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Sec. 902. (a) It shall be lawful for the Commission to requisition any vessel documented under the laws of the United States, during any national emergency declared by proclamation of the President, and when so taken or used, the owner shall be paid the fair actual value of the vessel at the time of taking, or paid the just compensation for the vessel's use based upon such fair actual value (excluding any national defense features previously paid for by the United States), less a deduction from such fair actual value of any construction differential subsidy allowed under this Act, and in no case shall such fair actual value be enhanced by the causes necessitating the taking. In the case of a vessel taken and used, but not purchased, the vessel shall be restored to the owner in a condition at least as good as when taken, less reasonable wear and tear, or the owner shall be paid an amount for reconditioning sufficient to place the vessel in such condition. The owner shall not be paid for any consequential damages arising from such taking or use.

(b) Except in cases of vessels where a construction differential subsidy has been allowed and paid, in which case the value of the vessel for the purposes of this section shall be established as provided in section 802, the Commission shall ascertain the fair compensation for such taking or use and shall certify to Congress the amount so found by it to be due for appropriation and payment to the person entitled thereto. If the amount found by the Commission to be due is unsatisfactory to the person entitled thereto, such person shall be entitled to sue the United States for the amount of such just compensation and such suit shall be brought in the manner prescribed by paragraph 20 of section 24, or by section 145 of the Judicial Code, as amended (U. S. C., title 28, secs. 41, 250).

The CHAIRMAN. We will meet tomorrow morning at 10 o'clock.

(Whereupon, at 12:10 p. m., the committee adjourned until the next day, Tuesday, June 24, 1941, at 10 a. m.)

[On account of death of Senator Pat Harrison, the next hearing was held on June 30, 1941.)

REQUISITION OF PROPERTY BY THE UNITED STATES

MONDAY, JUNE 30, 1941

UNITED STATES SENATE,
COMMITTEE ON MILITARY AFFAIRS

Washington, D. C. The committee met, pursuant to adjournment, at 9 a. m., in room 104-B, Senate Office Building, Senator Robert R. Reynolds (chairman) presiding.

Present: Senators Reynolds, Schwartz, Hill, Downey, Kilgore, Bridges, Gurney, and Thomas of Idaho.

The CHAIRMAN. The committee will come to order, please. Mr. Hart, we will be glad to hear you.

STATEMENT OF MERWIN K. HART, PRESIDENT OF THE NEW YORK

STATE ECONOMIC COUNCIL

Mr. HART. Mr. Chairman and gentlemen

The CHAIRMAN. Mr. Hart, due to the fact that only Senator Downey and I are here at the present time, we do not want to put you to the trouble of reading that whole statement. We can just embody it in the record. What do you think about that?

Mr. HART. That is satisfactory to me.
Would you like for me to point out one or two highlights?
The CHAIRMAN. Yes; you might do that.

Senator DOWNEY. Before that is done, Mr. Chairman, could I ask Mr. Hart something about the nature of the State Economic Council of New York ?

The CHAIRMAN. Certainly. - Mr. Hart. The New York State Economic Council is an organization that was formed 11 years ago with two objectives: One, to try to keep the cost of the Government-Federal, State, and localwithin reason, and the other, to preserve private enterprise.

Those really sum up its objectives, and it is because of those objectives that we are opposed to this bill even in its present form.

We think the present form is a great improvement over the original form, but we think that even as it is, too much authority is delegated to the Executive.

It seems to us that the method followed in the last war when, I believe, the President said that 17 different bills were passed, giving authority to the Executive, should be followed here. We do not see why not.

That would subject each request to the scrutiny of this committee at least. There might or might not be need of public hearings, but at least it would look after not only the interest of the Executive, representing the country, of course, in asking for authority, but also would safeguard or tend to safeguard the interests of the people.

I point out on page 2 of this statement that we are threatened with war against totalitarianism, and yet, as I analyze the totalitarianism, it is nothing in the world but excessive concentration of power in the Executive.

We have been building up considerable of totalitarianism, it seems to me, right here in the United States in recent years, and this would be a further grant of power in that direction.

Mr. Patterson made the objection when he was before the committee, made the observation, that since the Nation is drafting its men for defense, it should draft property. Of course, it has been drafting property in the form of taxation ever since it started, but the drafting by taxes is a known and orderly process, whereas this would be a big proposition.

I point out, Mr. Chairman, that it seems to me we have got away from adequate consideration of important property rights. We have been listening for many years to people who have insisted that human rights, whatever they may call them, are vastly greater than property rights.

I believe that property rights are one of the three greatest human rights, and I think I can prove it by the constitutions of each of the 48 States.

The constitution of North Carolina points out among the inalienable rights three, which are life, liberty, enjoyment of the fruits of their own labor, and pursuit of happiness—and that same thing in one way or another is in all constitutions. I think Wyoming has it more emphatically than any other State, but it is equal in the first State constitution adopted, and that of the last, that of New Mexico. Those are the fundamentals, and we have been getting away from recognizing that property rights are inseparable from human rights.

Take away the property, and let all property become the holdings of the State, and how long would those human rights, like liberty of speech, the press, and religion last? We do not think very long, it seems to me that what we need to do is to get back to the sacredness of property rights which are the savings of the average man.

It seems to me that this principle of this bill, while I understand it was drawn in the War Department, it smacks a good deal of thought of the more drastic principles of the bills that have been introduced in Congress in recent years, and I want to point out for the record the similarity between some of those, anyway, who are responsible for some of those bills, and of the views of Mr. Harold Lasky, of London, who is of course a frequent visitor in the United States and who points out in his recent book Where Do We Go From Here, that he and his friends are seeking social revolution in England and he makes it rather clear that they are not interested in the war unless they get that as a result.

I think most of the people of the United States feel that we have done pretty well by our system of private enterprise. I do not know that we are ready to go to war in order to bring out social revolution as our major objective, inasmuch as that would overthrow the system of private enterprise.

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There are one or two more points, Mr. Chairman, and I will be through.

It seems to me that the words "to requisition and to take over for the use of the United States” followed by the words “or its interest” is one of three or four phrases that are too broad and those are the phrases that make the bill, to a considerable extent, as objectionable as the other one.

I would not be surprised if under that provision property could be used in support of Soviet Russia in the new angle of the conflict that has come up, and for that to have been, in view of what has been disclosed to this Congress through the House Committee on Un-American Activities, and in New York State through the Craven committee, where we find we have got Communists right on the pay roll of the city and the State teaching the overthrow of our form of Government, for that to happen, would be, it seems to me, not,, only extremely unfortunate, but I think it would be positively detrimental.

Senator DOWNEY, Mr. Chairman, may I intervene with a question? The CHAIRMAN. Certainly.

Senator DowNEY. That can easily enough happen without this bill being passed; the United States Goyernment may give any kind of aid and assistance to Russia which it wishes, which the witness has just pointed out has been seeking the destruction of our own Government, without the passage of this bill.

Mr. HART. I realize that, Senator, but for the bill to be passed with this phrase in it, in the right of the development of the last 10 days, would again be a direct blessing of this Congress to that.

I realize-I have forgotten which House it was—that an amendment which would refuse the Executive the right to extend aid to Soviet Russia was defeated. It is my impression that it was the House, but I am not certain about that.

The CHAIRMAN. I introduced that in the Senate.

Senator BRIDGES. That was introduced in the Senate by Senator Reynolds.

The CHAIRMAN. Yes.

Senator BRIDGES. Limiting it to Russia, and I had a limiting resolution to specify certain countries.

The CHAIRMAN. That is right. Mr. HART. But I have a strange feeling that it is quite possible the Congress would not vote the same way about such an amendment at the present time. Then the likelihood of Russia getting in was remote in the minds of most of the authorities, military and otherwise, as I understand it, where as now it is, of course, an accomplished fact.

I want to see the British win-but it seems to me that the rushing in by the Evecutive within a couple of days after the war's breaking out between Germany and Russia, with assurances of aid to Russia, has really hurt Britain here in the United States, because it has aroused, I think, opposition of a lot of people who do not care particularly for Soviet Russia and in that way has been, it seems to me, a positive harm, and I have one more suggestion, Mr. Chairman, or two more points.

I object to the revolving fund here. I think that any funds from the proceeds of the sale of any property taken over should go back

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