arises, and the very life of a true democracy depends on keeping the control of governmental policy in the hands of the people's constitutional representatives.TM 3. In time of emergency speed and ability to make quick decisions are needed, but the counsel of the people's representatives is also needed. Congress can provide adequately for speed and quick decisions without surrendering its responsibilities and without placing in the judgment of one man absolute powers over the economic life of the Nation. He might be the ablest man in the Nation, but the problems confronting the President in a defense emergency are so extremely complex that Congress has no right to assume that any one man can meet them without adequate aid. The people have every right to expect that Congress will provide sufficient aid and at the same time maintain adequate control of those powers upon which their freedom depends.

4. The bill under consideration gives the President almost complete powers over our economic life for a period of 2 years. No matter how many mistakes might be made, or how serious they might be, only by a procedure almost equivalent to impeachment could those powers be retrieved, and then possibly too late to prevent irreparable damage. The powers might be wisely administered in some respect and poorly administered in others, in which case Congress would be practically helpless to correct the weakness, no matter how glaring it might be

5. On the other hand, quick decisions and quick action, where action is needed, must not be subjected to the slow processes of congressional deliberation.We deem the present situation so serious that all practical steps should be taken without delay to mobilize our full economic strength to meet any emergency which may occur. Events may soon develop which justify the immediate exer cise of any one or most of the powers conferred in the bill. Even more power to ration supplies at the consumer level and to control prices and wages may be needed. With two or three exceptions, which we will point out, we think it probably wise to grant the President most of the powers contained in the bill if and only if, adequate safeguards are provided so that the Congress is kept in touch with the situation at all times; so that mistakes may be promptly corrected; and so that limitations may be provided where powers are not wisely used.

6. Many costly mistakes made during and since World War II could have been avoided if the representatives of the people had been consulted. These are still fresh in our minds, and should serve as a warning not to depend almost entirely on the judgment of one man, but rather to provide for adequate consultation and the sharing of the responsibility by the Congress.

7. We believe. this can be accomplished without sacrificing in any respect the power for quick decisions and quick action by providing two amendments to the bill.

8. First, we would recommend that there be established a bipartisan Joint Security Committee of eight members, four to be selected from each House. It should be the purpose in the selection of the members of this Joint Security Committee to give major consideration to the experience, the capacity, and the trustworthiness of those selected, without regard to their seniority or committee position. To accomplish this it is suggested that, by caucus, the majority and minority parties in each House each select two members, and that the eight members so selected be confirmed by two-thirds vote of each House, thus putting a firm stamp of approval upon them. Any member should be removable by a two-thirds vote of the House of which he is a member.

9. This Joint Security Committee should act as an advisory committee to the President, and the powers conferred upon the President in this bill should be exercisable only after he has consulted with the Joint Security Committee with reference to them. The Committee should be constantly available throughout the life of the emergency. The President's hands should not be tied by any requirement that the Committee assent to his action. However, the Committee should know what is going on except in one type of case, when in the judgment of the President, the military security of the Nation demands complete secrecy. It is thought, however, that with men thus selected for this position of trust, such cases would be rare. The Joint Security Committee should make to the Congress such reports and recommendations as it determines are justified.

10. Thus the Congress would continuously work with the President in carrying the heavy war responsibilities, while leaving to him the right to make decisions after the benefit of conference with the representatives of the people.

11. The second amendment should be to provide that the Congress by joint resolution might withdraw or modify any one of the powers granted.

12. With such safeguards much broader powers could safely be granted to the President than if there were no such safeguards. Without some such amend

ments we believe practically every title of the bill would need very careful study with many revisions, because of the possibility of the serious consequences which might easily arise from the unwise exercise of the extremely broad powers provided in it.

13. We wish to comment on two sections specifically. Section 412 would serve no useful purpose and should be deleted. Its sole purpose is to place in the President's hands power to prevent inflation in the price of a few commodities of which the Government holds a supply. It authorizes their sale at the support price instead of at 105 percent of the support price plus carrying charges as under existing law. There can be no danger of an inflated price as long as Government stocks can be sold at less than parity. That is already provided in existing law. The proposed provision abandons the whole parity concept and establishes an uncertain support level as a fair market for farmers. It is the opening wedge for possible roll backs which proved completely unworkable during the days of OPA. When the support price and the sales price are the same, no private dealer could enter the market, with the result that Government trading would soon be substituted for private operations. The very fact that such a futile and unworkable provision should be proposed demonstrates clearly the need the President has for consultation with representatives of the Congress.

14. Section 411 deals with a highly technical subject which has had extensive study by the Committees of Agriculture. We feel that this section should also be deleted and a new bill covering this section alone should be introduced and referred to the Committee on Agriculture, because we believe that limitations should be provided to avoid the possibility of costly errors.

15. Summing up, we recommend the deletion of sections 411 and 412. We believe the bill provides a dangerous delegation of powers unless a Joint Security Committee of the Congress to confer with the President is created, leaving him freedom of action, but providing advice and counsel so that our democratic processes may be preserved and put to practical use.

Hon. BRENT SPENCE,

HOUSE OF REPRESENTATIVES,
Washington, D. C., July 26, 1950.

Chairman, House Committee on Banking and Currency,

Washington, D. C.

DEAR MR. CHAIRMAN: The attached resolution from the Restaurant Beverage Association of Washington, D. C., is self-explanatory.

I would appreciate your bringing this to the attention of the members of your committee for whatever action they deem necessary.

Sincerely yours,

EDWARD A. GARMATZ, M. C.

A RESOLUTION

Whereas on the 19th day of July 1950 the President in his message to the Congress of the United States and the American people, stated that the American people are united in their belief in democratic freedom and united in their detest of communistic slavery; and

Whereas the Armed Forces of the United States are presently engaged in combating an "act of raw communistic aggression" in Korea; and

Whereas these series of events are of signal importance to every citizen who will be called upon to do his share in order that our inherent rights and the freedom of this Nation are preserved; and

Whereas it will be necessary to increase our military strength with men, equipment, and supplies; and

Whereas it will be necessary for our Government to bring about a considerable adjustment in our national economy by proper legislation; and

Whereas the Restaurant Beverage Association of Washington, D. C., à trade association affiliated with the National Licensed Beverage Association, comprising retail restaurants serving food and drink to the general public, desires to fully cooperate with the President of the United States in order that the purpose of the United Nations to maintain peace among all nations may be fulfilled and our generations of young people throughout the world will not be compelled to take up arms again but may continue to pursue the paths of freedom, equality, opportunity, and happiness in a world truly at peace; and

Whereas the members of this association are desirous of offering their services, goods, and processed foods for human consumption at a fair and reasonable cost to consumer and server; and

Whereas in recent weeks an alarming increase in food commodity prices has occurred, which it is believed, has been caused by artificial stimulation, hoarding, and the unscrupulous operations of small groups of individuals seeking unethical profit and gain; and

Whereas the members of the Restaurant Beverage Association faced with these alarming, unjustifiable, and unnecessary increases and being further unwilling and unable to pass such increases along to the consuming public; and

Whereas the members of this association comprising small-business men with life savings invested and little or no capital reserves, are faced with bankruptcy, ruination, and certain elimination from the American economy unless these conditions are corrected; and

Whereas the extreme urgency of the situation requires prompt remedial action and relief: Therefore be it

Resolved, That the President and Congress of the United States take immediate legislative action embracing:

(1). A "freeze" of all food commodity prices.

(2). A “roll-back" of prices to a period consistent with sound and practical

economy.

(3). The institution of a form of control necessary to further stabilize the food industry from the producer to the consumer in order that a continuous and uninterrupted flow of food products shall be maintained at a fair and reasonable cost. RESTAURANT BEVERAGE ASSOCIATION OF WASHINGTON, D. C., ELMER F. RICHTER, Executive Secretary.

Hon. BRENT SPENCE,

MILLERS' NATIONAL FEDERATION,
Washington 4, D. C., July 26, 1950.

Chairman, Committee on Banking and Currency,

House of Representatives, Washington 25, D. C.

MY DEAR MR. CHAIRMAN: The wheat-flour-milling industry of the United States has an interest in two sections of H. R. 9176, which is now before your committee for consideration. These sections are 411 and 412.

The industry would have welcomed an opportunity to appear before your committee in person to explain our interest in these sections of the bill and to present our views with respect to them. However, in view of the limited time available and in the interest of conserving the time of your committee, we are presenting our views to you in writing in the enclosed statement with the request that it be made a part of the record of your hearings for your information and that of the members of your committee.

With kindest regards, I am

Sincerely yours,

HERMAN FAKLER, Vice President.

STATEMENT BY THE MILLERS' NATIONAL FEDERATION, WASHINGTON 4, D. C., JULY 26, 1950

Hon. BRENT SPENCE,

Chairman, Committee on Banking and Currency,

House of Representatives, Washington 25, D. C.

DEAR MR. CHAIRMAN: The Millers' National Federation is the national association of the wheat-flour-milling industry of the United States. Its membership includes approximately 328 milling companies, located in 37 States and the District of Columbia. These milling companies produce approximately 85 percent of the total wheat flour production of the United States.

The federation, in behalf of the wheat-flour-milling industry of the United States represented in its membership, wishes to bring to your attention and that of the members of your committee, the views of the industry with respect to sections 411 and 412 of H. R. 9176, now under consideration by your committee.

The Millers' National Federation submits this statement rather than to request the privilege to appear before the committee in person in the interest of conserving your time and in consideration of the urgency for action on other provisions contained in this proposed legislation.

other essential rights necessary in this work. Tests indicate that the use of iron ore produced from taconites by reason of the high iron content, increases the capacity of a blast furnace; thus the use of beneficiated iron ore would enable the blast furnaces to produce more pig iron without expansion in blast furnace facilities. Furthermore, the richer beneficiated iron ore produced from taconite would be very helpful for mixing with or sweetening, so to speak, those direct shipping ores which have an iron content of less than 50 percent of iron natural. Consequently, it appears essential that Congress should encourage the construction of plants to beneficiate taconites in order not only to replace the shortage, but also to improve the quality of the direct shipping iron ores.

The Congress of the United States could be very helpful in encouraging the construction of plants to beneficiate taconite by adding to section 302 of House bill 9176, now under consideration, the wording of either House bill 8512 or House bill 9202 so there would be specific authority to make loans for the construction of facilities to beneficiate taconites or iron formation. If Congress, on the other hand, in its good judgment, does not consider it advisable to amend section 302 as above proposed, I then urge that at least the report of this committee should contain a directive with respect to section 302. Such directive could indicate that one of the purposes of the enactment of section 302 was to make loans for the development and production of iron ore from taconites or iron formation. Such loans should cover a very large percentage of the cost of the facilities and be for a long term with a provision for repayment on a unit of production basis, that is, on each ton of iron ore produced from the beneficiating plants, a fixed amount would be paid to apply on interest and amortization of the loan. I do not know whether any producer of ore will be required to take advantage of a right so granted, but it would be unfortunate, indeed, if in times of emergency such as this when it is urgent that we go forward with the building of plants to beneficiate the taconites that a producer of ore would be unable to do so by reason of being unable to obtain the necessary money from either private sources or the Federal Government.

STATEMENT BY SYD J. HUGHES, VICE PRESIDENT, INDUSTRIAL BANK OF COMMERCE, NEW YORK CITY

Recommendation on the part of the administration for the restoration of consumer-credit controls is not essentially a product of the war emergency.

Since the cessation of hostilities of World War II, the President has consistently sought from the Congress the authority for such intimate and far-reaching domination over the purely personal customs and habits of every individual and of every family in the Nation.

Consumer credit regulation, conceived in the early stages of World War II and imposed upon the public by Executive decree under a concededly dubious interpretation of the Trading With the Enemy Act of 1917, has since been described by its peacetime proponents as antideflationary or antiinflationary in character, whichever objective was in currency.

In war it is supposed to contribute toward the conservation of essential materials and to remove obstacles from the channels of production and distribution. In peace it is supposed to have some profound influence upon the leveling of the peaks and valleys of the Nation's economic cycles, as well as constituting a blend of moral and economic discipline as concocted by the philosophy or whims of its administrators.

In fact, as an instrument of total war, regulation of consumer credit contributes absolutely nothing to the necessary regimentation of an economy already firmly gripped by allocations, priorities, and rationing.

It is a cumbersomely superfluous restriction or prohibition upon the acquisition by the public of manufactured articles that are not being manufactured, or are subject to the strict limitations of priorities and rationing.

In peacetime such regulation is an unwarranted and discriminatory invasion and abridgment of individual's rights. It is at most, only a spoke in the cycle of national economics and not a force of propulsion.

The course and volume of consumer credit is charted by the indices of the national product, the national income, and personal income. It may have some barometric significance in the gyrations of inflationary and deflationary factors, but it is not in itself an important pressure upon or a potent motivation of these gyrations.

To contend in time of total war that credit restrictions upon a nonexistent product is logical, or that in time of peace and prosperity such credit be conserved for the inevitable days of adversity, is an indulgence in pure fantasy.

Even if the public in time of peace, but in its hour of economic adversity were to seek out the channels of credit as a panacea, which by practical experience it does not do, what of the vendor of credit who blithely acquiesces?

He is quickly out of business or, if a quasi-public institution such as a bank, he is under new management.

Now, in neither the black of total war nor the white of total peace but in the fuzzy area of military grayness, we again have the subject shoved to the forefront as a specific for our national and international ailments.

Thus its proponents defend the potency of consumer-credit control as an instrumentality of great consequence in total war, in total peace, in deflation, in indiation, in partial war, and in partial peace.

In short, it is control for the sake of control and, whatever national or international condition or situation appears conducive to the attainment of this end, they are utilized with great declamatory vigor.

Those who point to the feepieness of such control as a war-victory measure and its unwarranted intervention as a peacetime abomination of the police state expose themselves to the risk of being branded as enemies of the common good. It is not paradoxical that some large financial and banking organizations advocate such controls in or out of war. Such advocacy is another manifestation of that peculiar hybrid evolution of some business and industrial leaders who proclaim for Government control when it appears to be their competitive business advantage and conversely denounce "Government interference."

As this Nation confronts the awful possibility of total war and the ghastly ravages of inflation, it is flicking at the target with a tack hammer when it toys with such controls instead of wieiding the sledge-hammer blows of wage and price control, priorities and rationing and greater productivity.

By means of its specific and far-reaching powers to regulate bank-reserve requirements and marginal trading, the Government has an effective instrument for the curtailment of credit in a quantitative sense.

If by its own excesses in credit ventures, such as domestic construction, the Government now finds it advisable to retreat to a more conservative policy, such a retreat was long overdue without the provocation of national emergency.

But such governmental excesses are no criteria by which to measure the eredit responsibility of non-Government agencies.

H. R. 9176, the House bill for the reimposition of Government controls over consumer credit, following on the heels of the Government's overdue selfrestraints, would appear to be a handy device for further confusing public thinking on the whole subject of autocratic government controls.

At the State levels there have long been laws and regulations governing consumer credit both as it applies to the supervision of the vendor and the protection of the consumer.

Interjection of the Federal Government into what is essentially a State and local domain, only contributes to the expansion of an ever-expanding bureaueracy. And in this instance a dead hand of bureaucracy, without the redeeming justification of benevolence, protection, or incentive.

Through the Government's right of levy upon the individual income it already determines what proportion of an earned dollar the individual or the family head can retain for his own disposal.

Through further control of individual and family credits, Government drives the entering wedge of dictating how and for what the public's remaining dollars may be expended.

Å high Government official has been known to take the position that, by "sopping up" through credit control any excess funds the individual or family may have available, such excess funds could then be diverted into Government bonds or additional taxes. This was a peacetime utterance. It is symptomatie of that type of power intoxication which assumes the people exist for the Government and not the Government for the people.

If this is the true purpose of such regulatory and restrictive authority, then let the public be so informed without obscuring the purpose in the name of "emergency."

As an inflationary deterrent, such controls only impose harsher conditions upon the individual or the family budgeting their disposable income to the distinct advantage of those in a strong cash or liquid position.

Are we again to enlarge upon the premise that "he who has gets"?