APPROPRIATION BILL FOR 1943

HEARINGS

BEFORE

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

SEVENTY-SEVENTH CONGRESS

SECOND SESSION

ON THE

FIRST SUPPLEMENTAL NATIONAL DEFENSE
APPROPRIATION BILL FOR 1943

PART 2

OFFICE OF PRICE ADMINISTRATION

WAR PRODUCTION BOARD

Printed for the use of the Committee on Appropriations

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON: 1942

COMMITTEE ON APPROPRIATIONS

CLARENCE CANNON, Missouri, Chairman

FIRST SUPPLEMENTAL NATIONAL DEFENSE

APPROPRIATION, 1943

HEARINGS CONDUCSED' BY THE SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF DEFICIENCY APPROPRIATIONS

TUESDAY, MAY 12, 1942.

OFFICE OF PRICE ADMINISTRATION

STATEMENTS OF LEON HENDERSON, ADMINISTRATOR, AND JOHN E. HAMM, DEPUTY ADMINISTRATOR, OFFICE OF PRICE ADMINISTRATION

STATEMENT OF FUNDS RECEIVED BY OFFICE OF PRICE ADMINISTRATION

The CHAIRMAN. Mr. Henderson, you were before this committee on June 29, 1941, in connection with the appropriation request of the Office for Emergency Management. Of course, that was before Pearl Harbor, and it was prior to the passage of the emergency price control bill. Out of that appropriation you have received several allotments. As I understand it, you had an allotment for the first quarter of $1,094,368; for the second quarter, $1,440,549; for the third quarter, $10,186,886, and for the fourth quarter, $1,889,102, making a total of $14,607,472. Then you have had from the President's fund for May and June, $14,607,472, making a grand total of $29,218,377. For this last quarter, from both funds, you have had $16,496,574. At that rate, what would you estimate the cost to be per year?

Mr. HENDERSON. Well, the total budget which we are discussing with the Budget Bureau is around $210,000,000.

The CHAIRMAN. How much of that is for personal services?

Mr. HENDERSON. The major part of it is for personal services, travel, a small amount for transportation, the usual amount for communications, and such items as utilities, printing and binding, and a small amount for contractual services, supplies, and equipment. In other words, it is a general administrative budget.

Mr. TABER. It contains no speculative moneys?
Mr. HENDERSON. No, sir.

LETTER OF CHAIRMAN CANNON TO PRICE ADMINISTRATOR HENDERSON

The CHAIRMAN. In view of the fact that the committee will shortly take up the estimates for your work, we thought it would be well if we should go over the matter with you in a sort of preliminary way. I forwarded a letter to you under date of May 7, 1942, which I will include in the record at this point.

1..

(The letter referred to is as follows:)

Hon. LEON HENDERSON,

Price Administrator, Office of Price Administration.

MAY 7, 1942.

MY DEAR MR. HENDERSON: The Subcommittee on Deficiency Appropriations of the Committee on Appropriations has jurisdiction to hear and recommend appropriations for the operation and maintenance of the Office of Price Administration. Thus far the subcommittee has had one opportunity of passing upon requests for funds and that occasion was prior to the enactment of the Emergency Price Control Act of 1942.

I am advised that the Price Administration has received allocations from funds appropriated for the Office for Emergency Management and from the President's emergency funds for the current fiscal year in a total slightly in excess of $29,000,000, and that during the course of the present month Budget estimates are expected to be transmitted to Congress for the support of the Administration during the coming fiscal year.

It is the opinion of the subcommittee that it would be helpful to them in the discharge of their responsibilities if you could appear before them on Monday afternoon next, at 2 o'clock, and give a general outline of your present organization and plans and as much of a forecast of the 1943 program as you can envisage at this time.

The subcommittee, of course, will expect at a later date to go fully into the details of the Budget estimates for 1943. In the meantime, however, the members feel that they would be better prepared to consider those estimates if they could have a preliminary discussion with you of the matters involving organization and the procedures upon which it is based.

I will appreciate it if you will advise me if this date and hour are convenient for you, and, if not, I will endeavor to arrange the session more suitably. With best wishes, I am,

Sincerely yours,

CLARENCE CANNON, Chairman.

DUTIES AND RESPONSIBILITIES OF OFFICE OF PRICE ADMINISTRATION

The CHAIRMAN. Now, in order to get a general view of the situation, perhaps you could give us at this time, first, a discussion of the duties and responsibilities of the Office of Price Administration, under the Emergency Price Control Act, and under any other authority that you have. First, give us a statement of the duties and responsibilities; second, of the actions you have taken under the authority up to this time, and, third, the organization that you have assembled up to this time, and the organization you propose to assemble between now and the opening of the next fiscal year. Will you give us a brief statement of those three items?

Mr. HENDERSON. Under the Price Control Act we now have statutory responsibility for all commodity prices, for some service charges, and for rents. The price control responsibility, with the exception of some reservations in the act, is fairly complete. The rent control authority authorizes the fixing of rents in defense areas in cases where, after proper notice to the State or locality, the rents are not brought to a reasonably noninflationary level. Under the price control authority, we have certain responsibilities, and, also, we have the use of various types of sanctions, but, in the main, the Act comprehends pretty much what we had been doing in the way of placing ceilings under the Executive Orders in effect when I was previously before this committee. The responsibility for rationing, which the Office of Price Administration is carrying at the present time, stems from the directive by Mr. Nelson, countersigned by the President, which carves out a portion of the priority authority which devolves upon the administration of the rationing programs. The War Production Board, because of our Nation-wide organization which is required for rationing, is from time

to time assigning to us special jobs. One, for example, which will be presented to the Board this afternoon, is that of providing means by which a voluntary plan for recapture of extra tires will be carried out throughout the country. That is not a rationing job nor a price job, and, obviously, it is not a rent job, but we have the type of organization that reaches down into all communities, and, therefore, is suitable for that work, which can run in conjunction with the tire rationing now being carried on.

ACTIONS TAKEN BY ADMINISTRATION IN THE PRICE FIELD

We have taken a number of actions to date. The principal actions in the price field, since the passage of the Act, are these: First, we reprinted in the Federal Register all the schedules that had been issued under the Executive Order authority. There is a special provision for that in the Price Control Act. That action was taken February 21, or, in other words, about 3 weeks after the signing of the Price Control Act. There were a large number of wholesale prices already covered, which were brought within the authority of the Act. Since that time all the separate schedules have been issued as formal price ceilings, apart from the voluntary agreements, understandings, and stabilizations.

Recently, because of the gravity of the inflation threat, we took action, at the President's suggestion, to put ceilings on all prices that could be administratively reached under the Price Control Act, and, so far as wholesale prices are concerned, that went into effect on May 11, or yesterday. So far as controls on the remainder of commodity prices are concerned, they go into effect next Monday.

RENT DESIGNATIONS AND DECLARATIONS

Prior to the announcement of the President's program, we had designated 21 defense rental areas. At the time we got out our big freeze, as we call it, we went further and designated 302 defense rental areas and issued declarations therefor. It was provided in the declarations that unless State or local action could bring about a satisfactory stabilization of rents in these areas within a 60-day period, the Federal Government would take action to stabilize such rents. There are now 323 defense rental areas, containing about 80,000,000 population, which gives you an idea of the importance of the action taken under our rent authority.

Mr. WOODRUM. Did you say the areas contained 80,000,000 population?

Mr. HENDERSON. Yes, sir.

Mr. TABER. That means a lot of country population as well as urban population.

Mr. HENDERSON. Yes, sir. It means the stabilization of the entire In some cases the areas extend outside of the boundaries of

areas. cities.

Mr. TABER. The rent regulation business is confined to residences, and does not extend to farms or anything like that?

Mr. HENDERSON. No, sir; nor to business properties.

CONDUCT OF RATIONING PROGRAMS

We operate a bit differently under the rationing programs. In this we are what we call kitchen mechanics pretty generally, so far as O. P. A. is concerned. It should be borne in mind that I am also the