Executive Order 9112—Authorizing Financing Contracts to Facilitate the Prosecution of the War

Whereas in order that contracts of the War Department, the Navy Department, and the United States Maritime Commission (hereinafter referred to as Maritime Commission) which are now outstanding or may hereafter be entered into for war production, including the obtaining or conversion of facilities, may be promptly and effectively performed, it is essential that additional facilities be provided through governmental agencies to supply necessary funds to contractors, subcontractors, and others engaged in such war production pursuant to such contracts; Whereas the War Department, the Navy Department, and the Maritime Commission have available to them amounts appropriated by Congress which may be used for the purpose of making or guaranteeing loans, discounts or advances, or commitments in connection therewith for the purpose of financing contractors, subcontractors, and others engaged in such production or otherwise to expedite war production; Whereas the guaranteeing or making of such loans, discounts, advances, and commitments by the War Department, Navy Department, and Maritime Commission will be expedited and facilitated by utilizing in this connection the Federal Reserve Banks and the Board of Governors of the Federal Reserve System, which are agencies of the Government exercising functions in connection with the prosecution of the war effort and which have offices and other facilities, including experienced personnel, located conveniently throughout the country and are in close and frequent contact with banking and other financing institutions; and Whereas the guaranteeing or making of such loans, discounts, advances, and commitments will greatly facilitate the participation of small business enterprises in war production; Now, Therefore , by virtue of the authority vested in me by the various provisions of the First War Powers Act, 1941, approved December 18, 1942, by all other Acts of Congress, and by the Constitution of the United States, and as President of the United States and Commander in Chief of the Army and Navy of the United States, and deeming that such action will facilitate the prosecution of the war, I do hereby order as follows: (1) The War Department, Navy Department, and the Maritime Commission are hereby respectively authorized, without regard to the provisions of law relating to the making, performance, amendment, or modification of contracts, (a) to enter into contracts with any Federal Reserve Bank, the Reconstruction Finance Corporation, or with any other financing institution guaranteeing such Reserve Bank, Reconstruction Finance Corporation, or other financing institution against loss of principal or interest on loans, discounts, or advances, or on commitments in connection therewith, which may be made by such Reserve Bank, Reconstruction Finance Corporation, or other financing institution for the purpose of financing any contractor, subcontractor, or others engaged in any business or operation which is deemed by the War Department, Navy Department, or Maritime Commission to be necessary, appropriate, or convenient for the prosecution of the war, and to pay out funds in accordance with the terms of any such contract so entered into; and (b) to enter into contracts to make, or to participate with any Federal Reserve Bank, the Reconstruction Finance Corporation, or other financing institution in making loans, discounts or advances, or commitments in connection therewith, for the purpose of financing any contractor, subcontractor, or others engaged in any business or operation which is deemed by the War Department, Navy Department, or Maritime Commission to be necessary, appropriate, or convenient for the prosecution of the war, and to pay out funds in accordance with the terms of any such contract so entered into. (2) The authority above conferred may be exercised by the Secretary of War, the Secretary of the Navy, or the Maritime Commission respectively or may also be exercised, in their discretion and by their direction respectively, through any other officer or officers or civilian officials of the War or Navy Departments or the Maritime Commission. The Secretary of War, the Secretary of the Navy, and the Maritime Commission may confer upon any officer or officers in their respective Departments or civilian officials thereof the power to make further delegations of such powers within the War and Navy Departments and the Maritime Commission. (3) Any Federal Reserve Bank or any officer thereof may be utilized, and is hereby authorized to act, as agent of the War Department, the Navy Department, or the Maritime Commission, respectively, in carrying out any of the provisions of this Executive Order, and the Secretary of the Treasury is hereby directed to designate each Federal Reserve Bank to act as fiscal agent of the United States pursuant to the provisions of section 15 of the Federal Reserve Act in carrying out any authority granted to it by or pursuant to this Executive Order. In any case in which any Federal Reserve Bank shall make or participate in making any loan, discount or advance, or commitment as agent of the War Department, Navy Department, or Maritime Commission under authority of this Order, all such funds as may be necessary therefor shall be supplied and disbursed by or under authority from the War Department, Navy Department, or Maritime Commission in accordance with such procedure as they may respectively require. Any amounts now or hereafter available under any appropriation act to the War Department, the Navy Department, or the Maritime Commission for the purpose of procuring materials, equipment, or supplies, or of expediting production thereof, may be expended through the agency of the respective Federal Reserve Banks in accordance with the provisions of this Executive Order. In taking any action under any designation or authority given by or pursuant to this paragraph no Federal Reserve Bank shall have any responsibility or accountability except as agent of the War Department, Navy Department, or Maritime Commission, as the case may be. (4) All actions and operations of any Federal Reserve Bank under authority of or pursuant to the terms of this Executive Order shall be subject to the supervision of the Board of Governors of the Federal Reserve System and to such directions and conditions as the Board of Governors of the Federal Reserve System may prescribe, by regulation or otherwise, after consultation with the Secretary of War, the Secretary of the Navy, or the Maritime Commission, or their authorized representatives. (5) The War Department, the Navy Department, and the Maritime Commission shall make reports of all contracts entered into by them respectively pursuant to the terms of this Executive Order, in accordance with the provisions of paragraph 1 of the regulations prescribed in Title II of Executive Order No. 9001 dated December 27, 1941. (6) Interest, fees, and other charges derived by the War Department, Navy Department, and Maritime Commission, respectively, from operations pursuant to the terms of this Executive Order may be held by the Federal Reserve Banks and shall first be used for the purpose of meeting expenses and losses (including but not limited to attorneys' fees and expenses of litigation) incurred by the Federal Reserve Banks in acting as agents under or pursuant to the provisions of this Executive Order; and to the extent that the amount of such interest, fees, or other charges is insufficient for this purpose the Federal Reserve Banks shall be reimbursed for such expenses and losses by the War Department, the Navy Department, or the Maritime Commission, as the case may be. FRANKLIN D ROOSEVELT The White House, March 26, 1942.