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It must also consider Treasury Department practices which have become formally established. As in all its statutory drafting work a general overall objective is the simplifying of language, and anyone who has had occasion to read provisions of the income-tax law or even fill out a tax-return form, knows that the statutes are in great need of this.

This project affords an excellent illustration of the topflight help which the institute is in a position to obtain for the projects which it undertakes. The chief reporter and his associate chief reporter are law-school professors and are experts in the tax field because of their teaching experience and their experience in private practice and Government work. The work they and their assistants perform is subject to the most careful consideration, review, and approval of a small, select group of tax lawyers. But the matter does not stop there. Before any drafts are submitted to the council or the membership of the institute, a larger group of about 40 tax experts from all parts of the country screens them and discusses them with the reporters and their advisers.

The income-tax project is still being worked upon, and it is not possible to say now that the finished product will be entirely incorporated in the Federal tax statutes. However, it is testimony to the quality of the work and to its ultimate reception to reveal now that in the process of enacting the Revenue Act of 1950, the Congress was aware of the work that is being done by the institute, and in 1 or 2 instances found parts of that work relevant and of sufficient high caliber to incorporate in the statute which it passed.

The American Law Institute today has more than a thousand elected members. Its president is a prominent New York lawyer-Harrison Tweed. William A. Schnader, former attorney general of Pennsylvania, and John G. Buchanan, of Pittsburgh, are its vice presidents. Its treasurer is William Dean Embree of New York City. Former United States Senator George Wharton Pepper is the chairman of the council. Represented on the council from the law schools are Fletcher R. Andrews, of Western Reserve University; Edwin D. Dickinson, of University of Pennsylvania; Albert J. Harno, of University of Illinois; Frederick D. G. Ribble, of University of Virginia; Austin W. Scott, of Harvard University; and Harry Shulman, of Yale Law School. On the council are judges from many courts: Hon Augustus N. Hand, Hon. Learned Hand, Hon. Joseph C. Hutcheson, Jr., Hon. John J. Parker, Hon. Orie L. Phillips, and Hon. Thomas W. Swan of the United States courts of appeals; Hon. James A. Fee and Hon. Charles E. Wyzanski, Jr., of the United States district courts; Hon. Laurance M. Hyde, of the Supreme Court of Missouri and Hon. Henry T. Lummus, of the Supreme Court of Massachusetts.

Making up the rest of the council are prominent practicing lawyers from all over the United States: Dillon Anderson of Texas, Francis M. Bird of Georgia, Howard F. Burns of Ohio, Herbert W. Clark of California, R. Ammi Cutter of Massachusetts, Norris Darrell of New York, Charles E. Dunbar, Jr., of Louisiana, Earl G. Harrison of Pennsylvania, William V. Hodges of New York, Joseph F. Johnson of Alabama, Monte M. Lemann of Louisiana, William L. Marbury of Maryland, Robert N. Miller of the District of Columbia, Timothy N. Pfeiffer of New York, Henry Upson Sims of Alabama, Eugene B. Strassburger of Pennsylvania, Thomas Day Thacher of New York, Floyd E. Thompson of Illinois, Robert B. Tunstall of Virginia, and Cornelius W. Wickersham of New York.

The general work of the Institute is under the direction of its director, Judge Herbert F. Goodrich, of the United States Court of Appeals for the Third Circuit. John E. Mulder, a former law-school professor and practicing lawyer, is in charge of its program on continuing legal education. John R. Ellingston has been responsible for the handling of the youth correction authority program. Were it 1ossible to list all the members of the institute, the names of many other prominent lawyers, judges, and teachers would appear.

For the privilege of helping to improve the law, institute members and officers are required to pay their dues annually, incur the expenses of traveling to and attending institute meetings, and spend considerable hours doing their homework for such meetings. Their purpose must be an entirely unselfish one; for, so far as anyone has ever been able to discover, membership in the institute is not a means for obtaining wealthy clients nor do its meetings offer the customary inducements for fun and riotous living that are part and parcel of most conventions. In the final analysis, the institute is an organization where the members participate in the fulfillment of a sense of public obligation and duty to help in the realization of the sole purpose and reason for the institute's existence-to improve the law under which men live.

GENERAL REVENUE REVISION

Judge GOODRICH. We got into this work on tax in 1946 through a conversation Mr. Norris Darrell, of New York, had with Mr. Colin Stam, chief of staff of the Joint Committee on Internal Revenue Taxation. That informal conversation led to the suggestion that perhaps a body such as this which was interested primarily in research could do a useful piece of work in this field. Before we got into this we consulted a number of people here in Washington, members of the Joint Committee on Internal Revenue Taxation, and I find a quotation from you, Mr. Chairman, that it was one of the most constructive things that could be done. And a statement from Mr. Stam that he was delighted to have this committee on taxation. And a statement from Senator Millikin that he welcomed the suggestion with a great deal of pleasure. And Senator George said that it was a very fine thing to do.

And with that encouragement we submitted a request to the Maurice and Laura Falk Foundation of Pittsburgh for a subvention, which was granted. This was back in 1948.

Our first difficulty in approaching the job was the question of whether we would not really be invading the field of policy, which we thought should be reserved for the Congress and not for a voluntary body. The decision was made that we were going to stay away from policy-legislation questions insofar as we could. Whether the income of a corporation is to be taxed or the payroll taxed is not our business. Those are rather distinct things which we stay away from. The question of whether there should be a capital-gains tax, as distinguished from some other kind of tax, is something that we stay away from, and we have endeavored to make our work on the technical level, and perhaps I may take a few minutes to describe how we go about it. We have employed two persons who do the bulk of the work: One, a former counsel, tax counsel for the Treasury, and the other, a former law-school dean.

We have gotten together a rather interesting group of tax lawyers to act as a policy committee, men like Paul Rodewald, of Fennsylvania; Robert Miller, of Washington, D. C.; John Paul Jackson, of Texas; Norris Darrell, of New York; Harry Rudick, of New York; Erwin Griswold, of Massachusetts; and Randolph Paul, of New York. Their meetings have been frequent and hard.

We have had the good luck to get special consultants who have been very helpful. These consultants are Messrs. Thomas N. Tarleau, present chairman of the American bar section on taxation; Edwin S. Cohen, who is to appear later today; Mr. H. Brian Holland, now Assistant Attorney General in charge of taxation; Mr. Maurice Austin, accountant and lawyer; Mr. John Paul Jackson; and Mr. Mark H. Johnson. They have all been exceedingly helpful in giving us technical advice in this particular field of taxation."

Then we have gotten together an advisory committee of some 50 or 60 lawyers who meet every year in sessions of 2 or 3 days, and we submit to them the reports of the policy committee, which they have worked out; and the work with that committee has been a great pleasure and a great surprise. I think it is perfectly remarkable the general objective which we get in going over these things. People feel, of course, that there needs to be some revision and reductions, perhaps, in taxes, but at the same time they recognize that the Government has got to have some money if it is going to operate. And

I think we have been remarkably successful in talking these things out enough so that the majority of the problems have been kept in mind.

In addition to this machinery-and I hope I am not talking too long on the machinery angle-but we do talk to informed judges, and tax lawyers, not only about tax problems, but about a great many other things.

We feel that this thing is not being talked over too hurriedly. We recognize we are not doing a perfect job, but we think we are doing a helpful job.

And we want it understood, Mr. Chairman, that we are not down here advocating this or any other publication. We are not a propaganda organization; we are a research organization, and if the work we are doing is helpful to you in helping you carry on your legislative responsibilities, then we would be only delighted to have it made available to you.

We have been working on this for some 5 years, and we will move ahead with another phase of taxation, on which we will want more counsel, notably that of estate and gift taxes. Whether we will find we can give any help as it applies to that field, we do not at the present time know. The material runs into a rather large volume. We have tried to explain both through the commentators on the tax and through the lawmakers what the problems were and how we are met with them and why, and it makes a great deal of material, both in magazines, and in comments. But it constitutes the best text on the problems in this field of anything that I know of.

And if the committee cares subsequently to have it as a part of its records, of course we will be delighted to submit it to you if you want it.

May I say, Mr. Chairman, in closing, that we are not urging any particular piece of legislation, but we submit this for whatever help it may give to you people who are charged with this very heavy responsibility.

The CHAIRMAN. We want to thank you, Mr. Goodrich, and through you the American Law Institute. You have undertaken what I consider a monumental and a very important piece of work for the whole country, and you are making a very helpful contribution. After all, we have to depend upon the trained minds of the people who are in the field of taxation to help us do this job. We cannot do it alone, and inasmuch as there has been no recodification since 1865, I think we will all agree with you that after some 5 years' work this is one of the largest and most comprehensive legislative jobs that we can undertake. And again we wish to thank you.

Judge GOODRICH. Thank you very much, Mr. Chairman.

TOPIC 36-RETIREMENT FUNDS FOR SELF-EMPLOYED AND OTHERS NOT COVERED BY EXISTING PENSION PLANS

The CHAIRMAN. Our first witness on topic 36, retirement funds for self-employed and others not covered by existing pension plans, will be our very distinguished colleague, Hon. Eugene Keogh, of New York. We are very happy to have you with us, Mr. Keogh.

STATEMENT OF HON. EUGENE J. KEOGH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. KEOGH. Mr. Chairman and members of the committee, I am sure I need not tell you how pleased I am to be here, and I would like just a moment to state to you my appreciation of the great service which this committee is rendering after the adjournment of the Congress in completing the agenda of these most important items.

Mr. Chairman, I have no prepared statement, and in view of that fact I shall try to be as brief as those who have no prepared statements usually say they are going to be, because in the room there are so many others who will discuss the provisions of the subject matter covered by this topic.

That subject matter is incorporated in 4 pending bills, 4 identical bills: 1 introduced by Representative Jenkins, of Ohio; 1 by Representative Camp, of Georgia; a third by Representative Elliott, of Alabama; and the fourth by me.

Those bills are in every respect identical to the bills that were pending before the 82d Congress, which bills were introduced by our very good and distinguished friend, the chairman of this committee, and myself.

They simply seek to set up a system whereby the self-employed and professional groups in this country, who up to now have been completely overlooked in the scheme of things, in providing a pension system, a system which might provide a voluntary retirement system or annuity for them.

I have several points that I wish to call to the committee's attention, Mr. Chairman, and there will be others who will follow me who will explain the provisions of the pending bills, but I should like to make the several points.

First is in the nature of a political point. This was urged by the Representative from Massachusetts, Mr. John McCormack, in his capacity as chairman of the platform committee at the Democratic National Convention in 1952, and then there was a second statement by the then candidate for President in 1952, and this is an excerpt from his state of the union message of February 2, 1953, and in the exchange of correspondence which is contained in a statement which was previously inserted in the Congressional Record, but which I respectfully ask permission to incorporate in the hearings as a part of these remarks.

The CHAIRMAN. Without objection, the statement will be made a part of the record.

(The statement referred to follows:)

RESTRICTED RETIREMENT FUNDS FOR PROFESSIONAL AND SELF-EMPLOYED GROUPS (Extension of remarks of Hon. Eugene J. Keogh of New York, in the House of Representatives, Wednesday, February 25, 1953)

Mr. KEOGH. Mr. Speaker, the efforts to fill an important gap in our pension system have been renewed in this Congress with the introduction of H. R. 10, by Representative Jenkins, Republican, of Ohio; H. R. 2692, by Representative Camp, Democrat, of Georgia; and H. R. 11, by me. These bills are similar to the one introduced by Chairman Reed, Republican, of New York, in the S2d Congress-H. R. 8391.

The purpose of the bills is to provide means whereby those engaged in the professions and those who are self-employers may obtain tax deferment by making limited contributions to a restricted retirement fund set up in accordance with the provisions of the bill. Ten million people are affected by this legislation who are otherwise unable to provide for retirement benefits. The principle of this legislation was endorsed by President Eisenhower in a press release under date of October 24, 1952. At the same time, I undertook to communicate with Representative John W. McCormack, Democrat, of Massachusetts, in his capacity as chairman of the platform committee of the Democratic National Convention of 1952, in which it is indicated that the Democratic platform was felt to have included the proposal embodied in the foregoing bills.

In order that the record may be complete, I have obtained the consent of Representative McCormack to inserting my letter to him and his to me. Those letters are as follows:

CONGRESS OF THE UNITED States,

HOUSE OF REPRESENTATIVES, Washington, D. C., August 4, 1952.

Re voluntary pension plans.

Hon. JOHN W. MCCORMACK,

Federal Post Office Building, Boston, Mass.

DEAR JOHN: You will undoubtedly recall that I took the liberty of submitting to the platform committee the following proposed plank:

"We urge the enactment of legislation to provide voluntary pension systems for the self-employed and professional people."

This specific language was not included in the platform, but the platform did provide, on page 22 of the mimeographed draft, under the plank "Social security," the subplank headed "Private Plans":

"We favor and encourage the private endeavors of social agencies, mutual associations, insurance companies, industry-labor groups, and cooperative societies to provide against the basic hazards of life through mutually agreed upon benefit plans designed to complement our present social-security program."

The question has arisen in the minds of those who have sponsored my proposed plank as to whether your committee in agreeing on the language included in the subplank had in mind such plans as were contemplated by the above proposal. It is my understanding that at the time this proposal was made to the drafting committee it was felt by the committee that the inclusion of the specific language was unnecessary because the subplank headed "Private Plans" was general in scope and included just such proposals.

I am meeting tomorrow with the accredited representatives of the groups interested in the legislation proposed, and I enclose a partial list of those who have been actively interested in advancing this legislation. It is my hope that in your capacity as chairman of the platform committee you might affirm my understanding that the inserted plank was deemed broad enough to include the voluntary restricted pension plan contemplated by my proposal. With kind regards, I am

Sincerely yours,

EUGENE J. KEOGH, Ninth District, New York.

CONGRESS OF THE UNITED STATES,

Hon. EUGENE J. KEOGH,

New York, N. Y.

HOUSE OF REPRESENTATIVES, Washington, D. C., August 5, 1952.

DEAR GENE: It was nice of you to write to me under date of August 4 and I hasten to extend to you my warm felicitations, knowing of your deep interest in the subject matter about which you have written, and knowing also of your great work on the Committee on Ways and Means, to which committee I look with considerable pleasure as a result of my many years of service on it.

The platform committee considered earnestly and fully your proposal and was of the opinion that it would be included in the platform, and in drafting the plank, which you have included in your letter, it was felt that this included your specific proposal. This, especially, in view of the fact that your plan would, in the main, be sponsored by industry-labor groups and cooperative societies. In

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