its worst form, because its burdens will be discharged in a very large degree by a few States and a small section of the country" (5. Congressional Record, vol. XXVI, pt. II (House), p. 1298). Representative Adams of Pennsylvania described the income tax as a "tax so odious that no administration ever dared to impose it except in time of war; and you will find that the people will not tolerate it in time of peace. It is unutterably distasteful both in its moral and material aspects. It does not belong to a free country-do you wish to put a tax upon thrift and impose a penalty on success? Do you desire to offer a reward to dishonesty and to encourage perjury? The imposition of the tax will corrupt the people. It will bring in its train the spy and the informer. It will necessitate a swarm of officials with inquisitorial powers. It is a direct step toward centralizaton" (6. Congressional Record, vol. XXVI, appendix, pt. 1, p. 207). Said Representative Hendrix of New York: "It does violence to one of the cherished rights of citizenship in a free republic-the right of complete noninterference. It slaps the fact of public opinion, insults every democratic tradition, disrespects the sacred sentiment of personal liberty, and commits the party to one of the most vicious of political tendencies, the division of the community into classes” (7. Congressional Record, vol. XXVI, pt. IX, appendix, pt. 1, pp. 395–396). "Should this bill pass," said Representative Milliken of Maine, "four-fifths of the taxes due will never be collected, and a comparatively few honest men will bear almost the entire burden. It necessitates a great army of official espials into the private business of the people, which is offensive to the American spirit of independence" (8. Congressional Record, vol. XXI, pt. IX, appendix, pt. 1, p. 306. POSTAL SAVINGS When a postal savings system was first suggested in the Theodore Roosevelt administration, the American Bankers Association passed a resolution condemning "as unwise and hurtful all propositions to establish postal savings banks." "I tell you," said one speaker, "it is entering upon a plan that a free and enlightened nation ought never to touch. Such vast deposits will be the football of politicians and an entering wedge to that deadly peril, paternalism" (9. Proceedings of the thirty-fourth annual convention of the American Bankers Association, 1908, pp. 294, 304). STATE BANK DEPOSIT INSURANCE Another speaker at the same convention, said about a proposal to guarantee bank deposits, "What can be more socialistic in its tendency, more paternal in its purposes, than this wild and illogical scheme and bank-deposit guaranty?" (10. Ibid., p. 281). FEDERAL RESERVE SYSTEM Even that essentially conservative piece of legislation establishing the Federal Reserve System did not escape the socialist tag. At the 1913 meeting of the American Bankers Association, the chairman of the association's currency commission said: "There are a great many different kinds of socialism; but, however the various theories differentiate, they all agree upon the fundamental proposition that the Government should own * * all moneymaking utilities *. For those who do not believe in socialism it is very hard to accept and ratify this proposed action on the part of the Government" (11. Proceedings of the thirty-ninth annual convention of the American Bankers Association, 1913, p. 79). * * Another speaker prophesied state control of all corporations. "If such a forced contribution of the savings of our people invested in the business of banking can be useful, how long before every other form of corporate investment will be subjected to like disposal? And if part can be forcibly taken on the plea that it is for the general good, why not take the whole?" (12. Ibid., p. 83). Like some physicians today, yesterday's bankers feared lay control. "It will readily be recognized that men trained in the banking business and conversant with the necessities of the borrowing public, as well as its ability to liquidate its obligations, could act with better information and clearer judgment than political appointees selected along partisan lines, and with only casual regard for their experience in the business," said the vice president of the American Bankers Association, “a business of such great magnitude and importance to the country's prosperity should be in the control of men educated and trained in such business in the highest degree, rather than in state control. This is not in any sense a political question. It must be solved upon the higher plane of statesmanship and not subjected to the strife and selfishness of political parties" (13. Ibid., p. 62). Health insurance is now added to the list of so-called socialistic proposals. It is in good company. Senator SMITH. I would just like to add that there is a great deal of propaganda both ways. There are two schools of thought in America today. One is that we must have more direction by the Central Federal Government over all our activities; the other is that the States still have intelligence to enable them to run their own affairs locally. I belong to the second class, and I think the burden of proof is on those who want to take away from the States their jurisdiction in these matters. If it can be demonstrated that there is some wide lack of care for our people, let us have the information. I have not seen it yet. It may be shown before we get through. But I certainly believe in recognizing the autonomy of our 48 independent States. It is time we began to study that more carefully and realize why their economy was kept when our Constitution was set up. We are getting into all kinds of jams trying to put the hands of the Federal Government into the States to run their affairs wherein they have the responsibility, and I cannot imagine any governor of a State being so stupid or unfeeling as not to be interested in the health of his people. He never would be reelected if he showed any evidence of that, and to say that we can bypass the judgment of our 48 governors to my mind just does not make sense in this connection-with all due respect to my good friend, Senator Murray. As I say, I welcome his views, but let us have them out in the open. Let us get down to the fundamentals of the thing and understand what this is all about. If they want something like that, they can very easily determine it because we have elections every now and then and support the people that we believe in, so far as the issues are concerned. Senator MURRAY. I appreciate the attitude taken by the distinguished chairman of this subcommittee. The argument he advances is the same argument advanced against every progressive piece of legislation we have had in this country. We had the same attitude with reference to the workmen's compensation law, the same attitude with reference to protection of children, the same attitude with reference to everything that we have had to fight for in this country for the welfare of the people. Senator SMITH. Might I ask the distinguished Senator whether he looks upon Mr. Baruch's position as in favor of Federal industrial health insurance? Senator MURRAY. He is in favor of the program we have presented in S. 1320. Senator SMITH. I didn't notice that he endorsed that particular bill. I thought-however, I don't need to say that, because his speech in full will speak for itself. We will leave that to the reader to determine what his position is. Now, Senator Donnell, will you proceed with the witness? (The correspondence submitted by Senator Smith follows:) AUGUST 7, 1947. MY DEAR GOVERNOR: One of the most important matters before the presen Congress has been the consideration of a national health policy which will brin about a wider medical service to meet the health needs of our people. To the end that this subject might be fully investigated, a subcommittee of th Senate Committee on Labor and Public Welfare has been studying the subjec for some months. This subcommittee is composed of the following Senators Senators Ball, Donnell, Pepper, Murray, and myself as chairman. In the course of our investigation and hearings, two fundamentally differen approaches to the matter have been presented and considered. These respectiv approaches are covered by bills that were introduced in the Seventy-nint Congress and by bills introduced in the Eightieth Congress. Extensive hearing were held last year on the Wagner-Murray-Dingell bill which was one of th measures introduced in the Seventy-ninth Congress. Extensive hearings hav this year been held on S. 1320 introduced in the Eightieth Congress by Senato Murray and others, which bill is the successor of the so-called Wagner-Murray Dingell compulsory health insurance bill, and on S. 545 introduced by Senators Taft, Ball, Smith, and Donnell. Supporters of S. 1320 contemplate a Nation-wide tax collected by pay-roll deduc tions of workers in industry, and other taxes on non-pay-roll citizens, in return for which tax the Federal Government assumes responsibility for the over-all medical care of all the people. Provision for certain decentralization of ad ministration is made in the bill. S. 545, on the other hand, contemplates Federal grants to the several States and challenges the States to develop their own programs for taking care of the health needs of the people within their respective jurisdictions. No special earmarked tax is proposed under the plan. Among the important questions which enter into the consideration of the bills are: (1) What percentage of the population in the various States is not getting adequate medical care today; and what classes-that is, the very poor, the white-collar class, etc.; (2) What States would approve a compulsory tax plan such as S. 1320 calls for, with a Government-supervised medical service; or (3) What States would prefer the S. 545 plan, leaving to the States the determination of policy-that is, compulsory or voluntary group health plans, etc. Our subcommittee would be very much aided if we could have a statement covering the situation in your State on these matters, which I assume could be prepared by the health authorities. I should add that under either plau Federal grants-in-aid are contemplated. Under S. 1320 the Federal tax would cover the entire cost, whereas under S. 545 a matching program is contemplated. Copies of S. 545 and S. 1320 are enclosed. Also as related to these problems, I would appreciate information as to the situation in your State with regard to the following matters: (1) How you handle the health problem in your widely scattered rural areas. (2) How the new Federal aid to hospitals program is working. The assistance of our 48 States with respect to this important matter will be greatly appreciated and I hope you can give us an outline of the situation in your State. In making this request I am acting in the spirit of what I understand is the position of the Governors' Conference-a larger participation by the States in the formulation of important national policies. Always cordially yours, H. ALEXANDER SMITH, Chairman, Subcommittee on Health, JANUARY 23, 1948. To: Hon. H. Alexander Smith, chairman, Subcommittee on Health, Senate Committee on Labor and Public Welfare. From: Melvin W. Sneed, professional staff member. Subject: Summary of reports received from governors in reply to your inquiry of August 7, 1947, relative to consideration of national health policy. 1. State preference relative to S. 545 and S. 1320. To the date of this memorandum reports have been received from 39 of the 48 State governors, many of whom specifically expressed their appreciation for having the opportunity to indicate their views on matters of national policy. The preferences reported with respect to S. 545 and S. 1320 have been classified and summarized as follows: Classification: Favors S. 545 (with or without qualifications) Favors S. 1320__. No preference indicated. Not in favor of either S. 545 or S. 1320_ Report not yet submitted_. Total--- Identity of the States in the respective classifications is as follows: Number of Governors 25 23. West Virginia. 25. Wyoming. 7. South Carolina. 5. Virginia. 48 DEAR GOVERNOR This is in connection with the letter sent to all Governors by Senator H. Alexander Smith, Republican, New Jersey, concerning the two Federal health measures pending in Congress. The letter does not give an accurate description of the two measures and appears to be an effort to obtain support for the bill sponsored by Senator Taft and the Republican Party. Senator Smith has endeavored to give the impression that the WagnerMurray-Dingle bill, sponsored by the Democrats provides for extensive Federal control over medicine. Actually it provides for local operation of a health insurance plan, assisted by Federal funds, under which patients continue to choose their own doctors as they do now. On the other hand, the Taft bill would not care for the entire population but only for "paupers." Also, it would give less Federal help to the poorer States which need such help the most. The Wagner-Murray-Dingle bill proposes one minimum standard of medical care for all the country. 1 Subsequently the Governor of Utah indicated by letter to the chairman that an error had been made in the original report to the subcommittee. The Governor requested that the record show that he did not favor S. 1320. The letter from Governor Maw follows the first Utah report. Senator Smith's letter is carefully written to give the impression that the Wagner-Murray-Dingle bill would encroach upon States' rights. It would not. What it would do is provide enough funds for all States to do a decent minimum job in medical care for its citizens. This The Taft measure would require needy States to match Federal funds. would mean that the more a State needs Federal help to provide adequate medical care, the less aid it would be able to receive. If you are planning to reply to Senator Smith's letter and desire detailed additional information about the two health measures the committee will be glad to supply you with the information. With best wishes, GAEL SULLIVAN, Must have been written around the first of September 1947: Do not know if it went only to Democratic Governors or (b) only to Democratic Governors in what might be considered doubtful States. Hon. H. ALEXANDER SMITH, STATE OF ALABAMA, DEPARTMENT OF PUBLIC HEALTH, Montgomery 4, Ala., September 2, 1947. United States Senator, Princeton, N. J. DEAR SENATOR SMITH: Your letter to Gov. James E. Folsom, in regard to health bills S. 1320 and S. 545, was referred to the health department. In turn, we have taken the liberty of discussing your letter with the committee on medical care of the Medical Association of the State of Alabama. In your letter you asked several questions, which I would like to attempt to answer. 1. It is impossible to give you any adequate figures as to the percentage of population not getting adequate medical care today. Alabama has always had a small number of physicians to serve its population and this became particularly acute during the war. Since the end of hostilities, however, there has been a marked improvement, since not only have the previous physicians returned but there has been a considerable influx of new physicians. In 1945 there were licensed 84 physicians by examination and reciprocity. This number increased to 179 in 1946, and so far in 1947 we have licensed 129. As of the present there are approximately 2,000 physicians practicing in Alabama. 2. It is not believed that Alabama would approve a compulsory tax plan, as outlined in S. 1320. 3. Alabama very definitely would prefer the S. 545 plan. It is our feeling, however, that each State could administer its own plan and should be permitted to work out a program best suited to its own population. 4. Alabama is divided into 67 counties and we have a full-time health department in each of these 67 units. Many of these units need strengthening but the basic organization is present to supply the public health needs of the whole State. 5. Alabama just completed its survey of existing hospital facilities and has set up a State-wide plan. This plan has been approved by the advisory council and public hearings on it will be held during the month of September, so that can be submitted to the United States Public Health for approval prior to the first of October. Indications are that there will be a certain amount of building under this program, although the present high cost of building, coupled with the limitation of one-third contribution from the Federal Government is going to make building prohibitive in some of our most needy areas. I would like to quote from a statement made by the chairman of the committee on medical care of the State medical association: "During the past 20 years in Alabama our death rate has been reduced more than 33% percent. Many of the old causes of death, such as typhoid fever, diphtheria, malaria, and smallpox, have almost been wiped out. We are now proud of our low death rate and invite comparison with any other State. In another 20 years-with our medical school turning out more good doctors-with our State hospital plan in cooperation with the Hill-Burton law building hospitals in every strategic town in our State-with our voluntary hospital and medical insurance plan available to everyone in our State-with such insurance available to the indigent and medically indigent under the Taft-Ball-Smith-Donnell bill, S. 545then, we believe adequate medical care will be available to practically every |