punishment, or to any penalty or forfeiture, for or on account of any transaction, matter, or thing concerning which he is compelled to testify or produce evidence, documentary or otherwise, after having claimed his privilege against selfincrimination, except that any such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying. The President shall not publish or disclose any information obtained under this section which the President deems confidential or with reference to which a request for confidential treatment is made by the person furnishing such information, unless the President determines that the withholding thereof is contrary to the interest of the national defense and security; and anyone violating this provision shall be guilty of a felony and, upon conviction thereof, shall be fined not exceeding $1,000 or be imprisoned not exceeding two years, or both.

PENALTIES

SEC. 13. Any person who willfully performs any act prohibited, or willfully fails to perform any act required by any provision of this Act or any rule, regulation, or order thereunder, shall upon conviction be fined not more than $10,000 or imprisoned for not more than two years, or both.

JURISDICTION OF THE UNITED STATES COURTS

SEC. 14. (a) The district courts of the United States, and the United States courts of any Territory or other place subject to the jurisdiction of the United States, shall have jurisdiction of violations of this Act or any rule, regulation, or order or subpena thereunder, and of all civil actions under this Act to enforce any liability or duty created by, or to enjoin any violation of this Act or any rule, regulation, order, or subpena thereunder.

(b) Any criminal proceeding on account of any such violation may be brought in any district in which any act, failure to act, or transaction constituting the alleged violation occurred. Any such civil action be brought in any such district or in the district in which the defendant resides or transacts business. Process in such cases, criminal or civil, may be served in any district wherein the defendant resides or transacts business or wherever the defendant may be found; and subpenas for witnesses who are required to attend a court in any district in any such cases may run into any other district. No costs shall be assessed against the United States in any proceeding under this Act.

EXCULPATORY CLAUSE

SEC. 15. No person shall be held liable for damages or penalties for any default under any contract or order which shall result directly or indirectly from compliance with this Act or any rule, regulation, or order issued thereunder, notwithstanding that any such rule, regulation, or order shall thereafter be declared by judicial or other competent authority to be invalid.

EXEMPTION FROM ADMINISTRATIVE PROCEDURE ACT

SEC. 16. Functions exercised under this Act shall be excluded from the operation of the Administrative Procedure Act except as to the requirements of sections 3 and 10 thereof.

SEPARABILITY

SEC. 17. If any provision of this Act or the application thereof of any person or circumstance is held invalid, the validity of the remainder of the Act and of the application of such provision to other persons and circumstances shall not be affected thereby.

DEFINITIONS

SEC. 18. For the purpose of this Act

(1) The term "natural rubber" means all forms and types of tree, vine, or shrub rubber, including guayule and natural rubber latex, but excluding reclaimed natural rubber;

(2) The term "chemical rubber" means any product of chemical synthesis similar in general properties and applications to natural rubber, and specifically capable of vulcanization, produced in the United States, not including reclaimed chemical rubber;

(3) The term "general-purpose chemical rubber" means a chemical rubber of the butadiene-styrene type generally suitable for use in the manufacture of transportation items, as well as any other type of chemical rubber equally or better suited for use in the manufacture of transportation items as determined from time to time by the President;

(4) The term "special-purpose chemical rubber" means a chemical rubber of the types now known as butyl, neoprene, or N-types (butadiene-acrylonitrile types) as well as any chemical rubber of similar or improved quality applicable to similar uses, as determined from time to time by the President;

(5) The term "rubber-producing facilities" means facilities, in whole or in part, for the manufacture of chemical rubber, and the component materials thereof, including, but not limited to, buildings and land in which or on which such facilities may be located and all machinery and utilities associated therewith;

(6) The term "rated production capacity" means the productive capacity assigned to any rubber-producing facilities at time of authorization of construction or as thereafter amended in authorizations of additional construction or alterations thereto and used in published reports and in the records of the Office of Rubber Reserve, Reconstruction Finance Corporation, or successor agency, or privately owned plants, as determined by the President;

(7) The term "component materials" means the material, raw, semifinished, and finished, necessary for the manufacture of chemical rubber;

(8) The term "stand-by condition" means the condition in which rubberproducing facilities, in whole or in part, are placed when determined to be not needed for current operations, but are maintained so as to be readily available for the production of chemical rubber or component materials;

(9) The term "person" means any individual, firm, copartnership, business trust, corporation, or any organized group of persons whether incorporated or not, and except for the provisions of section 13 any Government department, agency, officer, corporation, or instrumentality of the United States; and

(10) The term "United States" includes the several States, the District of Columbia, the Territories of Alaska and Hawaii, and Puerto Rico.

AUTHORIZATION FOR APPROPRIATIONS

SEC. 19. (a) There are hereby authorized to be appropriated such sums as may be necessary and appropriate to carry out the provisions and purposes of this Act.

(b) Until such time as appropriations herein authorized are made, any department or agency may, in order to carry out its functions, powers, and duties under this Act, continue to incur obligations and make expenditures in accordance with laws in effect on March 31, 1948.

EFFECTIVE DATE

SEC. 20. This Act shall become effective on April 1, 1948.

[H. Rept. No. 1409, 80th Cong., 2d sess.]

The Committee on Armed Services to whom was referred the bill (H. R. 5314) to strengthen national security and the common defense by providing for the maintenance of an adequate domestic rubber-producing industry, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill H. R. 5314 as amended do pass.

The amendments are as follows:

On page 10, line 23, after the word "one" add the word "department,"

On page 11, line 2, strike out the word "offices" and insert in lieu thereof the word "officers".

On page 12, line 5, strike out the words "sponsored by" and insert in lieu thereof the words "entered into with".

On page 12, strike out all of lines 9, 10, and 11 and insert in lieu thereof the following:

"(1) Effectuate cessation of further accumulation of technical information or rights to patents under the agreement dated December 19, 1941, as supplemented June 12, 1942, between the Government and others;".

On page 12, line 18, strike out the words "or sponsored by”.

On page 13, line 4, strike out the words "sponsored by" and insert in lieu thereof the word "with".

On page 13, line 19, strike out the words "sponsored by" and insert in lieu thereof the words "agreement with".

On page 13, line 21, strike out the word "office" and insert in lieu thereof the word "fficer".

On page 20, line 6, after the word "and" add the words "except for the provisions of section 13".

HISTORY AND PURPOSE OF THE PROPOSED LEGISLATION

In March of 1947 the Armed Services Committee reported favorably to the House, House Joint Resolution 118, which after amendment by the Senate. concurred in by the House, became Public Law 24. Among other things, it provided that Congress make a thorough study and investigation of the means of maintaining a technologically advanced and rapidly expandible domestic rubber-producing industry. It was hoped that legislation to accomplish this objective could have been ready before the end of the first session, but this proved impracticable due to the problems involved. Pending the enactment of permanent legislation on the subject, Public Law 24 extended allocation, inventory, and specification controls over rubber as well as the authority of the Government to produce and sell rubber until March 31, 1948.

In the meantime, the Armed Services Committee assumed the responsibility of making a thorough study of the entire chemical-rubber situation. The proposed legislation represents the committee's conclusions. It is the result of months of study and long hearings, an on-the-spot examination of some of the plants involved, and careful preparation.

On December 8, 1941, our total natural-rubber supply consisted of 533,000 long tons and 100,000 long tons afloat bound for the United States. This amount was less than 1 year's peacetime consumption, and a great deal less than the 700,000 long tons per year required for military and essential civilian needs. With the fall of Singapore, 90 percent of the world's natural-rubber supply went into the enemy hands. From January 1, 1942, to VJ-day, we imported into the United States approximately 315,000 long tons of natural rubber. In other words, our total imports for more than 32 years were not sufficient to supply even a half year's wartime need.

This problem became so serious that in September 1942, Bernard Baruch stated to the President:

"We find the existing situation to be so dangerous that unless corrective measures are taken immediately this country will face both a military and civilian collapse."

A substitute for natural rubber had to be found. Thus we turned to synthetic or chemical rubber to overcome the major part of the problem. We produced, in 1941, about 8,000 tons of chemical rubber in small privately owned plants. To augment this production, the United States expended $697,000,000 to build a great synthetic-rubber industry. By 1944, this industry, owned by the Government and operated by private persons, was capable of producing annually more than 1,000,000 long tons of chemical rubber. Had it not been overshadowed by the atomic bomb, this tremendous achievement would undoubtedly have been the outstanding accomplishment of the war effort.

At the end of the war the Government began closing down some of its facilities. It was felt that the demand for rubber would drop, and that the supply of natural rubber would slowly increase until, by the end of 1947, it would be almost sufficient to supply peacetime needs. In the meantime, the Congress had enacted the Strategic and Critical Materials Stock Piling Act, and natural rubber was included as one of the major items to be purchased and rotated in our stock pile.

All during the war and, indeed, until the enactment of Public Law 24, the Government had been the sole purchaser of natural rubber. Public Law 24, however, put an end to this power, and restored private purchasing. During the hearings on House Joint Resolution 118 almost everyone expressed the opinion that natural rubber would soon be in ample supply.

However, it was also agreed, following the publication of the Interagency Policy Committee Report, that the United States must never again be dependent upon a foreign source for all of its rubber. It was agreed, and it is even a stronger belief today, that the United States must maintain and develop a chemical-rubber policy and program.

The task, therefore, was to prepare legislation that would provide for our national security, above everything else.

In May of 1947, the subcommittee charged with preparing the legislation called an informal meeting of all persons interested in chemical rubber. It announced then that it desired the advice of Government agencies, members of the rubbermanufacturing industry, and others in preparing this legislation. At that time, it recognized certain problems that had to be solved, such as:

1. How much synthetic rubber should be produced annually in this country and, as a corollary to that, how great a quantity of rubber should we be capable of producting in stand-by plants?

2. How we will assure production and consumption of the required amount of synthetic rubber.

3. What method should we adopt in disposing of Government-owned plants, if it is determined that these plants are to be sold or leased to private industry? 4. What steps must we take to assure technological development in the production and use of synthetic rubber?

5. What protection against foreign imports of natural-rubber products should be established?

6. What must be done regarding specialty-type synthetic rubber?

7. What effect will a synthetic-rubber program have upon the world market? These problems and many others had to be solved. After hearing comments from many parties, the subcommittee concluded that no action could be taken during the first session. It requested all interested parties to prepare recommendations on the subject. It particularly pointed out to members of the rubbermanufacturing industry, since this legislation affected them more directly than any others, that, if possible, they should present their united views to the subcommittee. It especially desired the opinions of the small manufacturer of rubber products.

Following this, an inspection of many existing facilities was arranged. This 'took some members of the subcommittee to Texas, Kentucky, and Ohio, where they were able to observe the tremendous size and complexities of the facilities. The subcommittee held hearings as it traveled from place to place-public hearings where the comments of plant operators, labor, and private citizens were recorded. It then returned to Washington and began formal hearings in December. These hearings developed differences of opinion on many problems and unanimity on others. It was generally agreed that for national security reasons we must maintain a domestic rubber-producing industry. The size to be maintained in actual operation has been recommended all the way from over 300,000 long tons a year down to 100,000. The subcommittee determined that a minimum production and consumption of 225,000 tons a year would satisfy the requirement of keeping in -operation a diversity of production processes and allow for geographic dispersal for security reasons.

Statistical studies by Government and industry of requirements in a future emergency showed that we would require in existence a production capacity of about 600,000 tons. The proposed bill carries provisions for such production capacities.

Another point on which there is general agreement is that we must assure the consumption of what has to be produced, until such time as the quality of chemical rubber is improved so that it is equal or better than natural rubber in a majority of rubber products, especially in tires for trucks and heavy rolling equipment. The subcommittee examined various ways in which this could be accomplished, including tariffs, import quotas, subsidies, complex certificate schemes, and specification control in products. There was rather general agreement that the continuation of specification control, which has proved to be workable during the war and reconversion period, was desirable.

Another problem of importance was wartime patent pooling and exchange of technical information, which is still in effect. The subcommittee concluded that more rapid advancement in technology would be possible under the traditional competitive private patent system, and thus the proposed legislation recommends the negotiation of a termination of wartime agreements.

The greatest area of disagreement throughout the hearings was how the rubberproducing facilities could best be operated to provide the greatest national security and an equitable industry position for all consumers of chemical rubber. The proposed legislation states a policy against disposal to private industry. but provides for possible eventual disposal with adequate safeguards, including final approval by the Congress through concurrent resolution.

SECTION-BY-SECTION ANALYSIS

Section 2 of the bill establishes a policy of maintaining in the United States a rapidly expandible rubber-producing industry of sufficient productive capacity to assure the availability in times of national emergency of adequate supplies of chemical rubber to meet the essential civilian, military, and naval needs of the country. It makes certain that these Government-owned rubber-producing facilities will be maintained in constant readiness for any possible emergency, and to assure their availability the bill establishes a congressional policy of retaining the ownership of the facilities at this time.

Section 3 of the bill gives the President the power to exercise allocation, specification, and inventory controls over natural and chemical rubber. This section repeats the phraseology of Public Law 24. It permits the President to require, by regulation, the use of chemical rubber, in such specific percentages as he sees fit, of both general-purpose rubber and special-purpose types of chemical rubber. It should be noted that for the first time the President is clearly given the power to require the use of chemical rubber. Existing law (Public Law 24) has been interpreted so as to provide only for the limited use of natural rubber, which is an indirect way of requiring the use of chemical rubber. The section has one noticeable proviso, namely, that the President must require the use annually of minimum amounts of general-purpose chemical rubber and special-purpose chemical rubber. However, the President may determine percentages above these amounts. Thus, he can maintain the present percentages of Rubber Order R-1, increase them if he deems it necessary, or reduce them, but to no lower percentages than will result in the consumption of established minimums.

Section 4 (a) of the bill permits the President to impose import restrictions on rubber products, so that manufacturers required to consume chemical rubber will not have to compete with all natural-rubber products.

Section 4 (b) permits the President to exempt from required chemical-rubber usage products manufactured for export exclusively.

Section 5 (a) establishes tonnages of 600,000 long tons of general-purpose chemical rubber and 75,000 long tons of special-purpose chemical rubber as the rated production capacity to be maintained continuously in the United States either in active operation or in stand-by condition.

Section 5 (b) provides that at least 45,000 long tons of the special-purpose chemical rubber referred to in section 5 (a) shall be of a type suitable for use in pneumatic inner tubes. This will assure the availability, in an emergency, of a domestic source of rubber for inner tubes.

Section 5 (c) provides that the production capacity referred to in section 5 (a) may include privately owned capacity, as well as facilities owned by the Government. This section will permit the inclusion of any new chemical-rubber-producing facilities constructed by private persons in the total capacity of the Nation, and consequently may allow the discontinuance of certain Government facilities as they become obsolete because of technological progress.

Section 5 (d) requires the actual production per year in the United States of a minimum of 200,000 long tons of general-purpose chemical rubber and a minimum actual production per year of 25,000 long tons of special-purpose chemical rubber (such as butyl, neoprene, etc.).. This production may include the output from facilities owned by private persons, as well as from Government operations. Thus, if private industry builds or acquires chemical-rubber-producing facilities which will satisfy the requirements of sections 5 (a) and (d), and are within the definition of chemical rubber, they may eventually supplant, entirely, the Government's rubber production. This, then, protects the required consumer and should encourage private industry to produce better and cheaper chemical rubber.

Section 5 (e) gives the President the power to determine what plants are to be operated and what plants are to be placed in stand-by. It permits the President to consider geographic dispersal of plants as well as diversity of manufacturing processes, both essential to the national security.

Section 5 (f) is inserted to assure that there will always be available at least one alcohol butadiene plant. This is essential from a raw-material-diversification position and for other reasons, such as possible priority demands on aviation fuel and possible new processes producing cheap alcohol.

Section 6 (a) and (b) stresses the importance of research and development for the improvement of quality and production processes in chemical rubber. Since the Government is at present producing chemical rubber, and may continue to do so for some time, it is necessary in the interests of national security that the