Memorandum on Senate Alterations of Lever Bill
Title
Memorandum on Senate Alterations of Lever Bill
Creator
United States. Congress. Senate
Identifier
WWP19123
Date
1917 July 22
Description
The memorandum addresses the alteration proposed to the Food and Fuel Control Act.
Source
Hoover-Wilson Correspondence, Hoover Institution, Hoover Institution Archives, Stanford, California
Publisher
Woodrow Wilson Presidential Library & Museum
Subject
United States Food Administration
Language
English
Text
MEMORANDUM ON THE SENATE ALTERATIONS OF THE LEVER BILL
-- In respect to Food and Feeds --
Section I of the Lever Bill -- New Section 1 of the Senate Bill.
The Lever Bill has been amended by the Senate so as to alter the form of administration under the Bill, providing for the appointment of a board of three members by the President, subject to the approval of the Senate, one of whom shall be a farmer actually engaged in the cultivation of the soil.
There are two serious objections to this form of organization:
1st. The Bill covers four distinct issues:
(a) Food and Feeds.
(b) Fuel, Gasoline and Kerosene.
(c) Fertilizers and Agricultural Machinery.
(d) Temperance legislation.
These duties are too comprehensive to be covered by one department, but if the provisions for administration were left in the hands of the President, as in the Lever Bill, he could quite well set up the Department of Food Administration to cover (a) and assign other functions elswhere.
2nd. There are other objections of even more important order to the form of administration proposed, as it is utterly at variance with every principle of sound organization. The form of administration proposed means a three-headed control, each member on terms of equal authority because no matter how they may be nominally created in authority, they will have under the law a joint, and therefore, equal responsibility. Consequently, unanimous decisions must be obtained, otherwise it becomes necessary for any minority to either appeal to the President or to be constantly defining his position to the public in order to protect his responsibility. No such definition can be given either to the President or to the public without immediate friction and a totlal disintegration of esprit de corps of the staff. Three-headed administration means conflicting direction and intrigue between the different heads of the Department.
There are many other objections which are set out fully in a letter of Mr. Hoover to the President dated Ju,ly 20th.
Section 2 of the Lever Bill.
This section is stricken out in the Senate Bill but all of its provisions are incorporated in Section 20 of the Senate Bill, and while Section 2 of the Lever Bill is not vital as it contains only rules of interpretation, there is no real reason for striking it out.
Section 3 of the Lever Bill -- Now Section 2 of the Senate Bill.
The Lever section is declaratory and should remain with the amendment which is now in the Senate Bill, conferring the power in the President to create agencies. This power originally appeared in Section 15 of the Lever Bill, which latter section is stricken out of the Senate Bill but its effect is restored by the above inclusion in Section 2 of the Senate Bill.
It is of the utmost importance that the power to create agencies should be obtained.
Section 3 iof the Senate Bill.
Is a new provision, calling for declaration of interest and requires no comment from the Food Administration point of view.
Section 4 of the Lever Bill. -- Now Section 4 of the Senate Bill.
These are specifically the same, penalties only being added. The addition of the provision of a penalty is necessary inasmuch as Sections 8 and 9 of the Lever Bill are stricken out in the Senate Bill. The changes in phraseology are unimportant. With this addition of penalty we see no reason why Section 4 of the Senate Bill should not be retained, and Sections 8 and 9 of the Lever Bill abandoned as they thus amount to repetition.
Section 5 of the Lever Bill -- Now Section 5 of the Senate Bill.
This is the licensing clause. The new licensing section of the Senate Bill is absolutely unworkable -- first, because by the interstate commerce limitations probably the largest portion of distribution activities will be eliminated from control on one excuse or another, and second, by reason of being limited to certain specific industries, and it is to be noticed that it omits entirely importers, exporters, commission houses, wholesalers, flour mills, sugar refiners, and many other kinds of food control and distribution. The original Lever Bill provides that " ' ' ' ' whenever the President shall find it essential to license the importation, exportation, manufacture, storage, or distribution of any necessaries, in order to carry into effect any of the purposes of this ACT' ' '", and it is vital that this inclusive term shall be restored. As to the other alterations in the section, the interpretation of the words “storage”, “charge”, “commission”, and “profits”, at various points, is desired. The exclusion of farmers’ cooperative associations negates a large portion of effective grain control and is referred to more fully later on. The licensing volume clause in the Lever Bill was not in itself entirely strong enough to prevent extortion and wasteful practices, but the alterations in the Senate Bill practically negate all of its possibilities.
Section 6 of the Lever Bill -- Now Section 6 of the Senate Bill.
This is the hoarding section. The Senate Bill eliminates the penalties in the Lever Bill, but these are properly covered by Section 4 of the Senate Bill. It also eliminates Clause A of the Lever Bill and thereby eliminates the possibility of reaching any hoarder or any speculator who is not at the same time a dealer and thus liberates one of the most vicious types of speculation. The Senate Bill also expects farmers’ cooperative associations. There are some 5,000 farmers’ elevators in the country and it is impossible to control the movement of grain and stop the hoarding of grain at these places unless this be delteted. Representatives of the farmers’ associations have protested several times during the debate, at their being excepted. It would lalso be advisable to add to Section 6, a clause after the word “price”, immediately preceding the proviso, as follows:
“or (c) held by any person for more than thirty days after the President shall have given notice to such person or to the person in possession of said necessaries that national security and defense require the bona fide sale or use of said necessaries.”
Section 7 of the Lever Bill. -- Now Section 7 of the Senate Bill.
These are identical.
Section 8 of the Lever Bill.
This is deleted from the Senate Bill and is probably unnecessary for the Senate amendments to Section 4 of the Lever Bill are identical.
Section 9 of the Lever Bill.
This is stricken out in the Senate Bill and the same remarks apply as to Section 8 of the Lever Bill.
Section 10 of the Lever Bill -- Now appears as Sections 8 and 9 of the Senate Bill.
The Senate alteration does not appear to greatly change the effect of the Lever Bill. Section 9 of the Senate Bill, however, limits the power of purchase by specifically mentioning five commodities and this eliminates the possibility of dealing with other commodities, which may be vital from an American point of view, such as sugar anvd beans, and eliminates the possibility of purchase of fodder and some other commodities which may be necessary in order to control the action of the Allies or neutrals operating in the United States.
Section 11 of the Lever Bill -- Now represented by Section 10 of the Senate Bill.
If Section 5 of the Lever Bill stands, there is no objection to substituting Section 10 of the Senate Bill for Section 11 of the Lever vBill.
Section 12 of the Lever Bill -- Now represented by Section 11 of the Senate Bill.
There is no substantial difference between these two sections, both, however, should be again amended in words and figures as follows:
“Provided, that such operations, practices, and transactions, at, on or in or under the rules or any exchange, board of trade, or other similar institution of place of business, as are not prohbibited by the regulations made by the President, pursuant to the provisions of this section, shall not be deemed to be within the intent and meaning of Section 6 of this Act.”
Unless some such amendment as this is provided the boards of trade might take the view that they could not continue business at all and it might have the effect of closing their activities even though there was no objection to their continuance.
Section 13 of the Lever Bill -- Now Section 12 of the Senate Bill.
This is the minimum guarantee section and the section is now limited to wheat and requires clarifications as to what “primary markets” really means. Moreover, the right to sell must be extended to neutrals because we may be at peace and have neither belligerents or neutrals and we may eventually need to sell to neutrals fto find a market.
Section 14 and 14-a of the Lever Bill.
These are temperance sections in the Senate Bill.
Section 15 of the Lever Bill.
If the provision for the creation of agencies is introduced in Section 3 of the Lever Bill, there is no reason why this should not be stricken out.
Section 16 of the Lever Bill.
This has been stricken out of the Senate Bill and should be restored.
Section 17 of the Lever Bill is retained as Section 15 of the Senate Bill.
Section 18 of the Lever Bill -- Now Section 16 of the Senate Bill and is the appropriation for administrative expenses.
The Senate Bill strikes out the Civil Service clause which is desirable, unless the Lever Bill provisions provide for the engagement of specialists without civil service examination. The Senate Bill further alters the Lever Bill by providing that no salaries shall be in excess of $3,500, but does not state to what period this applies. In any event, it would be impossible to secure the best and very necessary intelligence for emergency work of the expert order at any such salary as this. It is extremely desirable that this section should be further amended to allow the construction of a temporary office building for administrative purposes, as there is no adequate office space available in Washington, except those of which the rent will exceed the cost of a temporary structure, and furthermore, any hotel or “rabbit warren” of a building will add to the cost of administration by duplication of a staff and will amount much in excess of the cost of a temporary and properly arranged building.
Section 19 of the Lever Bill -- Now Section 17 of the Senate Bill.
This provides for the appropriation of $150,000,000 working capital. The Senate provision adds the provision requiring itemized accounts to be filed with the Senate and the House begfore the 10th day of each month. It would be exteremely butdensome, if not impossible, in a war emergency organization, to file accounts in such short periods. Furthermore, both the Senate and House provisions should be amended to include the following:
“The appropriation specified in this section and in Section 16 of this Act, shall be immediately available and shall be paid out on the order of the President, or on the order of such officer or officers as may be designated by him for that purpose, which order of the President, or of such officer, shall be conclusive and binding upon all departments and the accounting officers of the Government, as to the correctness of said accounts and disbursements.”
The reason for this is that it will be impossilble to conduct the ordinary commercial operations within the methods and customs of the trade if the Administration is compelled to follow the Treasury regulations, with all of its delay and “red tape” and the above provision has been said by Treasury officials, to be sufficient to accomplish the regsults desired.
The appropriation of $150,000,000 was conceived from the point of view of Food and Feeds only and the immense operations now included for coal are absolutely uncovered and the entire Food operation will fail if this sum is spread over both.
Section 20 of the Senate Bill.
This is a new section on hoarding, entirely in conflict with Section 6 previously adopted and in itself absolutely devitalizes any hoarding regulation and is in fact, an absolute invitation and a legalization of speculation.
-- In respect to Food and Feeds --
Section I of the Lever Bill -- New Section 1 of the Senate Bill.
The Lever Bill has been amended by the Senate so as to alter the form of administration under the Bill, providing for the appointment of a board of three members by the President, subject to the approval of the Senate, one of whom shall be a farmer actually engaged in the cultivation of the soil.
There are two serious objections to this form of organization:
1st. The Bill covers four distinct issues:
(a) Food and Feeds.
(b) Fuel, Gasoline and Kerosene.
(c) Fertilizers and Agricultural Machinery.
(d) Temperance legislation.
These duties are too comprehensive to be covered by one department, but if the provisions for administration were left in the hands of the President, as in the Lever Bill, he could quite well set up the Department of Food Administration to cover (a) and assign other functions elswhere.
2nd. There are other objections of even more important order to the form of administration proposed, as it is utterly at variance with every principle of sound organization. The form of administration proposed means a three-headed control, each member on terms of equal authority because no matter how they may be nominally created in authority, they will have under the law a joint, and therefore, equal responsibility. Consequently, unanimous decisions must be obtained, otherwise it becomes necessary for any minority to either appeal to the President or to be constantly defining his position to the public in order to protect his responsibility. No such definition can be given either to the President or to the public without immediate friction and a totlal disintegration of esprit de corps of the staff. Three-headed administration means conflicting direction and intrigue between the different heads of the Department.
There are many other objections which are set out fully in a letter of Mr. Hoover to the President dated Ju,ly 20th.
Section 2 of the Lever Bill.
This section is stricken out in the Senate Bill but all of its provisions are incorporated in Section 20 of the Senate Bill, and while Section 2 of the Lever Bill is not vital as it contains only rules of interpretation, there is no real reason for striking it out.
Section 3 of the Lever Bill -- Now Section 2 of the Senate Bill.
The Lever section is declaratory and should remain with the amendment which is now in the Senate Bill, conferring the power in the President to create agencies. This power originally appeared in Section 15 of the Lever Bill, which latter section is stricken out of the Senate Bill but its effect is restored by the above inclusion in Section 2 of the Senate Bill.
It is of the utmost importance that the power to create agencies should be obtained.
Section 3 iof the Senate Bill.
Is a new provision, calling for declaration of interest and requires no comment from the Food Administration point of view.
Section 4 of the Lever Bill. -- Now Section 4 of the Senate Bill.
These are specifically the same, penalties only being added. The addition of the provision of a penalty is necessary inasmuch as Sections 8 and 9 of the Lever Bill are stricken out in the Senate Bill. The changes in phraseology are unimportant. With this addition of penalty we see no reason why Section 4 of the Senate Bill should not be retained, and Sections 8 and 9 of the Lever Bill abandoned as they thus amount to repetition.
Section 5 of the Lever Bill -- Now Section 5 of the Senate Bill.
This is the licensing clause. The new licensing section of the Senate Bill is absolutely unworkable -- first, because by the interstate commerce limitations probably the largest portion of distribution activities will be eliminated from control on one excuse or another, and second, by reason of being limited to certain specific industries, and it is to be noticed that it omits entirely importers, exporters, commission houses, wholesalers, flour mills, sugar refiners, and many other kinds of food control and distribution. The original Lever Bill provides that " ' ' ' ' whenever the President shall find it essential to license the importation, exportation, manufacture, storage, or distribution of any necessaries, in order to carry into effect any of the purposes of this ACT' ' '", and it is vital that this inclusive term shall be restored. As to the other alterations in the section, the interpretation of the words “storage”, “charge”, “commission”, and “profits”, at various points, is desired. The exclusion of farmers’ cooperative associations negates a large portion of effective grain control and is referred to more fully later on. The licensing volume clause in the Lever Bill was not in itself entirely strong enough to prevent extortion and wasteful practices, but the alterations in the Senate Bill practically negate all of its possibilities.
Section 6 of the Lever Bill -- Now Section 6 of the Senate Bill.
This is the hoarding section. The Senate Bill eliminates the penalties in the Lever Bill, but these are properly covered by Section 4 of the Senate Bill. It also eliminates Clause A of the Lever Bill and thereby eliminates the possibility of reaching any hoarder or any speculator who is not at the same time a dealer and thus liberates one of the most vicious types of speculation. The Senate Bill also expects farmers’ cooperative associations. There are some 5,000 farmers’ elevators in the country and it is impossible to control the movement of grain and stop the hoarding of grain at these places unless this be delteted. Representatives of the farmers’ associations have protested several times during the debate, at their being excepted. It would lalso be advisable to add to Section 6, a clause after the word “price”, immediately preceding the proviso, as follows:
“or (c) held by any person for more than thirty days after the President shall have given notice to such person or to the person in possession of said necessaries that national security and defense require the bona fide sale or use of said necessaries.”
Section 7 of the Lever Bill. -- Now Section 7 of the Senate Bill.
These are identical.
Section 8 of the Lever Bill.
This is deleted from the Senate Bill and is probably unnecessary for the Senate amendments to Section 4 of the Lever Bill are identical.
Section 9 of the Lever Bill.
This is stricken out in the Senate Bill and the same remarks apply as to Section 8 of the Lever Bill.
Section 10 of the Lever Bill -- Now appears as Sections 8 and 9 of the Senate Bill.
The Senate alteration does not appear to greatly change the effect of the Lever Bill. Section 9 of the Senate Bill, however, limits the power of purchase by specifically mentioning five commodities and this eliminates the possibility of dealing with other commodities, which may be vital from an American point of view, such as sugar anvd beans, and eliminates the possibility of purchase of fodder and some other commodities which may be necessary in order to control the action of the Allies or neutrals operating in the United States.
Section 11 of the Lever Bill -- Now represented by Section 10 of the Senate Bill.
If Section 5 of the Lever Bill stands, there is no objection to substituting Section 10 of the Senate Bill for Section 11 of the Lever vBill.
Section 12 of the Lever Bill -- Now represented by Section 11 of the Senate Bill.
There is no substantial difference between these two sections, both, however, should be again amended in words and figures as follows:
“Provided, that such operations, practices, and transactions, at, on or in or under the rules or any exchange, board of trade, or other similar institution of place of business, as are not prohbibited by the regulations made by the President, pursuant to the provisions of this section, shall not be deemed to be within the intent and meaning of Section 6 of this Act.”
Unless some such amendment as this is provided the boards of trade might take the view that they could not continue business at all and it might have the effect of closing their activities even though there was no objection to their continuance.
Section 13 of the Lever Bill -- Now Section 12 of the Senate Bill.
This is the minimum guarantee section and the section is now limited to wheat and requires clarifications as to what “primary markets” really means. Moreover, the right to sell must be extended to neutrals because we may be at peace and have neither belligerents or neutrals and we may eventually need to sell to neutrals fto find a market.
Section 14 and 14-a of the Lever Bill.
These are temperance sections in the Senate Bill.
Section 15 of the Lever Bill.
If the provision for the creation of agencies is introduced in Section 3 of the Lever Bill, there is no reason why this should not be stricken out.
Section 16 of the Lever Bill.
This has been stricken out of the Senate Bill and should be restored.
Section 17 of the Lever Bill is retained as Section 15 of the Senate Bill.
Section 18 of the Lever Bill -- Now Section 16 of the Senate Bill and is the appropriation for administrative expenses.
The Senate Bill strikes out the Civil Service clause which is desirable, unless the Lever Bill provisions provide for the engagement of specialists without civil service examination. The Senate Bill further alters the Lever Bill by providing that no salaries shall be in excess of $3,500, but does not state to what period this applies. In any event, it would be impossible to secure the best and very necessary intelligence for emergency work of the expert order at any such salary as this. It is extremely desirable that this section should be further amended to allow the construction of a temporary office building for administrative purposes, as there is no adequate office space available in Washington, except those of which the rent will exceed the cost of a temporary structure, and furthermore, any hotel or “rabbit warren” of a building will add to the cost of administration by duplication of a staff and will amount much in excess of the cost of a temporary and properly arranged building.
Section 19 of the Lever Bill -- Now Section 17 of the Senate Bill.
This provides for the appropriation of $150,000,000 working capital. The Senate provision adds the provision requiring itemized accounts to be filed with the Senate and the House begfore the 10th day of each month. It would be exteremely butdensome, if not impossible, in a war emergency organization, to file accounts in such short periods. Furthermore, both the Senate and House provisions should be amended to include the following:
“The appropriation specified in this section and in Section 16 of this Act, shall be immediately available and shall be paid out on the order of the President, or on the order of such officer or officers as may be designated by him for that purpose, which order of the President, or of such officer, shall be conclusive and binding upon all departments and the accounting officers of the Government, as to the correctness of said accounts and disbursements.”
The reason for this is that it will be impossilble to conduct the ordinary commercial operations within the methods and customs of the trade if the Administration is compelled to follow the Treasury regulations, with all of its delay and “red tape” and the above provision has been said by Treasury officials, to be sufficient to accomplish the regsults desired.
The appropriation of $150,000,000 was conceived from the point of view of Food and Feeds only and the immense operations now included for coal are absolutely uncovered and the entire Food operation will fail if this sum is spread over both.
Section 20 of the Senate Bill.
This is a new section on hoarding, entirely in conflict with Section 6 previously adopted and in itself absolutely devitalizes any hoarding regulation and is in fact, an absolute invitation and a legalization of speculation.
Original Format
Report
Files
Citation
United States. Congress. Senate, “Memorandum on Senate Alterations of Lever Bill,” 1917 July 22, WWP19123, Hoover Institute at Stanford University Collection, Woodrow Wilson Presidential Library & Museum, Staunton, Virginia.