June 22, 1935 - Article - Surrender Of The Purse (part 1), by Garet Garrett

Section 7, Article I, of the Constitution reads: "All bills for raising revenue shall originate in the House of Representatives."

Once an appropriation bill or a tax bill has originated in the House, the Senate may amend it or collaborate in perfecting it; and then, of course, it must be passed in its final form by the House and Senate both; but the law is that the Senate may not originate a bill touching the public purse. Only the House can do that; and the reason why it was provided that only the House could do it was that the House directly represents the people, who provide the money. That the President should originate such a bill was never imagined. The idea was repugnant. Moreover, to forbid it was believed to be one great safeguard of political liberty.

Now suddenly we come to the obsequies of that fundamental principle, and there is neither a time of mourning nor a day of celebration; only indifference. The founders undoubtedly would have said that we could not forsake it and keep for long our constitutional liberties. There might well have been some bias in that conclusion, some excess of prophetic anxiety; and yet, only five years ago scarcely anyone could have believed that with three hours of debate the House of Representatives would enthusiastically surrender control of the purse to the President.

That happened January last. You will find the story of it - part of it - by reference to H.J. Res. 117 in the Congressional Record. The rest of it you will find in three small pamphlets in which are recorded the committee hearings on H.J. Res. 117 - one hearing of two and a half hours before a subcommittee of the House on Appropriations and two hearings before the Committee on Appropriations of the United States Senate, after the bill had passed the House.

H.J. Res. 117 means House Joint Resolution No. 117, and that was the name of the bill whereby the incredible sum of $4,880,000,000 - generally referred to in the debates as $5,000,000,000 - was put into the hands of the President to be spent as he might see fit, for purposes of social relief, general welfare and economic reform. (pp. 5-6)

MR. FISH: Who was the author of this legislation?

MR. SABATH: The President of the United States.

MR. FISH: Does the gentleman speak with authority?


MR. FISH: Does the gentleman say the President approves everything that was in this original joint resolution? I wait for an answer.

MR. SABATH: The principles of the joint resolution have been recommended in the message of the President to Congress.

MR. FISH: I ask who recommended this resolution to the President for his approval?

MR. SABATH: The people, because of the conditions in the nation.

But it was a nettlesome subject still. A little later Mr. Green arose to say: "This resolution has, after careful study, been prepared by the President and submitted to Congress."

The debate was divided between two days. On the second day Mr. Snell returned to the subject, saying: "During the debate yesterday, in reply to the specific question by Mr. Fish, ‘Who is the author of this bill?' Mr. Sabath responded, ‘The President of the United States'. Mr Fish further asked, ‘Does the gentleman speak with authority?' Mr. Sabath replied, ‘Yes.' At a press conference yesterday, the President is quoted as definitely stating that he has never read this bill."

It was a question that apparently did not improve with handling, and yet it could not be let alone. Mr. Buchanan, chairman on the Committee on Appropriations, took the last word. He said: "The fact is that the President was consulted, and consulted extensively, about the preparation of this bill. He has approved every section as written and as proposed to be amended. He wants it. He has asked me to stay on the floor of the House to those who are co-operating with him that he would like very much to have the bill in the shape it is in."

Whereupon, the House passed it and sent it over to the Senate. Two hearings were held by the Senate Committee on Appropriations. Rear Admiral Peoples reappeared, in the chief expository role, yet representing nobody specifically; with him came Mr. Bell, acting director of the Budget Bureau, and a Mr. Hester, of the Treasury. Appeared also Harry L. Hopkins, Administrator of the FERA; Mr. Gill, his assistant, and the Secretary Ikes.

Mr. Hopkins was asked: "Did you have anything to do with the drawing of this bill?" He answered: "No." He was asked again: "Did you have anything to do with the original drafting of it?" He answered: "No, I did not." Senator Hale asked: "The specific provisions in it you had nothing to do with?" He answered: "No, but one of my assistants was called in."

Rear Admiral Peoples was being interrogated and Mr. Hester, of the Treasury, was assisting him with his answers, when Senator Dickinson interrupted to ask: "I would like to know whether or not- did you draft this bill, Mr. Hester?"

MR. HESTER: I worked on it.

SENATOR DICKENSON: Well, were you the principle author of this bill?

MR. BELL: It was done under my supervision, senator.

SENATOR DICKENSON: What is your name?

MR. BELL: Bell.

SENATOR BYRNES (introducing Mr. Bell): Director of the Budget. (acting director only)

MR. BELL: Mr. Hester helped on it.

Senator Hale wanted more information, and asked: "This is an administration bill, is it not?" The question was addressed to Mr. Hester, but Mr. Bell answered: "Yes, it is an administration bill. It was drawn under my supervision, Senator Hale."

SENATOR HALE: Mr. Hester drew it?

MR. BELL: He is a lawyer who assisted me.

SENATOR HALE: Also you adopted the suggestions of Admiral Peoples?

MR. BELL: Admiral Peoples helped on it, also.

SENATOR HALE: Did Mr. Hopkins have anything to do with it?

MR. BELL: His representative, Mr. Gill, deputy administrator, sat in.

SENATOR HALE: Senator Couzens said the other day on the floor of the Senate, or referred to a newspaper statement, that the authors of the bill were really Mr. Richberg and Mr. Cohen. Did they help?

MR. BELL: They had nothing to do with it.

SENATOR HALE: After you had drafted it, did you confer with anyone in the House about it, any member of the House?

MR. BELL: The chairman of the Appropriations Committee.

SENATOR HALE: And did you confer with any member of the Senate about it?

MR. BELL: I personally did not do so.

At a later point, to a question by Senator Steiwer, touching a change proposed to be made in the language, Rear Admiral Peoples said: "This is the President's bill, senator. I cannot commit him."

And that is all that was ever found out about it.

It was a Democrat, Mr. Smith of Virginia, who said in the House: "The provisions of this bill are a clear and complete abdication by the Congress of the United States of its functions, and a delegation by the Congress to the President, or whomsoever he may select, of the legislative duties imposed upon this body."

Mr. Robinson of Kentucky stated:"If this bill is passed in substantially the form in which it has been sent to Congress by the President, Congress ought to quit and go home... If this force bill is adopted as sent over here by the administration, President Roosevelt will have more dictatorial power than Hitler in Germany or Mussolini in Italy."

Mr. Blanton of Texas stated:"Has this Congress abdicated? Why, no. We are legislating now.... We have no Caesar in the White House. We have no Sulla there. We have no Louis XIV giving us commands. We have no Hitler or Mussolini there at the other end of the avenue."

Mr. Short of Missouri stated: "Not a single dictator in all Europe has the power with the money back of him that the present occupant of the White House has."

Mr. Blanton of Texas stated: "No, they have not, because our President has the power to do good. He has the power to relieve suffering. He has the power to restore self-respect, self-reliance, initiative and self-support in the breasts of American manhood."

[A "gage rule" was imposed upon the entire Revenue Bill of 1935. The entire bill was sent to Congress with the command from FDR and his associates not change or amend it.]

Nevertheless, it was only after a minority of Democrats, uniting with Republicans, that obliged the administration forces to open Sections 4 and 6 to amendment. That was the utmost concession. (pp. 6-7)

It was permitted in the House to debate this language, but not to touch it. That part of the text was sacred where the administration forces were in control. They were not strong enough, however, to withhold Sections 4 and 6 from amendment. Those contained the grants of administrative power.

Paragraph (c) of Section 4 authorized the President to -

"Consolidate, redistribute, abolish or transfer the functions and/or duties of, and transfer the property and/or personnel of, any governmental agency (including a corporation)."

The unlimited word there was "any". The President would have received the power to change or abolish any governmental agency whatever. By amendment, the word "emergency" was inserted after the word "any", making it read that the President could change or abolish only "any emergency" agency of the Government.

Paragraph (d) of Section 4 gave the President power to -

"Post pone, but not beyond June 30, 1937, the termination of the existence of any existing governmental agency (including a corporation) designated and utilized under this section."

What did that mean? It was thought to mean that, as to NRA, for example, the President would have only in some way to designate and utilize it under H.J Res. 117 in order to possess the power to extend it for two years, with no let or hindrance by Congress. The House struck that out. Then Section 6, authorizing the President to prescribe such rules and regulations as he might deem necessary to carry out the purposes of the resolution- all, so far, as usual- but then going on to say, "and any violation of any such rule or regulation shall be punishable by a fine of not to exceed $5000 or imprisonment for not to exceed two years, or both."

What did that paragraph mean? It meant that Congress would be delegating to the President the power in his own discretion to make innumerable rules and regulations that would have the force of criminal law- therefore, himself to impose upon the country a new body of criminal statutes. It meant more than that. The President having been authorized to delegate the power delegated to him, it meant that bureaus in Washington- bureaus to an unprecedented number and of kinds yet to be created- severally pursuing ideas of how to promote the general welfare, ideas of relieving economic maladjustments, ideas of improving living and working conditions, would have the power to make innumerable rules and regulations, each to have the force of criminal law. Bureaus, therefore, appointed bureaucrats, imposing upon the country an unlimited number and variety of what, in effect, would be criminal statutes.

What the House did with that paragraph was to write the word "willful" into the text, after the word "any", making it to read for "any willful violation"; then to insert a period after $5000, and strike out the words, "or imprisonment for not to exceed two years, or both." (pp. 36, 38)

Comments: Since Congress surrendered their legislative powers to the Executive back in the spring of 1933, it was only reasonable to assume that they would soon surrender power over the public purse as well. I would submit that almost all, if not all, revenue bills since this point in history have originated in the Executive branch. Think of this. The entire Internal Revenue Code are laws that were written by the Executive branch. This means that the Internal Revenue Code is unconstitutional. The Executive writes the tax laws, the Executive writes the criminal penalties into the tax laws, the Executive exercises judicial power in the U.S. Tax Courts, and in criminal tax cases the federal judge may be aptly deemed to be an Executive official acting in a judicial capacity since his/her salary is subject to the income taxing powers. Also, do you really think that a revenue bill that gave FDR $5,000,000,000 worth of power was something he would have no knowledge about? Recall he told reporters at a press conference that he had never read the bill? Do you think he was lying or telling the truth?

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