With great deference, therefore, to the views of those who entertain a contrary opinion, it seems to me that there can be no substantial basis for contending that H. R. 3 is open to constitutional objection.

Mr. SMITH. Mr. Chairman, Mr. James Windham, the assistant attorney general of South Carolina, is here.

Mr. WALTER. Yes, sir. Will you identify yourself for the record, please.

STATEMENT OF JAMES M. WINDHAM, ASSISTANT ATTORNEY GENERAL, STATE OF SOUTH CAROLINA

Mr. WINDHAM. I am James M. Windham, assistant attorney general for South Carolina, assigned as general counsel for the South Carolina State Tax Commission, with offices in Columbia, S. C.

First, may I thank you for the opportunity accorded me as a repsentative of the State of South Carolina to appear here before your honorable body. The attorney general, the Honorable T. C. Callison, expresses his regreats that because of previous business commitments he is unable to attend this hearing.

My statement shall be short, and I shall seek not to delay this hearing by a protracted discussion of legal decisions with which this subcommittee, I am sure, is familiar.

The aims and purposes of H. R. 3, as expressed so eloquently by its author, the Honorable Howard W. Smith, of Virginia, in his speech before the House of Representatives on Thursday, January 6, 1955, and carried in the Congressional Record, are indeed most laudable, and I should like to take this opportunity, speaking on behalf of the State of South Carolina, to go on record as endorsing its objectives. However, as my title has probably indicated to you gentlemen, my primary interest has to do with the impact of the decision of the United States Supreme Court in the case of Kern-Limerick, Inc. v. Scurlock, decided February 8, 1954, which has raised serious questions regarding the matter of intergovernmental taxation. In this case, it will be recalled, the Court held that forms of contracts where governmental immunity is not waived by Congress may determine the effect of State taxation, and went on to deny the State of Arkansas through its commissioner of revenue the right to collect from a vendor the Arkansas gross receipts tax on the sale of certain equipment by that vendor to a private contractor with the Navy Department. As stated before, while South Carolina heartily endorses H. R. 3, it is feared that its provisions may not remedy the situation which arises as a result of the Kern-Limerick decision. For this reason, it is suggested that there should be added to this bill the following

Incidentally, I might parenthetically add here I have not had a chance to discuss with Judge Smith the specific ideas that we have in mind, but at an earlier hour this morning I did hand to him this proposal which I am about to read. I am not speaking for him, because I have not had an opportunity, as I say, to have his consent expressed.

Anyway, for this reason it is suggested that there be added to this bill the following:

Except where such power is specifically granted, no act of Congress shall be construed as indicating an intent on the part of Congress to delegate to or confer upon the Government of the United States, or any of its instrumentalities, the

power to confer status upon private contractors, or persons claiming under them through forms of contract or otherwise, so as to entitle such contractors or persons to benefits of the constitutional immunity of the United States and its instrumentalities to nondiscriminatory State and local taxation.

It is believed that by this addition H. R. 3 will accomplish the purposes and aims of its author and supporters.

I might add that there are presently pending several suits in my State involving considerable sums of money, all having to do with the right of the State to collect sales and use taxes from private contractors or their suppliers where those contractors have business with the Federal Government or its agencies. The outlook is for many more such suits with the outcome doubtful unless the Congress provides some remedial legislation of the sort proposed by Mr. Smith. Again, please let me express my appreciation to the honorable chairman and members of this subcommittee for the opportunity of being heard.

Mr. WALTER. Are there any questions? If not, General, thank you very much.

Mr. CHELF. General, let me say that by the fact that some of us are not questioning there is no indication, by any stretch of the imagination, that we are not interested. We have so many people who desire to testify this morning that we are trying to expedite the matter as we go along.

Mr. WINDHAM. Thank you.

Mr. CHELF. We are paying attention to very word you utter, you may be assured.

Mr. WALTER. Judge Smith?

Mr. SMITH. Mr. Chairman, Mr. Douglas Bergman, a member of the Texas Legislature, is here representing the speaker of the House of Delegates of the State of Texas.

Mr. WALTER. Will you state your name for the record, please?

STATEMENT OF DOUGLAS BERGMAN, MEMBER, STATE
LEGISLATURE, TEXAS

Mr. BERGMAN. Mr. Chairman, my name is Douglas Bergman. I am at present a member of the Texas Legislature. I have formerly been assistant attorney general of Texas and assistant attorney for Dallas County. I am a partner of the law firm of Irion, Cain, Bergman & Cocke, of Dallas, Tex.

I am appearing before this committee in support of H. R. 3, by designation of the speaker of the House of Representatives, Texas Legislature, Mr. Jim Lindsey.

The reason for this is I think the great majority of the members of the Legislature of Texas are vitally interested in the passage of this bill or some similar legislation.

Texas, as many of you know, is, has been, and I hope, will continue to be a stronghold of States rights.

I do not have a prepared statement. I am going to talk more or less from just what I think. I do feel in the last 15 or 20 years that there has been a tremendous invasion not by Congress but by judicial interpretation and decision of the powers that had always existed in the States prior to that time to legislate within those States controlling

the many matters that concern the public welfare and police power of a State.

I personally feel that through not particularly a stretch of the Constitution and the commerce clause and the welfare clause, et cetera, but by an annihilation of the intention of those provisions of the Constitution as originally intended at the time of the framing of the document, that the Federal Government has invaded the powers of the States to such a degree that in a great many fields of endeavor and fields of legislation they have completely done away with and destroyed the powers of the States.

Mr. WALTER. Do you not feel in that connection that if the Smith act in effect prevented the State of Pennsylvania from legislating in the field that it did in the Nelson matter, that act would be unconstitutional?

Mr. BERGMAN. No; I do not.

Mr. WALTER. I just do not think the Federal Government can legislate in such a fashion within the framework of our Constitution. Mr. BERGMAN. I do not agree with you, Mr. Chairman. I do not think the question is a question of constitutionality.

There is no question but what the Federal Constitution expressly grants to the Congress the right to exclusively legislate in certain fields. But by the same token I think the Constitution also provides or anticipates that the States and the Federal Government will walk hand-in-hand down the judicial field in many other fields of endeavor. Now, for instance, the Nelson case I understand probably is the origination of the Smith bill. We have passed in 1952 in the Texas Legislature a similar bill or law. I have not read the Pennsylvania law, but it had similar import, to control and make it a crime to have Communist activity within the State of Texas. Now, if the decision in the Nelson case simply is by implication-what I am trying to get at, Mr. Chairman, is not that the Congress does not have the power in certain instances to preempt the field, but that that is a power which unless expressly set forth by Congress is not conveyed. This has come up through judicial interpretation by the Supreme Court. I for one, as a lawyer and I have practiced law for 21 years do not believe a lawyer can advise a client any more what the effect of legislation will be. You only have to look at the various decisions of the Supreme Court in this field.

Mr. WALTER. Then if the Smith Act did what the Pennsylvania Supreme Court said it did by implication, it has nullified the statute of the State of Texas. In my judgment for that reason it would be unconstitutional.

Mr. BERGMAN. What provision of the Constitution would it violate? Mr. WALTER. It deprives a State of authority to exercise its police power within the framework of its own powers.

Mr. BERGMAN. As I understand the holding in the case, it does not say that the State could not do it within the Constitution; it says that Congress by implication, having passed an all-inclusive law with reference to sedition, by implication therefore has preempted the entire field; and therefore the State cannot, because it did not have the constitutional right to.

The same is true in many other cases, but by the same token, Mr. Chairman, you have cases in other fields-for instance, in the motor

carrier field-where the Court has construed the thing just the opposite.

I feel this way: Certainly it is within the right of Congress to express its intention. I feel that the decisions of the Supreme Court have gone entirely too far in writing into the act of Congress by implication its intention. I cannot see where this act could hurt anybody or anything, to simply provide a measure or a standard of construing an act of Congress as to its effect and the intention of Congress, to be expressed in the act itself, and, in the absence of such an expression, that the Court would be bound in construing the law that Congress had not intended to preempt the field.

The question of constitutionality of such a provision has been raised. To me it is disposed of with the elementary proposition that there are certain fields that the Constitution does expressly provide the Congress shall have the exclusive right to legislate in those fields. Certainly than an act could not be written which would destroy that right. But under the fundamental ruling constitutional construction, if an act can be construed one way and would be constitutional and another way and would not be constitutional, of course the Court is bound to construe it in the manner in which it is constitutional. Therefore this act would only affect those fields of legislation which are not exclusive in the Federal Government, which to me is an extremely important element of return to what I consider was the soundest and most fundamental law, when you could look at a decision of the Supreme Court and you could sit down and advise a client that the law would be that tomorrow; and not that because of some public demand or because of some political expediency or something like that there might be required a construction on almost identically the same set of facts to hold one way in one case and another way in another. That is what I feel like in the last 15 or 20 years we have run into. This bill would expressly lay down a criterion or rule of decisionthat is the effect it would have; simply a rule of decision-that unless Congress so expressed in simple language in the law which it enacted that it intended to usurp the power and preempt the entire field that then so long as a State act was not in direct conflict with if that act would go along side by side with the rights of the States to regulate.

I have often expressed in the Texas Legislature a little saying of mine: I think the best government in the world is where a man can catch a streetcar and go talk to the man who can give him an answer. In the past several years we have gotten far away from that. The average small-business man cannot afford to hire a lawyer to talk to Washington or go talk to some board or commission that has exclusive power, not by act of Congress. You understand, I do not quarrel with the right of Congress to pass an act and say, "We are regulating the entire field." But it is not by that, but rather by construction of the Supreme Court in case after case, in which they say, "It is implied in the act that Congress intended to do it," when nobody in Congress ever had an intention of preempting it when they passed the law.

If I may, I should like to offer into the record a telegram to me from the speaker of the House of Representatives of Texas. It reads:

DEAR DOUG: Sorry cannot make trip with you. Hope these few remarks will assist you before the committee. Am in favor of passage of H. R. 3 or a similar

measure and feel that a large majority of the Texas Legislature would also favor its enactment. If we are to preserve the freedom of our people we must preserve the sovereignty of our several States. Certainly Federal enactments should not continue to strike down otherwise valid and nonconflicting State laws without congressional expression of such an intent.

In closing I should like to say this, in reference to a case I believe Mr. Gay mentioned, the Cloverleaf case. To me that illustrates the futility of the question that you here have before you without the enactment of legislation such as this. In that case, as I understand the facts, the State attempted to inspect certain renovated butter, I believe they call it, of the Cloverleaf Co., and he Court held in that case by virtue of the Pure Food and Drugs Act that Congress had preempted the entire field, and in this particular case it did not. deal with renovated butter, but dealt with, as I understand it-and I am not an authority on butter

Mr. WALTER. We have it here in the brief.

Mr. BERGMAN. It dealt with packing stock butter. By virtue of that holding nobody-neither the Federal Government nor the States-was in a position to regulate the other type of butter, which to me is somewhat foolish. If Congress had said that, all right, but certainly Congress by passing that law did not intend, nor did any Member of Congress in voting for it intend, as the Supreme Court said, to eliminate the power of the State to regulate another phase of the manufacture or inspection of that manufacture of butter.

I appreciate the opportunity of appearing before the committee. I may be somewhat prejudiced along this line, but I do feel that there is a great need for legislation similar to H. R. 3. I think it would be conducive to at least decisions in line with each other and not holdings by the Court in certain phases of business and industry enentirely in conflict with others in another phase of industry or business. In some manner there would be at least a uniformity of decision.

One question was raised about the retroactiveness of this, or its effect on existing laws. I personally feel that if the bill were passed it would have an effect on existing laws. I think it would have the effect of overturning certain decisions of the Supreme Court insofar as those that dealt with activities that were not exclusively within the power of the Congress to regulate are concerned.

There is one other matter I wanted to mention, and then I shall be through. That is, to my way of thinking the Garner versus Teamsters Union case has the effect of completely annihilating and destroying the Texas antitrust laws as they affect employees and employers in Texas. We have passed in Texas what is called more or less the right-towork law, and the law which puts labor unions under the antitrust laws of Texas. To my way of thinking the Supreme Court has in that case, completely, held that the antitrust laws of Texas are a complete nullity insofar as they affect local operations within that State. Mr. WALTER. Thank you very much.

Mr. FEIGHAN. I have just one question, Mr. Chairman.

Mr. WALTER. Yes, Mr. Feighan.

Mr. FEIGHAN. Do I assume correctly that in your opinion if H. R. 3 were enacted there would be no question as to the right of any State to enact legislation on the so-called right-to-work legislation?

Mr. BERGMAN. In my opinion if that were not in direct conflict with the provisions of the National Labor Relations Act or the Taft-Hart