Executive Order 11640—Further Providing for the Stabilization of the Economy

On August 15, 1971, I issued Executive Order No. 11615 providing for the stabilization of prices, rents, wages, and salaries, for a period of 90 days from the date of that Order. That Order also established the Cost of Living Council and charged it with the primary responsibility for administering the stabilization program, and for recommending to me additional policies and mechanisms to permit an orderly transition from the 90-day general prices, rents, wages, and salaries freeze imposed by Executive Order No. 11615 to a more flexible and selective system of economic restraints.

Subsequently, I received recommendations from the Cost of Living Council, and determined that the intent of the Economic Stabilization Act of 1970 (P.L. 91-379; 84 Stat. 799), as amended, could more effectively be carried out and the goals I specified in my speech to the Nation on October 7, 1971, could more effectively be achieved, on and after October 15, 1971 by substituting Executive Order No. 11627 for Executive Order No. 11615, as amended. Notwithstanding this substitution, the findings which I made in the preamble of Executive Order No. 11615 of August 15, 1971, were, after careful reconsideration, reaffirmed.

On December 22, 1971, I signed the Economic Stabilization Act Amendments of 1971 (P.L. 92-210; 85 Stat. 743) into law. To reflect the changes made by such Amendments in the Economic Stabilization Act of 1970 and to reaffirm the existing delegation of authority to the Council, this Order is substituted for Executive Order No. 11627, as amended. I hereby reaffirm the goals I specified in my speech to the Nation of October 7, 1971, and the findings which I made in the preamble of Executive Order No. 11615 of August 15, 1971.

Now, THEREFORE, by virtue of the authority vested in me by the Constitution and statutes of the United States, particularly the Economic Stabilization Act of 1970, as amended, it is hereby ordered as follows:

SECTION 1. (a) The Pay Board and Price Commission established by sections 7 and 8 of Executive Order No. 11627 of October 15, 1971, are hereby continued and shall act as agencies of the United States, and the Chairman of each of these bodies, acting in accordance with the majority vote of its members, shall, pursuant to the goals established by the Cost of Living Council, take such steps as may be necessary, and authorized by or pursuant to this Order, to stabilize prices, rents, wages, and salaries. Subject to action already taken under Executive Order No. 11627 and pending action under this Order, and except as otherwise provided in section 203 of the Economic Stabilization Act of 1970, as amended, Executive Order No. 11639 of January 11, 1972, and the President's memorandum concerning administrative pay adjustments of January 11, 1972, prices, rents, wages, and salaries are stabilized effective as of August 16, 1971, at levels not greater than the highest of those pertaining to a substantial volume of actual transactions by each individual, business, firm, or other entity of any kind during the 30-day period ending August 14, 1971, for like or similar commodities or services. If no transactions occurred in that period, the ceiling will be the highest price, rent, salary, or wage in the nearest preceding 30-day period in which transactions did occur. No person shall charge, assess, or receive, or knowingly pay or offer to pay, directly or indirectly, in any transaction, prices or rents in any form higher than those permitted hereunder, and no person shall, directly or indirectly, pay or agree to pay, in any transaction, wages or salaries in any form, or to use any means to obtain payment of wages and salaries in any form, higher than those permitted hereunder, whether by retroactive increase or otherwise.

(b) Each person engaged in the business of selling or providing commodities or services shall maintain available for public inspection a record of the highest prices or rents charged for such or similar commodities or services during the 30-day period ending August 14, 1971.

(c) The provisions of sections 1 and 2 of this Order shall not apply to the prices charged for raw agricultural products.

SEC. 2. (a) The Cost of Living Council (hereinafter referred to as the Council), established by section 2 of Executive Order No. 11615 of August 15, 1971, is hereby continued and shall continue to act as an agency of the United States.

(b) The Council shall be composed of the following members: The Secretary of the Treasury, the Secretary of Agriculture, the Secretary of Commerce, the Secretary of Labor, the Secretary of Housing and Urban Development, the Director of the Office of Management and Budget, the Chairman of the Council of Economic Advisers, the Director of the Office of Emergency Preparedness, the Special Assistant to the President for Consumer Affairs, and such others as the President may, from time to time, designate. The Secretary of the Treasury shall serve as Chairman of the Council and the Chairman of the Council of Economic Advisers shall serve as Vice Chairman. The Chairman of the Board of Governors of the Federal Reserve System shall serve as adviser to the Council.

(c) There shall be a Director of the Cost of Living Council who shall be appointed by the President, be a member of the Council, be a full-time official of the United States, be the Council's Chief Executive Officer, and shall be compensated at the rate prescribed for level III of the Executive Schedule by Section 5314 of Title 5 of the United States Code.

SEC. 3. (a) Except as otherwise provided herein, all of the powers and duties conferred upon the President by the Economic Stabilization Act of 1970, as amended, shall continue to be delegated to the Council, including, without limitation, the power to stabilize interest rates and corporate dividends and similar transfers at levels consistent with orderly economic growth and the power and duty to make the determinations and take the actions required or permitted by the Act.

(b) The Council shall develop and recommend to the President policies, mechanisms and procedures to achieve and maintain stability of prices and costs in a growing economy. To this end it shall consult with representatives of agriculture, industry, labor, State and local governments, consumers and the public, through the National Commission on Productivity and otherwise.

(c) In all of its actions the Council shall be guided by the need to maintain consistency of price and wage policies with fiscal, monetary, international, and other economic policies of the United States.

(d) The Council shall inform the public, agriculture, industry, and labor concerning the need for controlling inflation and shall encourage and promote voluntary action to that end.

(e) The Council shall prepare the section of the Economic Report and the quarterly reports required by section 216 of the Economic Stabilization Act of 1970, as amended.

SEC. 4. (a) The Council, in carrying out the provisions of this Order, may continue to (i) prescribe definitions for any terms used herein, (ii) make exceptions or grant exemptions, (iii) issue regulations and orders, (iv) provide for the establishment of committees and other comparable groups, and (v) take such other actions as it determines to be necessary or appropriate to carry out the purposes of this Order. More particularly, the Council, working through appropriate delegations to the Chairman of the Pay Board and the Chairman of the Price Commission, may (1) notwithstanding the provisions of subsection (a) of section 1 of this Order, prescribe base periods for determining maximum levels for prices, rents, wages, and salaries other than the base period specified in subsection (a) of section 1 of this Order, and (2) otherwise increase or decrease, subject to section 203 of the Economic Stabilization Act of 1970, as amended, the maximum levels for prices, rents, wages, and salaries prescribed by subsection (a) of section 1 of this Order.

(b) The Council may redelegate to any agency, instrumentality, or official of the United States any authority under this Order, and may, in administering this Order, utilize the services of any other agencies, Federal or State, as may be available and appropriate.

(c) On request of the Chairman of the Council, each executive department or agency is authorized and directed, consistent with law, to furnish the Council with any available information which the Council may require in the performance of its functions.

SEC. 5. The Council may require the maintenance of appropriate records or other evidence which are necessary in carrying out the provisions of this Order, and may require any person to maintain and produce for examination such records or other evidence, in such form as it shall require, concerning prices, rents, wages, and salaries and all related matters. The Council may make such exemptions or exceptions from any requirement otherwise imposed as are consistent with the purposes of this Order. Any type of record or evidence required under regulations issued under this Order shall be retained for such period as the Council may prescribe.

SEC. 6. The expenses of the Council shall be paid from such funds as may be available therefor, under legislation, from the Department of the Treasury or otherwise.

SEC. 7. (a) There is hereby continued the "Pay Board" (hereinafter referred to as the Board).

(b) The Board shall be composed of fifteen members. The members shall be appointed by the President by and with the advice and consent of the Senate; except that the foregoing requirement with respect to Senate confirmation does not apply to any member of the Board (other than the Chairman) who was serving, pursuant to appointment by the President, on December 22, 1971, and who continues to serve pursuant to such appointment, after such time. The Board shall include five labor representatives, five business representatives, and five representatives of the general public. The members of the Board shall serve at the pleasure of the President, and the President shall designate one of the members representing the public to serve as Chairman. Any person serving in the Office of Chairman on December 22, 1971, may continue to serve in such capacity on an interim basis without regard to the requirement with respect to Senate confirmation until the expiration of 60 days after December 22, 1971. The Chairman shall serve full-time and be an official of the United States and shall be compensated at the rate prescribed for Level III of the Executive Schedule by Section 5314 of Title 5 of the United States Code. Each other member shall receive compensation at a rate equal to the per diem equivalent of the rate prescribed for Level IV of the Executive Schedule by Section 5315 of Title 5 of the United States Code, when actually engaged in the performance of his duties as such member. The Chairman shall designate an Executive Director of the Board who shall be compensated at the rate prescribed for Level V of the Executive Schedule by Section 5316 of Title 5 of the United States Code, and who shall serve under the direction of the Chairman of the Board and perform such duties as the Chairman may specify. The Board shall conduct its proceedings in such manner as will be conducive to the proper dispatch of its business and to the ends of justice.

(c) The Board shall perform such functions with respect to the stabilization of wages and salaries as the Council delegates to the Board. Legal authority shall be in the Chairman of the Board, who shall act only in accordance with the majority vote of its members, shall perform such functions with respect to the stabilization of wages and salaries as the Council may delegate to him, including the development and establishment of criteria and standards for the stabilization of wages and salaries which shall be applied in the administration of this Order, as may be delegated to him by the Council.

SEC. 8. (a) There is hereby continued the "Price Commission" (hereinafter referred to as the Commission).

(b) The Commission shall be composed of seven members. The members shall be representative of the general public and shall be appointed by the President by and with the advice and consent of the Senate except that the foregoing requirement with respect to Senate confirmation does not apply to any member of the Commission (other than the Chairman) who was serving, pursuant to appointment by the President, on December 22, 1971, and who continues to serve pursuant to such appointment, after such time. The members of the Commission shall serve at the pleasure of the President, and the President shall designate one of the members to serve as Chairman. Any person serving in the Office of Chairman on December 22, 1971, may continue to serve in such capacity on an interim basis without regard to the requirement with respect to Senate confirmation until the expiration of 60 days after December 22, 1971. The Chairman shall serve full-time and be an official of the United States and shall be compensated at the rate prescribed for Level III of the Executive Schedule by Section 5314 of Title 5 of the United States Code. Each other member shall receive compensation at a rate equal to the per diem equivalent of the rate prescribed for Level IV of the Executive Schedule by Section 5315 of Title 5 of the United States Code, when actually engaged in the performance of his duties as such member. The Chairman shall designate an Executive Director of the Board who shall be compensated at the rate prescribed for Level V of the Executive Schedule by Section 5316 of Title 5 of the United States Code, and who shall serve under the direction of the Chairman of the Commission and perform such duties as the Chairman may specify. The Commission shall conduct its proceedings in such manner as will be conducive to the proper dispatch of its business and to the ends of justice.

(c) The Commission shall perform such functions with respect to the stabilization of prices and rents as the Council delegates to the Commission. The Chairman of the Commission, who shall act only in accordance with the majority vote of its members, shall perform such functions with respect to the stabilization of prices and rents as the Council may delegate to him, including the development and establishment of criteria and standards for the stabilization of prices and rents which shall be applied in the administration of this Order, as may be delegated to him by the Council.

SEC. 9. (a) The Committee on Interest and Dividends established by section 9 of Executive Order No. 11627 is hereby continued. The Committee shall be composed of the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Secretary of Commerce, the Secretary of Housing and Urban Development, the Chairman of the Federal Deposit Insurance Corporation, the Chairman of the Federal Home Loan Bank Board, and such others as the President may, from time to time, designate. The Chairman of the Board of Governors of the Federal Reserve System shall serve as Chairman of the Committee.

(b) This Committee shall, subject to review by the Council, formulate and execute a program for obtaining voluntary restraints on interest rates and dividends.

SEC. 10. (a) The Committee on the Health Services Industry established by section 10 of Executive Order No. 11627 is hereby continued. The Committee shall be composed of such members as the President may from time to time appoint. The members shall be generally representative of medical professions and related occupations, hospitals, the insurance industry, other supporting industries, consumer interests, and the public. The President shall designate the Chairman of the Committee.

(b) This Committee shall provide advice concerning special considerations that tend to contribute to inflation in the health services industry. This Committee shall also assist the Board and Commission in the performance of their functions by making technical analyses of specific matters referred to it by the Board or Commission.

SEC. 11. (a) The Committee on State and Local Government Cooperation established by section 11 of Executive Order No. 11627 is hereby continued. The Committee shall be composed of such representatives of State and local governments and subdivisions thereof, representatives of State and local employees, and such others as the President may, from time to time, appoint. The President shall designate the Chairman of the Committee.

(b) This Committee shall provide advice concerning special considerations involved in the stabilization of prices, rents, wages, and salaries pursuant to this Order as they relate to State and local governments, and subdivisions and employees thereof. This Committee shall also assist the Board and Commission in the performance of their functions by making technical analyses of specific matters referred to it by the Board or Commission.

SEC. 12. (a) The Rent Advisory Board established by section 11A of Executive Order No. 11627, as amended, is hereby continued. The Rent Advisory Board shall be composed of such members as the President may from time to time appoint. The President shall designate the Chairman of the Rent Advisory Board.

(b) The Rent Advisory Board shall provide advice concerning special considerations involved in the stabilization of rents. It shall also assist the Commission in the performance of its functions by making technical analyses of specific matters referred to it by the Commission.

SEC. 13. On request of the Chairman of the Council, Federal departments and agencies shall provide such assistance in carrying out the provisions of this Order as is permitted by law.

SEC. 14. All orders, regulations, circulars, or other directives issued and all other actions taken pursuant to Executive Order No. 11615, as amended, and Executive Order No. 11627, as amended, and in effect on the date of this Order, are hereby confirmed and ratified, and shall remain in full force and effect, as if issued under this Order, unless and until altered, amended, or revoked by the Council or by such competent authority as the Council may specify.

SEC. 15. (a) The Construction Industry Stabilization Committee established by section 1 of Executive Order No. 11588 of March 29, 1971, and the craft dispute boards authorized by section 2 of that Order, are hereby continued, except as modified by the provisions of the Economic Stabilization Act of 1970, as amended.

(b) The Chairman of the Pay Board, acting in accordance with the majority vote of its members, shall continue to perform all functions vested in the Secretary of Labor by Executive Order No. 11588, with respect to (1) the certification of determinations that a proposed wage or salary increase is not acceptable pursuant to section 5 of that Order, (2) the approval of rules and regulations issued by the Construction Industry Stabilization Committee pursuant to section 10 of that Order, and (3) the issuance of rules and regulations pursuant to section 10 of that Order.

(c) The revocation of subsection (d) of section 5 and section 6 of Executive Order No. 11588 contained in subsection (c) of section 14 of Executive Order No. 11627 shall remain in effect.

(d) Section 8 of Executive Order No. 11588 is hereby revoked and the Interagency Committee on Construction established by that section is therefore abolished.

SEC. 16. (a) Whoever willfully violates this Order or any order or regulation issued under authority of this Order shall be subject to a fine of not more than $5,000 for each such violation. Whoever violates this Order or any order or regulation issued under authority of this Order shall be subject to a civil penalty of not more than $2,500 for each such violation.

(b) The Council may in its discretion request the Department of Justice to bring actions for injunctions authorized under Section 209 of the Economic Stabilization Act of 1970, as amended, whenever it appears to the Council that any person has engaged, is engaged, or is about to engage in any acts or practices constituting a violation of any regulation or order issued pursuant to this Order. The relief sought may include a mandatory injunction commanding any person to comply with any such order or regulation and restitution of moneys received in violation of any such order or regulation.

(c) The Chairman of the Cost of Living Council, the Chairman of the Pay Board, the Chairman of the Price Commission, or the Secretary of the Treasury, respectively, or the duly authorized agent of any of them, shall have authority, for any purpose related to the Economic Stabilization Act of 1970, as amended, to sign and issue subpoenas for the attendance and testimony of witnesses and the production of relevant books, papers, and other documents, and to administer oaths, all in accordance with the provisions of Section 206 of the Economic Stabilization Act of 1970, as amended.

SEC. 17. Executive Order No. 11627 of October 15, 1971, Executive Order No. 11630 of October 30, 1971, and Executive Order No. 11632 of November 22, 1971, are hereby superseded.

SEC. 18. This Order shall be effective as of December 22, 1971.

RICHARD NIXON

The White House,

January 26, 1972