LETTER OF TRANSMITTAL Hon. SAM RAYBURN, HOUSE OF REPRESENTATIVES, Speaker of the House of Representatives, Washington, D. C. DEAR MR. SPEAKER: By direction of the select committee appointed pursuant to House Resolution 102 of the Seventy-eighth Congress to investigate executive agencies, I hand you herewith the fifth intermediate report of that committee. Sincerely yours, HOWARD W. SMITH, Chairman. III 78TH CONGRESS HOUSE OF REPRESENTATIVES 2d Session { REPORT No, 1366 INVESTIGATION OF EXECUTIVE AGENCIES AIRIL 24, 1944.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed Mr. SMITH of Virginia, from the Select Committee to Investigate Executive Agencies, submitted the following FIFTH INTERMEDIATE REPORT [Pursuant to H. Res. 102] INTRODUCTION This country has now experienced two years of statutory price control. Such control, made necessary by wartime scarcity of commodities and overabundance of money, has in a measure successfully combated the peril of inflation. Price controls have, as was to be expected, proven unpopular, since they are utterly foreign to our traditional system of free enterprise and open competition, but because they are deemed necessary for the stabilization of a wartime economy they should be, when legal, maintained. The administration of price control by the Office of Price Administration has been far from perfect, as has been pointed out by this committee in previous reports, and although in recent months under the guidance of the present Administrator there has been much improvement in personnel and in the administration of the law there is still room for further improvement. The administration of the Price Control Act is not alone to blame for public dissatisfaction. The law itself is faulty in many respects. During the last year in which the Emergency Price Control Act has been in operation this committee has conducted an intensive study of its application and effect. The time now approaches when the act must be reenacted by the Congress, and in order to remedy the defects now present in the act, this committee has drafted certain amendments to it with the one purpose in mind of alleviating harsh and unjust. 1 See H. Repts. 699, 862, and 898, 78th Cong., 1st sess. H. Repts., 78-2, vol. 2- -93 provisions and more clearly defining powers granted by the act and standards to which the exercise of such powers should adhere while at the same time maintaining in full force all powers necessary to the continued control of prices and thwarting of inflation. The bill herewith presented accomplishes one other objective-that of consolidating the original Price Control Act and its amendments into one cohesive whole. The individuals comprising this committee are not unreservedly in favor of every change incorporated in the proposed bill, as will be seen by the minority report attached hereto, but all do agree that a reform of the present act is necessary, and this proposed bill represents the consensus of committee opinion as to needed changes and modifications. To renew the Emergency Price Control and Stabilization Acts without amendment, as is now being urged by the Administrator and others, will ratify every illegal act or mistake committed and will set a precedent for further commission of the same illegal acts or mistakes which the courts will not overturn because of ratification by the Congress. Your committee, therefore, in obedience to the provisions of House Resolution 102,2 submits this, its fifth intermediate report, with the recommendation that H. R. 46473 be enacted into law. AN ANALYSIS AND COMPARISON OF H. R. 4647 WITH THE "EMERGENCY Italic herein indicates material added by the committee. Line type indicates material deleted from the Emergency Price Control Act of 1942. TITLE I-GENERAL PROVISIONS AND AUTHORITY PURPOSES; TIME LIMIT; APPLICABILITY SEC. 1. (a) It is hereby declared to be in the interest of the national defense and security and necessary to the effective prosecution of the present war, and the purposes of this Act are, to stabilize prices [, wages and salaries] and to prevent speculative, unwarranted, and abnormal increases in prices [, wages, salaries,] and rents; to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; to prevent hardships to persons engaged in business, to schools, universities, and other institutions, and to the Federal, State, and local governments, which would result from abnormal increases in prices [, wages, salaries,] and rents; to assist in securing adequate production of commodities and facilities; to prevent a post-emergency collapse of values, to stabilize agricultural prices in the manner provided in section 3; and to permit voluntary cooperation between the Government and producers, processors, and others to accomplish the aforesaid purposes. It shall be the policy of those departments and agencies of the Government dealing with wages (including the Department of Labor and its various bureaus, the War Department, the Navy Department, the War Production Board, the National Labor Relations Board, the National Mediation Board, the National War Labor Board, and others heretofore or hereafter created), within the limits of their authority and jurisdiction, to work toward a stabilization of prices and rents, fair and equitable wages, and cost of production. * See p. 50 for copy of H. Res. 102. 3 See p. 34 et seq. for text. Comment. With the exception of adding the words "wages,' "salaries," and "rents" no change is here made. (b) The provisions of this Act, and all regulations, orders, price schedules, and requirements thereunder, shall terminate on June 30, 1944 1945, or upon the date of a proclamation by the President, or upon the date specified in a concurrent resolution by the two Houses of the Congress, declaring that the further continuance of the authority granted by this Act is not necessary in the interest of the national defense and security, whichever date is the earlier; except that as to offenses committed, or rights or liabilities incurred, prior to such termination date, the provisions of this Act and such regulations, orders, price schedules, and requirements shall be treated as still remaining in force for the purpose of sustaining any proper suit, action, or prosecution with respect to any such right, liability, or offense. Comment. This subsection does not change the present law but merely extends its operation until June 30, 1945. (c) The provisions of this Act shall be applicable to the United States, its Territories and possessions, and the District of Columbia. Comment.-No changes in this subsection. (d) The Price Administrator shall have ninety days from the enactment of this Act within which to comply with its requirements, and during such period all orders, regulations, price schedules, and requirements heretofore promulgated by the Administrator shall remain in full force and effect, until changed in accordance with the terms of this Act. Comment. The revisions of present legislation contained in this bill will necessitate changes in certain of the regulations and orders of the Office of Price Administration now in effect, and it is the intention of this subsection to give a period of grace to the Price Administrator within which to effect such changes. PRICES; RENTS, AND MARKET AND RENTING PRACTICES SEC. 2. (a) Whenever in the judgment of the Price Administrator (provided for in section 301) the price or prices of a commodity or commodities have risen or threaten to rise to an extent or in a manner inconsistent with the purposes of this Act, he may by regulation or order establish such maximum price or maximum prices as in his judgment will be generally fair and equitable and will effectuate the purposes of this Act, but nothing herein shall be construed to give the Administrator the right to fix a price on any commodity unless there is evidence that the price of such commodity has risen or is threatening to rise. So far as practicable, In establishing any maximum price, the Administrator shall ascertain and give due consideration to adopt the prices prevailing between October 1 and October 15, 1941 (or if, in the case of any commodity, there are no prevailing prices between such dates, or the prevailing prices between such dates are not generally representative because of abnormal or seasonal market conditions or other cause, then to the prices prevailing during the nearest two-week period, but in no event prior to October 1, 1940, in which, in the judgment of the Administrator, the prices for such commodity are generally representative), for the commodity or commodities included under such regulation or order, and shall make adjustments for such relevant factors as he may determine and deem to be of general applicability, including the following: speculative fluctuations, in such prices by giving effect to general increases or decreases in costs of production, distribution and transportation, and general increases or decreases in profits earned by sellers of the commodity or commodities during and subsequent to the year ended October 1, 1941, as a result of the sale of a commodity or commodities in question subsequent to the date upon which such prices shall be established.: Provided, That this Act shall not be construed or interpreted in such a way as to give the Administrator the right hereafter to fix profits where such action has no relation to price control. [No common carrier or other public utility shall make any general increase in its rates or charges which were in effect on September 15, 1942, unless it first gives thirty days' notice to the President, or such agency as he may designate, and |