[Deschler's Precedents, Volume 3, Chapters 10 - 14]
[Chapter 13. Powers and Prerogatives of the House]
[C. House Prerogative to Originate Revenue Bills]
[Â§ 17. Referring Objection to Committee]
[From the U.S. Government Publishing Office, www.gpo.gov]


[Page 1852-1855]
 
                               CHAPTER 13
 
                  Powers and Prerogatives of the House
 
            C. HOUSE PREROGATIVE TO ORIGINATE REVENUE BILLS
 
Sec. 17. Referring Objection to Committee

Senate Authorization to Use Securities Proceeds as Debt Transaction

Sec. 17.1 The House agreed to refer to the Committee on the Judiciary a 
    resolution which alleged that a Senate joint resolution 
    ``authorizing the Secretary of the Treasury to use as a public-debt 
    transaction certain proceeds of securities hereafter issued under 
    authority of the Second Liberty Loan Act . . . to effectuate [an 
    Anglo-American debt agreement]'' infringed upon the constitutional 
    powers of the House in the matter of revenue.

    On May 14, 1946,(5) the House by voice vote agreed to a 
motion to refer to the Committee on the Judiciary a resolution alleging 
that Senate Joint Resolution 138 infringed upon the constitutional 
prerogative of the House to originate revenue-raising bills.
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 5. 92 Cong. Rec. 5000-12, 79th Cong. 2d Sess.
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        Mr. [Harold] Knutson [of Minnesota]: Mr. Speaker, I rise to 
    present

[[Page 1853]]

    a question of the privilege of the House. . . .
        The Speaker: (6~) The gentleman from Minnesota is 
    recognized. . . .
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 6. Sam Rayburn (Tex.).
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        Mr. Knutson: Mr. Speaker, the question of the privilege of the 
    House is set forth in a resolution, which I send to the Clerk's 
    desk; and on that I ask for recognition.
        The Clerk read as follows:

            Resolution offered by Mr. Knutson:

        ``Resolved, That Senate Joint Resolution 138, authorizing the 
    Secretary of the Treasury to use as a public-debt transaction 
    certain proceeds of securities hereafter issued under authority of 
    the Second Liberty Loan Act, as amended, to effectuate a certain 
    debt agreement between the United States and the United Kingdom of 
    Great Britain, extending the purposes for which securities may be 
    issued under that act and requiring payments of interest to the 
    United States to be covered into the Treasury as miscellaneous 
    receipts, is a bill to raise revenue within the meaning and intent 
    of article I, section 7, of the Constitution of the United States 
    requiring all such bills to originate in the House of 
    Representatives;

            ``That Senate Joint Resolution 138 therefore is an 
        infringement of the prerogatives and privileges of this House 
        and that said bill be taken from the Speaker's table and 
        respectfully returned to the Senate with a message 
        communicating this resolution.''

        The Speaker: The gentleman from Minnesota is recognized.

        Mr. Knutson: . . . In this case the Senate has not proposed or 
    concurred in amendments to a revenue measure, but on the contrary 
    it has initiated a bill the sole purpose of which is the raising of 
    revenue through the issuance of bonds or notes of the United 
    States. . . .
        . . . The rates of duty on goods imported from Great Britain in 
    the future will be fixed in an amount which the State Department 
    determines to be consistent with the terms of the financial 
    agreement which this bill brings into existence.
        The Senate report, on page 17, says:

            The proposed credit is to enable Britain to participate in 
        world trade without currency and trade discrimination, while 
        she reconverts her industries to peacetime production and 
        resumes her place in world trade.

        Tariff duties are, in their very nature, trade discriminations.
        The bill amends the Second Liberty Loan Act by adding to and 
    expanding the purposes for which securities may be issued under the 
    authority of that act. It does not merely refer to similar 
    authority contained in some other act of Congress but explicitly 
    authorizes bonds to be issued under authority of that act and 
    expressly extends the scope of that act to include such bonds. The 
    purposes for which bonds may be issued, and the authority for 
    issuing them are strictly revenue matters.

    Responding to Mr. Knutson, Mr. John W. McCormack, of Massachusetts, 
cited 2 Hinds' Precedents Sec. 1490, in which the House rejected a 
motion to return to the Senate a bill fixing the maximum amount of 
United States notes and providing for issuance of an

[[Page 1854]]

additional amount in circulation in national banks. Mr. McCormack 
inserted a memorandum supporting his position that the pending bill did 
not infringe upon the prerogatives of the House.(7)
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 7. 92 Cong. Rec. 5004, 5005, 79th Cong. 2d Sess.
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                                   Memorandum

        Senate Joint Resolution 138, ``to implement further the 
    purposes of the Bretton Woods Agreements Act by authorizing the 
    Secretary of the Treasury to carry out an agreement with the United 
    Kingdom, and for other purposes,'' has originated in the Senate. 
    The question arises, therefore, whether there is reasonable ground 
    for sustaining a question of privilege which might be raised under 
    article I, section 7, clause l of the Constitution which states: 
    ``All bills for raising revenue shall originate in the House of 
    Representatives; but the Senate may propose or concur with 
    amendments as on other bills.'' An examination of the judicial 
    decisions, congressional decisions, and precedents in the form of 
    similar bills leads to the conclusion that there is not sufficient 
    basis for sustaining a question of privilege.
        . . . [I]t appears to be clear that a bill to raise funds 
    through the sale of Government obligations does not violate the 
    privilege of the House as set forth in article I, section 7, clause 
    1 of the Constitution. Even if it should be concluded, however, 
    that a bill to raise funds by selling Government bonds violates the 
    privilege of the House, it would be necessary for the House to 
    reach the additional conclusion that Senate Joint Resolution 138 
    does provide for the raising of funds through the sale of 
    Government obligations. Such a conclusion would be illogical. Under 
    the Second Liberty Bond Act, as amended, the Secretary of the 
    Treasury is already authorized for certain purposes to issue public 
    debt obligations of the United States up to a specified maximum. 
    Senate Joint Resolution 138 merely instructs the Secretary of the 
    Treasury how to use funds which he is already authorized to raise 
    under the Second Liberty Bond Act, as amended. The resolution would 
    not increase the limit of public-debt issues, it would not 
    authorize the Secretary of the Treasury to issue any securities not 
    already provided for by the Second Liberty Bond Act, as amended, 
    and it would not vary in any way the type of security which may be 
    issued at the present time under existing law. . . .
        Senate Joint Resolution 138 is not a bill providing for the 
    raising of revenue within the meaning of article I, section 7, 
    clause 1, of the Constitution. But even if it did provide for the 
    raising of revenue it would fall within the class of legislation 
    where revenue-raising provisions are only incidental to broader 
    general purposes.(8)~ The primary purpose of Senate 
    Joint Resolution 138 is to authorize the execution of the financial 
    agreement between the United States and the United Kingdom dated 
    December 6, 1945. It is, accordingly,

[[Page 1855]]

    legislation to make effective agreements between the two 
    Governments regarding exchange controls, monetary policies, import 
    controls, participation in the International Monetary Fund and the 
    International Bank for Reconstruction and Development and 
    participation in efforts to bring into being an international trade 
    organization for the purpose of eliminating restrictive practices 
    detrimental to world trade.. . .
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 8. See Sec. 13, supra, for discussion of the distinction between bills 
        which primarily raise revenue and would therefore infringe on 
        the prerogative if they originated in the Senate, and those 
        which incidentally raise revenue and do not so infringe.
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        In view of the fact that Senate Joint Resolution 138 authorizes 
    the expenditure of funds by the Secretary of the Treasury, an 
    examination has also been made of the practice of Congress with 
    respect to appropriation bills. This purpose is stated in Cannon's 
    Procedure in the House of Representatives (4th ed. 1945), as 
    follows: (9)
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 9. This passage appears on p. 20 of the 1959 edition of Cannon's 
        Procedure.
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        ``Under immemorial custom the general appropriation bills (as 
    distinguished from special bills appropriating for single, specific 
    purposes) originate in the House of Representatives and there has 
    been no deviation from that practice since the establishment of the 
    Constitution.''. . .
        He also states that: (10)
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10. This passage appears on p. 22 of the 1959 edition of Cannon's 
        Procedure.
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        [B]ills providing special appropriations for specific purposes 
    are not general appropriation bills. . . .''
        It is clear, therefore, that a resolution appropriating funds 
    for the extension of a line of credit to the United Kingdom is not 
    a general appropriation and can originate either in the House or in 
    the Senate. . . .
        Mr. McCormack: Mr. Speaker, I offer a motion.
        Thc Clerk read as follows:

            Mr. McCormack moves to refer the resolution to the 
        Committee on the Judiciary.

        Mr. Knutson: Mr. Speaker, I move the previous question on the 
    motion.
        The previous question was ordered.
        The Speaker: The question is on the motion offered by the 
    gentleman from Massachusetts [Mr. McCormack].
        The motion was agreed to.

    Parliamentarian's Note: The unnumbered House resolution was not 
reported back to the House. Senate Joint Resolution 138, after referral 
to the Committee on Banking and Currency, eventually was passed by the 
House and approved by the President.