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CONFIDENTIAL BUSINESS DATA SUBMITTED TO THE

WAR PRODUCTION BOARD

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

Mr. HOBB8, from the Committee on the Judiciary, submitted the

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The Committee on the Judiciary, to whom was referred the bill (H. R. 1531) to provide for the control of confidential business data submitted to the War Production Board, having considered the same, report the bill favorably to the House with the recommendation that

In a letter addressed to the Speaker of the House of Representatives under date of June 26, 1944, Mr. Donald M. Nelson, Chairman of the War Production Board, directed attention to the need for a declaration of policy and a statement of law sufficient to safeguard the keeping and use of confidential data submitted on their formal questionnaires. Pursuant to his suggestion H. R. 5188 was introduced.

During the hearings on the bill H.R.5188, Hon. John Lord O'Brian, just before he resigned as General Counsel, War Production Board, made a statement of the problem confronting that agency with respect to the confidential information furnished by business concerns, and strongly urged the enactment of H. R. 5188. In the present Congress this bill was reintroduced as H. R. 1531.

The need for this legislation is explained fully in the following letters from the Chairman and the former Chairman of the War Production Board:

WAR PRODUCTION BOARD,

Washington, D. C., February 1, 1945.
Hon. HATTON W. SUMNERS,
Chairman, Committee on the Judiciary,

House of Representatives.
DEAR JUDGE SUMNERS: It has come to my attention that you have introduced
into the new Congress H. R. 1531, a bill to provide for the control of confidential
business data submitted to the War Production Board. This bill is the same, I
believe, as H. R. 5188, which you introduced in the last Congress, and which your
committee considered briefly in the hearings before them on the bill to extend the
Second War Powers Act. At that time, the general counsel, Mr. John Lord

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O'Brian, informed your committee that I approved the bill and recommended that it be enacted into law by the Congress as early as possible. A brief statement of the problem which is sought to be covered by the bill will, I think, be of assistance to your committee.

The War Production Board has had for some time internal regulations dealing with the handling and disclosure of classified information under the Espionage Act. These regulations are in accord with the policies of the armed services and other war agencies in handling this material and in case of a violation, the penalties under the Espionage Act may be invoked. The question arose early in 1944 as to whether other information of a confidential nature which is not covered by the Espionage Act was adequately protected under any existing Federal legislation. Much information dealing with industrial production and financial matters has been submitted to the War Production Board in confidence by concerns which report to the War Production Board on our formal questionnaires and in addition much of it has been made available by those concerns and others on a cooperative and voluntary basis to assist us in the war effort. The first type of information supplied on questionnaires is protected, to some extent, by the terms of the Second War Powers Act and of section 4 of the Federal Reports Act of 1942. As a first step to a complete protection which we felt was required for all of our "confidential" information, the Chairman of the War Production Board, Mr. Donald M. Nelson, issued General Administrative Order No. 2–155 by virtue of his inherent power as head of an agency to make suitable rules and regulations to regulate the affairs of the agency. This order set forth the policy that confidential business data shall only be used by employees of the Board for official purposes and shall not be taken away in the form of personal files by an employee who severs his connections with the Board. The Office of the General Counsel consulted with the Department of Justice to see whether under existing Federal legislation this regulation could be adequately enforced. The conclusion which was reached as a result of these conferences was that while some of this information might be safeguarded under existing legislation such as the Espionage Act, the Second War Powers Act, and the Federal Reports Act of 1942, to cover adequately the problem, especially in the cases of those who have severed or who are severing their connection with the Government, it would be necessary to ask the Congress for additional legislation. A bill accordingly was prepared in consultation with the Department of Justice and a draft of this proposed bill was submitted to the Attorney General and was cleared through the Bureau of the Budget. That bill was then submitted by Mr. Nelson to the Speaker. A copy of this letter is enclosed. Your bill is in accord with the draft which we submitted to the Speaker.

It has been our belief that the information covered in your bill was submitted to the War Production Board with the understanding that this information would be very carefully safeguarded and that the confidence in which it was submitted would not be violated. In receiving this information under conditions that it would be held only for the use of the War Production Board and related agencies, we in effect gave a pledge to industry and business reporting to us that we would not use this information for any other purposes. For that reason, we have asked for a statement of policy from the Congress, together with effective power to enable us to live up to that pledge, and I believe that it most important that H. R. 1531 be speedily enacted into law.

The Bureau of the Budget has advised that it has no objection to the submission of this report. Sincerely yours,

F. M. EATON, (for J. A. Krug, Chairman).

WAR PRODUCTION BOARD,

Washington, June 26, 1944. Hon. SAM RAYBURN, Speaker of the House, House of Representatives,

Washington, D. C. DEAR MR. SPEAKER: It has been called to my attention that much confidential information regarding business and industry in the United States has been made available, in confidence, to the offices of the War Production Board by manufacturers and producers with the understanding that this information is for warproduction purposes only. Examination of the United States Statutes at Large has shown that there is no complete declaration of policy and law with respect to the safeguarding of confidential information, other than of a military nature, which may be submitted to Government agencies for their own special needs. We are very anxious that this information shall not be used for purposes other than war production, and to secure this end, we would like such a declaration of policy by the Congress, and a statement of law to carry out that policy.

I enclose a copy of a proposed bill to provide for the control of confidential business data submitted to the War Production Board, which I believe will fulfill the needs of a declaration of policy and a statement of law sufficient to safe the keeping and use of confidential data which we have had submitted to us.

If you approve of this bill, will you be good enough to have it submitted to the chairman of the appropriate committee so that if it meets his approval, it may be introduced in the Congress and enacted into law?

I have been advised by the Bureau of the Budget that the enactment of the
proposed legislation is in accord with the program of the President.
Sincerely,

D. M. NELSON.
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CONGRESS

RELATING TO THE MARKETING OF FIRE-CURED AND
DARK AIR-CURED TOBACCO UNDER THE AGRICUL-
TURAL ADJUSTMENT ACT OF 1938, AS AMENDED

FEBRUARY 13, 1945.—Committed to the Committee of the Whole House on the

state of the Union and ordered to be printed

Mr. FLANNAGAN, from the Committee on Agriculture, submitted the

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The Committee on Agriculture, to whom was referred the joint resolution (H. J. Res. 98) relating to the marketing of fire-cured and dark air-cured tobacco under the Agricultural Adjustment Act of 1938, as amended, having considered the same, report favorably thereon without amendment and recommend that the bill do pass.

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STATEMENT

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Pursuant to section 312 (a) of the Agricultural Adjustment Act of 1938, as amended, whenever the Secretary of Agriculture finds that the total supply of tobacco as of the beginning of the marketing year then current exceeds the reserve supply level, the Secretary must proclaim, not later than the first day of December, a national marketing quota for the marketing year next following. Section 313 of the same act prescribes the method for apportioning such national marketing quota among States and farms. The total supply and reserve supply level of fire-cured and dark air-cured tobacco, as determined by the War Food Administrator, are not such that he may proclaim national marketing quotas for such tobacco under section 312 (a) for the marketing year 1945–46. On the other hand, representatives of the producers of such tobacco testified before the committee that, since these types of tobacco are not used in the manufacture of cigarettes, cigars, and other smoking mixtures and have a very narrow outlet under existing uncertain conditions, including the size of the nicotine production program for this year and the lack of a satisfactory export market, the proclamation of national marketing quotas

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