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proceeds of any disposition of any property sold or disposed of pursuant hereto shall be deposited to the credit of the current appropriations corresponding to that out of which was paid the cost to the United States of the property thus disposed of, and the same shall immediately become available for expenditure during the fiscal year in which the disposition was effected and the fiscal year next following for the purposes named in such current appropriation.
SEC. 4. The President may, from time to time, promulgate such rules and regulations and is empowered to require such information as may be necessary and proper to carry out any of the provisions of this Act, and he may exercise any power or authority conferred on him by this Act through such department, agency, board, or officer as he shall direct or appoint.
SEC. 5. The provisions of this Act shall be effective notwithstanding the provisions of any other Act: Provided, however, That this Act shall not be construed as repealing, altering, or amending any provisions of Acts authorizing the acquisition of property by the United States, but shall be construed and considered as an additional grant of authority.
The CHAIRMAN. At this juncture, I want to read in part a letter addressed to the Committee on Military Affairs under date of June 2, 1941, by the War Department, the officer of which is the Acting Secretary of War, Judge Patterson.
From this letter I will read the two opening paragraphs and then skip about three pages, which give a recitation of acts, but I am going to ask the reporter to embody that in the record. I am going to read just a portion of the letter in order that the members of the committee may be advised as to the text of the letter.
(The letter above referred to, portions of which were read as above indicated by the Chairman, is as follows:)
Washington. June 2, 1941. Hon. ROBERT R. REYNOLDS Chairman Committee on Military Affairs,
United States Senate. DEAR SENATOR REYNOLDS: There is enclosed a draft of a bill broadening the authority of the War Department to requisition articles, materials and other property required for national-defense purposes which the War Department presents for the consideration of the Congress with a view to its enactment into law.
Numerous existing statutes authorize the condemnation of real property for military, naval, and other purposes, and the act of February 26, 1931 (46 Stat. 1421; 40 U. S. C. 258a-258-e), facilitates to some extent the acquisition of title by the United States in such cases through a "Declaration of taking,” but formal condemnation proceedings are necessary and a sum estimated to constitute just compensation must be deposited in court. Moreover, the time when the United States may take possession of the property must await court determination. This procedure necessarily involves delay.
Section 9 of the act of Septen.ber 16, 1940 (Public, No. 783, 76th Cong.) authorizes the Secretary of War or the Secretary of the Navy to take over and operate any plant which refuses to accept and fulfill or to give precedence to a defense order. By necessary implication this includes authority to take over any unfinished products or raw materials on hand in such a factory, but the statute is not primarily one authorizing the requisition of personal property.
Similar authority is contained in section 120 of the National Defense Act (act of June 3, 1916, 39 Stat. 213; 50 U. S. Code 80), but the application of that statute is limited to time of war or when war is imminent.
The following existing statutes authorize the expropriation of various types of personal property under certain conditions:
The act of June 3, 1916 (39 Stat. 215; 50 U. S. Code 79), which authorizes the condemnation of lands, rights-of-way, materials, minerals and processes necessary for the construction and operation of nitrate plants.
The act of August 29, 1916 (39 Stat. 645; 10 U. S. Code 1361), which empowers the President, in time of war, to take possession and assume control of any system or systems of transportation, or any part thereof.
The act of July 9, 1918 (40 Stat. 888; 50 U. S. Code 172), which authorizes the condemnation of timber, sawmills, camps, m.achinery, logging roads, rights-of-way, equipment, materials, supplies, and any works, property, or appliances suitable for the effectual production of lumber and timber products when such property is needed for the production, manufacture, or building of aircraft, drydocks, or vessels, their apparel or furniture, for housing of certain Government employees, and for the procurement of materials and equipment for aircraft, drydocks, and vessels.
The act of June 10, 1929 (41 Stat. 1072; 16 U. S. C. 809), which authorizes the President to take possession of project works erected by holders of Federal licenses for the purpose of manufacturing nitrates, explosives, or munitions of war, or for any other purpose involving the safety of the United States, whenever the President deems such action necessary for the national safety.
The act of July 2, 1926, section 10 (g) (44 Stat. 784; 10 U. S. C. 310), which authorizes, under specified circumstances, the use by the United States of aircraft designs.
The act of June 19, 1934 (48 Stat. 1104; 47 U. S. C. 606), which authorizes the President to take over and use any radio station during any war, or threat of war, or state of public peril or disaster, or other national emergency declared by proclamation of the President, cr in order to preserve the neutrality of the United States.
The act of June 29, 1936, as amended (49 Stat. 2015; 46 U. S. C. 1242), which authorizes the requisition of certain vessels or watercraft whenever the President shall proclaim that the security of the national defense makes such action advisable or during any national emergency declared by proclamation of the President.
The act of October 10, 1940 (Public, No. 829, 76th Cong.), which authorizes the requisition of property procured, processed, or manufactured for export, the exportation of which has been denied under section 6 of the act of July 2, 1940 (Public, No. 703, 76th Cong.).
During the World War emergency in 1917 and 1918 the following statutes conferred authority to requisition various types of property:
The act of September 7, 1916 (39 Stat. 731; 46 U. S. Č. 809), which authorized the President to take possession, absolutely or temporarily, for any naval or military purpose, of any vessel purchased, leased, or chartered from the United States Shipping Board.
The act of March 4, 1917 (39 Stat. 1193), which authorized the President, upon certain conditions, to take possession of and use any factory, or any part thereof, for the production of ships or war material for the Navy.
The act of June 15, 1917 (40 Stat. 182), which authorized the President to requisition any contract for the building, production, or purchase of ships or material, any plant for the production of ships or any part thereof, or any ship or the charter of any ship.
The act of August 10, 1917 (40 Stat. 279), which authorized the President to requisition foods, feeds, fuels, and other supplies necessary to the support of the Army or the maintenance of the Navy, or any other public use connected with the common defense, together with storage facilities for such supplies, and any factory, packing house, oil pipe line, mine, or plant, or part thereof.
The act of August 10, 1917 (40 Stat. 282), which authorized the President to commandeer any or all distilled spirits for use in the man!ufacture of munitions and for other purposes.
The act of August 10, 1917 (40 Stat. 284), which authorized the President, under certain conditions, to take over and operate the plant or business of any producer of or dealer in coal or coke.
The act of March 1, 1918 (40 Stat. 438), which authorized the President to requisition or condemn land, houses, buildings, fixtures, furnishings, and facilities for the use of employees of shipyards in which ships were being constructed for the United States.
The act of April 22, 1918 (40 Stat. 535), which authorized the President to take possession of any street railroad, interurban railroad, or part thereof, and all cars, appurtenances, and franchises, or parts thereof, for the transfer and transportation of employees of shipyards or plants engaged in the construction of ships or equipment therefor for the United States.
The act of May 16, 1918 (40 Stat. 550), which authorized the President to requisition or condemn land, houses, buildings, furnishings, improvements, local transportation, and general community utilities for the purpose of providing housing, local transportation and other general community utilities for industrial
workers engaged in arsenals, navy yards, and industries essential to the national defense.
The act of July 18, 1918 (40 Stat. 915) which authorized the President to requisition the use or temporary possession or control of any drydocks, wharves, or loading or discharging terminal facilities in any port of the United States, or warehouses, equipment, or terminal railways connected therewith.
The act of October 5, 1918 (40 Stat. 101Q), which authorized the President to requisition and take over certain specified mineral substances and ores, minerals, metallurgical products, metals, alloys, and chemical compounds described as necessaries, and any undeveloped or insufficiently developed or operated idle land, deposit, or mine, or any idle or partially operated smelter, or plant, or part thereof, producing or capable of producing said necessaries.
The act of November 4, 1918 (40 Stat. 1022), which authorized the President to requisition land for the purpose of constructing, establishing, or extending any shipbuilding plant.
The act of November 4, 1918 (40 Stat. 1029), which authorized the President to requisition and take over lands, buildings, and their equipment for hospital facilities.
The provisions of one or more of these several statutes include authority to requisition not only an entire plant or other installation, but “any part thereof," to requisition a contract, and to requisition real property without resorting to the more cumbersome condemnation procedure.
The authority conferred by the statutes now in force is inadequate to meet conditions encountered as a result of the existing emergency. As to real estate the required procedure is cumbersome and slow. Recalcitrant plants cannot be taken over until an order has been placed and refused, and then the entire plant must be taken over and not a part of it only, while the present power of the War Department to obtain by compulsion equipment, supplies, and materials vitally needed for national defense purposes is limited to those procured, processed, or manufactured for export and denied exportation. Broader authority is deemed essential.
The enclosed bill comprises a consolidation of the more essential features of the World War legislation listed above and, if enacted, would:
Permit the acquisition of defense supplies and materials needed for the manufacture of defense items from recalcitrant owners with minimum delay and prompt compensation.
Tend to stabilize prices and prevent profiteering and hoarding, which the War Department is now powerless to do. For example, extremely high prices for second-hand machine tools, which in numerous cases seemed exorbitant, are now under some measure of control through purely voluntary agreements which are not legally enforceable and which continue only during the pleasure of the owners of such property. There is also some evidence of the acquisition by individuals or commercial concerns of unnecessarily large stocks of materials of types needed for defense purposes.
Permit the use of some needed part of a manufacturing plant in cases in which the facilities of the entire plant are not required.
Permit the prompt acquisition and effective employment of required equipment, such as machine tools not presently employed or not fully employed in the interest of the national defense, as for example, a large, expensive, special-purpose machine tool which is used very little, but which is not for sale because its owner desires to retain it for his own occasional use.
Permit the acquisition and use of manufacturing facilities not otherwise available. In several instances the equipment in small plants has been sold piecemeal at auction under court orders in bankruptcy proceedings, thus disrupting efficient installations and scattering valuable tools.
Permit the taking over of plants for the purpose of manufacturing articles not usually produced by such plants and not capable of being produced by them without changes in installations.
Permit the acquisition of contracts and contract rights, as distinguished from finished articles.
Enable the War Department to compel compliance with defense needs from corporations and plants under foreign ownership or control.
The Director of the Bureau of the Budget has advised that he has taken this matter up with the President, and that the enactment of this legislation in the form herewith submitted would be in accord with the President's program. Sincerely yours,
ROBERT P. PATTERSON,
Acting Secretary of War.
The CHAIRMAN. I will now ask Judge Patterson, the Acting Secretary of War, to come around, please, for his statement in relation to S. 1579.
STATEMENT OF HON. ROBERT P. PATTERSON, UNDER SECRETARY
OF WAR, ACCOMPANIED BY COL. JOHN P. DINSMORE, JUDGE ADVOCATE GENERAL'S DEPARTMENT OFFICE OF UNDER SECRETARY OF WAR
Mr. PATTERSON. Mr. Chairman and gentlemen, the bill, S. 1579 was introduced at the request of the War Department. I refer to a letter dated June 2, 1941, signed by me as Acting Secretary, requesting introduction of the measure.
That is the letter which Senator Reynolds has just quoted from.
The bill authorizes the President, during the national emergency, to take over property useful for national defense, the owner of the property to receive fair and just compensation. If the owner is not satisfied with the figure determined by the President to be fair and just, he may take 75 percent of that figure and have the courts determine the fair value, recovering any additional sum which, when added to the money already received, shall equal the value so determined by the courts.
The United States is in peril from the aggressive designs of the Axis Powers. The Congress is alert to the peril and has taken action to meet it. It has passed the Selective Service Act, under which over 500,000 men have been inducted into the Army. It has appropriated in the current fiscal year for the Army and the Navy nearly $25,000,000,000, not to mention further billions for equipment to be loaned to nations whose defense is deemed vital to our own defense.
The peril being what it is, no time should be lost, no effort spared in equipping our armed forces. The task of equipping the armed forces is a draft on the entire industrial power of the Nation. We have not depended on a volunteer system to recruit our Army, and we should not remain in a situation where, for the most part, we have to depend on a volunteer system to get the materials necessary for the national defense.
In some quarters the present bill, a measure to enable the President to exercise eminent domain over property needed for national defense on payment of fair value, has been discussed as if the power of eminent domain had never been heard of. Eminent domain is recognized in the fifth amendment to the Constitution in the provision that private property shall not be taken for public use without just compensation. For many years the Government has used the power
of eminent domain to acquire real estate for a post-office site or for a road. Within the past year the Government has acquired many tracts of real estate for camps and munition plants by eminent domain, taking the land without the farmers' consent and paying just compensation.
The present bill is designed merely to extend eminent domain to cover personal property in cases where such property is in the nature of supplies needed for defense of the Nation in a great emergency.
At the present tine the President has authority, by section 9 of the selective service law, to take over industrial plants where the owner refuses to produce military supplies. He also has authority, under the act of October 10, 1940, to requisition supplies for which an export license has been denied. But there are many cases covered by the proposed law that are not covered by the laws now on the books.
We need machine tools for production of defense articles. There are many machine tools in industries not manufacturing defense articles. There are many held by second-hand dealers at high. prices. Under the proposed law these could be requisitioned at a fair price and sold or loaned to concerns making airplanes for example.
There may be stocks of raw materials in the hands of persons who are not making defense equipment. Under this bill such raw materials could be taken over at fair value and devoted to the manufacture of munitions.
There are airplanes now used for pleasure by their owners which would be useful for national defense. Under the present bill these airplanes in case of need could be taken for the armed forces.
There are valuable patents, according to the Department of Justice, which are held by unfriendly foreigners and which play a part in controlling defense production. The Government should be in a position to take over any such patents, on payment of value.
Congress has recently passed the priorities law under which future production of machine tools, raw materials, and other things necessary for defense can be used so as best to serve our national defense needs. We should have the authority to accomplish the same purpose with our existing goods. Control over the disposition of future goods is not enough. We ask in this bill authority to determine priorities as to existing things.
The examples which I have given show that the power of eminent domain for the equipping of our armed forces in the period of emergency should be a broad one. Otherwise, it is probable that the cases . to be dealt with will not come within the reach of the law.
In the World War there were some 17 separate requisition statutes, one dealing with coal, one dealing with timber, and so on. These acts were passed after the situation as to a particular commodity had become acute, and there were resulting delays. Mr. Baruch, who directed our industrial effort with matchless ability at that time, is of the view that a broad requisition statute would be much more effective. In his work, American Industry in the War, 1941 edition, he says, at page 402:
There should also be enacted a general commandeering statute giving the President plenary authority in the usual terms to commandeer in time of war any manufacturing facility or any supplies deemed by him necessary to the successful conduct of war.
The bill now before the committee was drafted by officers in the planning branch of my office. Such a measure has for years been part of the industrial mobilization plan prepared by the War Department under the directions contained in section 5a of the National Defense Act of 1920. I want to stress the fact that this is not a new measure. A bill relating to requisition of private property by the Government in a time of national emergency, the same in substance as the bill now before this committee, appeared in the industiral mobilization plan of 1931 and may be found in the documents of the War Policies Commission, House Document 271 of the Seventy-second Congress, at page 450.