17652 CONGRESSIONAL R~CORO-- SENAT1l' September 20 Carrubba., Harry D. Walden, Denzll · E.· Schoen. James R. Keith; John H., Jr. Baker, EdwardS., Jr .. Johnson, Russell E. Butner, John C., m Dindinger, Jack W. Spicer, Raymond B. Jones, Edward H. Dowd, John J., Jr. Roothoff, John J. Mosher, Charles M. Merrill, George A. Rann, Louis A. . Hicks, Norman W. Peck, William H. Harmon, Autrey B. Westcott, Cl~arles T. Smith, Robert A. Kletzker, Robert L. Winn, Robert D. Meyers, George F. c J Cummings, James M. Dresbach, Earl ., r. Esslinger, Dean E. Dillard, Jack N. Dzialo, Edward. W. Harris, Robert G. Porter, Robert H., Jr. Killian, Edwin W. Overmyer, Gerald D. Morin, Donald E. Gelzer, Edward D., Jr. Miles, .Jack L. Hayes, James M. Wood, Ralph C. Lahr, Robert J. Spencer, Donald E. Hagarty, Patrick J. Johnston, Howard J. Hargett, Ernest C. .Jones, David G. Powell, David D. Green, Melvin K. Clark, Allen B. Badger, Guy 0. Lewis"' Elmer M., Jr. Russ, Donald M. Cashman, James G. Selvitelle, Benjamin Breckinridge, James T. B., Jr.

Thomas, John C. Taylor, Roma T., Jr. Worley, Kermit M. Macklin, Wllllam H. Owens, Thurman Webb, Lewis R. Derning, Edmund G.. McClelland, Wllliam A.

Jr. Hickman, Wllliam.T. Warshawer, Alan J. Flood, James H. A. Mader, John .F. Selmyhr~ Garlen L. Dixon, FrankL .• Jr. Martin, Lee D. Kleppsattel, F. M.,Jr. Blyth, Charles W. Critchett, Edward W • .Montague, Paul B.· May, Donald L. Ludwig, Verle E. Buchanan, Fitzhugh Owens, Owen L.

L., Jr. Wildey, Robert L. Meeker, Ermine L. Coffman, John W. Wachter, John A. Wessel, Wallace

Fegley, James E. Showalter, Charles E. Stowers, Robert M. Stephens, Reuel W.. Corn, Cl11ford D.

Jr. Grier. Samuel L. Eschholz, Theodore S. Witkowski, Henry J. Coon, Elvin R., Jr · Leidy, Alfred L. . Hillmer, Donald F. McCain, Gene M. Rump, William S. Brent, Joseph M. Beverly, Arthur C. Miller, Richard R. Reese, Howard E. Harris, William A. McNicholas, Robert J . . Marusa.k, Andrew Baeriswyl, Louis, Jr. V., Jr.

Wilson, Harold B. Stephenson, Charles

R .. m Gilman, Donald E. Blaha, Herbert. J. Patton, William C. Moa.k, Sta~ey T . . Rapp, David A. Walker, William T. Coffman, Raymond

P.,Jr. Wilson, Robert H. Eastman, Robert E. Edwards, Roy J. Woodruff, Paden

E., Jr. Ives, Merton R.

Peabody, Cl11ford J. Rogers, Harry L., Jr. Hall, William D. Markham., Edward

.J.,Jr. Richards, Wayne E. Mey~. Ed.w~d B. Parrott, Robert E. Arford. Jack 0. Plaskett, William, Jr. McCarty, Stewart

B., Jr. Discus, William

A., Jr. Hanifin, Robert

T.,Jr. Hecker, James s.

The following-named omcers of the Marine Corps for permanent appointment to the grade of lieutenant colonel, subject to quali­fication therefor as provided by law:

Amos, Raymond L. Valentour, James V. Wahrer, Maurice S. Stamps"' Clyde H.

Keenan, Lawrence W. Yezierski, Peter P. Leach, Robert D. Lindfelt, Haldon E.

EXTENSIONS OF REMARKS

West Virginia Above National Average in Homeownership-Progress in Other Areas Cited-State Savings & Loan League Holds 46th Annual Convention

EXTENSION OF REMARKS OF

HON. JENNINGS RANDOLPH OJ' WEST VIRGINIA

IN THE SENATE OF THE UNITED STATES

Friday, September 2o, 1963

Mr. RANDOLPH. Mr. President, sav­ings · and loan institutions comprise a vital and respected segment of the finan­cial strength of the United States. More than 35 million thrift-conscious Amer­icans take advantage of their convenient facilities which extend credit to 45 per­cent of all homebuyers, and now record nearly $85 billion in mortgages. In West Virgini~ the individual ownership of homes is at the rate of 64.2 percent, with the national average being 62.8 percent. Assets of savings and loan organizations have increased 12 times since World War II. During 1962, they financed the pur­chasing of 757,000 existing homes, and the construction of 429,000 others. In the same year they paid dividends to savers totaling $3 billion, and created 700,000 jobs for American craftsmen.

These figures indicate that savings and loan institutions have become an inte­gral part of the community, and a wei .. come partner in the acquisition of homes for millions of our citizens.

September 12, 13, and 14, 1963, the West Virginia Savings & Loan League h'eld its 46th annual convention at the Greenbrier, White Sulphur Springs, W. Va . . It was my privilege to participate in the first general session, on Friday morn­ing, September 13, and was attended by representatives of the 28-member asso­ciations in the Mountain State. Presid­ing was the president of the West Vir­ginia Savings & Loan League, Robert

F. Griffith. Also on the program were: Hon. Hulett C. Smith, Commissioner of the West Virginia Department of Com­merce; Eugene M. Mortlock, vice presi­dent of the U.S. Savings & Loan League; and Hon. Cecil H. Underwood, vice president of the Island Creek Coal Co. ·

Mr. Mortlock, in addressing the atten­tive audience, commented on the stead­fast service performed in the public in­terest by savings and loan institutions, and illustrated their widespread accept­ance by quoting figures reflecting the ex­pansion noted in West Virginia. He in.: dicated that since 1948, assets of savings and loan institutions in West Virginia have grown from $52 million to near the $300 million mark; the number of savers has increased from 23,000 to approxi­mately 100,000; homeownership has jumped from 43.7 percent in 1940, to 64.3 percent in 1962-this figure comfortably exceeding the national percentage of 62.8.

Mr. Mortlock also pointed out that this undeniable success should not impel us to slacken efforts to bring forth a more rewarding way of life for our citizens.

He continued: Surely we cannot afford success if it must

be an anesthetic for initiative or a formula for retreat from the competitive arena . . We must reserve an open mind, an ability to see things through the eyes of our opponents, a skill for understanding the motives and the thoughts of those whom we oppose. Yet we must act in the light of the best knowl­edge and reason available to us at the mo­ment. This ls a wildly imaginative, techni'­cal world in which we find ourselves . • • • a world where managers should not sleep too easily at night unless they accept the fact that there is a better way to do every­thing. We must be determined to engage in disciplined, effective research to obsolete our own ways and methOds.

Mr. Mortlock states here not only a worthy creed for lending erganizations, but a worthwhile reminder to West Vir­ginians who have 'seen the progress achieved in recent se'ars, but who must remain dedicated to the struggle for

a more balanced economy and an 1m­proved standard of living.

Commissioner Hulett C. Smith_, of the West Virginia Department of Commerce, spoke realistically of the challenges which have been met, and those which still demand the attention and energies of responsible individuals. He enumer­ated advances recorded in the location of new industry, in expansion of existing facilities, in providing additional em­ployment opportunities, and in enhanc­ing the overall commercial climate. Commissioner Smith declared that:

At the end of the first 8 months of 1963, we had helped to bring 82 new :pl~ts to West Virginia. Ninety-three expansions of existing industries had been accomplished. These developments brought p. total invest­ment of $145 million-and only manufactur­ing is inclu(fed in this cou.nt.

Our growth is 'even more impressive if we consider coal mines and coal preparation plants; electric power installations; trans­portatio~ and communications; Government expenditures through the accelerated public works program; national Investments in flood control projects through the Corps of Engineers; the National Science Foundation's Radio Astronomy Center at Green Bank; and research, warehousing, and retail establish­ment construction. • • • All of these ac­complishments contain the .reflection of great effor~ and the eleme~ts of great challenge.

Mr. President, I concur with Commis­sioner Smith in the thought that citizens of the Mountain State can be justifiably proud of these fruits of their struggle toward a parity with progress. Yet we cannot relax in this attempt; rather, new approaches and new resources must be called into play if we are to attain our goal.

Concluding participant in the first general session of ·the convention was Hon~ Cecil H. Underwood, former Gov­ernor of West Virginia,. who spoke effec­tively of rethinking .. and restructuring­new ·· approaches and · solutions to the :problems which confront this Nation in the space age.

It seems logical, then-

1963 CONGRESSIONAL RECORD- SENATE 17653 Said Mr. Underwood-

that true scientlftc investigation will thrive best if a proper climate exists-I speak of such things as understanding, appreciation, and support from government, society, and industry.

To remain in a competitive world position, America must advance its research and ex­ploration at a rate far greater than anything we have known. The patterns of these new demands are so dit!erent from our fam111ar past that pioneering wlll be exceedingly ditll­cult. For this reason, I believe an important share of scientific research leadership must fall to those parts of our country where dy­namic change and growth are welcome and possible. Among all States of our country, I think of none more peculiarly fitted to be­come the center of modern scientific research than West Virginia-a young Mountain State with its rich deposits of natural re­sources, a compelling desire to grow, a favored geographic position, and a people dedicated to individual freedom and per­formance.

Featured speaker at the second gen­eral session was Mr. George R. Parker, president of the Federal Home Loan Bank, of Pittsburgh, Pa.

Instrumental in the success of the 46th annual convention of the West Virginia Savings and Loan League were the pur­poseful officers of the group, who gave much in time and toil so that the meet­ings might go forward smoothly. Serving along with President Robert F. Griffith, of Wheeling, were John H. Thomas, of Charleston, first vice presi­dent; and R. Deane Blair, Moundsville, second vice president. Special recogni­tion should rightfully go to Executive Vice President Joseph P. Condry, of Charleston, whose efforts in behalf of the West Virginia league were felt not only at the convention, but throughout the entire year. Mr. Condry is a gifted ad­ministrator and one whose talents are refiected in the organized fiow of con­vention activity.

The Board of Directors includes Ker­mit E. McGinnis, Huntington;· James D. Wood, Bluefield; W. W. Wagner, Logan; James F. Brown, III, and Ivor F. Boiar­sky, both of Charleston, W.Va.

Mr. President, I request that excerpts from the addresses of Hon. Hulett C. Smith, Mr. Eugene M. Mortlock, and Hon. Cecil H. Underwood, at the annual convention of the West Virginia Savings and Loan League be printed in the CoN­G:aEsSIONAL RECORD, together with my own remarks, and a list of the member insti­tutions in West Virginia.

There being no objection, the material was ordered to be printed in the REc­ORD, as follows: LIST OF MEMBERS OF THE WEST VIRGINIA SAV­

INGS AND LOAN LEAGUE Beckley: Beckley Federal Savings and Loan

League. Bellair-e, Ohio: The Buckeye Savings and

Loan co. Bluefield: First Federal Savings and Loan

Association. Charleston: Charleston Federal Savings

and Loan Association, Empire Federal Sav­ings and Loan Association, First Federal Sav­ings and Loan Association, West Virginia Building and Loan Association.

Chester: Hancock County Federal Savings and Loan Association.

Clarksburg: First Federal Savings and Loan Association.

Fairmont: Fairmont Building .and Loan Association, First Federal Savings and Loan Association, Marion County Building and Loan Association, Standard Building and Loan Association.

Fayettevllle: Fayettevllle Federal Savings and Loan Association.

Huntington: Huntington Federal Savings and Loan Association.

Lewisburg: Blue Grass Federal Savings and Loan Association.

Logan: First Federal Savings and Loan Association.

Moundsville: Citizens Savings and Loan Co., First Federal Savings and Loan Associa­tion.

New Martinsville: Doolin Federal Savings and Loan Association.

Parkersburg: First Federal Savings and Loan Association, Traders Federal Savings and Loan Association.

Point Pleasant: Point Pleasant Building and Loan Association.

Ravenswood: Farmers Building and Loan Association, First Federal Savings and Loan Association.

Sistersvllle: First Federal Savings and Loan Association.

Wheeling: Peoples Federal Savings and Loan Association, Union Federal Savings and Loan Association.

ADDRESS 011' HULETT C. SMITH, COMMISSIONER, WEST VIRGINIA DEPARTMENT OF COMMERCE, BEFORE WEST VmGINIA SAVINGS AND LoAN LEAGUE, WHITE SULPHUR SPRINGS, W. VA., SEPTEMBER 13, 1963 Thank you for the chance to be with you

today. I am happy to share in your pro­gram and grateful for the opportunity to speak about progress in West Virginia-the beginning of a dynamic era of growth-and I believe, the awakening of a "sleeping giant" as we West Virginians are becoming more and more aware of the opportunities that lie within our State for economic growth and the general development of ourselves and our resources.

It is a privilege to join with Senator RAN­DOLPH and former Governor Underwood at this annual meeting of the West Virginia Savings and Loan League.

All of us in West Virginia have important reasons to be proud of the way our State has moved forward in recent years-1962 was a year of progress and our citizens are beginning to recognize the "acres of dia­monds" in our own back yard.

Do you realize that as a State, West Vir­ginia had the 25th highest rate of economic growth in the Nation last year? Our growth in manufacturing was greater than that of Michigan, Indiana, New York, Illinois, Penn­sylvania and Ohio, to mention only a few. Our growth rate exceeded the national aver­age by approximately 5 percent.

Increased employment has helped push personal income to new levels-an annual rate of t3.4 billion in July-and has sup­ported rising retail trade, particularly in the sale of new cars.

At the year's half-way mark, the gross State product--total output of goods and services (as determined by the statisticians of the C. & P. Telephone Co. of West Vir­ginia) had risen to an index of 112 based upon a scale of 100 for 1957-59; and 1957 was the best economic year for West Vir­ginia prior to 1962-this according to the West Virginia Chamber of Commerce rec­ords. The index was only 102.3 in January of 1961 when Governor Barron took office.

The average daily output of coal has reached its highest rate in years. Coal ton­nage has increased almost 5 percent over year-earlier levels.

Production from our chemical plants has increased 8 percent since December of 1962.

At the end of the first 8 months of 1963, we had helped to bring 82 new plants to

West Virginia. Ninety-three expansions of existing industries had been accomplished. These developments brought a total in­vestment of $145 million, providing more than 11,000 new job opportunities with pay­rolls adding up to $48 million-and, only manufacturing is included in this count.

Our growth is even more impressive if we consider coal mines and coal preparation plants; electric power installations; trans­portation and communications; Government expenditures through the accelerated public works program; national investments in fiood control projects through the Corps of Engineers; the National Science Foundation's Radio Astronomy Center at Green Bank; and research, warehousing, retail establishment construction. Add the programs of the Area Redevelopment Administration, including a new investment in a complex of tourist and recreation .facilities amounting to over $24 million; add a stepped-up road construc­tion program (which is now moving into high gear under the able leadership of State Road Commissioner Burl Sawyers). All of these accomplishments contain the reflection of great effort and the elements of a great chal­lenge.

We have only begun-we have only made a start-we realize that the job is by no means finished • • • and we recognize that we in this generation have been given an opportunity to continue this progressive surge.

We recognize that even with the new tools for financing industrial growth that have been provided by the actions of the 1961 and 1963 West Virginia Legislatures in establishing the West Virginia Industrial Development Authority and the Industrial Development Revenue Bond Act and the West Virginia Forest Industry Development Corp.-we have the real challenge to do more-to move faster-to accelerate the pace of progress.

But, we must still think about the other needs of West Virginia-industrial develop­ment and tourism are but two of the areas which must be expanded.

What about other major sectors of em­ployment? The task of the West Virginia Department of Commerce is to help provide job opportunities for West Virginians and to foster economic development of the State. We must look to the entire scope of State development, not just isolated segments.

What does it take to gain full employ­ment in West Virginia?

Shouldn't we guide ourselves by looking toward the recommended full employment pattern of the entire United States?

Looking at this pattern of nationwide em­ployment and projected growth, we can easily see that our State once had a higher percentage of employment in mining and agriculture. We are now dropping to near the national average. We were low in manu­facturing employment and now are gaining because this has been the focal point of our attack on unemployment in the past few months. Despite the general decline· in manufacturing employment throughout the Nation as a percentage of the work force, I'm proud to report that in West Virginia that percentage is increasing. Our State grew in the number employed in manufac­turing in the past 2 years-from 21,000 to nearly 25,000 employees. This increase of about 3,000 came in the face of a national de­cline in those employed in manufacturing­a loss attributed to automation.

But, we are not making the gains in con­struction, education and research, and re­source development classifications needed. It is to these areas that we must turn our attention in planning for the future.

We have long recognized our needs in housing, new homes, new schoolrooms, more teachers to reduce the size of classes • • • meeting these needs will provide the wages to stimulate other sections of the economy

17654 CONGRESSIONAL RECORD - .SENATE September 20

and the demand for services and consumer goods will increase.

· It we emphasize construction-housing­community !acUities, schools, resource de­velopment, and education as we look toward the future • • • what can it mean to us?

Nationally, it is estimated that doubling the number of teachers and doubling their salaries would add to the national total out­lay for education from around $10 billion a year to $40 billion a year. This would mean for the Nation's economy a direct in­crease in the demand for food, clothing, housing, automobiles, etc., and the related production facilities estimated to expand the gross national product by some $120 billion. What would it mean to West Virginia? The effects stagger the imagination.

It is stated also that we are spending a much smaller part of our total income on education than our grandfathers did 75 years ago, and we certainly know that a great part of our school facil1ties are inadequate and unacceptable.

In the Nation today, it is estimated that we are building only one-half the number of new homes needed to replace those be­coming obsolete, those required to take care of our expanding population, and those needed to provide proper housing for our less prosperous citizens. It is also said that 1f we build these homes that are needed, our national employment figure would increase in construction classifications by 1.25 mil­lion. This vast expansion would also be felt in West Virginia.

Some of the initiative for industrial financing has been taken by State govern­ment to provide for a dynamic industrial expansion in the sixties. Results indicate that this move has encouraged the growth of West Virginia manufacturing.

Should the initiative for encouraging this construction growth in homes and schools come from your State goverLlllent--or sbould it come from you as leaders in home financing? What do you think?

In any case, these fields of growth and the solution to the problems of employment in West Virginia continue to be a challenge. It 1s the great challenge of this generation. We must meet it. We shall meet it. With your cooperation as leaders of the :financial industry we shall make available for all West Virginians a richer, more rewarding life.

· ONE HUNDRED BILLION DOLLARS STRONG

(Excerpts from an address by E. M. Mortlock) Ours is truly a success story. A story of

big business born and bred out of a very \)asic need-a "poor" man's bank, grown $100 billion strong in 132 years of service--from $500 to $100 billion-from 1 association to 6,300.

This great American achievement has been made possible by 35¥2 million thrift con­scious citizens, who have saved to have-­and to invest--in a better America. This has been our mission-to spread the gospel of modest savings, performing a great service to our Nation.

As home financing institutions, we have made our most dramatic contribution to national prosperity, by extending credit to 45 percent of all homebuyers, now recording $85 blllion in our mortgage portfolios. We have capitalized on an era of favorable fi­nancial legislation, post war housing de­mand. We have pioneered the GI home loan program, and stimulated people's pro­pensity to save. We have wooed the public with appealing advertising campaigns, tailor­made a.avings programs, inves·tment a.afety and high dividend rates. We have set the pace in luring and lending funds-until we are now the logical choice for investors at almost every level of sophistication.

Such a history would indeed be far less astounding, had it not been for three great

events which altered the nature of our econ­omy and reshaped the role of the savings and loan movement:

1. The depression of the thirties which laid the framework for sweeping legislation de- . signed to strengthen the operations of all financial institutions, and encourage the de­velopment of financial intermediaries offer­ing specialized skills, later on, the regional home loan bank system, and the insurance corporation became the foundation of uni­form, nationwide standards of sound opera­tion.

2. The World War II economy, with full employment and high earning capacities gave birth to the thrift habit in its fullest force, enabling savings and loans to attain stature and win their contest for savings growth.

3. The postwar real estate boom clinched our role as the nation's mortgage lending specialists. This identification has been virtually unchallenged up until now as other financial factions have begun to recognize the investment appeal of the mortgage in­strument.

To sum up a program of progress, facts and figures illuminate our story-a story of the largest and fastest growing savings media in the country:

Assets increased 12 times since World War II from $8.747 to $100 billion. ·

Gross mortgage loan recordings-current, 12 months, August 1963, $23 billion.

Net savings gains, 12 months, August 1963, $11 billion.

Dividends to savers, 1962, $3 billion. Financed for purchase, 1962, 757,000 exist­

ing homes. Financed !or construction, 1962, 429,000

new homes. Total, 1,186,000. We produced 700,000 jobs for American

craftsmen. Since 1945 we have financed 5 mlllion of

21 million new homes built. Since 1945 we have provided credit for

another 9 Inillion families. WEST VmGINIA STATISTICS

Assets 1948, $52 million; now, to 1962, $300 m11lion.

Number of savers, 1948, 23,000; now, ap­proximately 100,000.

Percent of homes occupied, 64.3 percent; up from 43.7 in 1940.

This compares with a national average of 62.8 percent.

So much for a proud past. Too often, yesterday's recordbreaker is soon forgotten in · tomorrow's world. Now it is our turn to blaze a new trail, to set the pace, to shape the future. Now it is our job to build this busi­ness • • • bigger, better, and broader in scope, service, and significance.

But where do we start? Has this $100 bil­lion business been a result of careful plan­ning or an outgrowth of its own accord? Are we the industry leaders who can underwrite a future greater than the past, or are we content with admiring old trophies?

Surely we cannot a.trord success 1f it must be an anesthetic for initiative or a formula for retreat from the competitive arena. We must preserve an open mind, an ab111ty to see things through the eyes of our opponents, a skill for understanding the motives and the thoughts of those whom we oppose. Yet we must act in the light of the best knowl­edge and reason available to us at the mo­ment. This is a wildly imaginative, technical world in which we find ourselves • • • a world where managers should not sleep too easily at night unless they accept the fact that there is a better way to do everything. We must be determined to engage in dis­ciplined, effective Tesearcll to obsolete our own ways and methods.

Successful enterprise is rarely accidental. Usually it is the result of careful planning, courage, and dogged persistence in making

the plan work. The future that we study and plan for begins today. How w~ll we execute these plans is important, but the value of them rests in their usefulness as yardsticks of performance. We must have long-range goals to keep from being frus­trated by short-range failures.

We must reaffirm our belief in growth and show our faith by a program of participa­tion, wherein we can continue to make fur­ther contributions to the full and exciting life ahead. For this is a new frontier, with new demands and new responsibllities-the time to move into a hardheaded reappraisal of management goals and operating meth­ods. A successful business requires plan­ning to make it that way. The present is a1ways tugging at us, but tomorrow-that is a dreamer's paradise. Everything is pos­sible witi:l tomorrow: No dream too foolish­no goal too high.

It is absolutely necessary that a business justify its existence through economic per­formance. It must be able to innovate or create change and it must obtain adequate profits to meet the costs of the necessary risks which it generates. The balance sheet is the record of an association's past--not a guide to its future. The earnings state­ment proves nothing but that the associa­tion still has momentum from what has gone before. Our financial statement reflects our past, but how much does it tell of the fu­ture--or the men whose actions today deter­mine tomorrow's profits. A good balance sheet is like the foundation of a house. It is important, but nobody lives in it. Every­thing that counts happens above that level. Our officers must be managers of people, not monitors of work. We must concern our­selves not only with the question of financial solvency, but with that of human solvency as well.

We have grown ourselves into a rugged test of managerial skill, where analysis, fore­sight, and risk of misjudgment will play leading roles. We must act now for a be-tter future. We cannot a.trord to keep our eyes closed and fingers crossed, hoping for the best; nor can we afford to ignore the eco­nomic evolution taking place under our very nose-giving lipservlce to market research while continuing to operate by the seat <Y! the pants. The hour of luck and guesswork is over. The amateur must surrender to the professional in the management of finance.

We are knee deep in an age of acute com­petition. We must face the hard, cold facts of the earnings squeeze, discretionary con­sumer spending and inadequate investment outlets. The sleeping giants have been shaken out of their lethargic atmosphere by tlhe arrival of the trojan horse. But if we are to maintain our prominence, it is obvi­ous that we must develop new techniques, methods, and thinking processes.

We must recognize the need for forward planning in order to pinpoint areas of weak­ness and keep pace with running objectives so that we can adjust policy before it is too late. We must set standards of job per­formance and measure the effectiveness of managers. We must evaluate the total job being done, and at the same time accom­plish a better communication among those concerned with a particular job. Manage­ment must create and arrange organization conditions and methods of operation so that people can achieve their own goals best, by directing their efforts toward organization objectives. We must develop men who have the capacity to live in all dimensions, who shift easily from one to another. We must create and develop voluntary cooperation among those people whom we supervise. A manager must concern himself with the new, and with creative initiative. He must de­vote hls principal interest to the d11ferent, the rare, the significant. He must have

1963 CONGRESSIONAL RECORD - -SENATE 17655 imagination to innovate, capacity for judg­ment, and an lnclinatio~ to persevere. He must think, ponder, and frequently recon­sider. He must decide and he must act.

Clarity of objective and organized plan­ning through deliberate study of future con­ditions can prepare us for change and at the same time help us adjust to it. It is so much more important for us to look forward than to look back, in order to insure our survival and progress.

The secret of our continued success is to set high goals, expecting nothing-but to work as though you expected everything.

For we, as industry leaders, are men with a big job-the job of keeping vitally alive more than a century long precedent of serv­ing America. As we raise the banners "100 billion strong," let them be our inspiration, our incentive to forge ahead toward a busi­ness twice in size in half the time.

ExCERPTS FROM AN ADDRESS BY CECIL H. UN· DERWOOD, VICE PRESIDENT, ISLAND CREEK COAL Co., HUNTINGTON, W.VA.

As West Virginia begins its second cen­tury, we must accept the fact that welfare demands of our State will remain a heavy drain on Government revenues for yet some time. With about 16 percent of our popula­tion receiving welfare payments (excluding social security), the State will be hard pushed to find necessary money to support these programs. Revenues which are needed for schools, roads and other services often will be channeled into the welfare budget. As important as welfare services are, they do not create wealth, generate growth or con­serve resources; they merely represent hu­man! tar ian holding actions.

In reality, our problem-immediate and long range-is how to adjust the State's vast human resources with the manpower needs of industries based in our mineral re­source complex. While moving through this kind of readjustment, planning minds and administrative genius must be based solidly in the long-range future. The State must find a way to lead rather than follow eco­nomic cycles.

Long-range planning is compllcated by the Ungering threat of "cold war." Will our re­sources be needed for military mobiliza­tion? Or, can we use them for peaceful ad­vancement? I believe that West Virginia is uniquely situated to serve the needs of our Nation in the years ahead in either event: to create a new economic base !or peace­time prosperity; or to conserve the economic and m111 tary strength of America in a cold war.

Any future plan must be based in the rapidly emerging realities of our time. Coal and oil from our region are just beginning to !eel the competitive thrust of Russian oil as it moves into the world markets. Un­questionably, this competition will become more serious as the Soviets rely in greater degrees on .oil as an instrument of their foreign policy. The Russian oil threat is not so much a market fight as it is a com­petitive exercise in functional flexibllity.

America must constantly evaluate its rela­tive capabillty to interchange a varied range in the form of energy matter. To meet the Soviet challenge, the coal and other mineral concentrations of our Appalachian heartland must be functionally mobllized to provide a free and flexible flow of energy to all parts of our continent and throughout the free world.

I! our region can develop the capability tc provide energy in the form and quantity needed to meet constantly shifting combina­tions of world needs, we will help our Nation to "hold all competition for world control in effective balance.

The making of synthetic fuels from coal has been the subject of research in thil!l

CIX--1111

country since the days of World War I. Its concept has bro~dened to the inter­chang~ability of energy ·forms and its tempo increased since World War n.

Since it was first mined, coal has enjoyed a position as one of America's basic fuels. For many years it dominated the energy market; now it supplies only 22 percent of our energy needs.

Greater horizons beckon beyond these limits. Scientific research already has proved that any product manufactured by the chemicals and synthetic industries can be made from coal if it can be converted to usable forms. The only barriers standing between current research findings and these ultimate usages are the economics and tech­niques of conversion. Once this scientific breakthrough is realized, coal will become a base for manufacturing.

While West Virginia depended on coal to support its single-industry economy, coal has looked to research to stay alive com­petitively within the limits of the energy market. Now it is moving into a position where it can generate research for new uses, new products, and new scientific techniques. Once it becomes a manufacturing base, coal will lead economic cycles rather than follow them.

If West Virginia is to profit from this new world of scientific economics, it must wel­come the new century with new vision. We need to discover or to create new uses !or our coal, petroleum, chemicals, sands, timber, and other resources. From new uses will come new industries, new products and new jobs based on the needs of an automated society. Scientific research and economic intelligence will accelerate industrial devel­opmentA

Leadership for this new life demands con­centration of knowledge and dedication of research efforts. The college and university campuses must provide the focal point for this research and generate the brainpower to reach our goals. The colleges cannot ful­fill their obligations, unless they can depend on a steady flow of well-trained and curious­minded students from the public school sys­tem.

The mountaineer of 1863 found his free­dom in a new State. The new mountaineer of 1963 must find his freedom in a new world of research.

Our contemporary scientific advancement was attained only through years of painstak­ing xesearch. The world today is alive with scientlll.c revolution and daily pronounce­ments remind us of its extraordinary speed and sweep.

From an obscure amount invested 60 years ago, American industry and Government will spend well in excess of $60 billion in re­search during this decade. Reviewing the past half century, we can see clearly the practical relationship between the explosive expansion of research in industry, Govern­ment, academic and institutional environ­ments, and the equally explosive growth of our material and intellectual civilization. These two form a unit, and we will continue to advance only so long as each feeds upon the other in mutual growth.

Historically, science has been a practical way to get things done. Now, we Americans recognize it as a way of life. It is rapidly becoming the common denominator of mod­ern nations in international affairs. Through the great unities of approach and preparation which bind those dedicated to the scientific way, we may perhaps find that thus far elusive path to peace.

From the ideology expressed in the Declara­tion of Independence, the American concept of political freedom has been based squarely on the individual citizen. Scientific research extends to the very extreme its demands on individual effort in -the search tor scientific truth. Think of the intense personal efforts

it requires in preparation, dedication, imagi­nation, and originality.

It seems logical, then, that true scientific investigation will thrive best if a proper cli­mate exists-I speak of such things as un­derstanding, appreciation, and support, from Government, society, and industry.

To remain in a competitive world position, America must advance its research and ex­ploration at a rate far greater than anything we have known. The patterns of these new demands are so different from our familiar past, that pioneering will be exceedingly diffi­cult. For this reason, I believe an important share of scientific research leadership must fall to those parts of our country wbere dy­namic change and growth are welcome and possible. Among all the States of our coun­try, I think of none more peculiarly fitted to become the center of modern scientific re­search than West Virginia-a young moun­tain State with its rich deposits of natural resources, a compelling desire to grow, a fa­vored geographic position, and a people dedi­cated to individual freedom and performance.

SPEECH BY SENATOR JENNINGS RANDOLPH, OF WEST VIRGINIA

Federal Government involvement in sav­ings and loan affairs dates from the depres­sion years of the 1980's when the economy of the United States received a crushing blow. But it is plausible to forecast that Congress wlll maintain a continuing inter­est in the welfare of the Nation's savings and loan associations.

The depression in large part was triggered by wholesale failures in the Nation's bank­ing and financial system. Inherent weak­nesses were suddenly revealed when the strain and pressure of the business slump was brought to bear on financial institu­tions. Banks and savings ,and loan asso­ciations were caught up in the chain re­action of failure, and a vital and important segment of our national economy was lit­erally laid low. However, we are aware that the depression reached into every facet of our national life and every phase of com­merce.

The Congress realized that the lifeblood of the economy was in the financial re­sources available to it for expansion, for a ready source of credit, and for the serv­ices financial intermediaries could provide. It therefore moved to meet the challenge by enacting two meaningful legislative measures which have become pillars of strength !or the entire savings and loan in­dustry. I refer to the creation of the Fed­eral Savings and Loan Insurance Corpora­tion and the Federal Home Loan Bank 'Sys­tem. The extension of Federal insurance for participating associations and the guar­antee it afforded savers did much to restore confidence in financial institutions.

With the inception of the Federal Home Loan Bank System, savings and loan asso­ciations for the first time had available to them a ready source of liquidity for use in emergency situations when short-term de­mands dictated. They could also avail them­selves of long-term credit to meet economic ebb and flow. The Federal Government thus has become an active partner in the desti­nies of the savings and loan business. A Federal system of savings and loan BBSOCia­tions really grew out of the depression, and from acts of Congress to overcome the de­pression.

But there was an underlying, and in many respects, a more important reason for Con­gress to take keen interest in savings and loan affairs. It was the realization that the savings and loan business itself ·was a key part of one of the largest industries in the United States; namely, the homebuilding in­dustry. Without an adequate and proper financing of housing, it was rationalized that

17656 CONGRESSIONAL RECORD- SENATE September 20 the homebuilding industry would fall back and retrench, and would not be able to finance the homes under construction. This, too, was a major element in the decision ·of the Congress to move ahead with legislation which was to enable the savings and loan business to become stronger and better stabi­lized.

In intervening years since the depression much legislation has been passed which has broadened and extended the lending author­Ity and financing ability of savings and loan associations. I am speaking here of Federal associations to which only Federal Government legislation could apply. But it is generally recognized that as Federal legislation is enacted and put into use the respective States take parallel action to give parity to State-chartered institutions.

There are some who hold that the Federal Government is more of a drawback than an asset in the fortunes of the savings and loan business and that your organizations would be much better off 11 the Government would permit associations to operate in a more unrestricted climate. The Federal Govern­ment isn't infallible.

Certainly our democracy has made its share of mistakes. On the other hand, I have seen the Central Government act with wisdom in times of stress. As proof, look back to the years of the depression once again and re­fiect on the two major items of legislation that were passed by the Congress that st111 serve as a bedrock for your industry.

Your associations are $100 billion strong, or at least are expected to be sometime this month. More than ever, your industry is a giant economic force that finances more than 45 percent of the Nation's homes. It 1s clear that the Congress is interested in the well­being and future success of the savings and loan business simply because it exerts such far-reaching influence in the economic prog­ress of our country.

What•s happening in the 88th Congress? Are savings and loan associations meeting success with their legislative program? To understand the progress made thus far it is useful to note that an unusual volume of complex legislation has been brought be­fore the Congress. The administration's tax bill was introduced early in the ses­sion-probably the most ditncult measure to come before the House this year. Further complicating the progress of the Congress are several unusually controversial items on the calendar, such as the civil rights bills, the railroad crisis settlement, and, in the Senate, the ratification of the test ban treaty. All of these contribute to delay of hearings on legislation of specific interest to your industry.

In late May of this year, a bill was intro­duced by Representative WRIGHT PATMAN, chairman of the House Banking and Cur­rency Committee, that would raise the in­surance ce111ng for both insured banks and savings and loan associations from the pres­ent $10,000 :figure to $25,000. At the time of introduction, industry leaders tell me that they estimated there was a better than 50-50 chance that this item would be passed by the end of this year. The primary bill had been introduced by Chairman PATMAN and thus carried the endorsement of a com­mittee chairman; identical bills had been introduced by committee members on both the Democratic and Republican side, indi­cating bipartisan support; both insuring cor­porations, the Federal Deposit Insurance Corporation and Federal Savings and Loan Insurance Corporation had publicly endorsed this legislation.

During consideration of the measure, the White House Committee on Financial In­stitutions, known as the Heller Committee, released its long-overdue report. The com­mittee made a number of recommendations concerning the operation of savings and loan associations. Shortly thereafter, a new ad-

ministration bill was- introduced ln the f.louse, and was referred to the Banking and Currency Committee. This proposal included higher insurance ce111ngs. Also it provided f()r more rigid liquidity requirements and authority for the Federal Home Loan Bank Board to exercise dividend controls over sav­ings and loan associations at the option of the Board. Although no hearings have been held on the administration proposal, it is a reasonable assumption that the original bill endorsed and supported by the savings and loan business will not be reported until the administration measure has been a subject for further hearings.

Later this month the House Banking and Currency Committee will hold hearings to consider proposals to broaden and liberalize lending powers of financial institutions. Commercial banks, savings and loan asso­ciations, and credit unions will be concerned with these hearings, and all have indicated an interest and a willingness to give testi­mony. I am informed that the savings and loan industry has forwarded to the commit­tee a legislative package that would increase lending powers of Federal institutions and would grant authority for expansion into new areas of lending that are related to home financing but have heretofore been re­stricted.

Probably one of the most important of these powers would be authority for Federal institutions to deal in State and municipal securities. Numerous legislators who are ex­pert in this field believe this to be a neces­sary adjunct to the basic home lending func­tion of the savings and loan association be­cause State and municipal securities finance those elements of the community that are vitally necessary to the environment of the home itself. This means that savings and loan associations for the first time would be able to help finance schools, streets, water­works, sewage disposal systems and other municipal facilities that help to make the home complete.

Another key provision would give to Fed­eral associations the authority to finance home furnishings and appliances, in addi­tion to the basic mortgage. I understand also that your leaders are urging legislative authority to permit your associations to finance a relatively new type of home or resi­dence that has been spawned since post-war years-the mobile home.

These proposals incorporate a philosophy that is rapidly gaining favor among not only savings and loan organizations, but also among other elements of the financial com­munity, as well as among those in Govern­ment charged with supervision. The objec­tive is to provide greater freedom and fiexi­bility to meet new markets as they develop.

We have seen a trend toward freer invest­ment and lending policies, not only for sav­ings and loan firms, but also for national banks and Federal credit unions. The pre­vailing sentiment seems to be that more adaptable regulation of these institutions can be consistent with protecting the inter­ests of savers and investors.

Stated another way, the central thrust of the new philosophy seems to be the encour­agement of a greater range of competition between various Federal financing institu­tions by permitting banks to invest more heavily in mortgages, and· savings and loan associations to make more extensive invest­ments outside the area of single family homes.

The rationale for this new trend of thought ls that the public can be better served by increased competition between the various credit extenders and lending institutions.

In light of this trend, I predict that the Congress will be much more receptive to new ideas in legislation relating to finance than it would have been 5 years ago--more willing to accept innovation and pioneering.

- And . there- is reason to . believe that this more original thinking is necessary to meet emerging trends in the increasingly urban American society. Here 1s but one example of change: Apartment constructio-n and apartment living have skyrocketed over the past several years. In 1962, apartment con­struction accounted for 30 percent of total construction efforts in the country. In large metropolitan areas, over 50 percent of new construction was registered in apartment building. As these figures indicate, apart­ment living 1s a. vital part of our economy and these units must be financed.

Congress, in the closing days of the last session, passed legislation that accorded rec­ognition of this development and author­ized Federal associations to utilize an addi­tional 10 percent of assets for lending on apartment units. This change to permit financing of more apartment buildings will probably have less significance to us in West Virginia than to our counterparts in large metropolitan centers such as Chicago, New York, or Los Angeles. However, we must be responsive to regional needs as well as na­tional ones in meeting the challenge of our growing urbanization.

Congress must be alert to comprehend and to meet the problem of the housing needs of the American people as require­ments shift from one form to another. As needs vary, so should the capacity of the savings and loan association expand to meet the demands of the American consumer. I am not suggesting, however, adjustments to accommodate the short-lived trends of hous­ing that emerge from time to time and die overnight. Nor am I implying that you or the Congress should move imprudently in trying to keep pace with all types of living patterns. But, as a solid, unmistakable and long-term living pattern develops, this area probably should be opened to your institu­tions as well as others.

But, in the quest for and investigation of new markets. and additional business, I am confident that savings and loan associations will not overlook their time-honored and essential function-that of promoting home­ownership through the financing of the in­dividual home.

The New Oceanic Age

EXTENSION OF REMARKS OJ'

HON. WARREN G. MAGNUSON OJ' WASHINGTON

IN THE SENATE OF THE UNITED STATES

Friday, September 20,1963

Mr. MAGNUSON. Mr. President, Life magazine, in its Au·gust 30 issue, pub­lished a significant full page editorial titled: "$2.3 Billion Should Go Into the Ocean."

The editors of Life have rendered a timely and conspicuous public service by publishing this concise and convincing editorial pinpointing reasons why this Nation should pursue a broad and ex­tensive long-range oceanographic pro­gram. I commend it to my Senate col­leagues, a majority of whom I feel have long held similar views.

Expansion of the Nation's oceano­graphic research is not a new interest on the part of Time-Life publishers. The need also has been indicated in several other of our leading publications. Un­fortu.nately, however, there has only been a partial and piecemeal response on the

1969 CONGRESSIONAL ltECORD·~ -S:ENATE

part of Government and the · Congress. Planning has exceeqed perf9rmance and studies of inner space invariably yield precedence to those of the far reaches of the universe.

Life's editorial, which I will request be placed in the RECORD at the conclusion of my remarks, will, I am convinced, stimulate wide national recognition of the need to explore, scientifically, the 72 percent of earth's surface occupied by the oceans.

This is, as Life magazine so aptly puts it, an "oceanic age," and three-dimen­sional knowledge of the seas around us, their contents and the dynamic forces within them has become increasingly vital not only to our commerce and economy but also to our national se­curity.

Mr. President, in addition to the edi­tors of Time, Life, and those of several other publications of wide circulation which for several years have indicated support for an expande<;l oceanographic program-although none perhaps as im­pressively as Life in its August 30 edi­torial-it is appropriate that I state at this time that the Senate Committee on Commerce and the Senate as a body have advocated and supported a national long-range program of oceanographic re­search, surveys and education for almost 5 years.

AP. early .as July 1959, after several months of study, the Senate passed by unanimous consent Senate Resolution 136 endorsing the recommendations of the National Academy ot Sciences' Com-· mittee on Oceanography, forerunner of all plans for a coordinated, long-range program of expanded . oceanographic re­search. This resolution, previously re­ported unanimously by the Committee on Commerce, and which had been intro­duced by myself earlier in the session, was cosponsored, I am proud to say, by every member of the committee.

That same year, 1959, the Senate passed and sent to the houseS. 2482, re­moving limitations on the Coast and Geodetic Survey and enabling it to con­duct oceanographic research and surveys beyond the Continental Shelf, one of the recommendations of the committee on oceanography in presenting its 10-year program.

Later in the 1959 session, 14 Members of the Senate, including myself and with strong representation from both parties, cosponsored S. 2692 designed to imple­ment the entire report and recommenda­tions of the National Academy of Sci­ences' Committee.

Time-Life shared this early interest in oceanography. The :fine editorial in Life magazine's August 30 issue is no related inspiration but the culmination of long and thorough study of how this Nation must prepare for the new oceanic age.

S. 2692 passed the Senate on June 23, 1960, by unanimous consent and was re­ferred to the House .of Representatives which throughout the remainder of the 86th Congress took no action.

Early in the 87th Co.ngress, on Febru­ary 3, 1961, to be precise, I introduced, as was necessary in view of the death of S. 2692, a new bill, S. 901, which again

proposed to implement the long-range oceanography program recommended by the Committee on Oceanography. This committee~ I need not remind my col­leagues, is composed .of many of our most eminent marine scientists, none of whom are connected with any Govern­ment agency and all of whom are com­pletely objective.

Hearings were held, the Committee on Commerce favorably reported the bill, and it was passed by the Senate on July 28 of that year and referred to the House of Representatives.

The bill authorized a coordinated, na­tional oceanographic program and the expenditure over a 10-year period of $651 million for the construction of research ships, laboratories. and other necessary facilities; the design and procurement of new and advanced instruments and equipment, and the education and train­ing of prospective oceanographers and technicians.

The House for more than a year took no action on this Senate-passed measure but in August of last year considered an alternative. The House bill, in lieu of proposing a specific program or a specific time period, endorsed oceanography in principle and proposed that an ocean­ographic program be developed by the Office of Science and Technology. The House bill also contained a provision and language to which several administrative agencies directly concerned with the proposed legislation objected.

The House, when these measures were brought to the :floor, substituted the House version for the Senate bill, re­taining only the Senate number. The House version was passed and subse­quently vetoed.

This does not mean that Congress made no progress in the 87th Congress in constructive legislation to advance our oceanographic research capabilities. On the contrary several worthwhile bills were enacted.

Early in 1961 Representative GEORGE P. MILLER of California and I introduced similar bills in the House and Senate respectively authorizing the U.S. Coast Guard to conduct oceanwide oceano­graphic research, the Coast Guard then being lim1ted to such research 1n con­nection with its ice patrol.

Each of these bills passed the branch of Congress in which it had been intro­duced, minor differences were readily resolved in conference, and the legisla­tion was promptly approved by President Kennedy.

This is extremely helpful legislation because it has made possible the wide expansion of marine research on or from existing ships. I wish to credit the East­ern Pacific Oceanic Conference, repre­senting the western coastal States, for initially proposing this utilization of existing facilities by a highly qualified Government agency in broadening our oceanographic program.

In the 87th Congress also my distin­guished colleague from the State of Washington [Mr. JACKSON] and I intro­duced a bill to enable the geological sur­vey of the Department of the Interior, then limited under its organic act to the

national domain, to .conduct research into the geological structure and mineral re­sources wherever such research might be in the national interest whtc:ti, of course, includes the oceans.

Life magazine, in its editorial, appro­priately CJ.lls attention to this offshore mineral potential.

Senator CLINTON P. ANDERSON, of New Mexico, then chairman of the Commit­tee on Interior_ and Insular Affairs, like­wise championed this legislation in com­mittee. It was reported favorably, passed the Senate without opposition, and subsequently the House of Repre­sentatives.

.I .comment on these matters, Mr. Presi­dent, as evidence that the Congress is aware of the needs for expanding the Nation's oceanographic program and the facilities for three-dimensional marine research.

A question remains as to how this pro­gram may best be coordinated among the 20 separate Government agencies now participating in some phase or phases of the program, each necessarily jealous of its particular interest or activity.

Difficult as this problem is, the na­tional interest requires that it be re­solved and two Government groups, the Interagency Committee on Oceanogra­phy and the Office of Science and Tech­nology are giving it close attention.

I think the comment is justified that we have not yet attained what might be considered a balanced program, although overall significant advances have been made. These advances have been some­what of a piecemeal nature. Some agen­cies, perhaps better funded than others, are progressing rapidly, particularly those responsible for our military security.

Those primarily concerned with basic research, which is fundamental, do not appear as yet to have received the sup­port given those engaged principally in applied research, although several of the latter have suffered also. The greatest lag, however, may be in advancing the education and training program recom­mended by the National Academy of Sci­ence Committee on Oceanography and other science groups.

The administration, Mr. President, is concerned that a long-range coordinated program move ahead.

Several .months ago-June 1963-the Office of Science and Technology, headed by that extremely able scientist Dr. Jerome B. Wiesner, issued its projection of a national oceanographic plan for the 10 years ahead, a plan based on more than a year of interagency discussion.

This is the program which Life maga­zine refers to in its excellent, and as I stated previously, timely editorial. In effect, Life endorses this program, and the editorial undoubtedly will quicken public interest in what many of us in the Congress consider to be, in this oceanic age, a national necessity.

Mr. President, our responsiveness to this problem will, I suggest, be important when we consider the proposed 10-year oceanographic program so ably outlined in Life magazine's recent editorial.

17658_ CONGRESSIONAL RECORD- SENATE· September. 2.0.

I ask unanimous consent that this edi­torial, titled "2.3 Billion Should Go Into the Ocean," be printed in the RECORD.

There being no objection, the editorial was ordered to be printed in the RECORD, as follows: $~.3 Bn.LIOH SHOULD Go INTO THE 0cEAH

Why ha.s the administration announced a. new program to spend $2.3 billion during the next 10 years on oceanographic research?

Why does the administration want to par­cel out this sum among the U.S. Navy and 14 agencies-with 56 percent of it allocated for the kind of "basic research" once defined as finding out what questions to ask?

Why should the U.S. Congress and the U.S. public tolerate, let alone support, such a vaguely defined, long-range and perhaps open-ended exercise in Federal spending?

The answers lie in the very character of American geography. Even as the United States thrusts into space it does so from a continent that is in fact a large island en­veloped by massive oceans. Whoever knows most about those oceans holds the advantage tn the struggle for command of the seas, holds the lead in reaching !or the fabulous un­known resources of the ocean flOOl'. "Be­cause we're such a big island the public doesn't realize this," says one of the most famous oceanographers in the United St?a.tes, Roger Revelle, of the Scripps Institution of Oceanography at La Jolla, Calif. "We have to show the flag in oceanography all over the world."

The admlnlstratlon•s new program, which Oongress and the public ahould endorse, means coming to grips with oceans of igno­rance just as vital as the far reaches of space.

In fiscal 1964 the United States is spend­ing just $156 milllon on searching and prob­ing the seas that cover 71 percent of the earth's surface, provide the rain, decide the cllma.te, swirl the currents that help make a nation in Britain and a wilderness in Lab­rador a.t equivalent latitude. In the same flaca.l yea.r the United States is spending $4 bllllon in space. But the new administra­tion oceanographic campaign, without prej­udice to the space effort, wllllaunch the kind of research flee~isers, floating labora­tories, submarines capable of exploration 18,000 feet below, a new bathyscaphe for 36,000 feet below-that can perform the crltloa.l mission. Some reasons for coming to grips with the oceans:

Defense: The United States least vul­nerable strategic weapon is the Polaris-bear­ing nuclear submarine, 41 of which have been programed to date. Polaris sweeps enemy coastlines, invulnerable because it Is undetectable. But the U.S. Navy's own antisubmarine warfare planning against the U.S.S.R.'s 4:50 or so submarines alms to make all submarines just as detectable and just as vulnerable as surface craft. "There isn't an ocean in the world big enough to lose the sound of a. pistol flred at the right depth," said Columbus O'Donnell Iselin U of the Woods Hole Oceanographic Institu­tion on Cape Code, and already the Navy has batteries of hydrophones installed on tL.e edges of the continental shelves and mid­ocean islands to locate submarines hundreds of miles away. It is essential to protect Po­laris ~hrough the shifting states of the art of sea war by exploring jetstream currents submarines can ride and thermal layers and sea-floor mountains they can hide behind. also by mapping navigational landmarks In the deep. As of now only 3 percent of the ocean floor is mapped.

Food: By 1980 the United States will need perhapa as much as an added 3 billion pounds of seafoOd to maintain its protein diet. The needs ot undeveloped nations run

much higher. _ Bu~ the 1:!'.8. ftsherm~n have been humbled by Russians, Japanese and Peruvians and the proud old Yankee fishing banks otf Cape C.od sometimes look like. a Soviet lake. The Russians are even boasting about new floating ftsh factories in -which automation navigates the vessel, searchea out the fish, hauls in the catch, freezes it and packages it for the long journey home. In this situation the administration wants to increase the United States present an­nual catch of 37'2 milllon tons by 1972-among other processes, by cultivating un­dersea "fish fanns" along the Continental Shelf.

Mining: The fabulous success of the u.S. offshore oil industry points the way to estab­lishment of an underwater mining industry within 5 to 10 years. Most realistic proj­ects are the mining of placer deposits of precious metals in shallow waters offshore. diamonds orr South Africa, gold off Alaska, etc. Fifteen thousand feet beneath the Pa­cific near the Taumotu Islands manganese nodules and other minerals litter the sea floor at a potential value of $1.5 milllon per square mile. In the administration's 1o­year plan the Bureau of Mines even talks about sending an underwater "Lewis and Clark expedition" to find more metals re­sources. But this type of program has a deep-blue-yonder tone that bewilders in­land Congressmen.

The U.S. oceanographers, a. glamorous lot aboard their weather beaten survey ships, are going after all these prizes with unusual intramural advantages. By a.nd large they are satisfied with the current administra­tion budgets and they are not inaugurating the program with shouts and intrigue for ''more." They also seem fairly satisfied with their loose, almost casual grouping under the Interagency Committee on Oceanography (ICO) of the Federal Council for Science and Technology. There seems remarkably little duplication and interagency bicker­ing and there is no demand for an oceanog­raphy czar assigned to determine priorities, wipe out confusion, obliterate red tape Mc­Namara-style. The $2.3 billion, if approved, wlll therefore be parceled out amicably among the Navy (36 percent), the National Sicence Foundation (22 percent), the Bu­reau of Commercial Fisheries (15 percent), the Coast and Geodetic Survey (12 percent) and 11 other agencies ranging from the Atomic Energy Commission to the Public Health Service.

"The day a Russian Polaris-type subma­rine surfaces orr New York City and waves its red flag, you bet we'd have a crash pro­gram," the Navy oceanographers add, just in case. The Navy gets unfailingly agitated about oceanography when the Russians turn five ships loose to research the GUlf Stream off the U.S. coast, which they did last sum­mer. And the Navy is never more effective than when storming ahead on such quiet oceanographic projects as mapping the bot­tom of the Gulf of Siam, which it is doing right now. But the administration's pro­gram sets the Nation on course into its new oceanic age in a.n orderly manner that will probably render a crash program unneces­sary.

What the oceanographers do want is more attention-from Congress, from the public, from places far from -the sea--as they set forth on the new venture. They are get­ting some. Already more than 5 mllllon skin­divers are questing. Already family-type submarines are on the market. Hundreds of thousands or more Americans remember the Link trainer, that instrument of torture in which they were ftung about blindly while learning to 1ly In what now seems like the age before last. Where was Link last week­Edwin A. Link, the inventor, that is? Now

59 years old. he was busy on the oceanog­raphy ship Sea. Diver 1n Chesapeake Bay putting mice through pressure tests equiva­lent to pressures found at 2,000 feet below as a prelude to indoctrinating humans. The quest for kn~wledge chan~ environments, but its spir.lt remains the same.

Senator Vance Hartke Advocates Enact­ment of Quality Stabilization Law as Necessary Aid to Business and the Consumer

EXTENSION OF REMARKS OJ'

HON. JENNINGS RANDOLPH OP WESr VIRGINXA

IN THE SENATE OF THE UNITED STATES

Friday, September 20, 1963

Mr. RANDOLPH. Mr. President, qual­ity stabilization legislation pending in both Houses of Congress is designed to provide a necessary curb to a serious malady in our national economic wel­fare.

Many Americans are being confused by the use of slogans and unresearched decisions in reference to the measure s. 774.

There are over 70 national trade or­ganizations, representing virtually every brand-name retailer and every consumer product of quality name, joined in urg­ing such a law to strengthen their eco­nomic status.

There is a malady-that our small in­dependent businessmen are going out of business at an alarming rate, and that our entire commercial system is endan­gered.

The 11 Senators who sponsor the qual­ity stabilization bill do not contend that. its enactment is panacea or cure-all. It can bring some order out of chaos. It cannot hurt, it can help. It will not raise prices. It is elective on the part of the manufacturer, distributor and retailer of a brand name. It removes Government control. It is simple. It is sound. It is needed.

A review of the meaning of a brand name in our economy is important. Re­cently my esteemed colleague, VANCE HARTKE, of Indiana presented a docu­mented and knowledgeable address on this subject.

I request that the address of Senator HARTKE be printed in the CONGRESSIONAL RECORD believing that the many facts should be studied.

There being no objection, the address was ordered to be printed in the RECORD. as follows: ADDRESS 01' SENATOR VANCE HARTKE. BEFORE

MINNESOTA RETAIL HARDWARE AssOCL\TION CONVENTION, GRAND VIEW LODGE, ECHO LAKE, MINN., AUGUST 27, 1963 It certainly seems there is no group in

the United States who less requires a lesson on qcality stabilization than the fine mem­bers of the Minnesota Retail Hardware Asso­ciation. Your National Association, whose headquarters are 1n Indiana, was tlrst to endorse this bill-and has probably done as

1963 CONGRESSIONAL RECORD- SENATE 17659 much as any of the 75 national trade orga­nizations who followed in backing it. The quality stabilization c~n be won this year­but only because those who need and want it most, have been fighting more for what they want than knocking what they are against.

In this fight, there would be far less c:t.ance of victory-perhaps no chance at all­were it not for such as the Minnesota Re­tail Hardware Association and the Minne­sota delegation to Congress, led by Senators HUMPHREY and MCCARTHY.

I said the quality stabilization can be en­acted into law. It is well on its way, but it still has very far to go. This is, then, an excellent and necessary time to review what it is, how far it has gone, and what more there is to do.

Now, the problems of small businessmen are not now, have never been, and never will be defined by State lines and boundaries. The problems of small business are largely national problems. What matters far more­the importance of small business is and will always be national, not regional, not merely local.

We may differ among ourselves on many questions of national policy. Whether those differences be political or philosophical, rea­sonable and responsible Americans recog­nize that such differences and debates are ~ essential part of our system. They can be one of its strengths.

We may not always agree on what is best for our American system of free private en­terprise. Businessmen will differ with public officeholders-and public officeholders wm differ with businessmen-on what should be done or what can be done to support and strengthen our basic economic system.

We can, however, agree that the best eco­nomic system for our country is the free competitive system of private and profit­making businesses in which Government is the referee but not the signalcaller.

There is another important point on which we all should agree-that is the point that our system cannot survive and flourish un­less it is built upon the strong and solid foundation of small business in every field: manufacturing, wholesaling, retailing, and even services.

Small business is what keeps free enter­prise free.

Even the most absolute totalitarianisms of the 20th century-including the totali­tarian tyranny in Soviet Russia today-has big business in the form of monopolies and cartels, combines and syndicates. But genu­ine freedom has been missing from those systems at least in part because there was an absence of genuine opportunity for com­petition by small businessmen who could expect growth to be the reward of their success.

This is ~ fundamental concept. But it has always been a fragile concept. Over the past 100 years, as the United States has matured as an industrial Nation, we have been ·raced again and again with the necessity !or gov­ernmental action to preserve the competi­tiveness of our economic system-and to pre­serve the place and influence of small busi­ness as the principal source of such compe­tition.

Attacks upon the deadhand of monopolies and trusts and unfair business practices are not-and have never been-something alien to the American philosophy. O'n the con­trary, such efforts are peculiarly American in concept, purpose and ·results. It was a distinguished Republican President, Theo­dore Roosevelt, who recognized that trusts were stifling the growth and development of this country-and he pioneered · in doing something about the - problem. A great President !rom my own Democratic Party,

Woodrow Wilson, carried forward this work vigorously in-his adininistration. These joint efforts loosened the tight bonds of oppressive monopolies and set off the decades of growth and prosperity, which culminated in the "good times" of the 1920's.

But that prosperity did not endure be­cause it was undermined by the resurgence of speculators and manipulators who did not respect the essential strength of the Ameri­can enterprise system. We reaped a sad ·and tragic harvest in 1929-and through the de­pression years which followed. Again, it was necessary for the national political leader­ship to intervene to restore the proper per­spective and order of our marketplace. Once a-gain it was true that when competition was restored we began another long continued rise upward culminating in the prosperity we have known during recent years.

Today-much as I dislike to say it and much as some may dislike to face it-the simple truth is that the basic competitive strength of the American enterprise system is once again being challenged, undermined and eroded.

It has been predicted that within the coming 5 to 10 years, 75 to 90 percent of total retail drug volume will be divided between corporate and independent drug chains; 75 to 90 percent of total retail hardware vol­ume will be divided between corporate and independent hardware chains. The same for the furniture outlet-all major forms of gen­eral merchandise retailers.

It will also mean that more and more manufacturers of presold brands w111 find that tiny handfuls of corporate and independent chains will account for 90 percent of the manufacturers' total volume. In a rapidly growing number .of instances, from 50 to 150 giant chains-corporate and independent--will account for 75 to 90 per­cent of total volume on manufacturers' pre­sold brands of mass-consumed merchandise in practically all categories.

This is exactly what has happened in food. E. B. Weiss, vice president of Doyle Dane

Berbach, Inc., in his study, published in 1963 and entitled "Marketing's Stake in the Low­Margin Retail Revolution," predicted that by 1966 about 50 giant retail organizations will control 50 percent of the Nation's total retail volume in practically all major mer­chandise classifications.

A United Press International article in the Washington Post of June 7, 1961, quotes discount stores as saying "their movement is going to take over lock, stock, and barrel 80 percent of the retail business of the coun­try before 1970. That would doom not only most smaller neighborhood stores of all kinds, but most of the old line department stores and force the supermarkets to cease devoting themselves exclusively or even primarily to the food and grocery business."

We all know that one of the most basic and essential ingredients of the success of the great common market of America bas been that intangible and indefinable ingredi­ent of quality. Since the earliest days of colonial America, proud and self-respecting American craftsmen and American merchants have been known the world over for main­taining a high level of quality of the prod­ucts manufactured in their plants and sold from their shelves.

Craftsmen's marks are ancient ways of marking quality.

One of the most treasured exhibits at Smithsonian Institution is a piece of lead pipe. Crude, ugly, nothing but a battered piece of lead pipe-except for one thing-an inscription. Reliably translated, that in­scription is a brand name and the date is near the time of Christ's birth.

The use of trademarks is very ancient. They were used by the brickmakers of ancient

Egypt, the lampmakers of old Athens, and the helmetmakers and armorers of medieval England. There isn't a schoolboy of today or any day who hasn't heard of a Toledo blade as the sword of champions-not by television commercials either. That was community production, I suppose. Were there better swords? We shall not know. But if two were offered for your possession now as relics, one marked "Toledo," the other with no name-both beautiful if ancient, clumsy and slightly ridiculous-which would you choose?

The intended function of a trademark is to distinguish the goods of the proprietor from the goods of others in the marketplace. While a trademark might be just one word, it is an emblem, a symbol, a slogan, or other device. The expressions "trademark," "brand name" or simply "brand" or "mark" are synonymous.

The stamp on a product ."Made in U.S.A." has come to be recognized in even the most remote corners of the globe as a guarantee of high quality. I am told there are parts of the world-hal! a globe away from us­where the ultimate status symbol among young teenagers in so-called underdeveloped nations is to own and possess something bearing that stamp of "Made in U.S.A." Quality is the most universal synonym-the worldwide identification badge-of the Amer­ican enterprise system and its products.

Far more important, however, than the effect of quality in the world is the effect quality has had among Americans at home. If ever you have traveled in foreign lands, you know how local people will advise you not to shop at this store or that store be­cause, while the prices may be attractively low, the commodities and products sold are merely junk. Here at home, we have been spared this element of doubt and question and suspicion. When an American goes into any retail store anywhere in America-wheth­er in Iowa or Indiana, in New York or New Orleans, in Connecticut or California-he can and does expect to find on the shelves familiar products, bearing familiar labels, which he can buy with absolute confidence and trust in the quality of the product for which he spends his money.

The American consumer, more than any other consumer in the world, is privileged to trust what he is sold. He is privileged by ex­perience to believe that the merchant who opens his doors to the public is a self-re­specting businessman, eager and anxious as we all are to make a profit, but equally eager and anxious that each of his customers re­ceived dollar for dollar value on each pur­chase.

As every retailer knows, where other fac­tors are equal, goods identified with brand names or trademarks outsell the "un­knowns" 9 times out of 10. And as every buyer knows, bargain shopping ls done for the best known brand name at the least cost.

The very fact that a company identifies itself with the goods or services it sells, how­ever, is only the beginning of a story. Espe­cially in this country, the public looks at a trademark as a symbol of high quality, de­pendability, and full value, although tech­nically and legally the insignia stands only as an identification of the maker.

This basic trust in the quality of the prod­ucts offered in America's great marketplace has been basic to the growth and expansion of the American economy through all the years. Today, it is this ~asic fundamental which is most directly under attack by those who would thoughtlessly and shortsightedly sacrifice the element of quality to gain a monopolistic hold over the lifeblood of our competitive system.

Product quality has been and continues to be the indispensable ally of small busi­nessmen. If you will look back through the

17660 CONGRESSIONAL RECORD- SENATE September 20

history of small American manufacturers who have grown large, you will find-virtually without exception-that the basis of their growth was their ab111ty and Willingness to produce a product of superior quality. It you look at the growth history of America's greatest retalling businesse&-in any field­the same pattern holds true. America's suc­cess stories have not been written in there­tail field by predatory operators who misled or deceived the American consumer.

If the vitality and prosperity of the Amer­ican marketplace is to be protected, It fs fundamental that we must protect the integ­rity of the American marketplace. If we are going to have the highest quaUty life in the world-for businessmen and for laborers, for farmers and for professionals-we can­not afford to be 1.nd11ferent to the measure­ment of quality in the operation of our econ­omy.

Price cutting hurts the small h~dware dealer as it hurts all established and repre­sentative brand name retailers.

The "hurt" to small business by price cutting is not theoretical. It is real.

The crushing effect on the small retailer and the manufacturer, when there is a breakdown in effective price stabilization, is documented in the complaints of Sun­beam Corporation v. B. H. Macy.

The percentages of "Mixmasters" sold by the largest competitors in New York City during the normal period preceding the price war triggered by the Supreme Court decision on fair trade laws were Macy, 3.3 percent; Gimbel Brothers, 0.5 percent; Blooming­dale Brothers, 0.4 percent; Wanamaker, 0.2 percent. The total of these was 4.4 percent of the entire sale of "Mixmasters" in New York City during the period before the price war. The balance of the business in the area was done by approximately 1,500 other SUnbeam retailers who were located in New York City.

During the 10-week price war these com­petitors' percentages changed as follows~ Macy, 56.2 percent; Gimbel Brothers, 15.3 percent; Bloomingdale Brothers, 2.6 percent; and Wanamaker, which refused to particip­pate in the price war, zero. Thus, in 10 weeks, these three retailing giants were able to corner 74.1 percent of the market, with Macy's share of the market leaping from 3.3 percent to 56.2 percent.

The small businessmen whose share of the market dropped from 95.6 percent to 25.9 percent were indeed hurt. As to Sunbeam company? Its annual report to stockhold­ers disclosed that "factory sales in the area fell off 17.68 percent for the year while our national business was off 8.79 percent."

In 1952, Argus cameras sold its products nationally under the fair trade acts of vari­oua States. Following the :Michigan Supreme Court decision that year, invalidating the State Fair Trade Act's nonsigner clause, the retail market in Michigan became chaotic. By January 1954, price cutting of Argus cameras by retailers had become widespread. At the end of July 1954, Argus found that sales in Michigan and the Detroit area de­clined 37 percent in the period from January through July 1954, as against the same period of 1953. In the same period, national sales showed a 33 percent increase.

The brand name is essential to price cutters.

For the discounter, the abllity to advertise national brands at a discount price has long been the most important part of his hard goods operation. The big brand at a low price conveys value and establishes a true "discount" identity.

We have seen that quality of products is a tradition in our competitive private enter-

prise system as old as our country itself. If we are to protect that system and its strength, we must proteet the right of con­scientious, self-respecting manufacturers and retailers to maintain that quality which is so unalterably American. This is exactly what the proposed legislation in both Houses of Congress would do--and this is all that it would do.

Quality stabilization is not a price-fixing law.

Quality stabilization is not an anticon­sumer law.

Quality stabi11zation is not a protection for the inefficient or the ineffective. On the contrary, it is just the opposite--it is legis­lation which would protect the vital incen­tive necessary to keep quality products flow­ing to our consumers.

Quality stabi11zation Is not an efl'ort to prevent progress and modernization in Amer­ican business. Again, I say it is just the opposite-quality stabilization will assure the continuing progress and modernity of American enterprise.

All of us who have worked closely on quality stabilization have heard the op­ponents speak glibly and freely about the revolution in distribution, the revolution in retailing, the revolution in pricing. But those who know and understand the small business field know that the small business­men of this country are not sufl'ering from genuine progressive revolutions of invention and innovation. On the contrary, they are being made the victims of a reactionary philosophy of caveat emptor-"let the buyer beware."

There ·are great tides of invention and in­novation running in our economy and our society today. The use of automated tech­niques, better co~unication, better trans­portation-and many such other elements-­can and will bring beneficial gains for con­sumers and producers alike. Quality stabi­lization in no way interferes with such au­thentic progress. But the mere cheapening of standards of ethics and morality by the predators of today's marketplace does not constitute a revolution and does not repre­sent progress. Those who willingly and knowingly and deliberately pirate the repu­tation of a manufacturer or a retailer for quality products in order to lure customers in to their displays of junk merchandise are turning back the clock, rather than turning it ahead.

I do not believe we can afford to be in­different to this effort to pervert the char­acter of American enterprise by destroying the proud and honorable tradition of uni­versal quality.

Today in the world in which we all live, we recognize that we are presented with cleaJ"­cut choices. We, in America, enjoy the high­est standards in the world-the highest standards of living, the highest standards of pay for our workers, the highest standards of stable profit for capital investment, the highest standards of medicine and educa­tion and opportunity. The adversaries of our system-the totalitarians of the Com­munist world-are bent and determined to comprise and bring down those standards.

As a result, the choices before us are simple. Either we help the world to come up to our standard or else we shall fall with them to lower standards which will reduce the meaning of our freedo:t,n-if indeed we can keep our freedom at all.

Every American from the highest to the lowest, from the richest to the poorest has a vital stake in maintaining quality as a symbol and synonym of American enter­prise. If we do not maintain the Amer­ican standard of quality and excellence in our products, the results inevitably .Will be a :flooding of the world with just the kind

of junk, low-quality, virtually worthless products that all of us have seen coming into our markets in recent years. This is a direction which we cannot afford to' fol­low in our national life.

Your success has been built on your in­dividual initiative. It is being undermined. It is being destroyed by abuses and mis­representations of your established brand names. It is leading to a mass merchandis­ing by big business. In many cases, big business is vital and necessary to our econ­omy-but where does big business and mo­nopoly begin? You are today learning that answer. Increasingly, manufacturers are eliminating the wholesaler and retailer by selling directly to the consumer. Grocery stores are selling drugs, clothing, paint, hardware, radio sets. If they desire, they can use these items as leaders since they are merely sidelines of their basic business. As they grow larger, such store or combines can "loss leader" such items to lure custom­ers into the store. By so doing, they are, of course, destroying that brand name and the entire chain of distribution which has laboriously and expensively developed a de­sired brand name.

I believe, therefore, that it is wise for us to adopt in this country those measures necessary to maintain the standards of qual­ity and preserve the incentive of manufac­turers, wholesalers, and retailers to keep quality on the shelves for our consumers. That is why in both Houses of the Congress there is strong and growing support for the quality stabilization bill which you and many other retail merchants like you in many fields have so long and so steadfastly sup­ported.

You hardware dealers know you have a self-interest--a survival interest--in the suc­cess of the quality stabilization bill. Much of the American public does not. And many of my fellow Members in Congress, I believe, must be reminded of its importance to you.

In the House, the bill has cleared subcom­mittee and been voted out of the full com­mittee. The report has been made and the Rules Committee should any day elear it for vote on the House floor.

We are well underway with Senate hear­ings. I hope to complete them next month.

Probably most important of all is the team you have working for you. No Senator has ever been more able or dedicated than your great Minnesota leader, HUBERT HUMPHREY, ably a.Esisted by another great Minnesota leader, EUGENE McC.UTHY. His talk before your National Retail Hardware Association in Montreal last month was the most concise and indisputable argument yet for the bill. I'm sure those of you here today who heard Senator McC.uTHY will agree.

As majority whip of the Senate, HUBERT HuMPHREY, has working closely with him on passage of the bill. the minority whip, Sen­ator TOM KucHEL. A Democrat and Repub­lican, teamed in dedication. Your Congress­man, ANCHER NELSEN, is truly an anchor as with 24 other House signers of the bill they have with them the whip over there--HALE BOGGs; and the powerful chairman of the Commerce Committee, OREN HARRIS; the strong Rules Committee member, RAY MAD­DEN; the close friend of the President, ToR­BERT MACDONALD; the majority leader, CAJU. ALBERT.

They can, I believe, bring this bill in this year-if you increase your support • • • if you can increase the flow of factual com­monsense about the plight you are suffering. and the need for arrest of the disease now.

And I think, too, by an even greater dem­onstration of sincerity and commonsense, you will have performed the greatest service to your country-that you must survive if our system is to survive.