interstate and foreign commerce, which bill was passed by that body yesterday, April 19, and is presently pending with your committee. The measure is one of vital importance for which reason I strongly urge its prompt consideration and favorable report by the Committee on Interstate and Foreign Commerce. This measure was transmitted to the Congress by me on April 1, 1950, pursuant to a resolution adopted on February 15, 1950, by the Attorney General's Conference on Organized Crime. That resolution read as follows: "Be it resolved, That this conference endorse the idea of Federal legislation to prohibit the shipment of gambling devices into or out of any State where the possession or use of such devices is illegal. Further, requiring Federal registration of all such machines sold within States and prohibiting foreign export of such devices." The bill's purpose is to support the basic policy of the States, which outlaws slot machines and similar gambling devices, by prohibiting the interstate shipment of such machines except into States where their use is legal. Briefly, the measure may be analyzed as follows: Section 1 defines the term "gambling device." Section 2 makes it unlawful knowingly to transport or cause to be transported in interstate or foreign commerce any gambling device, or knowingly to take, receive, possess, or dispose of any gambling device transported in violation of the measure. The section excepts, however, from its prohibition gambling devices which are in the course of unbroken interstate transportation into any State where the use of such device is legal. Section 3 requires manufacturers of and dealers in gambling devices to register with the Federal Government and to file monthly inventories and records of sales and deliveries. It also requires each manufacturer or dealer to mark each gambling device so that it is individually identifiable. Section 4 prescribes labeling requirements for gambling devices and packages containing the same. Section 5 prohibits the manufacture, reconditioning, repair, sale, transportation, possession or use of gambling devices in places under the exclusive or concurrent jurisdiction of the Federal Government. Section 6 prescribes the criminal penalties for violations of sections 2, 3, 4, and 5 of the act. Section 7 provides for the seizure and forfeiture to the United States of gambling devices transported, possessed or used in violation of the act. It prescribes the procedures for such seizure and forfeiture to be those prescribed for violations of the customs laws. Lastly, section 8 contains the usual severability clause. In the history of Federal-State relationships, the use of Federal power to support State policies has had a number of important precedents. For example, in the field of liquor law enforcement Congress enacted the Wilson Act (26 Stat. 313, now 27 U. S. C. 121), held valid In re Rahrer (140 U. S. 545; followed by the Webb-Kenyon law of 1913, 37 Stat. 699, now 27 U. S. C. 122), held valid in Clark Distilling Co. v. Western Maryland Railway (242 U. S. 311); supplemented by the Reed amendment of 1917 (39 Stat. 1069), upheld in United States v. Hill (248 U. S. 420, 424 (amendment repealed in 1936 by 49 Stat., pt. I, 1930, sec. 9)); and followed still later by the Liquor Enforcement Act of 1936 (49 Stat., pt. I, 1928, now 18 U. S. C. 1261-1264, 3615). By these statutes, Congress prohibited the interstate transportation of intoxicating liquor into a State where the law forbade the bringing in of intoxicating liquor (but allowing for continuous interstate transportation through the State, 18 U. S. C. 1262) or where it was to be used in violation of the law of the State (27 U. S. C. 122); and subjected to the laws of the State intoxicating liquor which was transported there for use (27 U. S. C. 121). As the Court said in the Clark Distilling Co. case, supra: "In view of the conceded power on the part of Congress to prohibit the movement of intoxicants in interstate commerce, we cannot admit that because it did not exert its authority to the full limit, but simply regulated to the extent of permitting the prohibitions in one State to prevent the use of interstate commerce to ship liquor from another State, Congress exceeded its authority to regulate" (242 U. S. 311, 327). And again "Congress * * * considered the nature and character of our dual system of government, State and Nation, and instead of absolutely prohibiting, had so conformed its regulation as to produce cooperation between the local and national forces of government to the end of preserving the rights of all * * *"" (242 U. S. 311, 331). In the field of prison-made goods Congress enacted the Hawes-Cooper Act of 1929 (45 Stat. 1084), held valid in Whitfield v. Ohio (297 U. S. 431), and later the Ashurst-Sumners Act (49 Stat. 494 (since revised and merged into 18 U. S. C. 1761, 1762)), held valid in Kentucky Whip and Collar Co. v. Illinois Central Railroad Co. (299 U. S. 334). Under the Ashurst-Sumners Act Congress made it unlawful to knowingly transport in interstate or foreign commerce goods made by convict labor into any State where the goods were intended to be used or sold in violation of the State's laws. As Chief Justice Hughes pointed out for the Court "The pertinent point is that where the subject of commerce is one as to which the power of the State may constitutionally be exerted by restriction or prohibition in order to prevent harmful consequences, the Congress may, if it sees fit, put forth its power to regulate interstate commerce so as to prevent that commerce from being used to impede the carrying out of the State policy. 66 * * * Nor has the Congress attempted to delegate its authority to the States. The Congress has not sought to exercise a power not granted or to usurp the police powers of the States. It has not acted on any assumption of a power enlarged by virtue of State action. The Congress has exercised its plenary power, which is subject to no limitation other than that which is found in the Constitution itself. The Congress has formulated its own policy and established its own rule. The fact that it has adopted its rule in order to aid. the enforcement of valid State laws affords no ground for constitutional objection" (299 U. S. 334, 351–352). Still another example is the Lacey Act of 1900 (31 Stat. 188, partly repealed March 4, 1909, 35 Stat. 1158, sec. 341, partly continued, see 16 U. S. C., 1946 Ed. Supp. II, 668 (d)), under which Congress made it unlawful to ship birds or game killed in violation of the laws of the States and removing the interstate commerce protection for those shipped; held valid in Rupert v. United States (181 Fed. 87 (CCA 8, 1910). Of course, ever since the decision of the Lottery case in 1902 (Champion v. Ames, 188 U. S. 321) holding that Congress may prohibit the interstate carriage of lottery tickets, there has been no room for doubt of the authority of Congress to exclude from the channels of interstate commerce various forms of gambling paraphernalia such as, in this case, gambling machines. What the Court said almost 50 years ago is equally appropriate to the present situation: "As a State may, for the purpose of guarding the morals of its own people, forbid all sales of lottery tickets within its limits, so Congress, for the purposeof guarding the people of the United States against the 'widespread pestilence of lotteries' and to protect the commerce which concerns all the States, may prohibit the carrying of lottery tickets from one State to another. In legislating upon the subject of the traffic in lottery tickets, as carried on through interstate. commerce, Congress only supplemented the action of those States—perhaps all of them-which, for the protection of the public morals, prohibit the drawing of lotteries, as well as the sale or circulation of lottery tickets, within their respective limits. It said, in effect, that it would not permit the declared policy of the States, which sought to protect their people against the mischiefs of the lottery business, to be overthrown or disregarded by the agency of interstatecommerce. We should hesitate long before adjudging that an evil of such appalling character, carried on through interstate commerce, cannot be met and crushed by the only power competent to that end. We say competent to that end, because Congress alone has the power to occupy, by legislation, thewhole field of interstate commerce. What was said by this court upon a former occasion may well be here repeated: "The framers of the Constitution never intended that the legislative power of the Nation should find itself incapable of disposing of a subject matter specifically committed to its charge' (In re· Rahrer, 140 U. S. 545, 562). If the carrying of lottery tickets from one State to another be interstate commerce, and if Congress is of opinion that an effective regulation for the suppression of lotteries, carried on through such commerce,. is to make it a criminal offense to cause lottery tickets to be carried from one State to another, we know of no authority in the courts to hold that the means thus devised are not appropriate and necessary to protect the country at large against a species of interstate commerce which, although in general use and somewhat favored in both National and State legislation in the early history of the country, has grown into disrepute and has become offensive to the entire people of the Nation. It is a kind of traffic which no one can be entitled to pursue as of right" (188 U. S. 321, 357-358). It should be observed that the legislation passed upon in the Lottery case is still the existing congressional policy regarding lotteries (18 U. S. C. 1301–1303, etc.). This policy was bolstered and reiterated in 1934 by the provisions of the Communications Act forbidding the radio broadcasting of advertisements or information concerning lotteries (18 U. S. C. 1304, formerly 47 U. S. C. 316). More recently, on the subject of gambling generally, Congress in the act of April 27, 1948 (Public Law 500, 80th Cong., 62 Stat. 200), now 18 U. S. C. 1081-1083 (Public Law 72, 81st Cong., approved May 24, 1949, sec. 23), made unlawful the operation of gambling ships in American waters or of American vessels as gambling ships. The Committee on Interstate and Foreign Commerce in the Senate reported this measure favorably 8 days after its introduction in the Senate. Seven days thereafter the Senate, also recognizing and realizing the importance of the subject matter and the effectiveness of the approach adopted by the measure, passed it. It is also gratifying to note that governing officials and law-enforcement officers throughout the country have strongly endorsed this legislation. Accordingly, I urgently solicit prompt consideration of the bill and an early favorable report. Sincerely yours, J. HOWARD MCGRATH, THE SECRETARY OF COMMERCE, Hon. ROBERT CROSSER, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in reply to your communication of January 13, 1950, in which the Committee requests the report of this Department on H. R. 6736, a bill to prohibit the transportation or receipt of gambling devices in interstate and foreign commerce, and for other purposes. This bill would make it unlawful knowingly to transport or cause to be transported in interstate and foreign commerce any machine, apparatus, mechanical device, or any parts thereof, designed or adapted to the playing of any game of chance for money or other thing of value or to receive, possess, or dispose of any article transported in violation of the bill knowing the same to have been so transported. If the committee finds that the evils sought to be overcome warrant action by the Federal Government such as is proposed by H. R. 6736, the Department of Commerce would interpose no objection to its enactment. We would, however, like to call to the attention of the committee certain matters which we believe should be taken into consideration in its deliberations on this proposed legislation. The Department is submitting a report to your committee on S. 3357, an act apparently with objectives similar to the bill in question. The Senate act defines a gambling device as "any machine or mechanical device, or parts thereof, designed or adapted for gambling or any use by which the user as a result of the application of any element of chance may became entitled to receive, directly or indirectly, anything of value." Although even the definition of "gambling device" found therein might be subject to a somewhat broad interpretation, it is believed that it is a somewhat more precise definition than that found in H. R. 6736. It is suggested in our report on the Senate act that consideration should be given to the Internal Revenue's definition in connection with "coin operating devices," which distinguishes between "gambling devices" and "amusement devices". Such would, it is believed, be in accord with the apparent objectives of the bill to prevent commerce only in mechanical devices used in commercial gambling. It is believed also that the Congress will wish to give attention in its consideration of this bill to the question of its effect on States and their subdivisions where the operation of slot machines and other gambling devices is legal under the laws of such States and subdivisions thereof. Subject to the above observations, the Department would not, as stated above, object to the enactment of legislation along the lines proposed by H. R. 6736. We have not obtained the views of the Bureau of the Budget with respect to the transmission of this report. Sincerely yours, THOMAS C. BLAISDELL, Jr., DEPARTMENT OF JUSTICE, OFFICE OF THE ASSISTANT TO THE ATTORNEY GENERAL, Hon. ROBERT CROSSER, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice relative to the bill (H. R. 6736) to prohibit the transportation or receipt of gambling devices in interstate and foreign commerce, and for other purposes. This bill would provide: "That whoever shall knowingly transport or cause to be transported in interstate and foreign commerce any machine, apparatus, mechanical device, or any parts thereof, designed or adapted for the playing of any game of chance for money or other thing of value, or whoever shall receive, possess, or dispose of any article which has been transported in violation of this Act, knowing the same to have been transported, shall be guilty of a felony and upon conviction thereof shall be subject to a fine of not more than $5,000 or imprisonment for not more than two years, or both fine and imprisonment." The term "interstate and foreign commerce" is defined in the measure to mean "commerce between any State, District, Territory or possession of the United States and any place outside of the State, District, Territory, or possession." The purpose of H. R. 6736 appears to be identical with that of S. 3357, recently passed by the Senate and presently with your committee for consideration and action. The latter measure was transmitted to the Congress by the Attorney General following an exhaustive study by the Conference on Organized Crime of the most efficient way to effect the desired purpose. It is much more detailed in its approach to the gambling problem, provides procedures to implement the prohibitive provisions thereof, and has the endorsement of various Government officials and law-enforcement officers throughout the country. Accordingly, the Department of Justice urges prompt, favorable consideration of S. 3357 in place of H. R. 6736. The Director of the Bureau of the Budget has advised that there is no objection to the submission of this report. Yours sincerely, Hon. ROBERT CROSSER, Chairman, Committee on Interstate and Foreign Commerce, MY DEAR MR. CHAIRMAN: Further reference is made to your letter of January 13, 1950, requesting the views of the Treasury Department on H. R. 6736 (81st Cong., 2d sess.), entitled "A bill to prohibit the transportation or receipt of gambling devices in interstate and foreign commerce, and for other purposes." In this connection the Department also desires to present its views on S. 3357 (81st Cong., 2d sess.), a bill having a similar purpose which was passed by the Senate on April 19, 1950, and which is now pending before your committee. H. R. 6736 would make it a criminal offense knowingly to transport in interstate or foreign commerce any gambling machine or device, and would prohibit the receipt, possession, or disposition of any such device with knowledge that it was transported unlawfully. S. 3357 would prohibit the transportation in interstate or foreign commerce of any gambling device, or the possession or disposition of any gambling device so transported, subject to an exception with respect to transportation into any State in which the use of such gambling devices is legal. The Department is concerned primarily with section 3 of S. 3357, which would require every manufacturer of, or dealer in, gambling devices annually to register with the collector of internal revenue for his district. The section further provides that every such manufacturer and dealer shall file with the collector of internal revenue for his district an inventory and record of all sales and deliveries of gambling devices as of the close of the preceding calendar month, and that such monthly record shall identify each article and contain the name and address of the carrier. The section makes it unlawful for a manufacturer or dealer to sell, deliver, or ship any gambling device which is not so marked and numbered for identification or to manufacture, recondition, repair, sell, deliver, or ship any such device without having registered with the collector of internal revenue or without having filed with the collector the required inventories and records of sales and deliveries. The requirements for registration of manufacturers and dealers and periodic filing by them of information, as provided in section 3 described above, are for the purpose of assisting in the enforcement of the criminal sanctions of the bill. They are not related to the collection of the revenues which is the historic and exclusive function of the Bureau of Internal Revenue, the tax-collecting agency of the Federal Government. It would seem more desirable that those duties of gathering information be vested in the agency which is also charged with responsibility for enforcement of the proposed legislation. For example, the Department of Justice, upon whom the enforcement function under the bill would devolve, possesses the facilities for undertaking appropriate investigations, through its field personnel, and otherwise administering and enforcing the provisions of the proposed legislation. In the opinion of the Department, such a centralization of the functions would be more effective in dealing with many serious problems which may arise in the administration and enforcement of S. 3357. It may be that collectors of internal revenue were designated to receive such reports and information because of the fact that an annual license tax is now imposed upon persons who maintain for use coin-operated gambling devices. It should be borne in mind, however, that the tax is imposed upon the person who permits the use of such devices on his premises and not upon the manufacturer or dealer, and that the gambling devices, subject to existing tax provisions, represent only a small part of the devices which would be included in the proposed legislation. For the foregoing reasons, the Department believes that the amendment of section 3 to cover the problem above outlined would enhance the objectives of the bill. Due to the expeditious nature of this report, the Department has not been advised by the Bureau of the Budget as to whether the proposed legislation is in accord with the program of the President. Very truly yours, E. H. FOLEY, Jr., Acting Secretary of the Treasury. Mr. BECKWORTH. Mr. Preston, you may proceed. STATEMENT OF HON. PRINCE H. PRESTON, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA Mr. PRESTON. Mr. Chairman, may I inquire how the Chair would prefer that I proceed? Would you have enough time for me to read a prepared statement? Mr. BECKWORTH. You may proceed as you desire to proceed, Mr. Preston. Mr. PRESTON. I have a statement that is not too lengthy and, if I may, I would like to read it. Mr. HARRIS. Mr. Chairman, before our colleague gets started, may I inquire if the Department of Justice has made a report on H. R. 6736, introduced by our colleague, Mr. Preston? Mr. BECKWORTH. The Department of Justice made a report on S. 3357. I do not believe I find here a report from the Department of Justice on the bill introduced by our colleague, H. R. 6736. The CLERK. That report has not come in. Mr. HARRIS. I should like to ask that if and when that report is received that it be included at this point in the record along with the report on S. 3357. Mr. BECKWORTH. Without objection that will be done. |