SEC. 704. The President may make such rules, regulations, and orders as he deems necessary or appropriate to carry out the provisions of this Act. Any regulation or order under this Act may be established in such form and manner, may contain such classifications and differentiations, and may provide for such adjustments and reasonable exceptions as in the judgment of the President are necessary or proper to effectuate the purposes of this Act, or to prevent circumvention or evasion, or to facilitate enforcement of this Act, or any rule, regulation, or order issued under this Act.

SEC. 709. The functions exercised under this Act shall be excluded from the operation of the Administrative Procedure Act (60 Stat. 237) except as to the requirements of section 3 thereof. Any rule, regulation, or order, or amendment thereto, issued under authority of this Act shall be accompanied by a statement that in the formulation thereof there has been consultation with industry representatives, including trade association representatives, and that consideration has been given o their recommendations, or that special circumstances have rendered such consultation impracticable or contrary to the interest of the national defense, but no such rule, regulation, or order shall be invalid by reason of any subsequent finding by judicial or other authority that such a statement is inaccurate.

SEC. 711. There are hereby authorized to be appropriated such sums as may be necessary and appropriate for the carrying out of the provisions and purposes of this Act by the President and such agencies as he may designate or create. Funds made available for the purposes of this Act may be allocated or transferred for any of the purposes of this Act, with the approval of the Bureau of the Budget, to any agency designated to assist in carrying out this Act. Funds so allocated or transferred shall remain available for such period as may be specified in the Acts making such funds available.

SEC. 716. (a) Titles I, II, III, and VII of this Act and all authority conferred thereunder shall terminate at the close of June 30, 1952, but such titles shall be effective after June 30, 1951, only to the extent necessary to aid in carrying out contracts relating to the national defense entered into by the Government prior to July 1, 1951.

(b) Titles IV, V, and VI of this Act and all authority conferred thereunder shall terminate at the close of June 30, 1951.

(c) Notwithstanding the foregoing

(1) The Congress by concurrent resolution or the President by proclamation may terminate this Act prior to the termination otherwise provided therefor.

(2) The Congress may also provide by concurrent resolution that any section of this Act and all authority conferred thereunder shall terminate prior to the termination otherwise provided therefor.

(3) Any agency created under this Act may be continued in existence for purposes of liquidation for not to exceed six months after the termination of the provision authorizing the creation of such agency. (d) The termination of any section of this Act, or of any agency or corporation utilized under this Act, shall not affect the disbursement of funds under, or the carrying out of, any contract, guarantee, commitment or other obligation entered into pursuant to this Act prior to the date of such termination, or the taking of any action necessary to preserve or protect the interests of the United Sates in any amounts advanced or paid out in carrying on operations under this Act.

EXECUTIVE ORDER NO. 10161

Approved September 9, 1950

DELEGATING CERTAIN FUNCTIONS OF THE PRESIDENT UNDER
THE DEFENSE PRODUCTION ACT OF 1950

By virtue of the authority vested in me by the Constitution and statutes, including the Defense Production Act of 1950, and as President of the United States and Commander in Chief of the armed forces, it is hereby ordered as follows:

PART III. EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY

SEC. 301. The Department of the Army, the Department of the Navy, the Department of the Air Force, the Department of Commerce, the Department of the Interior, the Department of Agriculture, and the General Services Administration, in this Part referred to as guaranteeing agencies, and each delegate under section 101 of this Executive order shall develop and promote measures for the expansion of productive capacity and of production and supply of materials and facilities necessary for the national defense.

SEC. 302. (a) Each guaranteeing agency is hereby authorized, in accordance with section 301 of the Defense Production Act of 1950, subject to the provisions of this section, in order to expedite production and deliveries or services under Government contracts, and without regard to provisions of law relating to the making, performance, amendment, or modification of contracts, to guarantee in whole or in part any public or private financing institution (including any Federal Reserve Bank), by commitment to purchase, agreement to share losses, or otherwise, against loss of principal or interest on any loan, discount, or advance, or on any commitment in connection therewith, which may be made by such financing institution for the purpose of financing any contractor, subcontractor, or other person in connection with the performance, or in connection with or in eontemplation of the termination, of any contract or the operation deemed by the guaranteeing agency to be necessary to expedite production and deliveries or services under Government contracts for the procurement of materials or the performance of services for the national defense.

(b) Each Federal Reserve Bank is hereby designated and authorized to act, on behalf of any guaranteeing agency, as fiscal agent of the United States in the making of such contracts of guarantee and in otherwise carrying out the purposes of said section 301, in respect of private financing institutions.

(c) All actions and operations of Federal Reserve Banks, under authority of or pursuant to the said section 301 of the Defense Production Act of 1950, shall be subject to the supervision of the Board of Governors of the Federal Reserve System. Said Board is hereby authorized, after consultation with the heads of the guaranteeing agencies, (1) to prescribe such regulations governing the actions and operations of fiscal agents hereunder as it may deem necessary, (2) to prescribe, either specifically or by maximum limits or otherwise, rates of interest, guarantee and commitment fees, and other charges which may be made in connection with loans, discounts, advances, or commitments guaranteed by the guaranteeing agencies through such fiscal agents, and (3) to prescribe regulations governing the forms and procedures (which shall be uniform to the extent practicable) to be utilized in connection with such guarantees.

*

PART IX. GENERAL PROVISIONS

SEC. 902. (a) Except as otherwise provided in section 902 (c) of this Executive order, each officer or agency having functions under the Defense Production Act of 1950 delegated or assigned thereto by this Executive order may exercise and perform, with respect to such functions, the functions vested in the President by Title VII of the said Act.

(b) The functions which may be exercised and performed pursuant to the authority of section 902 (a) of this Executive order shall include, but not by way of limitation, (1) except as otherwise provided in section 701 (c) of this Executive order, and except as otherwise required by section 403 of the Defense Production Act of 1950, the power to redelegate functions, and to authorize the successive redelegation of functions, to agencies, officers, and employees of the Government, (2) the power to create an agency or agencies, under the jurisdiction of the officer concerned, to administer functions delegated by this Executive order, and (3) in respect of Parts I, II, IV, and V of this Executive order, the power to subpoena: Provided, That the subpoena power shall be utilized only after the scope and purpose of the investigation, inspection, or inquiry to which the subpoena relates have been defined either by the appropriate officer referred to in section 902 (a) of this Executive order or by such other person or persons as he shall designate.

(c) There are excluded from the functions delegated by section 902 (a) of this Executive order (1) the functions delegated by Part VII of this Executive order, (2) the functions of the President under sections 703 (b) and 710 (a) of the Defense Production Act of 1950, (3) the functions of the President with respect to regulations under sections 710 (b), 710 (c), and 710 (d) of the said

Act, and (4) the functions of the President with respect to fixing compensation under section 703 (a) of the said Act.

SEC. 903. All agencies of the Government (including departments, establishments, and corporations) shall furnish to each officer to whom functions are delegated or assigned by this Executive order such information relating to defense production or procurement, or otherwise relating to the functions delegated or assigned to such officer by this Executive order, as he may deem necessary.

SEC. 904. Each delegate referred to in section 101 of this Executive order shall, when and if he shall deem it necessary and appropriate, appoint a committee composed of representatives of such agencies of the Government as he may determine. Any committee so appointed shall advise and consult with the delegate concerned, as he may request, in connection with the carrying out of the functions delegated to him by sections 101, 201, and 302 of this Executive order, and shall advise the delegate concerned regarding requirements of materials and facilities.

THE WHITE HOUSE, September 9, 1950.

HARRY S. TRUMAN.

CRITERIA AND PRINCIPLES GOVERNING LOAN GUARANTEES

SCHEDULE X (2)

TITLE III, SECTION 301-GUARANTEES

The following statements of criteria and principles have been prepared by a committee representing interested agencies and were submitted to the National Security Resources Board for coordinated issuance. It is understood throughout that the purpose is to expedite production and deliveries or services under government contracts.

I. Statutory requirements.-Before an application for guarantee under title III, sec. 301, may be approved, the following requirments of the law must be met:

1. Guarantees will be issued only with respect to loans, discounts, advances, or commitments in connection therewith, made or to be made by a public or private financing institution.

2. Any such loan, discount, advance, or commitment must be for the purpose of financing a contractor, subcontractor, or other person in connection with the performance, or in connection with or in contemplation of the termination, of any contract or other operation deemed by the guaranteeing agency to be necessary to expedite production and deliveries or services under Government contracts for the procurement of materials or the performance of services for the national defense.

II. General principles.-To the maximum extent practicable and consistent with the requirements of the national defense, the following general principles or guides will be considered in connection with applications for loan guarantees:

1. Guarantees for financing performance of contracts or other operations should be provided only if, and to the extent, reasonably required to expedite prompt and efficient performance of Government contracts and subcontracts.

2. Action on applications for guarantees should be designed to aid and not impede essential procurement, production and services, but should be so administered as to minimize the risk of monetary loss to the Government to the extent compatible with aiding essential procurement.

3. Guarantees should not be provided unless it is considered that the production or service to be expedited thereby is essential to the national defense. 4. Private financing, without governmental guarantee, should be preferred to guaranteed loans, and in cases of guaranteed loans financing institutions should participate to an extent appropriate to the risks involved. 5. Due regard should be given to the desirability of following, so far as consistent with prevailing circumstances, the policies and procedures developed for guaranteed loans during World War II.

III. Small business.-Small-business enterprises should be encouraged to contribute toward the promotion of the national defense. To the extent con

sistent with the primary purposes of sec. 301 (a) of the Act, to expedite production and deliveries or services under Government contracts for the national defense, the following policies shall be followed insofar as practicable in relation to the Guaranteed Loan Program.

1. Full information concerning the Guaranteed Loan Program shall be made available to small-business enterprises.

2. Special effort shall be made for the expeditious handling of all applications for guaranteed loans involving small-business enterprises.

3. Due consideration shall be given to avoiding any action which would tend to eliminate competition, create or strengthen monopolies, injure small business, or otherwise promote undue concentration of economic power.

STATEMENT OF THOMAS F. FARRELL, DEPUTY ADMINISTRATOR FOR RESOURCES EXPANSION, DEFENSE PRODUCTION ADMINISTRATION

(This statement is submitted in accordance with numbered par. (5) of letter of Hon. John R. Murdock to Mr. W. H. Harrison, Administrator of the Defense Production Administration, March 29, 1951.)

RÉSUMÉ OF EMPLOYMENT DURING RECENT YEARS

1926-41: New York State Department of Public Works, as Commissioner of Canals and Waterways and as chief engineer.

1941-46: United States Army, in various engineering and administrative assignments, including deputy, Manhattan Engineer District.

1946-47: Chief engineer, New York State Department Public Works. 1947-50: Chairman, New York City Housing Authority.

1950-51: Commanding general, Three Hundred and First Logistical Command, and post commander, Camp Rucker, Ala.

March 3, 1951: Present Deputy Administrator for Resources Expansion, DPA. (For duties, see DPA Administrative Order No. 3, included as schedule I in Mr. Woodside's statement.)

(a) Authority.-Responsible, in the matter of minerals and metals, for certification of projects developed by the Secretary of the Interior for encouraging the exploration, development, and mining of strategic and critical minerals and metals.

(b) Problems.-Necessity of bringing together all agencies concerned with resources expansion, either general or specific, requires utilization of a committee of representative agencies, to advise and assist in expediting the expansion program.

The Resources Expansion Committee, through its regular meetings, is expected to assist in the solution of the administrative problems encountered. (c) Funds.-Statement of budgetary requirements for balance of fiscal year 1951, as submitted to Senate Appropriations Committee, is attached as schedule I. Estimates for 1952 are currently under study.

SCHEDULE I

Mr. Chairman and members of the committee, this statement introduces our request for additional budgetary authorization to implement sections 302 and 303 of the Defense Production Act for the balance of this fiscal year.

Section 302 provides for loans to aid in carrying out Government contracts for the procurement of materials or the performance of services for the national defense. These loans are for the expansion of capacity, the development of technological processes, or the production of essential materials, including the exploration, development, and mining of strategic and critical metals and minerals. The loans are to be made only to the extent that financial assistance is not otherwise available on reasonable terms.

Section 303 provides for the purchase of (or commitment to purchase) metals, minerals, and other raw materials, including liquid fuels, for Government use or for resale. It also provides for the encouragement of exploration, develop

ment, and mining of critical and strategic minerals and metals. In addition, it provides for the installation of equipment, facilities, processes, or improvements in Government plants, and for the installation of Government-owned equipment in privately owned plants and other industrial facilities.

Section 304 is the section which authorizes the money for sections 302 and 303. It authorizes the recommending agencies, subject to the certificate of the Defense Production Administrator and the approval of the President, to borrow from the Treasury such sums as may be necessary to carry out sections 302 and 303. The total amount to be borrowed is not to exceed an aggregate of $600 million outstanding at any one time.

Under section 302, the Administrator has already approved loans totaling approximately $44 million.

Under section 303, certifications by the Administrator total $337 million and include a $150 million revolving fund to acquire and resell natural rubber for national defense purposes, $10 million for the purchase of domestic castor beans for castor-oil lubricants, $10 million for the encouragement of domestic exploration of strategic and critical minerals and metals, $60 million for revolving fund for tin purchases, $100 million for a machine-tool program, $5.7 million for aluminum sheet, and $1.3 million for the procurement of oxygenfree copper. In addition, the sum of $240 million is committeed for the fourth quarter of this fiscal year to cover contingent liabilities arising out of contracts in the aluminum expansion program.

Accordingly, as of the fourth quarter of this fiscal year, $44 million will have been approved for direct loans under section 302 and $577 million will have been approved for projects under section 303, for a grand total of $621 million.

To carry out the mandate of Congress for the expansion of productive capacity and supply under the Defense Production Act, we have endeavored, with the complete cooperation of the recommending agencies and the Bureau of the Budget, to arrive at an estimate of budgetary requirements for the balance of the fiscal year.

Your committee will recognize the difficulties involved in reaching such an estimate. You will also understand there are imponderables and uncertainties. But we have proceeded with the information at hand. For example, in the case of section 302 loan applications, the known factors were the number of applications filed to date, the rate at which they have been filed, and the average amount of each application. These estimates were reduced, having in mind that there would be denials, participation in the loans by the Reconstruction Finance Corporation in some instances, and lag in processing of applications. This procedure was applied to all loan estimates of the four recommending agencies. In some cases, the agencies were able to specify programs of anticipated approvals, such as in nickel, copper, and fertilizer. Every effort has been made by the agencies concerned to arrive at estimates which were fair and representative of the funds that will probably be required.

The same may be said as to estimates under section 303. In these cases, the estimates were even more specific and were presented on a program-by-program basis.

All section 302 and section 303 estimates have been compiled and result in a total figure of about $3.9 billion. This figure represents approvals by the Administrator as well as estimates received from the recommending agencies. The projects covered by these estimates, other than those already approved, have not yet been examined by the Administrator and he does not know at this time whether approval will be forthcoming.

The sum of $1 billion in additional borrowing authority for the balance of this fiscal year is requested to cover all loans and projects not yet approved. Together with the $600 million already authorized, this will total $1.6 billion and will be $400 million short of the $2 billion total present legislative authorization provided in section 304 of the Defense Production Act.

The Administrator is asking now for $1 billion and, in the light of requirements which may eventuate before the expiration of this fiscal year, it may be necessary to request an emergency authorization of part or all of the remaining $400 million.

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