CONGRESSIONAL RECORD-DAILY DIGEST

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP57-00384R001200010030-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 20, 2016
• Sequence Number: 30
• Publication Date: February 1, 1954
• Content Type: OPEN

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1954
CONGRESSIONAL RECORD - DAILY DIGEST D87
Corps, and other USMC representatives also testified.
Adjourned subject to call of the Chair.
LABOR RACKETEERING
Committee on Government Operations: The Bender
subcommittee postponed until next. Friday today's
scheduled meeting to probe alleged nationwide rack-
eteering in labor.
NATIONAL :PARKS
Committee on Interior and Insular Alairs: Subcom-
mittee on Public Lands approved for reporting to the
full committee H. R. 6251, authorizing conveyance of
lands embraced in Shoshone Cavern to the city of Cody,
Wyo., for public recreational use; and agreed to the com-
mittee amendments, which will be offered during
House. consideration, to H. R. 4646, to permit Govern-
ment acquisition for public uses of privately owned
lands which are being managed on a sustained-yield,
basis or primarily for the growing of timber in exchange
for public lands of equal value, etc.
Also considered 22 proposed national park concession'
awards, and adopted a resolution offering no objection
to same. Meeting with the subcommittee was Donald
Lee, Chief of Concessions Management, National Park
Service.
HEALTH INSURANCE
Committee on Interstate and Foreign Commerce: Re-
sumed its study of methods now available to groups
and individuals to protect themselves against the cost
of illness, and. to find ways and means of expanding the
same. Testifying at today's session were E. R. Leibert,
Scarsdale, N. Y.; Gordon Gray, president, University
of North Carolina, and chairman, Commission on the
Financing of Hospital Care, Chicago, Ill.; and William
S. McNary, chairman, Council on Government Rela-
tions, American Hospital Association, Chicago, Ill.
Recessed until tomorrow morning.
U. S. FLAG--LEGAL PRACTICE-
IMMIGRATION-NATIONALITY
Committee on the Judiciary: Subcommittee No. i ap-
proved for reporting to the full committee S. 2111, per-
mitting the U. S. flag to fly 24 hours each day in Flag
House Square, Baltimore, Md. Also approved 38 pri-
vate immigration bills (7 of the House and 31 of the
Senate), and H. Con. Res. 197, granting status of per-
manent residence to certain aliens. Reported adversely
on,51,private immigration bills of the House.
The subcommittee also reported adversely on the fol-
lowing bills--H. R. 139, to make it a Federal offense to
use the U. S. flag for advertising purposes, or to mutilate,
defile, or cast contempt upon it; H. R. 485, making
eligible for practice before any administrative agency,
members of the bar of the highest court of a State, Ter-
ritory, possession, or the District of Columbia; H. R.
io26, prohibiting use of U. S. flag for advertising pur-
l
poses; H. R. 1265, amending U. S. Code, regarding
eligibility of members of the bar of the Supreme Court
to practice before all U. S. courts of appeals and district
courts; H. R. 1744, similar to H. R- 485, above; H. R.
2117, to provide that members of the bar of the U. S.
district court shall be eligible to practice before all ad-
ministrative agencies; H. R. 3417, amending U. S. Code
regarding imposition of penalties for using U. S. flag
for advertising purposes; and five bills providing for
repeal of the Immigration and Nationality Act of 1952
(H. R. 220, 435, 2710, 2959, and 3914)?
TAX COURT
Committee on the judiciary: Subcommittee No. 3 ap-
proved the following bills for reporting to the full com-
mittee-S. 984, amended, making provision for judicial
review of certain Tax Court decisions; and H. R. 1067,
amended, to authorize the U. S. Supreme Court to make
and publish rules for procedure on review of decisions
of the Tax Court of the United States.
POSTAL RATE READJUSTMENTS
Committee on Post Office and Civil Service:. Resumed
executive consideration of H. R. 6052, a bill to readjust
postal rates. Recessed on the legislation to tomorrow
morning.
PRIEST RAPIDS, WASH.
Committee on Public Works: Subcommittee on Flood
Control resumed hearings on H. R. 4898 and H. R. 4899,
bills relating to development of the Priest Rapids dam,
site on the Columbia River, Wash. Witnesses were
Representatives Holmes and Magnuson, authors of the
respective bills; and Brig. Gen. E. C. Itschner, Deputy
Chief of Engineers, Department of the Army.
The subcommittee met in executive session following
the hearing and suggested that Representatives Holmes
and Magnuson introduce a clean bill embodying amend-
ments suggested by executive departments.
ST. LAWRENCE SEAWAY
Committee on Public Works: Announced that an execu-
tive session will be held Wednesday morning, February
3, to consider St. Lawrence seaway.
ANTI-SUBVERSIVISM
Committee on Un-American Activities: Chairman
Velde announced the following legislative recommen-
dations.based upon investigations and hearings in the
year 1953-
That the Smith Act be amended so that in the field of the
law of evidence it should be provided that proof of membership
in the Communist Party shall constitute prima facie evidence
of violation of the act;
That legislation be enacted to permit as evidence the results
of technical surveillance in matters affecting the national secu-
rity, provided that adequate safeguards are adopted to protect
the civil liberties of all citizens;
That adequate legislation be enacted to provide against this
misuse of the fifth amendment and the Bill of Rights, which
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disuse prevents the committee from obtaining facts and infor-
, matron necessary to the proper function of the committee;
41 A study of the anti-Communist oath provisions of the Taft-
/ Hartley Act, with the view of strengthening the provision of
said act to prevent Communist infiltration into unions;
That legislation be enacted to mak, it a crime for any person
or persons unauthorizedly to transport in interstate commerce
any Government document falling within a top secret, secret,
or confidential classification;
That legislation be enacted forbidding the use of the U. S. mails
under second-class mailing privileges to subversive publications
emanating either from foreign sources or from sources within
the borders of the United States. It is also recommended that
the Internal Security Act of 195o be amended to permit the citing
of said publications as subversive;
amined to determine its effectiveness in controlling and exposing
subversive activities; and
That in any instance where a person holding a commission
in the armed services chooses to refuse to answer questions by
a duly aiorized authority concerning his present or past bersbib in the Communist Party, such commission should be
GENERAL TAX REVISION
Committee on Ways and Means: Announced that the
following substantive changes were agreed to today dur-
ing its executive consideration of the general revenue
revision bill for 1954-
Accounting Principles
Considered a series of provisions designed to bring the income-
tax provisions of the code into harmony with accepted account-
ing principles for reporting income and expenses. The adoption
of these principles means that income will be reported as earned,
expenses will be deductible at the same time the related income
is reported; the "lumping" of income, when accounting methods
are changed, will be prevented; and income will not be reported
more than once, or omitted, and that expenses will not be
deducted more than once, or omitted, when the taxpayer changes
from one accounting system to another.
r. Prepaid income.-Present law generally taxes income upon
receipt even though the taxpayer receives it in advance of the
period in which it is earned and even though the deductions
which ordinarily would be offset against this income cannot yet
be taken. The committee adopted a provision which would
give accrual basis taxpayers the option to report this "prepaid"
income as it is earned if this period is not more than 5 years after
the year of the receipt of the income. Where the expenses
attributable to, the income are incurred over more than a 5-year
period the prepaid income can be written off ratably over the
current year and next 5 years or in any other manner approved
by the Internal Revenue Service. This treatment is to be avail-
able only for income received after the end of 1953.
2. Shift from accrual to installment method.-Present law,
when a taxpayer shifts from an accrual to an installment method
of accounting, in the year of change taxes some of the taxpayers
income already taxed in the prior year. An accrual-basis tax-
payer, for example, who sells articles which represent $100,000
in gross income to him would have to include the entire amount
in his income in the year of sale even though he does not collect
$20,000 of this gross income until the next year. If for the next
year he shifts to the installment method of accounting, that is,
reporting the income as he received it, the $20,000 of gross
incomes on collections on prior sales would have to again be
reported for income-tax purposes. The committee adopted a
provision which provides that a taxpayer shifting from an accrual
to an installment method of accounting is not to be taxed twice
on the same income. The single tax imposed with respect to
this amount included in income of the first year under the
accrual method of accounting and in income of the second year
under the installment method is to be the lower of the two
taxes attributable to it. The tax attributable to this income is
the same percentage of the total tax which the amount is of total
gross income. In the example cited in this paragraph, if the
$20,000 were io percent of gross income in the first year, under
the accrual method, and the total tax in that year $75,000, the
tax attributed to this income would be $7,500. If in the second
year, under the installment method, the $20,000 were 13% per-
cent of gross income and the tax (including the tax on this
income) $45,000, the tax attributed to this income would be
$6,ooo. Since the $6,ooo is the lower of the two taxes the final
tax in the second year would be only $39,000.
3. Reserve for estimated expenses.-Present law permits a de-
duction for expenses only when the liability becomes fixed and
the amount is certain. Because present law requirements are
not in accord with accepted accrual accounting principles the
committee adopted a provision which permits taxpayers (other
than those on a cash basis) to take a deduction for reasonable
additions to reserves for estimated expenses. The expenses must
be related to income taxed during the year and of a type which
the Secretary or his delegate is satisfied can be reasonably esti-
mated. Reserves for contingencies, indefinite future losses, and
amounts in litigation would not fall in this category. At the
end of each year these reserves are to be reexamined and any
amount found to be excessive is to be added back to income for
that year. Examples of the types of reserves referred to above
are cash discounts valuation reserves against outstanding receiv-
ables, reserves for cost of product guaranties and reserves for
such expenses accrued at the end of a year for vacation pay, cost
of handling, packing, shipping, etc., merchandise sold but unde.
livered, and self-insured cargo claims pending.
4. Research and experimental expenditures.-Adopted a pro-
vision which provides specifically that a business can either write
off research and experimental costs in the year in which incurred
or elect to treat them as deferred expenses to be written off over
a period of 5 years or more. A method for the treatment of
these expenditures once adopted must be adhered to for subse-
quent years unless approval for a change (with respect to all or
a part of the expenditures) has been obtained from the Secretary
or his delegate. This provision does not apply to expenditures
for land, depreciable or depletable property or mineral, oil or
gas exploration. At the present time the Internal Revenue Service
is permitting taxpayers to expense, rather than capitalize, certain
research expenditures, but there is no specific statutory authority
for this treatment. This will be particularly beneficial to small
business which may have been unaware of the possibility of
expensing these amounts.
5. Organizational expenditures.-Present law requires a cor-
poration to capitalize expenses incident to their organization and
at present there generally is no way in which these expenses can
be written off prior to the corporation's liquidation. The com-
mittee adopted a provision which permits these expenses to be
treated as deferred expenses and written off over a period of
5 years or more.
6. Adjustments for changes of accounting methods.-At pres-
ent taxpayers who request permission to make a change in their
method of accounting must make certain adjustments in the year
of change. The adjustments are necessary to prevent income
and expenses from being reported twice and to prevent the omis-
sion of certain income entirely. However, in certain instances
where a change in accounting methods is made involuntarily,
the courts have denied the Internal Revenue Service the right
to require these adjustments. The committee adopted a provi-
sion requiring these adjustments to be made in all cases where
there is a change in accounting methods. This does not apply,
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CONGRESSIONAL RECORD - DAILY DIGEST
however, in the case of a shift from an accrual town installment
basis of accounting (see paragraph No. 2, today).
The committee provision also provides an averaging device,
where these adjustments are made, if (a) the taxpayer has not
changed his method of accounting in the prior 2 years, and (b)
the adjustments increase his taxable income by more than $3,000
in the year of change. The averaging device provides that the
tax of the person making the change is not to be increased by
more than it would be if the income attributable to the adjust-
ment were spread evenly over the year of the change and the-
2 prior years.
7. Repayments of amounts previously included in income.-
Under existing law when a taxpayer is required to repay an
amount which he had previously included in income, he is
allowed a deduction equal- to that amount in the year'the income
is repaid. If the taxpayer has little or no other income in the
year of repayment he may derive no benefit from part or all
of this deduction. The committee adopted a provision which
permits a taxpayer who repays more than $3,000 to go back to
the year the amount was reported as income and recompute his
income for that year omitting the amount which had to be
repaid.
Recessed on the subject until tomorrow morning.
BILLS SIGNED BY THE PRESIDENT
New Laws
S. 727, to provide that certain costs and expensed in-
curred in connection with repayment contracts with the
Deaver, Willwood, and Bell Fourche Irrigation Dis-
tricts shall be nonreimbursable. Signed,,January 30,
1954 (P. L. 289).,
H. R. 6665, establishing cotton acre~lge allotments for
1954. Signed January 30, 19 q.. EP `L. 290).
H. R. 7209, to contin t le effectiveness of the Missing
P. L. 291).
MITI'EE MEETINGS FOR TUESDAY,
FEBRUARY 2
(All meetings are open unless otherwise designated)
Committee on Agriculture and Forestry, on S. 1386, to amend
section 2 of Commodity Exchange Act relating to meaning of
word "commodity," io a. in., 318 Senate Office Building.
Committee on Appropriations, Subcommittee on Army Civil
Functions, on Missouri River Basin project, io a. m., room F-39,
Capitol.
Committee on Armed Services, Subcommittee on Real Estate
and Military Construction, on Air Force real-estate acquisition
projects, so a. m.; Hendrickson-Cooper-Kefauver subcommittee,
on miscellaneous bills, 2 p. in., both in 212 Senate Office Building.
Committee on Banking and Currency, on operations of the
Export-Import Bank and International Bank for Reconstruction
and Development and their relationship to expansion of inter-
national trade, with foreign witnesses, io a. m., 301 Senate Office
Building.
Committee on Foreign Relations, executive, on nominations,
Io:3o a. in., room F-53, Capitol.
,Committee on Interior and Insular Affairs, Subcommittee on
Territories and Insular Affairs, executive, to consider Alaska
statehood legislation, so a. in., 224 Sesiate Office Building; Min-
erals; Materials, and Fuels Economic Subcommittee, to hear
Joint Committee Meetings
PRESIDENT'S ECONOMIC REPORT
D89
joint Committee on the Economic Report: Committee
met in executive session with Rowland R. Hughes, As-
sistant Director, Bureau of the Budget. Mr. Hughes
discussed with the committee the Federal budget and
its relation to the recommendations contained in the
President's economic report.
Committee will continue tomorrow in open session
with testimony from Secretary of the Treasury
Humphrey.
D. C. PUBLIC WORKS
joint meeting: Subcommittees on Fiscal Affairs of the
Senate and House Committees on the District of Co-
lumbia concluded open hearings on H. R. 7389, to au-
thorize, and finance a program of public works con-
struction for the D. C., with testimony today from James
L. Martin, Assessor of the D. C.
Maj. Alexander de Seversky on use of titanium in aircraft pro-
duction, 10 a. in., 457 Senate Office Building. -
Committee on the Judiciary, subcommittee, on nomination of
Gov. Earl Warren to be Chief Justice of U. S. Supreme Court,
io a. in., 424 Senate Office Building.
Committee on Labor and Public Welfare, on Taft-Hartley
amendments, so a. m.; on nomination of Albert Cummins
Beeson to be a member of the NLRB, 2:30 p, in., both in room
P-63, Capitol.
Committee on Post Office and Civil Service, on S. 2244, pro-
motion by merit of postal service employees, S. 36r, adjustment
of compensation under contracts for carrying mail on water
routes, S. 2773, transportation of mails on motor-vehicle routes,
and S. 2728, collection of indebtedness of military and civilian
personnel resulting from erroneous payments, 10 a. M., 135
Senate Office Building.
House
Committee on Agriculture, to hear representatives of CROP
on disposition of surplus commodities, Io:3o a. in., 1310 New
House Office Building.
Committee on Armed Services, to resume on H. R. 7103, to
establish limitations on the number of officers who may serve in
the commissioned grades in the armed services, so a. m., 313-A
Old House Office Building.
Subcommittee No. 1, on two bills relating to the National
Advisory Committee for Aeronautics, 2 p. m., 313-A Old House
Office Building.
Committee on Foreign Affairs, Subcommittee on International
Organizations and Movements to hear Henry Cabot Lodge, Jr.,
U. 'S. representative to the United Nations, 2:30 p. m.; G-3 U. S.
Capitol.
Committee on Government Operations, Subcommittee on Mili-
tary Operations to hear Rear Adm. Murray Royar on the Navy's
conversion program regarding cataloging. Will also hear Roger
F. Hepenstal, Director of Federal Cataloging Program, 1o a. m.,
429 Old House Office Building.
Committee on Interior and Insular. Affairs, regular meeting
day, executive,. Zo a. in., 1324 New House Office Building.
Committee on Interstate and Foreign Commerce, on health.
insurance inquiry, ro a. in., 1334 New House Office Building.
Committee on the judiciary, regular meeting day, executive,
1o:3o a. in., 346 Old House Office Building.
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CONGRESSIONAL RECORD -DAILY MGM
February 1
Committee on Merchant Marine and Fisheries, Subcommittee Committee on Public Works, Subcommittee on Rivers and
on Panama Canal, executive, 1o a. rn., 219 Old House Office Harbors on sundry projects, io a. m.,
Building. 1304 New House Office
Building.
Committee on Post Office and Civil Service, on H. R. 6052, Committee on Ways and Means, on general revenue revision
postal rate revision bill, executive, io a. m., 213 Old House Office bill for, 1954, executive, io a. m., 1102 New House Office
Building. Building.
Hagen Subcommittee on Federal Civil Service, executive, 9:30 Joint Committees
a. m., 213 Old House Office Building. Joint Committee on the Economic Report, on President's eco.
Gross subcommittee on H. R. 720r, and H. R. 7554, providing nomic report, with Secretary of the Treasury Humphrey, 1o a. in.,
for compensation of certain employees on days when depart- ' 1301 New House Office Building.
ments or establishments of the Government are closed by admin- Joint Committee on Atomic Energy, executive, to hear Lewis L.
istrative order, executive, 9:30 a. m,.213 Old House Office Strauss on statistics report from AEC, 2:30 p. in., room F-88,
Building.
r-4-1
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