THURSDAY, JULY 2, 1942

UNITED STATES SENATE,

COMMITTEE ON APPROPRIATIONS,

Washington, D. C.

The subcommittee met at 10:30 a. m., Senator McKellar (chairman of the subcommittee) presiding.

Present: Senators McKellar, Hayden, Tydings, Thomas, McCarran, O'Mahoney, Bankhead, and Nye.

OFFICE OF PRICE ADMINISTRATION

STATEMENTS OF LEON HENDERSON, ADMINISTRATOR; DAVID GINSBURG, GENERAL COUNSEL; PAUL PORTER, DEPUTY ADMINISTRATOR FOR RENTS; H. B. FRY, BUDGET OFFICER; SHANE MCCARTHY, ASSISTANT DIRECTOR, OFFICE FOR EMERGENCY MANAGEMENT

Senator MCKELLAR. The committee will come to order. We have with us Mr. Henderson, who wants to talk to us about the item on page 20. All right, Mr. Henderson, we are glad to have you here.

Mr. HENDERSON. Mr. Chairman and members; I was particularly interested in having the opportunity to present to this committee the request that the appropriation for O. P. A. as passed by the House be increased by the Senate to the amount which was authorized by the Budget. Roughly, the appropriation as passed by the House is $75,000,000, and the estimate which was authorized by the Budget was $161,000,000.

AMOUNT REQUESTED OF BUDGET

Senator MCCARRAN. What did you ask of the Budget?

Mr. HENDERSON. We asked over $200,000,000 in our request of the Budget, of which $14,000,000 was reimbursement to the President's Fund, for advances under which we have been operating up to the end of the last fiscal year just closed. It was roughly $196,000,000.

The reason for requesting a hearing was that I felt not only, as any administrator does, that we had presented an honest budget request, but that I was conscious that I had failed signally to bring to the attention of the House exactly what the burden of our work entailed, and why it would be impossible for us to carry out our statutory and other obligations with the $75,000,000 which the house bill contains.

I say that I failed, .because I do not believe that any committee that would have time to devote themselves to understanding the tremendous task assigned to O. P. A. could fail to see that the funds in the house bill are insufficient.

HOUSE REDUCTION REDUCES FORCE BELOW PRESENT AUTHORIZATION

In the shortest terms, to state what the cut does to us, I can say that it cuts us below what our operating authorization is now.

Roughly, the Budget authorized up to 38,000 persons for us for our current work, and $75,000,000 would leave us with approximately 32,500.

The big item in our personnel requirements is for the local rationing boards. I would like to tell you what was the course, beginning with our first application, of our request as it was considered by the various authorities.

RESPONSIBILITY OF ADMINISTRATOR WITH RESPECT TO RENTS AND

PRICES

We have the responsibility under the Price Control Act for rents and prices. I take the position that that responsibility is not merely an authorization, that the Price Control Act is so written that when the Administrator determines by the standards of the act and all the legislative history, that prices are out of line, or that rents are getting into an inflationary status, he has no other course but to move.

ADMINISTRATION OF RATIONING PROGRAM

In addition to our authorizations and directives as they flow from the statute, the President and the War Production Board has assigned to me the job of doing the actual rationing administration once a determination is made that we should go into a rationing program. In respect to rationing we are not exercising the type of policy and judgments that we make in the Price Control Act; that is, if the War Production Board decides tomorrow that article X is to be rationed, under the President's directive I am compelled to go ahead and see that an equitable rationing plan is installed and administered. Senator MCCARRAN. That order, then, comes primarily from another authority, your primary order?

Mr. HENDERSON. Rationing decisions flow from the War Production Board and the President. In the matter of taking action on rents and on prices the language of the price-control statute and the legislative history are clear that Congress, in effect, directed me to go forward when I determined that prices were reaching an inflationary situation.

CREATION OF LOCAL RATIONING BOARDS

In order to carry out the rationing authority and responsibilities we have caused to be set up local rationing boards in every county in the United States. Those offices are handling a few commodities at the present time. The decisions are being made by a local board composed of three citizens, and they are doing yeomen work. They have asked, however, for clerical help in order to perform the increasing burden or work that is being laid upon them.