HEARING ON H. R. 3598 AUTHORIZING THE SECRETARY OF THE HOUSE OF REPRESENTATIVES, The committee this day met, Hon. Carl Vinson (chairman) presiding. The CHAIRMAN. The committee will be in order. We will take up H. R. 3598. The Clerk will report the bill and read the report. The committee will then hear from Captain Knox in regard to the proposed bill. (The bill and report referred to are as follows:) [H. R. 3598, 75th Cong. 1st sess.] A BILL Authorizing the Secretary of the Navy to accept gifts and bequests for the benefit of the Office of Naval Records and Library, Navy Department Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Navy is hereby authorized to accept, receive, hold, and administer gifts and bequests of personal property, and loans of personal property other than money, from individuals or others for the benefit of the Office of Naval Records and Library, Navy Department, its collection, or its services. Gifts or bequests of money shall be deposited in the Treasury of the United States as trust funds under the title "Office of Naval Records and Library fund." SEC. 2. Gifts or bequests for the benefit of the Office of Naval Records and Library, Navy Department, its collection, or its services, shall be exempt from all Federal taxes. SEC. 3. The Secretary of the Treasury is authorized, upon the request of the Secretary of the Navy, to invest or reinvest the trust funds, or any part thereof, deposited in the Treasury pursuant to section 1 of this Act, in securities of the United States Government or in securities guaranteed by the United States Government. The interest accruing from such securities shall be deposited to the credit of the Office of Naval Records and Library fund. [No. 2] AUTHORIZING THE SECRETARY OF THE NAVY TO ACCEPT GIFTS AND BEQUESTS FOR THE BENEFIT OF THE OFFICE OF NAVAL RECORDS AND LIBRARY, NAVY DEPARTMENT (H. R. 3598). MR. Vinson of GEORGIA NAVY DEPARTMENT, Washington, January 19, 1937. The SPEAKER OF THE HOUSE OF REPRESENTATIVES, Washington, D. C. MY DEAR MR. SPEAKER: There is transmitted herewith a draft of a proposed bill "Authorizing the Secretary of the Navy to accept gifts and bequests for the benefit of the Office of Naval Records and Library, Navy Department." The purpose of this proposed legislation is to authorize the Secretary of the Navy to accept, receive, hold, and administer gifts and bequests of personal property and loans of personal property other than money, from individuals or others for the benefit of the Office of Naval Records and Library, Navy Department, its collection or its services, such gifts or bequests of money to be deposited in the Treasury of the United States as trust funds under the title "Office of Naval Records and Library Fund." The draft of bill further provides that gifts and bequests for the benefit of the Office of Naval Records and Library, Navy Department, its collection or its services, shall be exempt from all Federal taxes. The bill also authorizes the Secretary of the Treasury, upon the request of the Secretary of the Navy, to invest, or reinvest, the trust funds, or any part thereof, deposited in the Treasury pursuant to the first section of this act, in securities of the United States Government or in securities guaranteed by the United States Government, the interest accruing from such securities to be deposited to the credit of the Office of Naval Records and Library Fund. In order to extend the usefulness of the Navy Department Library and its services, the Navy Department desires to secure the necessary authorization to accept gifts, loans, and bequests. Congress has enacted similar legislation in connection with gifts for use in providing recreation for enlisted men (act of June 30, 1932, 47 Stat. 424; U. S. C., title 5, sec. 419a) and in connection with gifts for the Library of Congress (act of Mar. 3, 1925, 43 Stat. 1107; U. S. C., title 2, ch. 5). There is no cost to the Government in connection with this proposed legislation. On the other hand, the Government would be benefited to the extent of the value of gifts other than money and by the use of money for the use of the Office of Naval Records and Library. The Navy Department recommends that the proposed legislation be enacted. The proposed legislation is in accord with the program of the President. Sincerely yours, CLAUDE A. SWANSON. STATEMENT OF CAPT. DUDLEY KNOX, OFFICE OF NAVAL RECORDS AND LIBRARY, NAVY DEPARTMENT Captain KNOX. The fund to be provided follows the precedent of the Library of Congress trust fund, and through that fund the Library of Congress has been able to supplement its work very broadly and in a very valuable way to the Government. They have had a special fund to acquire rare manuscripts and prints, rare books, to edit and publish special works, to collect special historical things, to finance the services of research, and other special historical purposes. In our own case we frequently wish to buy things. For example, we had an opportunity a year or two ago to buy the original gold medal presented to John Paul Jones by the King of France and we were unable to do so; also John Paul Jones' portraits. There are many documents on the market all the time that we would like to have. Sometimes they are expensive; sometimes they are not, but we have no special fund in the Navy Department for that purpose. The CHAIRMAN. Where do you get your money now to buy anything? Captain KNOX. At the present time we get it from Congress. Captain KNOX. We have practically no funds available for such purposes as this fund would provide for. The CHAIRMAN. How much does the appropriation bill carry each year for your department for that purpose? Captain KNOX. My office? For that purpose it carries nothing. It carries nothing for such purposes, except in the general contingent fund of the Navy Department, and we have special allotments from time to time from the Secretary's office, but it is very difficult for us to get it in that way. The only regular appropriations for my office are salaries and for the purchase of books. It might be that we purchase a rare book occasionally but the purchases are for the entire Navy Department, railroad telegraph schedules, documents, technical books of all kinds besides our general library purposes. There are times when we have opportunities to receive gifts of special things. For example, quite recently, Mrs. Eberstadt in New York offered the Navy Department a very valuable collection of naval prints, 1,500 of them, going back to between the 16th and 20th centuries. She was willing to make us a gift of them if it could be accepted at once and, therefore, as we were without the authority of Congress to accept it, she gave it to a private historical society instead. It was a very vaulable collection appraised at about $60,000. Mr. MCFARLANE. How much would it have cost us to take care of the set of prints had we been able to accept the gift? Captain KNOX. To take care of the prints? Mr. MCFARLANE. Yes; to procure them and bring them down to where they would be located; in other words, the total cost in connection with it. Captain KNOX. There is some expense involved in such care. That is where this trust fund would come in. For instance, there is a very valuable collection of ship models at the Naval Academy, a gift from H. H. Rogers, and they have to repair the models and sometimes that is very expensive. You cannot always anticipate needs. That is one of the aspects of this case, that oftentimes the need is immediate; you must meet it then or you do not meet it at all. Repairs must be made when needed or deterioration takes place rapidly. Purchases may be possible and if you cannot then make the purchase somebody else gets it. Mr. MCFARLANE. Then you would be asking Congress in the future to provide money to take care of the maintenance of all these things that you expect to receive under this bill. Is that true or not? Captain KNOx. The bill provides that we may accept funds. which would be available for such purposes. Mr. MCFARLANE. After we got that property, books, records, or what not, the Government would have to provide the necessary funds to house them and to repair them or whatever has to be done to look after them, would it not? Captain KNOX. Not necessarily. We do not have to accept a thing which is offered if we cannot care for it. There is a project now, that is, a proposal for a naval museum, as a part of the new Navy Department building. My understanding is that that is part of the plan of the Capital Park and Planning Commission, and if such a museum is built then the difficulty will not be so much the taking care of an embarrassing surplus as the filling of available space. Mr. MCFARLANE. I do not say I am opposed to it but I am wondering what it will cost. Mr. MAAS. This bill would permit the accumulation of trust funds which would take care of the maintenance feature. The CHAIRMAN. Under the law today you cannot accept things. We have to deal with them separately and independently as we did last year when we passed two bills to permit the Navy Department to accept certain bequests. Mr. MAAS. This would save us money by permitting the accumulation of trust funds which could be used for maintenance purposes. The CHAIRMAN. Last year we passed a bill to authorize the accept ship models of the estate of H. H. Rogers. As it now stands, we have to deal with such things separately and independently as they occur. That is the reason the Navy Department desires general legislation so as to be able to accept gifts and so forth when offered. Have you completed your statement? Captain KNOX. I have finished, except to point out that this bill has the approval of the Treasury Department, the Navy Department, and the Budget, and that it involves the appropriation of of no funds. The CHAIRMAN. What is the pleasure of the committee on this bill? Mr. MCFARLANE. I think there ought to be some change in the phraseology. It says: "Personal property other than money", and then it says "Gifts or bequests of money shall be deposited in the Treasury of the United States." It seems to me the phraseology of the bill would be plainer if after the words "personal property", on line 5, you add the words "and money. Mr. DREWRY. No; that would include loans. Strike out the word money. Why not strike out the words "other than money", in lines 5 and 6, and that would eliminate the question Mr. McFarlane raises. Mr. KNIFFIN. It says "loans of personal property." The CHAIRMAN. The Judge Advocate General of the Navy is here and will clear this up for us. Mr. DREWRY. I understood the witness to say that they would use the money that is to be given them for the purpose of getting books and other things they might decide to buy, but as I read the bill it does not provide for that at all. The money is to be invested and the only money they could use for the purchase of books would be the interest accruing from securities in the trust fund. STATEMENT OF REAR ADMIRAL G. J. ROWCLIFF, JUDGE ADVOCATE GENERAL OF THE NAVY The CHAIRMAN. Admiral Rowcliff, what have you to say about it? Admiral RowCLIFF. It was intended to authorize gifts of money, and following that, the trust fund itself would take care of this whole matter without getting another appropriation. It is an authorization for collection of historical material. The CHAIRMAN. Is it your idea that the library fund could use the money that might be given. It says in the last two or three lines of the bill that you could only use the interest from the money that is received. Admiral RowCLIFF. The primary intention is to use the interest on the money that is given and not the principal. Mr. MAAS. There is no restriction in the bill that you may not use the principal. It merely says-authorized upon request to invest or reinvest. Mr. DREWRY. "Gifts or bequests of money shall be deposited in the Treasury of the United States as trust funds", and then it says in section 3: "The Secretary of the Treasury is authorized, upon the request of the Secretary of the Navy, to invest or reinvest the trust funds." Then the last sentence says: "The interest accruing from such securities shall be deposited to the credit of the office of Naval Records and Library fund." Mr. MAAS. Are there not occasions arising when people wish to make gifts of money for specific purposes and you are not authorized to accept them? The CHAIRMAN. Then they would have to get a special bill. Mr. PHILLIPS. How much money is given the Department in a year in bequests, which you have not been able to accept in the past? Captain KNOX. No money has been given us, other than gifts of this sort such as the ship models, and such as Mrs. Eberstadt's collection, which was appraised at $60,000. It was not money given; it was objects. The CHAIRMAN. We passed bills last year permitting the Secretary of the Navy to accept certain ship models and bequests from two other estates. Captain KNOX. Yes; the ship models. Mr. MCFARLANE. I offer an amendment, line 7, page 2, to strike out the word "trust" and insert in lieu thereof the word "such", so as to read: "to invest or reinvest such funds, or any part thereof, deposited in the Treasury pursuant to section 1 of this act", and so forth. The captain said that any moneys that might be given might be for a specific purpose to buy certain property. Mr. DREWRY. That does not cover it. If you put that in, it simply says the Secretary shall invest or re-invest the trust funds, and if you put in your suggestion, such funds, what can they do with it. They can only invest it in securities of the United States Government or any securities guaranteed by the United States Government. The CHAIRMAN. You would not have any trust fund if you spent the principal. You want to invest the trust funds in certain designated securities and the interest that accrues supports the library. Mr. DREWRY. That is what he wants to do, to apply the interest arising from that fund. Mr. MAAS. Suppose you are offered $2,000 for a specific purpose and cannot accept? The CHAIRMAN. They could come here and we could handle it. Mr. MAAS. I would suggest changing the first word in line 9 from "shall" to "may", and then you would accomplish your purpose. Mr. MCFARLANE. In this bill do you not want the power fixed in somebody? Admiral ROWCLIFF. Yes. Mr. MCFARLANE. Would you not want this bill amended in that way? Admiral RowCLIFF. I was about to say to Mr. Drewry in response to his question a minute ago that we think that under the existing decisions of the Comptroller General it will give the Secretary of the Navy the necessary authority to handle the funds in this way. Mr. DREWRY. You think this bill covers it? Admiral RoWCLIFF. We think so. Mr. MCFARLANE. Who wrote this bill? Admiral RowCLIFF. My office wrote it. Mr. MCFARLANE. Do you think you ought to change the word "shall" to "may"? Admiral RowCLIFF. I do not think it is necessary. The CHAIRMAN. All in favor of reporting the bill favorably say aye; opposed no. The ayes have it, and I will ask Mr. Kniffin to report |