ices of all those who had been thus engaged." In the course of his remarks he presented awards to the two winners of the contests, in the senior high schools and the junior high schools of the Canal Zone, for the best essays on the life of General Goethals. Two student girls were the successful contestants, respectively Miss Mary Abele in the first category, and Miss Carolina E. Zirkman in the second. Each prize was a $25 United States savings bond.

Under leave accorded me, I am including as a part of these remarks news stories which appeared in the Star and Herald of Panama City, during the indictated celebration, as follows: [From the Panama City Star and Herald of March 30, 1954]

THATCHER MAINTAINS INTENSE PERSONAL INTEREST IN CANAL

Although his direct connections with the Panama Canal were severed over 40 years ago, Maurice H. Thatcher, member of the Isthmian Canal Commission from 1910 to 1913, has maintained his intense personal interest in Isthmian affairs throughout these years.

He and Mrs. Thatcher, who now live in Washington, D. C., will arrive by plane Tuesday afternoon to participate in the Goethals Memorial dedication ceremonies this week. Mr. Thatcher is the only surviving member of the group of men on whose shoulders rested the responsibility for the successful completion of the Panama Canal.

Although he was born in Chicago, Mr. Thatcher is known as a Kentuckian. He grew up in Kentucky and was practicing law in Louisville when he was appointed to the Isthmian Canal Commission after his fellow Kentuckian, Jo. C. S. Blackburn, resigned in 1910. He became a member of the I. C. C. April 12, 1910, and served until his resignation August 8, 1913, during which time he was head of Civil Administration in the Canal Zone.

Mr. Thatcher served 10 years from 1923 to 1933 in the United States House of Representatives from the Fifth Kentucky District. During his service in Congress he devoted his interests chiefly to welfare, public parks, and highways, Pan American and Panama Canal affairs, and to the promotion of domestic and foreign airmail service.

His congressional service is best known on the Isthmus as author of the legislation for the establishment and maintenance of Gorgas Memorial Laboratory in Panama, and for the construction of the ferry facilities and highway which provide the direct traffic link between the city of Panama and the interior of the Republic. The highway and

ferry were named in his honor when completed.

The construction of Thatcher Highway and

ferry was one of the major public improvements made in the Canal Zone during the 1930's. When Congressman and Mrs. Thatcher visited the Isthmus early in 1933 he was given a warm official welcome by the Republic of Panama.

The City Council of Arraijan voted to give him a plot of ground in that picturesque village as a token of their appreciation for the highway through the town, in addition, a special tour to the interior was arranged in his honor by various Panama organizations. Official and civic organizations participating included the Junta Central de Caminos. Panama Automobile Club, Rotary Club, and the Panama Federation of Highway Education.

High officials invited to attend the public demonstration for the Congressman included President Harmodio Arias and his cabinet, and Governor Julian L. Schley and many Canal officials.

Mr. Thatcher's personal interest in Isthmian affairs has continued since his congressional service. He was one of the principal supporters of the so-called "Old Timers" civilian employees who served during the legislation which provides for an annuity for Canal construction period. He was also the attorney in the test case in which the court of claims ruled that the annuities were not subject to income tax.

Mr. Thatcher is a prolific writer and has

been a frequent contributor to newspapers and other publications. He is particularly well known for his poetry, much of which deals with the canal and the people who built it or operate it. Many of his poems and other contributions have been published locally.

The former member of the Isthmian Canal Commission has been the recipient of high honors from many Latin American nations because of his friendship and interest in their progress. Among the honors which

have been accorded him is the Vasco Nuñez de Balboa medal in the rank of Comendador from the Republic of Panama, and decorations from both Venezuela and Ecuador.

[From the Panama City Star and Herald of April 2, 1954]

TOWNSMEN AT ARRAIJAN HONOR M. H. THATCHER-FORMER ICC MEMBER AND CONGRESSMAN VISITS STAR-HERALD PLANT

The Honorable Maurice H. Thatcher, former member of the Isthmian Canal Commission now visiting here in connection with the Goethals memorial ceremonies, was honored yesterday by the people of the town of Arraijan on the Canal Zone border at the terminal of Thatcher Highway.

It was the second time that Mr. Thatcher had been so honored by the people of that Panamanian town who on a previous visit had similarly welcomed him and set aside a lot within the town's limits as their recognition for the many benefits they had received from Mr. Thatcher's efforts while a Member of the United States Congress.

Upon returning from his visit to Arraijan, where he was accompanied by his wife, Mr.

Thatcher called at the Star and Herald offices where he was received by members of the management and editorial staff of this paper, with which the canal oldtimer and former Congressman maintained close and very cordial relations during the time of his service

here, which were continued uninterruptedly after his retirement from isthmian activities.

Mr. and Mrs. Thatcher were shown around the Star and Herald's plant and expressed themselves as deeply impressed with the progress and development noted since their last visit.

La Estrella de Panama-the Spanish language counterpart of the Star and Herald-on April 1, 1954, carried an editorial which paid high tribute to Mr. Thatcher; and its English translation— as it appeared on the following day in the Star and Herald-follows:

REUNION OF OLD FRIENDS

In a recent editorial, we discussed the vigorous and extraordinary personality of Col. George W. Goethals, who directed the construction of the interoceanic canal in Panama and was chairman of the Isthmian Canal Commission. In it we set forth the achievement of this man of superlative genius and will, to whose memory a monument has been erected in the Canal Zone.

Today we want to convey a heartfelt greeting to the hundreds of former officials and employees of the canal, who left our shores many years ago to scatter in their own country and who just a few days ago met again under Panamanian skies to pay their tribute of homage to the builder of the interoceanic canal.

Linked to the canal enterprise for a long time through various offices, jobs, and posi

tions, they left our shores, thinking perhaps that theirs would be a permanent absence. Yet, let the unforgettable name of Col. George W. Goethals-so closely linked to their

memories-be invoked for the tribute it so justly deserved, and here we have again on Panamanian soil many men whose labor over the years wrote a large portion of the history of the canal.

Among them is Maurice H. Thatcher, who headed the Department of Civil Administration in the early canal days. He has returned to Panama, where he is remembered and loved, to clasp friendly hands and to receive spontaneous expressions of affection, which bespeak clearly that our country has not forgotten his work as a "good neighbor" even in the days when the "good neighbor policy" was something unknown. And like Mr. Thatcher, there are hundreds of former employees of the canal back in Panama to whom we convey our most sincere greeting.

For, having turned the corner of the first century ourselves, having carried in our pages the account of the great canal enterprise, from the first attempt to its successful culmination, there have appeared in our columns the names of Americans who have returned to our country to reminisce over times gone by and to find out for themselves how friendships formed years ago are still in bloom.

May their return to Panama be a pleasant experience for these canal old timers, many of whom we are proud to call our friends. That is our sincere wish. And may they

feel that, despite time and the great material changes that they have found, Panamanians have kept faith with them. For all of them-whose names are too numerous to mention, but which are ever in our mindour cordial greeting and the expression of our lasting affection.

The Star and Herald, by the way, has a lineage of 105 years, dating back to something like 1849 when the construction of the Panama Railroad across the isthmus was begun. It is an outstanding daily newspaper of Central America, and its editorial policy, through the years, has done much to promote good relations between Panama and and the United States. It has long been an effective antagonist of communism and has vigorously opposed its infiltration into Latin American countries.

In addition, I include an article which appeared in the Panama Canal Review, the official organ of the Panama Canal Company and the Canal Zone Government, dated April 2, 1954, with reference to Mr. Thatcher's participation in the Balboa ceremonies already mentioned:

Attending the Goethals Memorial dedication ceremonies this week is one of the central figures of the canal construction period and one of the most enthusiastic alumni of the canal organization.

He is Maurice H. Thatcher, member of the Isthmian Canal Commission from 1910 to 1913 and head of the civil administration in the Canal Zone during that period.

Mr. Thatcher is as well known and famous in Panama as in the Canal Zone as Thatcher Highway and Ferry, the link to the interior of the Republic, is named in his honor. He was author of the legislation authorizing the highway and ferry.

He has followed news of the isthmus with intense interest since leaving the Canal Zone over 40 years ago to return to his native State of Kentucky and become United States Representative from the Fifth Congressional District. His lively interest in isthmian affairs was recently demonstrated when he participated in the formal opening of the "50 Years of Friendship" exhibit in the Library of Congress.

Mr. Thatcher, the only living member of the Isthmian Canal Commission, has made his home in Washington, D. C., for many years. He is a poet of note and has written many poems relating to the Panama Canal and the men and women who work for it.

In this general connection it should be noted, also, that in Congress Mr. Thatcher brought about enactment of the legislation establishing the Gorgas Memorial Laboratory in the city of Panama, and maintained and operated by Federal funds. The laboratory is doing splendid humanitarian service in research work, with respect to yellow fever, malaria, and the many other diseases of the tropics-both human and veterinary. Its fame is worldwide. Mr. Thatcher, following his retirement from Congress, became vice president and general counsel of the Gorgas Memorial Institute of Tropical and Preventive Medicine, which has supervi

sion of the laboratory. These servicesinvaluable in character-he renders without compensation, and purely as a contribution to Isthmian and international welfare.

Then I would add an editorial article which appeared in the Jeffersonian, published in my congressional district, at Jeffersontown, in Jefferson County, Ky., on May 28, 1954; and of which Mr. Carl A. Hummel is editor, and Mr. Thomas R. Jones is publisher. It is one of the best county newspapers in the entire State.

CANAL ZONE HONORS FORMER GOVERNOR This year, 1954, being the 50th anniversary of the independence of Panama, and of the acquisition by the United States Government of the Canal Zone, celebration rites of these historic events are being appropriately observed. A memorial shaft, to the memory of Gen. George W. Goethals, has been erected and was dedicated on March 31, in Balboa at the foot of the grounds of the Canal Zone Government's Administration Building.

General Goethals was chairman and chief engineer of the Isthmian Commission.

Former Congressman Maurice H. Thatcher, from this Kentucky district, was also a member of the Commission, as well as Governor of the Canal Zone. The present Canal Zone Governor, Gen. John S. Seybold, extended to Mr. and Mrs. Thatcher, now residing in Washington, D. C., a formal invitation to visit the Isthmus as guests of the

Canal Zone government. Governor Thatcher was one of the principal participants in the ceremonies dedicating the Goethals memorial.

The Thatchers were among other distin

guished guests at the dedication to fly from Washington to the Pacific side of the Canal

Zone on March 30, making the nonstop flight of 2,100 miles in 81⁄2 hours. Among the other passengers were United States Senator ALEXANDER WILEY, of Wisconsin, and George N. Roderick, Assistant Secretary of the Army, and their wives. Governor and Mrs. Seybold,

with other officials met the plane and welcomed the guests.

Ancon, adjacent to the city of Panama, was the first home of the Thatchers following their marriage in Frankfort, Ky., on May 4, 1910.

At the dedicatory ceremonies, Mr. Thatcher spoke and awarded prizes to student girls, winners in contests conducted in junior and senior high schools of the Canal Zone for essays on the life of General Goethals.

Following his tenure in the Congress, Mr. Thatcher was chosen vice president and general counsel of the Gorgas Memorial Institute of Tropical and Preventive Medicine, which supervises the Gorgas Memorial Laboratory. Through the years he has rendered

constant and valuable gratuitous service relative to the operation and maintenance of the laboratory.

The ferry across the Canal bears the name of "Thatcher," as well as the highway across the Canal Zone strip, both of which constitute links in the Inter-American Highway System. Many were the courtesies and the honors extended Mr. and Mrs. Thatcher on their visit to the Canal Zone, not only by the Zone officials but by the general public as well, who turned out en masse to greet them and to take part in parades and other festive occasions.

The party returned to Washington from the Canal Zone on April 2, in time to attend, on the following day, the crowning of a Kentucky girl, Miss Frances Mae Fisher, as queen of the cherry blossom festival.

During their recent brief stay on the isthmus, Mr. and Mrs. Thatcher received various courtesies. Thus he was presented with a scroll-letter of appreciation by the Panama Canal West In

dian Employees Association, in appre

A laud for the work of the first gold men Who toiled and wrought and strove, amain, To dig the ditch. They began it when

Old Yellow Jack, and the blight and bane Of Chagres Fever, took starkest toll. They came, enlisted, and ventured all; And wrestled death, with body and soul,To linger, these and those, to fall. Another fever filled blood and bone

Of all, throughout. Its currents run Until, within the stretch of the zone, The last lone yard of the link was done:A fever, absorbing in the fire

Which single zeal forever brings;

A fever which always must inspire

That strength from which great action springs.

From a boundless field from which to choose

The ablest Uncle Sam could find,— Were here assembled: steam-shovel crews, And engineers of ev'ry kind;Designers, trainmen, inventors rare; Dredgers, foremen, mechanics skilled; Electrical wizards;-and, ev'rywhere, The art to do what the blue-prints willed. Whate'er the call, whatever the task, Each one strove for a single end; So fair his service that none could ask Better result, or aught amend.

ciation of his effective services in their behalf through the years; and a demonstration was accorded both of them by the inhabitants of the town of Arraijan, in the Republic of Panama, in appreciation of Mr. Thatcher's services in Congress, which brought about the enactment establishing the ferry across the Panama Canal at Balboa and the construction of the connecting highway from the western terminus of the canal to the Canal Zone-Panama boundary He "toed" the dams with the huge output

line. The ferry and highway brought liberation from complete isolation to Arraijan and its residents have been grateful because of this. In January 1931, they presented a lot to him as a token of gratitude. At the recent demonstration, he gave the lot back to the town for use as a children's playground, and pledged a substantial contribution for playground equipment. The municipal officials of Arraijan have named the lot Parque Thatcher.

I am sure that the many friends of Mr. Thatcher-some of them his colleagues in this Chamber, yet serving here-and Mrs. Thatcher, will join me in extending to them heartiest congratulations upon these pleasing honors accorded them; and in wishing them many more years of health, strength, and useful

endeavors.

He reamed the hole, and the bolt sent home;
He mixed the parts, and filled the form;
Into cores he pumped the silt and loam;
And wavered not in sun or storm.
The dirt he hauled from the deepest cut;
Reclaimed tidelands in manner vast;

Of spoil of shovel and slide and blast.
He dredged the channels in sea and lake,
And built the bounds of dock and lock;
Upreared the spillways and each intake,—
And planted all on the solid rock.
He lent the sleight of his brain and hand
To do all things the goal required;
All things designed, and each thing planned,
Till naught was left to be desired.
The strengths of nature-both seen and hid—
He put in bonds to do his will;
And today, as then, as they are bid,
They work the wonders of his skill.
For the silver groups—a word or two;
For those of ev'ry race and soil:
Theirs were the humbler tasks to do;
They bore the brunts of periled toil.
In loyal spirit they labored here,

Through all the great, eventful days;

They met all duty devoid of fear,

And earned their bit of deathless praise.
And back of all was the Gorgas Squad,
To hold the bitter plagues at bay;
With stern Hygeia's miracle rod,

Touching the reference in the Pana-
ma Canal Review article to poems writ-
ten by Mr. Thatcher relative to the Pan-
ama Canal, and the men and women who
work for it, a conclusion of these re-
marks may well be made by adding his
fine tribute, in verse, to these workers,
first published in the Star and Herald
in its historic edition in commemoration
of the 25th anniversary-August 15, Orderly government ruled and reigned,
1939-of the formal opening of the canal
to world traffic:

Swift were the scourges swept away.
Strange things were done with a sturdy grace,
Until in Isthmia all was well;
Death's haunt became an abiding place

BUILDERS OF THE PANAMA CANAL

(In commemoration of the 25th anniversary of the formal opening)

(By Maurice H. Thatcher) There were workers great, and workers small

As judged by rank-in the enterprise; But glory enough there was for all,

And each was great to seeing eyes. Let Fame take care that her Scroll be just, And give to each his meed of praise,— Else, out of the ashes and the dust,

The Shade of Censure shall upraise.

Where the non-immune might safely dwell. America's mood was here maintained; All civil functions carried on;

And codes to fit all needs were drawn; And homes were made, and society

Was much the same as the homeland Here, men and women and children, free, brings; Lived in the midst of mighty things.

Executives, judges, and Q. M. D.'s;

Teachers and clerks, firemen, police; Nurses and doctors; and more like these, Bewrought, each one, his separate piece Of the finished whole. Their toils, no less Than those of the workers, "skilled" and "raw,"

Were full required for the job's success:
All were impelled by the selfsame law.

The mountains moved, and the waters rose; And faith, at last, fulfilled her dream: Lake, lock, and channel-the whole world knows

Attest the worth of a hope supreme! The ships now shuttle from shore to shore: Up, up, and up-and thence straight on; Then three times downward-and on, once more

Into the sunset or the dawn!

All were as one; and they strove and wrought To shape the passage to the Ind.

In terms of life it was dearly bought;

In money, cheap. The ranks are thinned By time and death; but the deed they did Excels all others of like and kind;

Its strength and virtue cannot be hid:
It lives-all tongues and lands to bind!

Protecting the Nation's Health

EXTENSION OF REMARKS

OF

HON. A. L. MILLER

OF NEBRASKA

IN THE HOUSE OF REPRESENTATIVES Monday, July 12, 1954

Mr. MILLER of Nebraska. Mr. Speaker, last week the House agreed to the Senate amendment to H. R. 7125 and sent the bill to the President for signature. There was little ballyhoo about it. The radio, press, and television gave it little play.

It

H. R. 7125 deals with pesticides-not a very interesting subject even though it is used or affected by nearly everybody. The primary purpose of the bill is to protect the public health. reaches that end by providing that no pesticide may be placed on the market until a tolerance for the product has been established by the Department of Health, Education, and Welfare.

Under existing laws, a tolerance need not be established before the product is placed on the market. This is evidenced by the fact that only 1 tolerance has been established even though there are about 40,000 different pesticides on the

market.

In other words, no one knew how dangerous those which did not have a tolerance were to the public health.

Under H. R. 7125 we would know and the consumer would be assured that he was not being poisoned unknowingly.

As for the farmer, he will be able to use the pesticide on his product without the fear of having his year's work confiscated as being adulterated or deleterious and injurious to public health by the Food and Drug Administration. Records show that entire crops have been confiscated because the chemical residue was too great.

Industry will be able to assure the farmers that if they use their product according to the directions it will greatly eliminate the losses due to pests. These losses are estimated at over a billion dollars a year.

Besides requiring that a tolerance be established prior to marketing, the bill

sets up a workable procedure in establishing a tolerance. Under the present law, lengthy public hearings must be held and too often they have become so long and drawn out that they are not

workable. This is borne out by the fact that despite 2 years of hearings, costing millions of dollars, only 1 tolerance was established.

The Select Committee To Investigate the Use of New Chemical Additives in Foods, Drugs, Cosmetics, and Pesticides, of which I was a member, found during the 81st and 82d Congresses that legislation along this line was sorely needed. As a medical doctor, I was a little disturbed with what I learned and was determined that legislation should be introduced to plug the leak in our public health laws.

I am most happy that Congress has passed this legislation and am quite confident the President will soon sign it into law.

Area Job Total Drops-Summer Gain Unlikely

EXTENSION OF REMARKS

OF

HON. MELVIN PRICE

OF ILLINOIS

IN THE HOUSE OF REPRESENTATIVES
Monday, July 12, 1954

Mr. PRICE. Mr. Speaker, when I picked up my hometown newspaper, the

East St. Louis Journal for June 22, I was

greeted with a headline: "Area Job Total Drops-Summer Gain Unlikely." I was struck by a number of facts related in the story, which was based upon an interview with C. R. Hughes, manager of the East St. Louis office of the Illinois State Employment Service.

Mr. Hughes said that unemployment in East St. Louis had climbed to 6,200 during May, an increase of 700 over the level on March 15 of this year.

We may recall that March was announced by the President as the month which would be the key to Federal action to relieve the stress of unemployment. March came and went, and now in my hometown, at least-and I do not think we are very much different than anyplace else unemployment is almost 13 percent higher than it was in March.

The question is, Where is the antirecession program of the administration? Those 6,200 unemployed in East St. Louis, together with other millions of unfortunate would-be wage earners throughout the land have been looking in vain for such a program.

The best they have had were statements, along in mid-March that April would be the month to look at, since a late Easter would delay the hypodermic

turning college students were expected by Mr. Hughes to swell the May unemployment total.

This analysis has been made by an employee of the State of Illinois, where the administration is run by the Republicans, so we can hardly kiss off his remarks as the words of a "prophet of doom and gloom." We must accept them as proven facts, and we must accept his analysis as that of one who knows whereof he speaks.

The reference to the lack of new job opportunities is highly significant because it points up the utter fallacy of the view taken by the Secretary of the Treasury, who says he is satisfied with a "second best" year, and who insists that it is not necessary to break records always in order to have prosperity.

What does a "second best year"which seems to make Mr. Humphrey very happy-mean? It means that a number of persons who were employed in the "best year" are not working. It also means that new members of the labor force the 600 to 700 referred to by Mr. Hughes in East St. Louis and an estimated 700,000 each year for the Nation as a whole-are denied job opportunities.

We have heard a very great number of words spoken by administration officials, Members of the Congress, and others about the sacredness of the right to work. Of course, these words have always referred to legislation designed to break the back of organized labor. But what about the right to work of these new members of the labor force? Is not that a sacred right; a sacred right which is callously rejected by the smug satisfaction with a second best year?

Our national economy must be expanded by from 3 to 5 percent every year if we are to provide jobs for all those who want to work; and we must provide jobs for them if we are to sell our gross national product. Anything less than such an expansion will mean that the second best year will be followed by a third best, and then a fourth best, and the spiral of unemployment will roll onward and upward to a point where the depression which followed the crash of 1929 will seem like heavenly prosperity.

Unless we provide such an expanding economy, we must admit and accept failure and defeat, not for ourselves but for our way of life and for our system of free enterprise. This we cannot do, for there is another evil system poised and ready to take over if we fail.

I include the article from the East St. Louis Journal as a part of my remarks: AREA JOB TOTAL DROPS-SUMMER GAIN

UNLIKELY

East St. Louis area employment has

during the rest of the summer.

There was another very pertinent fact in Mr. Hughes' report. He said new job opportunities were nonexistent, since all local firms had a large backlog of laidoff workers with call-back rights. The 600 or 700 high-school graduates and re

"The impact of production curtailment in the metals industry forced employment in the East St. Louis area down by 75 at the 92 reporting firms during a 60-day period ending May 15," said C. R. Hughes, manager of the East St. Louis office of the Illinois State

Employment Service.

fertilizers totaled 200; in the stone-clay-glass industry, 175; in roofing mills, 100; and scat

Seasonal employment rises in commercial

tered gains in other industries, 100. These gains, however, failed to offset a drop of 650

in the metals fields.

The May employment total for the 92 firms reporting was 22,443 or 2,250 less than May 1953.

Hughes said job opportunities have decreased materially in the past 60 days and unemployment has climbed to 6,200, about 700 above the March 15 level. New hiring will be limited for the next 2 months as most major firms have a pool of laid-off workers with call-back rights. The 600 or 700 highschool graduates and returning college students also will tend to swell the already unemployed group.

According to Hughes, manufacturing employment is expected to level off at current figures and in general remain stable. Potential construction expansion could raise nonmanufacturing employment to a somewhat higher level than anticipated.

Hughes said that information provided by local employers shows that employment will continue at a gentle decline during the next 60-day period. Heavy seasonal layoffs in the commercial-fertilizer industry, coupled with pessimistic employment forecasts in the metals industry, preclude the possibility of any overall employment rise in the next 2 months, he added.

Almost every major firm in the area has a pool of laid-off workers with call-back rights, according to Hughes. Industrial job openings for vacation workers practically are nonexistent this year.

Hughes said the overall outlook for the area is for a leveling off in the downward employment trend, with some degree of stabilization near present levels by midsummer.

plans, to the maximum number of people, (a) by providing technical advice and information, without charge, to health service prepayment plans and to the carriers or sponsors thereof; and (b) by making a form of reinsurance available for voluntary health service prepayment plans where such reinsurance is needed in order to stimulate the establishment and maintenance of adequate prepayment plans in areas, and with respect to services and classes of persons, for which they are needed."

To reaffirm the congressional policy opposed to Federal regulation of insurance, the committee added the following:

"Nothing in this act shall be construed to authorize any action inconsistent with the policy and provisions of the act entitled 'An act to express the intent of the Congress with reference to the regulation of the business of insurance,' approved March 9, 1945 (59 Stat. 33), as amended (15 U. S. C. 10111015)." (The so-called McCarran Act.)

Section 3, definitions:

The principal definitions in this section deal with "beneficiary," "carrier," "health service prepayment plan," and "personal health services."

The term "beneficiary" means an individual to whom a carrier, pursuant to a health service prepayment plan, undertakes (1) to pay in whole or in part for specified personal health services furnished to him by others, or (2) to provide specified personal health services.

The term "carrier” means an organization, other than an instrumentality of a State or political subdivision thereof, which is sponsoring or is engaged in providing protection under insurance policies or subscriber con

a Bill To Provide for Reinsurance of Health Service Prepayment Plans

EXTENSION OF REMARKS

OF

HON. CHARLES A. WOLVERTON

OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES Monday, July 12, 1954

Mr. WOLVERTON. Mr. Speaker, it is my understanding that H. R. 8356, a bill to improve the public health by encouraging more extensive use of the voluntary prepayment method in the provision of personal health services, under the rule granted today, will probably be brought before the House for consideration on Tuesday, July 13. Because of this fact it seems appropriate that I should submit for the benefit of the membership of the House a section-bysection analysis of the bill.

The bill provides for the establishment of a health reinsurance program in the Department of Health, Education, and Welfare. The short title of the act is "Health Service Prepayment Plan Reinsurance Act." However, it is often referred to as the health reinsurance bill.

The following is my analysis, by sections, of the bill reported to the House from the Committee on Interstate and Foreign Commerce, July 9, 1954:

ANALYSIS OF PROVISIONS OF H. R. 8356
TITLE I. GENERAL

Section 1, short title of bill.

Section 2, declaration of purpose: "To encourage and stimulate private initiative in making good and comprehensive health services generally accessible on reasonable terms, through adequate health service prepayment

prepayment plan.

The term "health service prepayment plan" means a plan under which a carrier undertakes to pay for or to provide personal health services to specified beneficiaries or classes of beneficiaries.

The term "personal health services" includes any services rendered to individuals by licensed health personnel or, under the supervision of such personnel, by auxiliary personnel for the improvement or preservation of physical or mental health or for the diagnosis and treatment of disease or injury; the use by such licensed or auxiliary personnel of any and all apparatus or machines designed to aid in the diagnosis or treatment of disease or injury; the provision of bed and board in general or special hospitals, convalescent homes, nursing homes, sanatoria, or other institutions licensed or designated as such by a State when care in such institutions is prescribed by such licensed personnel; the provision of drugs and machines, dressings and supplies, prostheses and applicances (including eyeglasses), when prescribed by such licensed personnel; and ambulance service.

The definition of the term "carrier" is intended to make clear, in conjunction with the definition of the term "health service

prepayment plan" that all kinds of plans using the prepayment method in the provision of personal health services or in payment or reimbursement for the cost of such services fall within the scope of the bill and may be considered for reinsurance. This would include, for example, insurance companies' plans offering protection under insurance policies, corporations or associations, such as the typical Blue Cross plan, undertaking in subscription or membership contracts to provide services through providers of such services (with whom, frequently, the carrier has directly or indirectly a contract or arrangement, in which case the contract or arrangement is considered a part of the plan), and prepayment plans of the direct-service type, such as those offered by medical cooperatives offering personal health services primarily through their own staff and facilities, as

well as groups of physicians undertaking to furnish medical care on a prepayment basis.

Section 4, National Advisory Council and other committees: This section establishes within the Department of Health, Education, and Welfare a National Advisory Council on Health Service Prepayment Plans, consisting of 12 members appointed by the President. The Council is charged, under section 4 (b), with the duty of advising, consulting with, and making recommendations to the Secretary on matters of policy relating to the activities and functions of the Secretary under the act. Under section 4 (c) the Secretary is also authorized to utilize the services of any member or members of the Council for advisory or consultative purposes in connection with matters related to the administration of the act and may also appoint special advisory committees and utilize the services of any member of such a committee for such purposes. Section 4 (d) provides that members of the Council and of other advisory and technical committees shall receive per diem and travel expenses.

Section 5, consultants: Authorizes use of expert consultants or organizations thereof. Section 6, utilization of other agencies: In addition to authorizing utilization of other Federal agencies, or of any other publice or nonprofit agency or institution, section 6 provides for utilization of State agencies supervising carriers, especially in determining compliance with requirements and standards prescribed by the Secretary for reinsurance.

Section 7, voluntary and uncompensated services: Authorizes Secretary to use volunteered or uncompensated services of outside individuals or groups.

Section 8, exemption from conflict-of-interest statutes: Provides a limited waiver of certain conflict-of-interest statutes for members of the Advisory Council and for special consultants used in an advisory or consultative capacity.

Section 9, regulations: Authorizes Secretary to promulgate necessary regulations. Prohibits any Federal supervisory or regulatory control over carriers, or over hospitals, other health facilities, or personnel furnishing health services.

Section 10, disclosure of information: With narrow exceptions, disclosure of information gained as result of operation of program is specifically prohibited.

TITLE II. TECHNICAL AND ADVISORY SERVICES

Section 201 authorizes studies and the collection of information on health service prepayment plans, and the distribution of such information as is developed.

Section 202 authorizes appropriations for the purposes of title II.

TITLE III. REINSURANCE OF HEALTH SERVICE PREPAYMENT PLANS

Section 301, authority to reinsure: Section 301 (a) authorizes the Secretary, subject to the provisions of this title and to

such terms and conditions as may be prescribed under the authority of this title, to reinsure carriers with respect to health service prepayment plans if the Secretary, after consultation with the Council, determines that reinsurance with respect to any kind or type of health service prepayment plan upon terms and conditions and at premium rates comparable to those offered pursuant to this title is not available from private sources to an extent adequate to promote such purposes.

Section 301 (b) limits Federal reinsurance to that part of a plan that is not otherwise reinsured.

Section 302, applications for reinsurance: Section 302 (a) establishes the bases upon which carriers file applications for reinsurance. The Secretary is authorized to require applicants to furnish whatever infor

mation may be necessary to evaluate the application.

Section 302 (b) requires applicants to agree to (1) pay reinsurance premiums; (2) comply with applicable State laws; (3) make periodic reports; and (4) comply with reinsurance contract.

Section 302 (c) makes such requirements applicable to renewal applications, except as otherwise specified by regulations.

Section 303, terms and conditions of approval for reinsurance:

Section 303 (a) sets forth broad terms and conditions which the Secretary must take into account in granting reinsurance. After consultation with the Advisory Council, the Secretary may specify by regulation as conditions for reinsurance: (1) The kinds and types of plans eligible; (2) minimum benefits; (3) safeguards against undue exclusions of health conditions or health services, or other undue exclusions or limitations; (4) standards for deductible and maximum liability provisions; (5) waiting periods for benefits; (6) coinsurance provisions; (7) standards for plan provisions with respect to costs and charges of providers of personal health services payable by the carrier, to the extent such standards are necessary to protect the fund against abuses or arbitrary cost increases; (8) standards as to duration, cancelability, and renewability of policies or subscriber contracts; and (9) other policy provisions.

Section 303 (b) requires that regulations prescribed under the authority of section 303 (a) be promulgated only after such consultation by the Secretary with interested groups, including State insurance department officials, as the Secretary deems appropriate.

Section 303 (c) prohibits the Secretary from reinsuring any plan for which the carrier's premium rates are such as to make the plan financially unsound, or any plan with respect to which the carrier's breakdown of its single premium rate, as between reinsured and nonreinsured types of benefit costs, is unreasonable, or any plan if reinsurance of the plan, considered as a whole, would not promote the purposes of the act. In other respects the Secretary would be precluded from setting any standards for the carrier's premium rates.

Section 303 (d) provides safeguards to carriers in the event of changes in the terms, conditions, limitations, etc., prescribed by regulations. Prohibits retroactive regulations.

Section 303 (e) prohibits the Secretary from reinsuring any plan for direct provision of medical or dental services by the carrier through a salaried staff of physicians, surgeons, or dentists in the employ of such carrier, unless control over the practice of medicine or dentistry rests solely in duly licensed members of the professions involved.

Section 304, reinsurance certificate: Section 304 provides that a reinsurance certificate may be granted if: (1) The applicant carrier is operating according to law; (2) there is no reason to believe that the carrier is financially unsound or operating in a manner which does not entitled it to public confidence; (3) the carrier agrees to comply with the terms and conditions prescribed for reinsurance; (4) the plan is sound; (5) the carrier has agreed to the reinsurance premium rate fixed by the Secretary for the plan; and (6) the reinsurance of the plan will promote the purposes of the act.

Section 305: Scope and extent of reinsurance obligation:

Section 305 (a) contains the formula to be used in determining the liability of the reinsurance fund to reinsured carriers. It provides for payment by the fund of 75 percent of the amount by which the carrier's aggregate benefit costs (i. e., "losses" or "claims") exceed the carrier's gross premium income reduced by a predetermined and

agreed-upon allowance for administrative expenses of the carrier.

Section 305 (b) provides for an analogous formula to be established in the case of direct providers of health services (e. g., health cooperatives, fraternal organizations, or other group practice prepayment plans) and affiliates of such carriers.

Section 305 (c) defines the scope and extent of the reinsurance obligation for plans that include benefits for other purposes than those specified in the definition of "health service prepayment plan” (sec. 3 (e)) (e. g., disability benefits).

Section 305 (d) establishes basis for reinsurance payments to bankrupt or insolvent carriers.

Section 305 (e) provides for regulations dealing with (1) reinsurance of two or more plans offered by a single carrier, and (2) duration of reinsurance of a new or renewal plan.

Section 305 (f) prohibits retroactive application of new or amended regulations to approved plans if such new or amended regulations are less favorable to the carrier than those theretofore in effect.

Section 305 (g) limits the liability of the United States to the amounts actually in the fund.

Section 305 (h) contains definitions of terms used elsewhere in section 305.

Section 306, premium charges for reinsurance:

Section 306 (a) provides for the Secretary to prescribe reinsurance premium rates, varying in accordance with the hazard involved in any particular plan.

Section 306 (b) requires reinsurance premium rates to remain constant during the current reinsurance term, except under certain circumstances.

Section 306 (c) authorizes the Secretary to prescribe the frequency and time of reinsurance premium payments.

Section 306 (d) provides for paying reinsurance premiums into the reinsurance fund. Section 307, reinsurance fund:

Section 307 (a) creates in the Treasury a health service prepayment plan reinsurance fund.

Section 307 (b) provides for handling payments into and out of the reinsurance fund, including payments of interest and, beginning July 1, 1959, for administrative expenses.

Section 307 (c) authorizes the Secretary, after consultation with the Council, to establish special accounts within the fund.

Section 307 (d) provides for investment of portions of the fund.

Section 307 (e) establishes basis for the Secretary to transfer funds from the different accounts for administrative expenses. Section 308, advances to the fund: Section 308 (a) authorizes appropriation of $25 million to capital advance account in Treasury for repayable advances to fund.

Section 308 (b) provides for repayments to capital advance account from income of fund.

Section 308 (c) provides for annual interest payments to the Treasury on advances to the fund, until advances have been repaid. Section 309, payment of reinsurance claims:

Section 309 (a) makes provision for carriers to claim reinsurance payments, and establishes basis for United States court action if the Secretary denies a claim.

Section 309 (b) provides for interest payments to carriers on unpaid claims.

Section 309 (c) establishes bases for payment of reinsurance claims, including authority to make tentative payments subject to adjustment after final determination of the claims.

Section 309 (d) provides for payment of reinsurance claims when carriers are involved in bankruptcy or insolvency proceedings; it also provides that distribution of reinsurance payments shall be solely used to

satisfy claims of subscribers or policyholders under reinsured plans.

Section 310, involuntary termination of reinsurance: This section provides for the Secretary to terminate reinsurance in accordance with provisions of regulations that have been in effect not less than 90 days.

Section 311, actions by policyholders or subscribers: Provides that individual policyholders have no claim against the fund.

Section 312, appropriations: Authorizes annual appropriations through June 30, 1959, for administrative expenses only incurred under title III. (Thereafter, such expenses will be payable from the fund.)

TITLE IV. MISCELLANEOUS

Section 401, legal powers and responsibilities:

Section 401 (a) provides authority to the Secretary to enforce or settle claims.

Section 401 (b) authorizes Secretary to hold hearings.

Section 401 (c) authorizes Secretary to determine the character and necessity of expenditures out of the fund and the manner in which they will be made.

Section 401 (d) establishes jurisdiction of United States courts.

Section 402, accounting and audits: This section provides for an annual budget program like those for wholly owned government corporations, and for annual audits by the General Accounting Office.

Section 403, annual reports: This section provides for annual reports, including recommendations of the Council (with minority views and recommendations, if any).

Section 404, criminal provisions and injunctions:

Section 404 (a) is a declaration by the Congress of the need to circumscribe advertising by reinsured carriers.

Section 404 (b) requires the Secretary to prescribe safeguards with respect to advertising and other representations by carriers concerning reinsurance under the act. It also provides criminal penalties for violations of this section.

Section 404 (c) provides for legal action by the Secretary in respect to advertising.

Section 404 (d) amends the United States Code as it relates to false advertising.

Section 405, appointments above grade GS-15: This authorizes the Secretary to employ not more than 10 persons in grades above GS-15 to administer the reinsurance program.

Section 406, effective date: Provides for effective date 30 days after enactment, but provides for lag period before reinsurance applications are received or considered.