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made under sections 10 and 11, and will be sent by NPA to the person who filed the application.

SEC. 14. Notice of NPA action to purchaser by supplier. Each supplier must, prior to making delivery to any person who has filed with him a certified statement of proposed use pursuant to section 7, notify such person in writing of denial in whole or in part by NPA of any item or items on such person's certified purchase order. Such notice shall state the separate quantity to be delivered for each different class of proposed use, if more than one class of use was specified in the certified statement.

SEC. 15. Termination of NPA authorization. (a) An authorization to deliver shall terminate at the close of the calendar month immediately following the allocation period for which delivery was authorized: Provided, however, That such authorization shall terminate immediately upon expiration of the allocation period if a purchaser fails to place his order during that period or if he requires postponement of delivery beyond the end of the calendar month immediately following such allocation period. When authorization to deliver is received before the specified allocation period, advance delivery may be made if it does not delay previously authorized deliveries.

(b) A purchaser may accept delivery before or after the allocation period, but if he knows or has reason to believe that a shipment was made prior to receipt of or after expiration of an authorization to deliver he must notify NPA immediately and hold such material intact subject to direction from NPA.. (c) The duration of an authorization to use any Appendix A, B, or C material is specified in the applicable schedule.

SEC. 16. Small orders.

EXEMPTIONS

The provisions of sections 6, 7, and 9 of this order shall not apply to small orders as defined in the applicable schedule, subject to the following conditions:

(a) All requirements of the applicable schedule relating to small orders shall be observed.

(b) No supplier shall deliver a quantity of any material in excess of the small order exemption to any one customer during the small order exemp⚫tion period.

(c) The total quantity of any material delivered by a supplier to all purchasers under this exemption during any small order exemption period shall not exceed an amount equal to the total of the following: (1) The amount which NPA has specifically authorized him on forms NPAF-46 or NPAF-47 to deliver on small orders; (2) the amount which he has received pursuant to specific authorization on form NPAF-45 or to a certified statement of proposed use; (3) the amount which he himself has acquired on small orders without specific NPA authorization and has not used; and (4) the amount which he had on hand on the initial allocation date, if he sells exclusively on small orders. (d) The total quantity of any material received under this exemption by any person from all suppliers during the small order exemption period shall not exceed in the aggregate one small order exemption quantity.

(e) If additional quantities of material acquired under this exemption are received during the same allocation period pursuant to NPA allocation authorization, the material acquired under this exemption shall be used for experimental purposes only, or be held in inventory subject to further direction from NPA.

(f) Material allocated for a particular purpose (other than inventory) shall be used for that purpose and not under this exemption unless changing circumstances or expiration of the authorization to use make it impracticable or impossible to use the material for the original purpose.

(g) If, prior to the effective date of this order, an operating unit of a single enterprise normally purchased separately, such unit may disregard the purchases or allocations of other operating units of that enterprise for purposes of this exemption.

SEC. 17. Existing stocks on initial allocation date. The provisions of sections 6, 7, and 9 of this order shall not apply to:

(a) Any material which a person other than a supplier had in stock on the initial allocation date or which was in transit consigned to such person prior to that date.

(b) Any material which a supplier had in stock on the initial allocation date which he customarily maintains for his own use, segregated physically and as a matter of record from his inventory of material for sale: Provided, however,

That prior to the allocation date no supplier shall transfer to his separate consumer's inventory more material than would be permissible under NPA Reg. 1. SEC. 18. Stockpile items and imports. The provisions of sections 6, 7, and 8 of this order shall not apply to:

(a) Deliveries of Appendix A, B, or C material to the General Services Administration for the sole purpose of stockpiling.

(b) Acceptance of deliveries of Appendix A, B, or C material directly from a foreign source.

SPECIAL PROVISIONS

SEC. 19. Release of material from allocations control. (a) The provisions of sections 6, 7, and 9 of this order shall not apply to any quantities of Appendix A, B, or C material specifically released by NPA from allocation control. Such release of an aggregate quantity of material will be accomplished on forms NPAF-46 or NPAF-47 and will be for general or limited purposes.

(b) Whenever such released material is delivered or redelivered the seller shall notify the purchaser in writing that the material is delivered under this exemption. If such material has been released for unlimited purposes the seller shall include in such notice to the purchaser the statement that there is no restriction on use or redelivery of such material. If, however, release is for a limited purpose no person shall deliver and no person shall accept delivery thereof unless the purchaser has filed with the seller a statement in the form set forth in section 7 to the effect that such material will be used or redelivered only for the purpose or purposes set forth in such statement. Material acquired on the basis of this representation shall not be used except in accordance therewith.

(c) The requirements of paragraph (b) of this section shall not apply to any delivery by a seller to a purchaser during a small order exemption period of a total amount which does not exceed one small order exemption quantity as defined in the applicable schedule, including quantities delivered pursuant to release, exemption and allocation.

(d) Quantities released under this section may be used or delivered without any limitation as to time. Such material may not be delivered or used, however, by any person to an extent which would delay his delivery or use of the same kind of material pursuant to an allocation authorization issued under this order.

SEC. 20. Toll agreements. (a) Any person who converts raw materials into any Appendix A, B, or C material for the owner of the raw materials under a toll agreement may deliver such Appendix A, B, or C material without restriction to the owner, or to any third person designated by the owner unless the toll processor knows or has reason to believe that the owner has no right pursuant to specific authorization or exemption under this order to direct delivery to such person.

(b) The owner of any Appendix A, B, or C material may deliver it for processing for him by any other person under a toll agreement only to the extent that the owner is authorized to process or use the material himself pursuant to specific authorization or exemption under this order. The processor may receive and process the material and return it to the owner without restriction unless he knows or has reason to believe that the owner is causing the material to be processed in violation of the provisions of this order. Unless advised to the contrary in writing by the owner, the processor shall assume that material delivered in small order quantities is tendered for processing under the owner's small order exemption. The total quantity which any person may process under the small order exemption on toll for owners and for his own account must not exceed one small order exemption quantity during each small order exemption period.

SEC. 21. Brokers and sales agents. Application and specific authorization shall not be required for the participation by a broker or sales agent when (a) material is ordered through a broker or sales agent and is to be delivered by the supplier direct to the purchaser, or (b) material is sold by a supplier through an agent who submits the buyer's purchase orders to the supplier for approval. In such cases the purchaser shall furnish the broker or sales agent with the necessary application form or certificate and the broker or sales agent shall transmit the form or certificate or the necessary information to the supplier. Application for authorization to deliver shall be made by the supplier as if the order had been placed directly with him. Similarly exempt small orders may be transmitted to the supplier and filled in accordance with section 16 as if placed directly with the supplier.

SEC. 22. Full container adjustments. A delivery authorized by NPA under this order (not including a delivery under the small order exemption) may be increased to the extent necessary to avoid shipping partly filled containers, if a

container in the nearest practicable size is used. The person accepting such overshipment shall hold the excess material as an advance shipment on subsequent allocations and shall (a) use it only for the purpose authorized for the subsequent allocation against which it is charged, or (b) hold it in inventory subject to further directions from NPA.

RECORDS AND REPORTS

SEC. 23. Records. Each person participating in any transaction covered by this order shall retain in his possession for at least two years records of receipts, deliveries, inventories, and use, in sufficient detail to permit an audit that determines for each transaction that the provisions of this order have been met. This

does not specify any particular accounting method and does not require alteration of the system of records customarily maintained, provided such records supply an adequate basis for audit. Records may be retained in the form of microfilm or other photographic copies instead of the originals.

SEC. 24. Audit and inspection. All records required by this order shall be made available at the usual place of business where maintained for inspection and audit by duly authorized representatives of NPA.

SEC. 25. Reports. Persons subject to this order shall make such records and submit such other reports to NPA as it shall require, subject to the terms of the Federal Reports Act of 1942 (Pub. Law 831, 77th Cong., 5 U. S. C. 139-139F).

GENERAL PROVISIONS

SEC. 26. Adjustments and exceptions. Any person affected by any provision of this order or by any action taken under this order may file a request for adjustment or exception upon the ground that such provision or action works an undue or exceptional hardship upon him not suffered generally by others in the same trade or industry, or its enforcement against him would not be in the interests of the national defense or in the public interest. In considering requests for adjustment which claim that the public interest is prejudiced by the application of any provision of this order, consideration will be given to the requirements of the public health and safety, civilian defense, and dislocation of labor and resulting unemployment that would impair the defense program. Each request shall be in writing and shall set forth all pertinent facts, the nature of the relief sought and the justification therefor.

SEC. 27. Communications. All communications concerning this order shall be addressed to the National Production Authority, Washington 25, D. C., Ref: M-45. SEC. 28. Violations. Any person who wilfully violates any provision of this order, or furnishes false information or wilfully conceals a material fact or furnishes false information in the course of operation under this order, is guilty of a crime and upon conviction may be punished by fine or imprisonment, or both. In addition, administrative action may be taken against any such person to suspend his privilege of making or receiving further deliveries of materials or using facilities under priority or allocation control and to deprive him of further priorities assistance.

NOTE: All record-keeping and reporting requirements of this order have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942. This order shall take effect on March 16, 1951.

[SEAL]

NATIONAL PRODUCTION AUTHORITY,
MANLY FLEISCHMANN, Administrator.

APPENDICES A, B, AND C

Lists of materials subject to this order with outline of allocation requirements. These appendices are issued and printed separately.

APPENDIX D-GENERAL INSTRUCTIONS FOR PREPARATION OF CERTIFIED STATEMENTS AND FORMS

CERTIFIED STATEMENT OF PROPOSED USE

1.Two or more end uses. In the event two or more end uses are involved in a single purchase order with which a certified statement of proposed use must be fiied under this order or the applicable schedule, the amount of the material required for each such use shall be listed as a separate item. Each item shall bear an identifying number so that the supplier may advise the purchaser by purchase

order number and item number as to the action taken by NPA on the supplier's application for authorization to make delivery.

2. Notarization. A certified statement of proposed use need not be notarized.

FORMS NPAF-45, 46, AND 47-GENERALLY

3. Where to obtain copies. Copies of forms NPAF-45, 46. 47 may be obtained at local field offices of the Department of Commerce.

4. Special instructions in schedules. The applicable schedule may contain special instructions which supplement or modify the following general instructions.

5. Notarization. The certification at the bottom of page 2 of each form need not be notarized.

6. Time of filing. These forms should be filed or mailed in time to reach NPA on or before the date specified in the applicable schedule.

7. Allocation period. Specify, in the space provided in the heading, the allocation period for which authorization is sought. If the allocation period is not one month strike out "month" and substitute the appropriate period throughout the form.

FORM NPAF-45

8. Form NPAF-45 is for use in requesting authorization to use or to accept delivery from a supplier. Suppliers who desire to consume from their own production, should consult paragraph 18 of these instructions.

9. Number of copies and where to file. Prepare five copies (a continuation sheet for Table I is available). Leave page 2 (Tables II-V inclusive) blank on the copy mailed to the supplier and on one copy mailed to NPA. Fill in Tables II, III, IV, and, if required by the applicable schedule, V on the other copies mailed to NPA. Sign the certification (bottom of page 2) on the original copy only. Send original and two copies (one with page 2 blank) to National Production Authority, Chemical Division, Washington 25, D. C., Reference M-45 Schedule Retain one complete copy and send one to the supplier, if any (page

2 blank).

10. Two or more suppliers or chemicals.

File separate sets of applications for

each supplier, and for each chemical or allied product.

11. Use from Inventory. Specify "Inventory" as supplier in heading. A combined application may be made for authority to accept material from a supplier and to use an additional quantity of the material from inventory. In such cases, insert in the heading both the name of the supplier and the words "and from Inventory", make a separate entry in Column (2) (Quantity Requested) of the amount requested from inventory, and insert in Column (6) (Remarks) the words, "From Inventory."

12. Columns (1) through (4). Consult the applicable schedule for special instructions. Each primary product to be made from the material and product end use must be listed separately in Columns (3) and (4). For classification of primary products, product end uses, and grades consult the applicable schedule. Quantities requested for each end use should be those required for actual operation during the allocation period.

In the case of material listed as "inventory" in Column (3) write into Column (4), "subject to further authorization."

In the case of material listed for "resale" in Column (3), write in Column (4) "upon further authorization" or "for exempt small orders." Suppliers who resell in both large and small quantities should insert in Column (4) "upon further authorization" for the total quantity ordered, and may apply on forms NPAF-46 or 47 for authorization to deliver an aggregate quantity for small orders.

In the case of material for export, write "export" in Column (3) and specify in Column (4), the name of the person to whom, or for whose account, the material will be exported, the country of destination, and the export license number, if any.

In Column (4), in addition to end use, show DO rating and government contract number, if any.

13. Column (5). Leave blank.

14. Tables II, III, and IV. Fill in as indicated except as otherwise provided in the applicable schedule. In Columns (10) and (14), report entire physical inventory, whether or not subject to unexpired authorization or exemption on the dates specified.

15. Table. V. Fill in only when and as required by the applicable schedule. 80176-51-pt. 1—13

FORMS NPAF-46 AND 47

16. Form NPAF-46 is for use by suppliers in applying for authorization to deliver any Appendix A material.

17. Form NPAF-47 is for use by suppliers in applying for authorization to deliver any Appendix B or C material.

18. Suppliers who consume. With respect to material which he produces and which he desires to use himself, a supplier should list his own name as a customer on the appropriate form (Form NPAF-46 for authorization to use any Appendix A material and form NPAF-47 for authorization to use any Appendix B or C material) and, when required by the applicable schedule, should also make application on form NPAF-45 for authorization to use any Appendix A or B material. In such cases where a report or inventory is required by the form, the supplier should list only his consumption inventory as distinguished from sales inventory.

19. Number of Copies and where to file. Unless otherwise provided in the applicable schedule, prepare four copies. Sign the certification (bottom of page 2) on the original copy only. Send the original and two copies to the National Production Authority, Chemical Division, Washington 25, D. C., Ref: NPA Order M-45 Schedule and retain one copy.

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20. Number of sets. File a separate set of forms for each separately located plant or distributing point unless otherwise expressly provided by the applicable schedule.

21. Columns (7) of NPAF-46 and (6) of NPAF-47. Leave blank.

22. Table I. Fill in as indicated on form NPAF-46 listing customers alphabetically, as far as practicable. On form NPAF-47 group customers according to end use and list alphabetically within each group, as far as practicable. List each person who has furnished the applicant supplier with either a copy of that person's form NPAF-45 or a certified purchase order calling for delivery in the requested allocation period.

In Column (8) of form NPAF-46 and in Column (2) of form NPAF-47 show DO rating and government contract number, if any.

An aggregate quantity may be requested for exempt small orders without listing individual customer's names. In the case of Appendix C materials specify "NPAF-45" without further use description in Column (2) of Form NPAF-47 opposite the names of customers who have filed copies of form NPAF-45 with the applicant supplier.

23. Table II. Fill in as indicated. In Columns (11) and (14) of NPAF-46 and in Columns (10) and (13) of NPAF-47 report entire physical inventory whether or not subject to unexpired authorization or, exemption on the dates specified. In Column (17) of NPAF-46 and (16) of NPAF-47, specify a quantity no greater than what is estimated will be available for allocation during the requested allocation period, taking into account undelivered balances on unexpired prior authorizations.

24. Table III. Fill in only when and as required by the applicable schedule. Mr. HARRIS. Do you have any further comments to make? Mr. MCMULLEN. No further comments.

Mr. DOLLIVER. Mr. McMullen, what is your background? Are you a chemical engineer?

Mr. MCMULLEN. I am not a chemical engineer. I have had 12 years with the chemical industry in an executive sales capacity.

Mr. DOLLIVER. Are you a chemist?

Mr. MCMULLEN. Not a chemist by profession, only by experience. Mr. DOLLIVER. So your experience before you went with the National Production Authority was more in the executive end of the chemical industry?

Mr. MCMULLEN. Yes, sir.

Mr. DOLLIVER. Now, yesterday I think Mr. Wolverton asked questions of your associate, Mr. Mullin, who is the legal representative of the National Production Authority, regarding the legality or basis legally for the order which allocated sulfuric acid in these 11 far Western States. He said he would furnish a brief to the committee

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