DEFICIENCY APPROPRIATIONS BILL, 1938

MARCH 2, 1938.-Ordered to be printed

Mr. WOODRUM, from the committee of conference, submitted the following

CONFERENCE REPORT

[To accompany H. R. 9306]

The committee of conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 9306) making appropriations to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1938, and prior fiscal years, to provide supplemental appropriations for the fiscal year ending June 30, 1938, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendments of the Senate numbered 1 to 20, inclusive, and agree to the same.

STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE

The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 9306) making appropriations to supply deficiencies in certain appropriations for the fiscal year ending June 30, 1938, and prior fiscal years, to provide supplemental appropriations for the fiscal year ending June 30, 1938, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon and recommended in the accompanying conference report as to such amendments, namely:

The Senate added a total of 20 amendments to the bill, all of which, except those making textual corrections in the House bill, are supported by Budget estimates submitted for consideration after the bill had passed the House. The items of direct appropriation provided by the Senate amendments are as follows:

The House has accepted all of the Senate amendments.

$120, 000. 00

C. A. WOODRUM,

71, 000. 00 118,000. 00

55, 000. 00 34, 000. 00 4, 724. 91

1,200. 06

46, 564. 19 49, 995. 69

500, 484. 85

CLARENCE CANNON,
LOUIS LUDLOW,

JOHN TABER,

ROBERT L. BACON,

Managers on the part of the House.

2

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75TH CONGRESS HOUSE OF REPRESENTATIVES 3d Session

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REPORT No. 1870

PREVENTING PROFITEERING IN TIME OF WAR AND TO EQUALIZE THE BURDENS OF WAR AND THUS PROVIDE FOR THE NATIONAL DEFENSE, AND PROMOTE PEACE

MARCH 1, 1938.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. MAY, from the Committee on Military Affairs, submitted the

following

REPORT

[To accompany H. R. 9604]

The Committee on Military Affairs, to whom was referred the bill (H. R. 9604) to prevent profiteering in time of war and to equalize the burdens of war and thus provide for the national defense, and promote peace, having considered the same, submit the following report thereon with the recommendation that it do pass:

A DECLARATION OF POLICIES

This bill is a statement of broad policies, and is deliberately intended to avoid the mistake of seeking to legislate as to details so far in advance of the possible outbreak of war. Certainly this bill is the deliberate conclusion of the American people, after more than 19 years since the armistice of November 11, 1918. We are now purposely cautioning friends of this legislation not to seek to write details into this broad statement of policies, by way of amending the same. All of us have our special and personal ideas and plans about how to make application of the broad principles of price control, and for the drafting of the man power and the commandeering of the material resources of the Nation in the event of war, so that the burdens of war may more equitably and justly be distributed among the citizens of the Nation. Your committee feels it would be a serious mistake to seek now to legislate as to details, perhaps many years in advance of the outbreak of war, when the conditions, economic and social, that may be prevailing at that time, cannot now be foreseen.

We believe that the Congress that will be sitting at any future. declaration of war will be pleased to have this deliberate expression of policy upon the statute books, in the form of general legislation.

We also believe that this report accompanying H. R. 9604 will be referred to by those who will be in the Congress at any future unfortunate and inevitable declaration of war, and that the matters stated in this report may be helpful to those then charged with the details of legislating as to the drafting of the manpower and the commandeering of material resources.

SPONSORED BY THE AMERICAN LEGION AND WORLD WAR VETERANS

The bill is sponsored by the American Legion with its 11,000 posts, which is the great organization of the veterans of the World War.

When the veterans came back home they learned that while they had left behind them many of their comrades sleeping in France beneath the white crosses, row upon row, and while many thousands of their comrades were confined to hospitals or asylums shattered and blasted in mind and body, many people who never even smelled gunpowder had profiteered and profited tremendously during the war. The veterans learned that while they were fighting, some 22,000 individuals at home stepped from the shadow of financial obscurity into the millionaire class, that hundreds of persons already millionaires saw their fortunes mount higher and higher, that other thousands entered the luxury class, and that nearly every person at home at work-and there was a job for everybody who wanted one-made more in 1 hour than the man at the battle front received per day. The veterans found upon their return the great shadow of the deflation period stretching across the land, closing factories, mills, stores and business houses, and bankrupting the farmers. They found that the war had cost the country and its unborn children at least 50 percent more than it should have cost. They found that even as George Washington had bitterly complained in the days of the Revolution of people who "would build their greatness upon their country's ruin” many people had built their greatness upon the sacrifices, the heartaches, and the sufferings of the World War. The veterans, through their organization, the American Legion, declared that if this Nation ever had to go to war again there should be no such profiteering, but that there should be equal burdens and equal sacrifices for all.

PRESENT ATTITUDE OF AMERICAN LEGION

Your committee is glad to report that representatives of the American Legion appeared at the hearing upon what was then H. R. 1954, but by amendment of this committee and reintroduction by the now author, has now become H. R. 9604, and expressed their approval of the provisions of this bill. Among those who appeared was the Honorable Harry W. Colmery, national commander of the American Legion. Also Col. John Thomas Taylor, vice chairman, national legislative committee of the American Legion.

EXCERPT FROM THE PRESIDENT'S MESSAGE

At this point, we incorporate as a part of this report, an excerpt from the message of the President of the United States on January 28, 1938. The excerpt from the message of the President is as follows:

I believe also that the time has come for the Congress to enact legislation aimed at the prevention of profiteering in time of war and the equalization of the burdens

of possible war.

Such legislation has been the subject for many years of full study in this and previous Congresses.

PRACTICAL AND WORKABLE STEP TOWARD THE IDEAL

But we must not be led astray by purely idealistic and impractical theories about a complete equalization of the burdens of war. We know that such total equalization of the hardships and inconveniences and sufferings and sacrifices of war is impossible. We know that a citizen who gives his life, or gives a part of his body and his health, has given more than some other citizen who may have contributed millions in money to the war fund, in the form of taxes, either excesswar-profits taxes, or ordinary income taxes at a high rate, or high inheritance taxes. However, since we cannot attain completely the ideal, we must not be deterred from an honest effort to prevent the conscienceless, wasteful, and outrageously extravagant profiteering that went on during the World War period, when more than 22,000 individuals climbed out of financial obscurity into the class of millionaires, and hundreds of those who were already millionaires saw their fortunes mount higher and higher by the tens of millions, and even hundreds of millions.

TAX PROVISIONS IN EXCLUSIVE JURISDICTION OF WAYS AND MEANS

COMMITTEE

It may be objected by some that H. R. 9604 does not provide for the levying of an excess-profits tax during the period of the war. The explanation is simple and complete. The Committee on Military Affairs has no jurisdiction of raising revenues by any form of taxation. But your committee, by this report, takes the liberty of commending the attention of the Congress and especially of such future Congresses as may have to face the issue of war, and more especially of the Ways and Means Committee of such future Congresses, our deliberate conviction that 100 percent of all profits shown to be due to war-time business conditions shall be taxed out of the person, firm, or corporation earning such excess profits. In this connection, we respectfully call attention to the report of the War Policies Commission, dated March 5, 1932, and found in House Documents, volume 25 of the Seventy-second Congress, first session, being subdivision (d) of that report and reading as follows:

In addition to all other plans to remove the profits of war, the revenue law should provide that, upon declaration of war and during the period of such emergency, individuals and corporations shall be taxed 95 percent of all income above the previous 3-year average, with proper adjustments for capital expenditures for war purposes by existing or new industries.

We respectfully call attention to the personnel constituting the War Policies Commission, consisting of 6 Members of the Cabinet, 4 Members of the United States Senate, and 4 Members of the House of Representatives. We respectfully submit that such recommendation of the War Policies Commission and the slightly different recommendation of this committee, to wit, 100 percent instead of 95 percent, should be, and probably will be, all persuasive upon that future Congress and its Committee on Ways and Means that shall be confronted with the responsibility of conducting a war of defense.

H. Repts., 75–8, vol. 1- -67