Hearings, Aug. 5-9,11-15, Sept.17-18,22-23,25, 1941

Administration, acting under section 25 of the Lever Act, fixed a price of $2.45 per ton. The buyer refused to pay more than this fixed price, and the seller sued for the difference, asserting that the price rgulation was invalid and that he was entitled to the price fixed by his contract. The Court gave judgment against the seller, stating that the act and order "will be deemed to have deprived him only of the right or opportunity by negotiation to obtain more than his coal was worth." The Court held that, as applied to the coal in question, "The statute and Executive orders were not so clearly unreasonable and arbitrary as to require them to be held repugnant to the due-process clause of the fifth amendment" (p. 262).

Similarly, in Block v. Hirsch, 256 U. S. 135, the Court noted that the District of Columbia rent legislation would deprive the landlord of the power of profiting by the influx of people to Washington "and thus of a right usually incident to fortunately situated property." Nevertheless the rent legislation was upheld. Compare Nortz v. United States, 294 U. S. 317: United States v. Hudson, 299 U. S. 498; Legal Tender Cases, 12 Wall. 457.

In exercising their powers both the Federal Government and the States may consistently with due process prescribe regulations diminishing the value of property, provided that their powers are not exerted arbitrarily and the legis lature has not abused its broad discretion in selecting the means of promoting the public interest. See Northwestern Laundry v. Des Moines, 239 U. S. 486, Reinman v. Little Rock. 237 U. S. 171, Hadacheck v. Los Angeles, 239 U. S. 394; Miller v. Schoene, 276 U. S. 272; Powell v. Pennsylvania, 127 U. S. 678, 685; Hamilton v. Kentucky Distilleries Co., 251 U. S. 146.

In Ruppert v. Caffey, 251 U. S. 264, the Court upheld the application of the wartime Prohibition Act to nonintoxicating liquor, notwithstanding the hardships due to the fact that no time was allowed for the disposal of such liquor and of valuable brewing properties. The Court rejected the argument that this was a prohibition which could be enforced legally only if compensation were made. It pointed out that there was no "taking" of property which required the payment of "just compensation" but only a regulation of property which was valid and not arbitrary.

"Here, as in Hamilton v. Kentucky Distilleries & Warehouse Co., supra, there was no appropriation of private property, but merely a lessening of value due to a permissible restriction imposed upon its use" (251 U. S. at 303).**

Particular hardships in the app'ication of a price ceiling which is generally fair and equitable to buyers and sellers of the commodity cannot be anticipated in advance. It is a commonplace, however, that regulation which is generally valid and in the public interest may not be held invalid because it imposes hardship upon particular individuals." In the exercise of its war or nationaldefense powers, Congress is vested with a wide latitude of discretion, and "its action, unless purely arbitrary, must be accepted and given full effect by the courts." See Hamilton v. Kentucky Distilleries Company, 251 U. S. 146, 163. Congress may, without obstruction from the due-process clause, require the able-bodied men of this country to give their services to the Nation for $21 or $20 a month. Congress may cause great hardship to companies who, having contracts for supplies at a certain price, find that the Government through priorities has redirected the flow of goods so that they are either left without materials or are relegated to purchase from other sources at higher prices.

32 In accord, see Morrisdale Cool Co. v. United States, 259 U. S. 188-190: Highland V. Russell Car & Snow Plow Co., 279 U. S. 253, 262; DuPont de Nemours & Co. v. Hughes, 50 F. (d) 891 (C. C. A. 3d). The just compensation clause of the fifth amendment is applicable only when the Government takes property away from the owner. The legislation under consideration in Congess specifically provides that nothing contained therein shall be construed to require any person to sell any commodity.

The concept of a fair return on fair valve is applicable only to public utility regulation and public utilities are explicitly excluded from the scone of these bills. Public utility rate regulation differs essentially from price regulation of the kind here involved because it singles out individual units in particular industries for special obligations with respect to the community. It is the close analogy of this process of regulation to a taking of particular property for public use that leads to the fair return on fair value rule. The pending bills, on the other hand, involve general regulation of all nonutility businesses largely on the basis of market prices prevailing before the regulation goes into effect. Compare Tagg Bros. & Moorhead v. United States, 230 U. S. 420; Aetna Insurance Co. V. Hyde, 275 U. S. 440; Hegeman Farms Corp. v. Baldwin, 6 F. Supp. 297, affirmed, 203 U. S. 163.

23 Purity Extract Co. v. Lunch, 226 U. S. 192; Pierce Oil Co. v. Hope, 248 U. S. 500; United States v. Hudson, 299 U. S. 498; New York Rapid Transit Corp. v. City of New York, 303 U. S. 573.

Omnia Commercial Company v. United States, 261 U. S. 502. Similarly, Congress may, without obstruction from the due-process clause, provide for the fixing of prices in the interest of national defense. The legislation may bring about inconveniences, or even hardships, but these, like other inconveniences or hardships, must be borne when a higher national interest must be served.

III. PROCEDURE AND ADMINISTRATION

All of the authority under the pending bills is vested in the President, who is permitted to delegate his authority to such departments, agencies, or persons as he may designate or appoint. The wisdom of this flexible approach, as contrasted with the proposals for a rigid 5-man, bipartisan, interdepartmental, or other kind of board or commission, is indicated by our own World War experience, as well as by our experience during the present defense program.

Time and again Mr. Baruch has warned that, although we need committees for counsel, we must have administrators for action. Objective studies of the operations of the original War Industries Board have indicated that its chief defect was that it was a committee." And when Congress passed price-control legislation during the World War authority was delegated directly to the President, who in turn delegated authority to individual administrators.35

An emergency calls not for partisan, or group, or special or vested interest representation, with its necessary concomitants of delay, compromise, and inaction. It calls for bold decision and rapid execution by an administrator in whom both authority and responsibility are centered, under the supervision of the President, who represents all classes and all groups in the community.

Boards and commissions have proved useful in normal times primarily to secure a continuity of policy and decision through the exercise of quasi-judicial and quasi-legislative functions, independently of the executive. Ordinarily they are designed to operate over long periods of time, and gradually to implement a growing body of regulatory legislation. But this is an emergency. The duration we trust will be short. Adaptability and coordination will be at a premium. The President, and the President alone, is responsible for the direction and coordination of the entire defense program. Billions of dollars have been appropriated by Congress for expenditure under his guidance. Legislation has been enacted giving him authority to require priority for defense orders, to place compulsory orders, to requisition industrial plants, and to ration supplies for civilian use. This is no usurpation or aggrandizement of power. Under the Constitution, the President is our Chief Executive, and Commander in Chief of the Army and Navy; therefore, he must shoulder responsibility for the success. ful execution of the defense program which Congress has authorized. This is the crux of the matter and there is no other fundamental issue. Price control is not an isolated phase of this program: it is an integral part of economic mobilization for defense. To deprive the Chief Executive of authority for price stabilization in the defense program by the creation of an independent board or

Grosvenor B. Clarkson points out in his book. Industrial America in the World War (1923), that "The defect of the War Industries Board as at first created was that it was a committee. Committees are good for counsel, but poor for action, and especially so when their authority is nebulous, and for lack of leadership they do not stretch it and strengthen it by use" (p. 51).

There was at the time considerable debate on whether the Department of Agriculture or a special food administrator should be given power to control food. The President, following a White House conference on May 12, 1917, issued a statement explaining that the normal activities of the Department of Agriculture for food production, conservation, and marketing should be carried on but that "the emergency powers asked for over distribution and consumption, imports and exports, prices, purchase and requisition of commodities, storing, etc., should be placed in the hands of a food administrator appointed by the President and directly responsible to him the proposed administration • ⭑ * is intended, of course, only to meet a manifest emergency and is to continue only while war lasts." (Official Bulletin No. 10 of the National Defense Advisory Commission, May 21, 1917, p. 4.)

Section 25 of the Lever Act authorized the President to fix the price of coal and coke. It also provided that "said authority and power may be exercised by him in each case through the agency of the Federal Trade Commission.' The President appointed Dr. Harry A. Garfield Fuel Administrator and delegated to him the price-fixing authority. The exercise of this authority was sustained in MacDonald Coal Mining Co. v. United States (56 Ct. Cl. 440. affirmed on other grounds, 261 U. S. 608); Highland v. Russell Car & Snow Plow Co. (279 U. S. 253).

30 The Interstate Commerce Commission (in the field of transportation), the Federal Trade Commission (in the field of competitive practices), and more recently, the Securities and Exchange Commission (in the field of financial practices), are excellent examples of this salutary practice.

Particular hardships in the app'ication of a price ceiling which is generally fair and equitable to buyers and sellers of the commodity cannot be anticipated in advance. It is a commonplace, however, that regulation which is generally valid and in the public interest may not be held invalid because it imposes hardship upon particular individuals. In the exercise of its war or nationaldefense powers, Congress is vested with a wide latitude of discretion, and "its action, unless purely arbitrary, must be accepted and given full effect by the courts." See Hamilton v. Kentucky Distilleries Company, 251 U. S. 146, 163. Congress may, without obstruction from the due-process clause, require the able-bodied men of this country to give their services to the Nation for $21 or $20 a month. Congress may cause great hardship to companies who, having contracts for supplies at a certain price, find that the Government through priorities has redirected the flow of goods so that they are either left without materials or are relegated to purchase from other sources at higher prices. ch

32 In accord, see Morrisdale Coal Co. v. Unit Russell Car & Snow Plow Co., 279 U. S. 253, 50. (d) 891 (C. C. A. 3d). The just com applicable only when the Government takes p tion under consideration in Congess specifica shall be construed to require any person to sell The concept of a fair return on fair valve and public utilities are explicitly excluded rate regulation differs essentially from price it singles out individual units in particular to the community. It is the close analogy particular property for public use that lea pending bills, on the other hand, involve largely on the basis of market prices pre Compare Tang Bros. & Moorhead v. United Hyde, 275 U. S. 440; Hegeman Farms Co U. S. 163.

33 Purity Extract Co. v. Lunch, 226 U. S United States v. Hudson, 299 U. S. 498; York, 303 U. S. 573.

III. PROCEDURE AND ADMINISTRATION

All of the authority under the pending bills is vested in the President, who s permitted to delegate his authority to such departments, agencies, or persons as he may designate or appoint. The wisdom of this flexible approach, as trasted with the proposals for a rigid 5-man, bipartisan, interdepartmenta. other kind of board or commission, is indicated by our own World War exper ence, as well as by our experience during the present defense program.

Time and again Mr. Baruch has warned that, although we need committers for counsel, we must have administrators for action. Objective studies of th operations of the original War Industries Board have indicated that its chief defect was that it was a committee." And when Congress passed price an legislation during the World War authority was delegated directly to the Ps dent, who in turn delegated authority to individual administrators."

An emergency calls not for partisan, or group, or special or vested n representation, with its necessary concomitants of delay, comprese inaction. It calls for bold decision and rapid execution by an admis? whom both authority and responsibility are centered, under the Ste 4 the President, who represents all classes and all groups in the comm

Boards and commissions have proved useful in normal times primumiy toosse cure a continuity of policy and decision through the exercise of ms juicin and quasi-legislative functions, independently of the executive. Ordinarily the are designed to operate over long periods of time, and gradually to implement growing body of regulatory legislation." But this is an emergency. The m tion we trust will be short. Adaptability and coordination will hear a premie The President, and the President alone, is responsible for the directio coordination of the entire defense program. Billions of dollars have been appropriated by Congress for expenditure under h's guidance Legislation has been enacted giving him authority to require priority for defense orders, to place civilian use. This is no usurpation or aggrandizement of pewer Under the compulsory orders, to requisition industrial plants, and to ration supplies for Constitution, the President is our Chief Executive, and Commander in Chief ad the Army and Navy; therefore, he must shoulder responsibility for the se ful execution of the defense program which Congress is authorized T is the crux of the matter and there is no other fundamentale Price contr is not an isolated phase of this program: it is an Interal part of sonomic mobilization for defense. To deprive the Chief Executive of authority for price stabilization in the defense program by the creation of dependent hourd or

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Similarly, in Block v. Hirsch, 256 U. S. 135, the Court noted that the District of Columbia rent legislation would deprive the landlord of the power of profiting by the influx of people to Washington “and thus of a right usually incident to fortunately situated property." Nevertheless the rent legislation was upheld. Compare Nortz v. United States, 294 U. S. 317: United States v. Hudson, 299 U. S. 498; Legal Tender Cases, 12 Wall. 457.

In exercising their powers both the Federal Government and the States may consistently with due process prescribe regulations diminishing the value of property, provided that their powers are not exerted arbitrarily and the legislature has not abused its broad discretion in selecting the means of promoting the public interest. See Northwestern Laundry v. Des Moines, 239 U. S. 486, Reinman v. Little Rock, 237 U. S. 171, Hadacheck v. Los Angeles, 239 U. S. 394; Miller v. Schoene, 276 U. S. 272; Powell v. Pennsylvania, 127 U. S. 678, 685; Hamilton v. Kentucky Distilleries Co., 251 U. S. 146.

Particular hardships in the app'ication of a price ceiling which is generally fair and equitable to buyers and sellers of the commodity cannot be anticipated in advance. It is a commonplace, however, that regulation which is generally valid and in the public interest may not be held invalid because it imposes hardship upon particular individuals. In the exercise of its war or nationaldefense powers, Congress is vested with a wide latitude of discretion, and "its action, unless purely arbitrary, must be accepted and given full effect by the courts." See Hamilton v. Kentucky Distilleries Company, 251 U. S. 146, 163. Congress may, without obstruction from the due-process clause, require the able-bodied men of this country to give their services to the Nation for $21 or $30 a month. Congress may cause great hardship to companies who, having contracts for supplies at a certain price, find that the Government through priorities has redirected the flow of goods so that they are either left without materials or are relegated to purchase from other sources at higher prices.

32 In accord, see Morrisdale Coal Co. v. United States, 259 U. S. 188-190; Highland V. Russell Car & Snow Plow Co., 279 U. S. 253, 262; DuPont de Nemours & Co. v. Hughes, 50 F. (d) 891 (C. C. A. 3d). The just compensation clause of the fifth amendment is applicable only when the Government takes property away from the owner. The legislation under consideration in Congess specifically provides that nothing contained therein shell be construed to require any person to sell any commodity.

23 Purity Extract Co. v. Lunch, 226 U. S. 192; Pierce Oil Co. v. Hope, 248 U. S. 500; United States v. Hudson, 299 U. S. 498; New York Rapid Transit Corp. v. City of New York, 303 U. S. 573.

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