DEPOSITED BY THE UNITED STATES OF AMEICA AUTHORIZING THE REQUISITION OF PERSONAL PROPERTY THURSDAY, JULY 31, 1941 HOUSE OF REPRESENTATIVES, Washington, D. C. The committee met at 10:30 a. m., Hon. Andrew J. May (chairman) presiding. The CHAIRMAN. The committee will please be in order. Gentlemen, I have set this hearing for the consideration of S. 1579, a bill "To authorize the President of the United States to requisition property required for the defense of the United States." The bill has been passed by the Senate. The Senate conducted rather extensive hearings, heard some 20 or 25 witnesses. At the time that I set this hearing on the Senate bill, I was not aware of the fact that Mr. Faddis has a bill pending in this committee, H. R. 4959, which deals with a number of subjects, including the particular subject of the requisitioning of property by the United States. I think we might well consider both bills together and then determine in the committee what we wish to do. It would expedite matters very materially if we could consider S. 1579. I announced yesterday that I should like to complete the hearings on the bill today. There was some objection, I understood, from some members of the committee. However, we will proceed with the hearings and get through as soon as we can. Copies of these bills will be made a part of the record. (S. 1579, 77th Cong., 1st sess.] AN ACT To authorize the President of the United States to requisition property required for the defense of the United States Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That whenever the President, during the national emergency declared by the President on May 27, 1941, but not later than June 30, 1943, determines that (1) the use of any military or naval equipment, supplies, or munitions, or component parts thereof, or machinery, tools, or materials necessary for the manufacture, servicing, or operation of such equipment, supplies, or munitions is needed for the defense of the United States; (2) such need is immediate and impending and such as will not admit of delay or resort to any other source of supply; and (3) all other means of obtaining the use of such property for the defense of the United States upon fair and reasonable terms have been exhausted, he is authorized to requisition such property for the defense of the United States upon the payment of fair and just compensation in the manner provided for by the Act of October 10, 1940 (Public, Numbered 829, Seventy-sixth Congress, third session), and to dispose of such property in such manner as he may determine is necessary for the defense of the United States. 1 SEC. 2. Wherever the President determines that property acquired under this Act and retained is no longer needed for the defense of the United States, he shall, if the original owner desires the property and pays the fair value thereof, return such property to the owner; but, in any event, property so acquired and retained shall, if the owner desires the property and pays the fair value thereof, be returned to the owner not later than December 31, 1943. SEC. 3. The President from time to time, but not less frequently than once every six months, shall transmit to the Congress a report of operations under this Act. SEC. 4. The President may issue such rules and regulations and require such information as may be necessary and proper to carry out 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. Passed the Senate July 21, 1941. ATTEST: EDWIN A. HALSEY, Secretary. [H. R. 4959, 77th Cong., 1st sess.] A BILL To further expedite the strengthening of the national defense, to provide for licensing of exports and imports, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the words "United States," as used herein, shall be deemed to include the United States and all areas, dependencies, Territories, and possessions subject to the jurisdiction of the United States, including the Philippine Islands, the Canal Zone, and the District of Columbia. (b) That the word "person", as used herein, shall be deemed to mean an individual, partnership, association, company, or other unincorporated body of individuals, or corporation, or body politic. (c) That the words "to conduct business," as used herein, shall be deemed to include 1. pay, satisfy, compromise, or give security for the payment or satisfaction of any debt or obligation; 2. draw, accept, pay, present for acceptance or payment, or indorse any negotiable instrument or chose in action; 3. enter into, carry on, complete, or perform any contract, agreement, or obligation; 4. buy or sell, loan or extend credit, trade in, deal with, exchange, transmit, transfer, assign, or otherwise dispose of, or receive any form of property; 5. have any form of business or commercial communication or intercourse with. (d) That the words "air carrier," as used herein, shall be deemed to mean any person subject to the jurisdiction of the United States who undertakes, whether directly or indirectly or by a lease or any other arrangement, to engage in air transportation. (e) That the word "investment," as used herein, shall be deemed to mean any property, real or personal, or any evidences of indebtedness, or any evidences of ownership. SEC. 2. That whenever the President shall determine that the interests of national defense so require and shall make proclamation thereof, it shall be unlawful (a) To export from, ship from, take out of, import into, or bring within the jurisdiction of the United States any munitions, implement of war, or military equipment, or component parts thereof, or machinery, tools, or supplies and basic or intermediate constituents necessary for the manufacturing, servicing, or operation of any of the foregoing categories, or other articles or materials found by the President to be necessary for the maintenance and support of the military or naval forces or the national defense, except under such rules and regulations as the President may prescribe. Any proclamation issued for the purpose of prohibiting exportation or importation under the authority of this section shall name the articles or material so prohibited: Provided, That upon a determination by the President that the policy pursued by any country or area conflicts with the policy of the United States as now effectuated by the Act of March 11, 1941 (Public Law 11, Seventy-seventh Congress), and is detrimental to the interests of national defense, the President shall proclaim such fact, designating the country or area, and thereafter it shall be unlawful to import into or bring within the jurisdiction of the United States any article or material from such country or area: Provided further, That the President may except any article or material from such prohibition by making proclamation thereof, naming the article or material excepted. (b) To conduct within the United States an export or import business which deals with any of the articles and materials designated in a proclamation issued under the authority of section 2 (a), except with license of the President. Such a license may be granted or refused under such rules and regulations as the President may prescribe: Provided, That any refusal of a license shall be predicated upon a determination that the conduct of such a business would be detrimental to the interests of the national defense. (c) For any person to conduct business of any nature within the United States when such business involves the representation of or conducting business with, directly or indirectly, any person doing business within any area or country which the President, under the authority of section 2 (a), has determined to be pursuing a policy in conflict with the interests of national defense, and has made proclamation thereof, except with license of the President, under such rules and regulations as he may prescribe. SEC. 3. Whenever the President shall determine that it is necessary for the successful prosecution of the policy of the United States as now effectuated by the Act of March 11, 1941 (Public Law 11, Seventy-seventh Congress), and in the interests of national defense, and shall make proclamation thereof, he may (a) (1) Suspend or amend the rules and regulations prescribed by the Federal Communications Commission applicable to any or all cable, telegraph, telephone, or radio stations within the United States used for the transmission or receipt of messages to or from any locality outside the United States. (2) Prescribe additional rules and regulations necessary in the interests of national defense to govern the transmission or receipt of messages by any or all cable, telegraph, telephone, or radio stations with the United States to or from any locality outside the United States. (3) Require that copies of all messages transmitted from the United States to or received therein from any locality outside the United States by means of cable, telegraph, telephone, or radio communication be kept on file at the station within the United States which transmitted or received the communication, as the case may be, and that such copies be made available for the inspection of such officers as are from time to time authorized to make an inspection, under such rules and regulations as the President may prescribe; Provided, That such inspection shall be made for the sole puropse of discovering any violation or attempted violation of any Act of Congress now or which may hereafter be in effect: Provided further, That the contents of such messages shall not be made public nor revealed to any person other than the officers designated by the President, except that such information may be used in any prosecution instituted for a violation of any United States statute: Provided further, That nothing in this section shall be construed to amend, add to, or change in any way any statute or any rule or regulation of the Federal Communications Commission with respect to cable, telegraph, telephone, or radio stations which operate exclusively within the United States and are not used for the transmission or receipt of messages to or from localities outside the United States. (b) (1) Issue rules and regulations suspending, amending, or adding to existing rules and regulations governing shipments of mail, parcel post, and express to or from areas outside the jurisdiction of the United States. (2) Cause to be opened for inspection by such officer or officers as he may authorize, under such rules and regulations as he may prescribe, mail, parcel post, or express which is addressed to any foreign country or which enters the United States from any foreign country: Provided, That such opening and inspection shall be made for the sole purpose of discovering violations of the laws of the United States now or hereafter in effect which relate to the national defense, and that any information secured shall not be made public nor revealed to any person other than the officers designated by the President, except that such information may be used in any prosecution instituted for a violation of any United States statute relating to the national defense: Provided further, That nothing in this section shall be deemed to permit the deletion, erasure, alteration, or change of any of the material contained in such mail, parcel post, or express: Provided further, That this section shall not be applicable to newspapers or periodicals published by any person not wholly or partially controlled by any foreign person. For the purposes of this section the clause "wholly or partially controlled by any foreign person" shall be deemed to mean that 25 per centum of the outstanding voting stock or one fourth of any other means of control is in foreign ownership. (c) (1) Suspend, amend, or add to the rules or regulations now in force governing the operations of air carriers engaged in air transportation between the United States and foreign countries; specify under such rules and regulations as may be necessary, the route or routes to be followed by any or all air carriers engaged in air transportation between the United States and foreign countries, including the designation of terminal and intermediate points of such route or routes, and provide for the transportation by such air carriers of persons, whom the President may designate, in preference to all other persons when such transportation is necessary to the interests of national defense. (2) Require that any or all air carriers engaged in air transportation between the United States and foreign countries permit the United States, insofar as it is compatible with any rights or obligations secured by treaty between the United States and any foreign country, to use any air base, airport, landing area, or airnavigation facility in which such air carrier holds a property interest of any nature or in connection with which it holds an exclusive right, privilege, or license: Provided, That if any property rights are taken under authority of this section, the President shall pay just compensation to the person entitled thereto, in accordance with, as near practicable, the procedure prescribed in the Act approved October 10, 1940 (Public, Numbered 829, Seventy-sixth Congress), as it may from time to time be amended. (d) (1) Prescribe the order of priority in which any person who owns, possesses, manages, or controls drydocks, wharves, lighterage systems, or loading or discharging terminal facilities in any port of the United States, or warehouses, equipment, or terminal railways connected therewith, shall serve vessels and shippers, and for such purposes issue such rules and regulations as may be necessary. (2) Determine and prescribe the rates, terms, and conditions to be charged or required for the furnishing of such services, including stevedoring, handling of cargo, and the handling, dispatching, and bunkering of vessels, and for such purposes issue such rules and regulations as may be necessary. (e) (1) Purchase or otherwise acquire any munitions, implements of war, or military equipment, or component parts thereof, or machinery, tools, or supplies and basic or intermediate constituents necessary for the manufacturing, servicing, or operation of any of the foregoing categories, or other material or commodities, industrial or agricultural, found by the President to be necessary for the maintenance and support of the military or naval forces or the national defense, in any quantity, and from any source, domestic or foreign, with or without competitive bidding, as he may deem necessary in the interests of national defense, and requisition and take over any and all such articles and materials within the United States necessary for the purposes above set forth, and use, sell, exchange, or otherwise dispose of any of the articles or materials so purchased, acquired, or requisitioned. Any moneys received by the United States as the proceeds of any such sale or other disposition of any such articles or materials or any portion thereof, shall be deposited to the credit of that appropriation out of which was paid the cost to the Government of the property thus sold or disposed of, and the same shall immediately become available for the purposes named in this section. (2) Provide for the storage and maintenance and rotation, if necessary to prevent deterioration, of articles and materials so purchased, requisitioned, or otherwise acquired. (3) Pay just compensation for any articles or materials requisitioned pursuant to the provisions of this section, in accordance with, as near as practicable, the procedure prescribed in the Act approved October 10, 1940 (Public, Numbered 829, Seventy-sixth Congress), as it may from time to time be amended. (f) Authorize the Reconstruction Finance Corporation to purchase or otherwise acquire, through such agency or agencies as the President may designate, or to make loans to purchase, such investments as may be owned by any foreign government or foreign person. SEC. 4. There is hereby authorized to be appropriated from time to time, out of any money in the Treasury not otherwise appropriated, such amounts as may be necessary to carry out the provisions and accomplish the purposes of this Act. SEC. 5. Any person violating any provision of this Act, or of any proclamation, order, rule, or regulation issued hereunder, shall, upon conviction thereof, be fined not more than $50,000 or, if a natural person, imprisoned for not more than two years, or both; and the officer, director, or agent of any corporation who knowingly participates in such violation shall be punished by a like fine, imprisonment, or both; and any property, funds, securities, papers, or other articles or documents, or any vessel, together with her tackle, apparel, furniture, and equipment, concerned in such violation, shall be forfeited to the United States as for a violation of the customs laws. SEC. 6. The several courts of first instance of the Commonwealth of the Philippine Islands shall have jurisdiction of all offenses under this Act committed in the Philippine Islands. SEC. 7. The President may exercise any power or authority conferred on him by this Act through such departments, agencies, or officers as he shall direct. SEC. 8. A detailed statement of all expenditures under this Act and of all receipts hereunder shall be submitted to Congress at the beginning of each regular session. SEC. 9. If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby. SEC. 10. The authority and powers conferred by or pursuant to this Act shall terminate two years after its enactment unless the Congress shall otherwise provide. SEC. 11. The provisions of this Act shall become effective thirty days after its enactment. The CHAIRMAN. We have with us this morning the Under Secretary of War, Hon. Robert P. Patterson, whom it has been our pleasure to hear many times in the past. I shall ask the judge to tell us about the bill and give us whatever information he would like us to have; and also state whether he is for it or against it. STATEMENT OF HON. ROBERT P. PATTERSON, UNDER SECRETARY OF WAR Mr. PATTERSON. Mr. Chairman and gentlemen, S. 1579 is the bill that is before you. A companion bill here was introduced at the request of the War Department some 2 months ago by Judge May. The bill in the Senate was introduced, by request, by Senator Reynolds, the chairman of the Senate Military Affairs Committee. At that time the bill was very broad in scope. As you doubtless will recall, it covered the requisitioning by the United States of any property, real or personal, that can be used or is adapted for use by the national defense. The bill was a military measure, drafted in the War Department. It has quite a history in the War Department. It goes back to about 1931 when a similar bill appeared as an appendix to the Industrial Mobilization Plan, published in 1931, and in the records of the House. In the course of the hearings in the Senate Committee on S. 1579, a modified measure was drafted by me, by the War Department, and that is the measure that was approved by the Senate Military Affairs Committee, and passed by the Senate without roll call, about 10 days ago. The modified measure-and that is the one I am supporting todayprovides for the requisitioning by the United States of military and naval munitions, supplies, and equipment, component parts of such supplies, and the machinery and raw materials necessary for their production. It is limited simply to those items and the broad definition of all property, real and personal, adapted for use in national defense, has been dropped. Fears were expressed by people, whose opinions we have to respect, that the broad classification would enable the Government to adopt oppressive measures. It was even said by some that we could stifle |