Comparison of the Defense Production Act of 1950 with World War statutes and Executive orders-Continued TITLE V-GENERAL PROVISIONS Defense Production Act of 1950 SEC. 501. (a) It is the sense of the Congress that small-business enterprises be encouraged to make the greatest possible contribution toward achieving the objectives of this Act. (b) In order to carry out this policy (i) the President shall provide small-business enterprises with full information concerning the provisions of this Act relating to, or of benefit to, such enterprises and concerning the activities of the various departments and agencies under this Act; (ii) in the formation of any business advisory committees under this Act, consideration shall be given to providing fair representation for small, medium, and large business enterprises, for different geographical areas, for trade association members and nonmembers, and for different segments of the industry; (iii) in administering this Act, such exemptions shall be provided for small-business enterprises as may be feasible without impeding the accomplishment of the objectives of this Act; and (iv) in administering this Act, special provision shall be made for the expeditious handling of all requests, applications, or appeals from small-business enterprises. World War II legislation (i) (Similar idea is expressed in Sec. 632 of National Military Establishment Appropriation Act of 1950 (P. L. 434, 81st Congress) but provisions are different.) (ii) (Similar idea is expressed in S. Con. Res. 14 (61 Stat. 1024) but provisions are different.) (iv) (Similar intention is expressed in Federal Reports Act of 1942 (56 Stat. 1078) but provisions are different.) (a) 56 Stat. 179 (3): "(3)* person (which, for the purpose of this subsection (a) shall include any individual, partnership, association, business trust, corporation, or any organized group of persons, whether incorporated or not), and make such investigations, as may be necessary or appropriate, in his discretion, to the enforcement or administration of the provisions of this subsection (a)." First War Powers Act of December 18, 1941, Secs. 201, 301 (55 Stat. 839): "SEC. 201. The President may authorize any department or agency of the Government exercising functions in connection with the prosecution of the war effort, in accordance with regulations prescribed by the President for the protection of the interests of the Government, to enter into contracts and into amendments or modifications of contracts heretofore or hereafter made and to make advance, progress and other payments thereon, without regard to the provisions of law relating to the making, performance, amendment, or modification of contracts whenever he deems such action would facilitate the prosecution of the war "SEC. 301.*** * SEC. 505. (a) The President shall be entitled, by regulation, subpena, or otherwise, to obtain such information from, require such reports and the keeping of such records by, make such inspection of the books, records, and other writings, premises or property of, and take the sworn testimony of, any person as may be necessary or appropriate, in his discretion, to the enforcement or the administration of this Act and the regulations or orders issued thereunder. The President shall issue regulations insuring that the authority of this subsection will be utilized only after the scope and purpose of the investigation, inspection, or inquiry to be made have been defined by competent authority. Second War Powers Act of March 27, 1942. Title III (56 Stat. 179, ch. 199, Sec. 301): SEC. 2 (a, 3-4): "The President shall be entitled to obtain such information from, require such reports and the keeping of such records by, make such inspection of the books, records, and other writings, premises of property of, any person. . . , and make such investigations, as may be necessary or appropriate, in his discretion, to the enforcement or administration of the provisions of this subsection (a). "For the purpose of obtaining any information, verifying any report required, or making any investigation pursuant to paragraph (3), the President may administer oaths and affirmations, and may require by subpena or otherwise the attendance and testimony of witnesses and the production of any books or records or any other documentary or physical evidence which may be relevant to the inquiry. Comparison of the Defense Production Act of 1950 with World War statutes and Executive orders-Continued TITLE V-GENERAL PROVISIONS-Continued Defense Production Act of 1950 (b) No person shall be excused from attending and testifying or from producing books, papers, documents, and other evidence in obedience to a subpena before any grand jury or in any court preceeding based upon or growing out of any alleged violation of this Act on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to penalty or forfeiture; but no natural person shall be prosecuted or subjected to any penalty or forfeiture, for or on account of any transaction, matter, or thing concerning which he is so compelled, after having claimed his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that such natural person so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying: Provided, That the immunity granted herein from prosecution and punishment and from any penalty or forefiture shall not be construed to vest in any individual any right to priorities assistance, to the allocation of materials, or to any other benefit which is within the power of the President to grant under any provision of this Act. (c) The production of a persons' books, records, or other documentary evidence shall not be required at any place other than the place where such person usually keeps them, if, prior to the return date specified in the regulations, subpena, or other document issued with respect thereto, such person furnishes the President with a true copy of such books, records, or other documentary evidence (certified by such person under oath to be a true and correct copy) or enters into a stipulation with the President as to the information contained in such books, records, or other documentary evidence. Witnesses shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. (d) Information obtained under this section which the President deems confidential or with reference to which a request for confidential treatment is made by the person furnishing such information shall not be published or disclosed unless the President determines that the withholding thereof is contrary to the interest of the national defense, and any person willfully violating this provision shall, upon conviction be fined not more than $10,000 or imprisoned for not more than one year, or both. SEC. 506. The district courts of the United States and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have jurisdiction of violations of this Act or any rule, regulation, order, or subpena thereunder, and of all civil actions under this Act to enforce any liability or duty created by, or to enjoin any violation cf, this Act or any rule, regulation, order, or subpena thereunder. Any criminal proceeding on account of any such violation may be brought in any district in which any act, failure to act, or transaction constituting the violation occurred. Any such civil action may be brought in any such distirct or in the district in which the defendant resides or transacts business. Process in such cases, criminal or civil, may be served in any district wherein the defendant resides or transacts business or wherever the defendant may be found; the subpena for witnesses who are required to attend a court in any district in such case may run into any other district. The termination of the authority granted in any title or section of this Act, or of any rule, regulation, or order issued thereunder, shall not operate to defeat any suit, action, or prosecution, whether theretofore or thereafter commenced, with respect to any right, liability, or offense incurrred or committed prior to the termination date of such title or of such rule, regulation, or order. No costs shall be assessed against the United States in any proceeding under this Act. World War II legislation "No person shall be excused from attending and testifying or from producing any books, records, or other documentary evidence or certified copies thereof or physical evidence in obedience to any such subpena, or in any action or proceeding which may be instituted under this subsection (a), on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual shall be subject to prosecution and punishment or to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled to testify or produce evidence, documentary or otherwise, after having claimed his privilege against self-incrimination, except that any such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying . "Such attendance and testimony of witnesses and the production of such books, records, or other documentary or physical evidence may be required at any designated place from any State, Territory, or other place subject to the jurisdiction of the United States: Provided, That the production of a person's books, records, or other documentary evidence shall not be required at any place other than the place where such person resides or transacts business, if, prior to the return date specified in the subpena issued with respect thereto, such person furnishes the President with a true copy of such books, records, or other documentary evidence (certified by such person under oath to be a true and correct copy) or enters into a stipulation with the President as to the information contained in such books, records, or other documentary evidence. Witnesses shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. . "The President shall not publish or disclose any information obtained under this paragraph which the President deems confidential or with reference to which a request for confidential treatment is made by the person furnishing such information, unless the President determines that the withholding thereof is contrary to the interest of the national defense and security; and anyone violating this provision shall be guilty of a felony and upon conviction thereof shall be fined not exceeding $1,000, or be imprisoned not exceeding two years, or both." Second War Powers Act of March 27, 1942, Title III (56 Stat. 179-180 c.) 199 Sec. 2 (a, 6). 66* * * "SEC. 2. (a, 6) The district courts of the United States and the United States courts of any Territory or other place subject to the jurisdiction of the United States and the courts of the Philippine Islands shall have jurisdiction of violations of this subsection (a) or any rule, regulation, or order or subpena thereunder, whether heretofore or hereafter issued, and of all civil actions under this subsection (a) to enforce any libaility or duty created by, or to enjoin any violation of, this subsection (a) or any rule, regulation, order, or subpena thereunder whether heretofore or hereafter issued. Any criminal proceeding on account of any such violation may be brought in any district in which any act, failure to act, or transaction constituting the violation occurred. Any such civil action may be brought in any such district or in the district in which the defendant resides or transacts business. Process in such cases, criminal or civil, may be served in any district wherein the defendant resides or transacts business or wherever the defendant may be found; and subpena for witnesses who are required to attend a court in any district in any such case may run into any other district. No costs shall be assessed against the United States in any proceeding under the subsection (a)." Comparison of the Defense Production Act of 1950 with World War statutes and Executive orders-Continued TITLE V-GENERAL PROVISIONS-Continued Defense Production Act of 1950 SEC. 507. No person shall be held liable for damages or penalties for any act or failure to act resulting directly or indirectly from his compliance with a rule, regulation, or order issued pursuant to title II of this Act, notwithstanding that any such rule, regulation, or order shall thereafter be declared by judicial or other competent authority to be invalid. No person shall discriminate against orders or contracts to which priority is assigned or for which materials or facilities are allocated under title II of this Act or under any rule, regulation, or order issued thereunder, by charging higher prices or by imposing different terms and conditions for such orders or contracts than for other generally comparable orders or contracts, or in any other manner. SEC. 508. SEC. 509. 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. "SEC. 2 (a, 7). No person shall be held liable for damages or penalties for any default under any contract or order which shall result directly or indirectly from compliance with this subsection (a) or any rule, regulation, or order issued thereunder, notwithstanding that any such rule, regulation, or order shall thereafter be declared by judicial or other competent authority to be invalid." Anti-Inflation Act of December 30, 1947 (61 Stat. 945-946, ch. 526, Sec. 526, (c-d)): "(c) Whenever a governmental officer or agency determines that a plan of voluntary action with respect to any material, commodity, or facility is practicable and is appropriate to the successful carrying out of the policies set forth in said Act, that agency or official may request in writing compliance by one or more persons with such plan of voluntary action as may be approved by the Attorney General. Any act or omission by such person or persons in compliance with a written request made pursuant to this section and with a voluntary plan promulgated thereunder shall not be the basis at any time for any prosecution or any civil action or any proceeding under the antitrust laws of the United States or the Federal Trade Commission Act. "(d) Such written request may, in the discretion of the governmental officer or agency which made the request, be withdrawn at any time by said governmental officer or agency, by written notice from said governmental officer or agency of such withdrawal to the Attorney General, and after publication of notice of such withdrawal in the Federal Register as provided in subsection (e), the provisions of this Act shall not apply to any subsequent act or omission by reason of such request or voluntary plan." Second Decontrol Act of July 15, 1947 (61 Stat. 323, ch. 248, Sec. 5.): "SEC. 5. The functions exercised under Title III of the Second War Powers Act, 1942, as amended (including the amendments to existing law made by such title), and the functions exercised under section 6 of such Act of July 2, 1940, as amended, shall be excluded from the operation of the Administrative Procedure Act (60 Stat. 237), except as to the requirements of sections 3 and 10 thereof." Anti-Inflation Act of December 30, 1947 (61 Stat. 948, ch. 526, Sec. 8 (b)): * "(b) There is hereby authorized to be appropriated to the President such sums as may be necessary to carry out this section. * * * Funds made available for the purposes of this section may be allotted for any of the purposes of this section to any department, agency, or independent establishment of the Government, or transferred to any other agency requested to assist in carrying out this section. SEC. 510. SEC. 511. SEC. 512. STATEMENT ISSUED AT SALT LAKE CITY, UTAH, BY M. S. ECCLES, MEMBER, Board of GOVERNORS of the Federal Reserve SYSTEM, JULY 18, 1950 Because of the Korean crisis a dangerous inflationary situation is rapidly developing. This is due to the urgent and increasing military needs and a rapid stepping up of business and civilian demands on top of an economy that has been showing inflationary pressures for some time, especially in the durable goods and housing sector. Price inflation is sure to develop when the demand for goods and services supported by money and credit exceeds the supply. The available supply of money and credit can be increased only by the banking system making loans to or buying securities from either the Government or the public. In the present situation it is, therefore, imperative, if price inflation is to be controlled, to stop the overall growth of loans and investments by the banking system, including the Federal Reserve. This can be promptly brought about if the Government will adopt without delay the required monetary and fiscal program. Such a program would materially reduce civilian demand and thereby increase the supply of goods and labor available for the military needs without the necessity of putting the country under all of the onerous wartime direct controls, unless the Korean situation develops into world war III. Even then, it may not be necessary to go all the way because it would likely be an atomic war that would not last long. In any case, the following program is an urgent necessity and should be carried out immediately, no matter what action may be called for later: MONETARY AND CREDIT PROGRAM 1. Request every bank to unite in a Nation-wide voluntary agreement to stop bank credit expansion which has been growing rapidly by limiting new loans made by any bank to the amount of loans paid; meet the gain or loss in its deposits by buying or selling Government securities accordingly. Such a bank program would stabilize the Government securities market, as well as the general credit situation. If this voluntary program is not carried out, then the Federal Reserve should increase reserve requirements to the legal limit and get additional powers if necessary. 2. Request the insurance companies and the mutual savings banks not to sell their Government securities for the purpose of getting money to increase their loans and other investments. This would avoid putting pressure on the Federal Reserve to support the Government securities market, thereby creating new deposits and excess reserves in the banking system. 3. Require the RFC to stop making loans, except when they are for military purposes and cannot be gotten elsewhere. 4. Reduce the effective demand for housing by requiring FHA to rescind its recent reduction in interest rates and reduce its insurance coverage, thereby requiring home owners to make larger down playments, slowing up the approval of mortgage guaranties by the Veterans' Administration and mortgage insurance by the FHA, requiring the Federal National Mortgage Association to limit its purchases of insured and guaranteed mortgages to the amount sold. 5. Reduce the effective demand for consumers durable goods by giving to the Federal Reserve control of consumer credit terms, which should be made sufficiently restrictive as to down payment and maturity to curb further growth of the huge volume now outstanding. 6. Require the Treasury to permit short-term interest rates to rise moderately and thereby take off the pressure for long-term interest rates to go down. This change of policy would make the Government securities more attractive to the public. It would reduce the need of the Federal Reserve supporting the market for Government securities which creates excess money and makes impossible the restrictive monetary policy that is called for. The above six-point program has the advantage that it can be put promptly into effect or rescinded to the extent needed without requiring legislation, with the exception of consumer credit regulations. FISCAL PROGRAM 1. Make no reduction in taxes this year. 2. Increase second- and third-class postal rates enough to meet large Post Office deficits. 3. Close tax loopholes previously recommended by the Treasury, especially those where the Government is losing large amounts of revenue. 4. Reimpose a corporation excess-profits tax of 75 percent on all net earnings above 10 percent on the first $5,000,000 of invested capital and 8 percent on any balance, allowing a $5,000 exemption of earnings subject to excess-profits tax. 5. Request organized labor to make no demands for wage increases while excess-profits tax is in effect. 6. The Treasury should offer promptly to nonbank investors long-term nonmarketable bonds, G type, 15-year maturity, interest rate 21⁄2 percent. The above fiscal program is essential if the Government deficit is to be held to a minimum so that it can be financed outside the banking system. This is also an essential requirement of the monetary and credit program suggested if it is to be successful. The present situation calls for the people to save their money and purchase more bonds. They cannot be expected to do this unless the Government takes the necessary action to protect the purchasing power of the dollar (their money) from further price inflation, which has already been permitted to go too far. The vigorous credit, monetary, and fiscal program above outlined will accomplish this purpose without the need of imposing the objectionable harness of direct controls. HOUSING AND HOME FINANCE AGENCY, Hon. BURNET R. MAYBANK, OFFICE OF THE ADMINISTRATOR, Chairman, Senate Banking and Currency Committee, United States Senate, Washington 25, D. C. DEAR SENATOR MAYBANK: Pursuant to your request, I am pleased to give you my comments on the proposed housing credit controls contained in title IV of S. 3936, the Defense Production Act of 1950, on which your committee is now holding hearings. Before proceeding to a discussion of the specific provisions of title IV, I should like to emphasize my unqualified endorsement of legislation of this type. The seriousness of the present international situation and the threat which it represents to the basic security of our Nation make it essential that the housing program, like all major programs of the Government, be adjusted to meet realistic current and developing needs. In my judgment title IV of the Defense Production Act of 1950 would equip the Federal Government to take whatever actions may become necessary in the foreseeable future in the housing credit field. At the outset I should also like to point out that, in the field of housing and home finance, we enter the present critical international situation with an important asset which we did not have during the national defense and early war period of World War II. I refer, of course, to the fact that we now have a single agency in which most of the major responsibilities for urban housing and home finance are centralized. As your committee will recall, our experiences in housing and home finance during the national defense and early war period of World War II made abundantly clear the serious deficiencies involved in an administrative organization which placed in several separate agencies responsibilites for certain phases of housing or home finance and the necessity for placing those responsibilities in a single agency-which, in fact, was done on a temporary basis in 1942. I am satisfied that if we did not now have a single permanent agency in which most of the major responsibilities for urban housing and home finance have already been placed, we could not have moved so swiftly to accomplish the initial steps which have already been taken, within the limits of authority now available, to curtail housing credit as a means of conserving resources for national defense. These initial steps, which are summarized for the convenience of your committee in the latter part of this letter, are essential first actions in the field of housing and home finance. Other actions, for which there must be granted legislative authority along the lines provided in S. 3936, may be necessary as the international situation develops, and we must be prepared and equipped to take such actions. CONTROL OF HOUSING CREDIT UNDER S. 3936 The initial steps which have been taken to control housing credit, while desirable and important, cannot be as comprehensive or consistent as public interest already requires. As the following table indicates, less than half of the outstanding home mortgage debt is insured or guaranteed by the Federal Government. For a substantial portion of the remainder, Federal authority is limited in the main to indirect supervisory action by the Home Loan Bank Board and other Federal supervisory agencies. The authority provided in title IV is necessary to help fill these gaps. |