Mr. BERGSON. That is right.

Senator BRICKER. Which proved in the war, I think, to be a very cumbersome and very annoying situation to a lot of the regulatory authorities.

I wonder if you have studied that sufficiently to know the need for it.

Mr. BERGSON. The authority we have proposed, Senator, gives the President the authority, and, of course, by delegation, I would assume the Economic Stabilizer, the authority to determine not to intervene. This is not mandatory intervention on the part of the Government, so that they would not be in every single case. It requires notification and mandatory permission for intervention if the decision to intervene is made.

The purpose of it is to be able to apprise the State regulatory agencies of the stabilization difficulties that may be created by any proposed rate increase.

Senator BRICKER. Do you not think they know that?

Mr. BERGSON. I think it might be helpful to them to have the particulars brought to their attention. It in no way imposes

Senator BRICKER. Would it not ultimately hold up the case and the right to produce testimony and delay and interfere? That is the way it was used, I know, in many instances, and I for one am opposed to the Federal Government sticking its nose into that which is primarily and essentially a State business. I do not think if the utilities are properly regulated in the State it has one iota of impact upon the inflationary program in this country if the rates are not exorbitant, and it is the authority of State commissions and regulatory bodies to see that they are not exorbitant, and I think to a large degree they have been very successful in doing that.

Mr. BERGSON. I agree with you to that extent, Senator, but in the areas where it has not worked it seems desirable to have the authority-

Senator BRICKER. What are some of those areas?

Mr. BERGSON. The Economic Stabilization people are the ones who have encountered this difficulty, and they will be appearing before you, and they will give you the specific details. I do not have them with me, but we will see to it that you have them.

Senator BRICKER. I wish you would, because if it has any substantial effect upon the program, certainly no one would oppose it, but just to give you the stand-by authority to go into a State commission and say we have the right to interfere, and we will present testimony here for a couple of months, which I have known them to do, I do not think it is a proper relationship between the States and the Federal Government.

Mr. BERGSON. I agree that if there is no justification for it, the authority should not be given, but they assure us that there is justification for it, and we will ask them to bring you the evidence.

Senator BRICKER. Will you make a note that we want that and see that they are advised?

Mr. BERGSON. Certainly.

Senator BRICKER. On page 20 you talk about rent control, and that the Federal Government should not enter into the field of rent control where the State and local authorities provide adequate facilities. Who is going to determine whether those facilities are adequate or

not?

Mr. WILSON. We will have our ESA establishments in all the States, and if it appears inadequate, and they maintain adequate steps are not being taken, then we want to use the authority the President has, but we have to use the ESA organization for that determination.

Senator BRICKER. I am one who has felt that the State authority and local authority was the proper one to administer a program of this kind. Say, for instance, New York had a rent-control programand they have one-and the President should decide that is not adequate; it is not doing the job. This would give him authority, under your suggested amendment, to go in and say to New York you are not doing this in the right way. We are just going to superimpose the Federal authority over the State regulatory authority. Is that the situation?

Mr. BERGSON. That is a possibility, Senator, but I hope you are presuming an extreme situation.

Senator BRICKER. That is the only way you can test the law; is it

not!

Mr. BERGSON. I am sure there will be no desire on the part of the Federal Government to intervene where there is reasonably adequate State regulation, for a variety of reasons. One is, as you point out, that a good, well-administered State regulatory agency can do the job better: and, secondly, there will be enough for them to do anyway. There is the danger you mention, but I do not think it is as real as apparent.

Senator BRICKER. Of course I agree you have enough to do anyway. If this law is enacted as suggested you will have plenty on your hands. This, of course, properly should be, I suppose, put to Mr. Woods, but since you have brought it up, I would like to pose this problem to you: Wages have gone up tremendously since the war or since 1940 and 1941; prices have gone up, as we all know, multiplied many times over in some instances, and the last testimony we had was that under rent control there had been a 15-percent, on the average, increase in rents during that same period, maybe 15, 20, or 25 percent.

Have you any plan or program to take care of the needs of those people that have tried to provide for their own social security, so to speak, in investing their money in real estate for rental purposes, to give them the advantage of present-day prices, and to take into consideration the continuing-maybe not continuing, and I hope it is not continuing-adulteration of the dollar which has taken place since 1940 when these rent controls were imposed up to the present time.

Mr. BERGSON. That is done, specifically, in the bill, Senator. It provides that in setting any ceilings in areas where there are presently ceilings, that individual and general adjustments in maximum rents shall be made to compensate landlords for increases in cost of operation and maintenance, since the maximum rent is stated in the rentcontrol area. That is a mandatory provision.

Senator BRICKER. We have tried to do that. You put it on individual or general cases. Of course, the implementation of it is the difficult problem.

Mr. BERGSON. That is the problem; yes.

Senator BRICKER. I do not think it is needed in area

you have increased demands because of war producti

the camps in the new installations like the atomic energy and the like. Outside of that, it seems to me that it is purely a local problem unless you do give the property owners who rent the property-and most of them are small owners, 82 percent have four apartments or four rental units, or less-the advantage of the inflation that has taken place up to the present time and put them on a comparable basis with agriculture, with labor, and with industry.

Mr. BERGSON. As you pointed out at the start of your question, Senator, Mr. Woods will probably be able to give you a lot more specific information on that point than we are able to do, but I would like to point this out, that those areas, theoretically now, and I do not know enough of the facts to want to argue with you on specifics, but theoretically those areas which are presently under control are those areas where controls are needed. There is provision in this act for adjustment there. For areas which are not presently under control, and which it is determined that controls are subsequently, or may subsequently be needed, the requirement is that due consideration must be given to the May 24-June 24, 1950, period, which is the same requirement that you have in your pricing regulations. So that if new controls are imposed in areas which are presently decontrolled or never have been controlled, the considerations you mentioned will be mandatory.

Senator BRICKER. That would apply even to the areas that have been continually controlled throughout the whole period. Those are the ones I am concerned with.

Mr. BERGSON. Those are the ones, of course

Senator BRICKER. Those are the ones that have suffered, those are the ones that have carried too much of the burden of the reconstruction program.

Mr. BERGSON. Those are the ones it is assumed will have required the continuation of controls. As I said, I do not know the specific details about that, but Mr. Woods will know.

Senator BRICKER. I am not concerned with the big-property owners, with the big-apartment-house owners, they have the money and the power and the influence and the contacts to take care of their needs, but the others have not, and they will be punished and punished terribly. In many instances it has been for political considerations only, and we have determined that to my satisfaction on the record. It has been determined also by contacts on the outside. There are instances I personally know about, and we do not want a continuation of a political institution of this kind that will penalize one segment of a Society just because there are more votes on the other side. That is one thing I definitely rebel against.

One more question, Mr. Wilson: You mention here the control of commodity speculation, you state the amount of speculation in commodities, the increase in 1951 over 1950, and the small speculator coming in, and then the need for the hedging right.

Have you any evidence that commodity speculation really affects ultimately the price of commodities? The reason I ask you that is there was a report of the Committee on the Economic Report that indicated that it does not. We had that up, Mr. Chairman, at the time we enacted the first bill.

The CHAIRMAN. That is right.

Senator BRICKER. I was just wondering—

The CHAIRMAN. I was thinking when you said that about the wheat markets that there is probably more speculation in the wheat markets, because you had a ceiling price on cotton, so the ones that used to speculate in the cotton market went over to the wheat market. Did not that happen?

Mr. WILSON. I do not know.

The CHAIRMAN. I should imagine so, because in the market in May and July when Mr. DiSalle put the price freeze on, there was no trading in the market for months. So if people did trade, I would judge from what I have seen they just moved over to the wheat market.

Senator BRICKER. What I am getting at is the evidence we have or that you have at hand, of the effect that commodity trading has upon the price of the commodity.

Mr. WILSON. Well, we will ask Mr. Brannan to bring over the specific data on it. Senator. I am not sure myself of the effect it has on it. Senator BRICKER. If it has any effect upon the price, that is what we are driving at.

Mr. Wises. All I know is that on a certain commodity the farmer got a certain price, we will cali it a dollar, and those goods were sold to the user which happens to be the mills of the country, at $1.50. a 50-percent mark-up, and it was alleged to have been brought about to a considerable degree, Lot altogether, of course, by speculation in that particular con.modity. Well, if there is that sort of a lush practice that runs the price of it up 50 percent, and if it is brought about purely by speculation—I think one of two things ought to happen: The American people should not have to pay that big bill to the speculators, and we ought to find a way of minimizing the speculation or. if the speculation goes on, we ought to find a way of grabbing the profit.

Senator BROKER. I agree with you entirely on that. The only question I have in mind. and I have it only because of the report of the Joint Committee on the Economic Report, is what inhence the commodity exchange has upon the price of the product ultimately to the consumer! That is what we are trying to protect against, the infationary practice. We have no interest in protecting a gambler one way or the other, but if it has any effect upon the price, that is what we want, the basic proof of what effect it has. I have no objection to regulation of the extreme, if it is raising unjustly the price of the commodity and the profit is going into the pockets of those who are dealing of the exchanges. Certainly that all ought to be regulated,

as Tom SAT.

Mr. WISON. That is all I am trying to do.

Senator Bazowe. Or the profits taken by the Goverment through sone way, by taration or another way.

On page * you mention that these changes involved the antiLaring presons of title L. Have you anything in addition to what we talked about a minute ago as to the penalties in those antiboarding provisions!

22:1 to

Mr. Brass. The only change we are recommending there, Senator, is a provision that would permit the President by repilation, to permit kode sozzz, rather than the word bering” i materia there is an antiboarding designation. For example, it m able to in due importers to keep more than their norm hand so that we could have a supply available in die o

the camps in the new installations like the atomic energy and the like. Outside of that, it seems to me that it is purely a local problem unless you do give the property owners who rent the property-and most of them are small owners, 82 percent have four apartments or four rental units, or less-the advantage of the inflation that has taken place up to the present time and put them on a comparable basis with agriculture, with labor, and with industry.

Mr. BERGSON. As you pointed out at the start of your question, Senator, Mr. Woods will probably be able to give you a lot more specific information on that point than we are able to do, but I would like to point this out, that those areas, theoretically now, and I do not know enough of the facts to want to argue with you on specifics, but theoretically those areas which are presently under control are those areas where controls are needed. There is provision in this act for adjustment there. For areas which are not presently under control, and which it is determined that controls are subsequently, or may subsequently be needed, the requirement is that due consideration must be given to the May 24-June 24, 1950, period, which is the same requirement that you have in your pricing regulations. So that if new controls are imposed in areas which are presently decontrolled or never have been controlled, the considerations you mentioned will be mandatory.

Senator BRICKER. That would apply even to the areas that have been continually controlled throughout the whole period. Those are the ones I am concerned with.

Mr. BERGSON. Those are the ones, of course

Senator BRICKER. Those are the ones that have suffered, those are the ones that have carried too much of the burden of the reconstruction program.

Mr. BERGSON. Those are the ones it is assumed will have required the continuation of controls. As I said, I do not know the specific details about that, but Mr. Woods will know.

Senator BRICKER. I am not concerned with the big-property owners, with the big-apartment-house owners, they have the money and the power and the influence and the contacts to take care of their needs, but the others have not, and they will be punished and punished terribly. In many instances it has been for political considerations_only, and we have determined that to my satisfaction on the record. It has been determined also by contacts on the outside. There are instances I personally know about, and we do not want a continuation of a political institution of this kind that will penalize one segment of a society just because there are more votes on the other side. That is one thing I definitely rebel against.

One more question, Mr. Wilson: You mention here the control of commodity speculation, you state the amount of speculation in commodities, the increase in 1951 over 1950, and the small speculator coming in, and then the need for the hedging right.

Have you any evidence that commodity speculation really affects ultimately the price of commodities? The reason I ask you that is there was a report of the Committee on the Economic Report that indicated that it does not. We had that up, Mr. Chairman, at the time we enacted the first bill.

The CHAIRMAN. That is right.

Senator BRICKER. I was just wondering