RATIFYING AND CONFIRMING ACT 4 OF THE SESSION LAWS OF HAWAII, 1949, EXTENDING THE TIME WITHIN WHICH REVENUE BONDS MAY BE ISSUED AND DELIVERED UNDER CHAPTER 118, REVISED LAWS OF HAWAII, 1945 JULY 7, 1949.-Referred to the House Calendar and ordered to be printed Mr. REDDEN, from the Committee on Public Lands, submitted the following REPORT [To accompany H. R. 4688] The Committee on Public Lands, to whom was referred the bill (H. R. 4688) to ratify and confirm Act 4 of the Session Laws of Hawaii, 1949, extending the time within which revenue bonds may be issued. and delivered under chapter 118, Revised Laws of Hawaii, 1945, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass. The amendments are as follows: Page 2: Following line 6, add the following new section: EXPLANATION OF THE BILL The purpose of this bill is to ratify the action of the Territorial Legislature of Hawaii which extended for 2 years the time within which revenue bonds of any municipality or other political subdivision in the Territory may be issued and delivered without requiring the approval of the President and without the incurring of an indebtedness within the meaning of the Hawaiian Organic Act. No appropriation of Federal funds is required. Similar extensions of time have been regularly ratified and confirmed by the Congress since 1938. Inasmuch as the current extension expired on June 30, 1949, H. R. 4688 has been amended to make the ratification contained therein retroactive to that date. The Territorial government and the Department of the Interior recommend that the bill be enacted. Pertinent comments from the Department's favorable report are set forth below and are made a part of this report. The bill would ratify and confirm Act 4 of the Session Laws of Hawaii, 1949, which amends the Hawaiian Revenue Bond Act of 1935, as amended (Act 174, Session Laws of Hawaii, 1935; sec. 6095 of ch. 118, Revised Laws of Hawaii, 1945) so as to extend until June 30, 1951, the time within which revenue bonds of any municipality or other political subdivision in the Territory, authorized by the said Act 174, could be issued and delivered without requiring the approval of the President of the United States, and without the incurring of an indebtedness within the meaning of the Hawaiian Organic Act (June 9, 1926, 44 Stat. 710). Similar extensions of time were ratified and confirmed by the Congress by the following acts: May 13, 1938 (52 Stat. 351), August 7, 1939 (53 Stat. 1242), May 5, 1942 (56 Stat. 270), and April 3, 1944 (58 Stat. 186). This Department has no objection to this legislation, and recommends that it be enacted. The Committee on Public Lands unanimously recommends the prompt enactment of this bill, as amended. NEW YORK QUININE & CHEMICAL WORKS, INC.; MERCK & CO., INC.; AND MALLINCKRODT CHEMICAL WORKS JULY 7, 1949.-Committed to the Committee of the Whole House and ordered to be printed Mr. LANE, from the Committee on the Judiciary, submitted the following REPORT To accompany H. R. 4653] The Committee on the Judiciary, to whom was referred the bill (H. R. 4653) for the relief of New York Quinine & Chemical Works, Inc.; Merck & Co., Inc.; and Mallinckrodt Chemical Works, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. The purpose of the proposed legislation is that Merck & Co., Inc., acting on behalf of itself and on behalf of Mallinckrodt Chemical Works and the New York Quinine & Chemical Works, Inc., pursuant to the wartime arrangement entered into at the request of the Government between the three companies and Defense Supplies Corporation for stock piling critical materials, is hereby relieved from the liability of turning over to the Reconstruction Finance Corporation, as successor to Defense Supplies Corporation, the sum of $139,293.55, which amount was received by Merck & Co., Inc., for the account of Defense Supplies Corporation pursuant to the above-mentioned wartime arrangement. The companies named in the bill are the three United States manufacturers of narcotic drugs licensed to import crude opium by the Bureau of Narcotics of the Treasury Department. Opium is the raw material used in the production of essential narcotic drugs, such as morphine, codeine, and so forth. It is derived from the opium poppy, grown principally in Turkey, Iran, and India, and is imported into this country in crude form. During normal times the three licensed importers make their own purchases abroad, subject to the strict supervision and regulation by the Bureau of Narcotics. At the outset of World War II the United States Government determined that immediate steps be taken to acquire a large reserve H. Repts., 81-1, vol. 5-13 stock pile of crude opium in this country so that the armed forces would be assured of an adequate supply of essential narcotic drugs. Early in 1942, at the request of the Commissioner of Narcotics, the three companies selected Mr. James J. Kerrigan, vice president of Merck & Co., Inc., to represent them in their probable dealings with the Government in connection with the stock piling of crude opium. In 1942, at the request of the Government, Mr. Kerrigan participated in conferences with representatives of Defense Supplies Corporation and the various other Government agencies in Washington in the formulation of a general program for the purchase of crude opium from Turkey, Persia, India, and other countries. Methods were discussed for purchasing opium and the financing of the purchases. Mr. Kerrigan stated that the three companies he represented were ready and willing to continue to purchase opium directly from the foreign suppliers in sufficient quantities to assure a reserve supply for the manufacture of opium narcotics. The Government representatives decided, however, that the purchases would be made and financed by the Defense Supplies Corporation, with the understanding that the supplies, when received, would be held as a reserve stock pile subject to allocation by the Commissioner of Narcotics. At that time the DSC requested Mr. Kerrigan, due to his long familiarity with the procurement of opium, to act on behalf of the Government and negotiate the purchase with the foreign suppliers. Mr. Kerrigan acceded to this request, declining on behalf of himself and his company a purchase commission which had been offered. Under this program Mr. Kerrigan negotiated with producers in Turkey for the purchase by, and delivery to, the United States Government of over 400 tons of crude opium, consisting of 300 tons of Turkish opium and 1,800 cases of Indian and Persian opium amounting to a total of 288,000 pounds. The total purchase price paid by the Government including ocean freight, insurance and other costs, amounted to $3,649,136.66. The opium was received and stored in Government vaults at New York and Denver and held as a reserve stock pile. Early in 1944, the manufacturers' own supplies of crude opium were exhausted, and Commissioner Anslinger, over a period of approximately 2 years, allocated the entire Government reserve stock pile of crude opium so created in sufficient quantities to meet the requirements of the manufacturers. As the supplies were allocated, the three companies purchased the crude opium from the DSC under letter agreements which provided a fixed price per pound, plus a commission to the DSC of one-half of 1 percent of the amount of each invoice. The total payments made to the Government under these letter agreements amounted to $3,998,326 which included the $3,649,136.66 paid by the Government to the Turks, plus a commission to the DSC, as provided in the letter agreements, and in connection with the allocations of 314,000 pounds in 1945 and early 1946, an additional $314,000 representing approximately $1 per pound arbitrarily added by the DSC. The value of crude opium for narcotic manufacturing purposes is based on its morphine content. It is customary, therefore, in purchasing crude opium from foreign sources to pay a provisional price based upon the estimated morphine content and to finalize the price |