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Admiral LAND. It is not the property taken, but what is on the property. It is all the little contingencies, from outhouses to manufacturing plants. That is what causes the complications in getting machinery buttoned up.
It is this contingent liability that runs into years there, the cases where you cannot reach a price in negotiating the thing without carrying it to the courts. That may run into years.
As I say, I am interested in the time element. The mechanics of eminent domain are all right. They have been on the books since the Constitution was adopted. But it is the slowing down process in an emergency that requires some additional legislation so that the Government can carry out its duty to its citizens and defend these United States.
I am citing these various instances not to show that we are unsuccessful but that we have lost time, time, time in these negotiations, because we are trying to treat the people as American citizens, like we would like to have them treat us; and in so doing we endeavor to get together and have a meeting of the minds. Then again comes in this contingent liability, the prospective earnings, that were mentioned. They are proper to be considered. But under the emergency that exists today I think we ought to be able to reach a deal and reach it promptly and go through with it.
The courts always give redress, even if it takes a long time, to any injured citizen. I am not worried about that. Let the future take care of that.
At the present time there must be a meeting of the minds; and if there are any recalcitrant citizens—and there are some- we have here a way that we can put pressure on them to accomplish the nationaldefense effort.
Senator DowNEY. Mr. Chairman, if I may just state to Admiral Land the worry that is on my mind with respect to this bill, with particular reference to the people in my State of California. That is this: that undoubtedly in many cases the Government will have two alternative courses open to it. It may assist the prime contractor by helping him or forcing him to work out subcontracts, or it may assist that primary contractor by going out among the smaller units of his competitors and actually commandeering the machinery in the possession of the latter.
Now, I believe that the former policy is the much wiser and more equitable policy. It results in much less dislocation in the future.
What does worry me is that the Government may take this easiest way out, that would be the perfectly natural thing for human beings to do, and that is, instead of working for the letting of some subcontracts, may just go out and summarily seize the machinery that the primary contractor needs.
Admiral LAND. Senator, you cannot fight a war with willingness. You cannot make an omelette without breaking eggs. We are breaking eggs right now.
Senator DOWNEY. What I am concerned about is that we are not going to make an omelette at all, but just a sorry mess.
Admiral LAND. Most wars are sorry messes. God forbid, but they are. We are pretty close to being into it.
I feel that this bill is not going to be, as you say, a dislocation. I say it is going to be utilitarian. There is going to be a dislocation, or
let us make it, a utilitarian use, the least damage to the least number and the greatest good to the greatest number.
I don't want to talk in general principles. I agree with you as regards these small people. But you can carry it to reductio ad absurdum. We are very sympathetic in helping to increase the amount of subcontracts. But when it resolves itself into excessive costs plus loss of time, I think you must count the thing off somewhere.
Now, human beings are going to be doing that. That means that errors will be made. But we will do the best that we can with the tools that we have. If you are not satisfied with what those in the administrative end are doing, I say by all means change them.
The CHAIRMAN. Are there any questions?
Senator Kilgore. I just want to ask a question or two of particular nature. As to this Baltimore Pullman plant, were they a shipbuilding concern?
Admiral LAND. They were not a shipbuilding plant. They are now a byproduct of the Bethlehem Steel Co., a shipbuilding firm, who obtained some property across the bay, on which they had a remarkably fine assembly plant that was doing very little. You know, the Pullman business has not been so good for a number of years.
We negotiated with them. They are fine gentlemen. They had other Government agencies dealing with them in this particular case. I think they had some dealings with the War Department. They were smart people, and they wanted to play both ends against the middle. We had a little trouble. It was perfectly proper trouble.
But I would have solved that trouble in weeks less time by such a statute as this. All I would have had to do would have been to come in and say to the 0. P. M., "You determine the priority. If this is an ordnance plant, all right. I am out. If this is a shipbuilding plant, I am in. Now, you boys come across."
They did ultimately, but we lost time.
Senator KılgoRE. You were trying to get the facilities of that entire plant?
Admiral LAND. Yes, sir; and we have them.
Admiral LAND. No, sir. We took it over under this 5-year amortization facilities scheme that has been adopted by the Government agencies. Senator KılgORE. In other words, you leased it and did not buy it? Admiral LAND. We leased it.
Senator KILGORE. One of the troubles, then, is the fact that we still, in spite of everything that we have done, have three competing procurement agencies, do we not, or maybe several more than that?
Admiral LAND. That is true. And that was one of the major difficulties, as I understand it, one of the major causes of this difficulty—that they could not decide who would take priority. That could not happen under a proper priority system.
That difficulty is always going to obtain relatively, but actually that is pretty well removed. We scrap among ourselves, but it is settled by the proper administrator, and we go along.
Senator KILGORE. Now the Priority Administrator settles it or the 0. P. M.?
Admiral LAND. The Priority Administrator, as I understand it, is in the 0. P. M. He is a part of the three P's production, priority, and procurement.
Senator KILGORE. In that case you were not after some tools out of the plant that would render the entire rest of the plant useless, were you?
Admiral LAND. No.
Senator KilGORE. That is not the thing that is worrying this committee.
Admiral LAND. I merely have been trying to be a shoemaker and stick to my own last. My shoemaking is shipbuilding and ship operations. But the shoe pinches just as hard every ship operator and pinches every shipper and every chamber of commerce and every port authority in the United States, including a good many of you gentlemen up here on the Hill, who are on my back all the time as to the curtailing of service due to lack of bottoms.
Senator Downey. We do not have any ships left now, I understand, except Japanese.
Admiral LAND. You don't regret that any more than I do. Senator Hill. If we give you this bill, you will give us more ships, will you not?
Admiral LAND. I will give them to you faster.
Senator HILL. The Admiral has indicated what has been worrying a good many of the members of the committee, and that is the thought that maybe this power would be used to go in and take machine tools and machinery away from the little operator and turn it over to the big operator. Do you folks see any such thing as that?
Admiral Land. Only in very exceptional isolated cases. We have not had a case like that but I would like to say, if we do have a recalcitrant owner, I would like to be able to say to him, “Come across.”
We can lick these fellows, but I say, the question of time is concerned. That is what this bill will do. It will increase production and reduce the time.
The CHAIRMAN. Are there any other questions, Senator Hill?
STATEMENT OF REAR ADMIRAL S. M. ROBINSON, CHIEF,
BUREAU OF SHIPS, NAVY DEPARTMENT The CHAIRMAN. Admiral, will you be good enough to tell us why in your opinion this bill is necessary?
Admiral ROBINSON. I think I can state the position of the Navy Department in a few words, sir.
I can endorse everything that Judge Patterson has said, for one thing; and that pretty well covers the case.
I do think that the bill as written here is a little stronger than the amendment that Secretary Patterson has proposed, and we would prefer to see the bill as it is now written rather than the amendment. In regard to some of the points that were raised this morning, but which were, I think, pretty well cleared up before the War Department finished, I think it is a mistake to think that this bill is going to have anything to do with the absorption of business generally throughout the country. That is already provided for and is going on and will continue.
This bill here will really be used very little. There will be times when it will be quite essential. But the relative number will be very few. We should not, however, be put in the position of not having the authority that is here when we do need it.
As was pointed out very clearly, the thing that is causing and will continue to cause disruption of business is the authority that now is lodged with the 0. P. M. in regard to priorities. That is really what governs business, and not this particular bill. This might do it if we did not have priority; but priority is so much more important that I think we can neglect any effect that this bill will have here, because that is absolutely complete in its final effect.
One more thing, however. Ì have great confidence in the ingenuity of the American businessman. As soon as this bill is passed, I foresee that every man who has a business now will immediately study his plant to see if there isn't some part of the national defense that he can enter into; and he is himself going to take steps to get into that.
It is impossible for the War Department or the Navy Department or the 0. P. M. or any of them to have the absolutely complete knowledge of the industry of this country that would be necessary in order to make sure that every small plant in the United States was engaged in some way in the national defense advancement. But it can be done and I think it will be done as soon as everybody realizes that he must put his plant into national-defense production some way or other. As soon as he realizes that, he will do that of his own effort without any prodding from the Navy Department or the War Department or the 0. P. M. either. He will do it himself. He will do it by dealing with other business people and the businessmen himself.
These people have these contracts. It is impossible, of course, for the Navy Department or the War Department to put these contracts out in small sizes. The Navy Bureau of Ships will contract for a ship. It may cost $8,000,000 or $50,000,000 to build it.
Now, the contractor in turn subcontracts for machinery. That contractor in turn contracts for, we will say, turbine rotors. That man in turn contracts for bearings. It goes on indefinitely. There is almost no limit to which they cannot carry it in any given area.
But a whole lot of it has to be done by the cooperation of the American business people. It just is not possible for the War Department and the Navy Department to run the national defense business without every citizen in the United States devoting some of his time to thinking out how he can best advance that program.
And I think it will be done. And a bill of this kind brings that home to everybody, and makes them realize that if he does not have national defense work in his business, he is not going to be secure. It makes him think about it some.
In the final analysis that is what we have to rely on. And I think that the final outcome of this whole business is that all of the country will be devoting a large part of its resources to the national defense.
You must realize that it took Germany 7 years of absolutely unlimited authority to direct all of the industry in the country into a total war effort. We are trying to do it in one year. We are pretty good, but I don't think that we can do quite as much in 1 year as Germany did in 7.
But it is coming very fast, and this bill will strengthen the hands of everybody who has anything to do with the national defense, and will at the same time act as sort of a prod on everybody else that is not connected with these things. It will tend to bring them in and make them use their ingenuity in getting in.
I think that is all I have to say, sir.
Admiral ROBINSON. Oh, yes. I am sure that it will. I think it would be more helpful if we could get the bill as originally introduced rather than with the amendment.
Senator Hill. What provision in the bill as originally introduced and not now in the measure in its substituted form is it that you want?
Admiral ROBINSON. I only listened to the proposed amendment as it was read. But it seemed to me that it did weaken the bill somewhat, because it restricted it pretty much to machine tools and things of that kind, whereas we might want to take over a building with the machine tools in it.
It might be interpreted to mean the same thing as the original bill. But the present bill enables us to take over anything that is needed in the national defense, and I think that that is the way it should be, because it is not going to be exercised unfairly.
As Senator Downey said, the people administering this bill are going to do it with the greatest restraint. They will bave every reason to do that and none whatever to do otherwise. And the stronger that the bill can be made, it seems to me, the better it will be.
I don't see any restriction at all on what is going into the program so long as it is national defense. That is the sole criterion. You may be sure that nobody is going to take over anything that is not actually national defense.
For one thing, they don't have the time. They have too much to do to be interfering with people unnecessarily.
And you may be sure that this thing will be used only for a last-ditch resort. Nobody is going to bother about that. We are contracting for things all the time. We are too busy. It is only in rare instances that we are going to run into trouble. But certainly we ought to have the necessary authority to take care of those situations.
I think that the bill the way it is is a little better than the proposed amendment, and I cannot see any particular reason for the amendment. It does not seem to me to have any reason for it or anything behind it. Certainly nobody wants to accept any kind of property of one kind more than the other, the machine tools any more than the land or the shop or anything else.
The CHAIRMAN. Are there any further questions, Senator Hill?