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MARKETING OF FIRE-CURED AND DARK AIR-CURED TOBACCO

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for such types of tobacco is desirable. It was pointed out that prior to the outbreak of the war, approximately 60 percent of such tobacco was exported, while at present approximately 20 percent is exported.

House Joint Resolution 98 would provide that, notwithstanding the provisions of section 312 (a) relating to the finding of the total supply of tobacco, the reserve supply level, and the amount of the national marketing quota, and the provisions of section 313 relating to the apportionment of the national marketing quota among States and farms, national marketing quotas for fire-cured and dark aircured tobacco for the marketing years 1945–46, 1946–47, and 1947-48 shall be proclaimed and the national marketing quota and State and farm acreage allotments shall be the same for the marketing year 1945-46 as were established for the marketing year 1943-44, and the national marketing quotas and State and farm acreage allotments for the marketing years 1946–47 and 1947–48 shall be the same as for the preceding year. National marketing quotas for fire-cured and dark air-cured tobacco were last proclaimed and approved by referenda of the producers for the three marketing years 1941-42, 1942–43, and 1943-44. However, pursuant to the authority contained in section 371 (b) of the Agricultural Adjustment Act of 1938, the War Food Administrator terminated national marketing quotas and State acreage allotments established for such tobacco for the purposes of title III of such act. Thus, the marketing year 1943–44 was the last year for which national marketing quotas and State and farm acreage allotments were established for such tobacco and, since the formula prescribed in section 312 (a) of the act is not satisfactory to meet the present situation, the marketing quotas and acreage allotments estabIished for the 1943–44 marketing year are taken as a starting standard.

House Joint Resolution 98 would also provide that in each year an additional acreage not in excess of 2 per centum of the total acreage allotted to all farms in each State for the 1943-44 marketing year may be allotted among the old farms in the State to adjust inequities.

The joint resolution would provide further that in each year an additional acreage equal to not more than 5 percent of the national marketing quota may be allotted among farms on which no tobacco was produced in the last 5 years. With respect to the marketing year 1945–46, the 5 percent would also be distributed among those farms on which no tobacco was produced in the 5 years prior to 1944. This is necessary to provide a new allotment for the farm on which such tobacco was produced for the first time in 1944, inasmuch as no allotments were established for 1944.

The national marketing quotas for fire-cured and dark air-cured tobacco would have to be proclaimed within 5 days after the effective date of the joint resolution and, pursuant to the provisions of the Agricultural Adjustment Act of 1938, as amended, the referenda of producers would have to be held within 30 days thereafter. If the producers disapproved a quota, the Secretary would have to proclaim the result of the referendum within 5 days after the referendum.

The joint resolution specifically provides that it shall not have the effect of modifying or repealing any other provisions of the Agricultural Adjustment Act of 1938, as amended. Thus, pursuant to section 313 () of that act, the marketing quota for any farm would be the actual production of the acreage allotment established for such farm in the manner provided in the joint resolution; and the Secretary of

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Agriculture would be authorized, pursuant to section 371 (b), to increase or terminate national marketing quotas for such tobacco if, after investigation, he found such action necessary to meet a national emergency or an increase in export demand or to effectuate the declared policy of the act.

House Joint Resolution 98 would result in establishing marketing quotas and acreage allotments for fire-cured and dark air-cured tobacco in substantially the same manner as has been done for fluecured and burley tobacco pursuant to Public Law 118, Seventyeighth Congress (57 Stat. 387), as amended by Public Law 276, Seventy-eighth Congress, second session.

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79TH CONGRESS HOUSE OF REPRESENTATIVES S 18t Session

EXPRESSING THE INTENT OF THE CONGRESS WITH
REFERENCE TO THE REGULATION OF THE BUSINESS
OF INSURANCE

FEBRUARY 13, 1945.- Referred to the House Calendar and ordered to be printed

Mr. WALTER, from the Committee on the Judiciary, submitted the

following

REPORT

[To accompany S. 340)

NOT ON

The Committee on the Judiciary, to whom was referred the bill (S. 340) to express the intent of the Congress with reference to the regulation of the business of insurance, having considered the same, report favorably thereon with an amendment with the recommendation that the bill, as amended, do pass.

The committee amendment is as follows:

Strike out all after the enacting clause and insert the following: That the Congress hereby declares that the continued regulation and taxation by the several States of the business of insurance is in the public interest, and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States.

SEC. 2. (a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.

(b) No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically so provides.

Sec. 3. Nothing contained in the Act of September 26, 1914, known as the Federal Trade Commission Act, as amended, or the Act of June 19, 1936, known as the Robinson-Patman Antidiscrimination Act, shall apply to the business of insurance or to acts in the conduct of that business.

SEC. 4. (a) Until January 1948, the Act of July 2, 1890, as amended, known as the Sherman Act, and the Act of October 15, 1914, as amended, known as the Clayton Act, shall not apply to the business of insurance or to acts in the conduct thereof.

(b) Nothing contained in this section shall render the said Sherman Act inapplicable to any act of boycott, coercion, or intimidation.

Sec. 5. Nothing contained in this Act shall be construed to affect in any manner the application to the business of insurance of the Act of July 5, 1935, as amended, known as the National Labor Relations Act, or the Act of June 25. 1938, as amended, known as the Fair Labor Standards Act of 1938 or the Act of June 5, 1920, known as the Merchant Marine Act, 1920.

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Sec. 6. As used in this Act, the term “State” includes the several States, Alaska, Hawaii, Puerto Rico, and the District of Columbia.

Sec. 7. If any provision of this Act, or the application of such provision to any person or circumstances, shall be held invalid, the remainder of the Act, and the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected.

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From its beginning the business of insurance has been regarded as a local matter, to be subject to and regulated by the laws of the several States. This view has been fostered and augmented by decisions of the United States Supreme Court for a period of more than 75 years, leading to the generally accepted doctrine that the business of insurance was not subject to Federal law.

On June 5, 1944, in the case of U. S. v. Southeastern Underwriters Association et al., the Supreme Court decided that the business of insurance was commerce and, therefore, subject to the Sherman Act of July 2, 1890, as amended, and the Clayton Act of October 15, 1914, as amended.

The Attorney General, in several appearances before the Judiciary Committee, frankly stated that the Department of Justice had no opposition to an extension of time to the insurance industry in order to make necessary adjustments to this decision.

Inevitable uncertainties which followed the handing down of the decision in the Southeastern Underwriters Association case, with respect to the constitutionality of State laws, have raised questions in the minds of insurance executives, State insurance officials, and others as to the validity of State tax laws as well as State regulatory provisions; thus making desirable legislation by the Congress to stabilize the general situation.

Bills attempting to deal with the problem were considered in both the House and the Senate during the Seventy-eighth Congress, but failed of enactment. Your committee believes there is urgent need for an immediate expression of policy by the Congress with respect to the continued regulation of the business of insurance by the respective

Already many insurance companies have refused, while others have threatened refusal to comply with State tax laws, as well as with other State regulations, on the ground that to do so, when such laws may subsequently be held unconstitutional in keeping with the precedent-smashing decision in the Southeastern Underwriters case, will subject insurance executives to both civil and criminal actions for misappropriation of company funds.

The committee has therefore given immediate consideration to S. 340, together with a similar measure, H. R. 1973, so that the several States may know that the Congress desires to protect the continued regulation and taxation of the business of insurance by the several States, and thus enables insurance companies to comply with State laws. What is more, the Congress proposes by this bill to secure adequate regulation and control of the insurance business.

Nothing in this bill is to be so construed as indicating it to be the intent or desire of Congress to require or encourage the several States to enact legislation that would make it compulsory for any insurance company to become a member of rating bureaus or charge uniform rates. It is the opinion of Congress that competitive rates on a sound financial basis are in the public interest.

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