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· Sec. 11. If any provision of this Act or the application of such provision to any circumstance shall be held invalid, the validity of the remainder of the Act and the applicability of such provision to other circumstances shall not be affected thereby.

Approved, March 11, 1941. · The CHAIRMAN. Are there any questions by any member of the committee? · Mr. PATTERSON. I will simply add, of course, the War Department had no notion when it submitted the bill that it was going to interfere with the watch in a man's pocket or anything like that. The bill is couched in broad language, but what we have in mind is purely materials, supplies, and equipment for the armed forces. . Senator Hill. Mr. Secretary, even if it did take that man's watch under this bill, he would get due compensation for it?

Mr. PATTERSON. Yes, sir.

Senator Hill. In other words, every piece of property that you might take, under this bill, the owner of that property would get due and proper compensation therefor?

Mr. PATTERSON. There is no element of forfeiture in this bill at all.
Senator HILL. No element of forfeiture at all?
Mr. PATTERSON. None at all.

Senator HILL. And no one is going to sustain any loss such as a man sustains when he is drafted into the service and perhaps has to leave his business or some lucrative endeavor he is in, to go into the Army at $30 a month?

Mr. PATTERSON. The situation is not comparable.
Senator HILL. Because the sacrifice is not comparable.
Mr. PATTERSON. No, sir.

Senator HILL. Now, as you have already suggested, this is simply the third, and so far as I forsee, the final step of what we vndertook to do when we passed the Selective Service Act.

The first step that we took was the drafting of our men, our manpower; the second step was when on the floor of the United States Senate there was written into the Draft Act what was known as the Overton-Russell amendment, and which now appears as a section of the Draft Act. That is section 9. That second step, in short, being simply this, that the Government would have the power to place an order with a factory or plant and if that plant did not comply and fulfill that order, the Government had the power to take over the plant so as to insure the production of the material which the Government needed.

Now, this third step is to take that property which is not covered by section 9 as you say, things like patents and maybe a man has got some machine tools out here that he cannot use himself so far as the defense effort is concerned; he cannot make a contribution to the defense, but they are badly needed to be used somewhere else for defense.

Now, you take those machine tools. He is fully compensated, and they are put to work to properly prepare and equip these men that we have inducted into the service, so that not only they will be best prepared and trained, but if they should have to go into battle we will give them the best possible chance to protect and to save their lives in battle. Is that not what the situation is? Mr. PATTERSON. You have stated our views. Senator LODGE. Have you completed, Senator Hill?

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Senator Hill. Yes. .

Senator LODGE. What would be the objection, Mr. Secretary, to following the system followed in the World War and enacting a series of specific measures as the need arose?

Mr. PATTERSON. Delay Senator LODGE. Is that the only objection you have against it? Mr. PATTERSON. Yes. Of course, they were about to enact a general commandeering statute just as the armistice came. They recognized at that time that that was no satisfactory way of handling the thing and that is the testimony of Mr. Baruch, who was in charge of the industrial efforts at that time.

Senator LODGE. Have you furnished that for the record?

Mr. PATTERSON. That is in my statement, a quotation from his work, where he recommends a general requisition statute rather than piecemeal requisition statutes such as relied upon at that time.

Senator LODGE. Did the statute he recommended have that permanent feature in it?

Mr. PATTERSON. I do not know that he recommended any particular draft. I have explained its purposes, I think, before you came

in.

Senator LODGE. No; I heard that quotation. Mr. PATTERSON. If there is any other way, I do not know of any way of returning material that may have been expended. As a matter of fact, the only point in putting in the "permanent” in this act was to get in the word “temporary” so we could turn back. Otherwise we would not have had the word "permanent” in it at all.

Senator LODGE. Well, so long as you have a statute that enables you to take aluminum and keep it, you would not necessarily be wedded to these words which enable you to take a man's watch and keep it?

Mr. PATTERSON. No, sir.

Senator LODGE. You have no desire to cover a whole lot of things that are of no military value.

Mr. PATTERSON. No. Senator LODGE. Of course not. Mr. PATTERSON. No. Senator LODGE. Who drafted this bill, Mr. Secretary? Mr. PATTERSON. I think Colonel Dinsmore drafted it. As I explained, it has been in the Industrial Mobilization Branch for at least 10 years.

Senator LODGE. I wanted to get that into the record.

Mr. PATTERSON. There is no desire here on the part of anybody to seize power. I have heard it so described, but that is not the purpose.

Senator LODGE. I do not know whether you want to seize power; but maybe some others do.

Mr. PATTERSON. I take the full responsibility, Senator, for the introduction of the measure.

Senator LODGE. Either directly or indirectly, anyway, it is drawn absolutely as strong as it possibly could be drawn, is it not?

Mr. PATTERSON. Yes, sir.
Senator LODGE. To sell or otherwise dispose of.

Mr. PATTERSON. Qualified only by the words “useful or to be used for national defense.”

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Of course, those are important qualifying words, and I think that it is right that it should be in the interest of national defense

Senator LODGE. Now, take those words of any kind or character'' at the beginning, what is the need for that phrase there?

Mr. PATTERSON. Well, that is supposed to make it broad enough for patents, contracts, shares of stock, if you like, or anything like that which might be most convenient; but it all has to do with national defense.

If someone can think of a happier form of wording that will accomplish what we are after and at the same time limit operations, it is all right with me.

Senator LODGE. Will you say for the record, or off of the record, I do not care which, give some specific examples of the uses that you would like to make of this power when you get it?

Mr. PATTERSON. I do not anticipate that this power will be availed of very often. It is one of those things that you have got to have in the closet, however, in case of need. It is a wonderful thing to have it.

Senator LODGE. Just so that people will know that you have it? Mr. PATTERSON. Yes, sir.

Senator LODGE. Of course, it is perfectly true, if you are going to draft-

Mr. PATTERSON (interposing). If you are going to dicker with a man for some supplies or machine tools, or something that he has, it gives the Government that right, and that is very necessary if he is asking an exorbitant price.

Senator LODGE. Well, I think as you said, and as Senator Hill said, there is a lot of justice in saying that if you are going to draft a measure under which you are going to draft property, obviously that is a fair thing to do. On the other hand, you do not want to make such changes in our social system that the things for which the man was drafted will disappear behind his back. That is true, too, is it not?

Mr. PATTERSON. Of course we want that bill passed. Under necessity he will do anything. That is a fact.

Senator LODGE. But we are not at war yet.
Mr. PATTERSON. No.

Senator LODGE. And it is obviously true that if you draft a man and then refuse to draft a machine tool that is unfair; but if you draft a man and then take his watch while he is away at camp, that is unfair.

Mr. PATTERSON. I do not think that the Army is short of timepieces.
Senator LODGE. No; I do not think it is either.
Well, I think that is about all I wanted to ask.

Mr. PATTERSON. Someone has suggested that we ought to have the words in there, in case of shortage, "for the Army and Navy."

I take it that is implied in what is said there, but if someone wants to put those words in there, that is all right.

The CHAIRMAN. Senator Downey, you desire to ask some questions? Senator DOWNEY. Mr. Patterson, I want to preface my remarks by saying frankly I am very much alarmed about the effect of this bill upon southern California, knowing the conditions that exist there.

Now, I am just thinking out loud, and I would like to have your advice and help as we go along.

We have in southern California between four and five hundred small manufacturing shops and machine tool shops. To a greater or less extent, depending upon the particular industry, they are now being used in nondefense industries.

The Maritime Commission and the Navy have very formally taken the position that they are going to restrict the contracts they give out to as few large existing well-equipped plants as possible. That is their frank statement, and they defend that upon the position that that is the best way to get the work done.

Now, those shipbuilding contractors are loaded up with hundreds of millions of dollars in contracts, and they are endeavoring in every way by any means to seize any kind of machinery they can adapt to their purpose in southern California and I believe that the Army and Navy authorities desire to do that very thing, and I have no doubt with the very highest integrity.

The same is true, to a somewhat lesser extent, perhaps in the airplane industry.

Now, what I believe is that the passage of this bill will result in the destruction of hundreds of the smaller manufacturing businesses, of Los Angeles, that have been built up over 10, 20, and 30 years. I think we are going to see there that machines are taken away from them. I think we are going to see their business destroyed without compensation, so far as the business is concerned. I think we are going to see them lose their architects, and their mechanics, and their foremen.

As a matter of fact, I think that is the purpose of this bill, at least, so far as southern California is concerned, and I have made some investigations, Judge Patterson, actually on the ground, and much of my information comes to me from the military men themselves directly.

It is a condition that is very much frightening the small businessmen of southern California.

Now, it may be necessary to have that kind of a military dictatorship under which an Army officer can go into any plant in southern California he wants to and say “Give us half of your plant” or onethird, or all of it, and turns it over to the Bethlehem or the Consolidated, or the Los Angeles, that may be necessary. We may be in that great peril, but I do not believe that the committee should underestimate the power and the possible prejudices of this bill to men who have spent decades building up their businesses.

Mr. PATTERSON. Well, that takes it into the buying policies, and I can speak on that, so far as the War Department is concerned.

It is our policy, of course, to place as many prime orders as broadly as we can with concerns of the type that you speak of and where we cannot place prime orders, to assist in the subcontracting of larger orders so that it is fed down to those smaller plants.

We got a direction from the President within the last month to try to do that, as much as we could.

We would rather use the machine tool right in the plant where it is now located then move the machine tool. There is no doubt of that. In my opinion it is better in every way, economically and socially; better for our own production. Failing in that, however, we do want the power to take essential machine tools. Of course, most of these machine tools that you speak of are not of the nature or sort that we want for any armament production. Most of themthat is my understanding from the machine-tool people are not.

Senator DOWNEY. In the first place, let me say I have been informed by representatives of the Maritime Commission and of the Navy Department that the policy you now mention is exactly the

I can speakerson. Well, thiding up their busice

contrary. That is, the policy you mention as that of the War Department is contrary to their policy. They are now following a policy whereby they desire to have all of the work done upon one site within the factory itself and not let it out. They desire to restrict the work to as many large corporations as possible. For instance, they want to throw all the work together in the Bethlehem and two other shipbuilding companies out there, so far as possible. I have been informed of this, Judge Patterson, by representatives of the Navy itself, and if you desire me to cite authority, I will be pleased to do it. They desire not to have that work done out in the smaller plants, but to have the machine tools assembled there on the site itself, and I can call the representatives of the Navy Department, if you care, and I am sure that they will fortify or corroborate that statement.

Mr. PATTERSON. All I was speaking of, Senator, was the War Department.

Senator DOWNEY. Yes; I also, so far as the War Department is concerned, I have heard by representatives of your own War Department that there are very great difficulties that have developed, and delays in farming out these small contracts. · Mr. PATTERSON. That is true.

Senator DOWNEY. And one of the purposes of this very bill is to obviate the necessity of doing that very thing.

Mr. PATTERSON. No; it is true we have had a good deal of trouble doing it, and in the nature of things, that trouble will persist for some time, but it is our policy to resort to subcontracting in every case where we can. Of the two alternatives, if you are going to remove the order or the business to the machines, or the shop, or move the shop to some other place where the main order might be, in the course of performance, we would prefer the first.

Senator DowNEY. Well, in the first place, Mr. Chairman, if I may make my position clear, I would certainly not object to any bill which allowed the Army to commandeer second-hand machinery needed for defense, especially if that is being held for speculative purposes. That would clearly be in the interest of national defense and would not injure anyone except the particular man who might be trying to make a speculative profit.

The same rule would certainly apply to strategic war materials where they are being hoarded, and the Government ought to have the right to commandeer them; but I must admit, Judge Patterson, I look with horror upon giving our Army officers the right to go into any machine tool shop in southern California or any manufacturing plant and say, “We are going to move out today 24 percent” or “one-third” or “50 percent,” or “75 percent of your machines, and pay you the value of the machine tools we take."

There will be businesses there worth hundreds of thousands of dollars, perhaps millions of dollars which will be affected and we are giving the Army the right under this bill to destroy those without any compensation, as I understand it-I may be in error-for the goodwill or the value of the business, and I do not believe it is necessary.

I might say that, to me, it seems that the airplane industry in southern California is going ahead with tremendous speed. I think looking ahead 18 months, we are going to have more airplanes than we can find pilots and air fields for. According to the statement of

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