77th Congress i HOCSK OF REPRESENTATIVES f Report
1st Session    f (     No. 276
DEFENSE AID SUPPLEMENTAL APPROPRIATION BILL,
1941
March 18, 1941.—Committed to the Committee of the Whole House on the state
of the I'nion and ordered to be printed
Mr. Taylor, from the Committee on Appropriations, submitted the
following
;.n<r fltf^.imSv^ .EEPORT ;; ///.,//;V/,,',^/
[To accompany H. It. 4050]
The Committee on Appropriations submits the following report in
explanation of the accompanying bill entitled "A bill making supple-
mental appropriations for the national defense to provide aid to the
Government of any country whose defense the President deems vital
to the defense of the United States, and for other purposes," with a
recommendation for immediate consideration and early enactment.
The purpose of the bill is to provide the necessary appropriations
to carry into etlect an act to promote the defense of the United States,
approved March 11, 1941.
The Budget estimates upon which this bill is based were transmitted
to Congress on March 12 by the President in a letter addressed to the
Speaker of the House of Representatives (H. Doc. No. 139) requesting
a total of direct appropriations of $7,000,000,000.
The letter of the President to the Speaker is as follows:
The Whitb Hovm;,
Washington, March It, 191,1.
Hon. Sam Raybcrn,
SptaV.tr, House of Reprtstntatires,
Washington, D. C.
My Dear Mr. Speaker: This Nation has felt that it ffM imperative to the
security of America, that we encourage the democracies' heroic resistance to
aggressions, by not only maintaining but also increasing the flow of material
2 DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941
assistance from this country.   Therefore, the Congress has enacted and I have
signed H. R. 1776. .
Through this legislation our country lias determined to do its full part in
creating an adequate arsenal of democracy. This great arsenal will be here in
this country. It will be a bulwark of our own defense. It will be the source of
the tools oi defense for all democracies who are fighting to preserve themselves
against aggression.
While the defense equipment produced under H. R. 1776 remains under the
control of the United States until it is ready for disposition, it is the fixed policy
of this Government to make for democracies every gun, plane, and munition of
war that we possibly can.
To accomplish these objectives I am transmitting an estimate in the amount
of 87,000,000,000, the details of which are set forth in the accompanying letter
from the Director of the Bureau of the Budget.   I strongly urge the immediate
enactment of this appropriation.
Respectfully,
Franklin D. Roosevelt.
This Budget estimate was received on March 12. The committee
held hearings on March 13, 14, and 15, having before it the Secretary
of State, the Secretary of War, the Secretary of the Navy, the Chief of
Staff of the Army, the Assistant Chief of Naval Operations, the Direc-
tor General of the Office of Production Management (Mr. Knudsen),
the Director of the Bureau of the Budget, and other officials concerned
with the planning of the program.
The estimates upon which the bill is based were carefully prepared
after a survey of the requirements to carry out the act of March 11.
The work of the survey was facilitated by the furnishing by the
British Government of a specific list of its needs. That list has been
studied by the War and Navy Departments and other agencies
concerned and by the Office of Production Management and in con-
sultation with the representatives of that Government. The pro-
gram under the $7,000,000,000 has been coordinated and correlated
with our own needs for our own defense. It represents in terms of
money and quantities of defense articles the needs for assistance as
they can be seen at this time. The sum is stupendous and the program
is gigantic but the issue is greater than both.
The committee has incorporated in the bill the full amount of
the Budget estimate of $7,000,000,000 distributed according to the
10 categories of appropriation. The policy of aid to countries whose
defense may be determined to be vital to the defense of the United
States has been established with the approval of an act to promote
the defense of the United States on March 11 (H. R. 1776, Public
Law No. 11). The remaining step to start the full impact of that
policy is to implement with funds the agencies which the President
may designate to carry out the purposes of the law. In urging ex-
pedition m the granting of the appropriations the committee has in
mind the legislative history of H. R. 1776. That bill was introduced
in the House of Representatives on January 10, reported to the
House on January 30, passed the House on February 8, reported to the
benate on February 13, passed the Senate on March 8. The House
concurred in the Senate amendments on March 11 and the President
signed the bill immediately. The program now needs to proceed
with the utmost expedition consistent with prudence if it is to have
the effect which the law contemplates and which the American people
unquestionably overwhelmingly approve.
DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941
3
The committee invites attention to the remarks of the Secretary of
State at the opening of the hearing on these appropriations. They
are a clear and cogent restatement of the policy and purpose of our
Government in approving an act to promote the defense of the United
States and of the urgency of providing the appropriations called for
by the bill.   The following excerpt epitomizes the statement:
Secretary Hull. * * *. Our safety and the success of tho course upon
which we have set ourselves demand the courage and the wisdom to go full out in
furnishing adequate materia! aid to the nations whose defense is necessary to our
defense. When we do this, we take the most effective step possible in the circum-
stances to keep war away from our hemisphere, from our own Nation. Doing
this, we act in defense of our homes, our institutions, our liberties, our way of life.
In this task, half measures will not suffice. There is much to bo done and the
task is urgent. We must strive with all our will, all our power, and all our
resources. To be content with less would be to invite disaster. No people in
history have had such opportunity to learn from the tragic example of others.
We cannot stint and we must not falter.
It has been deemed advisable by the committee and in consonance
with the advice of the administrative officials concerned that all of the
usual minute justification of appropriations should not be discussed
in the printed hearing. The total appropriation of $7,000,000,000
and the several categories of the 10 appropriations constituting that
amount have been "broken down" for the committee into component
elements and the committee is possessed of the itemization used by
the Government agencies concerned in making up the individual
amounts of the categories of appropriation which comprise the total.
The omission of this detail from the printed hearing is not occasioned
by any desire to withhold information from the Congress and the
public to which they are entitled. Rather it is a desire to withhold
from certain foreign governments and their diligent agents detailed
information which they should not have. The procurements under
the funds in this bill arc for weapons and instruments of war to aid
countries which are engaged in a desperate struggle and whose success
in that combat is vital to us. These details have a strategic value
which must be carefully preserved. The committee ventures to
express the hope that what might only be considered bv some to be
"interesting news" to the citizens of this country shall not become
"strategic news" elsewhere to the harm of the very countries we are
trying to assist and to ourselves.
There has been speculation on the part of some that the production
of such vast amounts of defense articles for assistance to other countries
might injure our own defense. The committee desires to quote from
the very pertinent testimony of the Chief of Staff of the Army in
response to a question from Representative Ludlow:
Mr. Ludlow. General, I want to ask whether, in your opinion, providing these
articles in aid to Britain will in any way endanger our own defense.
General Marshall. No, sir; on the contrary I think that as we now have
matters arranged, the result will be to our advantage. Our own actual resources
will not be diminished until the finished products come off the production line
and are readv for shipment. Increased production will add to our strength until
the time for distribution begins. 1 will go further and say this; that I would be a
much happier man today if I thought we had reached a point in our production
development where wo actually had more capacity than we required. 1 hat would
be the most favorable situation possible for us, in view of present conditions.
The committee has also been advised with respect to the utilization
by the United States of the defense articles to be procured with these
DEFENSE AID SUPPLEMENTAL APPROPRIATION', 10-11
funds in the event they ore not disposed of for aid to any country
whose defense is vital to the United States.
Secretary Stimson made this statement, which shows very com-
mendable planning by the War Department and very commendable
cooperation by the British:
• • * Of the War Department items, practically all or 95 |x?rcent arc those
which can be used for our own Army purposes and which would be vitally useful
in ca-e Britain should fall. Only 5 percent represent purely British types of
weapon* including the facilities to bo erected for such weapons, as distinguished
from our American tvpes and thoir facilities. And even in the case of this last
5 percent, the plant facilities necessary for construction—that is,the tool- Mini the
plant* for these purely British items—could bo used by us on very short notice.
In other words, as you are doubtless familiar, I might give as an example that
the British use the ,303-calibcr riile. The facilities for the construction of that
rifle which thev arc using in this country today, under their contracts for its
creation, could be transferred so as to manufacture the .30-caliber ritle which we
use. I am informed, in about 2 months. And, in the same way, the facilities for
the ammunition could be transformed. And that is true largely of other British
items.
The committee has received from the Director General of the
Office of Production Management a resume* from last June to date of
the progress of our own defense efforts. Contracts placed for mate-
riel total $12,600,000,000. Contracts for construction on 302 Govern-
ment plants total $1,574,000,000. A total of 421 privately financed
prime contractors' plants have been certified for assistance in the
amount of §393,000,000. The total for facilities, governmental, or
privately owned assisted with Federal funds, is S2( 138,000,000 on a
total of 723 plants. In addition the British Government has (inanced
01 plants for a total of $171,000,000. Mr. Knudsen advised the com-
mittee that if funds are, provided for the facilities contemplated by
the bill they can be procured in a reasonable time and will meet the
needs for procurement of the materiel. Some existing facilities will be
availublc in addition to those wliich the British Government has
provided and which will become available rapidly as they run out of
British orders.
The committee has also made inquiry as to British resources and
orders placed in this country. The total of such orders placed by the
British Purchasing Mission to .Januarv 1, 1941, is $2,700,000,000.
Payments on these orders to March' 12 totaled $1,682,000,000,
consisting of SI,300,000,000 paid prior to Januarv 1, 1941, and
$382,000,000 paid during the period January 1 to March 12, 194 1.
All goods delivered under these orders have been paid for in cash and
some goods not delivered have been partially paid for in advance.
The committee has been assured that, none of the $7,000,000,000
contained in the bill will hv used to pay for materials under any orders
heretofore placed by the British Government and that sufficient
existing dollar resources and dollars to be acquired by them will be
available to pay for those orders. The estimated British biddings in
the Inited States as of January 1 last consisted of SG16,0OO(OOO of
marketable securities, $900,000,000 in direct investments, $292,000,000
in gold, $54,000,000 m official dollar balances, and $305,000,000 in
private dollar balances. These figures necessarily have changed as
these resources have been drawn upon between Januarv 1 and March
12 by $382,000,000 to meet payments for the goods "ordered. The
committee is also advised that the British assets in this country
insofar as they are not needed for payment on their orders here will
DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941 5
be given as security on defense articles which the United States may
furnish to them.
Britain is engaged in a terrific struggle. The expenditures of the
United Kingdom and the Dominions are currentlv amounting monthlv
to $1,750,000,000, of which $1;500,000,000 is by the Tailed Kingdom
and $250,000,000 by the Dominions. Canada will spend $1,400,000,-
000 in the fiscal year 1941-42 on her direct war effort, which is 25
percent of her expected national income.
The agreements with the governments to be assisted under "An
act to promote the defense of the United Stales " rest with the Presi-
dent ot the United States. His is the responsibility to determine the
terms and conditions under which the nations receiving this aid should
make a return to the United States. A nation engaged in a death
struggle with a mortal enemy needs, in addition to the tools of war,
the maintenance of its own economy and financial stability in order
to pursue successfully its efforts. If the United States furnishes
Great Britain with defense, articles but upsets her economy the aims
and purposes of our assistance would be defeated.
The committee desires to call attention to the form in which the
appropriations are made in this bill. It is not a "blank check"
appropriation. Public Law Xo. 11 provides that the President may
authorize the head of any department or agency to procure the defense
articles which that act specifies for aid to any country whose defenso is
vital to the United States. It is not practicable, considering the prob-
lems involved in this huge program, to appropriate specifically in terms
of the normal Government appropriations in the usual detail to each
of the agencies and eacli of the bureaus and other offices concerned
and "freeze." the procuring funds in customarily rigid channels. It
should be borno in mind that the appropriations in this bill arc for
aid to countries that are at war. That war is being fought on the
high seas of tho world, in Europe and in Africa, and with hostilities
and moves of conquest in Asia. The important theaters of the war
are shifting rapidly from one area to another. Changes are occurring
constantlv in the types of weapons and their use. A program of aid
such as this must be as flexible as a program of use in combat. The
needs may change frequently and the emphasis on certain needs may
shift to others. The committee therefore feels that it is highly desir-
able that flexibility should be provided and to that end has approved
the proposal for a "20-percent transfer between appropriations with the
stipulation that not more than 30 percent can be added to any one of
the first S of the 10 specified appropriations by virtue of the transfer.
This flexibility is particularly desirable not only with respect to the
amounts for defense articles under specific categories hut also with
respect to the application of the amounts to any particular countries
as exigencies may occur from time to time.
The bill contains 10 separate appropriations, 7 of which are devoted
to categories of procurement of specific classes of defense articles and
3 of which are devoted to services. Each of these 10 appropriations
is subject to allocation by the President to such department or agency,
as he mav deem advisable, to procure the typo of defense articles
needed. The total of the 7 procurement appropriations is SG.750,-
000,000 and the total of those devoted to services is $250,000,000.
A few of these categories are necessarily problematic, particularly
the item of $200,000,000 for repairing and reconditioning defense
6 DEFENSE AID SUPPLEMENTAL APPHOPRIATION,  194 1
articles. This must be so, duo to inability to secure any substantial
data upon which to base an estimate.
The 10 categories of appropriation into which the $7,000,000,000 is
divided consist of the following:
1. Ordnance and ordnance stores, supplies, spare parts, and ma-
terials, including armor and ammunition and components thereof,
$1,343,000,000. ;   . .
2. Aircraft and aeronautical material, including engines, spare
parts, and accessories, $2,054,000,000.
3. Tanks, armored cars, automobiles, trucks, and other automotive
vehicles, spare parts, and accessories, $362,000,000.
4. Vessels, ships, boats, and other watercraft, and equipage, sup-
plies, materials, spare parts, and accessories, $629,000,000.
5. Miscellaneous military equipment, supplies, and materials,
$260,000,000.
6. Facilities and equipment, for tlio manufacture or production of
defense articles by construction or acquisition, including the acquisi-
tion of land, and the maintenance and operation of such facilities and
equipment, $752,000,000.
7. Agricultural, industrial, and other commodities and articles,
$1,350,000,000.
8. Testing, inspecting, proving, repairing, outfitting, recondition-
ing, etc., defense articles, $200,000,000.
9. Services and expenses not specified or included in any of the
foregoing, $40,000,000.
10. Administrative expenses, $10,000,000.
Each of these 10 appropriations will be accounted for as though it
had been made in the normal fashion. The expenditures will be
audited by the General Accounting Office. Treasury statements will
show the expenditures under the appropriations in this bill in the same
manner as other appropriation expenditures arc exhibited.
TlWfaiHj $7,000,000,000 is a large total for any single appropria-
tion bill. The question naturally arises as to why all the fund should
bo granted at one time—why not appropriate some now, some more
ator, and some still later—take it piecemeal instead of all in one
lump—because the amount is made available until June 30 1943 The
amount is based upon the procurement of definite quantities of defense
articles. Ihey have to be acquired for this specific purpose: they are
in ho mam, not articles of commercial use. In some instances
facilities must be constructed with which to produce them. It
should be recalled that these funds are all to be expended by the
wIf^nTSc1 and thc,defonso articIes to be procured
to^iPmKd ?tat<* Untl1 a* President decides pursuant
&«t« I, *f ** d<mC Wlth ,hcm- No offi<*r of the United
Z u, fj . -mt° commitm.en!« on behalf of the United States
mot o,E! mg a» aPP»Pn«tion from which the entire commit-
^mUmnt^FKi^£*%^ othcr specif,c authority to make a
f?,IITIZ 0 b-h.alf> °f thc ¥nit*d States. If only a'part of the
iM^rtV^^K* "°7 °un,y ^ Pnrt of the commitments for
money ^IS^*?*1111* °C H for wiIh that amount of
Sles must w« ? Z?l th° comm,lm<^ for the rest of the defense
articles must wait until more money s available Such a Hdnv
would be inexcusable and nonrcsponsi^e to "r^scTandI policy
DEFENSE AID SUPPLEMENTAL APPROPRIATION,   194 1
7
expressed by the act. If all the money for all the program is available
at one time, all the commitments for all the program can progress as
rapidly as the executive officers can make the plans and enter into
the contract. If the funds are appropriated in installments the
program of procurement is apt to become an installment program in
point of time. The committee was advised that substantially thc
entire amount of the funds provided would be required prior to July
I, 1942.
Thc committee has likewise canvassed the practicability of providing
part of the $7,000,000,000 in direct appropriation and part in contract
authorization. So far as the obligation of the Government to pay is
concerned a definite commitment through a contract made by an
administrative officer against legislative authority to enter into
contracts is as binding upon the United States as though the contract
wore made under a direct appropriation sufficient for its fulfillment.
The Congress would have to appropriate to discharge the contract
authority granted when the need for cash arose or repudiate obliga-
tions lawfully entered into. In effect contract authorizations granted
by Congress to permit administrative officials to initiate procurement
programs are deferred appropriations and the only point in giving a
contract authorization is to defer the appropriation to the end that the
appropriations and the cash withdrawals from the Treasury may more
nearly harmonize on a fiscal-year basis. In the present instance if
part of this money is given in cash and part in contract authorization
it will advertise to those seeking information with respect to the
military characteristics of the program what part of it is long range
and wfiat part is relatively short range. So far as a division between
cash and contract is concerned there is no particular advantage to the
United States in providing the funds in that fashion, but there would
bo circumlocution in our bookkeeping. There is a particular disad-
vantage to those we are seeking to aid.
The committee is advised that under thc terms of the bill the pro-
cedure to be followed will be the allocation from the particular appro-
priations involved to a Federal agency for procuring certain defenso
articles or furnishing certain services authorized by the act of March
II. The agency receiving such an allotment will then proceed to
procure the defense articles or perform the services in accordance with
the laws which are applicable at that time to that agency in connection
with making its own similar procurements or performing its own
similar services. No new procedures or departures from existing
practices and requirements are contemplated.
The total appropriation in this bill is 87,000,000,000. Public Law
No. 11, section 3 (a) (2), provides that thc value of the defense articles
procured from appropriations made before the enactment of that
act and disposed of under the authority of that paragraph shall not
exceed $1,300,000,000. This sum phis the $7,000,000,000 carried in
this bill makes a total ceiling of aid of $8,300,000 000. The com-
mittee has included in the bill, however, in modified and clarified
form the Budget recommendation (sec. 2) that the President may
order the transfer from any of the appropriations in the bill to the
appropriate appropriation of the department or agency, which pro-
cured such a defense article and by which it was disposed of an
amount equivalent to the value of thc defense article so disposed of,
8 DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941
but the total of such transfers shall not exceed the total of SI .300,000,-
000 This transfer provision, to tho extent it is availed of, will
operate to reduce the ceiling of $8,300,000,000 For example, if the
entire $1,300,000,000 in value of dofense articles should be disposed
of under the law and the President should determine that 5500.000,000
should be transferred to the furnishing agencies for replacement pur-
poses, the ceiling of aid becomes a total of $7,800,000,000 instead of
SS 300 000.000 and the amount available under this bill for new aid
becomes $6,500,000,000 instead of $7,000,000,000. The Budget rec-
ommendation provided for transfer from the appropriations to cover
the value of defense articles disposed of subject to the $1,300,000,000
limit and the value of defense articles that might be disposed of in
the future under such appropriations as might be made available
hereafter for that purpose. The committee has confined tho transfer
proposal to the $1,300,000,000 and prefers to cross the bridge of the
future when it comes to it.
This transfer provision will also have the effect of protecting our
own defenses in that it will make it possible to provide for replace-
ment of defense articles that are disposed of under tho $1,300,000,000
that are deemed necessary to be replaced in the interest of our own
defenses. It will also be in the interest of maintaining an orderly
record of tho cost of the entire aid program. Without some such
arrangement, it might become necessary for replacement of any such
defense articles to await future appropriations with consequent
delay and with confusion in the cost records of the entire aid program.
Tiio committee has suggested during the course of the hearings
that the Bureau of the Budget maintain appropriate central records
in connection with the finances of this program and has received
assurances that the suggestion will be followed. Such central record-
ing should include the allocation of funds for procurement and
reimbursement, the periodic statement of obligation of funds, and
other appropriate fiscal data in connection therewith, so that this
information may be currentlv available for the information of Con-
gress. Tho committee has also received assurances that appropriate
centralized informational records will be kept of procurements and
other progress so that there will be available the principal progress
data for such access as the appropriate jurisdictional committees of
Congress may wish.
Tlie committee deems it advisable to incorporate section 3, which
provides that any defense article procured from funds in the bill shall
be retained by or transferred to and for the use of such department or
agency of the United States as tho President mav determine, in lieu
of being disposed of to a foreign government, whenever in his judgment
the defense of the United States will be best served thereby. Obviously
if our own need at any point in the program should' precipitously
become more important than the furnishing of aid to a country whose
defense the President had deemed vital to the defense of the" United
States, the right should exist to retain and use for our own immediate
necessities such defense articles as tne President should consider would
best serve our own interests.
The committee has included as section 4 a provision prohibiting the
use of any of the money contained in the bill for paying the salary or
wages of any person who advocates, or is a member of an organization
that advocates, the overthrow of the Government of the United States
by force or violence.   This section is identical with similar provisions
DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941 9
adopted by the House at this session in connection with other appro-
priation bills.
For the convenience of the House membership there is reprinted
as an appendix to this report the text of "An act to promote the defense
of the United States, approved March 11, 1941" III. H. 1770, Public
Law No. 11, 77th Cong.).
Tho committee is awaro of the very grave responsibility it has in
recommending this hugo appropriation. It has considered it from all
angles and concludes that if effective implementation is to bo given to
tho recent law providing for this aid there is no other course but to
provide the full amount. Either tho United States means what it said
in "An act to promote tho defense of the United States" and goes in
whole-heartedly, enthusiastically, and oxnoditiously to becomo the
arsenal and storehouse of defense articles lor aid to tho beleaguered
democracies whom we have avowed to assist in order to promote our
own defenses, or we become a faltering "welsher" on the promises we
have held out to those brave countries and their peoplo who are looking
in this direction for tho ray of sunshine that will illumine tho dark
pathway they are trending. Wo either give an all-out assistance or
we fall down on the job. No halfway measures can bo countenanced
at this critical stage.
Tho committee also desires to call tho attention of the executive
agencies of tho Government to the serious responsibility that rests
upon them under any allocations the President may make for them
to administer. Procurements should bo made with the utmost care
to protect tho interests of tho United States, contracts should be
carefully drawn with appropriate cancelation provisions to protect
the Government, and every official should regard this task as important
as if his own individual life depended upon its faithful and prudent
administration. The patriotic endeavors of industry, labor, and nil
othor citizens are needed. A unified, harmonious effort by nil tho
people of tho United States behind this program will carry it forward
successfully and promptly. Tho news of that program and this
effort wilfbo an inspiration to every citizen of every nation we are
seoking to aid. That tonic and tho defense articles wo furnish them
should bo their salvation and ours.
APPENDIX
[Public Law 11—77th Congress]
[Chapter 11—1st Session]
[H. R. 1776]
AN ACT
Further to promote the defense of the United States, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That this Act
may be cited as "An Act to Promote the Defense of the United
States".
Sec. 2. As used in this Act—
(a) The term "defense article" means—
(1) Any weapon, munition, aircraft, vessel, or boat;
(2) Any machinery, facility, tool, material, or supply neces-
sary for the manufacture, production, processing, repair, servic-
ing, or operation of any article described in this subsection;
(31 Any component material or part of or equipment for any
article described in this subsection;
(4) Any agricultural, industrial or other commodity or article
for defense.
Such term "defense article" includes any article described in this
subsection: Manufactured or procured pursuant to section 3, or to
which the United States or any foreign government has or hereafter
acquires title, possession, or control.
(b) The term "defense information" means any plan, specification,
design, prototype, or information pertaining to any defense article.
Sec. 3. (a) Notwithstanding the provisions of any other law, the
President may, from time to time, when he deems it in the interest
of national defense, authorize the Secretary of War, the Secretary
of the Navy, or the head of any other department or agency of the
Government—
(1) To manufacture in arsenals, factories, and shipyards
under their jurisdiction, or otherwise procure, to the extent to
which funds are made available therefor, or contracts are author-
ized from time to time by the Congress, or both, any defense
article for the government of any country whose defense the
President deems vital to the defense of the United States.
(2) To sell, transfer title to, exchange, lease, lend, or otherwise
dispose of, to any such government any defense article, but no
defense article not manufactured or procured under paragraph
(1) shall in any way be disposed of under this paragraph, except
after consultation with the Chief of Staff of the Army or the
Chief of Naval Operations of the Navy, or both. The value of
defense articles disposed of in any way under authority of this
paragraph, and procured from funds heretofore appropriated,
shall not exceed $1,300,000,000. The value of such defense articles
10
DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941 11
shall be determined by the head of the department or agency con-
cerned or such other department, agency or officer as shall be
designated in the manner provided in the rules and regulations
issued hereunder. Defense articles procured from funds hereafter
appropriated to any department or agency of the Government,
other than from funds authorized to be appropriated under this
Act, shall not be disposed of in any way under authority of this
paragraph except to the extent hereafter authorized by the Con-
Qf8 in-tn0 Acts appropriating such funds or otherwise.
(3) To test, inspect, prove, repair, outfit, recondition, or other-
wise to place m good working order, to the extent to which funds
are made available therefor, or contracts are authorized from time
to time by the Congress, or both, any defense article for any such
government, or to procure any or all such services by private
contract.
(4) To communicate to any such government any defense infor-
mation, pertaining to any defense article furnished to such govern-
ment under paragraph (2) of this subsection.
(5) To release for export any defense article disposed of in
any way under this subsection to any such government.
) The terms and conditions upon which any such foreign govern-
t receives any aid authorized under subsection (a) shall be those
which the President deems satisfactory, and the benefit to the United
States may be payment or repayment in kind or property, or any other
direct or indirect benefit which the President deems satisfactory.
(c) After June 30, 1943, or after the passage of a concurrent
resolution by the two Houses before June 30, 1943, which declares
that the powers conferred by or pursuant to subsection (a) are no
longer necessary to promote the defense of the United States, neither
the President nor the head of any department or agency shall exer-
cise any of the powers conferred by or pursuant to subsection (a);
except that until July 1, 194G, any of such powers may be exercised
to the extent necessary to carry out a contract or agreement with such
a foreign government made before July 1,1943, or before the passage
of such concurrent resolution, whichever is the earlier.
(d) Nothing in this Act shall be construed to authorize or to
permit the authorization of convoying vessels by naval vessels of the
United States. . .
(e) Nothing in this Act shall be construed to authorize or to permit
the authorization of the entry of any American vessel into a combat
area in violation of section 3 of the Neutrality Act of 1939.
Sec. 4. All contracts or agreements made for the disposition of
any defense article or defense information pursuant to section 3 shall
contain a clause by which the foreign government undertakes that
it will not, without the consent of the President, transfer title to
or possession of such defense article or defense information by gift,
sale, or otherwise, or permit its use by anyone not an oilicer, employee,
or agent of such foreign government. •    • :
Sec 5. (a) The Secretary of War, the Secretary of the Navy, or
the head of any other department or agency of the Government
involved shall, when any such defense article or defense information
is exported, immediately inform the department or agency designated
12 DEFENSE AID SUPPLEMENTAL APPROPRIATION, 1941
by the President to administer section 6 of the Act of July 2, 1940
(54 Stat. 714), of the quantities, character, value, terms of disposi-
tion, and destination of the article and information so exported.
(b) The President from time to time, but not less frequently than
once every ninety days, shall transmit to the Congress a report of
operations under this Act except such information as he deems
incompatible with the public interest to disclose. Reports provided
for under this subsection shall be transmitted to the Secretary of
the Senate or the Clerk of the House of Representatives, as the case
may be, if the Senate or the House of Representatives, as the case
may be, is not in session.
Sec. 6. (a) There is hereby authorized to be appropriated from
time to time, out of any money in the Treasury not otherwise
appropriated, such amounts as may he necessary to carry out the
provisions and accomplish the purposes of this Act.
(b) All money and all property which is converted into money
received under section 3 from any government shall, with the approval
of the Director of the Budget, revert to the respective appropriation
or appropriations out of which funds were expended with respect to
the defense article or defense information for which such consideration
is received, and shall be available for expenditure for the purpose for
which such expended funds were appropriated by law, during the
fiscal year in which such funds are received and the ensuing fiscal
year; but in no event shall any funds so received be available for
expenditure after June 30, 1946.
Sec. 7. The Secretary of War, the Secretary of the Navy, and the
head of the department or agency shall in all contracts or agreements
for the disposition of any defense article or defense information fully
protect the rights of all citizens of the United States who have patent
rights in and to any such article or information which is hereby
authorized to be disposed of and the payments collected for royalties
on such patents shall l>e paid to the owners and holders of such patents.
Sec. 8. The Secretaries of War and of the Navy arc hereby
authorized to purchase or otherwise acquire arms, ammunition, anil
implements of war produced within the jurisdiction of any country
to which section 3 is applicable, whenever the President deems such
purchase or acquisition to be necessary in the interests of the defense
of t he United States.
Sec. 9. The President may, from time to time, promulgate such
rules and regulations as may be necessary and proper to carry out any
of the provisions of this Act ; and he may exercise any power or
authority conferred on him by this Act through such 'department,
agency, or officer as he shall direct.
Sec. 10. Nothing in this Act shall be construed to change existing
jaw relating to the use of the land and naval forces of the United
States, except insofar as such use relates to the manufacture, procure-
ment, and repair of defense articles, the communication of informa-
tion and other noncombatant purposes enumerated in this Act.
Sec. II. If any provision of this Act or the application of such
provision to any circumstance shall be held invalid, the validity of
the remainder of the Act and the applicability of such provision to
Approved, March 11, 1941.
o