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Secretary PATTERSON. What I was trying to bring out here, gentle men, was the fact that Congress has given us, the War Department and Navy Department, ample powers to mobilize the industrial system of this country, its rich resources in metals, agriculture, produe tion, transportation systems and everything, and if we have not done : a job in war mobilization, so far as material resources of this country are concerned, it is not your fault, it is our fault, because you have given us all the means that anyone could desire to get war production, The CHAIRMAN. You can go so far, as I understand it, if I remember the various acts, as to tell industry what industry shall make, how much industry shall charge you for it

Secretary PATTERSON. Yes; and if it is too low, they have to go to the courts to get higher

The CHAIRMAN. That is, the Government has virtually taken away the whole voluntary principle from industry. When it comes to the final analysis you can go to the Ford plant and say, "You make us bolts," and then you will examine the price, and you say, "You can only charge us this much." Is that true?

Secretary PATTERSON. Yes, sir.

Senator MAYBANK. I would like to ask the judge if it is not a fact that the War Production Board has taken over many of these critical materials that are necessary for industry to run on.

Secretary PATTERSON. Yes, sir; that is under the priority power. I have come down myself and aked for some of these laws, and the Congress has never failed to give us anything along the line of material mobilization.

Senator MAYBANK. And it is a fact, isn't it, also that the War Production Board is under the direction of the Director of War Mobilization?

Secretary PATTERSON. Yes.

Senator MAYBANK. That is, Mr. Krug

Secretary PATTERSON. Yes, sir.

Senator MAYBANK. Would that be an added reason for the Director of War Mobilization to go ahead and freeze the people in these plants, when that is the only source that you can get the materials?

Secretary PATTERSON. I think that is so.

Senator AUSTIN. I ask unanimous consent to insert in the record nt this place a list of statutes affecting property, which list was compiled by Ernest L. Bell, Jr., counsel for the Citizen's Committee for a National War Service Act.

Senator HILL. What is the date of that, Senator?

Senator AUSTIN. I see not date on it but I know it was during the bearings of the last session of Congress, and it lists the numerous acts, The Met referred to bears date of February 3, 1944 ļ

Senator Hill. Do you not think it would be wise following that alw to teen section 9 of the Selective Service Act?

Senator Atetty. It is a good idea to put in the whole werton. Yake Hot Put section 9 of the selective Service Act in yo. The Let of statutes referred to is as foloRE,

1

CERTAIN FEDERAL STATUTES WHICH AFFECT THE USE AND OWNERSHIP OF PROPERTY IN WARTIME 1

I. Requisition of Personal Property. II. Compulsory Orders to Produce.

III. Condemnation, Acquisition, and Control of

Property.

IV. Priorities.

V. Repricing.

VI. Renegotiation.

VII. Excess Profits Tax.

VIII. Control of Prices and Rents.

IX. Patents and Royalties.

1

I. REQUISITION OF PERSONAL PROPERTY

1. Under the Requisition Act of October 16, 1941 (Public Law 274, 77th Cong.' 1st sess.), the President may requisition and dispose of such military of 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, as he deems necessary for the defense of the United States, if he determines such need is immediate and will not admit of delay or resort to any other source of supply and that all other means of obtaining the use of the property upon fair and reasonable terms have been exhausted. The owner is entitled to fair and just compensation for the property taken. The owner may require the return of retained property no longer needed for the defense of the United States, upon payment of the then fair value thereof.

2. Under the Requisition Act of October 10, 1940 (Public Law 829, 76th Cong., 3d sess.), the President may requisition and dispose of similar property intended for export, the exportation of which has been denied in accordance with the provisions of section 6 of the act approved July 2, 1940, upon determination that such property is necessary in the interest of national defense. The owner is entitled to fair and just compensation for the property taken. The compensation is confined to the fair market value of the article or material taken, without any allowance for prospective profits, punitive or other damages.

3. Under the Merchant Marine Act of 1936 (46 U. S. C. 1242), whenever the President shall proclaim that the national defense makes it advisable or during any national emergency declared by proclamation of the President, the United States Maritime Commission may requisition or purchase any vessel or any other watercraft owned by citizens of the United States, or under construction within the United States, or for any period during such emergency, may requisition or charter the use of any such property. The owner is entitled to just compensation for the property taken or for the use of the property but in no case is the value of the property taken or used to be deemed to be enhanced by the causes necessitating the taking or use. No amount shall be paid for any consequential damages arising from the taking or use of the property.

4. Under the act of June 6, 1941 (Public Law 101, 77th Cong., 1st sess., 55 Stat. 242), extended by resolution of June 16, 1942 (56 Stat. 370), the President may, through such agency or officer as he shall designate, purchase, requisition, charter or requisition the use of, or take over the title to, or possession of, for such use or disposition as he shall direct, any foreign merchant vessel which is lying idle in waters within the jurisdiction of the United States, including the Philippine Islands and the Canal Zone, and which is necessary to the national defense. The owner of the vessel is entitled to just compensation but the amount thereof is to be deposited with the Treasurer of the United States and is subject to be applied to the payment of valid claims or liens against the vessel.

II. COMPULSORY ORDERS TO PRODUCE

5. Under section 9 of the Selective Training and Service Act of 1940 (Public, No. 783, 76th Cong., 3d sess.), the President is empowered through the head of the War Department or the Navy Department, in addition to other methods of purchase or procurement, to place orders for required products or materials with any person producing, or capable of producing, such products or materials. Under penalty of having his plant taken over for operation by the Government imprisonment, and fine, such person must comply with such orders, give them precedence over all other orders and contracts and deliver the products ordered at a price deemed reasonable by the Secretary of War or the Secretary of the Navy. 1 Whenever reference is made to any statute such reference is to the statute as amended.

Persons with whom such orders are placed are entitled to fair and just compensation for complying with the order. (Authority to place compulsory orders similar to that given by sec. 9 of the Selective Training and Service Act of 1940 was also given by section 120 of the National Defense Act of 1916.)

6. Under the Smith-Connally amendment (Public Law 89, 78th Cong., 1st sess.) to section 9 of the Selective Training and Service Act of 1940, the President, through such department or agency as he may designate, may take over for the use and occupation by the United States any plant, mine, or facility equipped for the manufacture, production, or mining of any articles or materials which may be required for the war effort or which may be useful in connection therewith, whenever the President finds that there is an interruption of the operation of such plant, mine, or facility as a result of a strike or other labor disturbance, that the war effort will be unduly impeded or delayed by such interruption and that the exercise of the power is necessary to insure the operation of such plant, mine, or facility in the interest of the war effort.

III. CONDEMNATION, ACQUISITION, AND CONTROL OF PROPERTY

7. Under the act of July 2, 1917 (50 U. S. C. 171) and title II of the Second War Powers Act (Public Law 507, 77th Cong., 2d sess.), real property, together with any personal property located thereon or used therewith, may be acquired by condemnation; temporary use of, or any other interest in, such property may be so acquired; and immediate possession may be taken upon filing of the condemnation petition and entry of an ex parte court order, without waiting for approval or declaration of taking.

8. Defense Housing.—Under the act of October 14, 1940 (54 Stat. 1125; 42 U. S. C. 1521), the Federal Works Administrator is authorized, in those localities in which the President finds that an acute shortage of housing exists or impends which would impede national defense activities and that such housing would not be provided by private capital when needed, to acquire improved or unimproved lands or interests in lands by purchase, donation, exchange, lease, or condemnation for housing purposes.

IV. PRIORITIES

9. Under title III of the Second War Powers Act (Public Law 507, 77th Cong., 2d sess.), all Army and Navy contracts, orders, subcontracts, or suborders, and contracts or orders for foreign governments are subject to priorities established by public authority. No person is liable for damages or penalties for default under any other contracts or orders, resulting directly or indirectly from compliance with such priority orders.

V. REPRICING

10. Title VIII of the Revenue Act of 1943 authorizes each war-procurement agency, by agreement or order, to adjust the price of any article or service of any kind required by the agency or required by, or furnished or offered to any war producers for performing contracts with the agency or subcontracts thereunder. Any person aggrieved by an order may sue the United States to obtain fair and just compensation for articles and services furnished in accordance with the order. Upon willful refusal or failure to furnish any articles or services at the price fixed by such an order, the President may take immediate possession of the plant in accordance with section 9 of the Selective Training and Service Act of 1940.

VI. RENEGOTIATION

11. Under section 403 of the Sixth Supplemental National Defense Appropriation Act of 1942 (Public Law 528, 77th Cong., 2d sess.), as amended, all contracts (and subcontracts thereunder) with certain exceptions, of the War, Navy, and Treasury Departments, of the Maritime Commission, and the War Shipping Administration, and of the Defense Plant Corporation, the Defense Supplies Corporation, the Rubber Reserve Company, and the Metals Reserve Company are subject to renegotiation for the purpose of removing excessive profits received or accrued under such contracts. If the contractor and the renegotiation agency of the Government do not agree as to the excessive profits, the Government may determine unilaterally the amount of the profits that are excessive.

VII. EXCESS PROFITS TAX

12. Under the Revenue Act of 1943 excess profits as determined by the act are taxed at a flat rate of 95 percent subject to an over-all ceiling of 80 percent of the corporate net income. The taxpayer, however, is entitled to a post-war refund equal to 10 percent of the excess profits tax.

VIII. CONTROL OF PRICES AND RENTS

13. Under the Emergency Price Control Act of 1942 (Public Law 421, 77th Cong., 2d sess.), the Price Administrator may establish maximum prices and maximum rents whenever in his judgment that is necessary in order, among other reasons, to prevent profiteering, speculation, to protect defense appropriations and persons with relatively fixed and limited incomes, and to stabilize prices generally. Such maximum prices must be observed regardless of any contract or lease to the contrary. The Administrator also may require a license of any person subject to any regulation as a condition to selling any commodity in respect of which a price regulation is applicable.

IX. PATENTS AND ROYALTIES

14. Royalty adjustment.-Under the Royalty Adjustment Act of 1942 (35 U. S.C. 89) whenever the head of any department or agency believes that royalties being charged to the Government are excessive, he may make an order reducing such royalties to a rate or amount deemed fair under condtiions of wartime production. 15. Patent infringement.-Under the act of June 25, 1910, as amended (35 U. S. C. 68), the Government may make, have made, or use any patented invention without license of the owner, whose only remedy is by suit in the Court of Claims for reasonable compensation.

16. Patents withheld.-Under the act of October 6, 1917, as amended (35 U. S. C. 42), a patent application may be ordered to be kept secret and issue of the patent withheld until termination of the war, if the invention is one whose publication would be detrimental to the public safety or defense of the United States.

17. Prohibition against obtaining foreign patents.-Under the act of August 21, 1941 (35 U. S. C. 42a), American inventors are forbidden during the war to file foreign patent applications except when authorized in each case by a license obtained from the Commissioner of Patents.

X. TRANSPORTATION

18. Under the act of August 29, 1916 (10 U. S. C. 1361), the President, through the Secretary of War, may take possession and assume control of any system of transportation or any part thereof. Pursuant, in part, to the authority of this act, the President took possession and control of the railroads under Executive Order No. 9412, December 27, 1943 (8 Fed. Reg. 17395). The Secretary of War has been authorized under this act to take possession and assume control of any civil aviation system to the extent necessary for the prosecution of the war (see Executive Order No. 8974, December 13, 1941, 6 Fed. Reg. 6441).

19. The act of February 4, 1887, 24 Stat. 380 (10 U. S. C. 1362) provides for preference to shipments of troops and material of war upon demand of the President in time of war or threatened war.

20. The Interstate Commerce Commission Act (49 U. S. C. 1 (15)) gives the Commission the right to control many features of transportation--for an example, car service, joint and common use of terminals, priorities, and preferences; the act (49 U. S. C. 304 (e)) also gives the Commission similar emergency powers in connection with motor carriers; and section 420 of Public Law 558 (77th Cong., 2d sess.), gives the Commission similar emergency powers over freight forwarders. 21. The act of June 15, 1917 (50 U. §. C. 191), authorizes the Secretary of the Treasury, subject to the approval of the President, to make rules and regulations governing the anchorage and movement of vessels in the territorial waters of the United States whenever the President has by proclamation or Executive order declared a national emergency to exist by reason of actual or threatened war. 22. Public Law 197 (77th Cong., 1st sess.) gives the President the right, under certain conditions, to cause pipe lines to be extended and operated by the Government.