delegated properly so. That doesn't mean, sir, at all that I would not consider it very bad administration if I felt that everything that was done had to be done either by one of my men or approved by one

of my men.

Senator BREWSTER. Then do I understand that 6 months from today, if this thing isn't working, you are going to tell us that you can't be blamed?

Mr. NELSON. I do not, sir; no, sir.

Senator BREWSTER. I mean either you have got to be responsible or you are not.

Mr. NELSON. Sir, I have no alibis to make now or 6 months from now under the authorities which have been granted me by the President. If they fail, it is my failure solely and not because of any alibi 1 can give you, sir.

Senator BREWSTER. And you will be responsible for the elimination of anything savoring of friction as between your representatives and your department?

Mr. NELSON. Yes, sir; and there will not be friction, sir.

Senator BREWSTER. That is all we want to know.

Mr. NELSON. Because friction means delay. There will be differences of opinion

Senator BREWSTER. Of course.

Mr. NELSON. As there will be between members of your committee. Senator BREWSTER. But there will be decisions?

Mr. NELSON. But there will be decisions, sir.

Senator BREWSTER. Now, on the matter of placing the contracts, all the departments, as you know, now are under serious question on the matter of profits, the limitation of profits. Our various legislative committees are considering the possibility of legislation. To what extent do you consider it is practical in your program to have restrictions as to the profits on your contracts, as distinct from tax legislation which would reach whatever might be excess profits, if you would give an opinion on that? •

Mr. NELSON. Yes, sir. I haven't thought this through carefully yet, of course, but I feel that no manufacturer is entitled to unconscionable profits on a war contract. I think a manufacturer, a workman-anybody connected with it-as long as we have the profit system in this country, is entitled to a fair profit for his labor or his management, and that it should be a fair profit. It is my opinion that where excessive profits occur in a contract, that contract ought to be renegotiated. That occurs at times, because we are dealing in new territories. Senator BREWSTER. And with vast volume.

Mr. NELSON. Vast volume; vastly increased volume. And there is no one wise enough today to know what the cost will be when a plant gets working full on repeat business and when they learn how to make that economy. I hope that we will get an interchange of ideas as between manufacturers making an item, so that economies brought about in one plant can be brought about in another, and that we can get economy primarily of time, of course, but of cost, too. While I think the cost is secondary in this effort, and that time is primary, I think we should not waste money in getting the time element. Senator BREWSTER. You said before our committee sometime ago that you felt America was ready to make any necessary sacrifice to win

this war as long as they were each assured that the burden was equitably distributed.

Mr. NELSON. That is right, sir. I said they would as long as, first, they thought it was necessary and, second, if they thought it was being shared alike by all.

Senator BREWSTER. And you do consider it is a part of your responsibility in the tremendous powers given you, to achieve as far as possible those twin goals?

Mr. NELSON. Yes, sir; I think they are fundamental in having morale in this country.

Senator BREWSTER. And it will be your endeavor to educate all agencies of procurement, business, and labor and everyone else to that philosophy?

Mr. NELSON. Yes, sir; because I believe that an absolute, fundamental conception of economy in a democratic system.

Senator BREWSTER. You do recognize, taking the two big fields in connection with your dollar-a-year men, two groups of industries, the monopoly groups and the competitive groups? When you have a dollar-a-year man from a monopoly group like aluminum, for instance-possibly automobiles, but aluminum-there has, of course, been the feeling, warranted or not, that their advice must be affected by the tremendous concern with which they are associated. Senator Ball raised the question about the matter of competitive solution of that problem. How are you going to liberate yourself from any possible bias of that character?

Mr. NELSON. Well, of course, you are pointing out one of the most difficult jobs of administration in my big job. That is a difficult job of administration, I will grant you. I think it can be eliminated, first, in the man you select for the job and, secondly, of course, in the type of supervision and policies that he works under and the care that is exercised in seeing to it that everybody who has an idea in the picture gets a fair and considered hearing on that idea.

Senator BREWSTER. Perhaps you would say that the problem would be solved if it is recognized?

Mr. NELSON. I think that is a very fair way of putting it, sir.
Senator BREWSTER. And you do recognize it?

Mr. NELSON. I recognize, sir, that in all of us there are biases. Senator BREWSTER. Yes. In the competitive industries, in the highly competitive smaller industries, you have the peril of favoritism in allocation, and you recognize that also, that is, that a man who is carrying on a business and finds a dollar-a-year man in charge here, being paid a salary by a competitor, isn't going to be very happy about it. Is there any way by which you can reassure those fellows that they are going to get a fair break?

Mr. NELSON. You ask the mechanism by which they do it. I don't know at the moment. I can assure you that

Senator BREWSTER (interposing). Again you recognize it?

Mr. NELSON. I recognize it, sir, but I would also like to point out that that would be equally true if that man severed his connection and worked on a Government salary. I don't believe that the difference between the dollar you pay him and the $8,000 which you can pay him under the regulations would change that bias if it is there, sir. think that is the important difference that is in my mind about this.

Senator BREWSTER. You mean his bias as between concerns?
Mr. NELSON. Well-

The CHAIRMAN (interposing). Isn't it true, Mr. Nelson, that the probabilities are that the most biased ones will probably go home because they are more interested in the money than they are in the country? You recognize these problems and, when you go to solve them, the chances are that those fellows who feel that they can't under any circumstances sever their connections on account of the fact that they have to have that much money to live, will in all probability go home, and you won't be bothered with them. Then you can get somebody who can agree with your policy and carry this thing out.

Mr. NELSON. Mr. Senator, of course, I don't feel that those criteria necessarily apply. That is the difference, I think. I don't believe that the amount of money you pay or whether a man has severed his connection

The CHAIRMAN (interposing). I was just remembering the statement that you made that these fellows had created for themselves a standard of living which they couldn't forgo for $8,000 a year.

Mr. NELSON. Well, sir, it isn't quite the standard of living which they don't forgo-it is a question of their obligations, the debts and other things they have, and their families could not live. True, you say they would do it if they went into the Army. Well, in the Army you take mostly younger men who haven't reached that stage where they have big income taxes to pay. When I say "big income taxes," there is no criticism of it. I believe that everybody should pay it and pay according to his ability, sir.

The CHAIRMAN. That is true, but you must also remember that many of these Army boys are on the other end of the string and are probably leaving a lot of debts which will be harassing them when they get back from this emergency. That is just the other point of view.

I am not going to argue this question with you, because I have certain views on it and you have certain views. We are behind you to win this war, and I say, whether you are right or wrong, we are going to get behind you and help you win it.

Mr. NELSON. I appreciate that attitude more than I can tell you. Senator BREWSTER. There is one other thing I want to bring out. You have made it clear that you now have, as you understand it, unlimited authority.

Mr. NELSON. In the field of production and procurement, and I limit it to those two.

Senator BREWSTER. You are sufficiently realistic and you have been around Washington long enough to know that there are influences. of various kinds that try to manifest themselves.

Mr. NELSON. Yes, sir.

Senator BREWSTER. From legislative sources, and executive sources, and now even from judicial sources, as the judiciary seem to take concern in executive matters, and from business sources. We have that confidence in you that you are immune to as much of that as possible. But I think this committee wants to be assured that as far as governmental functioning is concerned-legislative, executive, and judicial-we want you to keep in that happy position. And I would like your assurance that the first time any impairment of your

311932-42-pt. 10--21

authority appears from legislative, executive, or judicial sources, you will advise this committee in order that we may know that the responsibility then is more diffused. Is that fair?

Mr. NELSON. Sir, if you say "impairment," of course that, again, we have to define if we are to put down on paper just what we mean. I can assure you, sir, of one thing. In the first place, I am not interested in politics in any particular. I have never been and I am not interested in it. I recognize it as a business that you have to learn from childhood, and it is a business and a profession, just as the business of selling goods at retail is something that you must learn, or manufacturing, or other business.

Now, sir, I am down here for one purpose, and that is to put this program over if it is humanly possible and if I have the ability. and if I see anything that will materially affect this war effort, the production effort, I want to assure you, sir, that I am not going to hesitate to appeal for help anywhere I can get it. I think, sir, from what I have seen-I have been down here a great deal and know Washington fairly well; I don't believe anybody ever knows all about it nearly everybody concerned is interested in one thing: putting over this program.

Senator BREWSTER. And you are ready to be the goat?

Mr. NELSON. Yes, sir; I am ready to be the goat, because I think the country expects it of me.

Senator BREWSTER. You will let us know if there is any way we can help you?

Mr. NELSON. I will be glad to do it. I recognize this, too, sir—and I would like to say this off the record-that I have everything to lose and nothing to gain during this job.

Senator BREWSTER. That is why we have confidence in you, Mr. Nelson.

The CHAIRMAN. Mr. Nelson, I think that statement ought to be on the record, because that is a strong statement.

to.

Mr. NELSON. I will put it on the record, sir.

The CHAIRMAN. I don't want to put it on the record unless you want

Mr. NELSON. I will put it on the record.

The CHAIRMAN. Are there any other questions, gentlemen?

PLAN TO ESTABLISH INDEPENDENT AGENCY TO ASSIST SMALL BUSINESS

Senator MEAD. Mr. Chairman, if there are no questions down that way, and we are at a loss for the moment, I want to go back to little business.

Mr. NELSON. All right, Mr. Senator.

Senator MEAD. I believe that your appointment was received with universal acclaim because of past performances and because of the confidence the people have in you. I think that is the sentiment expressed individually and collectively by our committee.

Now, I was wondering if, as a result of this concentration of authority and, I hope, the cooperation of the Army and Navy and other procurement agencies, you can give us any reassurance of the acceleration of this program of procurement and production and how it is stepping up, and if the process of stepping it up is going to be continued. What

is the situation today? Has it improved over what it was when you took over this assignment? What is the situation? What can you say for the country for the future?

Mr. NELSON. Well, I would rather not make a statement at this time on that, sir.

Senator MEAD. We wouldn't want any details.

Mr. NELSON. I don't want to be put in the position of making any promises. The record should show what we do. I can say and I am very happy to say it-that there is the finest kind of cooperative spirit today in both the Army and the Navy and the Maritime Commission, and I for one, will do everything I can, without impeding the progress of the program, to see that that cooperative spirit continues. Senator MEAD. Because of that cooperation and the concentration of power, you look, and the country looks, for an acceleration of the volume of that program. Isn't that true?

Mr. NELSON. That is certainly true, sir, and I will consider that I have been a great failure unless that is constantly accelerated.

Senator MEAD. Surely. That is what I mean. And, from present indications, that constant acceleration has set in to remain, to continue. Mr. NELSON. Well, I sincerely hope so, sir, and I believe it is true. Senator MEAD. Just one other point, and then I am through.

I believe one of the best ways of making a contribution to the acceleration of that volume is for us to give some thought to the setting up of an independent agency with authority and power to go out and enlist all of these plants and factories that are not now in the program. Now some of them are dead. They have been made casualties as a result of priorities or some other very necessary wartime provision or order. Some of them are dying. Others will go out as a result of the auto and tire and other rationing within the next 2 or 3 months. Not one of those casualties can in any way hope for relief through any agency of Government unless something is done directly for them. They can't qualify for a loan. There isn't any possibility of a grant. So it occurs to me that an independent agency ought to be set up, at least for the duration, which would revive and rehabilitate these casualties and aid in the conversion of those industries that are slowly disintegrating because of priorities and other orders.

This independent agency could, by grants and loans, put all of these plants in shape, and surely we have as much right putting those plants in shape as we have making loans for the construction of plants that do not exist.

So it occurs to me that one way in which we could make a great contribution to the increased volume of production would be to set up an agency whose job it would be to bring plants not now in the defense program directly into the program, and an agency that would have personnel-engineering personnel, organization personnel-in order to advise them how to bring this about, an agency that would have the power to make grants where the Government has already ruined an industry, and loans where it is still a going industry but very likely to be going out soon.

I think that if we gave some thought to the setting up of an industry agency, not to interfere with your agency or to interfere with the Department of Commerce, but merely an agency to go out and to revive and rehabilitate and convert existing plants that could be within