STATEMENT OF JOHN L. ROGERS, MEMBER OF THE INTERSTATE COMMERCE COMMISSION

Mr. ROGERS. My name is John L. Rogers and I am a member of the Interstate Commerce Commission.

Mr. HOBBS. We are always delighted to have you with us, Mr. Rogers, and we appreciate your presence and testimony.

Mr. ROGERS. I do not know that I understand, Mr. Chairman, just the total purpose of these hearings. I understood it was in regard to the temporary legislation growing out of the war effort-as to whether or not that should be extended.

The only authority that

Mr. HOBBS (interposing). There are six resolutions pending before this subcommittee for its consideration, each of which in different language would terminate the emergency or hostilities or the war, and we are seeking to get all the light we can upon the effect that the passage of any one of those resolutions might have upon the present set-up.

Mr. ROGERS. The only authority that the Commission has exercised during the war is that contained in the permanent legislation, that is the Interstate Commerce Act, under which the Commission has certain emergency powers. Those have been in effect since 1917. The authority that we have had all these years related purely to rail transportation. Under the Second War Powers Act we have exercised certain authority as to motor carriers and as to water carriers. Mr. HOBBS. How about air?

Mr. ROGERS. NO; that is under the Civil Aeronautics Authority. Mr. HOBBS. You have under the Second War Fowers Act no authority over air transportation?

Mr. ROGERS. No. If the Second War Powers Act is extended, and I believe it has been passed by the House and is now pending before the Senate, that takes care of our needs. We do think it ought to be extended as provided until next March. And if that is done why there is no other legislation that we would be concerned with.

Mr. HOBBS, And with the Second Extension of the Second War Powers Act there would be no effect upon the Interstate Commerce Commission of the passage of any of these resolutions?

Mr. ROGERS. No; I think not. I think not.

Mr. HANCOCK. Do you have any authority over the operations of ODT or are they entirely independent of you?

Mr. ROGERS. They are independent. Of course, Director Johnston, of ODT, is also a member of the Commission. And on numerous occasions during the war the ODT and the ICC have acted in conjunction and through service orders issued by the Commission under its authority we accomplished many things that ODT wanted to accomplish as well as the Interstate Commerce Commission. We have worked hand in hand.

Mr. HANCOCK. In cooperation and consultation you have avoided conflicts, but there could be conflict of authority, could there not Mr. ROGERS. I could see there could be, but we have not had it. Mr. HANCOCK. That is probably due to good teamwork. Mr. ROGERS. Perhaps.

Mr. HOBBS. As well as the appointment of the gentlemen who are members of your Commission at the head of this ODT?

Mr. ROGERS. It has worked out very well, very well.

And I believe that is all I have, Mr. Chairman, unless there are some questions.

Mr. HOBBS. I think you have made it perfectly clear and we appreciate very much your presence and your testimony.

Mr. ROGERS. Thank you.

Mr. HOBBS. Unless there are some other questions Mr. Rogers may be excused.

Mr. EMERSON. The Treasury Department is represented by Mr. Spingarn.

STATEMENT OF STEPHEN J. SPINGARN, ASSISTANT GENERAL COUNSEL, TREASURY DEPARTMENT

Mr. SPINGARN. My name is Stephen J. Spingarn; I am assistant general counsel of the Treasury Department.

Mr. HOBBS. We are delighted to have you with us again.

Mr. SPINGARN. Thank you, sir.

First of all, I would like to say again that the Treasury is in agreement with the general statement made yesterday by Mr. Snyder.

There is a considerable body of statutes affecting the Treasury Department which hinge on the duration of the war, the hostilities, or the emergency. However, the bulk of those statutes fall into two groups, as I indicated yesterday.

The first are war revenue measures. The question of continuation or termination of those is before the Ways and Means Committee, and I do not suppose that this committee desires to go into that rather complicated question at this time.

Mr. HOBBS. We would like very much to have you express yourself on the point of the immediacy of this necessity of awaiting action of the Ways and Means Committee.

Mr. SPINGARN. We would prefer, I believe, to await action by the Ways and Means Committee on those revenue measures.

The second group

Mr. HOBBS (interposing). Just a minute. Mr. Feighan wants to ask a question.

Mr. SPINGARN. Yes, sir.

Mr. FEIGHAN. I would ask, roughly, how many such war revenue measures are there?

Mr. SPINGARN. I would say I have a list here-there are probably, just estimating, 30 or more.

Mr. ROBSION. Another question.

Mr. SPINGARN. Yes, sir.

Mr. ROBSION. Do you feel that no action should be taken by the Congress or that it should not be taken until the Ways and Means Committee acts on the fixing of the date of the termination of the war? Mr. SPINGARN. Well, each of these measures rests on a different bottom and every one should be considered separately. So that as far as revenue measures are concerned I do not think that they should all be terminated simultaneously by a declaration of the end of the war, of hostilities, or the emergency.

The second group of statutes are statutes in which the Treasury has no primary interest, but is involved principally as the administering agency. And the question of whether or not those statutes should continue or be terminated is primarily one for other agencies. I am therefore not commenting on those statutes, since frankly we would not be affected other than that we would discontinue administering them if the statute lapsed, and our position is that there would be no particular administrative difficulties one way or the other.

Finally, we come to a small group of statutes in which the Treasury is directly interested to varying degrees and which we feel should be continued.

The first of these is the act of April 13, 1943, which provides that "until 6 months after the cessation of hostilities in the present war as determined by proclamation of the President or concurrent resolution of the Congress" any balance payable to the United States by an insured bank arising solely as a result of subscriptions made by or through such insured bank for the United States Government securities-i. e., so-called War Loan accounts-shall be excluded from the base used for the determination of the Federal Deposit Insurance Corporation insurance assessment, and should also be exempt from the Reserve System requirements provided by the Federal Reserve Act.

At the hearing yesterday Mr. Vest, the representative of the Federal Reserve Board, indicated the opinion of that Board that that statute might be terminated as of approximately the end of the current calendar year.

As I said at that time, it had been our opinion that the statute should continue a little longer than that, but before I made any definite statement on the matter I wanted an opportunity to recanvass the situation with the Treasury in he light of Mr. Vest's statement. I have done so since the hearings yesterday, and have discussed the matter with the Fiscal Assistant Secretary of the Treasury, and it is the opinion that that statute should be continued until June 30, 1947, or approximately 6 months longer than the date proposed by the Federal Reserve Board.

Mr. Heffelfinger, the assistant to the Fiscal Assistant Secretary of the Treasury, is here, and if the committee desires a statement, Mr. Chairman, on why we think it should be continued, I would like to have him make it.

Mr. HOBBS. I am sure we would be delighted to hear him.

STATEMENT OF WILLIAM T. HEFFELFINGER, OFFICE OF FISCAL ASSISTANT SECRETARY OF THE TREASURY

Mr. HEFFELFINGER. There is no question about the termination of the statute, Mr. Chairman. It is a matter of timing. If the statute would terminate today it would require the banking system to raise about $3,000,000,000 of reserves overnight. That is a very severe requirement.

By terminating the statute 6 months from now the reserve requirements will not be as heavy as it is estimated we will pay out a large part of the present balance in that period, and our problem would be much smaller. That is, however, speculating as to the future.

On our present plans that may be possible, but we are making a decision now which will affect us 6 months from now. If at that time our deposits are down to three billion or five billion it is still a problem for the banks to provide overnight reserves for those billions.

We feel that if the statute is continued until June 30, 1947, the problem will be somewhat easier to handle.

One other way to approach the problem may be to terminate the statute as to new deposits after a certain date and let the existing deposits run off under the present provisions. Under such an arrangement any new moneys going into our accounts would be subject to prewar reserve requirements. That may have a good effect and be something that the Federal Reserve Board might also want to consider. Mr. HOBBS. I am wondering if the Federal Reserve System did not have in mind under the Second War Powers Act which has already been extended

Mr. HEFFELFINGER (interposing). What power was that?

Mr. HOBBS. I do not remember the exact reference, but it had to do with

Mr. SPINGARN. Is that the provision that has to do with dealing direct?

Mr. HOBBS (continuing). Authorizing overdrafts.

Mr. SPINGARN. That is a different provision, sir.

Mr. HOBBS. And that would not apply to this?

Mr. HEFFELINGER. That would not apply; no sir.

Mr. HOBBS. Thank you. That is what I wanted to know.

FURTHER STATEMENT OF STEPHEN J. SPINGARN, ASSISTANT GENERAL COUNSEL, TREASURY DEPARTMENT

Mr. SPINGARN. The next provision which the Treasury believes should be continued is section 5 (b) of the Trading With the Enemy Act, as amended, which among other things, authorizes "during the time of war or during any other period of national emergency" the regulation of transactions in foreign exchange and the regulation of transactions involving property in which a foreign country or a national has an interest.

The freezing control of foreign property administered by Foreign Funds Control rests on the authority of this statute. Its continution is necessary for the orderly unfreezing of billions of dollars of foreign assets in the best interests of the United States and the foreign countries whose property is involved.

Among other Treasury activities which rest upon 5 (b) are the reports obtained concerning foreign exchange transactions and the reports of unusual currency transactions obtained from banks for the purpose of preventing and disclosing income-tax evasions.

This statute, of course, is permanent legislation in the sense that it applies during any period of war or national emergency. It was originally enacted in 1917 and, with amendments, has been on the books ever since.

Mr. HOBBS. In other words, that power depends upon the continuation of your war emergency?

Mr. SPINGARN. Of the war or a period of national emergency. Mr. HOBBS. Yes.

Mr. SPINGARN. Yes, sir.

The next statute is the act

Mr. HOBBS (interposing). Will that be true permanently?

Mr. SPINGARN. Yes, sir; any future war or any future national emergency, the statute would be in effect as presently written. Mr. HOBBS. So your idea is that the Treasury would be interested in having that emergency power continued on permanently? Mr. SPINGARN. Yes, sir.

Mr. HANCOCK. As I understood it is not permanent; no. No powers shall be invoked unless the President says there is an emergency.

Mr. SPINGARN. That is correct. What I had in mind is this: If a resolution were adopted by this committee and passed by the Congress which terminated the emergency and the war, the powers under that statute would go into abeyance until a future state of national emergency or war were declared.

The Treasury needs those powers in order to handle its Foreign Funds Control program, and for other purposes. And, therefore, if any such resolution were adopted we feel this is one of the statutes that should be excepted from its provisions.

Mr. HOBBS. Thank you, sir.

Mr. SPINGARN. The next statute is the act of December 23, 1944, which authorizes disbursing officers, for the accommodation of military and civilian personnel of the United States, to cash and negotiate checks and other instruments payable in United States and foreign currency and to conduct exchange transactions involving United States and foreign currency. Section 4 of the act provides that it shall remain in effect for 6 months after the termination of the present war or until such earlier time as the Congress by concurrent resolution or the President may designate. The legislation is essential during the time that substantial numbers of military and civilian personnel are stationed abroad as a part of the occupation forces and for the purpose of liquidating transactions growing out of activities in foreign countries incident to the war.

Since the occupation forces will apparently be in foreign countries over a long period of time, the Department believes that the best solution is to make the legislation permanent.

In any event, as I have indicated, it should not be terminated before our occupation forces have returned to the United States. What that date will be, I have no idea, of course.

Mr. SPRINGER. On that one point, the fact that the treaties have not yet been effected-the peace treaties-would that have any bearing on the subject you are speaking of?

Mr. SPINGARN. No, sir; I do not believe so.

Mr. SPRINGER. You do not think so?

Mr. SPINGARN. This legislation has no relationship to peace treaties. This actually simply affords, in the absence of adequate commercial facilities, overseas Government banking facilities for our troops and civilian personnel overseas.

Mr. MICHENER, May I ask a question right there?

Mr. SPINGARN. Yes, sir.

Mr. HOBBS. Yes.

Mr. MICHENER. Was it under this act that the war currency was printed overseas?

Mr. SPINGARN. No, sir. That was under other authority.