Senator PAYNE. Mr. Baruch, a great deal has been said about the psychological effect that would come over the people if standby controls or freeze legislation of this type was adopted.

That to me is a little false because isn't it true that there is a psychological thinking on the part of our people wondering what is going to happen next, until we can ever arrive at a point where we get permanent peace in this world?

us.

Mr. BARUCH. Quite right. It is the fear of war that hangs over

Senator PAYNE. Isn't it true that the situation that many refer to back in World War I and World War II, and even the Korean situation at present, deals with the conflict that has taken place outside of the bounds of this Nation. Aren't we in a position, due to the present age that we are living in, this atomic age, when it is recognized that an aggressor nation does have the bombs with which to drop on this Nation, or any nation of their choice, that they do have the planes to carry those bombs; that America does not have a radar system capable of detecting the approach of those bombers in adequate time to serve notice upon our people; that such an attack could happen and happen very fast upon this very Nation itself?

Don't you think because of that fact we are not dealing with situations that have been in effect in past years? That we are dealing with a situation that might develop here because of an extreme type of an aggressor who might suddenly decide that he has watched world wars take place before and he has seen the productive might of America, its ability to mobilize its manpower, to perfect and develop the items that are necessary to carry by water and by air to those distant nations and stop an aggressor. That this time they won't make the same mistake but they will carry the battle forward and stop the production at its source and try to end it there?

Mr. BARUCH. That is the overall mobilization on the books ready to go.

Senator PAYNE. So we should prepare now and not be caught waiting for the time that we hope never would come, but might come? Mr. BARUCH. That is right.

The CHAIRMAN. Are there any other questions, gentlemen? If not, Mr. Baruch, we thank you very much.

Mr. BARUCH. It has been a great pleasure.

The CHAIRMAN. Our next witness is Congressman Multer. You may proceed in your own way.

STATEMENT OF ABRAHAM J. MULTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK

Mr. MULTER. I appreciate the opportunity you have afforded me to attend, this hearing and state my views on this very important legislation you are now considering.

I am also authorized to tell you that I am speaking for 21 of my colleagues in the House who have cosponsored H. R. 3184, the principle of which is identical with that of the principle of your bill, S. 1081. Rather than take the time to read the names of my colleagues, I will furnish the names to the reporter.

The CHAIRMAN. Without objection, the names will be inserted in

the record at this point.

(The names referred to are as follows:)

Hugh J. Addonizio, New Jersey
Richard Bolling, Missouri
Vera Buchanan, Pennsylvania
Charles A. Buckley, New York
Emanuel Celler, New York
Isidore Dolligner, New York
Sidney A. Fine, New York
William J. Green, Jr., Pennsylvania
Louis B. Heller, New York
Lester Holtzman, New York

Charles R. Howell, New Jersey

Edna F. Kelly, New York
Eugene J. Keogh, New York
Arthur G. Klein, New York
Eugene J. McCarthy, Minnesota
George D. O'Brien, Michigan
Barratt O'Hara, Illinois

Adam C. Powell, Jr., New York
John J. Rooney, New York

Franklin D. Roosevelt, Jr., New York
Samuel W. Yorty, California

Mr. MULTER. There is a full and complete explanation of H. R. 3184 in the Congressional Record of February 18, and my statement of that date with reference to the bill. Therefore, I will not take the time now to burden you with those details.

I know you have conducted exhaustive hearings on the subject and you are thoroughly familiar with the background, the need and the reasons for the bill. May I very briefly summarize the purposes, as I see them, of S. 1081 and those of H. R. 3184. Incidentally, I might say that I know there are other Members of the House who have introduced bills of similar purport.

The purpose of these bills is to vest in the President the standby power to freeze prices, wages, and rents in the event the international situation should worsen, and the country is subjected to a sharp rise in prices, such as occurred immediately after the commencement of the Korean conflict. Upon the finding of the President that there is an immediate threat to the economic stability or security of the Nation, he may immediately invoke the power granted by the bill. In other words, as has been so forcefully stated here today, this is not intended to do anything now. It is a preparatory measure so we will be ready in the event the occurrence takes place.

I might indicate there is some slight difference in language between S. 1081 and H. R. 3184, which the members of this committee may want to consider. I think it is the purpose of the bill, if it is enacted, to cover prices, rents, wages and have it apply to everything across the board at the time it is invoked.

I think you will find the language used in S. 1081 is not quite sufficient to do that, because in S. 1081 you use the words, "materials and services," rather than the broader terms, "commodities, properties and services." You might consider that in executive session to determine whether or not you should use the broader language rather than the more limited language.

I might also indicate that in S. 1081 the freeze date is the day before the proclamation, while in H. R. 3184 we give the President the choice of any date within 30 days prior to that. I think the more flexible provision is the better.

In H. R. 3184, there is no provision for adjustments, while in S. 1081 there is provision for adjustment. I think in this 90-day freeze period, whatever the time is, that the President proclaims, everything should be kept in status quo

Senator MAYBANK. You don't mind being interrupted? I was thinking very much along the lines you are thinking. What about perishable commodities and things of that kind that might be caught?

I am thinking especially of citrus crops in Florida. You might hit it when everything is glutted on the market and 30 days will change it in a given locality. Think of that.

Mr. MULTER. As to perishables, my principle may be wrong and yours right. I am not sure. But as you present the problem to me, as to perishables, you either dispose of them the day they get to market or within 2 or 3 days, or they may not be able to be disposed of. Senator MAYBANK. Then they are in the glutted market and stay there 30 days; in the meantime, you could have a frost and freeze; Mr. MULTER. You have a very ticklish situation there which has to be dealt with carefully.

While we all realize the necessity of an across-the-board freeze so everybody will be kept on the same footing, at the same time we don't want to put anybody out of business or destroy anybody's business. Senator MAYBANK. Or punished by an act of God, which is what it would be.

Mr. MULTER. That is quite right. To pass to another subject, I might comment, because it fits directly in line with the question raised by Mr. Baruch as to commandeering, we must remember that commandeering is an act of government to protect itself. We are not dealing with that at the moment here. We are dealing with trade, what people are going to be doing between themselves, selling back and forth. We are not talking about the Government going in to take what it needs to maintain its security.

I might also offer the comment that section 806, which is found in the three bills, in my opinion is a necessary provision. You can't under our system of government, even in a freeze, say that a man must sell his product. I think that matter has had a good bit of attention from the best constitutional lawyers in the country, and they agree that such a provision must be in the bill or you will very likely defeat our purpose and invalidate the entire act.

I might also indicate in S. 1081 you have either intentionally or purposely omitted any reference to real property, while that is in H. R. 3184. I think you will find, if you refer to the past history of rent control, it is necessary you control the price, at least in the immediate freeze, of the disposition of real property, because one of the devices that was resorted to in the early days of rent control was to go through the scheme of a sale. So that instead of it being rented, they charged what they pleased by an installment method of sale. The CHAIRMAN. If you will yield for a moment, you are talking about many things that would rightfully belong in any bill that was going to have any duration. The duration should never be longer than the necessity or the war. But S. 1081 is intended strictly as a freeze bill, so that you could hold the status quo while the Congress was writing the necessary legislation. Much of it included what Congress would consider during that 90-day period, many of the points you are bringing up. So I think we have a question as to whether it is better to have just a freeze bill so that you freeze it and then have the Congress proceed to write up the legislation, or whether it is better, as many recommend, such as Mr. Baruch does, that you write much of the legislation and many of the rules and regulations in advance. Of course, that is one of the big subjects of controversy here.

There is no doubt but your points would have to be taken up by the Congress in case we did get into a big emergency, and S. 1081 was a law and the President actually froze it. Then you would have to get into many of the things you are talking about. But the question is whether the Congress is in a frame of mind at the moment to go any further than just what might be termed a simple freeze in case of a big emergency. Many are against even a simple freeze. Others, of course, would like to prepare the necessary laws or rules or regulations of what we are going to do. Of course, unfortunately, we don't have, very much time, as you know, because this law expires on April 30, which is about 5 weeks away.

Your points are certainly points that ought to be considered.

Mr. MULTER. I am making these suggestions because if they have been overlooked I know the committee would want to consider them. If we are talking about an across-the-board freeze authority, it should permit the President to say, "Let's hold the line now exactly where it is," and I think we would want him to do it right across the board. The CHAIRMAN. At the moment I am pretty much convinced that S. 1081 should give the power to the President, even for that short a period, while Congress is deciding what they might do, the right to ration certain goods. I think maybe that ought to be in S. 1081. At least, we have had much testimony to that effect.

There is also this question, and I would like to know what you think of this: Do you think that S. 1081 ought to likewise give the President, even during this 90-day period while Congress is deciding what it wants to do, if anything, the right to reinstate regulations X and W?

Mr. MULTER. I think it is essential that we give him that power. The CHAIRMAN. Even in a 90-day freeze?

Mr. MULTER. Yes.

The CHAIRMAN. To control the downpayments?

Mr. MULTER. You can't divorce the two things.

The CHAIRMAN. As to the downpayments and the terms on consumer goods, you think that might well go into S. 1081?

Mr. MULTER. I think it belongs there. We are in trouble if we should, during that 90-day period, let credit run away, particularly if it is installament credit. Once a man has made his contract to run 3 years or 5 years with no down payment or a minimum down payment, you can't cure that situation with any rollback legislation. I think it is important that all of these credit controls be exercised together with these price and wage controls, if the emergency strikes us. Then let's work it out in the Congress as to how much of it we want, what we want to change, what exemptions are required.

In that connection, incidentally, in H. R. 3184, I have put in a provision for the continuance of the joint committee, which is created under the Defense Production Act. Rules and regulations are primarily a legislative function. Wherever possible we ought not to delegate the making of the rules and regulations to the administrative branch or the executive branch. While I don't specify it in so many words in my bill, I think it would be well to put in a provision that that joint committee be continued and that that joint committee be authorized to employ staff, as they do now, who would work out rules and regulations which we hope they will never be called upon to use, but they can work it out just as you work out a complete mobilization plan in advance of mobilization.

Then, when we are ready to act, during that 90 day period, we will have the material correlated for it. We will have the ifs, ands and buts as to what regulations are good, bad or indifferent, and how we should proceed. I think we can save a tremendous amount of time and do a better job.

Most of the difficulty in the OPA days and most of the difficulty under the existing control law was caused by the fact that we have had to call upon men to move in quickly. They promulgated regulations which to them seemed fair and proper, but they invariably overlooked either the consumers' angle or the manufacturers' angle, the jobbers' angle or the retailers' angle. The result was that you had all the pressure from the different groups and there was constant revision.

If a committee or staff is working these things out in advance, we may be able to get to a fair set of regulations, and without too great amount of trouble. We will always have people come in and say that controls are all right, but I don't need them in my business. Barring that kind of pressure, if we can have this committee set up to do this job in advance, even though it is wasted effort and wasted money, and not used, then let's have it, and I think we can save ourselves a great deal of grief if we must use this law sometime in the future.

That summarizes my position, gentlemen.

The CHAIRMAN. Are there any questions?

Senator BENNETT. Just one observation. While Mr. Multer has been talking about S. 1081, he would take the real heart out of S. 753 and put over into S. 1081, which is the creation of a standby organization. He would have the standby organization under a joint committee staff, but he would assign to it all the responsibilities that would have been assigned by S. 753 of the standby organization setup. The CHAIRMAN. Is that your proposal?

Mr. MULTER. I would take away from the Executive any standby organization, but I would continue a standby legislative staff which could work out the rules and regulations that we may have to use. They could gather all the information, the pros and cons in the meantime.

Senator BENNETT. You believe a staff of the size that is ordinarily available to congressional committees would have the time and the ability to write a complete set of regulations for this very complex economy of ours and finally work out an equitable arrangement among all phases of the economy in the complete absence of an understanding of what the circumstances will be when this so-called great emergency hits us?

I don't believe there is a group of men on earth, including myself, certainly, who are smart enough to peer into the future and understand the economic conditions in time of emergency so they can at this time write equitable regulations. I don't think they can write equitable regulations at any time, but I think it is particularly difficult and completely impossible to start out without a knowledge of what the situation is going to be.

Mr. MULTER. One comment, Senator, and one reservation. The reservation is that no matter what we bring out, whether by law or regulation, it is not going to satisfy everybody.