Statement of- Biddle, Hon. Francis, Attorney General, Washington, D. C. Boynton, H. W., treasurer, Handy & Harman, New York, N. Y... Burke, Dennis N., president, International Photo Engravers Union, Eccles, Hon. Marriner S., Chairman, Board of Governors, Federal Reserve System, Washington, D. C. Green, Hon. Theodore Francis, a Senator from Rhode Island. Hirsch, M. Fred, M. Fred Hirsch Co., Inc., silversmiths, Jersey City, Ingleby, George A., president, New England Manufacturing Jewelers' Keleher, Rear Admiral T. J., Office of Procurement Material, Navy Kinsman, Mr., Towle Co., Newburyport, Mass.. Lund, Richard J., Chief, Miscellaneous Minerals Branch, War Pro- Spahr, Walter E., secretary of the Economists' National Committee Stieff, Gideon N., The Stieff Co., Baltimore, Md. Stimson, Hon. Henry L., Secretary of War, Washington, D. C....... Thompson, Martin N., president, Local 19593, American Federation Copy of Public, No. 438, Seventy-third Congress- Copy of Public, No. 165, Seventy-sixth Congress- Article submitted by Senator Danaher, entitled "The Silver Situation Today," by Handy and Harman_... Exhibit No. 1. "Members of the New England Manufacturing Jewelers' and Letter submitted by Senator Maloney, from Irving C. Fox, counsel, Na- Copy of committee print (S. 2768), October 15, 1942. Letter addressed to Senator Wagner from Senator Wiley, submitting state- ments of Pen and Pencil Workers Union, Local 19,593, Fox River Valley; TO AUTHORIZE THE USE FOR WAR PURPOSES OF SILVER WEDNESDAY, OCTOBER 14, 1942 UNITED STATES SENATE, SUBCOMMITTEE ON COINAGE AND PHILIPPINE CURRENCY OF Washington, D. C. Present: Senators Maloney (chairman of the subcommittee), Clark of Idaho, Danaher, and Butler. Present also: Senator Green. Senator MALONEY (chairman of the subcommittee). The subcommittee will come to order. The purpose of this meeting is to consider S. 2768, to authorize the use for war purposes of silver held or owned by the United States. I might explain that this is a subcommittee of the Senate Committee on Banking and Currency. The committee reporter will make the bill a part of the record. (The bill, S. 2768, is as follows:) [S. 2768, 77th Cong., 2d sess.] A BILL To authorize the use for war purposes of silver held or owned by the United States Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That notwithstanding any other provision of law, the President is authorized, through the Secretary of the Treasury, to sell, lease, or otherwise dispose of, upon such terms as the Secretary of the Treasury shall deem expedient, to any person, partnership, association, or corporation, or any department of the Government, or to the government of any country whose defense the President deems vital to the defense of the United States, for use in connection with the war effort, including but not limited to the making of munitions of war and the supplying of civilian needs contributing to the war effort, and the converting of existing plants to those purposes, any silver held or owned by the United States: 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: Provided further, That at all times the ownership and the possession or control of an amount of silver of a monetary value equal to the face amount of all outstanding silver certificates heretofore or hereafter issued by the Secretary of the Treasury shall be maintained by the Treasury. SEC. 2. Authority to sell silver under this Act shall expire on January 1. 1944, Senator MALONEY. With the permission of the members of the subcommittee and solely for the purpose of the convenience of the subcommittee and Senators, I should like to have printed in the record at this point a copy of Public, No. 438, Seventy-third Congress. 1 (The document referred to is as follows:) [PUBLIC NO. 438-73D CONGRESS] AN ACT To authorize the Secretary of the Treasury to purchase silver, issue silver certificates, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the short title of this Act shall be the "Silver Purchase Act of 1934." SEC. 2. It is hereby declared to be the policy of the United States that the proportion of silver to gold in the monetary stocks of the United States should be increased, with the ultimate objective of having and maintaining, one fourth of the monetary value of such stocks in silver. SEC. 3. Whenever and so long as the proportion of silver in the stocks of gold and silver of the United States is less than one-fourth of the monetary value of such stocks, the Secretary of the Treasury is authorized and directed to purchase silver, at home or abroad, for present or future delivery with any direct obligations, coin, or currency of the United States, authorized by law, or with any funds in the Treasury not otherwise appropriated, at such rates, at such times, and upon such terms and conditions as he may deem reasonable and most advantageous to the public interest: Provided, That no purchase of silver shall be made hereunder at a price in excess of the monetary value thereof: And provided further, That no purchases of silver situated in the continental United States on May 1, 1934, shall be made hereunder at a price in excess of 50 cents a fine ounce. SEC. 4. Whenever and so long as the market price of silver exceeds its monetary value or the monetary value of the stocks of silver is greater than 25 per centum of the monetary value of the stocks of gold and silver, the Secretary of the Treasury may, with the approval of the President and subject to the provisions of section 5, sell any silver acquired under the authority of this Act, at home or abroad, for present or future delivery, at such rates, at such times, and upon such terms and conditions as he may deem reasonable and most advantageous to the public interest. SEC. 5. The Secretary of the Treasury is authorized and directed to issue silver certificates in such denominations as he may from time to time prescribe in a face amount not less than the cost of all silver purchased under the authority of section 3, and such certificates shall be placed in actual circulation. There shall be maintained in the Treasury as security for all silver certificates heretofore or hereafter issued and at the time outstanding an amount of silver in bullion and standard silver dollars of a monetary value equal to the face amount of such silver certificates. All silver certificates heretofore or hereafter issued shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues, and shall be redeemable on demand at the Treasury of the United States in standard silver dollars; and the Secretary of the Treasury is authorized to coin standard silver dollars for such redemption. SEC. 6. Whenever in his judgment such action is necessary to effectuate the policy of this Act, the Secretary of the Treasury is authorized, with the approval of the President, to investigate, regulate, or prohibit, by means of licenses or otherwise, the acquisition, importation, exportation, or transportation of silver and of contracts and other arrangements made with respect thereto; and to require the filing of reports deemed by him reasonably necessary in connection therewith. Whoever willfully violates the provisions of any license, order, rule, or regulation issued pursuant to the authorization contained in this section shall, upon conviction, be fined not more than $10,000 or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both. SEC. 7. Whenever in the judgment of the President such action is necessary to effectuate the policy of this Act, he may by Executive order require the delivery to the United States mints of any or all silver by whomever owned or possessed. The silver so delivered shall be coined into standard silver dollars or otherwise added to the monetary stocks of the United States as the President may determine; and there shall be returned therefor in standard silver dollars, or any other coin or currency of the United States, the monetary value of the silver so delivered less such deductions for seigniorage, brassage, coinage, and other mint charges as the Secretary of the Treasury with the approval of the President shall have determined: Provided, That in no case shall the value of the amount returned therefor be less than the fair value at the time of such order of the silver required to be delivered as such value is determined by the market price over a reasonable period terminating at the time of such order. The Secretary of the Treasury shall pay all necessary costs of the transportation of such silver and standard silver dollars, coin, or currency, including the cost of insurance, protection, and such other incidental costs as may be reasonably necessary. Any silver withheld in violation of any Executive order issued under this section or of any regulations issued pursuant thereto shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure, and condemnation of property imported into the United States contrary to law; and, in addition, any person failing to comply with the provisions of any such Executive order or regulation shall be subject to a penalty equal to twice the monetary value of the silver in respect of which such failure occurred. SEC. 8. Schedule A of title VIII of the Revenue Act of 1926, as amended (relating to stamp taxes), is amended by adding at the end thereof a new subdivision to read as follows: "10. SILVER, AND SO FORTH, SALES AND TRANSFERS.—Ön all transfers of any interest in silver bullion, if the price for which such interest is or is to be transferred exceeds the total of the cost thereof and allowed expenses, 50 per centum of the amount of such excess. On every such transfer there shall be made and delivered by the transferor to the transferee a memorandum to which there shall be affixed lawful stamps in value equal to the tax thereon. Every such memorandum shall show the date thereof, the names and addresses of the transferor and transferee, the interest in silver bullion to which it refers, the price for which such interest is or is to be transferred and the cost thereof and the allowed expenses. Any person liable for payment of tax under this subdivision (or anyone who acts in the matter as agent or broker for any such person) who is a party to any such transfer, or who in pursuance of any such transfer delivers any silver bullion or interest therein, without a memorandum stating truly and completely the information herein required, or who delivers any such memorandum without having the proper stamps affixed thereto, with intent to evade the foregoing provisions, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not exceeding $1,000 or be imprisoned not more than six months, or both. Stamps affixed under this subdivision shall be canceled (in lieu of the manner provided in section 804) by such officers and in such manner as regulations under this subdivision shall prescribe. Such officers shall cancel such stamps only if it appears that the proper tax is being paid, and when stamps with respect to any transfer are so canceled, the transferor and not the transferee shall be liable for any additional tax found due or penalty with respect to such transfer. The Commissioner shall abate or refund, in accordance with regulations issued hereunder, such portion of any tax hereunder as he finds to be attributable to profits (1) realized in the course of the transferor's regular business of furnishing silver bullion for industrial, professional, or artistic use and (a) not resulting from a change in the market price of silver bullion, or (b) offset by contemporaneous losses incurred in transactions in interests in silver bullion determined, in accordance with such regulations, to have been specifically related hedging transactions; or (2) offset by contemporaneous losses attributable to changes in the market price of silver bullion and incurred in transactions in silver foreign exchange determined, in accordance with such regulations, to have been hedged specifically by the interest in silver bullion transferred. The provisions of this subdivision shall extend to all transfers in the United States of any interest in silver bullion, and to all such transfers outside the United States if either party thereto is a resident of the United States or is a citizen of the United States who has been a resident thereof within three months before the date of the transfer or if such silver bullion or interest therein is situated in the United States; and shall extend to transfers to the United States Government (the tax in such cases to be payable by the transferor), but shall not extend to transfers of silver bullion by deposit or delivery at a United States mint under proclamation by the President or in compliance with any Executive order issued pursuant to section 7 of the Silver Purchase Act of 1934. The tax under this subdivision on transfers enumerated in subdivision 4 shall be in addition to the tax under such subdivision. This subdivision shall apply (1) with respect to all transfers of any interest in silver bullion after the enactment of the Silver Pruchase Act of 1934, and (2) with respect to all transfers of any interest in silver bullion on or after May 15, 1934, and prior to the enactment of the Silver Purchase Act of 1934, except that in such cases it shall be paid by the transferor in such manner and at such time as the Commissioner, with the |