1951: United States

A summary of the legislative, judicial, and political events of 1951 in the United States is presented below. Detailed articles on other aspects of the national scene and on the United States in world affairs appear under separate headings.

CONGRESS

The first session of the 82nd Congress convened at noon on Wednesday, Jan. 3, and adjourned sine die on Oct. 20, 1951. The Senate had been in session 996 hours and 46 minutes over 172 days, the House 704 hours and 41 minutes over 163 days. Public bills enacted into law totaled 255, private bills 411. Of 13 bills vetoed, 2 were overridden. The Congressional Record had 14,052 pages of proceedings and an appendix of 7,350 pages. A total of approximately 12 million words were uttered in the Senate, for an average of about 125,000 per senator. The 9 million words of the House members would average about 20,700 for each. It was estimated that the printed record of the session weighed 100 pounds and ran 6 times the length of the Bible. Printing all this cost about $6,638 a senator.

Personnel.

The first session of the 82nd Congress was nominally Democrat-controlled. The Senate began with 49 Democrats and 47 Republicans, and the House with 235 Democrats, 199 Republicans, and 1 Independent. There were several changes in both Houses throughout the session, due to death and resignation. Arthur Vandenberg (R., Michigan), leader of the bipartisan foreign program and chairman of the Senate Foreign Relations Committee, died in April after a long illness. Gov. G. Mennen Williams appointed Blair Moody (D.) to succeed him. Senator Brewster (R., Maine) replaced Vandenberg on the Foreign Relations Committee. Sen. Virgil Chapman (D., Kentucky) was injured fatally in an automobile accident. Gov. Lawrence Wetherby appointed Rep. Tom Underwood (D.) to his seat. A month after the session adjourned Sen. Kenneth S. Wherry (R., Nebraska) died of pneumonia. He was one of the most colorful and able members of the Senate. Shortly after his election to the Senate in 1942 he became minority whip and later, from 1949, Republican floor leader.

While the Congress was nominally controlled by the Democrats, the Southern bloc, which numbered more than a score in the Senate and 100 in the House, was strongly opposed to the administration's domestic policies. The two Democratic factions in the Senate early entered a contest of strength over the post of Majority Leader, to replace Scott Lucas of Illinois, who had lost his seat in the previous election. Ernest W. McFarland of Arizona, a Fair Dealer but in sympathy with the Southern leaders, won 30 to 19 over Joseph C. O'Mahoney of Wyoming, an all-out supporter of the administration. Sam Rayburn of Texas was named Speaker for the sixth time.

The administration suffered a major defeat on the very day the House assembled, when 152 Republicans and 92 Democrats, by a vote of 244 to 179, decided to restore the Rules Committee's former power, making it virtually impossible to force 'undesirable' liberal legislation out of committee. The new Republican members voted 44 to 7 to restore the old rule. The vote against the new measure contained 136 Democrats, 42 Republicans, and 1 Independent. The Republican-Southern Democrat coalition took firm command in the first session of the 82nd Congress. The one field of legislation in which Congress and the President saw alike was in the matter of defense. They both agreed on plans for a vastly larger armed program, and record military funds were approved.

The Truman Program.

'State of the Union.'

In his 'State of the Union' message on January 8, President Truman dwelt almost entirely on foreign policy and military preparedness matters. He made a strong plea for national unity and requested the following legislation: (1) appropriations for the military; (2) extension and revision of the Selective Service system; (3) military and economic aid for foreign countries; (4) revision and extension of the authority to expand production and to stabilize prices, wages, and rents; (5) improvement of agricultural laws, to help obtain the kind of farm products needed for the defense effort; (6) improvement of labor laws to help provide stable labor-management relations and to make sure of a steady production in the emergency; (7) housing and training of defense workers, and the full use of all manpower and resources; (8) means for increasing the supply of doctors and other medical personnel; (9) aid to the states to meet the most urgent needs of elementary and secondary schools; and (10) a major increase in taxes.

A large part of the message was devoted to a vigorous denunciation of Russian aggression. In the coming months, he said, military procurement and atomic energy and power development must have priority. He added that the Government must economize in its nondefense activities. He urged a three-point foreign program: (1) economic aid to foreign countries to contain communism; (2) military aid to countries which want to defend themselves; and (3) continued support of the United Nations.

Economic Report.

In his 11,000-word annual 'Economic Report' to Congress, the President estimated that primary national security programs would cost $140 billion during fiscal 1951-1952, and he called for much more of a tax increase than the $8 billion increase of 1950. He said that the cost of operating the Federal Government would require more than 27 per cent of the national income. He called for drastic increases on individual taxes and warned that 'by far the largest part of additional revenue must come from the middle and lower tax brackets.' Corporations, he said, should pay 'several billion dollars' more in taxes, and he said there was particularly good reason for higher excise taxes on nonessential and civilian goods competing for war materials and facilities.

The President urged that price controls should move forward with speed and decisiveness. He pleaded for more flexibility in wage controls to allow for adjustments to correct inequities and inequalities, and to assist in the recruitment of labor for defense industries. He warned labor not to seek wage increases to meet the higher taxes, however. He estimated that the taxes would have to be increased by possibly an additional $20 billion a year.

He also argued for additional authority to control speculative trading in farm products, additional powers over commodity exchanges, strengthening of rent controls, additional real-estate credit controls, an increase of steel capacity to 120 million ingot tons within three or four years, more orecarrying boats on the Great Lakes, an immediate start of the St. Lawrence Seaway project, expansion of electric power by 4.5 million kilowatts, and an increase in national production to $310 billion, at 1950 prices, by the end of the year.

Budget.

In his 1,089-page 'Budget Message,' the President submitted to Congress a budget which called for spending $71.6 billion in fiscal 1952. He estimated Federal receipts at $55.1 billion, leaving a deficit of $16.5 billion to be offset by new taxes.

President Truman's budget was easily the largest in peacetime history. It totaled more than the U.S. Government spent in its first 131 years, from 1789 through 1919, and more than double the outlay in the three fiscal years covering World War I. It was only $27 billion short of the peak budget during World War II.

The Draft and U.M.T.

One of the first measures introduced in Congress to implement the President's recommendations was a new draft measure, to permit the drafting of 18-year-old boys for 27 months' service. As originally drawn up, the bill would extend the service of all draftees to 27 months, and provided that no draftee under 19 should be permanently assigned, except to training duty, outside the United States unless he had completed at least four months' basic training.

By a 79 to 5 vote, the Senate passed a bill providing for the draft of 18-year-olds immediately and for Universal Military Training (U.M.T.) later. Only 5 Republican Senators voted against the bill, which would also extend draft service from 21 to 24 months. U.M.T. was retained in the bill by a 68 to 20 vote. This was the first approval, implied or otherwise, ever given to U.M.T. by either branch of Congress. The Taft amendment to limit the life of the bill was defeated by a vote of 58 to 30.

Shortly after Senate action, the House Armed Services Committee voted 32 to 3 to lower the draft age from 19 to 18, and to extend the term of service from 21 to 26 months. The House measure calling for a stand-by U.M.T. finally passed by a vote of 372 to 44. Thirty-seven Republicans and 7 Democrats voted in the negative. Differences between the Senate and House bills were settled by a conference committee, which agreed upon the 24-month plan. The deferment of military men with one dependent, except in cases of extreme hardship, was barred. High school students would be deferred until graduation or age 20. The conferees agreed to extend to July 1, 1955, presidential authority to extend enlistments one year. The armed forces were to be limited to 5 million.

As finally approved by the conference committee and enacted into law, the measure committed Congress to U.M.T. in principle, but required additional legislation before it could be put into effect. The Senate gave its final approval by voice vote, and the House approved it 339 to 41.

Taxes.

The general tax increase recommended by President Truman totaled $10.7 billion, but early action in the House scaled this down to $7.2 billion, and the Senate reduced it to $5.5 billion. After considerable debate, both Houses accepted a compromise, which called for the following: (1) raise an additional $5.8 billion; (2) increase personal income taxes, effective November 1, by an average of 11.75 per cent, boosting the withholding rate from 18 to 20 per cent (the Senate had favored an 11 per cent personal tax increase and the House a 12.5 per cent boost); (3) reduce excess profits tax credit from 85 to 83 per cent of earnings in the best three years of 1946-1949, inclusive; and (4) apply regular corporate tax rates to mutual savings banks and building and loan associations, but permit those institutions a 12 per cent tax-exempt reserve.

The measure also contained the Jenner Amendment, a provision to forbid the withholding of funds by the Federal Government from a state which, by law, permits publication of the names of persons receiving relief payments. This provision was amended to limit its effect to those states whose legislation forbids the use of such names for commercial or political purposes. The Jenner Amendment was the result of a decision by Federal Security Administrator Oscar R. Ewing to withhold Federal payments for relief in Indiana, following that state's enactment of a law making relief rolls public.

Just before the tax bill was finally enacted into law, there was a great deal of confusion in the House, where a surprise move by an unusual coalition of Republicans and so-called liberal Democrats blocked its final acceptance, voting 204 to 157 against its final enactment at that time. Thirty-four Republicans and 1 Independent joined with 122 Democrats in favor of the measure, while 139 Republicans and 65 Democrats were against it on this vote. Most of the Republican opponents of the bill did not want any tax increase at all and insisted, instead, on reductions in Federal spending. The Democratic opponents maintained that the bill was unfair to low-income taxpayers.

Two days later, however, the Senate approved the revised conference report by a voice vote, and the House did like-wise (185-160), with 147 Democrats, 37 Republicans, and 1 Independent voting for, and 34 Democrats and 126 Republicans against it. The major difference from the earlier bill was that the tax increase in the lowest bracket would be 11 instead of 11.75 per cent, and the withholding rate would be increased from 18 to 20 per cent. The total to be raised by the new bill was to be $5,691,000,000. In signing the measure into law, President Truman asserted that the increase was not enough, and that therefore he would ask Congress in January for still higher taxes.

Mutual Security Program.

President Truman sent a special 5,000-word message to Congress, outlining a Mutual Security Program of foreign aid to help the free foreign nations meet Soviet aggression. He asked for a sum of $8.5 billion to finance the program. He recommended $6.25 billion for military aid and $2.25 billion for economic assistance. He also suggested that the lending authority of the Export-Import Bank be increased by $1 billion. He declared that Communist China had become a satellite of Soviet Russia, which was also sponsoring friction in Iran and had helped to force the nationalization of the oil industry there. He indicated that the United States would propose aid for Western Germany and Yugoslavia as well. The total amount voted was about $1.2 billion below the President's earlier estimate. The final Senate vote on the bill was 61 to 5, all the negative votes being cast by Republicans.

As the measure finally came from the House-Senate conference committee, it called for the sum of $7,483,400,000 and the creation of a new Mutual Security Agency to take over the functions of the Economic Co-operation Administration and co-ordinate all foreign assistance programs. The conferees also agreed to give the President authority to transfer up to 10 per cent of the funds provided for one program to another program. At least 11 per cent of the total amount of economic aid in the bill must be extended in the form of loans instead of grants. The Senate approved the conference measure 56 to 21, and the House accepted it 234 to 98. The final figure approved was $7,328,903,976. President Truman appointed W. Averell Harriman Director of the Mutual Security Agency. Harriman also became chairman of a special North Atlantic group to co-ordinate the economic and military programs of the Western European countries.

Defense Production Act.

In a 'fireside chat' to the nation in mid-June, President Truman declared that the welfare of the whole nation was at stake, and that unless some action were taken inflation would ruin the economy, allowing Russia to win the whole world to totalitarianism without firing a shot. The President's speech was in support of a stricter controls law. In a message to Congress earlier he had asked not only for an extension of the Defense Production Act beyond June 30, but for a strengthening of the law by including (1) broad authority to recontrol rents, (2) tighter controls on credit including loans for old housing, and (3) incentives to businessmen to expand productive capacity.

Acting on the President's recommendation a one-month extension of the Defense Production Act was passed by Congress just before the expiration of the previous legislation on the subject. The Banking and Currency Committees of the two Houses had debated the measure for two months before separate bills were reported out. When the measure finally emerged, it was only a shadow of what the administration had requested, and in some respects it actually decreased the President's power. The request for a two-year extension of controls was rejected. The House bill calling for the one-month extension was passed by a voice vote, after prohibiting a vast series of price rollbacks by a 232-152 vote. The Senate measure, which provided for an eight months' extension, was approved 71 to 10, all 10 being Republicans. The Senate Banking Committee then approved the House bill with only 1 dissenting vote, by Sen. Everett M. Dirksen (R., Illinois); final Senate action was rushed through with only a sprinkling of negative votes. President Truman's main objection to it was on the ground that it banned any price rollbacks or new price ceilings for one month. He immediately renewed his fight for broader and stronger Federal controls over prices, wages, rents, credit, and materials.

Later, in voting on the new Senate-passed controls bill, the House inflicted a severe blow on the administration when it voted 200 to 112 to ban all livestock slaughtering quotas. Such prohibition was contained in the measure already approved by the Senate. A coalition of Republicans and Southern Democrats pushed through the plan against strong administration opposition. Farm subsidies were also rejected by a voice vote, and an administration request for new authority to build and operate defense plants was rejected 159-139. The House also refused, 92-39, an administration request for unlimited authority to establish new Government corporations by executive order.

In swift succession, the House approved 166 to 102 a coalition amendment providing that ceiling prices for all items, farm and nonfarm alike, must allow manufacturers and processors a reasonable profit on each item; approved 160 to 144 an amendment to guarantee slaughterers and processors of meat a reasonable margin of profit on each category of animals handled; denied by voice vote the administration's request to fix parity prices at the beginning of each crop year, rather than month by month, for purposes of price control; and shouted approval of an amendment to exempt fees for professional services from price control.

The House also approved 207 to 123 a Banking Committee amendment to permit future rollbacks on all items except beef, and at the same time rejected, 217 to 124, an amendment to ban all past and future rollbacks on farm prices. An amendment to ban all rollbacks on all commodities and services was defeated 147 to 89. An amendment freezing for 120 days all wages and prices except those on farm products selling below their parity prices was approved 180 to 151. An amendment was also approved 138 to 101 to exempt from price ceilings domestically produced strategic materials in short supply. The House also approved 140 to 43 an amendment relaxing restrictions on the installment buying of new and used automobiles.

In general, the voting in the House was in two stages. First, the Committee of the Whole House sat, with votes not recorded. It was during this stage that the opposition easily overpowered the administration. The lobbies fed amendments to the Representatives at such rapid speed that the administration officials protested that the controls program was being destroyed. The second stage came when the House emerged from committee status and individual votes were recorded. Some members of the opposition coalition then switched sides. Some amendments denounced most loudly by the administration were then abandoned. The final vote for the bill as a whole was 323 to 92. It then went to conference. The fourteen members of the conference committee finally agreed on the measure which was promptly passed by the Senate. The House approved it 294 to 80, just before the temporary measure expired. President Truman signed the bill into law reluctantly, and warned that it would be an encouragement to black markets and would push prices up instead of holding them down. He indicated that he would soon submit to Congress detailed recommendations for amending the law to provide adequate controls.

The expiration date of the new law was June 30, 1952. Among its chief features were the following: it sanctioned the 10 per cent rollback on beef already in effect but prohibited any further beef rollbacks; it allowed rollbacks on other agricultural products only to 90 per cent of the May 1951 levels or to parity, whichever was higher, with farm prices to rise if other prices went up; it permitted future industrial rollbacks, but only to certain levels, and if manufacturers could show that their costs had increased, they might be allowed to lift ceilings; it ended Government authority over slaughtering; it left intact the Government's power to freeze wages, but permitted wage readjustments; it allowed residential rent increases of 20 per cent, but also rollbacks in critical areas; it continued the President's powers over defense materials and the defense program; it relaxed installment restrictions on automobiles by increasing payoff time from 15 to 18 months; on other goods such as radios, television sets, and household appliances it reduced down payments from 25 per cent to only 15 per cent, with 18 months to pay; and it retained credit restrictions on the purchase of housing except in critical areas.

Defense.

The military budget which President Truman submitted to Congress requested an appropriation of $61 billion for the 1952 fiscal year. He suggested that about $20.6 billion of this sum would not be spent until a later period, but asked that more than $40 billion be used for defense during the coming fiscal year. The budget included $15.7 billion for the Army, $11.4 billion for the Navy and Marine Corps, and $13 billion for the Air Force. It did not include any funds either for military aid to the American allies or for the stockpiling of strategic materials, which were covered in other recommended legislation. The President said that the proposed military funds would permit maintaining and equipping an armed force of 3.5 million men during the 1952 fiscal year.

Acting on the President's request, the Senate passed the largest single military spending bill in history, voting almost $60 billion for America's expanding armed forces. Sen. Paul Douglas (D., Illinois) tried to reduce the amount by nearly $1 billion, but to no avail. The final roll-call vote was 79 to 0. Just before final passage of the huge defense measure, administration leaders accepted an amendment by Sen. H. Alexander Smith (R., New Jersey) to cut the total by a straight 2.5 per cent, to save $1,525,000,000. At that time the figure stood at $61,033,856,030. A Senate-House conference committee agreed on $56,937,808,030, after cutting a special $5 billion emergency fund for air power to $1 billion. The House approved the measure by voice vote.

The biggest military construction program ever undertaken, including secret projects abroad to put U.S. bombers in range of Russia, was approved by the House on a 352-5 roll-call vote. It called for an expenditure of $5,768,720,928, with more than half of the entire amount going to the Air Force. This program was in addition to the $56 billion military appropriation passed earlier. Rep. Fred Marshall (D., Minnesota) joined 4 Republicans in voting against the construction bill. The Senate added $118,948,250 to the program; then both Houses by a voice vote concurred in the conference-report measure, which was for $5,864,301,178, with $3,543,661,800 for the Air Force.

Housing.

New defense housing legislation was enacted. The $1,635,000,000 measure, finally passing the House by voice vote, provided a $1,500,000,000 expansion of Federal mortgage insurance authority to spur building of living quarters in critical defense areas. It also set up $50 million for public housing, if needed, and provided $60 million for community facilities and services (such as schools, hospitals, and sewers), and $15 million for prefabricated homes, among other features. The Senate finally concurred in the conference report, and the measure became law.

Disabled Veterans.

Congress also passed a bill which increased the benefits for veterans disabled in civilian life. It provided that any veteran so disabled that a nurse or attendant is required to care for him should receive a pension of $120 per month instead of the usual $60 to $72. The bill was vetoed by President Truman, on the grounds that it would increase present discriminations between veterans and nonveterans in matters having no connection with military service. The veto was overridden in the House, 318 to 45, and the Senate did likewise, 69 to 9, with no senator speaking in support of the President's veto. Two of the 9 were Republicans: Senators James H. Duff (Pennsylvania) and Homer Ferguson (Michigan).

Congress failed to uphold the Presidential veto of a bill which would require the Government to pay $1,600 toward the cost of a car by any World War II or Korean veteran who had lost a leg or arm or is blind or nearly so because of his military service. The House overrode the veto 223 to 53, and the Senate did likewise 55 to 10. The bill affected an estimated 11,700 World War II veterans and an unknown number of Korean veterans.

Reciprocal Trade Agreements.

The reciprocal trade agreements program, first instituted in 1934, was extended for two years until June 12, 1953. The vote in the Senate was 72 to 2, with only Senators George W. Malone (R., Nevada) and Henry C. Dworshak (R., Idaho) dissenting. The bill passed the House by a voice vote. Under the law the President could cut tariffs in return for concessions from foreign nations. This was an economic weapon aimed at Communist countries. The measure also contained restrictions on the power of the President to negotiate pacts with foreign countries. These were contained in a 'peril point' provision and an escape-clause section. If the President reduced the tariff to a point the U.S. Tariff Commission considers dangerous to the American economy, he must explain to Congress. Also, the United States could withdraw a tariff cut if it were found that the reduction seriously affected a domestic industry.

India Loan.

Congress authorized a $190 million loan to India for the purchase of two million tons of grain. During floor debate on the bill, an amendment was approved to require that India use all of the loan to buy grain only in the United States. An amendment to cut the loan authorization to $100 million and to require repayment of part of the loan in atomic materials and raw jute was rejected. The bill was finally approved by the Senate by a voice vote, and the House vote was 293 to 94.

Postal Rates.

The price of the 'penny' postcard was doubled by a voice vote in the House. Increases were also allowed for second- and third-class mail rates and special-delivery charges, in order to raise $117 million a year in postal revenues. The Senate had already passed a slightly different bill. The bill as finally enacted into law not only doubled the price of the penny postcard, but also raised the rates for other postal services. No change was made in the 3-cent rate for first-class letters or in air-mail rates, but the new law provided for an immediate 10 per cent boost in second-class mailing charges for newspapers and magazines, with a gradual increase to 30 per cent by Apr. 1, 1954. Special-delivery rates were raised from 15 to 20 cents. Charges for most post-office special services were also raised.

CONGRESSIONAL INVESTIGATIONS

General MacArthur.

A joint investigation into President Truman's removal of Gen. Douglas MacArthur from his command in the Far East on Apr. 11, 1951, was conducted by the Senate committees on the armed services and on foreign relations between May 3 and June 27 under the chairmanship of Sen. Richard B. Russell (D., North Carolina). Interrogation of Gen. George C. Marshall, Secretary of Defense, the Joint Chiefs of Staff, and Secretary of State Dean Acheson brought forth a uniform opinion that General MacArthur had violated presidential directives bearing on public relations affecting Far Eastern policies of the United States and the United Nations. Testimony during the hearings also brought out the information that early in April the Joint Chiefs of Staff had voted unanimously in favor of the removal of General MacArthur from his command, but that they had not initiated the action or requested President Truman to take such action. At the conclusion of the hearings, the joint investigating committee endorsed the principle of freedom of expression and discussion involved in the inquiry. The Democratic majority of the committee abstained from drawing any conclusions, but eight Republican members issued a joint statement severely criticizing the administration's military and political policies in Korea and the Far East.

Organized Crime and Narcotics Traffic.

In 1950 and through most of 1951 a Senate committee on organized crime in interstate commerce conducted an investigation across the country concerning the activities and influence of criminal syndicates in politics, business, and labor. The first part of the investigation, which ended May 1, 1951, was under the chairmanship of Senator Estes Kefauver (D., Tennessee); Rudolph Halley, once assistant district attorney of New York, served as counsel chairman. The 1951 proceedings under Senator Kefauver were highlighted on March 12 by the introduction of television broadcasting, playing to an audience of millions, and by the dramatic and colorful testimony of New York City's former Mayor William O'Dwyer and Frank Costello, national gambling and rackets figure. The committee heard hundreds of witnesses including Government officials, political and business leaders, lawyers, and gamblers and racketeers in several U.S. cities.

Upon relinquishing the chairmanship of the committee, Senator Kefauver submitted a report to the Senate showing that criminal syndicates and local groups had gained control of dozens of legitimate businesses by methods stretching from forceful persuasion to murder. The two main syndicates were reported to be in Chicago and New York, the latter representing the Costello-Lansky-Adonis triumvirate. The report explained how organized criminals secured profitable contracts from businessmen after breaking up strikes and unions, and emphasized that the U.S. Government had suffered losses of millions of dollars through fraudulent income tax returns. According to this document, local criminals and gangsters were able to evade prosecution through protection or influence provided by politicians, businessmen, and lawyers, and through their charitable contributions to create good public relations. The Kefauver committee devoted considerable attention to Frank Costello's alleged relations with Tammany and other politicians, and it sought to establish proof of former Mayor O'Dwyer's responsibility for failure to prosecute the racketeering activities of waterfront unions, murder gangs, and gambling and dope syndicates. It also blamed several governors for political favoritism toward gangsters, for co-operation with corrupt state officials, or for failure to prosecute gambling. Senator Herbert O'Conor (D., Maryland) took over the chairmanship of the Senate crime committee from May to September, and during this period emphasis was given to an investigation of the sale of narcotics to adolescents in large and small cities in New York, New Jersey, and Pennsylvania. The committee blamed Illinois state legislators, politicians, and policemen for co-operation with Chicago race-track syndicates. Both sections of the Senate crime group made recommendations for legislation and more effective enforcement in connection with their findings.

Reconstruction Finance Corporation.

Following earlier closed hearings concerning alleged political influence and personal favoritism in the operations of the Reconstruction Finance Corporation (R.F.C.), a Senate Banking and Currency subcommittee made a detailed investigation of the part played by some of the agency's officials in connection with the extension of loans to certain private companies. Testimony presented to the subcommittee revealed that E. Merl Young, an R.F.C. examiner, had solicited $85,000 from the Texmass Petroleum Company for assistance in negotiating a loan with the Federal agency, and that he had also obtained personal favors in connection with the purchase of expensive furs for his wife, a White House employee. Testimony also indicated that William E. Willett, an R.F.C. director, had facilitated a loan of $300,000 to a firm headed by C. Edward Rowe by personally assigning an examiner to handle the transaction. Sen. James E. Murray (D., Montana) was reported to have interceded with R.F.C. in connection with a $1 million loan application by the Sorrento Hotel of Miami Beach, Fla.; and one of his sons was reported to have received a fee of $21,000 in connection with this application. Another son of Senator Murray was said to have attended a conference between the Sorrento Hotel attorney and Walter L. Dunham, an R.F.C. director, just before the loan was granted. The subcommittee also obtained testimony showing that Donald Dawson, President Truman's assistant on personnel, and Hilton W. Robertson, an R.F.C. examiner, had stayed at the Saxony Hotel in Miami Beach as guests of the management.

The Senate Banking subcommittee, headed by Sen. J. W. Fulbright (D., Arkansas), ended its hearings on August 20 and issued two reports, a majority one signed by four Democratic members and a minority one prepared by the two Republican members. The minority report called for the immediate abolition of the R.F.C., as an agency inherently subject to corruption, and it also contained a strong partisan and personal attack against President Truman, the administration, and the Democratic Party organization. The majority report favored Congressional reform of R.F.C., defended the political and personal integrity of the President, and pointed out that Republican legislators had also been involved in influencing R.F.C. lending policy. During the hearings, it was reported that the subcommittee had suppressed a file of over 800 photostatic copies of letters, submitted by President Truman, in which members of Congress themselves had brought pressure to bear on the matter of pending R.F.C. loan applications. While the investigation was in progress, the President submitted a plan to the Senate for the abolition of the R.F.C. board of directors and its replacement by a single administrator, and for the creation of a Board of Review to pass on loan applications in excess of $100,000. The Senate approved this proposal in April, and President Truman appointed W. Stuart Symington as the first administrator of the Federal lending agency. In May, when he became R.F.C. administrator, Symington removed from office an official of the agency's Minneapolis regional office and made some new appointments. In June, he submitted evidence to the Department of Justice that Allan E. Freeze, a former R.F.C. employee, had worked for one of the agency's borrowers, the Texmass Petroleum Company, while in the employ of the Federal lending agency. Shortly thereafter, Freeze and two other officials of the oil company resigned.

American Lithofold Corporation.

A Senate investigation subcommittee under the chairmanship of Senator Clyde R. Hoey (D., North Carolina) held an investigation into the activities of the American Lithofold Corporation of St. Louis, Mo., from September to the end of the year, in connection with loans obtained from the R.F.C. Testimony was given that William E. Boyle, Jr., Chairman of the Democratic National Committee, had accepted a fee of $8,000 from the Lithofold company after the latter had received $565,000 in R.F.C. loans in 1949. Boyle testified that he had had no connection with the company's loans, and that he had received $1,250 in legal fees from this firm before he became Chairman of the Democratic National Committee. Senate investigators also heard that Boyle had paid various sums of money to H. Turner Gratz during 1946-1949, when the latter was an R.F.C. employee. Gratz, who subsequent to these transactions became Assistant Chairman to the Democratic National Committee, denied any connection with the R.F.C. loans to Lithofold, and maintained that money received by him from Boyle represented personal services. During the hearings, Sen. John J. Williams (R., Delaware) revealed that Guy G. Gabrielson, Chairman of the Republican National Committee, had acted as private legal counsel of Carthage Hydrocol, Inc., of which he was an officer, in its application for a substantial R.F.C. loan. Senator Williams did not consider Gabrielson's action improper at the time, but censured him for interceding with R.F.C., after he became Chairman of the Republican National Committee, in Hydrocol's unsuccessful attempt to obtain an extension of the loan. During hearings, Gabrielson admitted that he had used his political influence to secure the election of Harvey J. Gunderson to the chairmanship of the New York Stock Exchange after Gunderson resigned as a director of the R.F.C. On October 1, a Republican Party conference in Washington gave Gabrielson a vote of confidence and supported him in his determination not to resign his political post as a result of the Hoey subcommittee findings. Four days later, the subcommittee suspended its investigation into the R.F.C. connections of Boyle and Gabrielson. On October 13, however, Boyle resigned the Democratic Party chairmanship and was succeeded by Frank E. McKinney of Indianapolis.

Bureau of Internal Revenue.

Between August and November 1951, a House Ways and Means subcommittee, under the chairmanship of Rep. Cecil R. King (D., California), conducted an investigation of the operations of the Bureau of Internal Revenue that incidentally added new evidence on the subject of influence-selling in connection with R.F.C. loans. The subcommittee heard testimony that James B. E. Olson, supervisor of the New York Alcohol Tax Unit of the bureau, had been paid $6,000 by the American Lithofold Corporation between 1949 and 1950 for his assistance in securing printing contracts with New York liquor firms under his tax jurisdiction. Olson testified that James P. Finnegan, a collector of internal revenue in St. Louis until his resignation in April 1951, and one-time officer of Lithofold, had acted as intermediary between the printing company and New York liquor companies. According to Olson, he split his fees with Joseph P. Nunan, former collector of internal revenue in New York. Officers of Lithofold testified that Finnegan had made several trips to Washington with them, at their firm's expense, to assist in arranging R.F.C. loans. According to this testimony, William E. Boyle, Jr., in 1949 arranged the interview between the Lithofold officers and the chairman of the R.F.C. board of directors, as a result of which this company was finally successful in obtaining approval of several loans. William E. Willett testified that he had discussed the first of these loans with Finnegan, although he did not know the latter was an internal revenue officer. Executives of Lithofold told the subcommittee that after the loans had been granted their firm had given gifts to Boyle, Frank Prince (an R.F.C. official at the time of the loans), and Matthew J. Connelly, Presidential secretary. Finnegan stated during the hearings that the income of $100,000 appearing in his income tax returns for 1947-1949 was derived from fees and commissions. Officers of Lithofold, however, testified that they paid $45,000 to Finnegan in fees, commissions, and expenses; $5,800 to Olson; $13,000 to John L. Kelly, head of the New York Wage and Hour Division of the U.S. Department of Labor; and $1,000 to Walter Doxon, a Newark, N. J., internal revenue agent.

As a result of the House Ways and Means subcommittee investigations, and sometimes concurrently with these hearings, the Government investigated the operations of several regional offices of the Bureau of Internal Revenue, and some tax officials were dismissed while others were permitted to resign. Finnegan was indicted by a Federal grand jury in St. Louis on October 11 for misconduct and acceptance of bribes, including a charge of acceptance of payment of $3,000 from the American Lithofold Corporation in December 1950 in connection with an R.F.C. loan. During the same month, four New York internal revenue agents were suspended, and Joseph P. Marcelle, a New York collector of internal revenue, resigned at the Government's request. In November, a collector of internal revenue in San Francisco and another in New York were dismissed, while other tax officials in several parts of the country were dismissed or asked to resign. In October, John B. Dunlap, Commissioner of Internal Revenue, announced that the Government had not suffered losses due to dishonesty on the part of tax officials. On November 1, President Truman announced that he would seek legislation to bring income tax collectors under civil service, and two weeks later he dismissed T. Lamar Caudle, head of the Tax Division of the Department of Justice, thus opening a new field for future Congressional investigations. The King subcommittee summoned Caudle after his dismissal by the President and elicited testimony that he had connections with officials or individuals involved in tax investigations, had accepted free transportation to Florida, had received a fee of $5,000 for helping to negotiate an airplane sale, and that he had also participated in the much-publicized mink-coat operations.

FOREIGN AFFAIRS

American foreign policy was the subject of a vigorous debate which began in the Senate in January. Sen. Robert A. Taft (Ohio), spokesman for the Republicans, challenged the administration's policies at almost every point, but with many qualifications, and demanded a thorough recasting of America's role in the world. The main lines of Taft's argument centered around (1) the role of the U.S. armed forces and (2) the powers of the President. He supported the 'Western-Hemisphere Gibraltar' speech of former President Herbert Hoover, which favored the strengthening of America's sea and air power but opposed large land armies. Taft also charged that President Truman usurped authority, in violation of the laws and the Constitution, when he sent troops to Korea. He insisted that the President has no power to commit troops to fight in Europe.

Red China.