Collective Bargaining With Something Added

EXTENSION OF REMARKS

OF

HON. CHARLES B. HOEVEN

OF IOWA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, April 29, 1964

Mr. HOEVEN. Mr. Speaker, President Johnson, in announcing settlement of the threatened railroad strike, apparently took it upon himself to claim full credit for what was done. The American people, of course, know that railroad management and the railroad brotherhoods also deserve a lot of credit for bringing about the settlement. In this connection, I include as part of my remarks a most enlightening news story written by James Bartlett which appeared in the Washington Evening Star of April 28, 1964, as follows:

TAX CONCESSIONS AND RAIL PEACE-TUNNEL DEPRECIATION, FREIGHT RATE BILL SEEN AS INDUCEMENTS TO AGREEMENT

The disclosure that tax concessions were discussed in the process of settling the railroad labor dispute has stimulated curiosity regarding the precise nature of the President's mediation.

At Mr. Johnson's request, the Treasury will shortly review its disinclination to allow the railroads to depreciate their investments in tunnels and gradings. The tax authorities have insisted for years that a hole in a mountain does not depreciate and an official change of mind could be worth $30 million a year to the railroads.

The President also appears to have nudged Representative OREN HARRIS, Democrat, of Arkansas, into renewed efforts to pass the transportation bill. The measure, which would make the railroads' feright rates more adaptable to competition and less subject to regulation, was blocked by an 8-to-6 vote of the House Rules Committee on April 9. Presumed at that time to be dead for this session, the bill has been reviewed by new intimations of White House backing.

Mr. Johnson's interest in these two matters, which hold tremendous advantages for the railroads, is clearly linked to the carriers' decision to accept the compromise of the labor dispute last Thursday. Persons involved in those final negotiations insist there was no deal but the reward of securing the President's good will was obviously one of the railroads' inducements to agree.

Only time will reveal how firmly Mr. Johnson intends to exert his gratitude toward the railroads. He can order a review of the Treasury's tax ruling but he cannot order the tax officials to rule against their interpretation of the law. These are technical decisions that will be awkward to reverse unless Congress changes the law.

Mr. Johnson had indorsed the purpose of the Harris bill, which is stoutly opposed by the truckers and bargelines, some weeks before he entered the labor dispute. The test of whether this was a consideration in the settlement will be whether he now applies that extra measure of presidential leverage which spells the difference between

Appendix

passage and oblivion for a controversial bill.

A President can do many things for a huge industry that is involved at many points with the Government. But the enticement of presidential favor could not have wrung agreement last Thursday, from the carriers or the brotherhoods, without the series of events that had gone before.

The carriers felt able to accept the financial penalties entailed in the final compromise because they had previously won the key battles regarding the engineers and firemen and had broken the back of the featherbedding trend. They were far enough ahead in the campaign that they began in 1957 to feel that they could afford to give a little on this last settlement.

The issues were narrowed to bridgeable dimensions during 10 days of negotiation by the brilliant persistence of Theodore Khell, Dr. George Taylor, and the Government mediators. But this narrowing could not have taken place if the brotherhoods had not been squeezed for the first time into a unified bargaining position.

The major credit for convincing the brotherhoods that their best course was to get together and negotiate seriously is accorded without reserve to the President. He convinced them that he was determined to have a settlement and he left them confused as to whether they could count on his readiness to seize the railroads if there was a strike.

Mr. Johnson approached this first task of persuasion with the uninhibited, emotional and rawboned tactics of a country preacher. He staged a strenuous and earthy performance that left some of his audience with a feeling that he had lost more in diginity than he had gained in agreement.

But he won his point and went on in subsequent days to show that he could change his pace. His later appeals to the two groups were marked by the same force and determination, but they were calmer and more thoughtful.

Through it all Mr. Johnson used every pressure that was applicable: patriotism and tax relief, the welfare of the economy and the prospects of the election, threats and This promises, friendship and hostility. was collective bargaining with something added.

staff, commented with warm approval on the logic and force of Senator GRUENING'S fight.

There being no objection, the article was ordered to be printed in the RECORD, as follows:

ALASKA DISPLAYS ENVY: CAN'T GET FOREIGN AID

(By John W. Kole)

WASHINGTON, D.C.-Alaska would be better off as a foreign country when it comes to low-interest loans for its earthquake devastated economy. This charge was repeated in three Senate floor speeches last week by Senator GRUENING, Democrat, of Alaska. GRUENING, 77, has been fighting battles for Alaska for 25 years, including the one leading to statehood in 1959.

"I shall continue to raise the question of why the people of a hundred foreign lands who have suffered no disaster such as has befallen Alaska can receive grants and loans at a rate much lower than our own citizens are afforded," he said.

OFFICIAL WENT TO ALASKA

After the earthquake March 27, Eugene P. Foley, Administrator of the Small Business Administration (SBA), toured Alaska.

He issued instructions for 30-year loans to businessmen at 3-percent interest, with a 1year moratorium on interest payments and a 5-year moratorium on principal payments.

GRUENING fired off a letter to Foley contending that this just wasn't enough.

NOTES LOW INTEREST

"I indicated to Mr. Foley that the terms for Alaska disaster borrowers should at least be as generous as those given to borrowers under our foreign aid program where there was no disaster," GRUENING told the Senate.

"Many of our foreign aid loans are made at the rate of three-fourths of 1-percent interest per annum with repayment terms of 40 years and a moratorium on repayment of principal up to 10 years."

As of Saturday, Foley had not replied to GRUENING'S letter even though the Senator wrote him again Friday.

Foley declined to comment when asked about GRUENING's appeal, but an SBA spokesman said the agency was already losing money on the loans, at 3 percent.

Alaska Displays Envy: Can't Get Foreign cent for the money," he said.

Aid

EXTENSION OF REMARKS

OF

HON. WILLIAM PROXMIRE

OF WISCONSIN

IN THE SENATE OF THE UNITED STATES Wednesday, April 29, 1964

Mr. PROXMIRE. Mr. President, I ask unanimous consent to have printed in the Appendix of the RECORD an interesting article from the Milwaukee Journal of April 26, on the gallant fight being made by the distinguished Senator from Alaska on behalf of his devastated State. On Sunday I was in Milwaukee and many Wisconsin citizens who had read this article by the Journal's extraordinarily competent John Nole of the Journal's

"We're paying the Treasury almost 4 per"Why, it costs at least three-quarters of 1 percent to do the bookkeeping and collection on these loans. We would be better off charging no interest." CHILEAN CASE CITED

GRUENING noted in his letter to Foley that in August 1961, Chile received a loan of $100 million after getting a $20 million direct grant to deal with earthquake reconstruction.

This 40-year loan was made at threefourths of 1-percent interest, with a 10-year moratorium on the repayment of principal.

GRUENING said there was "always the possibility" that Chile either would not repay

the debt or be forced later to refinance it.

GRUENING has called for many millions of dollars more in direct grants for Alaska than the $50 million which Congress authorized speedily at President Johnson's request.

"In our U.S. foreign aid program, now in excess of $100 billion since its inception, we have been lavish with grants-outright gifts," GRUENING said.

"Yet in the discussion about the rehabilitation of the canneries, fishing boats, stores, and warehouses destroyed in Alaska by earthquake and tidal wave, we are told by administration spokesmen that far less generous terms are in order."

spiration resulted in the coinage legislation that made this motto a byword to all Americans.

Today our daily lives are threatened by

EXTENSION OF REMARKS

OF

HON. E. ROSS ADAIR

OF INDIANA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, April 29, 1964

Mr. ADAIR. Mr. Speaker, the National Society, Children of the American Revolution, recently held its annual national convention here in Washington. As a part of the program, there was an oratorical contest in which a young lady from Indiana participated. She was Miss Kay Krueger, of South Bend. Kay spoke on the subject, "American MottoIn God We Trust." What she had to say was so timely and important, that I think it may well be read by all. It follows:

AMERICAN MOTTO: "IN GOD WE TRUST"
(By Kay Krueger)

"In God we trust." All my life I have heard those words "In God we trust." To trust is to place a confident reliance on the integrity and justice of another. And, there is no better place to put such trust than in God.

The desire for religious freedom prompted many of our forefathers to come to America. It was their hope that in the New World they would at last be free to worship God in their own way.

Later our Founding Fathers were deeply aware, when they discussed the fundamentals of our Constitution, that the rights and lib

of absolute communism. Communism, according to Lenin's prophecy, will eventually dominate the world. We must be careful to guard the significance of the inscription, "In God We Trust," and to destroy any forces that would lead to the elimination of our precious first amendment. It is our challenge as CAR members and as young American citizens to preserve the spirit of our national motto. We must stimulate within the people we come in contact an appreciation of and a desire to understand the principles on which our country was founded. For with understanding, they will not hesitate to courageously defend these principles.

In the defense of these principles, we will stand up to communism and proudly proclaim to all our faith in God and country. Our national motto has a long history be

hind it; let us keep it on our coinage and in

our hearts.

Speech by German Bundestag President to Soviet Zone of Germany

EXTENSION OF REMARKS

OF

HON. MILWARD L. SIMPSON

OF WYOMING

IN THE SENATE OF THE UNITED STATES Wednesday, April 29, 1964

Mr. SIMPSON. Mr. President, on February 17 the President of the German Bundestag, Dr. Eugen Gerstenmaier, delivered a radio speech to the

Thomas Jefferson, author of the Declaration of Independence and of the Statute of Virginia for Religious Freedom, thought religion was a vital ingredient in the structure of a free society. He also firmly believed that monopoly by a single religion was one of the surest ways to religious persecution.

The Commander in Chief of the Revolutionary Army, George Washington, had more than military decisions to make. Often it was necessary for him to deal with religious prejudicies. All during the war and his Presidency, he was always mindful of the cause of religious freedom. He held himself impartial on matters of religion in a supreme effort to keep church and state separate.

The feelings of Jefferson and Washington reflected those of the other delegates attending the Convention in Philadelphia which was for the purpose of formulating the Constitution of the United States. This remarkable document clearly states in amendment I, the first of the ten amendments usually called the Bill of Rights, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." This amendment became effective December 15, 1791.

Therefore, with faith in God obviously so important to his country, it was but natural for Francis Scott Key, in his famous poem, "The Star-Spangled Banner," to write these immortal lines, "and this be our motto, 'In

Germany. His speech concerned the most patent point of friction between communism and the Western world, the total irreconcilability of the principles of Christianity and communism.

I ask unanimous consent, Mr. President, that an English translation of Dr. Gerstenmaier's address be printed in the Appendix of the RECORD.

There being no objection, the address was ordered to be printed in the RECORD, as follows:

IRRECONCILABLE OPPOSITION BETWEEN CHRISTIANITY AND COMMUNISM-UNDER NO CONDITION IS IT POSSIBLE FOR ANYONE TO LIVE IN INNER PEACE WITH ULBRICHT AND HIS REGIME

On February 17, 1964, the President of the German Federal Diet, D. Dr. Eugen Gerstenmaier held the following speech on radio station NDR/WDR on the broadcast "We Speak to the Zone":

My dear fellow countrymen, recently, I received a letter from two evangelical clergymen in Dresden. I do not want to mention their names, for it was not an open letter. On the contrary, it was of a very personal nature, despite the fact that it was a political letter. It spoke out for a new German peace initiative. Both of the clergymen felt that the complete renunciation of atomic weapons in the Federal Republic as well as in the zone would be an excellent opportunity of bestowing a real help to the world

and to our people in both parts of Germany. As you can see, nothing new is being spoken of in this letter-it is the same "old story." Why do I bring it up here, nonethless?

My answer is: First, because the completely honest and convincing tone of this letter has again shown me how an uninterrupted propaganda can obscure the perception and judgment of truth-loving men and because, second, this letter expresses in a touching and terrifying way how some people, in their need for peace, will even go so far as to reconcile themselves to a system, with which-if they want to be truthfulthey could live only in a state of basic antagonism and under intense strain.

To the content of the letter itself, I can only answer: The Federal Republic of Germany does not have any atomic weapons, nor is it its aim to acquire atomic weapons. Its aim, on the contrary, is the general and controlled disarmament of the two world blocs, for which a long and hot battle has been in process for quite a long time already, and which has always proven a failure until now, because the Communist bloc has never been willing to submit to the indispensable control which this disarmament entails.

The cause, which these two clergymen assuredly advocated in good faith, is not, as some people might think, a great or small step forward toward the achievement of this general controlled disarmament. On the contrary, it aims at severing the Federal Republic from the mutual security of the NATO, expelling the Americans from Germany and the European continent in order to deliver all Germany into the clutches of Moscow and Pankow. That we are decisively opposed to even the smallest step in this direction does not require any further explanation.

Such a determined attitude, it should be understood, is also in your interest, my dear fellow countrymen in the zone, for a West Germany without resistance and a weak West would only be an invitation to the Communists in Pankow as well as in Moscow to deal with you in an even more unscrupulous and ruthless manner than they do at present.

Furthermore, such a weakened West would not diminish the danger of war-it would increase it. For it was the development of arms and the defense policy of NATO that made Red Moscow realize and will yet make bloodRed Peiping realize, that they will never achieve their goal, Communist world domination, by the use of arms. But they continue to pursue this goal economically and by the use of increased propaganda. We accept this challenge. This means, however, that the battle for the future of the world will be fought economically and psychologically and never again militarily. But I repeat that as long as atomic weapons are not done away with under strict control, they must be preserved and kept up to date as security measures. This is unproductive, but it is necessary. What does this mean for you, my dear fellow countrymen in the zone? According to my conviction, it means two things:

First, that you should not allow your clear vision of the inferiority of the Communist economic and social order in its competition with the free world to be obscured by any propaganda and by any appeal for peace à la Ulbricht. Even in the West, all is not gold that glitters. Even here there is room for much serious criticism. But it is simply a proven fact, confirmed by Khrushchev himself, that the economic production of Russia always falls short of the productive achievements of the free world, despite the fact that almost 50 years of Communist rule in big and rich Russia have undeniably brought along considerable improvements. Communist economy lacks simply that, which alone would enable it to keep constant pace with the free world: the productive force of freedom. If the Soviet economy would achieve

Nation must appear simple to people in other countries who are desperately trying to raise living standards to a level most Americans would regard as below subsistence.

More and more serious thinkers are speaking out on the effects of the world's tremendous population surge. And this is good for only through open debate are we going to stir the resolution needed to find solutions to the problems caused by this population explosion.

I want to commend to my colleagues one such thoughtful expression of opinion, the following editorial from a fine community newspaper, Tucson Daily Citizen, Tucson, Ariz., of April 23, 1964: POPULATION CONTROL A MUST IN A WAR AGAINST POVERTY

What's the proper strategy for a successful war on poverty?

Is it to expand the dole by taking from the "haves" and giving to the "have nots"? Such strategy tends to be shortsighted, palliative rather than curative, because it doesn't strike at the root of the problem. And such strategy is politically tainted by a desire to garner the votes of the poor.

Fighting poverty by means of the dole is to wage the kind of war the United States

Given 36 more years at its current rate of growth, the United States will have 150 million more people than it has today. The Population Policy Panel of the Hugh Moore Fund, a nonprofit educational foundation based in New York, reecntly stated:

"This presents the prospect of 8 million unemployed instead of 5 million todayof 10 million on welfare, of 30 million elderly and 100 million children to be taken care of. The cost of maintaining such an enlarged burden of nonproducers could of itself add

millions of families to those which today are unable to adequately support themselves."

Neither foreign aid to poor people abroad nor Federal aid to poor Americans will prevent the spread of poverty. Population control is the only answer.

"The population problem can be successfully attacked," according to the National Academy of Sciences, "by developing new methods of fertility regulation and implementing programs of voluntary family planning widely and rapidly throughout the world."

The U.S. Government, which is spending billions of research dollars a year, should consider diverting a much more substantial share of them into the fight against overpopulation.

causes.

mercial storage. The risks involved are against loss from fire, windstorm, and other It was pointed out that the wide distribution of commodity holdings by the Commodity Credit Corp. accomplished the same spreading of risk which individuals obtained from insurance. The new policy was to take effect on the renewal dates of the present Uniform Grain Storage Agreement, July 1, 1964, the current cotton storage contracts, August 1, 1964, and other storage contracts covering rice, beans, and oils.

You specifically asked to be advised whether the Department of Agriculture was going beyond the governmental policy of self-insurer when it applied such policy to commodities pledged as collateral on pricesupport loans.

While you undoubtedly are aware that the Department of Agriculture in a press release dated March 24, 1964, (USDA 956-64) announced the recession of its announced position of January 10, 1964, we would like to take this opportunity to explain the Government's longstanding policy of self-insurer modities in commercial storage which are and the application of such policy to compledged as collateral on price-support loans.

As far back as February 9, 1892, first Comptroller of the Treasury Matthews advised the Department of State that “it is not the policy or practice of the Government to insure its property." In numerous

that has been a negative matter of maintaining a precarious equilibrium. At worst, as it now appears, it is a matter of steadily yielding ground to the enemy.

The only way to win the war on poverty is to strike at the root cause while you treat the symptoms. And that means halting the present explosive growth of population.

The rate of population increase must be reduced not only in the United States, but all over the world. Population of the world is growing by nearly 7,000 every hour, by approximately 60 million a year.

It took many thousands of years from the appearance of the first man until 1 billion human beings inhabited the earth, a population point reached about 1830. Just one century later, about 1930, there were 2 billion living people. It took only 30 more years to add a third billion. Recent estimates hold that the fourth billion will have been added by 1975, just 11 years from now. And 5 billion human beings will crowd the earth by 1985, just 21 years from now, unless something is done to halt the explosion.

The prospect is frightening. The population explosion is every bit as dangerous as the H-bomb.

How does population growth affect poverty?

For an example, look to Mexico, where the birth rate is about four times the death rate. If this rate continues for 20 years, there will then be 75 million Mexicans instead of the present 38 million.

Mexico is one of the most progressive of all Latin American countries. But it has to run fast, insofar as economic growth is concerned, just to hold its own insofar as the standard of living is concerned. If the birth rate could be brought into line with the death rate, millions of poverty-stricken Mexicans would start to benefit from the nation's economic growth.

Many other countries rival Mexico's population growth rate but fail to achieve its economic growth. In an effort to improve living standards in Asia, Africa, and Latin America, the United States has given more than $15 billion in economic aid in the past 5 years. But there are more hungry people in those areas now than there were 5 years ago, because population has climbed 250 million in the meantime.

EXTENSION OF REMARKS

OF

HON. ROBERT H. MICHEL

OF ILLINOIS

IN THE HOUSE OF REPRESENTATIVES Wednesday, April 29, 1964

Mr. MICHEL. Mr. Speaker, sometime after the Department of Agriculture announced on January 10, 1964, a new policy of being its own insurer of commodities owned by the Government and pledged as collateral on price support loans which are in commercial storage, I wrote to the Comptroller General inquiring as to whether the Department of Agriculture had authority to go so far as to act as its own insurer. Although the Department of Agriculture rescinded its announced policy on March 24, I think it would be very worthwhile to have printed in the RECORD at this point the full text of the Comptroller General's letter of April 24, written in response to my inquiry on this subject. Mr. Speaker, under unanimous consent, I include this letter in its entirety at this point:

COMPTROLLER GENERAL OF THE UNITED STATES, Washington, D.C., April 24, 1964. Hon. ROBERT H. MICHEL, House of Representatives, Washington, D.C.

DEAR MR. MICHEL: By letter dated March 31, 1964, acknowledged April 6, you wrote to our office concerning an announcement' by the Department of Agriculture that the Commodity Credit Corp. would assume certain risks which heretofore had been covered by casualty insurance underwritten by commercial insurance carriers. This announcement, which was made in Department of Agriculture press release dated January 10, 1964 (USDA 98-64) stated that the new policy was in the interest of economy and was in keeping with the governmental policy of being its own insurer. The assumption of risks was to be on commodities owned by the Government and those pledged as collateral on price-support loans which are in com

Treasury and Comptrollers General of the United States this policy has been restated and followed. By way of specific example, Assistant Comptroller of the Treasury Mitchell referred to this long-standing policy in his decision reported at 13 Comp. Dec. 779 to the Secretary of the Interior dated May 10, 1907. In that decision Assistant Comptroller Mitchell held that moneys available for the purchase of supplies for use in the education of natives in Alaska were not available for the payment of premiums for insurance on such supplies en route to

Alaska.

The theory behind this rule is well stated in decision of April 15, 1942, to the Chairman of the Board of Directors of the Virgin Islands Co. (corporation), reported at 21 Comp. Gen. 928, 929. In that decision it was stated:

ment to assume its own risks of loss, upon the theory that the magnitude of the Gov

"It is the general policy of the Govern

ernment's resources makes it more advanta

geous for the Government to carry its own risks than to have them assumed by private insurers at rates sufficient to cover all losses, to pay their operating expenses (including agency or brokers' commissions) and to leave such insurers a profit."

Of more direct application to the question of carrying insurance on commodities used as collateral on price-support loans, is unpublished decision B-59941, October 8, 1946. In that decision the Administrator, War Assets Administration was advised that the wide distribution of its risks, was a factor to permit the Government to assume its own risks.

It should be pointed out that the Government's practice of self-insurance is one of policy and not of positive law. When the economy sought to be attained under this rule would be defeated, when sound business practice indicates that a saving can be effected, or when services or benefits not otherwise available can be obtained by purchasing insurance, an exception to the general rule has been recognized. For example, in unpublished decision B-35379, July 17, 1943, to the Secretary of Commerce there was recognized the need for an exception in allowing the purchase of hull insurance on aircraft where the insurance companies had needed expert appraisers and adjusters and the War Training Service did not, nor could not re

cruit, an adequate force of personnel to handle the appraisal of damages in fixing the liabilities of certain contractors.

Congress has given tacit approval to the self-insurance policy here discussed on several occasions by enacting laws which grant exceptions to this rule. Noteworthy among such exceptions are the Government Losses in Shipment Act, approved July 8, 1937 (ch. 444, 50 Stat. 479, 5 U.S.C. 134 et seq.), and the act of August 1, 1956 (ch. 841, 70 Stat. 890, 5 U.S.C. 170h (a)), which gave the Secretary of State authority to purchase insurance to cover the Government's possible tort liability arising from the operation of Government automobiles in foreign countries.

With the foregoing background on the policy of the Government to be a self-insurer of its own property, we now turn to the application of such policy to commodities in commercial storage which are pledged as collateral on price-support loans.

On pages 10 and 11 of our report to the Congress submitted November 10, 1959, on our audit of the New Orleans Commodity Office of the Commodity Stabilization Service we made the following recommendation:

"As previously stated, CCC followed the policy of not insuring Government-owned cotton but required that warehousemen carry fire insurance on cotton stored by producers as collateral for price-support loans.

"In August 1956, we recommended to the Administrator of CSS that (1) a study be made of the costs of insuring loan cotton and of insurance proceeds in previous years and (2) that consideration be given to the feasibility of adopting alternative methods of providing protection against losses on loan cotton which would result in lower costs.

"In February 1957, we were informed by the Administrator of CSS that the New Orleans office had started compiling statistics on inventory cotton with respect to fire losses as compared with insurance premium savings and that the statistics and data obtained from the study could also be used to make a similar comparison with respect to loan cotton.

"In March 1959, the New Orleans office advised the Deputy Administrator of CSS that a study of estimated savings accruing as a result of not insuring acquired (inventory) cotton for the period July 1, 1956, through June 30, 1958, had been completed. The net savings were estimated to be $3,059,344 for the 2-year period.

"Based on the demonstrated savings of over $1.5 million a year accruing as a result of not insuring inventory cotton, we believe that CSS should determine whether similar savings could be accomplished with respect to loan cotton by adopting alternative methods of providing protection against losses."

We would like to point out that our Office has not made similar recommendations concerning the other commodities pledged as collateral on price-support loans.

In his justification for the announced policy of January 10, 1964, of the Government assuming the risks attending commodities pledged on price-support loans, the Acting Secretary of Agriculture stated:

"The economic justification cited by the Comptroller General for not permitting the expenditure of appropriated funds for insurance (on Government-owned property) applies with particular force to the widely distributed storage holdings of the Commodity Credit Corporation.

"Assumption by CCC of its risks of losses would result in substantial monetary savings to the Government. Studies of operations during fiscal years 1957, 1958, and 1959, demonstrated that out of every dollar of insurance premiums paid by warehousemen

under the Uniform Grain Storage Agreement, only 28 cents was collected by CCC in payment of insured losses. Similar information compiled for the fiscal years 1962 and 1963 shows that for every dollar of insurance premiums paid by warehousemen under the Uniform Grain Storage Agreement only 27 cents has been paid to CCC as a result of insured CCC losses.

"Under the present cotton price support program docket, payment is authorized for insurance on cotton during the loan period which is acquired by CCC but the insurance is dropped after cotton is acquired. For the period July 1, 1958, through June 30, 1963, CCC shows estimated savings of $3,569,575 in assuming its own risk on owned cotton. These are not savings to CCC since, in computing this total, administrative and other overhead costs were taken into consideration. It is logical to assume that very substantial additional savings would accrue to CCC if CCC were to assume the risk of loss on loan cotton also.

We feel that the policy of the Government as self-insurer of its property should apply as well to commodities pledged as security for price-support loans. The economic justification is identical and we know of no legal distinction that should be drawn. While a mortgagee has an insurable interest on the mortgaged property to the extent of the debt secured (44 C.J.S., Insurance, sec. 187b., p. 884) we know of no law-absent contractual requirements-which would require a mortgagee to insure his interest.

As previously pointed out, exceptions have been made to the Government's policy as self-insurer of its property. Inasmuch as we view that policy as equally applicable to commodities held as security on price-support loans, the standards for exception to such policy apply as well. Those standards for exception are repeated here as follows: 1. Where the economy sought by selfinsurance is defeated.

2. Where sound business practice indicates that a savings can be effected, or

3. Where services or benefits not otherwise available can be obtained by purchasing insurance.

It is apparent from the findings made by the Department of Agriculture that neither of the first two reasons for exception apply in this consideration. We are not aware of any basis for applying the third reason for exception in this matter.

Consequently, we believe that the Department of Agriculture's decision as stated in the press release of January 10, 1964, that the Commodity Credit Corporation would assume its own risks on Government-owned commodities and commodities held by it as security on price-support loans, was in accord with the Government's policy to selfinsure.

nual American Success Story Award, presented by the Free Enterprise Awards Association. He is the youngest person to receive the FEAA Award.

The story of Dr. Herzog's success is an inspiration to young Americans. He served in World War II; worked his way through some of the top colleges in the United States; received his Ph. D. in nuclear geophysics at MIT, with additional education at Harvard; and presently is a part-time professor in geophysics and geochemistry at the Pennsylvania State University. He is the president and founder of the Nuclide Corp., established in 1954 as Nuclide Analysis Associates to provide a talent pool of professors consulting in mass spectroscopy. Nuclide undertook its first manufacturing contract in 1957, when it designed and built a mass spectrometer for the Oak Ridge National Laboratory.

Dr. Herzog and his associates have built Nuclide from a one-room laboratory to three buildings, located at State College, Pa., where 125 scientists and technicians develop and manufacture mass spectrometers, spectrographs and other technical apparatus for the analysis of isotopes, gases, liquids and solids. In 5 years the company, under the guidance of Dr. Herzog, has had a 700-percent growth. Today, Nuclide products and services are used in world-wide research and process control by industry, university and Government laboratories. In 1963 the Nuclide Corp. received the coveted President's "E" Award for "outstanding contribution to the export expansion program of the United States of America." This year's FEAA Award is another fitting recognition of Dr. Herzog's genius and the contribution the Nuclide Corp. which he founded is making in the scientific world. The FEAA citation reads in part:

Won an enduring place in the history of American endeavor by achieving success despits adversity through industry, sacrifice, and ethics, symbolizing the success possible to all under our free enterprise system.

The 17th Pennsylvania Congressional District is proud of this distinguished citizen.

Administrative Aircraft

SPEECH

OF

HON. GEORGE H. MAHON

OF TEXAS

IN THE HOUSE OF REPRESENTATIVES

Tuesday, April 21, 1964

The House in Committee of the Whole House on the State of the Union had under consideration the bill (H.R. 10939) making appropriations for the Department of Defense for the fiscal year ending June 30, 1965, and for other purposes.

Mr. MAHON. Mr. Chairman, in my colloquy with the gentleman from Iowa [Mr. SCHWENGEL] with regard to the use of administrative aircraft by the services, the question was asked as to the