all; but the Senator from Nebraska was making such a splendid argument in support of the abandonment of this secrecy clause within the tax bill, and had touched so closely to a matter in which the Committee on Public Lands and Surveys was interested in the last few days, that I felt I could not refrain.

The Senator from Nebraska had insinuated that had the records of the Treasury been open to the Committee on Public Lands and Surveys in its inquiry into the affairs of the Continental Trading Co. the path of that committee might have been made somewhat easier than it has been.

I said, when I interrupted the Senator, just this, that it occurred to the committee a matter of a week ago to ask the Treasury just what it was doing with regard to prosecuting any possible tax claims which might exist on the part of the Government against the Continental Trading Co. and those who participated in it, and I was saying that if there was any information of worth coming out of that inquiry, it was not, under the law as it stands at the present time, the privilege of the committee to make use of that information.

Whatever information the committee has received we are virtually sworn to secrecy upon, but I can say this in that connection, that for a matter of six months the committee has been endeavoring to ascertain the names of the participants in the profits of the Continental Trading Co., and as to who was responsible for the Continental Trading Co. We have been quite unsuccessful. The only two who were available and who we had reason to believe might have been participants in that company have sworn that they knew nothing of the affairs of the Continental Trading Co., have sworn that though they have received a profit from that company, they did not know, when the profit was paid to them, what its source really was. The only other three who could give direct testimony in that connection have fled the country and have been abroad through all these years.

If it has been disclosed to us that there has been settlement made by the Continental Trading Co. for any taxes owing the Government by the Continental Trading Co.-I say, if it has been disclosed to us that any such settlement has been made, it is not our privilege now to disclose, as a committee, just who made the settlement of that tax. I think it fair to assume that a statement of the names of the persons who made such a settlement would be indicative of whom the Continental Trading Co. was and who the individuals concerned were, but as it stands, under the law it is not our privilege to use the information which is available in the Treasury.

This morning, upon the convening of the Senate, the senior Senator from Montana [Mr. WALSH] offered for the committee a resolution asking the Joint Committee on Internal Revenue Taxation to gain that information. We can gain it eventually, I have no doubt, but it seems to me to be a sorry state of affairs when the only way this information can be won is first of all to have secured information wholly foreign to that possessed by the Treasury Department; that it is the privilege of those who are evading the tax under the law as it stands at the present time to make settlement when they will, and the public knows absolutely nothing about it.

About the time the committee began its work under the resolution (S. Res. 101) offered by the Senator from Nebraska [Mr. NORRIS] during the current session of the Congress a member of the committee addressed a communication to the Secretary of the Treasury calling his attention to the fact that in all reasonable probability a very considerable amount of tax was due from the Continental Trading Co. to the Treasury, and likewise that the facts disclosed before the committee rendered it altogether probable that no return had been made and no tax had been paid. Information with respect to that matter was asked, and inquiry was made as to whether any legislation was necessary or desired in order to aid the Treasury in the collection of any tax that might be due. In response to that letter, a letter came from the Secretary saying that the fact was that no tax had been paid and no return had been made, and up to that time the Treasury was not advised that any further legislation was necessary, but further inquiry would be made in respect thereto.

Nothing having been heard about the matter until, as the chairman of the committee has stated, something about 10 days ago, a further communication was addressed to the Secretary of the Treasury, as a result of which some communication has been had with officers of that branch of the Government, and as a consequence thereof the resolution which was offered this morning and adopted by the Senate was introduced. It is expected that definite information will come promptly concerning what has been done concerning the collection of this tax.

Mr. NORRIS. Mr. President, I want to thank the Senator from North Dakota and likewise the Senator from Montana for their contribution to what I was trying to say.

It is quite evident, from what these two Senators have said, that even they possess information which they are not at liberty now to disclose to the Senate, all because we have a law on the statute books which makes these public documents secret. It is quite evident, it must be apparent to every Senator who has listened to the statements of these two Senators, that there is information in the Treasury which they do not have, but that they at least know that there is something there that they do not have. They may have more information than that. But because of the secrecy made necessary by the law, they can not even disclose their knowledge to the Senate, a body which, in conjunction with the House of Representatives, is charged with legislation for more than a hundred million people, in a Republic where the people are supposed to rule. Yet, because of the secrecy in the Revenue Bureau of the United States, even members of our committee can not disclose the evidence to the the legislative body, which must be informed before any legislative remedy can be applied. It is a queer predicament, it seems to me, for a civilized nation to find itself in. Yet we are going on from year to year giving a premium upon fraud and dishonesty, then giving a premium to those who have committed the fraud and dishonesty, making it difficult for the officials of the Government to arrest and punish or to collect civilly under any liability which may exist from those who are at fault.

The particular amendment in only a few words would remedy that situation. Is there anyone who doubts if these documents were public documents, subject to examination, that instances of this kind would at least more rarely occur? The thief, the demagogue, the briber is afraid of publicity. That is one thing above all else that he avoids. So I say again we are by our laws giving a premium to the dishonest, to the debauchers of

property that is almost sacred because it was set aside to preserve our Army and our Navy and our country in times of dire distress.

I think that is all I would venture to say at this time in this connection.

Mr. WALSH of Montana. Mr. President, I feel like adding to what has been said by the chairman of the committee the fact that it was disclosed some nearly four years ago now that this ephemeral Continental Trading Co. had realized profits out of its transactions extending over a period of something like a year and a half, and really consummated some time ago, of something over $3,000,000. That fact was known to some of the officers of the Government at least four years ago, when an application was made for a continuance of the Teapot Dome trial at Cheyenne, Wyo.

I heard the chairman of the investigating committee when he said that the committee would probably be criticized because the results were not as great as some people think they ought to be.

I have heard that criticism made. I heard made, I think, on the floor of the Senate at the beginning of the investigation objections to the expenditure of public money in the various investigations. But I say here and now to the Senator from North Dakota [Mr. NYE] and the Senator from Montana [Mr. WALSH] and the other members of the Committee on Public Lands and Surveys that, considered only on a cold financial basis, the investment made of public money in the investigations has brought greater returns to the taxpayers of the United States than the expenditure of any amount of money ten times as great in the history of our country. We did recover Elk Hills reservation in California, we did receover Teapot Dome, and the title now rests in the Nation, property worth hundreds of millions of dollars. Not one foot of it would have been recovered had it not been for investigations made by the Senate committee.

Years ago, when the resolution was first introduced by the late Senator from Wisconsin, Mr. La Follette, and when it was passed by the Senate and the investigation was commenced by this committee, there was criticism both here and elsewhere. The committee and those who favored the resolution were criticized in a great many places in the United States, by high officials and high representatives in all kinds of business. Much of the criticism probably was honestly made. It was not a long time that the committee was at work before they began to unearth sufficient to convince even the worst doubter that there had been going on for several years the greatest kind of fraud; that a high public official, a member of the Cabinet, had been bribed and that he had given away hundreds of millions of dollars of the property of the United States.

So I would like to say to the members of the committee that while it may seem difficult, and has been even weary and uphill work, sometimes thankless, they have made a record that will be admired and glorified years after they have passed away. The late Senator La Follette was condemned, and one of the reasons for his condemnation was his activities in the Teapot Dome matter. Although he has passed away and can not listen to the praise that comes to his name, the whole world knows now that he was right, that he was on the right track, and that he was one of the principal instrumentalities that brought about, even if we consider it only in dollars and cents, hundreds of millions of profits to the United States by the saving of the naval oil reserves.

But, Mr. President, the money involved is the least part of it. The investigation which has been going on for years has brought to light, a little at a time, disclosures that have shown how this wicked thing was done, how unpatriotic some of our public servants were, how unpatriotic and dishonest and traitorous were some of our very wealthy men who were bribing public officials for dollars and cents. So I think it is a noble record, one of which, although the members of the committee may not think so much of it, their children will be proud.

Mr. President, I have said this much about the committee work not because it has a direct bearing upon the pending question but because the remark of the Senator from North Dakota [Mr. NYE] brought it forth. But enough has been disclosed now to show that there is a connection in the secrecy between those who have defrauded the people of the United States, between officials who have sold out the Government of the United States for gold, and the secrecy that is going on in our Government. It is only another demonstration of what I have often said, that secrecy in government will ultimately, if not checked, lead to its destruction. It is a law of human nature. There is no escape from its result.

More quickly than anyone thought, this secrecy going on in the lease of the oil lands, something that was concealed from the people of the United States, has brought to light some of the most disgraceful disclosures that have ever been put in print. It can not be kept up long and have the Government survive. We can not make a daily occurrence of that kind of thing and expect the Republic to live. It will be an impossibility. The only way to purify it, or one of the ways to make it nearer impossible for these things to occur, is to throw open the doors to the public records of the United States. Therefore I hope that the Senate will adopt the amendment and incorporate it in the law.

Mr. COUZENS. Mr. President, several Congresses have endeavored to have put into the law an amendment such as is now proposed by the Senator from Nebraska [Mr. NORRIS]. The committee which investigated the Bureau of Internal Revenue had occasion during its examination to discover the criminality of the operations of the bureau through the very secrecy provision now in the law.

It seems to me that it is appropriate at this time to read into the RECORD Some of the experiences we had and some of the records we found as a result of the examination. Of course, I know that Senators are busy on all sorts of committees, and have direct activities with special measures, and I assume, for that reason, that not many Senators have read the report of the select committee which investigated the Bureau of Internal Revenue. I want to read just a page or two of the results that were secured by means of our investigation.

On page 229 of the investigation report which was made to the Senate there appears the following:

Many of the principles, practices, methods, and formulæ applied in determining taxes have never been reduced to writing, and only about 15 per cent of the formal written rulings have ever been published. Mr. NORRIS. Mr. President, I did not quite get that statement. Does the Senator mean to say that only 151⁄2 per cent of the rulings have ever been published?

Mr. COUZENS. That is correct as of the time we made the investigation. I have no information of the condition since, nor do I know what rulings have been published since.

Mr. NORRIS. That means that anyone seeking a refund of an overpayment of taxes would not be able to find out what the rule was, or what the precedents, if any had already been established, might be.

Mr. COUZENS. That is correct.

Mr. NORRIS. That is a deplorable condition.

Mr. COUZENS. That condition was disclosed in the testimony and incorporated in the report.

This failure to promulgate and publish the principles and practices to be followed in determining tax liability has resulted in gross discrimination between taxpayers similarly situated. Taxpayers desiring the benefit of the most favorable practices have been forced to employ former employees of the Income Tax Unit and pay immense fees for information which should be freely available to everybody. The premium thus placed upon the value of unpublished information is the cause of the immense turnover among the employees of the unit and creates a necessity for salaries entirely out of range with what the Government pays for similar services in other bureaus.

This failure to promulgate and publish adequate rulings has retarded the settlement of the law and practice of the department. This unsettled condition of the law and practice has encouraged the filing and prosecution of claims and requires the continued discussion and consideration of questions which should have been long since disposed of by established precedents.

Uniformity in the taxation of those similarly situated is the first and fundamental requisite of any just system of taxation. Such uniformity can not be accomplished unless tax liability is determined in accordance with principles uniformly applied.

The most serious defect in the administration of the income tax law is the absence of any adequate statement of the departmental construction of the provisions of the law, the principles, formula, and methods applied, and the practice and procedure followed in determining tax liability.

In order not to delay the Senate I will pass over several paragraphs and refer to page 230 of the report. I want to say in this connection that the report is based on absolute evidence presented to the committee and is not speculation or an opinion arrived at by the committee itself.

Mr. WALSH of Montana. Mr. President, I inquire of the Senator whether the report with respect to this feature was unanimous?

Mr. COUZENS. No; the report was not unanimous. It was not signed by the Senator from Indiana [Mr. WATSON] or by former Senator Ernst, of Kentucky. I might say in further answer to the Senator from Montana that the testimony is a public record and became a public record after we presented it to the Senate. The hearings were held before members of the committee, and the staff of the Bureau of Internal Revenue was present at all times.

Mr. WALSH of Montana. I would like to inquire of the Senator whether the Senators referred to made a minority report?

Mr. COUZENS. I think Senator Ernst made a minority report, which was concurred in by the Senator from Indiana [Mr. WATSON].

Mr. WALSH of Montana. Mr. President, is the Senator able to tell us whether they canvassed this particular feature of the matter?

Mr. COUZENS. I do not recall. The minority report was not published, as I remember, but was read into the RECORD by the former Senator from Kentucky, Mr. Ernst.

Mr. WALSH of Montana. The Senator is not able to tell us whether or not it expressed any views upon this particular feature of the matter?

Mr. COUZENS. No; but I shall be glad to look that up. I was not prepared for this question to come up this afternoon, but I wish to say that the bureau itself has at no time denied these statements.

Mr. NORRIS. Mr. President, will the Senator from Michigan permit an interruption at that point?

Mr. COUZENS. I shall be glad to do so.

Mr. NORRIS. I am speaking only from recollection, but I remember distinctly that the former Senator from Kentucky, Mr. Ernst, referred to it, and I think it was at the time when, as the Senator from Michigan has stated, he read his report into the RECORD. While he disagreed with the Senator from Michigan in some of his conclusions, I do not believe he made any denial, as I remember, or contradiction of the statements that the Senator from Michigan has just now made, nor did he claim that the evidence did not disclose just what the Senator from Michigan has stated that it disclosed.

Mr. COUZENS. His report was particularly directed against the chairman of the committee for his method of inquiry. On page 230 of the report from which I have just been reading it is stated:

When Congress reenacts a statute which has received Executive interpretation it is considered to have given implied legislative approval to such interpretation. During the hearings it was repeatedly claimed that by reenacting the provisions of the revenue acts Congress has affirmed the administrative construction. It is therefore of vital importance that Congress have the means of informing itself as to how the revenue acts are construed and applied. Unless the practices and precedents interpreting and applying the revenue laws are reduced to writing and published, Congress has no means of learning what it is presumed to know in acting upon revenue legislation. Without knowledge of the administrative interpretation and application of the revenue acts Congress can not inteliigently determine the desirability or necessity for their amendment.

THE REGULATIONS

more

The income tax law is necessarily most general in its terms and empowers the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, to promulgate regulations" particularly defining the taxpayer's rights and obligations under the law. It was doubtless the intention of Congress that these regulations should be sufficiently complete, comprehensive, and specific to enable any taxpayer to determine his own tax liability.

The regulations under each revenue act must be promulgated before the returns made under such act are prepared. It has been impossible to foresee the multitude of questions which would arise under a new law or under new provisions of subsequent acts. The "regulations under the earlier acts were, therefore, of necessity, very broad and general, and in many cases were mere restatements of the income tax law. We now have an entirely different situation. It is over seven years since the 1917 returns were filed, and it is extremely doubtful if many questions can arise which are not presented by the returns filed since March, 1918.

Most questions which can arise have been acted upon in some manner, and, if uniformity and consistency of ruling is to be observed, this accumulated mass of precedent constitutes a fund of information which should be available to the employees of the bureau and to the tax-paying public. This information should also be available to Congress. It is only by examining such precedent that Congress can determine how its acts are construed and applied, and whether amendment is necessary or desirable.

Notwithstanding the fact that nearly every conceivable question which can arise under the income tax laws has been presented by returns on file, and some action has been taken upon the most of such questions, the "regulations promulgated under the 1924 act are still so broad and general as to give the employees of the Income Tax Unit, the taxpayers, and the Congress but little more guidance and assistance than do the "regulations" promulgated under the 1918 act.

PUBLISHED RULINGS

The generality of the regulations leaves a multitude of questions as to the interpretation of the law and the regulations, to be passed upon in particular cases. In many instances taxpayers before filing

returns write to the unit requesting rulings upon the application of the law to particular facts. These inquiries are referred to what is known as the rules and regulations section, where they are answered. When, in the judgment of the rules and regulations section, these answers cover questions not covered by published rulings, they are forwarded to the solicitor for his approval, and if approved become what are called income-tax rulings.

The advice of the rules and regulations section is sometimes also sought by the audit and engineering divisions upon matters pending in the unit. It is the practice of the rules and regulations section to

answer inquiries from the unit divisions if the question is covered by a published ruling, but otherwise to refer the questions to the solicitor for a ruling.

Solicitor's rulings are made upon questions referred by the rules and regulations section upon cases brought to the solicitor's office on appeal by the taxpayer upon refunds involving over $50,000 and upon requests made by the commissioner or deputy commissioner upon their own initiative or upon the suggestion of a chief of a

division.

For a time the tax advisory board recommended methods of procedure and formula and acted upon cases appealed by taxpayers. The committee on appeals and review was the appellate body to which appeals were taken from unit determinations until it was abolished, when the Board of Tax Appeals was created under the revenue act of 1924.

ONLY 15 PER CENT OF FORMAL RULINGS PUBLISHED

As of March 6, 1925, there had been issued by the solicitor-
And this is a point I wish to emphasize-

the tax advisory board, the committee on appeals and review, and by the rules and regulations section 20,311 rulings, of which only 3,168, or 15 per cent, had been published.

There were 20,311 rulings, and only 15% per cent ever came to public observation.

Mr. NORRIS. Mr. President

Mr. COUZENS. I yield to the Senator from Nebraska. Mr. NORRIS. Does that mean that the remainder of those rulings-the 84% per cent-were inaccessible?

Mr. COUZENS. Yes, sir.

Mr. NORRIS. That means that it would have been impossible for me, for instance, if I had been an attorney for a client who had a case there, to find out what the precedent established in any of those other cases was?

Mr. COUZENS. So far as any public record is concerned, that is correct. I do not say if the attorney had applied to the commissioner and intimated that there was such a ruling and stated he would like to see it that he could not have examined it. Mr. NORRIS. He would have had to know in advance that there was such a ruling. Mr. COUZENS. He would have to know in advance. It was not a public record. He might have learned from an associate, or another attorney, or an auditor, or an accountant that there was such a ruling in existence.

The number of rulings issued by each of these authorities and the number published is shown by the following table

I am not going to delay the Senate by going into all the details, but the advisory tax board issued 71 rulings or recommendations and published 50 of them, or 71 per cent.

Going further down the table, the committee on appeals and review issued 8,367 rulings or recommendations and published only 403 of them, or 4 per cent.

The aggregate of all these rulings, as I have said, was 20,311, of which 15% per cent were published.

The representatives of the commissioner stated to this committeeThis is a matter of record

that all rulings upon novel questions of general application were published, provided it were possible to so delete the facts as to destroy the identity of the case, and that unpublished rulings are never used as precedents.

In other words, the commissioner testified before the committee that unpublished rulings were not used as precedents, so that if any taxpayer should get a favorable decision in his particular case, it could never be used as a precedent in another case.

This statement is not sustained by the facts as disclosed by the investigation.

In that section of this report dealing with "Depletion and the valuation of natural resources many formal rulings by the solicitor and the committee on appeals and review are reviewed and discussed. Every one of these rulings are of general interest and importance. The facts in every case could be so deleted as to destroy the identity of the taxpayer. Not one of these rulings have been published.

The excuse of the bureau as offered to the committee was that they could not publish these rulings without disclosing the name of the taxpayer; that it was impossible, because of the peculiarity of the situation, to delete the names and yet give the facts to the public.

Mr. NORRIS. Mr. President, if I may be permitted again to interrupt the Senator

Mr. COUZENS. I am glad to yield.

Mr. NORRIS. Even that excuse would have been unavailable if we had had this kind of a provision in the law. Mr. COUZENS. That is absolutely correct.

Mr. NORRIS. Because the commissioner of course was saying, "I can not give you this case because I am prohibited under the law from disclosing this information."

Mr. JOHNSON. But, beyond that, the decisions were well known to a favored few. That is correct, is it not? Mr. COUZENS. Every employee who left the bureau knew of these 17,000 unpublished decisions, or a percentage of them, and was able to go to his client or clients in soliciting business and say "Mr. Jones," or "Mr. Smith, I know of a decision of the Bureau of Internal Revenue that will secure you a refund of a million dollars. You do not know of it, and you can not get it. If you will let me take your case for a 25 per cent or 50 per cent contingent fee, I will take it up and get you a refund." I know that from actual experience. So it is perfectly obvious that the secrecy of the bureau, against which at every opportunity I have protested, is discriminatory as between taxpayers and leads to fraud and graft.

I continue to read from the report:

The following statement of several of these rulings suffices to prove their general importance and the fact that they can be stated without revealing the identity of the taxpayer:

A ruling by the solicitor that the commissioner may reconsider tentative valuation made for depletion purposes.

Rulings by both the committee on appeals and review and the solicitor that discovery depletion may be based upon discoveries made after the existence of the mineral is known.

A ruling that the provision barring discovery depletion when the property is acquired as the result of purchase of a proven tract or lease permits the allowance of discovery depletion to the owner of a fee which was a proven tract or lease when he acquired the fee, provided he had an option to purchase when the mineral was discovered.

In the National Aniline & Chemical case a published ruling of the solicitor was violated, and an unpublished ruling, advisory tax board recommendation No. 68, was followed. That this was not an oversight, but was done deliberately, is shown by the record.

In the United Motors Corporation case (3923), committee on appeals and review recommendation No. 6617 is contrary to published recommendation No. 34 providing for the 1913 valuation of corporate stock, yet No. 6617 was not published.

Recommendation No. 6617 is based upon seven unpublished rulings, one of which is L. O. 1117, which the committee states in its ruling was cited by both the unit and by the taxpayer.

It was cited by the taxpayer and by the unit without ever being published, because the taxpayer learned of it through means resulting from the secretive methods employed by the department.

This particular ruling not only shows the extent to which unpublished rulings were relied upon as precedents, but discloses the fact that at least this taxpayer had access to and was able to avail itself of this unpublished precedent.

It may be observed that since June 1, 1925, the commissioner has refused to give this committee copies of unpublished rulings, some of which had been requested but the copying of which had not been finished on June 1, 1925.

That was the time when the authority of the committce expired under the resolution

It thus appears that some taxpayers are permitted to secure and utilize rulings which even a Senate committee can not secure.

I will skip over here; and I want to make reference to the value of this secrecy to the tax expert.

This system-

That I have just been talking about

had not only led to the lack of uniformity and lack of consistency in rulings upon the same and closely related questions but has given rise to and now maintains the lucrative business of the tax expert or "fixer." There is nothing so involved, complicated, or technical about the procedure in the Income Tax Unit that anyone of ordinary intelligence can not understand it, provided he has access to the information. Taxpayers generally, however, to secure the advantages accorded others similarly situated find it necessary to employ some one with inside information.

I want to point out to Senators that this is not a mere report; it is all sustained by evidence. The evidence is now in the hands of the Senate. If anyone challenges that statement he can go to the records, and deny, if he cares to, the statements I am now making, which are signed by a majority of the committee.

I have no desire to delay action on the proposed amendment; but if anyone is in doubt as to the desirability of adopting this amendment, I can refer him to the testimony that is already in the hands of the Senate, produced by the select committee that examined the Bureau of Internal Revenue, and specifically refer him to the reports from which I have read.

PRESIDENTIAL APPROVALS

A message from the President of the United States, by Mr. Latta, one of his secretaries, announced that the President had approved and signed the following acts and joint resolution: On May 16, 1928:

S. 2004. An act authorizing the paving of the Federal strip known as International Street, adjacent to Nogales, Ariz. On May 17, 1928:

S. 1662. An act to change the boundaries of the Tule River Indian Reservation, Calif.;

S. 2340. An act to transfer to the city of Duluth, Minn., the old Federal building, together with the site thereof;

S. 3565. An act to provide compensation for disability or death resulting from injury to employees in certain employments in the District of Columbia, and for other purposes; and S. J. Res. 119. Joint resolution granting an easement to the city of Duluth, Minn.

CONSTRUCTION OF RURAL POST ROADS (S. DOC. NO. 111) The PRESIDING OFFICER (Mr. McNARY in the chair) laid before the Senate the following veto message from the President of the United States, which was read, as follows: To the Senate:

There is returned herewith, without my approval, S. 3674, a bill to amend the act entitled "An act to provide that the United States shall aid the States in the construction of rural post roads, and for other purposes," approved July 11, 1916, as amended and supplemented, and for other purposes.

The bill would authorize appropriations of $3,500,000 each for the fiscal years 1929, 1930, and 1931, to be allocated to States having more than 5 per cent of their area in unappropriated or unreserved public lands, nontaxable Indian lands, or other Federal reservations, for the construction, by the Bureau of Public Roads, of the main roads through such lands. From 1917 to 1929, inclusive, Federal appropriations aggregating $840,000,000 have been authorized for cooperative construction of rural post roads and appropriations aggregating $733,200,000 have been made to meet the requirements as they have developed. From 1922 to 1929, inclusive, Federal appropriations aggregating $58,000,000 have been authorized for forest-development roads and forest highways and appropriations thereunder aggregating $54,055,000 have been made. From 1925 to 1929, inclusive, $10,000,000 have been appropriated for the construction of roads in national parks.

While expenditures from appropriations for cooperative construction of rural post roads are contingent upon equal contributions by State or local agencies, no such requirement obtains with reference to appropriations for roads in national forests and national parks, since such roads are required for the protection, administration, utilization, or development of Federal resources. The bill would provide for entire construetion from Federal funds of main roads through unappropriated or unreserved public lands and nontaxable Indian lands. Such expenditures could not be justified on the basis of protection or development of Federal resources and would constitute a radical departure from the established policy of Federal aid on a cooperative basis in road construction.

Having in mind the increasing ability of the States to finance road construction due to the general adoption of the gasoline tax and the increase in revenue from this source which would accrue to States from roads constructed through public and Indian lands therein, I see no reason why the States should be relieved from their contribution toward the construction of these roads as required by existing law. I am constrained therefore to return this bill without my approval.

Mr. CURTIS. Mr. President, I understand that the veto message has to be entered on the Journal before that vote is taken. The PRESIDING OFFICER. The Senator from Nevada has a perfect right to make a statement, however. Mr. CURTIS. I beg pardon.

Mr. ODDIE. Mr. President, when the message is entered on the Journal in the proper way, in a short time I shall move that the Senate consider this matter.

The PRESIDING OFFICER. The Chair will state to the Senator that a motion is not necessary. The matter is on the table for that purpose at any time. The message will lie on the table and be printed.

CLAIMS OF INDIANS IN THE STATE OF WASHINGTON (S. DOC. NO. 110) The PRESIDING OFFICER laid before the Senate the following veto message from the President of the United States, which was read, as follows:

To the Senate:

I am returning herewith Senate bill 1480, “An act authorizing certain Indian tribes and bands, or any of them, residing in the State of Washington, to present their claims to the Court of Claims," without my approval.

These claims amount to approximately $9,125,000, which represents the value of 6,500,000 acres of land, in the aboriginal possession of the Indians, at $1.25 per acre, and includes hunting and fishing rights to the value of $1,000,000. These claims are not based upon any treaty or agreement between the United States and these Indians, nor does it appear to me that they

The PRESIDING OFFICER. The question is, Shall the bill pass, the objections of the President of the United States to the contrary notwithstanding? The bill and message will lie over for the day and be printed.

SUPPLEMENTAL ESTIMATES, DEPARTMENT OF COMMERCE (S. DOC. NO 109)

The PRESIDING OFFICER laid before the Senate a communication from the President of the United States, submitting supplemental estimates of appropriations for the Department of Commerce, fiscal year 1928, amounting to $1,373,020, and for the fiscal year 1929 amounting to $47,955; in all, $1,420,975; which with the accompanying papers, was referred to the Committee on Appropriations and ordered to be printed.

RELIEF OF JOHN BOYD (S. DOC. NO. 108)

The PRESIDING OFFICER laid before the Senate a cominunication from the President of the United States, transmitting a supplemental estimate of appropriation for the District of Columbia, fiscal year ending June 30, 1928, for the payment of a final judgment rendered against it amounting, with costs, to $516.66, which, with the accompanying papers, was referred to the Committee on Appropriations and ordered to be printed. INTERNATIONAL CONFERENCE ON CIVIL AERONAUTICS (H. DOC. NO 308)

The PRESIDING OFFICER laid before the Senate the following message from the President of the United States, which was read, and, with the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed: To the Congress of the United States:

I commend to the favorable consideration of the Congress the inclosed report from the Secretary of State, with the accompanying papers, to the end that legislation may be enacted authorizing (1) the President to invite representatives of foreign governments to attend an International Aeronautical Conference on Civil Aeronautics, to be held in Washington, D. C., December 12, 13, and 14 of this year, and (2) an appropriation of $24,700 for the expenses of such a conference in accordance with the recommendations of the Secretary of Commerce, as submitted through the Secretary of State.

CALVIN COOLIDGE.

THE WHITE HOUSE, May 18, 1928. (Inclosure: Copy of report from the Secretary of State, with inclosures.)

INTERNATIONAL TELEGRAPH CONFERENCE AT BRUSSELS (H. DOC. NO. 309)

The PRESIDING OFFICER laid before the Senate the following message from the President of the United States, which was read, and, with the accompanying paper, referred to the Committee on Foreign Relations and ordered to be printed: To the Congress of the United States:

I transmit herewith a report from the Secretary of State requesting that the Congress be asked to enact legislation authorizing an appropriation in the sum of $19,800 to pay for the expenditures involved in the participation by the United States in the International Telegraph Conference to be held at Brussels, beginning about September 10, 1928.

I recommend that the Congress enact legislation authorizing an appropriation for the sum mentioned, in accordance with the recommendation of the Secretary of State.

THE WHITE HOUSE, May 18, 1928.

CALVIN COOLIDGE.

(Inclosure: Report from the Secretary of State.)

NAVAL CONSTRUCTION

Mr. HALE. Mr. President, I do not desire to delay action on the amendment now before the Senate nor on the bill; but there are certain matters that I feel that I ought to bring before the Senate. I will ask Senators not to interrupt me in the

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course of what I have to say, as there are many figures involved.

Mr. SMOOT. The Senator is not asking for action to be taken at this time?

Mr. HALE. I am not asking for any action at this moment. What I shall say will not consume a great deal of time.

Mr. President, to understand clearly the present naval situation and the purposes of the naval construction bill which is on the calendar it will be necessary to go back a number of years into naval history.

In August, 1916, the so-called 1916 building program was authorized by act of Congress. This program provided for the construction of 157 new ships of various types, including a number of very large and very powerful battleships and battle cruisers.

Most of the ships included in the building program, including all of the battleships and battle cruisers, had been laid down and were in process of construction when President Harding took his seat in the White House in March, 1921.

At that time we had on the ways 9 battleships, 3 of them of a tonnage of 32.600 tons each, 6 of a tonnage of 43,200 tons each, and 6 battle cruisers of a tonnage of 43,500 tons each. The battleships, when work was shortly thereafter stopped upon them, were in a stage of completion averaging 43 per cent, and the battle cruisers 16 per cent.

Mr. President, had all of these ships been completed and had they been added to our naval forces, and had a sufficient number of cruisers, submarines, aircraft carriers, and other auxiliary ships been laid down properly to round out the Navy, we would have had a Navy powerful enough in all probability to withstand all of the navies of the world now in existence combined.

This would have guaranteed to us absolute protection from any attack by sea.

After the Great War a feeling arose in this country and throughout the civilized world that naval armament should be cut down and that the various peoples of the world should be relieved of the burdens of taxation necessary to maintain and keep up the great armaments then existing and planned for, and, above all. as far as possible that competition in naval armament should be stopped.

To carry into effect such a plan for the limitation of armament the Washington Conference for the Limitation of Armament was called by President Harding in November, 1921.

With our tremendous shipbuilding program on the ways, which no other country could reasonably hope to equal, we were in a position to bring about an agreement among the five greater naval powers of the world-Great Britain, Japan, France, Italy, and ourselves-for such a limitation, and we did bring about, Mr. President, such a limitation of naval armament, so far as capital ships and aircraft carriers were concerned, by agreeing to scrap all of our battleships building, with the exception of two, and all of our battle cruisers building, with the exception of two, which were to be turned into aircraft carriers, making a total of 465.800 tons of new construction that was scrapped, on which $150,000,000 had already been spent.

In addition to this we agreed to scrap a number of older battleships, as did two of the other four nations parties to the treaty-Great Britain and Japan-which battleships could have been kept up only at great expense, and would in all probability have been scrapped had there been no conference on limitation of naval armament.

The other nations parties to the conference agreed to scrap no ships that were in process of construction, with the exception of Japan, and nearly all of her building program was on paper.

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In exchange for giving up this great naval supremacy of we secured a basis of limitation on capital ships and carriers of 5 to 5, or an equality with Great Britain; 5 to 3 with Japan; and 5 to 1.67 with France and Italy on capital ships and 5 to 2.22 on carriers.

The sacrifice in reaching this ratio was almost altogether on our part. At the same time the representatives of the United States made a strong attempt to have the same ratio apply to other combatant vessels, including cruisers, destroyers, and submarines, but the attempt was a failure and no agreement other than the agreement on capital ships and aircraft carriers was reached.

When in a conference called on our own initiative we showed ourselves ready to sacrifice our naval supremacy the surprised world was only too glad to accept our terms for a limitation in this class of ships, and to that extent the conference was a success. The pity is that with this immense leverage we could not have fixed the ratio limit on all classes of combatant ships. It is true that we tried our best to do so, and at one time it