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No. 20 "The Legislative Situation" Speech of Jouett Shouse, March 7, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_20 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 20 "The Legislative Situation" Speech of Jouett Shouse, March 7, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Pamphlets Available * Copies of the following pamphlets may be obtained upon application to the League's national headquarters: American Liberty League Speech by Jouett Shouse The Tenth Commandment Why, The American Liberty League? Statement of Principles and Purposes Progress vs. Change Speech by Jouett Shouse Recovery, Relief and the Constitution Speech by Jouett Shouse American Liberty League Its Platform An Analysis of the President's Budget Message N. R. A. Its Past, and Recommendations for the Future Analysis of the $4,880,000,000 Emergency Relief Appropriation Act Economic Security A Study of Proposed Legislation Democracy or Bureaucracy? Speech by Jouett Shouse The Bonus An Analysis of Legislative Proposals The Constitution Still Stands Speech by Jouett Shouse Inflation Possibilities Involved in Existing and Proposed Legislation The Thirty Hour Week Dangers Inherent in Proposed Legislation The Pending Banking Bill A Proposal to Subject the Nation's Monetary Structure to the Exigencies of Politics * Write to AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… The Legislative Situation â˜… â˜… â˜… Speech of JOUETTSHOUSE President, American Liberty League March 7, 1935 AMERICAN LIBERTY LEAGUE National Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… Document No. 20 "The Legislative Situation" â˜… Jt is now approximately six months since the formation of the American Liberty League was announced. Inasmuch as it is an organization which appeals to the public for support an accounting of its activities appears desirable. The League is unique in the recent history of public affairs in America. It has attracted nationwide attention and it has been the recipient of criticism so violent and so widespread as to constitute inspired propaganda. Its purposes have been misrepresented and maligned. Its objectives have been falsified. Its ultimate aims have been distorted. Some of the criticism heaped upon it has been sincere. Much of it has been selfishly political. Part, at least, has been instigated by the fear of having the League fulfill its announced function of dealing frankly and fully in a non-partizan way with pending public questions. Among its detractors have been those prominent in the Government, as well as other ambitious politicians masking behind whatever garb, and publicity-seeking demagogues who would resort to any method to obtain newspaper notice. Some sought to destroy the League before it could start and there were those who tried to place every possible impediment in its way. The only answer to be drawn from all of this is conclusive and persuasive argument as to the definite need of the League in the public affairs of America at the present juncture. But let it be recorded tonight despite obstacles, despite calumny and misrepresentation, despite criticism of all sorts, the League is still here and is going to continue along the lines on which it was projected to render to the American people a constructive service in a time of grave danger and serious import. When the League was or-Non-partizan ganized its sponsors stated Attitude that one of the main ob- Maintained jectives in its educational program would be to study and to report on important legislation under consideration by the Congress. Assurance was given that it would be wholly non-partizan, that it would analyze from a factual standpoint existing problems and base its recommendations without prejudice upon the merits of the proposals under consideration. To that course it has adhered unswervingly. It is neither for nor against the present administration. It is neither for nor against any political party. It is neither for nor against any individual official in public life. Whatever position it takes is based upon definitely enunciated principles and finds its foundation in the desire to do what will tend toward the welfare and prosperity and happiness of the whole people of the Nation rather than any small group or any selected few. Beginning immediately after Congress convened, the League has placed before its membership and before the public successively seven discussions of important legislative matters. It has commended the position of the administration whenever it could, but it has not hestitated to criticize where criticism seemed necessary in the public interest. Immediately after the President presented his Budget Message to the Congress the Research Division of the American Liberty League prepared a factual review of the recommendations made for the fiscal year ending June 30, 1936. It was the first adequate analysis that came from any source and it disclosed to the public important features of the recommended budget which previously had not been revealed. The next factual study which the Liberty League placed before the public was a review of the National Recovery Administration with recommendations for its future. This was fol- lowed a week later by an analysis of the Emergency Relief Appropriation Bill which proposed to place in the hands of the President the gigantic sum of $4,880,000,000 to be expended in any way that he might see fit, without the slightest restriction by Congress and without the exercise of the constitutional duty of Congress to deal with questions of policy relating to the expenditures. Then came the only detailed analysis that has been made of the Economic Security legislation on which extended hearings were later ordered by the Committees of Congress. The next document was a discussion of the Bonus, then a pamphlet on inflation, and the first of this week an analysis of the bills now pending which provide for the imposition upon industry of a thirty-hour week. Let us analyze briefly the position taken by the Liberty League upon each of these important matters. In the discussion of the The Budget Budget Message attention Message was called specifically to Analyzed the statement made by the President early last year that every effort should be made to balance the budget, including expenditures for recovery and relief, for the fiscal year 1936, and when he suggested that a debt limit of $31,834,-000,000, which he estimated as the total by June 30, 1935, should represent the maximum debt to be placed upon the Nation. Despite this declaration it was pointed out by the League that this year the President suggested an increase of the debt to $34,239,000,000 and that he approved regular expenditures, entirely apart from relief and recovery, more than a billion dollars in excess of the similar appropriations made under his administration for the year 1934. The League asserted, as had the President himself in most striking language on March 10, 1933, that the soundness of the Nation's financial structure will be jeopardized by a debt burden which is excessive, and urged that the Congress give most careful consideration to the appropriations which were requested, in order to hold them within proper bounds and to exercise the economy that should be expected of a prudent government in time of financial danger. In the discussion of the National Recovery Administration the point was made that this agency of the Government had been created because of an emergency, that any continuance of the unusual Executive authority conferred under it should be for a limited period, that until the emergency passes there should be no attempt to enact permanent legislation for the control of American industry, that self-government in industry should be the goal in any plan to promote recovery, that there should be a minimum of bureaucratic regulation, that law-making by Executive order and some other improper practices of NRA should cease, that undue encroachment upon the sovereignty of the States must be avoided and that provisions of law respecting relations of employers and employees should be fair to both parties. Since this analysis was published the President is understood to have recommended the extension of the present NRA Act for a period of two years. That is probably a reasonably satisfactory solution of the problem at this time. The re-organization now under way apparently contemplates the elimination of many of the most undesirable practices that formerly prevailed and decisions by the Courts wiU soon clear the air as to the exact powers which may be exercised as well as those which may not. To permit the NRA to die upon the expiration date of the present legislation the middle of next June would involve too drastic a readjustment by industry and, therefore, the recommendation of the President, in view of present conditions, and particularly with a series of important Court decisions immediately impending, seems wise. In the analysis of the Economic complicated bill relating Security to Economic Security the Program Liberty League took the position that existing conditions due to the depression warrant a most sympathetic attitude toward both unemployment insurance and old age pensions. Attention was called, however, to the fact that the legislation is not of an emergency character, that it should be given most careful consideration by the Congress, that any legislation enacted should be based on sound fiscal policies and should not impose an excessive burden upon the Federal Government or a burden upon industry such as it may be unable to bear at the present time without seriously retarding recovery. It was also urged that inasmuch as four different subjects are dealt with in the pending bill it might well be separated into several independent measures in order that each should receive the study to which it is entitled. Attention was also called to the effect of proposed old age pensions upon the finances of the Government in future years as voiced in a report of the President's Committee on Economic Security. It was urged that any old age annuity system based on contributions by employers and employees should be self-sustaining and that to the greatest extent possible all social insurance plans should involve reliance upon the cooperation of the States. It was further pointed out that while there may be justification for the exercise of the Federal taxing power to assure laws for unemployment insurance in the different States, the attempt in the bill now before Congress to compel the States to write into their laws certain controversial features with reference to labor is an improper use of Federal authority. The Bonus pamphlet issued by the Liberty League was based upon approval of the position taken by the President in his letter of December 27th, last, to the Commander of an American Legion Post in Texas. 6 In the study of the dan-Inflation ger8 0f inflation the ad-Dangers ministration was com-Illustrated mended for its refusal to utilize the power given it in May of 1933 and the dangers inherent in inflation were pointed out through recent experiences in Russia, Germany and France. A striking instance was cited in Germany. There the entire mortgage indebtedness of the people, estimated at ten billion dollars in 1913, could have been paid off in November of 1923 with one American cent one cent, mind you. But while indebtedness was wiped out, along with it went the endowments of hospitals and colleges, pensions and annuities and fixed income of all the small salaried classes. The danger of inflation once begun, the difficulty of controlling it was strikingly voiced. In the recent study of the thirty-hour week bill issued on last Monday the administration's attitude in opposition to the bill was pointed out and endorsed and there was emphasis on the fallacy of the argument that this bill, if enacted into law, would increase purchasing power or stimulate industry. On the other hand, the position of the Liberty League is that the bill would retard recovery through higher prices and reduced consumption, that while purporting to aid one class of citizens it would in reality injure all classes, that it involves an unwarranted attempt to control production in violation of constitutional principles and that it would be impossible to enforce even with a vast new bureaucracy larger and more powerful than any heretofore established in our Federal Government. This brief review of these various important matters upon which the League has taken a definite stand shows that in frequent instances it has been able to endorse the position of the administration and that it has been glad to give such endorsement whenever the opportunity offered. 7 Now let us enter into some discussion of the Emergency Relief Appropriation Bill which involves an appropriation of $4,880,000,000 and which has been a subject of protracted controversy in the Senate and before the country. What has been the position of the American Liberty League on this measure? Certainly we have had no quarrel with the administration upon the question of adequate relief for the unemployed. In one of the first announcements after the organization of the League our Executive Committee six months ago made this statement: "The American Liberty League thoroughly recognizes the obligation of our government to come to the relief of the men and women who are in distress because of unemployment through no fault of their own, or are suffering from affliction over which they could have no control. And this we firmly believe can be done without violation of our Constitution or of American traditions." Therefore, with the general objective of the bill the League was entirely in accord. When the President in his message to Congress on January 4th laid down two principles, namely, the return of care for the unemploy-ables to their own communities and the substitution of work relief for the dole wherever possible, we heartily endorsed his stand. Permanent dependents should never have been placed upon the Federal rolls and unquestionably the line should be drawn sharply between those who are willing to work if work is provided and those who try to compel their support at the hands of a paternalistic government. We commended the attempt to draw this line and we pointed out that there are desirable undertakings, not costly and not superfluous, in which work relief can be utilized. On the other hand, we called attention to the fact that the Public Works Administration, the purpose of the creation of which was solely to put men back to work, had not succeeded in that objective, that it had allotted funds for extravagant buildings and other unnecessary projects and 8 had encouraged and financed the invasion of fields of private enterprise by Government agencies. We did not hesitate to say that if a continuance of such policies was to be tolerated in case Congress should turn over to the President this gigantic sum of $4,880,000,000, the American people of all classes would fare far better by the application of a system of direct dole. When the Emergency Relief Bill was first before the Senate an amendment was adopted which would have compelled the payment of the prevailing wage scale on all expenditures made under it. Clearly the President was right in objecting to that amendment. The principle which he enunciated in his January message of paying less than the regular wage scale for work relief, in order that men on relief would take advantage of the opportunity for regular employment whenever offered by private enterprise, was a sound principle that deserved endorsement at the hands of Congress. The objections raised by the Liberty League to the measure in the form in which it was sent to Congress from the White House were that it was clearly unconstitutional under the decision rendered by the Supreme Court this year in the Amazon Petroleum case, and that it represented an utter abdication of the important power of Congress over appropriation of public funds. These objections were urged as earnestly as possible, both in written documents and in public speeches. While the final form the $4,880,000,000 biU will take cannot at Relief Bill this moment be predicted, Improved Jt is gratifying that as re- ported out the second time from the Senate Committee on Appropriations it contains an allocation of funds, flexible as it should be, yet representing a general expression of the views of Congress as to the purposes for which the money is to be expended. Though a marked improvement over its original 9 form, there is still question whether the bill meets constitutional requirements as laid down in the Amazon Petroleum case. It will be recalled that in that case the Supreme Court made this important point: "If section 9 (c) were held valid, it would be idle to pretend that anything would be left of limitations upon the power of the Congress to delegate its lawmaking function. The reasoning of the many decisions we have reviewed would be made vacuous and their distinctions nugatory. Instead of performing its law-making function the Congress could at will and as to such subjects as it chooses transfer that function to the President or other officer or to an administrative body. The question is not of the intrinsic importance of the particular statute before us, but of the constitutional processes of legislation which are an essential part of our system of government." But apart from constitutional features there are other points of the relief bill upon which Congress should pass. Here is a list of enumerated projects for expenditure of the four billions: Roads, streets, highways and the elimination of grade crossings. All right. Rural habilitation and relief in rural areas. If wisely allocated. All right. Housing. Good, if not an unwise duplication of existing facilities. Civilian Conservation Corps. An excellent plan for taking care of the youth. Flood relief, sanitation, prevention of soil erosion, reforestation. All of them worthy ends. Projects for professional and clerical persons. Many of them certainly need help. Public projects of States and local governments and rural electrification. These two are open to question. Is it proposed to duplicate utility facilities at the expense of investors in existing plants? Is it the aim of the administration to expend this money of the taxpayers for further competition by government with industry? Does the President purpose the establishment of other projects similar to the Tennessee VaUey Authority? 10 Into this Congress should inquire carefully and if there are to be power projects created, whether along the Missouri River, the Arkansas River, or any other river, the authorization must be granted specifically by Congress and not assumed under a general appropriation biU for purposes of relief and employment. There are other factors which should be taken into account and upon which the Senate should act before it passes the bill. Laying aside the question as to whether or not it is possible to initiate enterprises that would within a year absorb the four billion dollars provided for work relief, there should be a limitation as to the ultimate cost of any particular undertaking that may be formulated. The fear has been voiced in important quarters that, without limitation by Congress, certain gigantic enterprises might be begun with a portion of this money which would require the expenditure of many additional billions before they could be completed. It is not a question of the good faith of the President. It is a question of the duty of Congress as custodian of the taxes of the people to see that neither by intent nor inadvertence could any such situation arise, and to effect this purpose Congress should lay down a flat rule that would compel the completion within the limitations of the appropriation here given of any undertaking commenced out of it. The President seems confident that the passage of this bill will enable him to substitute work relief for the dole. If the appropriation is made let us hope that result can be realized speedily. But regardless of a worthy optimism, certainly months will be required before the change can be made, especiaUy in view of the lack of preparation for expenditure as evidenced by the administration's own witnesses before the Senate Committee. As a result, the present methods of direct relief must continue in a vast number of instances for a considerably longer time. 11 There are two questions Issues appertaining to direct re- That Must lief with which the ad- Be Faced ministration has thus far refused to deal. One of them is the payment of relief to workers on strike. The other is the payment of relief to aliens. In both important principles of public policy are involved and Congress should make declaration concerning both in connection with the pending bill. Is there any good reason why this Government should continue to support at the expense of its taxpayers a huge horde of aliens who have not made a pretense of attempting to become American citizens and, insofar as can be told, who have no idea of taking any such steps? What nation would support our citizens who were alien to it and who became a burden upon it? By what right are our people taxed in order to supply money for these aliens? The Relief Administrator and his assistants state frankly that the only question which they consider is the need of relief. Assuredly it is the duty of some branch of the Government to take a definite position in this connection on behalf of America and American citizens and to refuse to pile up further the burden of taxation upon our citizens of this and of future generations to care for those for whom we have neither responsibility nor obligation and some of whom at least, from many standpoints, it would be highly desirable for us to deport. I have gone into detail with reference to this relief bill for each of several reasons. It involves a larger appropriation than was ever before contemplated in a single measure save in time of war four billion, eight hundred and eighty million dollars and all of it to be spent for relief. Do you realize what a billion dollars means? Dr. Kemmerer of Princeton University uses a striking illustration to drive the matter home. A billion dollars, according to him, means one 12 dollar for every minute since the birth of Christ, and therefore four billion, eight hundred and eighty million dollars means four dollars and eighty-eight cents for every minute since the birth of Christ. This is a sum of money almost incalculable in its size and in its potentialities. By the bill as sent to Congress from the administration it was to be turned over to the President without any suggestion as to the method of its expenditure, without any limitation save that it should be used for relief and without any declaration of policy on important questions involved. The power is still huge, but Congress has injected certain directions and it is to be hoped that before the bill is completed others will be included in addition. The American Liberty League was the first organization to call attention to the implications of the bill and its inherent dangers. We have done all we could to induce changes in the bill, but, as pointed out tonight, we have favored much that was involved. We have not sought a reduction in amount. We have been thoroughly in sympathy with the objective. We have opposed local allotment of the funds involving a Congressional "pork barrel." We have felt that the President was right in his contest over the so-called McCarran Amendment. We have asked only that Congress should make the bill conform to the definite specifications of the Supreme Court as laid down in the Amazon Petroleum case, and should enunciate necessary policy. That is the record. It gives striking evidence of the attitude of the League. We are neither for nor against the administration. We shall support it when we can. We shall not hesitate to oppose it when that course seems necessary. The Constitution provides Executive three separate and dis- Encroachments tinct departments of our On Congress Government Executive, Legislative and Judical. The Legislative branch has the same responsi- 13 bility to perform its duties as does the Executive branch. Unfortunately over succeeding years we have witnessed encroachment upon the powers of the National Legislature. The President is supposed to suggest; the Congress is supposed to act. In acting it may either accept or reject the advice of the Executive. The legislation that it passes should be written by the Congress. It should welcome helpful and constructive suggestion from any source, but in no circumstance should it allow itself to be used merely as a rubber stamp to give form of law to measures sent to it by the Executive. Under the stress of the depression and the need of emergency measures with which to try to combat it, Congress, during the past two years, has exercised little volition. It has seemed content to pass measure after measure sent down from the White House and it has permitted in one of its branches the imposition of "gag rule" which prevented either debate or amendment upon these measures. Fortunately there is a growing disposition, evidenced by recent events, for Congress once more to assume its proper function as the Legislative arm of the Government. It is a healthy sign, one to be commended and it should be welcomed by the Executive. If an increasing disposition is shown to encourage Congress to write legislation the justified resentment of Executive encroachment will subside and proper Presidential leadership will be welcomed. The American Liberty The League League has no delusion Plans for as to its place in the sun. The Future It does not for an instant consider that it has been ordained by any power, either human or Divine, to act as a super advisory body over the Congress of the United States. It has no intention of attempting to express its opinions upon all the legislation that may come before the Congress. It will select only those measures which seem of outstanding importance to the people 14 of the country as a whole. It will continue to produce factual analyses and to offer such suggestions as seem in the public interest without the taint of partizan prejudice or personal bias. During the coming weeks, as in the last two months, from time to time it will give to the American people the benefit of careful study of important matters. In all that it does it will attempt to prove constructive and will hope to prove serviceable. It welcomes to membership any American citizen, man or woman, who believes in the principles enunciated by the Constitution under which we have lived for a hundred and fifty years, who believes in the American form of government as we have known it and who desires to do his part to uphold and defend the Constitution as the living voice of the Declaration of Independence. To join the League is very simple. All that is necessary is to write to the American Liberty League, National Press Building, Washington, D. C. Membership blanks and other literature will be sent upon request. No monetary payment is required. Subscribing members are welcome, but those unable to contribute are likewise welcome. If you believe in the principles for which the League stands you can help to make our work more valuable by joining with us, because with an increasing membership our voice will become more and more effective in connection with such legislative recommendations as we may make. 15