AMEND SECTION 37 OF THE NATIONAL DEFENSE ACT

JUNE 12, 1930.-Referred to the House Calendar and ordered to be printed

Mr. STAFFORD, from the Committee on Military Affairs, submitted the following

REPORT

[To accompany H. R. 3592]

The Committee on Military Affairs, to whom was referred the bill (H. R. 3592) to further amend section 37 of the national defense act of June 4, 1920, as amended by section 2 of the act of September 22, 1922, so as to more clearly define the status of reserve officers not on active duty or on active duty for training only, introduced by Mr. James, having considered the same, report thereon with the recommendation that it do pass with the following amendments:

Line 5, add an "s" to the word "section"; strike out "356" and insert in lieu thereof "351, 352, 353, 356, and 360".

Line 8, page 1, and line 1, page 2, strike out the phrase "or while on active duty for instruction or training only".

Section 37 of the national defense act as amended, with this proposed amendment shown in italics, reads as follows:

SEC. 37. Officers' Reserve Corps.-For the purpose of providing a reserve of officers available for military service when needed there shall be organized an Officers' Reserve Corps consisting of general officers of sections corresponding to the various branches of the Regular Army, and of such additional sections as the President may direct. The grades in each section and the number in each grade shall be as the President may prescribe. Reserve officers shall be appointed and commissioned by the President alone, except general officers, who shall be appointed by and with the advice and consent of the Senate. Appointment in every case shall be for a period of five years, but an appointment in force at the outbreak of war or made in time of war shall continue in force until six months after its termination. Any reserve officer may be discharged at any time in the discretion of the President. A reserve officer appointed during the existence of a state of war shall be entitled to discharge within six months after its termination if he makes application therefor. In time of peace a reserve officer must at the time of his appointment be a citizen of the United States or of the Philippine Islands, between the ages of twenty-one and sixty years. Any person who has been an officer of the Army at any time between April 6, 1917, and June 30, 1919, or an officer of the Regular Army at any time may be appointed as a reserve officer in the highest grade which he held in the Army or any lower grade. Any person commissioned in the National Guard and rec

ognized as a National Guard officer by the Secretary of War may, upon his own application, be appointed as a reserve officer in the grade held by him in the National Guard. No other person shall in time of peace be originally appointed as a reserve officer of Infantry, Cavalry, Field Artillery, Coast Artillery, or Air Service in a grade above that of second lieutenant. In time of peace appointments in the Infantry, Cavalry, Field Artillery, Coast Artillery, and Air Service shall be limited to former officers of the Army, officers of the National Guard recognized as such by the Secretary of War, graduates of the Reserve Officers' Training Corps, as provided in section 47b hereof, warrant officers and enlisted men of the Regular Army, National Guard, and Enlisted Reserve Corps, and persons who served in the Army at some time between April 6, 1917, and November 11, 1918. Promotions and transfers shall be made under such rules as may be prescribed by the President, and shall be based so far as practicable upon recommendations made in the established chain of command. So far as practicable reserve officers shall be assigned to units in the locality of their places of residence. Nothing in this act shall operate to deprive a reserve officer of the reserve commission he now holds. Any reserve officer may hold a commission in the National Guard without thereby vacating his reserve commission. Reserve officers while not on active duty shall not, by reason solely of their appointments, oaths, commissions, or status as reserve officers, or any duties or functions performed or pay or allowances received as reserve officers, be held or deemed to be officers or employees of the United States, or persons holding any office of trust or profit or discharging any official function under or in connection with any department of the Government of the United States.

This comprises section 2 of the act of September 22, 1922, in its entirety as referred to in paragraph (a), page 2 of the Secretary of War's letter. The act is amended by adding a new sentence.

The purpose of the proposed legislation, as embodied in H. R. 3592, is to remedy a condition occasioned by a ruling of the Attorney General that prevents reserve officers, who are attorneys at law, from practicing before the Treasury Department or from performing any other work that the law forbids officers of the Government to undertake.

The Attorney General has recently handed down an opinion, which supports the contention of the Treasury Department, that reserve officers are "officers of the Government" under the penal statutes of the United States. Unless remedial legislation is enacted it is feared that there will be many resignations from the Officers' Reserve Corps because of this restrictive construction. The bill has the approval of the War Department, other than that it recommends the elimination of the clause in line 8, page 1, and line 1, page 2, as follows: "or while on active duty for instruction and training only." This amendment the committee adopted for the reasons as given by the War Department, as follows:

The bill, H. R. 3592, defines the status of reserve officers so broadly that the well established and desirable relation of these officers to our military law would be disturbed in time of peace. Thus reserve officers might be held ineligible to sit on military courts or boards in time of peace and the legality of the orders issued by reserve officers on active duty for training purposes might be successfully questioned.

The War Department also suggested the striking out of the word "office" in line 6, page 2, and substituting the word "place", but the commitee believed that the clause "office of trust" has a more general acceptation in legal terminology than "place of trust."

A further amendment is suggested by the War Department, which the committee adopts, to add certain sections of the statutes, which this legislation also affects. This provides for striking out section 356, in line 5, page 1, and inserting in lieu thereof sections 351, 352,

353, 356, and 360. The reason for this is as given by the War Department, as follows:

The reference to section 356, title 10, United States Code in lines 5 and 6, page 1, of H. R. 3592, is believed to be incomplete as the citation therein given evidently refers to section 2 of the act of September 22, 1922, in its entirety.

The committee recommends the passage of the bill with the two committee amendments for the reasons stated.

The report of the War Department explaining the legislation is as follows:

Hon. W. FRANK JAMES,

Chairman Committee on Military Affairs,

House of Representatives.

JULY 30, 1929.

DEAR MR. JAMES: I am pleased to comply with your request of June 21, 1929, for a report on H. R. 3592, a bill to further amend section 37 of the national defense act of June 4, 1920, as amended by section 2 of the act of September 22, 1922, so as to more clearly define the status of reserve officers not on active duty or on active duty for training only.

The applicable provisions of existing law upon this subject appear in sections 37 and 38 of the national defense act of June 4, 1920, as amended, which establish the Officers' Reserve Corps and provide that all persons appointed therein shall be commissioned in the Army of the United States.

The proposed legislation, H. R. 3592, meets deficiencies in existing law which does not clearly define the civil status of reserve officers who are not on active duty or who are on active duty in time of peace. Reserve officers who are members of the bar are therefore in some doubt as to their status in litigation in which the Government may be involved. Many other reserve officers who are interested in the civil affairs of their own States are similarly in doubt as to their status under State constitutions many of which deny State offices to citizens who are officials of the Federal Government.

The War Department favors the enactment of legislation which will meet the deficiencies just described. While H. R. 3592, as drafted, would accomplish this end, careful study in the War Department seems to show that textual amendment as follows may be desirable:

"A BILL To further amend section 37 of the national defense act of June 4, 1920, as amended by section 2 of the act of September 22, 1922, so as to more clearly define the status of reserve officers not on active duty or on active duty for training only

"Be it enacted by the Senate and House of Representatives of the United States of American in Congress assembled, That section 37 of the National Defense Act of June 4, 1920, as amended by section 2 of the act of September 22, 1922 (Fortysecond Statutes, page 1033; [section] sections 351, 352, 353, 356 and 360, title 10, United States Code), be, and the same is hereby, amended by adding thereto another sentence as follows: 'Reserve officers while not on active duty, [or while on active duty for instruction or training only,] shall not, by reason solely of their appointments, oaths, commissions, or status as reserve officers, or any duties or functions performed or pay or allowances received as reserve officers, be held or deemed to be officers or employees of the United States, or persons holding any [office] place of trust or profit or discharging any official function under or in connection with any department of the Government of the United States."

The reasons leading the War Department to suggest these changes are given below:

(a) The reference to section 356, title 10, United States Code in lines 5 and 6, page 1 of H. R. 3592, is believed to be incomplete as the citation therein given evidently refers to section 2 of the act of September 22, 1922, in its entirety.

(b) The bill H. R. 3592 defines the status of reserve officers so broadly that the well-established and desirable relation of these officers to our military law would be disturbed in time of peace. Thus reserve officers might be bell ineligible to sit on military courts or boards in time of peace and the legality of the orders issued by reserve officers on active duty for training purpose. might be suc cessfully questioned.

The War

It is believed that the amendments herein given would overcome the difficulties just mentioned while insuring the intent of the proposed legislation. Department therefore favors the enactment of the amended draft.

The proposed legislation will be without cost to the Government.

If any additional information from the War Department is desired, I shall be pleased to furnish it. Should hearings be held upon the proposed legislation, suitable witnesses will be designated to appear.

Sincerely yours,

O

JAMES W. GOOD, Secretary of War.

AMENDMENT TO FEDERAL FARM LOAN ACT PERMITTING INTERMEDIATE CREDIT BANKS TO MAKE LOANS TO ELIGIBLE AGRICULTURAL OR LIVESTOCK FINANCING INSTITUTIONS ON BILLS PAYABLE AND ELIMINATING SIX MONTHS' MINIMUM MATURITY REQUIREMENT

JUNE 12, 1930.-Referred to the House Calendar and ordered to be printed

Mr. MCFADDEN, from the Committee on Banking and Currency, submitted the following

REPORT

[To accompany S. 4287]

The Committee on Banking and Currency, to whom was referred the bill (S. 4287) to amend section 202 of Title II of the Federal farm loan act by providing for loans by Federal intermediate credit banks to financing institutions on bills payable and by eliminating the requirement that loans, advances, or discounts shall have a minimum maturity of six months, having considered the same, report favorably thereon with the recommendation that the bill do pass without amendment.

Your committee having had before it the bill H. R. 12062 held hearings thereon and gave it full consideration. During the consideration thereof the Senate bill (S. 4287) was referred to the committee, and substituted for the House bill.

A full explanation of the merits of the bill is contained in the report made by the Senate, and in order that this may be before the House the basis thereof is used for this present report.

Under sections 1031 and 1033, title 12, United States Code, Federal intermediate credit banks have the power, with proper safeguards,

to

1. Discount for or purchase from any eligible bank, savings institution, trust company, or agricultural and livestock financing institution, with its indorsement, any note, draft, bill of exchange, or other obligation, the proceeds of which was primarily used for agricultural or livestock raising purposes;

2. Buy or sell, with or without recourse, debentures issued by any other Federal intermediate credit bank; and

3. Make loans direct to cooperative associations composed of persons producing or producing and marketing agricultural staples or