Mr. MARSH (reading): Washington's No. 1 lobbyist labors for, not against, the people. I am glad to accept that verdict of the headline. (The article is as follows:) [Spot News-King Features Syndicate, Cleveland 14, Ohio, December 27, 1947] (By Jay Richter, Central Press Correspondent) WASHINGTON.--As the April showers bring May flowers, so the return of Congress to Washington sprouts lobbyists all along the shores of the imperturbable Potomac. However, Some citizens are sure to point out that the comparison is a bad one. It is indisputable that flowers smell much better than lobbyists. the notion abroad in the land that all lobbyists specialize in extracting low promises for high prices is not always based on hard facts. There are exceptions, and one of these is Benjamin C. March. Not that there's anything odd in his being a lobbyist. There are 12 of these professional persuaders for every one of the 531 Congressmen you elect. That's counting only those who admit it and register, as a new law requires. It is estimated that there are at least again as many invisible lobbyists who call themselves by sweeter names. Ben Marsh is a lobbyist who readily admits it. As a matter of fact, he proclaims it. Ben even lobbied for the law which requires lobbyists register, and then he was the first to sign up, making him Washington's No. 1 lobbyist. A rough comparison would be the prohibition days bootlegger who worked for repeal * * * on his own time. The gaunt, slightly stooped figure of the 70-year-old dean of capital lobbyists bears little resemblance to others of his ilk on any score sheet. In 27 years at ,his trade, he has never given a cocktail party, a fancy dinner or promised a favor to the great and near-great. Marsh represents the People's Lobby, Inc., which he himself founded in the early twenties. It is supported by members' dues and voluntary contributions. His office is a cluttered, book-ridden and manuscript-strewn room of an F Street building down at the foundations. A worn mimeograph machine in one corner, which he personally operates, is one of the most prolific in town. It is estimated that he has issued nearly 5,000,000 pamphlets, bulletins, open letters, press releases, and related materials. The dean's clients are the common people. In their behalf, he trumpets for the lobby's program of a mixed American economy composed of cooperative associations, private enterpris, and public ownership. Probably no one in Washington has advised, pleaded with even berated, as many Presidents, a half-dozen of whom he has known personally. From William Howard Taft to Harry Truman, Marsh has given freely, and publicly, of his counsel upon every important problem of the day. The Dean is bombastic on paper. "It is your duty, Mr. President," he recently advised the White House, "to drive the rapacious horde of profiteers out of the temple of democracy—even as Christ drove the money-changers out of the temple, in His day on earth-to protect the common people." Virtually, everybody but common people or consumers at one time or another are punctured by the dean's free-swinging pen. Ben recently called for a consumers' session of Congress to enact legislation to protect consumers from the unbridled rapacity of most business enterprises and big landed farmers, and the short-sighted boomerang policies of many major labor unions." Marsh is not a crackpot. Congressional committees frequently call upon him for testimony on important bills. His quiet conversational charm and quick wit contrast sharply with his bombastic writing style. He is a respected friend of Washington newsmen who are attracted by his ability to turn a neat phrase, such as this favorite: "More lobbyists are ruined by the salon than the saloon." In contrast to most other lobbyists, notably representatives of wartime contractors, the dean of them all believes lavish social entertainment constitutes poor lobbying. When he gains entry to an office on Capitol Hill, his approach is direct and businesslike. "People's Lobby, Inc.," he is likely to begin, "represents virtually everybody but property owners who can afford to take care of themselves. Now, what you ought to do, Mr. Congressman * In an effort to "unconfuse" a Senator on the inflation problem, the dean observed that "You can't give champagne prices for water stock. We'll have to exercise self-discipline, or we'll get imposed police power." It is no secret that many lobbyists receive considerably more than the $12,500 annual salary of the lawmakers they are paid to influence. The records show, for example, that 14 representatives of electric firms receive pay checks which average $19,170 annually. The annual average salaries of 58 lobbyists representing agriculture is $13,040. Labor lobbyists get comparatively low pay, but the AFL spent more than three-quarters of a million dollars in an effort to defeat the Taft-Hartley bill. Ben Marsh, on the other hand, resists the efforts of People's Lobby, Inc., to boost his nominal annual pay of about $1,800 yearly. Instead, he dips into modest savings to meet high living costs. "My pay is about the average of the people I represent," he says, "and I want to know all their problems by sharing their thoughts and troubles." Mr. MARSH. Congress must not expect to fool the people, by giving small income brackets a token reduction in taxes, and one to the wealthy, which will enable them to make campaign contributions of the legal maximum for a dozen to 20 relatives or friends. A small tax reduction also, is not an acceptable substitute for the necessary price reduction of 10 to 15 percent, and measures to stop inflation, such as the Chairman of the Federal Reserve Board has recommended. If you do not mind, Mr. Chairman, I would like to interpolate a little bit as I go along. I have been so interested in Mr. Hanes' testimony this morning and the questions. You have been discussing the reduced purchasing power of the dollar. Sure. We call it inflation. What has Congress been doing in the 30 years I have been here so we have not gotten an economic system to prevent inflation? I leave that question to be answered in November. In every prosperous year, such as 1946, 1947, and probably this year, the national debt should be reduced by two or three times the interest on this debt, which means by $10,000,000,000 to $15,000,000,000. In the past, Mr. Chairman and members of the committee, I have submitted a great many statistics. I am not going to do that today because you have all you need, but I would just like to outline briefly the principles which we think should be incorporated in this bill, and you will recognize it means revamping quite generally the bill which the House has passed. The revenue bill you are now considering should: 1. Retain personal income tax rates on income over $6,000 if not over $5,000. 2. Retain present profits taxes. 3. Restore wartime excess-profits-tax rates. 4. Repeal some excise taxes and reduce others as recommended by Mr. Matthew Woll in his minority report to the House Ways and Means Committee, as a member of the Special Tax Study Committee. I did not want to burden the record with the details of those recommendations, but they appear on page 65 of the report to the House Ways and Means Committee submitted November 4, 1947, and they include repealing excise taxes, starting with oleomargarine, which total $1,058,000,000. I think Mr. Woll was the only signer of this minority report. They recommend 50 percent reduction in excise taxes of $436,000,000, which means a total amount of reduction from excise tax reduction. Senator HAWKES. May I hear you repeat that again? Fifty percent reduction in all excise taxes or just certain ones? Mr. MARSH. He recommended the repeal of excise taxes totaling $1,058,000,000. Mr. Woll recommended reducing by 50 percent excise taxes totaling $436,000,000. Senator HAWKES. That would not touch them all because you know last year we collected about $7,274,000,000 excise taxes. Mr. MARSH. He did not try to cut them all off. Mr. MARSH. But his total he recommended was a reduction from excise taxes of $1,494,000,000. 5. Provide adequate penalties for failure to distribute as dividends the percent of profits the law requires, and close loopholes for evasion. 6. This bill should also impose at least a small tax of around 1 percent on the value of land, exclusive of improvements therein and thereon. Land speculators have always been the beneficiaries of Government policies and expenditures, and the selling price of farm and city lands has increased since 1932 by at least $35,000,000,000, probably nearer $40,000,000,000. The tax exempt value of land in the United States is now between $80,000,000,000 and $85,000,000,000, and the selling price of land is usually about the last to go down, in a deflationary period. It is time Congress began taxing these tax-exempt land values. Mr. Chairman, there was an item in the paper since I wrote this which I think will interest this committee, and the last suggestion I have made bears on it. The Government wants to get what is known as the "Nevius tract, a large tract of land. An appraisal of $850,000 was put on it, out of which the Government would get, according to the press reports, $150,000 tax; but now they have tried to raise the charge to the Government by another $750,000 to make a total of $1,600,000. If you had the heavy taxation of land values, the Government could buy that land for a much lower price, and I sometimes wonder when the manufacturers and big taxpayers as well as little ones of this country will wake up to the fact that the extortion of land speculators on industry and consumers is extremely heavy. Congress properly provided in the Reorganization Act for a budget, but this has been more honored in the breach than in the observance. It is however a sound policy, and a bipartisan insistence upon its observance in an election year would be a welcome assurance of national unity in intelligence. Since 1932, Congress has by bipartisan action accepted the responsibility of the Federal Government to see that people do not starve, at least too fast, by enacting unemployment compensation and similar legislation, thought the coverage for unemployment compensation should be extended. The acceptance of this principle should determine tax policies. A certain sum, varying in different areas, is necessary to maintain a decent standard of living. Any tax, of whatever sort, excise, consumption, or unemployment, levied on incomes below this minimum impairs the health of such a family. Just as it is arrant nonsense to increase wage rates, when the cost of living is permitted to increase promptly so as to nullify the wage increase, it is folly to levy taxes which result in reducing spendable incomes below the minimum requisite for a health standard of living. While Congress does not plan this year the coordination of Federal, State, and local taxes, your tax bill should make it clear by its tax policy Congress does not approve tax policies of most other taxing authorities which levy the same rate of taxation on buildings, and other labor products that it does on land values, for this means the enrichment of land speculators, and the impoverishment of citizens, for whose well-being the Federal Government, not the State, not the local, has accepted responsibility. We shall probably have a drastic capital levy or repudiate much of the national debt. I would like to read in a few lines from an editorial in the United Mine Workers Journal of July 15, 1946. As you all know, John L. Lewis is not known as an extreme radical, but here is what he says: Sooner or later thinking leaders of labor are going to awaken to the fact that, regardless of what has happened in America before, capital levy tax is the only way out of the financial mess in which this country finds itself. Of course, it is a good deal worse now than nearly 2 years ago when that editorial appeared in the United Mine Workers Journal. Mr. Chairman, I would like to submit a tentative draft of a bill to provide for a tax of 1 percent by the Federal Government on the unimproved value of land of all sorts in the United States. The CHAIRMAN. It will be accepted and filed. A BILL To provide revenue for the defense of the United States, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, beginning July 1, 1948, there shall be assessed and collected 1 per centum of the value of all land situated in the United States, its Territories, possessions, and the District of Columbia, exclusive of the value of improvements therein or thereon, and shall be collected each July 1 thereafter by each State, Territory, possession, and the District of Columbia from the holders of legal title to such land area within their jurisdiction and transmitted immediately to the Treasury of the United States. SEC. 2. "Value of land" shall, for the purposes of this Act, be the sum of the annual rental value of the land or area, exclusive of the value of improvements thereon or therein, multiplied by twenty, or the full assessed value thereof. "Improvements" shall, for the purposes of this Act, mean all buildings, structures, machinery, docks, wharves, bridges, canals, roads and highways, fences, tillage, fertilization, crops, orchards, groves, forests growing or planted thereon or therein. "Holders of legal title" shall, for the purposes of this Act, mean the persons, corporations, associations, partnerships, syndicates, trustees, or any agent or proxy who may have legal title to the land. SEC. 3. This Act may be cited as the "Land Values Taxation Act of 1948." Mr. MARSH. There is one final suggestion I would like to make. You are all interested in reducing expenditures, and we all are. Congressman Engel, of Michigan, was good enough to send me a statement he read into the Congressional Record which points out there are about five captains, and five majors, and three lieutenant colonels, and one and one-half colonels in the Army for every second lieutenant, which seems a very large number. I sincerely hope in considering that provision, I am referring to the Joint Reorganization Act, your own law, you will realize that a good deal of saving can be made in the Army expenditures, because we certainly do not seem to need 21,177 captains, and 20,706 majors, and 12,637 lieutenant colonels, and 4,002 colonels. We have enough generals to run for the presidency as it is without keeping colonels, captains, majors, and lieutenant colonels on top. I would like to refer, in conclusion, to the erroneous statement which Mr. Hanes made in his very able presentation, that Europe was going to the "bow-wows" with what he calls socialism. He read an editorial from yesterday's New York Herald Tribune. I would like to incorporate some figures from the current issue of United News and World Report. You all know David Lawrence is not an extremist. He pointed out, under the degree of socialization adopted in Europe, many European countries' industries have the greater increase in production. Of course, the lowest in two or three which were severely bombed. In Britain output of goods has gained 9 percent since 1946 and is back to a point only 10 percent below 1937-a good year. It is better than 1938. Steel production in Britain reached a new high in January, and records are being set in the output of tractors, automobiles, machinery, and chemicals. However, a shortage of scrap threatens to cut steel output by 10 percent before the year is out. Coal production is increasing, and coal can now be exported for the first time since before the war. In France, production is better than in 1938 and only 7 percent below the prosperous year of 1937. Last year 20 percent more goods were turned out than in 1946, and output still is rising. In January French gains over 1938's average monthly output were 20 percent in coal, 5 percent in steel, 38 percent in tires, 15 percent in paper. Output of textiles rose 35 percent last year, but still is below prewar. Textiles, perfume, and wine are major export items. Italy managed last year to step up production by 35 percent, but it still is 34 percent below the average of prewar years. Specifically, the Italians last year increased steel output by 42 percent, coal 20 percent, automobiles 120 percent, and cement 60 percent. But there are still 2,000,000 unemployed in Italy, and worker efficiency is only about three-fourths what it was before the war. Total production in the United States-British zones rose only 17 percent in the last year, to put the area at 40 percent of the 1937 level. Ruhr coal output is increasing, but other industries are faltering. Germany cannot even supply parts for machinery previously sold to other countries. The depression level of German industry, plus lack of trade with eastern Europe, is handicapping continental recovery efforts. (American military government has opposed social ownership in Bizonia.) I would also like to point out to you that after the People's Lobby put the matter up to the State Department rather vigorously, we got a point-blank statement that under the European recovery plan there was no intention to discriminate against social ownership in any country when adopted by the free will of the people. Mr. Chairman, to my mind, this session this morning is one of the most interesting of 30 years I have been here. It reminds me of a book I read a few years ago, The Twilight of Capitalism, and that is what it is. |