payments, maturities, etc. In prescribing and suspending regulations President shall consider (1) the level and trend of real-estate construction credit, (2) the effect of the use of such credit upon purchasing power, demand for real property, need in economy for maintenance of sound credit conditions, and needs for increased defense production (p. 69).

Section 602 (b) Contravention of regulations forbidden. Records of persons to be subject to examination (p. 71).

Section 602. (c) Registration: Persons subject to regulations may be required to register. Registration may be removed for violation. Provisions of section 25 of Securities and Exchange Act to apply, concerning court review by circuit court of appeals and Supreme Court. President may utilize services of Federal Reserve Board, Federal Reserve banks, and other agencies of Federal and State Government (p. 71).

Section 602 (d) Definitions: (1) Defines real-estate construction credit-new construction, real property; (2) also defines credit (p. 72).

Section 603 Willful violations: Any person who willfully violates section 601, 602, or 605 shall be fined not more than $5,000 or imprisoned not more than 1 year in jail, or both (p. 74).

Section 604 Securities Exchange Act of 1934: Federal Reserve Board in carrying out provisions of this title to have same power as Commission under sections 21 and 27 of the Securities Exchange Act of 1934, relating to investigations (p. 74).

Section 605 Government-guaranteed loans: President may modify amounts and maturities of loan guaranteed by Government but relative preferred position of veterans to be preserved (p. 75).

Section 606 Consultation with NAC: Before initially invoking either consumer credit or real-estate construction credit controls, President to consult with National Advisory Council and to find and declare exercise of such controls necessary in interest of national security or economic stability (p. 76).

TITLE VII-GENERAL PROVISIONS

Section 701 (a) Definitions: "Person" includes United States Government (p. 76).

Section 701 (b); "Materials" includes raw materials, articles, commodities, products, supplies, components, technical information, and processes (p. 77). Section 701 (c): "Facilities" excludes farms, churches, and dwellings (p. 77). Section 701 (d): "National defense" includes acts of Armed Forces, AEĆ, Government agencies, defense acts, and Mutual Defense Assistance Act (p. 77). Section 701 (e): "Wages, salaries, and other compensation" includes all forms of remuneration to employees by employers for personal services (p. 77).

Section 702 National Advisory Council: Members appointed by President by and with the advice and consent of the Senate. Membership shall be representative of business and industry, agriculture, labor, the military and consumers. Function to advise President on general policies relating to economic mobilization. Compensation $50 per day while engaged in duties and transportation costs plus not over $15 per diem allowance. Members are exempt from conflict of interest statutes (p. 77).

Section 703 State of war: President not required to consult National Advisory Council before acting in the event of a war (p. 78).

Section 704 (a) Small business: To help small business carry out purposes of act (p. 78).

Section 704 (a) (1): President shall provide small business with full information about this act and its administration (p. 78).

Section 704 (a) (2): Business advisory committees shall be appointed while controls are on a standby basis for purposes of consultation in formation of rules, regulations, or orders. Fair representation on committees for different size businesses, geographical areas, trade association members and nonmembers and for different segments of the industry (p. 79).

Section 704 (a) (3): Exemptions to be provided small business that will not impede the accomplishment of objectives of the act (p. 79).

Section 704 (a) (4): Handle quickly small business matters (p. 79).

Section 704 (b): If President uses allocation power to extent of dislocating normal civilian market distribution, he shall try to see segments of industry get proportionate share of civilian supply computed on representative period (date left blank in bill) with due regard to current competitive position and chance for new business (p. 79).

Section 705 (a) Delegation of authority: The President may delegate any power or authority under the act to any Government official and authorize redelegation except function of consulting with National Advisory Council may not be delegated. President authorized to create new agencies and continue any existing agencies. Such agencies may be placed on standby basis. President may appoint heads and assistant heads of new agencies without regard to Classification Act of 1949 (p. 80).

Section 705 (b) Senate confirmation: Such heads and assistant heads subject to Senate confirmation. On Governor's request, regional office to include policymaker from each State it serves (p. 81).

Section 706 Rules and regulations: President may issue rules and regulations necessary to carry out provisions of the act; but may not restrict natural gas used in State in which public regulatory agency can restrict such use (p. 81). Section 707 (a): President to consult private interests in trying to encourage voluntary controls (p. 82).

Section 707 (b): Exempts appropriate voluntary control agreements from antitrust laws or Federal Trade Commission Act. Attorney General and Chairman of Federal Trade Commission to be informed of agreements (p. 82).

Section 707 (c): (1) Official who approves voluntary agreements must be appointed by President and confirmed by Senate.

(2) Official must consult Attorney General, Chairman of Federal Trade Commission before approving voluntary agreements.

(3) Agreement subject to approval Attorney General. Authority to approve agreements not to be delegated except to single official (p. 82).

Section 707 (d): Withdrawal of request or finding removes immunity from Antitrust and FTC Acts for future actions (p. 84).

Section 707 (e) Survey: Attorney General is to survey (or have FTC make survey) factors tending to eliminate competition, create monopolies, or injure small business during administration of this act and to submit to Congress and the President reports of such surveys at his discretion (p. 84).

Section 707 (f): No voluntary program or agreement for control of credit shall be approved or carried out under this section (p. 84).

Section 708 (a) Subpena powers: President authorized to subpena persons and documents until 2 years after act expires. He shall be sure scope of investigation is defined by competent authority and data cannot be had from any Government agency. United States district court to have jurisdiction requiring compliance with subpena (p. 84).

Section 708 (b) Self-incrimination: Witness cannot successfully plead selfincrimination but is not subject to prosecution for such testimony (except perjury). This immunity not to be construed to vest any allocation or priority rights in witness (p. 85).

Section 708 (c) Production of papers: Production of papers outside place where usually kept not required if custodian furnishes true copy or enters stipulation as to contents. Witness fees same as in United States court (p. 86).

Section 708 (d) Penalties: Penalty for willful violation of section up to $1,000 or imprisonment for 1 year, or both (p. 87).

Section 708 (e) Confidential information: Confidential information not to be published or disclosed unless President determines it is necessary for national defense. Penalty for violation up to $10,000 fine, or 1 year imprisonment, or both (p. 87).

Section 708 (f) Right to counsel: Subpenaed persons have right to counsel and record of testimony (p. 87).

Section 709 (a) Injunctions: President may apply to court to enjoin violation of act (p. 87).

Section 709 (b) Jurisdiction and venue: United States district courts and United States courts of the Territories and possessions have jurisdiction of violations of act and of civil actions under act. Criminal action may be brought where act occurred; civil action where defendant resides or does business. Processes and subpenas may be served wherever defendant or witness can be found. End of act or of regulation not to defeat suit or prosecution. No cost to be assessed against United States Government. All litigation to be under control of Attorney General (p. 88).

Section 710 Exculpatory provision: No prosecution for compliance with regulations later found to be invalid. No person to discriminate against priority of orders (p. 89).

Section 711 Accompanying statement: Administrative Procedure Act not applicable except section (3) requiring publication in Federal Register. Regula

tions to be accompanied by statement they were formed in consultation with industry representatives or that this was not practicable; but regulations not invalid if statement is found inaccurate (p. 89).

Section 712 (a): President may hire supergrade employees without limitation (p. 90).

Section 712 (b): President may hire persons without compensation and exempt them from conflicting interest statutes; they are to receive transportation and not over $15 per diem while away from home (p. 90).

Section 712 (c) Experts and consultants: President may hire experts and consultants on per diem basis up to $50 per day while actually employed, plus transportation and not over $15 per diem and exemption from conflicting interest statutes (p. 91).

Section 712 (d) Voluntary services: President may use voluntary services of persons and Federal, State, and local agencies; and may exempt them from conflicting interest statutes (p. 91).

Section 712 (e) Speculation: Penalty by fine up to $10,000 or imprisonment up to 1 year, or both, for use of confidential information for speculation on commodity exchange (p. 92).

Section 712 (f) Reports: President may print necessary reports (p. 92). Section 713 Appropriations: Necessary appropriations authorized (p. 92). Section 714 (a) Joint Committee on Defense Production: Continues joint congressional committee to be composed of 10 members: (i) 5 members from Senate Banking and Currency Committee (3 from majority, 2 from minority); (ii) like provision for Members from House. Committee shall elect chairman and vice chairman (p. 93).

Section 714 (b) Function of committee: Function of committee is to make a continuous study of programs authorized by act both before and during activation of controls and all problems affecting consumer interest, giving special attention to prices charged the ultimate consumer for food, fuel, and clothing and the costs and methods of production and distributing consumer goods; and to review progress achieved in execution and administration of the act; to aid standing committees and to make reports of studies (p. 94).

Section 714 (c): Authorized to hold hearings, issue subpenas, administer oaths, etc. Contempt proceedings may be instituted against witness in accordance with Revised Statutes sections 102-104 (p. 94).

Section 714 (d) Personnel: Authorized to appoint necessary personnel (p. 95). Section 714 (e) Expenses: Expenses of committee not to exceed $50,000 per fiscal year. One-half paid by Senate; one-half paid by House (p. 95).

Section 715 Applicability: Provisions of act (including rent controls) to be applicable in United States, its Territories and possessions and the District of Columbia (p. 96).

Section 716 Separability: Declares that if portion of act is found invalid remainder of act shall not be affected thereby (p. 96).

Section 717 Strikes against Government: No person may be employed under this act who asserts the right to strike against the Government or advocates the overthrow of the Government by force or is a member of an organization that does so. Accepting employment while either of the two above given provisions are present makes person guilty of a felony and subject to a fine up to $10,000 or imprisonment up to 5 years, or both (p. 96).

Section 718 (a) Effective date: Title VII (general provisions) becomes effective upon date of enactment of act (p. 97).

Section 718 (b): Titles IV (price and wage stabilization) and V (rent control) shall become effective May 1, 1953 (p. 97).

Section 718 (c): Titles I (priorities and allocations), II (authority to requisition and condemn), III (expansion of productive capacity and supply), VI (control of consumer and real-estate credit) become effective July 1, 1953 (p. 97).

Section 719 (a) (1) Termination: Act terminates at the expiration of 90 days after ending of hostilities in Korea (p. 97).

Section 719 (a) (2): Title III (expansion of productive capacity and supply) terminates June 30, 1954 (p. 98).

Section 719 (a) (3): Title VII (general provisions) terminates at the time provided in paragraph 1 of this subsection, or June 30, 1954, whichever is later (p. 98). Section 719 (b) (1) Concurrent resolution: Congress by concurrent resolution or the President by proclamation may terminate act at any time (p. 98).

Section 719 (b) (2): Congress by concurrent resolution may terminate any section of act (p. 98).

Section 719 (b) (3) Liquidation: Agencies created under act may be continued for 6 months after termination of act for purposes of liquidation (p. 98).

Section 719 (c): Termination of a section or of an agency shall not affect the disbursement of funds, contracts, etc., entered into previous to such resolution (p. 98).

STATEMENT OF SENATOR CAPEHART UPON INTRODUCTION OF S. 753

Mr. President, I have just sent to the desk a bill, the Economic Stabilization Act of 1953-which proposes, among other things, a standby system of economic controls.

As members of this body well know, and as does anybody who is at all acquainted with my record on various economic and social questions, I have always been prominently identified with those who believed and strongly advocated that the less Government control and the less Government interference in our economic and social life, the better. I have been nourished on freedom.

To me "free competitive enterprise" is not a glib phrase or some loose or abstract terminology. To me it has been, truly, a way of life. It is a way of life that has profound meaning for me and which I have done everything in my power to preserve, strengthen, and develop and to which I shall continue to dedicate my life.

Mr. President, it is exactly because our system of free competitive enterprise means so much to me, and because I believe American enterprise unfettered by controls and Government regulation, functions at its optimum that I am introducing the Economic Stabilization Act of 1953 today.

No doubt, Mr. President, this sounds somewhat strange and paradoxical. But I have only decided to introduce the bill after a great deal of thoughtful deliberation based on long experience working on the subject of economic controls as a member of the Senate Banking and Currency Committee, and as lone who had personal experience with controls as an industrialist during World War II. You will recall when I first came to the Senate in 1945 I fought hard along with other Senators to amend the price-control bill so that it would operate more equitably, efficiently, and with unnecessary interference with our productive machinery. You will remember, also, when it appeared to many of us that the price-control program was doing more harm to our production and distribution machinery than good that I with others sought to abolish it.

More recently you will recall my efforts in attempting to amend the Defense Production Act so that it would be administered more fairly and so as to insure that production would not be discouraged.

No one who understands and appreciates our American economic system, no member of this illustrious body-all good independent and free Americans-likes or prefers a system of price and production controls operating over our economy. A great majority of us will be glad to see the end of all price controls on April 30. Not one member of this body, I am confident, wants to see controls continued one day longer than they think they are necessary. No one, least of all, I, wants to see controls ever reimposed once they are removed.

Certainly this is our feeling now after 2 years of economic controls. It was our feeling in 1946 after 4 years of controls.

Yet, just as surely as Congress voted for the Emergency Price Control Act of 1942 after the Japanese invaded Pearl Harbor, and again in 1950 after the North Koreans crossed the 38th parallel, just as surely shall we, much as we detest controls over our economic life, do the very same thing again.

Mr. President, it is my considered judgment that it is out of the haste with which Congress and the administration have had to act in enacting the legislation and in getting the program into operation that a very large number of our difficulties and problems with the operation of a control program arises. When you stop to consider the difficulties of trying artificially to control and direct an economy as large, varied, and as complicated and dynamic as ours, you wonder how anyone would be so bold as to attempt it. Yet, attempt it we did, and on balance, it seems to me, it was better for America and the world that we did. Naturally any system of controls will give rise to some problems and will result in a certain amount of inequities and unfairness. The problem is how to minimize them. To a large extent this is a problem which takes time, hard study, experience, and continuous cooperation between business, labor, Congress and the administration. It is the height of impracticability to expect that Congress can do a proper job of legislating a good controls law into effect in a period of less than 3 months, and

for such a law to begin properly functioning within 7 months from the incidence of the request for the legislation. To expect Congress to act within a few days or a few weeks, or for an agency to begin a reasonably adequate administration of such an act earlier than 4 months from the date it is enacted is to ignore what should be hard work and valuable experience. But even 3 months is not enough time in which to frame a good, workable and fair law, especially in a time of high tension, emotion, and accelerated economic change.

But what happens in a period of 3 months or 7 or 8 months after the incidence of an economic emergency? The very evil which we try to control or stop makes its greatest headway. People become panicky and in an effort to avoid the higher prices which they expect, rush out and clean off the shelves, hoard for anticipated needs; savings are converted into goods, and the stream of spending expands in an accelerated and explosive fashion.

Business does likewise. It expands greatly its buying, accumulates excessive inventories and sells them at higher and higher prices. The price mechanism almost ceases to function for consumers and businessmen alike. Prices become a secondary consideration and the inflationary spiral is already viciously destroying our purchasing power and increasing the cost of our defense production and our cost of government.

In June 1950, when the Korean conflict began, industry was producing at very high levels and consumer demand was being fairly well satisfied. There were no backlogs of demand like there were after World War II and no cutbacks were called for in the production of consumer durables. Yet the vicious inflationary process took place pretty much in the manner I just described. From June 1950 to January 1951 when price controls were finally imposed the cost of living had increased by 8 percent. It is estimated that this increase cost the American citizens approximately $20 billion.

More important than the money it cost is the human suffering which is unnecessarily created and the strain and stresses it puts on our economic system. It creates all sorts of dislocations, inequities, disequilibriums, friction, and disruptions in our personal lives and in our productive system which takes years to rectify, and in many cases are never corrected. Most important it delays and hinders our chief objective at such times-organizing and increasing our production potential for our national defense.

Now, I am not so naive as to think an economy like ours can shift from a peacetime economy to wartime economy, without some inflationary effects. But the effects need not be so great, nor must they take place before the shifts or changes in production actually occur.

Members of this body will recall how in June 1950 I urged an across-the-board freeze on all prices, wages, and salaries. If we had been able to do that when the Korean conflict began and adjusted the inequities later, we would have avoided a large part of the inflation we experienced in the 8 months before the freeze was finally imposed.

The bill which I have introduced would permit the President in the event a state of war should come to pass, God forbid, to freeze all prices, wages and salaries as of the business day preceding the date of the imposition of the freeze. He would then have 3 months, but in no event more than 6 months, to make adjustments in such prices, wages, and salaries, the adjustments to be made in accordance with fair and equitable standards known and clearly set forth in the bill. Imagine how fortunate we would have been to have such a law on the books on June 24, 1950. Or, think of how foolish it is not to be prepared for such an eventuality especially when we know there is an enemy increasingly arming itself for the purpose of destroying us.

We are not a militaristic nation. Yet we prepare for war. We are not a nation of soldiers, yet we have a selective service and a military reserve system in peacetime. The fact that we do prepare for war and have such a system ready to operate effectively and efficiently to help mobilize our military might is an important reason why we have been able to do that part of our job with relative smoothness, speed, and with a minimum amount of dislocation. There is no question if we were similarly prepared for economic mobilization, we could be able to do that part of our job more efficiently, effectively, and with considerably less dislocation.

At the present time our economy is in fairly good economic shape. Prices are in fairly normal relationship. We are close enough in time to controls to know a good deal about them and their administration-in the Congress, in the executive offices, and throughout industry. We are not being moved by emotion or fearing imminent changes in our economy, our consumer needs, nor do we expect radical