Madison County Democrat. (London, Ohio) 19??-1958, 1950-09-15
EMERGENCY
CONTROLS
OF 1850
Broadcast by Fred O. kiel,
Industrial Economist, Federal
Reserve Bank Of Cleveland,
over VICAR

Several weeks ago in thi.
series of reports, there was dis
cusSed the problem of what kline
of controls should be devised tt
reduce to a minimum the infla
tionary potential of the war ane
preparedness program. On Sep
tember l the Congress, after
weeks of study and debate, passed
and sent to the President for his
approval The Defense Production
Act of 1850.
In view of the great amount
of public discussion as to what
ought to be included in such leg
islation, or what might be the fl
nal wording of the Act, it be-
comes pertinent to summarize
the major provisions that were
actually included and which will
become the law of the land as
soon as the President affixes his
signature.
The stated objectives of the Bill
are to facilitate the diversion of
materials and production equip
meEt from civilian uses to military
and defensive needs, and to eX-
pand production facilities to meet
more adequately the combined de-
mand of civilians and the military
establishment. The President is
given very broad powers to pro-
mote the national defense and at
the same time to prevent undue
wages, prices, production, and
distribution of goods.
The authority to invoke the var
ious phases of the legislation is
given to the President, with the
exception of the control Of con-
sumner credit which is vested in
the Board of Governors of the
Federal Reserve System. The
Chief Executive may delegate his
authority to any existing govern
ment agency, or set up new
agencies to administer the law,
but cannot create any new gov
ernment corporations.
The principal provisions of the
Bill are as follows:
Title l is concerned with prior
tiles and allocations The PreSi-
dent is authorized to require that
performance of government con-
tracts or orders for national de-
fense be given priority over all
other contracts. He can require
that such government contracts
be accepted and performed. To
carry out these contracts, ma
terials and facilities may be allot-
ed as needed The term facility"
includes just about everything ex-
cept farms, private dwellings, and
places of worship The term ma
teriaf' includes raw materials,
articles, technical information and
processes. Contracts of employ
ment are specifically exempted.
This section also prohibits hoard
ing of materials.
Title II is concerned with req
uisitions. 1t authorizes the Presi
dent to requisition any material or
facility that may be needed for
the supply or manufacture of
goods for national defense that
cannot be obtained upon fair or
reasonable terms or without un-
due delay through ordinary chan
nelS of business.
guaranteed loans to
contractors that want, or are
working on, government defense
contracts are provided for un-
der Title III Under this section.
the Federal Reserve Banks or
other agencies may be designated
by the various procurement de-
partment to guarantee financial
institutions against loss on loans
to all types of defense contract
ors. Such guarantees during the
last war enabled many small busi-
neSses to bid on government work
and obtain bank loans which could
not have been obtained under