I ran for President back in 1948, as you know, because I felt there was no choice between Truman and Dewey, except that Mr. Dewey said, "I will do it more efficiently." As to the traditional differences in what they stood for, there was no difference. Of course, we got started so late we could not get on the ballot except in a few States, but we carried 39 electoral votes, and a change of 22,000 votes in a few States would have thrown that election into the House of Representatives. Senator WILLIAMS. Of course, all of these proposals before the committee to allow either a tax credit on a percentage basis or a deduction, all embrace the principle that if a man wishes to contribute to a third party, he would get the same credit as he would if he contributed to the two major parties. That is a principle that must be preserved. I believe in the two-party system, but if there is a citizen who believes in that third-party candidate, he has a right to contribute to that third-party candidate and to help see if he can be elected. That should be preserved, and would be under all the proposals before the committees which recommend that we have a tax credit for a percentage of the first-Senator Kennedy recommended the first $20, or a percentage of it. I have a proposal here for a $100 deduction and a combination tax credit. But in all of those proposals, the right of the third party would be maintained. We are told it would have to be if we are going to enact that kind of legislation.

Senator THURMOND. I would hope that no plan would be adopted whereby the funds contributed would be prorated to the parties on the basis of previous registrants in the party, on the basis of previous votes of the party, because a third-party situation might have to arise or might arise during an election year. That is a time the contributor may want to give to that party where ordinarily, he would not. He would go along normally with the candidate of the two-party structure.

So that is another objection to just contributing to the party. If they can contribute to the candidate, then that alleviates the difficulty involved here.

Senator WILLIAMS. Under all these proposals for the deductions, the money would not come into the Federal Treasury, and there would be no allocation as far as the Federal Government is concerned. The allocation, whatever it may be, would be an allocation solely affected by the American people as they made their contribution, but not at all affected by any Federal action. I think that is important, too. Senator METCALF. However, I think perhaps a weakness of the Presidential proposal as introduced by Senator Long, and some of the other proposals, is that a third-party contribution is only ascertained after an election. So that the third party must campaign on the basis of trying to get their money back after their votes are ascertained. A proposal such as I have would allow a third party to get the money in during the course of the campaign, which seems to me to be very important to permit this voluntary contribution, to help the third party during the essential part of the campaign, rather than after the votes are in.

Senator THURMOND. I thoroughly agree with the statement of the distinguished Senator from Montana. After I ran, after the vote in 1945-the time was so late; we were pinched, pinched, pinched, to have enough funds to go on the radio-there was no television thenand we could not get our message over. There was no way to reach the

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abounding with high-pressure advertising, television and radio spots. and many well-known personalities. In some cases the same is true. although certainly to a lesser extent, in races for a U.S. Senate seat or even a seat in the House of Representatives. But all in all, I think that it is easier to attract financing for the top job in the Nation than it is for any of the lesser jobs. Second, a contribution of $1,000 or more has a much greater weigh in terms of the influence it may buy if it is contributed in a congressional race than it would be in a presidential race. I am not insinuating that all contributions of $1,000 or more are calculated to buy influence. I am just saying that the possibility is greater. For this reason, I think that it is perhaps more important to extend the tax incentives to campaigns for all offices and not just for the office of President.

One question which may occur is in attempting to decide how to determine whether a contribution to a particular candidate qualifies for the edduction. In many cases there are numerous candidates for the same office either in the general election or, more likely, in a primary.

This plan could be limited to duly qualified candidates in a general election if in the collective judgment of the committee this would be a preferable starting point. If it was decided, however, that the funds are needed as badly in primaries and party conventions as they are in general elections, then it could certainly be extended to those who are duly qualified candidates in the primary or convention conducted by any recognized political party in the State. Also, write-in candidates should be entitled to receive contributions which qualify for the deduction on the same basis as all other candidates.

The peculiar genius of the American political system has been that it does not suppress new ideas or new approaches to either old or new problems. The plans that have been discussed so far in the Senate and the one recommended by the President would, I fear, go a long way toward doing just that. I do not think that it is wise to discourage, through virtual economic coercion, the growth of diverse political opinions, even though they may be expressed through third party movements. The American people have consistently supported a twoparty system. It would be a misreading of history, however, to dismiss out of hand the influence of third-party efforts. They have had an influence, and they can and most probably will have profound influence upon the course of events in the future. Contributions to duly qualified candidates on third-party tickets should, therefore, be treated on the same basis as contributions to the candidate of either of the two major parties.

Thank you, Mr. Chairman, and gentlemen of the committee, for allowing me to appear and testify on this important question. I shall be pleased to answer any questions that I can if you care to propound

any.

Senator METCALF. I thank our distinguished colleague for his presentation. I have some questions, but first I will call on Senator Williams.

Senator WILLIAMS. Senator Thurmond, I have no questions except this point: First, I appreciate your coming before the committee and giving us the benefit of your opinion. And as I understand it, the basic point you are making in your statement is that the contributions must be voluntary contributions by the individual to the party or the candidate of his own choice?

Senator THURMOND. That is correct.

Senator WILLIAMS. And that is a basic American right, to contribute to or withhold his contribution from the political party as he may see fit.

Senator THURMOND. That is right.

Senator WILLIAMS. I think that is very important in that phase. I will say I am in complete agreement with the principles as you have advanced them, whether that be in the form of a tax deduction, as has been proposed, both in your statement and the bill that I introduced, and as was proposed by President Johnson, or whether it be in the form of a combination of a percentage of a tax credit for the first $10 or $15 or $20 and a $75 deduction. I am not personally concerned as to which form that takes or which method, provided that in no circumstances is it a 100-percent tax credit. I think it is important that as this citizen decides to contribute to the political party or candidate of his choice, he should in every instance be making some contribution out of his own pocket, and it must cost him something.

Now, what that percentage is, I have no magic figure. I do think that the two points that we must preserve in this legislation are the right of the individual to select the party or the candidate, whether it be a major party or a third party, his choice, and second, when he designates that individual to get that contribution, he will be making some contribution, some sacrifice on his own part. On that basis, we are in complete agreement.

Now, one further question: Do you not agree that of equal importance is the necessity of revising our Corrupt Practices Act to plug what has been recognized as some of these obvious loopholes which-wherein it would require more complete reporting of our contributions and all expenditures?

Senator THURMOND. I think that should be done.

Senator WILLIAMS. Would you not agree that the Corrupt Practices Act and the Hatch Act, wherever it is necessary, should be amended in that direction to achieve that objective?

Senator THURMOND. I certainly do.

Senator WILLIAMS. Thank you.

Senator THURMOND. In the matter of contributing to a party, the parties in recent years have had candidates of such varied and diverse philosophies but if a man is allowed to contribute only to a party, then he may be contributing to the election of people whose philosophies he is not in accord with.

Senator WILLIAMS. That is right.

Senator THURMOND. For instance, if I were making a contribution to a party today, there are people in the Republican Party whose philosophy is entirely different from that of the distinguished Senator from Delaware. I may wish to help the Senator from Delaware, but would not wish to help some other candidate whose philosophy is entirely different and who I think ought to be in a different party. The same thing may apply, for instance, in the Democratic Party. That is the reason I think this should be a matter of contributing to an individual candidate, because you are contributing there to what that candidate stands for. He believes in what you stand for. That is the reason why, for many years, I have advocated a realinement of parties.

people, because the papers simply did not give the publicity to a thirdparty candidate that they could have.

After the elections were over, some funds came in from some dinners, came in late, and we had some funds left over. I remember we gave it later on to some historical society in our State, the South Carolina Society.

Senator METCALF. It did you very little good then.

Senator THURMOND. It did very little good then. So I commend the Senator from Montana on the wise statement he made.

Senator WILLIAMS. If the Senator will yield, one further handicap under the administration's proposal of direct appropriations and the manner in which they took care of the third party. The third party would get its money after the election if they get 5 percent of the vote. But if they get 4.9 percent, all they get is bills.

Senator THURMOND. Well, they would not need the money after the election is over.

Senator WILLIAMS. But there would be no payment after the election, even, if they get 4.99 percent of the vote. They have to get 5 percent of the vote.

But I will be frank with you, I do not know how we will devise a better system. If it were just any amount of money, then you would have every Tom, Dick and Harry running for election to see how many dollars he would get. If he gets one-half million votes as a protest vote, then he gets half a million dollars.

Senator THURMOND. There would have to be some plan devised where this money would have to be used for the campaign, and it reverts to the Federal Treasury if not used, or some plan, so it would not go into a man's pocket.

Senator METCALF. I am sure the American people are not going to be fooled into contributing to the campaign of a Lar Daley in a red, white, and blue uniform parading up and down the streets.

Senator WILLIAMS. I am speaking of direct appropriations under a formula where he would get the money. That is the weakness of a direct appropriation, if they use the matching formula.

You know, the point I made

Senator THURMOND. That is another weakness, as the Senator has pointed out.

Senator WILLIAMS. It is not a weakness in the proposal you have made or the proposal of the Senator from Montana, because it would be voluntarily done by individuals.

Senator METCALF. I thank the Senator from Delaware.

I certainly appreciate the statement that the Senator from South Carolina has made, not only because of his experience as a third-party candidate, but perhaps you remember that the party that you have adopted and the party to which the Senator from Delaware belongs was a third party at one time, to replace a major political party in our two-party system. And from time to time, other third parties arise who either make a contribution to or maybe replace one of our major parties.

A great Senator from Montana once ran for Vice President with Senator La Follette of a third party, and I think he and Senator La Follette made a great contribution to the history of the country, even if they were not successful, as you did in your campaign, Senator Thurmond...

So I have tried to work out'a system that will raise money for that third party in the year in which it comes about. These third-party outbursts come about because of dissatisfaction as a result of the two-party system. At the same time, we do not want to proliferate these third parties. We do not want to continue them after the contribution they have made is over.

It would seem to me that this voluntary business of just contributing in that year and not allowing, if you get 5 million votes, say you can get some more money from the Federal Government 4 years hence. Senator THURMOND. I thoroughly agree with you.

Senator METCALF. It is the kind of thing we should try to do. Secondly, of course, I thoroughly agree with you that even though we need a great deal of money in presidential campaigns, in many presidential campaigns, and in many senatorial campaigns, the opportunities for control of the vote of that candidate lessens as the number of major contributors increases. I think you have made a significant contribution. I congratulate you on your statement.

Senator THURMOND. Thank you very much, Senator.

Senator METCALF. Thank you very much, Senator, for your contribution. It has been of very vital interest.

Senator THURMOND. Thank you, Mr. Chairman. I wish to thank the committee for your courtesy.

Senator METCALF. Our next witness is Mr. DuVall, of the U.S. Chamber of Commerce, our last witness today.

We are delighted to have you, Mr. DuVall. Although we have run real late and we have had a long day, we welcome your testimony and your participation. Will you please proceed in your own way.

I see you have a prepared statement. Go right ahead.

STATEMENT OF WILLIAM M. DuVALL, CHAMBER OF COMMERCE OF THE UNITED STATES, ACCOMPANIED BY WALKER WINTER, VICE PRESIDENT, AND MILTON A. SMITH, GENERAL COUNSEL Mr. DUVALL. Mr. Chairman, my name is William M. DuVall. I am director of civic affairs for Borg-Warner Corp. I am a member of the national chamber's public affairs committee. I reside in Lake Forest, Ill. I am a graduate of Coe College, Cedar Rapids, Iowa, and did graduate work at the State University of Iowa.

With me today are Mr. Walker Winter and Mr. Milton A. Smith. Mr. Winter is a partner in Ross, Hardies, O'Keefe, Babcock, McDugald, and Parsons of Chicago, a vice president of the national chamber, and chairman of the chamber's taxation committee. Mr. Smith is general counsel for the national chamber.

At the outset, I want to outline the national chamber's viewpoint on the role of citizens in public affairs because it bears directly on the comments I shall make on campaign financing proposals pending before this committee

Maintenance of individual freedom and our political institutions necessitates broad-scale participation by citizens, including business and professional people, in the selection, nomination, and election of public officeholders. The values of our free society and of American citizenship can best be preserved through effective functioning of a multiparty system in which all parties are free from domination of any vested interest, through voluntary action on the part of individual citizens in supporting the party of their choice with both time and money through continued reliance on the Federal-state concept of governmental organization.