approval of the Secretary of the Treasury, may by regulations prescribe, and the requirement of a memorandum of such transfer shall not apply. 'As used in this subdivision— "The term 'cost' means the cost of the interest in silver bullion to the transferor, except that (a) in case of silver bullion produced from materials containing silver which has not previously entered into industrial, commercial, or monetary use, the cost to a transferor who is the producer shall be deemed to be the market price at the time of production determined in accordance with regulations issued hereunder; (b) in the case of an interest in silver bullion acquired by the transferor otherwise than for valuable consideration, the cost shall be deemed to be the cost thereof to the last previous transferor by whom it was acquired for a valuable consideration; and (c) in the case of any interest in silver bullion acquired by the transferor (after April 15, 1934) in a wash sale, the cost shall be deemed to be the cost to him of the interest transferred by him in such wash sale, but with proper adjustment, in accordance with regulations under this subdivision, when such interests are in silver bullion for delivery at different times. "The term 'transfer' means a sale, agreement of sale, agreement to sell, memorandum of sale or delivery of, or transfer, whether made by assignment in blank or by any delivery, or by any paper or agreement or memorandum or any other evidence of transfer or sale; or means to make a transfer as so defined. "The term 'interest in silver bullion' means any title or claim to, or interest in, any silver bullion or contract therefor. "The term 'allowed expenses' means usual and necessary expenses actually incurred in holding, processing, or transporting the interest in silver bullion as to which an interest is transferred (including storage, insurance, and transportation charges but not including interest, taxes, or charges in the nature of overhead) determined in accordance with regulations issued hereunder. "The term 'memorandum' means a bill, memorandum, agreement, or other evidence of a transfer. "The term 'wash sale' means a transaction involving the transfer of an interest in silver bullion and, within thirty days before or after such transfer, the acquisition by the same person of an interest in silver bullion. Only so much of the interest so acquired as does not exceed the interest so transferred, and only so much of the interest so transferred as does not exceed the interest so acquired, shall be deemed to be included in the wash sale. "The term 'silver bullion' means silver which has been melted, smelted, or refined and is in such state or condition that its value depends primarily upon the silver content and not upon its form." SEC. 9. The Secretary of the Treasury is hereby authorized to issue, with the approval of the President, such rules and regulations as the Secretary of the Treasury may deem necessary or proper to carry out the purposes of this Act, or of any order issued hereunder. SEC. 10. As used in this Act The term "person" means an individual, partnership, association, or corporation; The term "the continental United States" means the States of the United States, the District of Columbia, and the Territory of Alaska; The term "monetary value" means a value calculated on the basis of $1 for an amount of silver or gold equal to the amount at the time contained in the standard silver dollar and the gold dollar, respectively; The term "stocks of silver" means the total amount of silver at the time owned by the United States (whether or not held as security for outstanding currency of the United States) and of silver contained in coins of the United States at the time outstanding; The term "stocks of gold" means the total amount of gold at the time owned by the United States, whether or not held as a reserve or as security for any outstanding currency of the United States. SEC. 11. There is authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $500,000, which shall be available for expenditure under the direction of the President and in his discretion, for any purpose in connection with the carrying out of this Act; and there are hereby authorized to be appropriated annually such additional sums as may be necessary for such purposes. SEC. 12. The right to alter, amend, or repeal this Act is hereby expressly reserved. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby. SEC. 13. All Acts and parts of Acts inconsistent with any of the provisions of this Act are hereby repealed, but the authority conferred in this Act upon the President and the Secretary of the Treasury is declared to be supplemental to the authority heretofore conferred. Approved, June 19, 1934, 9 p. m. Senator MALONEY. I should also like to have made a part of the record Public, No. 165, Seventy-sixth Congress. (The document referred to is as follows:) [PUBLIC-No. 165–76th Congress] [CHAPTER 260-1ST SESSION] [H. R. 3325] AN ACT To extend the time within which the powers relating to the stabilization fund and alteration of the weight of the dollar may be exercised Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 10 of the Gold Reserve Act of 1934, approved January 30, 1934, as amended, is further amended by striking out the period at the end of such subsection and adding thereto the words "and to the Congress. SEC. 2. Subsection (c) of section 10 of the Gold Reserve Act of 1934, approved January 30, 1934, as amended, is further amended to read as follows: "(c) All the powers conferred by this section shall expire June 30, 1941, unless the President shall sooner declare the existing emergency ended and the operation of the stabilization fund terminated." SEC. 3. The second sentence added to paragraph (b) (2) of Section 43, title III, of the Act approved May 12, 1933, by section 12 of said Gold Reserve Act of 1934, as amended, is further amended to read as follows: "The powers of the President specified in this paragraph shall be deemed to be separate, distinct, and continuing powers, and may be exercised by him, from time to time, severally or together, whenever and as the expressed objects of this section in his judgment may require; except that such powers shall expire June 30, 1941, unless the President shall sooner declare the existing emergency ended." SEC. 4. (a) Each United States coinage mint shall receive for coinage into standard silver dollars any silver which such mint, subject to regulations prescribed by the Secretary of the Treasury, is satisfied has been mined subsequently to July 1, 1939, from natural deposits in the United States or any place subject to the jurisdiction thereof. (b) The Director of such mint with the consent of the owner shall deduct and retain of such silver so received 45 per centum as seigniorage for services performed by the Government of the United States relative to the coinage and delivery of silver dollars. The balance of such silver so received, that is 55 per centum, shall be coined into standard silver dollars and the same or any equal number of other standard silver dollars shall be delivered to the owner or depositor of such silver, and no provisions of law taxing transfers of silver shall extend or apply to any delivery of silver to a United States mint under this section. The 45 per centum of such silver so deducted shall be retained as bullion by the Treasury or coined into standard silver dollars and held or disposed of in the same manner as other bullion or silver dollars held in or belonging to the Treasury. (c) The Secretary of the Treasury is authorized to prescribe regulations to carry out the purposes of this section. Such regulations shall contain provisions substantially similar to the provisions contained in the regulations issued pursuant to the Act of Congress approved April 23, 1918 (40 Stat. L., p. 535), known as the Pittman Act, with such changes as he shall determine prescribing how silver tendered to such mints shall be identified as having been produced from natural deposits in the United States or any places subject to its jurisdiction subsequent to July 1, 1939. Approved, July 6, 1939. Senator MALONEY. I should like to advise the members of the subcommittee that I have invited the following officials of the Government to testify, if they so desire, on the bill. I would make the point that it was not a request but an invitation: Hon. James F. Byrnes, Director of Economic Stabilization; Mr. Lou E. Holland, Chairman, Smaller War Plants Corporation, Hon. Francis Biddle, Attorney 78102-42- --2 General, Secretary of the Navy Knox; Secretary of War Stimson; Donald M. Nelson, Chairman of the War Production Board; Governor Marriner S. Eccles, of the Federal Reserve Board; and Secretary of the Treasury Morgenthau. And the Navy will be represented at our hearings, as well as the War Production Board, and perhaps the Treasury Department. I should like to put in the record at this point a self-explanatory letter from the Secretary of the Treasury, which I think I might read [reading]: OCTOBER 13, 1942. MY DEAR MR. CHAIRMAN: Further reference is made to your letter of September 15, 1942, relative to S. 2768, to authorize the use for war purposes of silver held or owned by the United States. It is understood that it is the purpose of S. 2768 to permit the silver which is being lend-leased by this Government for use in war industries to be maintained as security for outstanding silver certificates and to permit the sale or other disposition of all silver which is not so held. This Department approves of any such legislation which is designed to permit the use of silver held or owned by the United States for purposes which will further the successful prosecution of the war and, accordingly, recommends the enactment of S. 2768, as modified by the suggestions contained in this letter. Reference is made to the following proviso in S. 2768: "Provided, That no silver shall be sold under this Act at less than its cost to the United States or at less than the then current market price for silver, whichever is the higher." In this connection, it should be noted that the silver now held in the Treasury has been acquired at various cost prices, the average cost to the United States of all silver not now held as security for outstanding silver certificates being approximately $0.485 per fine troy ounce. Furthermore, there is no single current market price for silver. Prices vary depending upon various circumstances and ceiling prices established by the Office of Price Administration vary for silver of different categories. It is, accordingly, suggested that the above-quoted proviso be changed so as to read as follows: "Provided, That the average price for all silver sold under this Act shall not be less than 50 cents per fine troy ounce." It should also be noted that there is a situation in which silver might be made available for war purposes, which is not specifically covered by S. 2768. Approximately 350,000,000 ounces of silver now held as security for outstanding silver certificates is in the form of standard silver dollars. Approximately 35,000,000 ounces of this silver is in the form of coins not fit for circulation. Less than 70 million standard silver dollars are now in circulation and it is unlikely that there will be any heavy demand for those held by the Treasury. If the Congress desires that any part of the silver dollars held in the Treasury be used as provided in S. 2768 for other silver held by the United States, it will be necessary to add certain provisions to S. 2768, including an authorization for an appropriation for melting losses. Since the War Production Board is primarily concerned with the problem of seeing to it that all available silver is allocated in such a manner as to best further the war effort, the Department would, of course, consult with the War Production Board in disposing of silver pursuant to the provisions of the proposed legislation. The Department has been advised by the Bureau of the Budget that there is no objection to the submission of this report to your Committee. Very truly yours, Hon. ROBERT F. WAGNER, H. MORGENTHAU, Jr., United States Senate. Chairman, Committee on Banking and Currency, I would like to read, with the further permission and forbearance of the subcommittee, a letter addressed to Senator Wagner by Mr. Nelson of the War Production Board [reading]: 1 OCTOBER 10, 1942. The Honorable ROBERT F. WAGNER, Chairman, Committee on Banking and Currency, United States Senate. DEAR SENATOR WAGNER: This is in answer to your letter of September 15, in which you requested my views on S. 2768, a bill to authorize the use for war purposes of silver held and owned by the United States. This legislation would authorize the President, through the Secretary of the Treasury, to sell, lease, or dispose of, upon such terms as the Secretary sees fit, the silver owned by the United States. The Secretary is authorized to sell this silver for use in connection with the war effort, "including but not limited to" essential war and civilian needs. I wish to be certain that the silver purchases will still be subject to control by the War Production Board through its priority and allocation powers, so that essential requirements for the war effort can be met. I think it would be advisable, therefore, to add the phrase "upon the recommendation of the Chairman of the War Production Board" after the words "through the Secretary of the Treasury," at the end of line 4, page 1. With the above recommendation, I approve the passage of this bill. The Bureau of the Budget has indicated that it has no objection to the submission of this letter. Sincerely, DONALD M. NELSON. I would like also to put in the record a communication addressed to Senator Wagner from the Attorney General [reading]: Hon. ROBERT F. WAGNER, Chairman, Committee on Banking and Currency, OCTOBER 12, 1942. United States Senate, Washington, D. C. MY DEAR SENATOR: This acknowledges your request of October 7 for my views concerning a bill (S. 2768) to authorize the use for war purposes of silver held or owned by the United States. As this legislation does not impinge on any activities of this Department and relates to matters of policy within the jurisdiction of the Treasury Department, I would prefer not to make any suggestions concerning the merits of the legislation. You may desire to obtain the views of the Secretary of the Treasury concerning the matter. Sincerely yours, FRANCIS BIDDLE, I should like also to put in the record a letter from the Chairman of the Federal Reserve System [reading]: Hon. FRANCIS MALONEY, United States Senate, Washington, D. C. OCTOBER 9, 1942. DEAR SENATOR MALONEY: I have your letter of October 8, 1942, regarding the hearings before a special subcommittee of the Committee on Banking and Currency of the Senate respecting S. 2768, to authorize the use for war purposes of silver held or owned by the United States, which will commence on Wednesday morning, October 14, 1942. I have not as yet had the opportunity to consider the proposed bill, but I shall get in touch with you early next week so as to advise whether I would wish to appear as a witness or designate someone else in the Board's organization to do so. It may also develop that our interest in the matter can be satisfied by sending you a statement respecting the bill. Sincerely yours, M. S. ECCLES, Chairman. I should like also to put in the record a somewhat similar letter from the Attorney General, addressed to me [reading]: Hon. FRANCIS MALONEY, United States Senate, Washington, D. C. OCTOBER 10, 1942. MY DEAR SENATOR: This acknowledges your letter of October 8 inviting me or someone under my jurisdiction to testify before a subcommittee of the Čommittee on Banking and Currency of the Senate, at hearings on a bill (S. 2768) to authorize the use for war purposes of silver held or owned by the United States. I appreciate your courtesy in this matter but desire to suggest that in view of the fact that the legislation relates to a matter within the jurisdiction of the Treasury Department, you will probably find it more satisfactory to procure the testimony desired by you from the Secretary of the Treasury or someone under his jurisdiction. With kind personal regards, FRANCIS BIDDLE, Attorney General. Before we proceed to hear witnesses, Senator Danaher has some material he would like to put in the record. Senator DANAHER. I should like it to appear that I have received many, many dozens of communications from constituents in Connecticut, who report the impact of the situation as it exists today upon their individual welfare. I should like to have the members of the subcommittee know that the material I refer to is available for the inspection of the subcommittee when we later meet in executive session with reference to the bill. On that account I will not ask that they be printed in full in the record. I should also like to say that at the time of previous consideration of other measures a record has been made, which is quite complete, Mr. Chairman, and therefore the status of the silver situation is quite apparent. Handy and Harman, analysts, have recently compiled a brief résumé of "The Silver Situation Today," under that title I mean, and it appeared in the edition of Saturday, August 29, 1942, in the Bridgeport Life. Since it is brief but very pointed I should like to have it appear in the record in full. Senator MALONEY (chairman of the subcommittee). Without objection the committee reporter will make it a part of the record. (The article referred to is as follows:) [From the Bridgeport Life, August 29, 1942] THE SILVER SITUATION TODAY In response to numerous requests, Handy and Harman outline the silver situation FOREIGN SILVER This is silver produced outside of the United States, or domestic production prior to July 1, 1939. Most of it comes from Mexico, Canada, and South America. The production of foreign silver in the Western Hemisphere during 1941 was approximately 135,000,000 ounces. It is running at about the same rate in 1942, but some of the silver is not reaching this market. During 1941, about 72,000,000 ounces of foreign silver was purchased by the United States Treasury Department at 35 cents an ounce. During the first half of 1942 such purchases were negligible. The use of foreign silver for direct war purposes has increased tremendously. Silver brazing alloys, silver for bearings and contact metals represent the principal uses. In addition, silver for some purposes other than war production but considered to be essential are being given priorities by the War Production Board |