the
recent Supreme Court decisions. That .
supposed disruption, however, is nothing
as compared to that which would be
caused by the amendment now before
us. The amendment would void hard-
won reapportionment in several States
and reinstate the inequitable situation
existing prior to the Supreme Court de-
cisions. The senior Senator from Wis-
consin has already indicated the dire
consequences that the amendment might
have in his State. The legislatures of
numerous States have taken steps to
comply with the Supreme Court deci-
sions. This amendment, if passed, would
tend to negate the progress made in these
States and would frustrate orderly com-
pliance with a constitutional mandate.
Another factor, which has been em-
phasized by the Senator from New York
[Mr. JAvrrs], is the dubious constitu-
tionality of the Dirksen amendment.
Following the passage of this amend-
ment, there would undoubtedly be dis-
agreement in the lower Federal courts
as to its constitutionality. Confusion
would exist as to whether the amend-
ment was merely a "request" to the
courts or an outright "order." The dis-
ruption that would' be caused to orderly
reapportionment by such a situation is
apparent. And if, as many of us believe,
the framers of this amendment are seek-
sing to rebuke the Court and establish
congressional control over decisions of
the courts, then the amendment is per-
nicious and unconstitutional.
? Finally, we must ask ourselves whether
' there is any practical necessity for this
'procedure. Time and again the courts
have granted stays to their reapportion-
ment orders where unusual circum-
stances have made immediate com-
pliance with the Supreme Court decision
impossible. This amendment is to a
large extent superfluous. The courts do
not need to be told by Congress when
justice demands that a stay be granted
to a reapportionment order? Justice is
a matter with which our Federal tri-
bunals are well acquainted. The courts
are in fact allowing the States a "rea-
sonable opportunity", to reapportion.
The Dirksen amendment is even more
objectionable on grounds of substance
than procedure. The amendment would
lead to a dangerous confrontation of
Congress and the Supreme Court. By
passing this amendment, we would in
effect be directing the verdicts of the
Supreme Court. We would be striking
at the Constitution itself and the funda-
mental principle of the separation of
powers. The Supreme Court would no
longer be the umpire of the Federal sys-
tem; Congress would have assumed this
role. Respect for the independence of
courts demands that we, as Members of
Congress, respect the Supreme Court
when it acts within its proper sphere.
Traditionally, constitutional adjudica-
tion has been a matter for the courts,
and not for Congress. Government
under law becomes a meaningless slogan
if Congress can tell the courts how they
must decide cases involving individual
constitutional rights.
And as the distinguished junior Sen-
ator from Montana [Mr. METCALF] has
ably demonstrated, the one-man, one-
vote principle is not merely a result of
statutory construction. Voting equality
is an individual constitutional right. The
Dirksen amendment does not seek to,
suspend a certain judicial construction
of a statute; it would suspend a funda-
mental constitutional right. By legisla-
tive fiat we would prevent the Supreme
Court from protecting a basic right of
American citizenship?the right to an
equal vote. If Congress can so suspend
one fundamental constitutional right,
why not another? What would there be
to prevent Congress from suspending the
right of free speech or freedom of reli-
gion? There is great danger in thus at-
tempting to remove certain categories of
cases from judicial consideration. A
pernicious precedent would thereby be
set. To substantially delay the realiza-
tion of a basic' constitutional right is be-
neath the dignity and the proper func-
tion of the Senate.
The decisions in Baker against Carr
and the cases following it were designed
to correct a situation in which smne
areas were grossly underrepresented in
numerous State legislatures. The shock-
ing inequities of the overweighted vote
are alien to out basic concepts of politi-
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1964, CONGRESSIONAL RECORD SENATE
cal -democracy. Yet the right of fair
representation is now denied many ?
American citizens by improper legisla-
tive apportionment. It was this situa-
tion which led the Supreme Court to rule
that unequal representation was not
equal protection of the laws. We must
not forget that political equality is .the
fundamental principle of any democracy.
The recent decisions of our Supreme
Court are yet another proof that democ-
racy acts to correct its own evils. The
Court seeks to correct an imbalance in
legislative representation that now tends
to be weighted against the town dweller,
but tomorrow it may be the rural resi-
dent whose rights will need the protection
of the Court. The Dirksen amendment
seeks to preserve an unrepresentative,
undemocratic system.
The Dirksen amendment has been
aptly labeled the "rotten borough"
amendment. Its effect would be to per-
mit unbalanced State legislatures to per-
petuate themselves by ratifying a con-
stitutional amendment legalizing the
imbalance. The senior Senator from
Montana, our distinguished and honored
majority leader, a cosponsor of the bill,
has said that it was not his purpose to
encourage a constitutional amendment if
It was to be submitted for approval by
legislatures as currently constituted.
But make no doubt about?it, this bill
will be attempted if we pass the amend-
ment as Senator DIRKSEN, the original
architect of the proposal, has made per-
fectly clear. We ought not to give the
malapportioned legislatures this chance
to so preserve themselves. Any vote on
such a constitutional amendment must
be on the basis of the one-man, one-
vote rule announced in Reynolds against
Sims.
It has been urged that if the people
wish their State legislature to be appor-
tioned on a basis other than population,
they may so decide by majority vote.
This proposition is unsound. The Su-
preme Court has stated that an equally
weighted vote cannot be abridged by the
vote of a majority of the State electorate
if the resulting apportionment scheme
violates constitutional requirements?
W.M.C.A., Inc. against John P. Loinenzo.
The right to an equal vote is an inalien-
able right which cannot be destroyed by
the majority. Again, it should be em-
phasized that the Dirksen amendment
suspends a constitutional right which is
personal in nature.
The senior Senator from Wisconsin
[Mr. PRoxivinml has said that "poor ap-
? portionment prevents State action, and
makes Federal action more likely." 'Un-
der the apportionment systems declared
unconstitutional by the Supreme Court,
our town dwellers are not adequately
protected by the State legislatures. As-
a consequence, the cities and local com-
munities have been encouraged to resort
to the Federal Government for assist-
ance. Reapportionment on the basis of
population is destined to lead to more
? healthy State and local government and
to breathe fresh life .and vitality into the
principle of local responsibility. It is
indeed ironic to Se,e certain Senators who
continually defend the virtues of States
rights supporting this amendment, which
can only serve to perpetuate a situation
of increasing reliance on Washington on
the part of local populations. A vote
against the Dirksen amendment will go
a long way toward ending political iner-
tia in many State legislatures. A truly
representative State legislature will be
able to do a better job at the State level.
Malapportionment can only be a hurdle
to effective State and local government.
Mr. President, I have attempted to
summarize my objections to the Dirksen
amendment. I wish to close by con-
curring in the excellent closing state-
ment of the junior Senator from Mon-
tana [Mr. METCALF] when he said on
Tuesday:
I am convinced that the Dirksen amend-
ment is wrong, it is wrong in the spirit of the
Constitution, it is wrong in the principle of
the separation of powers, it is wrong in the
doctrine of the supremacy of law. It should
be rejected.
THE THREAT TO RURAL AREAS
Mr. President, turning to another mat-
ter, but a related matter, it has been
argued by some of the proponents of the
Dirksen amendment, and some of the
opponents, that it is designed to favor
the ruraldistricts of the country. To
whatever extent that argument has any
merit?and I would seriously question
that it has, because I think any action
which abridges any constitutional right
is in the long run a fundamental threat,
not only to town dwellers, but to all
Americans?that kind of unprecedented
and dangerous act can set a pattern for
a later threat aimed atrural America.
But if those who are pressing this
amendment on the ground that it will
assist the rural sections of the country
are sincerely concerned about that issue,
, then I am sure they will also be carp-
luny and thoughtfully concerned about
the agricultural problem that faces us
in 1964 and the years ahead.
It is to that subject, which is somewhat
related to the question now under con-
sideration, that I should like to turn my
attention briefly at this time.
THE AGRICULTURAL RECORD
Mr. President, it is not possible to pre-
dict at this moment in the current Presi-
dential campaign where Senator GOLD-
WATER will be on the farm issue in
November.
It is time, however, to clear the record
. _
to date.
In 1960, Senator GOLDWATER proposed
to eliminate the farm programs built
over the past 30 years. He said in Sep-
tember 1960 in Los Angeles, Calif.:
I favor placing agriculture back under the
law of supply and demand, with provisions
for farmers hit by acts of God."
In 1960, in his book, "The Conscience
of a Conservative," he wrote:
What has been lacking is not an under-
standing of a problem that is really quite
impossible not to understand but the politi-
cal courage to do something about it.
Doing something about it means?and
there can be no equivocation here?prompt
and final termination of the farm subsidy
programs. The only way to persuade farm-
ers. to enter other fields is to stop paying
inefficient farmers for produce that cannot be
sold at free market prices.
21559
This rash condemnation of farm pro-
grams and price supports was modified
when Senator GOLDWATER had captured
the Republican nomination for the Pres-
idency. He then concluded that there
should be:
Price supports?designed to help farmers
achieve orderly marketing within the-frame-
work of our dynamic American market sys-
tem. Price support programs should be vol-
untary and should be established for specific
commodities, in order to widen markets, ease
production controls, and help achieve in-
creased family income.
But that view did not last.
In an exuberant moment, a few days
ago, in the town of Oregon, m., according
to the Washington Evening Star, the
candidate returned to his off-the-cuff,
off-the-hip position when he demanded
to know:
What is wrong with the American farmer
planting what he wants, when he wants, and
as much as he wants, and taking his chances
In the marketplace?
If Senator GOLDWATER would look at
the results of several recent studies he
would find a clear answer to the question
he asked in Illinois. He would know that
a direct answer has been given at least
six different times by leading farm econ-
omists or teams of economists, and that
in each instance they found that the re-
sults of uncontrolled farm production
in a free market would be catastrophic.
LEGISLATIVE REFERENCE SERVICE STUDY
There was a -study published in the
Journal of Farm Economics in August
1958 by Walter Wilcox, farm economist
on the staff of the Legislative Reference
Service, Library of Congress. Mr. Wil-
cox concluded that in the absence of
price support programs?the programs
under which production is controlled
and a minimum price maintained in the
markets?realized net farm income
would have been 20 to 55 percent lower
in the years 1937-39, 14 to 43 percent
lower in 1940-42, 24 to 34 percent lower
in 1943-49, and 28 percent or more lower
from 1952 to the date of the study.
Prof. Goeffrey Shepherd and associ-
ates at Iowa State University in August
1960 issued a study, Iowa State Univer-
sity Special Report No. 27, which showed
that if price supports, production con-
trols, and the censervation reserve were
abandoned?in effect, if the American
farmer "planted what he wants, when he
wants and as much as he wants, taking
his chances in the marketplace"?the
prices of hogs and cattle respectively
would decline to 11 and 12 cents per
pound. The price of corn would fall to
66 cents per bushel and wheat would
drop to 74 cents. They estimated that
net income of livestock producers might
go down 50 percent.
AGRICULTURE COMMITTEE STUDY
Using a somewhat different approach,
and assuming a continuation of export
subsides and thelood-for-peace program,
economists in the Department of Agri-
culture and in the land-grant colleges
made a study for the Senate Agriculture
Committee in 1959, published as Senate
Document 77 in January 1960?which
indicated that the removal of price sup-
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21566 CONGRESSIONAL. RECORD SENATE
ports would result in a 461percent drop
in realized pet farm income in 1965.
This study indicated that if commod-
ity programs were discontinued, prices
of key farm products would be expected
to fall to the following 'levels:
Wheat, 90 cents a bushel; corn, 80
cents a bushel; beef cattle, 15 cents a
? pound; and hogs, 11 cents a pound.
THE CORNELL STUDY
Professor Robinson, of Cornell Univer-
sity, in a similar study published in Farm
Economics, 1960, concluded that even
though a conservation reserve of 30 mil-
lion acres, marketing orders and special
distribution programs were continued,
if direct price supports'and average con-
trols were dropped, net farm income
would fall 19 percent. Hog prices would
fall to 14 cents a pound, beef cattle to 15
cents per pound, wheat to $1.18 a bushel,
and corn to 98 cents a bushel. .
? PENNSYLVANIA STATE UNIVERSITY STUDY
Professor Brandow, of Pennsylvania
State University, in a study for the Joint
Economic Committee?committee print,'
November 1960?estimated that with
price supports and production limita-
tions removed, realized net farm income
by 1965 would fall to $7.2 billion- or 36
percent below the 1959 level. His pro-
jections indicated wheat prices would
fall to 87 cents a bushel, corn to 77 cents
a bushel, hogs to 11 cents a pound, and
beef cattle to 17 cents a pound.
IOWA STATE UNIVERSITY STUDY
. Professor Heady, executive director of
the center-for agricultural and economic
adjustment, Iowa State University, and
his associates reviewed the results of
those earlier studies and, using revised
and more comprehensive statistics, ana-
lyzed the effects on farm income, Gov-
ernment costs, and consumer food out-
lays of 16 alternative wheat and feed
grain programs?Farm Program Alter-
natives, CAED Report 18, May 1963.
The study is so detailed that only a
few of the highlights can be reported
here. They conclude that the excess
capacity of agriculture in 1960 and 1961
amounted to 7 percent, ,This percent-
age of potential output was avoided by
diversion and conservation programs or
was diverted from, commercial markets
by domestic and foreign distribution
programs. ?
?
If that additional 7 percent had been
channeled through , commercial markets,
farm prices would have fallen 28 per.,
cent, gross income wOuld have. fallen 21
percent, and net income would have
fallen over 60 percent.
In other words, the blueprint reCom-
,
mended by the Senator from. Arizona, ac-
cording to, this very careful study at one
of our great agricultural universities,
would result in a drop of more than half
of all the net farm income of this coun-
try. ? ?
Mr. PROXMIRE. Mr. President, .will
the Senator yield?
The PRESIDING OFFICER (Mr. BUR-
DICK in the chair). Does . the Senator
from South Dakota yield to the Senator
from Wisconsin?
Mr. McGOVERN.' I ean happy to
yield.
Mr. PROXMIRE. These are startling
statistics. I am familiar with the
studies. Many perions had been under
the impression they referred to net -in-
come, and that the 25 to 28 percent drop
Was a drop in that income. This is a
revelation, and I think it should be
shocking to the American farmer to learn
that more than half his net income would
be gone.
Mx. McGOVERN. The Senator is cor-
rect. ,
Mr. PROXMIRE. What he had left
with which to pay for his living expenses,
for his own food and for his other ex-
penses, and to keep his family's head
above water?and we know he has very
little left now?would be cut by 60 per-
cent, according to this careful and au-
thoritative study by economists and
economic experts who; as the Senator
from Sbuth Dakota says, have no ax to
grind.
Mr. McGOVERN. The Senator is ab-
solutely correct. The fundamental test
we must keep in mind when we measure
the impact_ of farm programs upon
farmers is what they do to net farm in-
come; what the farmer has left after he
pays.all of.. his farming expenses.
? THE MISLEADING PARITY' FIGURE '
In recent days: speeches haveTheen
made in the Senate deploring the fact
that the parity index has fallen to 74
percent. This is a misleading figure,
when one considers that the parity in-
dex does not reflect the more than. $1.5
billion that has been placed in the pock-
ets of farmers through the acreage 'di-
version program, the conservation pro-
gram, and the wheat certificate program
and as adjustment payments on feed
grains. Those dollars will buy just as
much in the way of food, clothing, ed-
ucation, and health as the 'dollars the
farmers receive from any other, source.
Those payments are added to the'incoine
of the farm producer. So this is a cru-,
cial figure. -I shall discuss it further a
little later. ' ?
Mr. PROXMIRE. Mr: President, will
the Senator yield? '
Mr. McGOVERN. I yield. -
Mr. PROXMIRE. Is it not else true
that in the 8 years before the Kennedy
administration took office, the parity
index dropped from 101 to 78?
Mr. McGOVERN. That is correct.
Mr. PROXMIRE. Since that time, it
has dropped from 78 to 74. So While we
deplore the drop?and it fs a problem?
the Senator from South Dakota makes
an excellent correction. But also
true that the big drop in parity took
place between 1953 and 1960.
Mr. McGOVERN. That is 'correct.
Mr. PROXMIRE. That drop was
many tithes greater than the drop that
has taken place in the intervening 4
years, on the basis of annual figures.
The di?op was far greater before the
Kerthedy4ohnson administration moved
in.
Mr. McGOVERN. The Senator is cor-
rect. ,, -
With reference to the comments by
the Senator from Wisconsin, I wish to
add and to stress the fact that the parity
figure is a good one only so long as it is
applied to a program that depends purely
on what farmers receive in the market-
place, But the monthly parity index no
September 16
longer fully reflects the income situation
because we have moved increasingly to
other forms of income support. I refer
primarily to the diversion payments, the
wheat certificate program, and other
means that have been adopted which
generate farm income which is not re-
flected or included in the price paid for
commodities.
In addition to the '74 percent of
parity?and I stress this again?farmers
are receiving another $1.5 billion in
acreage 'diversion, certificates and com-
pensatory payments not reflected in the
parity index.
EFFECT ON PRODUCTION ?
The university agricultural economists
to whom I have referred, after review-
ing the situation with the most compre-
hensive and up-to-date analytical tools,
estimate that within a 2-year period a
10-percent drop in farm prices would
bring about only a 1-percent reduction
In output. In a 4-year period, a 10-
percent drop in prices would be expected
to result in a 11/2-percent reduction in
output. In other words, the reduction
in production on the farms would be
almost negligible.
The basic price-supply relationships as
analyzed by competent economists give
theg_to those who say that if Govern-
ment price-support programs were dis-
continued, farm families would be able
to earn higher incomes within a short
time. ,
NET INCOME WOULD FALL 40 PERCENT
Professor Heady and his associates
find in this research work that after
allowing for the effect of lower prices
on production?if all price supports, di-
version, conservation, and export subsidy
programs were discontinued for feed
grains, and wheat?within the next 5
years ? net farm income would fall by
more than $5 billion a year or about 40
percent.
Grain production would increase faster
than livestock production could be ex-
panded and carryover stock of grains
would have to be increased for several
years to avoid an even More chaotic price
and income catastrophe.
? Let me' repeat, this study' by Iowa
State University economists concludes
that if price supports, acreage diversion,
and 'export 'subsidy programs for wheat
and feed grains are eliminated, carry-
over stocks would have to be increased
for several years, yet net farm income ?
would fall by 40 percent.
On the other hand, they conclude, if
a combination of price support, acreage
diversion, and export subsidy programs
are continued, farm income can be main-
tained at current levels without further
increases in Government costs. And to
me this conclusion is as important as
the eariler one.
CAED STUDY
Another of these studies, bearing out
the general conclusions, came from the
Center on Agricultural and Economic
Development at Iowa State College. Drs.
Luther G. Tweeton, Earl 0. Heady, and
Leo V. Mayer projected probable farm
prices in 1967 if we permit unlimited
production without price support, but
continue to subsidize exports under food .
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.1,9 64, CONGRESSIONAL RECORD SENATE.
for peace, continue conservation reserve
contracts to their expiration, and with
the Government buying at the market
price and accumulating stocks of com-
modities when production of feed grains
and wheat exceeds utilization.
' The objective economists to whom I
have referred, without any ax to grind,
by applying the best economic science
they could to the problem, have told us
that if we remove production controls
and price supports, we shall have a drop
of $5.7 billion in net farm income by the
year 1967. Under this same formula, ?
corn could be expected to drop to 85 cents
a bushel, oats to 49 cents, barley to 71
cents, sorghum grain to 73 cents, wheat
to 94 cents a bushel, cattle to $15.80 per
hundredweight or nearly $6 below 1962,
hogs to $13.50, and sheep to $13.50.
The National Planrming Association
has recently issued a further study, to
Which I will refer later, sustaining all
the previous investigations of uncon-
trolled production for a free market.
The results of these various studies,
directly answering Senator GOLDWATER'S
rhetorical statement that there is noth-
ing wrong with the American farmer
"planting what he wants, when he wants
. and as much as he wants, and taking his
chances in the marketplace," have been
publicized again, and again, and again.
MR. GOLDWATER'S GOAL
It is 'difficult to believe that the candi-
date has not at least accidentally opened
the CONGRESSIONAL RECORD at an account
of one of the studies in view of their
repetitious appearance, and that there-
fore what he is really saying is that he
stands on his original position: That
many farmers should be forced off the
land, that they should be "persuaded," as
he put it, to leave the land by being
bankrupted. -
It is equally difficult to believe, Mr.
President, that, partisans of the 'Senator
from Arizona, who advocates the with-
drawal of farm price supports and let-
ting prices fall to, "persuade farmers to
enter other fields," should raise low farm
prices as an issue in the election cam-
paign when lower prices is their own can-
didate's goal for agriculture.
I think farm prices are too low. I am
dissatisfied with the return to farmers
provided in the wheat certificate program
for 1965. I am attempting to persuade
the administration to announce con-
siderably more liberal certificate pay-
ments, at least on export wheat, next
Year.
Food costs American citizens 19 per-
cent of their income. It is the biggest
bargain for this human necessity in any
major nation in all the history of man-
kind.
I regret that those who prepare the
budgets in the executive branch chose to
enforce economy on the producers of our
abundant, low-cost food supply when
the 1965 wheat program was being con-
sidered. .1 have suggested that savings
might more appropriately come out of
the budgets for armaments we already
have in oversupply, for building aircraft
that won't fly, buying supplies already in
stock, or building overly elaborate recre-
ation and club facilities.
But for partisans of the Senator from
Arizona, who -wants lower farm prices,
to argue that agricultural returns are
shamefully low, and to use a parity figure
no longer indicative of real farm income,
is transparent political demagoguery.
WARM INCOME IS UP
The CONGRESSIONAL REcorth has con-
tained a number _ of speeches recently
complaining that the farm parity ratio
has dropped to 74 percent of parity?
the lowest in a decade.' Senator Psox-
MIRE and I have discussed this briefly,
but let the make it clear.
No mention is made of the fact that
over $11/2 billion of farm income this
year will be paid to farmers for diver-
sion of acreage for their wheat certifi-
Cates and as feed grain payments. There
is no mention that these returns are not
reflected in the monthly parity ratio.
Their omission makes the parity ratio
meaningless as a yardstiek ,of farm
in-
cOme until it is adjusted each yearend.
It is estimated this year that wheat
producers will get $35 million acreage
diversion payments and $415 million on
certificates. Feed grain producers will
get $850 million- for acreage diversion
and $250 million from payments equiva-
lent to 18 cents per bushel on corn?a
total of $1,550,000 not reflected in the
74 percent of parity statistic now being
cited.
The best yardstick,of farm income is
farm income itself. There is no political
or mathematical sleight of hand involved
in the realized net farm income figures.
The total net income of our farmers in
the last 4 years of the Eisenhower-
Benson administration was $11.7 billions
per year.
The total net farm income of farmers
in the Kennedy-Johnson administration
averaged $12.9 billion a year from 1961.
through 1963. Realized net income,
which excludes inventory changes, has
been up $900 million annually.
That is a substantial improvement in
the take-home pay of farmers under the
Democratic administration, and' it will
prove futile to try to tell farm people
with more money in their pockets than
they had in the fifties that they have
less.
INCOME PER FARM
There is an element of statistical mis-
guidance in a second farm income figure
frequently cited since the administra-
tion of Ezra Taft Benson at the Depart-
ment of Agriculture. That is the figure
On income per farm.
It has gone up steadily for a number
of years?including years in the, fifties
when-total net farm income declined?
because the number of farmers is de-
clining, and there are fewer farm opera-
tors to divide the pie.
To the extent that total net farm in-
come has been increased, we Democrats
can take pride in the fact that income
per farm in the United States has in-
creased. ?
It was $2,961 in 1960 under Benson.
It was $3,504 in 1963 under Orville
Freeman of the Kennedy-Johnson ad-
ministration, up $543 per farm.
What do the people who complain
about this record propose to do in No-
?
21561
vember? What is the alternative they
offer?
We have an incumbent running for
Congress in the Western Congressional
District in South Dakota who voted
against .the voluntary wheat certificate
plan?and therefore for only 50 percent
of parity for wheat, who complains that
return from wheat under the- certificate
plan is too low.
It is too low.
But what does he propose? He tried to
kill the voluntary wheat certificate bill
and thus throw wheat farmers into a
price skid that would drop wheat to $1.25,
a bushel with no certificate. He says
that wheat farmers will make less under.
the 1964 program than they made in
1963. But what he fails to say is that the
1964 voluntary certificate program is
preventing an additional $950 million
drop in wheat income.
He proposes to elect as President Of the
United States a man who says?and I
quote?
Now there is one specific law I would get
rid of and that ,is the Agricultural Act.
The only way to persuade farmers to enter
'other fields of endeavor is to stop paying in-
efficient farmers for produce that cannot be
Sold at free market prices.
If we allowed a continuation of the nor-
mal tendency which has been existing in this
country since its founding, that is the drift-
ing away from the small farm, those affected
might be more gainfully 'employed by work-
ing for the larger farmers, or by working as
mechanics, for example.
Those who complain about low farm
prices and advocate the election of a man
who wants farm prices to go so low they
will bankrupt most of the farm popula-
tion demonstrates nothing but their low
opinion of the intelligence of farmers. ?
THE RAPID CHANGE IN RURAL AREAS
The past 4 years have produced a con-
structive record by the Congress and the
administration in meeting rural prob-
lems. This record has been accom-
plished in spite of the fact that many
city dwellers-do not realize the import-
ance of a healthy agriculture to the en-
tire Nation. This creates a serious diffi-
culty for farm program advocates in the
Congress at a time when the rural popu-
lation is becoming a smaller and smaller
percentage of the total population.
It could be argued that the problem of
agriculture is really the failure of our
Nation to deal adequately, with the suc-
cess of agriculture.- Rural America has
changed with blinding speed. These
changes reflect and encompass the rapid'
advances in the technology and manage-
ment of farming itself.
Unfortunately, the problem aspects of
farming and rural life seems to be much
more visible to the naked eye than do the'
Success aspects of farming. Our great
abundance is, in reality, a national asset.
it is a blessing for a nation not to have
to worry about tomorrow's food or next
year's crop. As I have already men-
tioned, the average family buys its food
at lower real cost than ever before in
'any country at any time?only 19 per-
cent of take-home My..
The magnitude of the agricultural
revolution is at least as remarkable as
the advancement of automation and Cy-
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21562 CONGRESSIONAL RECORD ? SENATE
bernation in our Nation's industrial
plant.
The single overpowering fact is a tre-
mendous productive explosion. The
principal features of this explosion have
been improved crop varieties, more power
and machinery leading to better timing
of farm and ranch operations, and better
farm and ranch management.
Crop production per acre which went
,up 10 percent from 1940 to 1950, jumped
39 percent from 1950 to 1962. Just about
every kind of crop shared in this advance.
Livestock lagged a little behind crops
but still scored dramatic increases in
production. From 1950 to 1962, produc-
tion per breeding unit of livestock in-
creased some 27 percent.
With mechanization proceeding rapid-
ly, there have been sharp increases per
man-hour in both crops and livestock.
Per hour of labor, crop output jumped
70 percent during the 1940's and 97 per-
cent between 1950 and 1962. Livestock
output per hour of labor rose 36 percent
between 1940 and-1950, and 87 percent in
the years 1950 to 1962.
The total man-hours of labor used in
farming decreased 26 percent' over the
period 1940-50, and-40 percent during the
period 1950-62. To put it simply; this
labor was replaced by farm machinery
and by purchased fertilizer, seed, feed,
and other inputs. The farmer became
less dependent on his own labor, and that
of his family, and became more depend-
ent on things he had to buy with dollars.
In this way, he became more and more
dependent on the market.
Meanwhile, the number of people on
the farm declined?to about 7 percent of
our total population. And this has had
a number of implications=including the
obvious One of a decline in political
strength.
RURAL COMMUNITIES INVOLVED
Beyond this, though, is the fact that
the decline of the rural population has
contributed to the difficulties faced by
many small towns and rural communities
which have since pioneer days depended
on 'farming populations to keep them
alive. As a town's hinterland population
dries up?its commerce and its public
services tend to decline?and this in
turn causes a further withering of the
rural population.
Certainly, this is a vicious cycle, and
one to be deplored by all of us who ap-
preciate the abundance that rural Amer-
ica has given to the world?and the con-
tributions that it has made to the dem-
ocratic values of our free Nation.
These are matters that have received
a grat dal of attention in the past 4
years?under the leadership of President'
Kennedy and President Johnson. Sec-
retary of Agriculture Orville L. Freeman
has attacked these problems with all the
vigor that he possesses. The 87th and
88th Congress have a good record of act-
ing to meet the needs of agriculture and
rural America.
Senator ELLENDER is to be congratu-
lated for the leadership he has brought to
these matters in the Senate. Congress-
man COOLEY has acted with vision and
wisdom in bringing before the House of
Representatives many measures of great
importance. I think we should congrat-
ulate these men?and the many others
who have had a part in th 4 years of
achievment.
THE KENNEDY-JOHNSON POLICY
President Kennedy, in 1962 presented
a food and agriculture program for the
sixties which laid the broad pat-
terns for a constructive approach to the
rural challenges facing the Nation. Un-
der President Johnson?a man of deep
personal understanding of farming and
ranching?this policy has been strength-
ened. It is a?three-dimensional approach
aimed at?
First. Commodity programs designed
for the needs of commercial family farm
agriculture.
Second. Community programs, which
are essential to the full development of
opportunity in rural America.
Third. Consumer programs, which
serve those who use food and fiber as
well as those who produce it.
This administration, in its approach
to commodity programs, accepted the
premise that commercial agriculture
built on the family farm system will con-
tinue to be the most productive and de- ?
sirable system of farming?both from
an economic and a social standpoint.
Further, it believes that so long as our
ability to produce exceeds our ability to
consume this abundance at a fair price,
we will need commodity programs to pro-
tect and-stabilize income.
Improved farm programs of the past
4 years have had much to do with the
general rise in farm income that has
taken place.
INCOMES IMPROVED
During the first 3 years of this ad-
ministration, mostly as a result of com-
modity programs enacted since 1961,
realized net farm income has averaged
$1.2 billion higher and total net farm
income which includes changes in in-
ventory has averaged $900 million a year
higher than the average of the 1957-60
period. Gross farm income has averaged
$4 billion higher, and net income per
farm, which was $543 higher in 1963
than in 1960, has averaged $600 a year
higher.
Nearly all widely grown major cash
crops and classes of livestock brought
more cash from farm marketings in
1963 than in 1960.
Farmers are continuing to benefit this
year from the new programs enacted by
the 87th and 88th Congresses. For the
first half of this year, net realized farm
income is not much different from last
year. This is especially important when
you consider that, without the wheat-
cotton legislation paSsed last spring,
farmers would already be experiencing
a substantial drop in income.
GOVERNMENT HAS SAVED
Since 1961, Congress has enacted pro-
grams for feed grains and wheat that
have reduced the volume of surplus
grain in storage by 30 million tons, at
a saving so far of over $200 million in
carrying costs. If we had continued the
1960 type of programs instead of new
feed grain and wheat programs, another
133 million tons of surplus feed grains
and another 5001million bushels of sur-
September 16
plus wheat would have been on our hands
by this time.
SURPLUS REDUCED
The feed grain program was one of
the first acts of the Congress after the
Kennedy administration came into office.
It reversed the surplus accumulations
that had taken place during the 1950's.
When the feed grain program was put
into effect in 1961, feed grain carryovers
had risen to an all-time high of 85 mil-
lion tons. The feed grain program re-
versed that trend for 2 straight years.
Record yields in 1963 are preventing
further reductions in the carryover this
year, but it will still be 15 million tons
below the 1961 high.
The voluntary wheat programs of 1962
and 1963 made possible a sharp reduc-
tion in the oversupply of wheat. These
programs?along with aggressive efforts
to capitalize on new export opportuni-
ties?have resulted in a decline in carry-
over from the alltime high of 1.4 billion
bushels in 1961 to less than 750 million
bushels as of August 28.
The 1964 wheat program made it pos-
sible to maintain a level of grower in-
come that was in serious jeopardy fol-
lowing last year's referendum. Follow-
ing that referendum, growers were faced
this year with a likely decline of about
$600 million in income. This was headed
off through enactment of the new -vol-
untary program, restoring between $450
and $500 million in wheat income.
PRICE SUPPORTS RAISED
Adjustments in price supports have
also been used to bring higher income to
farmers.
In 1961, for example, Secretary Free-
man raised the price support on soybeans
from $1.85 to $2.30 a bushel?against
many criticisms. We got no burdensome
surplus?yet farmers over the past 3
years have received $1.5 billion more
from sales of their beans than had price
and production remained at the 1960
level.
COTTON RETURNS MAINTAINED
For cotton growers, these 4 years have
brought a higher level of income, in addi-
tion to new legislation that strengthens
the entire cotton economy. The last Re-
publican budget?the one President Ken-
nedy found when he came in?projected
a price support level of 28.66 cents for the
1961 crOp. One of the first moves of this
administration was to raise the price
support level to 33.04 cents?and
this meant a difference of over $300 mil-
lion to cotton growers for the 1961 crop
alone.
The new cotton legislation enacted
this spring is quite significant. While
the basic support price for the 1964 crop
is now 30 cents, compared with 32.47
cents a pound for 1963 crop cotton, small
producers and all who plant within their
domestic allotments will receive an addi-
tional 31/2 cents in the form of payments.
Meanwhile, our domestic textile industry
is benefited in its competition with for-
eign mills.
BEEP PRICES SUPPORTED
This administration has also moved
vigorously to strengthen the beef mar-
ket and to reduce beef and veal imports.
Imports were rolled back to about the
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CONGRESSIONAL RECORD ? SENATE
1959-63 level through voluntary agree-
ments with the major suppliers export-
ing to the United States. The U.S. De-
partment of Agriculture has also stepped
up beef purchases and is cooperating
with industry in a vigorous promotion
program here and abroad. In addition
to exports for dollars, beef is moving
overseas under the Public Law 480 pro-
gram?food for peace.
The actions of Government and in-
dustry in stimulating consumption of
U.S. beef here and abroad has had a
part in the general rise in fed cattle
prices since early June. The average
price of choice fed steers has advanced
about $5 a hundredweight since that
time.
The necessity for commodity programs
to help in managing qverproduction has
been' proved a number of times by in-
dependent groups outside the Depart-
ment of Agriculture?and the consensus
Is remarkable.
NATIONAL PLANNING ASSOCIATION'S STUDY
Here is an example, the most recent
study of the effect on farm programs:
In June of this year the Agriculture
Committee of the National Planning As-
sociation proposed a national farm pro-
gram for feed grains and wheat. This is
an independent committee, not tied to
any farm, or commodity, or political or-
ganization. Its chairman is one of the
most respected editors and authors in
the farm belt?Lauren Soth, of the Des
Moines Register and Tribune. The chief
economist of the American Farm Bureau
Federation as well as the legislative di-
rector of the National Farmers Union
are members.
"Sound national management of our
grain industry." The NPA Committee
emphasized, "is the most important
single element of a sound national food
and agriculture policy."
The committee examined three
choices:
First. Unrestricted ?production, with
no Government payments or price sup-
ports going to farmers.
Second. Compulsory production con-
trol, and.
Third. A voluntary crop -acreage
restriction program, with payment in-
centives for participation and price sup-
port loans.
This independent policy group, in com-
paring costs and benefits of the three
types of , action, wasted no time in dis-
missing the first choice, which is Mr.
GOLDWATER'S current choice. It ex-
plained:
A study by Iowa State University and Ok-
lahoma State'University concluded that, with
unrestricted grain production, net farm in-
come would decline from $13.3 billion in
1962 to $7.6 billion in 1967. This calculation
was made under the assumption that the
Food for Peace program, export subsidies, and
a modest grain storage operation would con-
tinue. It was also assumed that other Gov-
ernment programs in food and agriculture
would be unchanged.
The cost of Government programs for feed
grains and wheat would decline from about
$2.5 billion a year to $1.2 billion, and the
total cost to the public for food would be
slightly lower. However, this gain for con-
sumers would be at the expense of extreme
hardship among farmers?a 40-percent de-
No. 177-6
cline in net farm income below the current
level. /t would risk severe damage to the
farming industry, bringing unfavorable con-
sequences to the productivity of agriculture
in the long run.
That ends the National Planning Asso-
ciation quotation. Everyone?or per-
haps in deference to Senator GOLDwATER,
I should say everyone in the mainstream
of opinion?agrees that commodity pro-
grams are essential not only to farm wel-
fare, but to the national welfare. And
even Mr. GOLDWATER advocated this view
briefly.
THE FARMER COMMITTEES
I should not leave the subject of com-
modity programs without mentioning an
institution that is essential to their ad-
ministration. I refer to the Farmer Com-
mittee System.
This Administration has reversed the
previous downgrading of committeemen,
put nominations for these posts back in
the farmers' hands, and gives them more
responsibility, as in the Making of price-
support loans. Now a new law we have
passed within the month provides for
3-year staggered terms for committee-
men and for election of the county com-
mitteemen by all the community com-
mitteemen. To help them do important
work well, a strong in-service training
program was developed in every State.
CROP INSURANCE EXPANDED
Another action to aid the,family farm
is the doubling of the coverage of Fed-
eral crop insurance. Insurance is now
offered on 13 different crops, being avail-
able on one or more crops in about ones-
third of the Nation's agricultural coun-
ties. Congress only recently completed
action to permit extension of crop insur-
ance to 150 new counties each year in-
stead of 100.
THE COMMUNITY AID PROGRAM
May I turn now to the community de-
velopment aspect of the Food and Agri-
culture Program for the sixties. ?
For many years the Nation's efforts to
solve agriculture's problem have focused
largely on the problems of various farm
commodities. Only recently, have we
started to cope effectively with the hu-
man-problems of people on submarginal
farms, to assist communities Which need
to diversify their economic base if they
are to survive, to move against the wide-
spread cancer of poverty in rural Amer-
ica, and to think of the growing needs
of families and individuals in cities and
suburbs for land and water and space
where they can live more abundantly.
This administration has set out to
meet some of those needs through a
variety of approaches,' particularly
through a nationwide Rural Areas De-
velopment effort. Before 1961, RAD
was a kind of pilot program?and a poor
relation at that. Since that time, it has
enlisted, nearly 100,000 persons serving,
on local RAD committees in 2,100 coun-
ties in the country. This compares with
300 counties which in 1960 were involved
in the pilot phase.
RAD will be strengthened by the Eco-
nomic Opportunity Act. This new legis-
lation will enable the local committees to
broaden and intensify their attacks on
rural poverty.
21563
Already, with the help of new tools pro-
vided by Congress since 1960, local RAD
leaders completed 'projects creating an
estimated 212,000 nonfarm jobs in rural
America?and some 148,000 additional
jobs were created as an indirect result.
These new tools included the Area Re-
development Act, the Accelerated Public
Works Act, the Manpower Development
and Training Act, and the Food and
Agriculture Act of 1962.
With the help of Congress, USDA
agencies have broadened and strength-
ened their services.
The Farmers Home Administration is
now making water system loans to com-
munities and housing loans to senior citi-
zens. Loans of all kinds in each of the
last 3 fiscal years have run well over
double the level of the 1960 fiscal year.
In the last 4 fiscal years, FHA has loaned
about $2.5 billion?compared with about
$1.2 billion, which would have been loan-
ed under a continuation of the 1960 level.
Some 254,000 rural Americans today
have access to modern water systems in
460 rural communities because of water
system loans made by the Department
during the past 3 years. More than
49,000 rural families, including 2,700
elderly persons, built or remodeled their
homes through new or expanded pro-
grams since 1960.
RURAL ELECTRIFICATION EXPANDS
,Rural electrification loans are serving
more than 100,000 new rural consumers
each year. Rural electric cooperatives,
with expanded loan programs since 1960,
have improved service while lowering
their power costs by $2.5 million this
year.
Since mid-1961, at least 937 commer-
cial and industrial enterprises have been
launched with help from the rural elec-
tric co-ops. These enterprises represent
a total investment of three-quarters of a
billion dollars. The number of new en-
terprises launched .during 1963 was 25
percent greater than in the preceding 18
months.
CONSERVATION SPEEDED
Conservation programs have been
stepped up.
In the past 4 years, the number of
small upstream watershed projects au-
thorized for construction has almost
doubled the total of the preceding 6
years.
Some 396 projects?with about one-
fourth of them providing either recre-
ation, community, and industrial water
supplies, or wildlife preservation?have,
been approved for construction.
Conservation programs have a new
emphasis on recreation and other in-
come-producing uses for land no longer
needed for crop production. More than
20,000 farmers?many with USDA help?
have developed outdoor recreation as an-
other source of income for themselves
and enjoyment for city people.
The development rate of national for-
ests has been doubled and the authoriza-
tion for forest roads and trails has
tripled. In the past 10 years, recreation
visits to the national forests have in-
creased from 35 to 135 million?which is
- the estimate for the 1964 calendar year,
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21564 CONGRESSIONAL RECORD ? SENATE
CONSUMERS AIDED
The third dimension in our agricul-
tural policy?consumer programs?aims
at making better use of our abundance?
both at home and abroad. It also is di-
rected at protecting consumers through
strengthened inspection and grading,
and by helping to make more efficient the
marketing system.
More than 6 million elderly, handi-
capped, and other needy people were
helped through food distribution pro-
grams in 1963. Wc distributed 1.9 billion
pounds of food. That is nearly double
what was distributed in 1959-60?be-
sides being better rounded out as to qual-
ity and variety.
Sixteen million youngsters are bene-
fiting from school lunches. Another 14
million are sharing in distribution of 2.9
billion pints of milk. Some 4.5 million
more children received school lunches in
fiscal year 1964 than the average for
1956-60. In the special milk program,
milk was provided in 30,000 more schools
and child-care institutions in 1964 than
in 1956 "
The pilot food stamp plan has proved
that this means of sharing food abun-
dance means better diets, better income
to farmers, and improved business for
retailers. In a survey of pilot commu-
nities, it was found that the food stamp
program stimulated retail grocery sales
by an average of 8 percent.
The expanded food stamp program will
make it possible to bring better diets to
low-income families?especially families
needing a greater variety of foods for an
adequate, healthful diet. The pilot pro-
gram has been operating in 43 counties
of 22 States?serving 380,000 people.
The new permanent legislation removes
-the area limitation.
EXPORTS AT RECORD LEVEL
Exports have also been expanded.
We are exporting the produce of 1
acre out of every 4. In the case of
wheat, it is one out of three. Total
farm exports set an all-time record for
the fiscal year ending last June 30, top-
ping $6 billion.
Some of that was for soft currency, but
$4.6 billion of it was for dollars and the
big increase in total exports occurred in
dollar sales. Contrast this with dollar
export sales averaging only $2.6 billion
in 1955-60.
The export record of the past year rep-
resents the contributions of Government
and industry. The U.S. Department of
Agriculture is today engaged in an ag-
gressive market-promotion partnership
with 44 separate agricultural producer
and trade organizations reaching into 67
countries.
The 1963 Trade Expansion Act makes
possible a continued expansion of trade
to benefit American industry and agri7
culture. ' The authority of the Trade
Expansion Act continues to be used ag-
gressively toward the achievement of ex-
panded trade in industrial and agricul-
tural products.
FOOD FOR PEACE
Food for peace now helps 114 countries
and territories throughout the world?
providing hundreds of millions of people
with food that would otherwise not be
available to them. Five 10,000-ton ships
leave American ports every day carrying
food-for-peace cargoes. U.S. food dona-
tions will provide school lunches for some
40 million children in friendly countrieS
this school year.
Food has also been made a vital tool
in foreign economic development, ena-
bling developing areas to use U.S. food to
aid in the construction of roads, schools,
public buildings, and many other works.
Food-for-wages programs under title II
of Public Law 480 alone are underway in
22 cbuntries of the world?giving em-
ployment to 700,000 workers.
In less than 4 years, the Kennedy-
Johnson administration has achieved a
broad range of improvements in meeting
the problems of change that affect agri-
culture and rural America.
CONGRESS' RECORD
I know that President Johnson and the
officials of his administration appreciate
the accomplishments of these last two
Congresses?without which, this 'kind of
progress would have been entirely impos-
sible.
There are those who are now attempt-
ing to distort the agricultural progress
of the past 4 years by using an unad-
justed parity ratio figure, which stands
at 74 percent only because one and a half
billion dollars of payments income is now
excluded from the calculation. I would
like to suggest to these persons that they
could better devote their thought, time,
and energy to developing a constructive
program for their candidate, and de-
veloping support within their party for
such measures in the Congress, instead
of almost total opposition.
THE REPUBLICAN RECORD
In 1961, in the House of Representa-
tives, Republican Party members voted
161 to 4 against the feed grain bill. In
the Senate, they voted 26 to 8 for an
amendment to kill the feed grains provi-
sion.
In 1962, they voted 167 to 1 in the
House and 30 to 2 in the Senate against
needed omnibus farm bills proposed by
the administration.
In 1963, the House Republicans voted
167 to 1 and the Senate Republicans 28
to 3 against the administration's volun-
tary feed grains bill.
In 1964, the Republican vote was 167
to 10 in the House and 21 to 5 in the Sen-
ate against the voluntary wheat-cotton
bill.
I have great respect for the handful
of Republican Members of Congress?
the tiny minority?who have supported
the farm bills. I hope they will use their
Persuasive powers to win their candidate
for the Presidency over to a more con-
structive position?to eliminate his pres-
ent zeal to liquidate the ? bulk of our
farmers.
If they cannot do so, then I recornmedd
to them the honest and courageous
course taken by the Senators from New
York as a consequence of the civil rights
issue. They cannot effectively advocate
a solid farm program in the Halls of
Congress and on the campaign hustings
and then urge the election of a Presiden-
tial nominee who is determined to end
the farm program.
September 16
Real progress has been made for farm-
ers and rural America in the past 4 years.
Far more can be made in the next ,4 years
after rural America has registeled its
overwhelming disapproval of a farm pol-
icy which, we are already warned, will
mean catastrophe to food and fiber
producers.
Mr. PROXMIRE. Mr. President, I
congratulate the Senator from South
Dakota-[Mr. MCGOVERN] on his excel-
lent speech on reapportionment. Un-
fortunately, I was occupying the chair
of the Presiding Officer earlier and was
unable to comment when he concluded
that part of his remarks. It seems to me
that his speech went to the crux of the
problem, particularly his treatment of
the relationship between Congress and
the Supreme Court.
When the Senator said that what has
happened in connection with, ithe Dirk-
sen-Mansfield proposal calls nto some
question the reputation of the Senate as
the greatest deliberative body in the
world, was he referring to the fact that
no hearings, no hearing record, and no
committee consideration whatsoever
have been given to the Dirksen-Mansfield
amendment or to the Tuck bill?
Mr. McGOVERN. The Senator is cor-
rect. In the first instance, I said that
the Dirksen-Mansfield amendment was
ill advised, and that it is always some-
what dangerous to launch into a direct
attack on the courts; but when it is done
in the kind of haste that has been dem-
onstrated in the Senate, it is all the
more deplorable.
Mr. PROXMIRE. I should like to call
attention to one fact that has already
been mentioned, but I wish to emphasize
It. There has been this immediate value
of the discussion that has been engaged
in by the Senator from South Dakota and
other Senators so far; that is; Senate de-
liberation has helped win a dramatic and
drastic change in the attitude of Mem-
bers of Congress. The vote on the Tuck
bill was one clearly significant and really
startling change, from a decisive victory
In the House to a crushing defeat in the
Senate, obviously because of the debate
and, deliberation that has taken place
in the Senate.
Mr. McGOVERN. If I may interrupt
the Senator, I said in my opening re-
marks, in paying tribute to him?I be-
lieve he was engaged in a conference at
the time with the Senator from Illinois
[Mr. DOUGLAS]?that we are all indebted
to the Senator from Wisconsin and the
Senator from Illinois, and other Sena-
tors, for alerting the Senate and the
Nation to the danger involved in this
proposal.
I am deeply grateful to the Senator
from Wisconsin that he was alert to see
the danger of the Dirksen amendment
and gave some of the rest of us time to
catch up with him in his awareness of
what is at stake.
Mr. PROXMIRE. What the Senator
from Wisconsin was emphasizing was
the great function of the Senate to de-
liberate. Time was taken and days were
consumed?a few days, really; but some
days were consumed?in analyzing and
discussing the implications of this meas-
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CONGRESSIONAL RECORD ? SENATE 21565
ure. This met the standard for delibera-
tion which the Senate has won.
I invite the attention of the Senator
from South Dakota also to the fact that
whereas 2 weeks ago it was considered
that the Javits-McCarthy amendment
would have been crushed?I heard lead-
ers on the other side of the aisle say that
it would be pulverized; the votes that
would be obtained for it would be scat-
tered?the fact is that it came within
one switch, or two votes?one Senator
switching?of a tie vote, on a 42 to 40
vote.
Also, in spite of the fact that time has
elapsed--since we started discussing this
question, so many others have come up
that actually there has been only a rela-
tively few hours of debate on it.
Yesterday, we came out within a hair's
breadth of knocking out the Dirksen-
Mansfield amendment with a substitute,
which in the judgment of most Senators
would not have called the Supreme
Court's jurisdiction into question in any
sense, would not have questioned judicial
review, and would have resulted in a
settlement of the matter which certainly
would not have been satisfactory to
many of us but would have been a vast
improvement.
Mr. McGOVERN. Is the Senator sug-
gesting that perhaps with 2 or 3 more
days of education on this issue we may be
able to pass some legislation?
Mr. PROXMIRE. Yes, indeed. The
Senator from Illinois [Mr. DIRKSEN] has
emphasized the notion that there are not
many Senators in the Chamber during
debate. We have been kind and con-
siderate in not asking for live quorums.
This is usually done with anything like
a filibuster, but we have considered the
position of all Senators on this question
and have relied on their study of the
CONGRESSIONAL RECORD, reading reports
In the newspapers, and holding conver-
sations with other Senators and other
officials to persuade them?on the basis
of the speech just made by the Senator
from South Dakota [Mr. McGovERN],
and the fine speech along quite different
lines which was delivered by the Senator
from Michigan [Mr. McNAmARA] ?that
we are going to win additional adherents.
It will not take much now. We are so
close to victory. We shall win. On the
other hand, our opponents are about as
far from getting cloture as they can be.
They obtained 30 votes for cloture the
other day. We obtained 63 votes against,
which must be a record crushing of a
cloture motion.
The Senator's speech, it seems to me,
was particularly appropriate and useful
because he did, as I say, go into the crux
of the situation: In the Dist place, the
confrontation by Congress of the Court.
He coined a remarkable apt phrase for
this butting in: "The directed verdict."
What could be worse in continuing our
system of government with the separa-
tion of powers than to provide that the
Congress can direct the verdict of the
Court. Obviously, it would destroy the
whole function of the Court as the su-
preme arbiter. One of As prime func-
tions is to review acts of Congress to de-
termine their -constitutionality.
The Senator's phrase was excellent.
That is just what this Dirksen amend-
ment is, a directed verdict.
Then, the Senator from South Dakota
pointed out what I believe has been over-
looked by many commentators and by
others, that this would suspend the in-
dividual constitutional right?prevent a
basic constitutional right., Many people
have commented that they found not
much evil in = the Dirksen-Mansfield
amendment, including Walter Lippmann.
They have overlooked what the Senator
has stressed: That it would suspend an
individual constitutional right.
The final point I wish to make is that
the Senator from South Dakota was par-
ticularly persuasive when he emphasized
that political equality is the basis of our
democracy, and that what the Dirksen-
Mansfield amendment would do would be
to suspend action of the Supreme Court
until this political equality, or any real
chance for it, could be destroyed.
When we take these three steps to-
gether, they really go to the heart of the
problem. Those speeches?together with
the excellent speech made by the Senator
from Montana [Mr. METCALF]?I believe
are two of the finest speeches I have
heard in a long time on this subject.
They are two of the best, on the relation-
ship between Congress and the Supreme
Court.
Mr. McGOVERN. I thank the Sena-
for from Wisconsin for his generous
words. They are especially appreciated
because he is one of the real students in
the Senate on the problem that is now
Le.nding before us.
FOOD FOR PEACE IN YUGOSLAVIA
AND POLAND
Mr. McGOVERN. Mr. President, the
Senate and House bills extending one of
this country's most effective instruments
in the field of foreign policy, the food-
for-peace program, will soon be consid-
ered by a conference committee of our
two Houses. The food-for-peace pro-
gram has been such an effective instru-
ment because it enjoys the happy dis-
tinction of conferring important bene-
fits upon both the United States and the
recipient countries.
This program, almost more than any
other program in which our country is
participating, blends self-interest with
practical humanitarianism.
We are all fully familiar with the most
obvious of these benefits. The use of
otherwise surplus 'Production from our
great agricultural base helps developing
or stricken countries to meet the needs
of their people for food and fiber. The
savings to our taxpayers in storage
charges, the strengthening of our domes-
tic agricultural prices and the new busi-
ness provided for transport and other
business enterprises in the United States
help our own people, while the image and
reality of American abundance and ef-
ficiency in agricultural production serve
to advance our foreign policy abroad.
In its action on the food-for-peace ex-
tension voted on September 3, however,
I fear that the House of Representatives
has overlooked an Important foreign pol-
icy consideration related to this program.
By its amendments to section 107 of the
food-for-peace program, the House of
Representatives has made it impossible
for the United States to continue this
program in two of the most strategically
located countries of the world?Yugo-
slavia and Poland.
We all know the basic argument of
those who oppose any policy favoring
better relations with Yugoslavia and
Poland. They say it is inconsistent to
follow positive policies toward certain
Communist countries while opposing
other Communist countries such as Red
China and Cuba. I submit that there is
no valid basis for this argument because
there is no real inconsistency.
When our interests have been threat-
ened by aggression or subversion from
Communist China, Cuba, the U.S.S.R.,
or any other Communist country, we
have taken whatever measures necessary
to ? safeguard our security interests.
When these threats have not been pres-
ent and where circumstances are favor-
able, we have exploited opportunities to
expand relations with Communist coun-
tries in order to make our presence and
influence felt within them?in their own
back yards, so to speak.
The objectives of this policy of peace-
ful engagement have been to lessen the
danger of conflict and temper the
fanatic commitment to the ideological
goals of the Communist extremists. In
the last 2 or 3 years, there is some' evi-
dence that even the Soviet Union is be-
ginning to free itself from blind
ideology and to view the world and its
own society in somewhat more prag-
matic terms. In Yugoslavia and Poland,
however, this development has been go-
ing on for many more years, and it is
not unreasonable to think that the
Yugoslav and Polish examples have sig-
nificantly influenced the other countries
of the Soviet bloc, including the U.S.S.R.
itself. The United States and other
Western countries have long recognized
and supported these trends.
Yugoslavia provided the first oppor-
tunity to help drive a wedge into the
monolithic world Communist movement
dominated by the 'Soviet Union. Yugo-
slavia's refusal to tolerate Soviet domi-
nation was a windfall to U.S. interests.
As a calculated risk we supported Yugo-
slavia's efforts to maintain its independ-
ence. We extended our influence behind
the Iron Curtain. Our support enabled
the Yugoslav nation to sustain inde-
pendent foreign and internal policies
which still make the Yugoslav system
the major challenge to Communist
orthodoxy.
Following the Polish events in 1956
which brought Gomulka to power, the
United States took advantage of still an-
other opportunity in Eastern Europe.
The Gomulka government expressed its
desire to reestablish its ties with the West
and simultaneously introduced certain
liberalizing measures at home. Here
again the United States and its Western
allies took account Of these developments
and did what they could to encourage
this trend.
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21566 CONGRESSIONAL RECORD-- SENATE Septemar 16
- In carrying out our policy of support-
ing Yugoslav and Polish-bids for inde-
pendence and for closer relations with
the free world, the administrations of
Presidents Eisenhower, Kennedy, and
Johnson used the food-for-peace pro-
gram as an.essential instrument of policy.
This program has demonstrated the real
interest and concern of the United States
for the welfare of the peoples of Eastern
Europe. It has helped greatly to provide
Yugoslavia and Poland with an alterna-
tive to economic dependence on the
Soviet Union and the means for taking
certain liberalizing measures internally.
The operation of this program in Yugo-
slavia and Poland has fostered greater
contacts between the peoples of these
countries and the United States and
these contacts in turn have enabled
pragmatic and humane influences to re-
inforce national aspirations for aban-
donment of the extreme authoritarian .
features of Soviet-style communism.
The examples of Yugoslavia and
Poland in effect were the earliest chal-
lenges to world Communist unity dic-
tated by Moscow which had been a vital
feature of the world Communist power.
The evolution of both countries from
replicas of the Soviet Union to countries
enjoying fruitful contacts with the West
and working out their own foreign and
domestic policies has had a significant
influence for other countries within the
Soviet bloc. The examples of Yugo-
slavia and Poland have thus strength-
ened the forces,of independence and na-
tionalism which have now become the
dominant features in Eastern Europe. It
is clear that this is not the time to aban-
don our involvement within the heart-
land of Communist power?to walk away
from the competition.
For these reasons, Mr. President, I
would strongly urge that no amendments
to the food-for-peace legislation be en-
acted which would in any way tie the
hands and cripple the ability of the
President to continue to use this instru-
ment flexibly to achieve the objectives of
our foreign policy in Eastern Europe.
(At this point Mr. YOUNG of Ohio took
the chair as Presiding Officer.)
Mr. McGOVERN. Mr. President, I
have prepared an analysis of this partic-
ular part of the food-for-peace issue and
together with some supparting docu-
ments and news items, I ask unanimous
consent that they be printed in the REC-
ORD.
There being no objection, the material
was ordered to be printed in the RECORD,
as follows:
PUBLIC LAW 480 IN YUGOSLAVIA
It should be noted that our Public Law 480
program in Yugoslavia has shifted signifi-
cantly from softer to harder terms in recent
years, so that the dollar income which will
accrue to the United States from the program
has risen considerably. Since fiscal 1962
title IV dollar repayment has been a standard
feature in our Yugoslavia Public Law 480 pro-
grams. In that year, the proportion of title
IV in the total of title I and title IV sales
agreements was 15.6 percent. In fiscal 1963
the proportion was 15 percent, and in fiscal
1964 it increased to 72 percent. In the fiscal
1964 program, furtherniore, a significant
move toward commercial sales was made by
requiring repayment by the end of 1968 of an
estimated $19.7 million plus interest at 4.18
percent for wheat sold under title IV. In
addition, the 1964 program provided for re-
tention by the United States for its own uses
of 15 percent rather than 10 percent of the
title I local currency sales proceeds, from
which the equivalent of $550,000 is to :be
converted into dollars for U.S. Government
uses over a 3-year period and about $364,000
is to be converted into other nondollar cur-
rencies tO finance U.S. agricultural market
development in other countries. Both
United States and Yugoslav officials are in
agreement that the trend away from title I
and toward more commercial terms should
be maintained to the extent that.the Yugo-
slav balance-of-payments situation and U.S.
interests in supporting further liberalization
in the Yugoslav system permit.
[From the New York Times, Sept. 11, 1964]
RUSH IS OPPOSING Two HOUSE PLANS To
CURTAIL AID TO EASTERN EUROPEANS
(By M. S. Handler)
WASHINGTON, September 10.?Secretary of
State Dean Rusk urged today the elimination
of two House proposals that in the opinion of
Government officials would destroy foreign-
policy aims in Eastern Europe.
The House proposals would amend Public
Law 480, which provides for the sale of Gov-
ernment surplus foodstuffs to friendly coun-
tries for local currencies. In recent years,
the U.S. Government has prevailed upon
Poland and Yugoslavia to increase their com-
mercial imports from the United States sub-
stantially.
One amendment, proposed by Representa-
tive PAUL FINDLEY, Republican, of Illinois,
would exclude Yugoslavia and Poland from
the definition of "friendly countries," and
would deprive them of eligibility for aid un-
der Public Law 480.
The other amendment, offered by Repre-
sentative PAUL G. ROGERS, Democrat, of Flo-
rida, would also exclude them on the ground
that their ships and aircraft are engaged in
trade with Cuba. The amendment by Mr.
ROGERS would affect Greece, Lebanon,
Morocco, Cyprus, and Liberia for the same
reason.
Government officials said the proposed
amendments, by eliminating Yugoslavia and
Poland, would terminate a major contribu-
tion of the United States to national in-
dependence movements in Eastern Europe
? and to the loosening of Soviet control over
. the Communist Parties and government
? policies in the area.
Government officials were particularly ex-
ercised about the exclusion of Yugoslavia,
because they are convinced that the policy
'of independent communism adopted by
President Tito in 1948 has spread through-
out Eastern Europe, and that the effects may
be seen today in Rumania, Hungary, and
Poland. They also believe that traces of
Yugoslav policy may be seen in the changes
in the Soviet Union. ?
Government officials attributed these re-
cent successes to Marshal Tito in stimulat-
ing independent Communist movements that
led to the breaking of Soviet control:
The liberalization movement in Hungary
led by the party leader, Janos Kadar, a for-
mer protege of Marshal Tito.
The independence movement in Rumania.
Marshal Tito's unpublicized close rela-
tions with Palmiro Togliatti, the Italian
Communist leader, who secretly defended
Marshal Tito against Stalin, and whose own
ideas against a monolithic communism di-
rected from Moscow paralleled those of the
Yugoslav leader.
Mr. Togliatti's memorandum, made public
after his death August 21, which bore many
traces of Tito-Togliatti ideas shared in
common.
Officials said that taking into account
Poland's difficult geographical position,
Wladysslaw Gomulka, the Polish leader, had
made a maximum effort to assure Poland's
independence while the country is allied to
Moscow, and that American aid had played
an important role in helping him through
economic crises.
Officials interpreted the recent moves of
the Rumanian and Hungarian Governments
to improve their trade relations with the
United States as further evidence of the
success of American policy in Eastern
Europe. They contend that the stronger
the ties of the Eastern European Commu-
nist states become with the United States
and other Western countries, the looser their
ties with the Soviet Union.
Economic assistance to Poland and Yugo-
slavia has permitted the regimes -in those
countries to relax their internal contrbls
and to return, to a degree, to a more relaxed
relationship between the citizen and the
state.
PUBLIC LAW 480 AGREEMENTS AS A VALUABLE
WEAPON IN ACHIEVING OBJECTIVES IN EAST-
ERN EUROPE
The Public Law 480 agreements have been
the principal instrument 'in the 'hands of
Presidents Eisenhower, Kennedy, and John-
son to advance our foreign policy objectives
In Poland and, indirectly, in all of the Soviet
bloc countries of Eastern Europe. The pri-
mary objective has been to bring the Eastern
European countries closer to the free world.
By building carefully and painfully the spe-
cial United States-Polish relationship
? through the judicious use of the Public Law
480 tool, we have created an example for the
other Soviet bloc countries of the type of
relationship they might hope to have with
the United States under certain circum-
stances.
The United States has demonstrated its
willingness to cooperate with those Eastern
European countries seeking closer ties with
the United States and showing greater de-
-gree of independence from Soviet domina-
tion. The stirrings in Eastern Europe in the
past year or two, increasing assertions of
national autonomy?most notably in Ru-
mania?have been nourished by U.S. policy
toward Poland.
PUBLIC LAW 480 AGREEMENTS HAVE ENCOURAGED
DESIRABLE CHANGES IN POLAND
U.S: policy toward Poland since 1956 has
been dedicated to foster and to encourage
greater freedom of action in Polish foreign
relations and a more liberal internal atmos-
phere. In carrying out this policy the United
States began to sell surplus agricultural com-
modities to Poland under Public Law 480.
Since the Gomulka regime came to power
-in 1956, Poland has asserted a measure of
autonomy which, until recent actions by Ru-
mania, had been unique within the bloc. The
program of agricultural collectivization was
reversed so that today more than 85 percent
of the arable land is privately held. Basic
freedom of worship is possible, for Roman
Catholics who make up 95 percent of the
population. Oppressive police practices have
been moderated. Polish pOlicy since 1956 has
reflected strongly the nationalist sentiments
and Western orientation of the country and
has sought greater economic and other ties
with the free world.
The importance of contacts between the
Polish people and the West are indisputable,
and they are of particular value during this
time of stress and change within the Com-
munist world. Our special police toward
Poland since 1956 has been designed to in-
crease these contacts and it has achieved
considerable success. The VOA is not
jammed. We operate an information pro-
gram in Poland. We have established a con-
sular office in Poznan?the only office
maintained by this Government behind the
Iron Curtain outside of the respective capi-
tal cities. We are able to meet with the
Polish people, and we are able to put for-
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