REQUISITION OF PROPERTY BY THE UNITED STATES WEDNESDAY, JUNE 18, 1941 UNITED STATES SENATE, Washington, D. C. The committee met, pursuant to call, at 10 a. m., in room 104-B, Senate Office Building, Senator Robert R. Reynolds (chairman), presiding. Present: Senators Reynolds (chairman), Johnson of Colorado, Hill, Downey, Kilgore, Gurney, Thomas of Idaho, and Lodge. The CHAIRMAN. The committee will now come to order. I shall ask the official reporter to insert in the record at this point the full text of S. 1579. (The bill S. 1579 above referred to is as follows:) [S. 1579, 77th Cong., 1st sess.] A BILL To authorize the President of the United States to requisition certain property for the use of or disposition by the United States Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That, during any period of national emergency proclaimed by the President, the President is authorized, when he deems it in the interest of national defense, (a) to requisition and take over, either temporarily or permanently, property of any kind or character, whether real or personal, tangible or intangible, or any part thereof, or any right or interest therein or with respect thereto, whether by virtue of contract, patent, license, or otherwise, which itself or through its exercise or control can be used or is adaptable for use directly or indirectly in any way for national defense or in the construction, manufacture, production, transportation, repair, testing, or storage of military or naval supplies or other articles, commodities, materials, machinery, or equipment for national defense; and (b) to use and, on such terms as he shall deem satisfactory, to sell or otherwise dispose of, either temporarily or permanently, any property, right, or interest requisitioned or taken over pursuant to the provisions of this Act. SEC. 2. Whenever the President shall requisition and take over any property pursuant to the provisions of this Act, the person or persons having any right, title, or interest therein shall be paid as compensation therefor such sum as the President shall determine to be fair and just. If any such person or persons entitled to receive it are unwilling to accept as full and complete compensation for such property the sum so determined by the President, such preson or persons shall be paid 75 per centum of the sum so determined by the President and shall be entitled to sue the United States for such additional sum as when added to the sum already received shall be determined as fair and just compensation for such property in the manner provided for by section 24, paragraph 20, and section 145 of the Judicial Code (U. S. C., title 28, sec. 41, par. 20, and sec. 250), but no recovery shall be allowed against the United States in any such action unless the action be brought within two years after the date on which notice shall have been given of the determination by the President of the amount to be paid as compensation. SEC. 3. Appropriations available for the acquisition of property for nationaldefense purposes shall be available for the acquisition of such property under the provisions of this Act; and any moneys received by the United States as the 1 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:) Hon. ROBERT R. REYNOLDS, Chairman Committee on Military Affairs, WAR DEPARTMENT Washington June 2, 1941. 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. Č. 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 September 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, machinery, 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, or 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. C. 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 manufacture 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. 1010), 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, |