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owned property. Finally, we have from the administration itself a measure which undertakes to accomplish what Dr. Wirt said was its objective 7 years ago.

If we are permitted to hold an election next year, it is my opinion a Congress will be chosen that will undertake to recover some of the power heretofore abjectly surrendered. I don't believe Mr. Willkie and his secret sponsors can prevent it. I am sure this is true of Indiana.

The CHAIRMAN. Senator Gurney, have you any questions?
Senator GURNEY. No questions.


Colonel TAYLOR. Mr. Chairman and gentlemen of the committee, we are unqualifiedly for this bill. We have been for it for the last

20 years.

The American Legion has ever since its organization been for what we call universal service, and that is proper service of not only the manpower of the country but the industry and the wealth and the material of the country.

We had some several years ago before the Congress what is known as the Sheppard-Hill bill. I just want to read one section of that

I bill: that in the event of war or of a national emergency declared by Congress to exist which in the judgment of the President demands an immediate increase of the Military Establishment, the President be and he is hereby, authorized to draft into the military service of the United States such members of the unorganized militia between the ages of 20 and 31 as he may deem necessary subject to such conditions, exemptions, rules, and regulations as the President may prescribe and publicly proclaim.

That has been done by the Congress. It should have been done long ago.

Likewise during such time of war or national emergency declared by Congress the President shall have the power to determine and publicly proclaim from time to time the material resources, industrial organizations, and public services over which Government control, including the acquisition of materials for use or resale by the Government, shall then be necessary, and such control shall be exercised by him through agencies then existing or which he may then create for such purposes.

That last paragraph that I read to you is the bill which is now before this committee for your consideration.

In listening to the witnesses, I question whether they understand that there is a real war going on. Out of the experience that the veterans of the last war had we came back fully determined that the same situation should not develop again as developed prior to the last war, that is, that not only should men be drafted, not only should men be offered for sacrifice in the war, but that all of the resources and all of the property of the country should contribute their full share.

Now is the time to do that.

Again it is true that under the National Defense Act of 1920 there is a provision for the President to take over property under the rights of eminent domain. But that does not cover this situation so far as rights to materials are concerned.

This is necessary. This is something that the Legion itself and the War Department has given years of study to. You had a committee composed of five members of the Senate, five of the House, and five Cabinet members; and they came out after they studied this very situation for more than 2 years and recommended this type of legislation some 4 or 5 years ago to the Congress.

The only thing that is worrying me is whether it is too late. It should have been done long ago. Not having been done long ago, it should be done now.

No greater benefit, no greater privilege, should be given to property or property rights—I don't care whether they are patents or what they are, telephone companies or anything else—no greater privilege should be extended to them than to the men who actually go out and do the fighting.

This is necessary. The War Department, out of its experience and its study, has come to the Congress and said, "Now is the time that we need it.” And I dare say that the witnesses from the War Department have pointed out to you the reasons why it is needed now.

I just want you to know that so far as the veterans of the last war are concerned—and there are 1,100,000 of them in the American Legion—we ask you to put this legislation through now.

That is all I have to say.
The CHAIRMAN. Are there any questions, Senator?
Senator GURNEY. No questions.
The CHAIRMAN. Senator Downey! Senator Lodge ?
Senator DOWNEY. No.
Senator LODGE. No.
The CHAIRMAN. Thank you very much.

STATEMENT OF DR. A. P. HAAKE, MANAGING DIRECTOR, NATIONAL ASSOCIATION OF FURNITURE MANUFACTURERS, CHICAGO, ILL. · The CHAIRMAN. Will you give the reporter your name and address? Dr. HAAKE. My name is Dr. A. P. Haake. I am managing director of the National Association of Furniture Manufacturers, Chicago. Their office is in Chicago. I live at 214 Berry Parkway, Park Ridge, Ill., one of the Chicago suburbs.

I am speaking in behalf of a large group of furniture manufacturers. I might add also that I have been active for some years in an organization of small businessmen.

I am professionally an economist, having formerly been connected with several universities. My connection with the furniture manufacturing association is that of an economist rather than that of a conventional secretary. In other words, my point of view is that a person who is neither management nor labor, but one who stands far enough away from the trees to see the forest. And I think—at least, I like to believe—that I have kept myself in as unbiased a position as it is possible for a human being with emotions to do.

I am frankly opposed to this bill, and I know that the people for whom I am appearing are unanimously opposed to the bill. I have not heard any exception to that position.


At the outset let me say in explaining our position that they are not opposed to national defense. They are very ardently in favor of doing whatever is necessary to defend our country and to keep it alive.

The question, therefore, is not whether or not we are willing to go along with the Government and all other groups of citizens in defending our country. We raise the question as to whether or not this type of legislation is necessary to do so.

It seems to us that it carries with it implications which are far more far reaching and far more serious than their immediate effect might be one way or another.

I have read carefully the original bill and, frankly, no less carefully the substitute bill; and in all candor I find no difference between the two in their effect.

The substitute bill has rather expertly avoided the implications of the first bill to the casual reader. But I think anyone who reads carefully will discover that in the substitute bill there is no change in the powers or the implications of those powers as given to the President.

He is still permitted to acquire practically any property. Apparently he is not, because the bill points directly to whatever is necessary for national defense, and points to tools and machinery and military or naval equipment or munitions.

But there are those apparently innocent words there "or component parts thereof.” And, while I am not a lawyer, just plain English tells me that “component parts thereof” will cover almost anything that is produced in these United States.

It would cover wood screws, for example. It would cover the wood itself. It already should cover aluminum. I see nothing that would not be covered by "component parts thereof."

And then the bill goes still further and applies not only to the actual materials and the properties, but also to any right or interest therein.

There at once become involved all stocks and bonds, any notes that may have been taken by banks against that property; and if there were anything lacking in the first coverage, it seems to me that this second phrase completes it.

Then the President is given the power to take that over and dispose of it as he sees fit. That seems to be an essential power, and one could offer some justification for that power. But there are no limitations that are sufficient to safeguard this American system of ours, if you please, free enterprise.

While this may sound ridiculous, stranger things have happened. A lease for a property might be taken over and under the guise of defense turned over to a foreign interest. A small business concern may be turned over to a large business concern. It might be possible, for example, in a furniture plant to take over not the entire plant, but a strategic portion of it, such as the cutting-off division, and thereby make the entire operation impossible. In short, small business is placed possibly at the mercy of large business which sees fit to cooperate in its own interest.

And while I know that businessmen and labor men and ordinary citizens are loyal to their country, it remains true that the average



man without exception, no matter where he is, can on occasion justify acts under the name of patriotism that are really in his own interest.

And I think it is exceedingly dangerous to open that door so widely for the domination of so many small business units by large ones, for the possible turning over of control of our industries to foreign groups or foreign commissions.

Even that during the course of the war might not be so serious, but there is no limitation. Then property might be turned over, leases given over; but it is not provided as to when that shall cease or how soon or when they shall be turned back.

If one were to ask for a piece of legislation which in effect would socialize all property, not only for today, but for all time, I personally would ask for nothing more effective than this particular piece of legislation, bearing in mind, if you please, that we are not objecting to the stated purpose of it. We are objecting to what may easily come and in our judgment will come in the train of that bill.

We don't think it is necessary. I understand that testimony already has been given to the committee that the President possesses all the power that is needed in the taking over of general property, such as corporations and materials, but that the present situation does not enable him to take over personal property, which this bill goes to extreme length in doing.

The Vultee incident in Los Angeles demonstrated that the President does have authority to act and adequate power to act to handle a labor situation. More power would not seem necessary for that purpose.

I am reminded—I don't like to point this out, but I think it should be—that at the time that the lend-lease bill was before Congress, the country was assured that this was a peace bill. And yet after the bill was passed, I recall reading in the press from one of the proponents of that bill that in effect the public should have had sufficient intelligence to realize that it really was a war bill.

Well, millions of people in the United States believed it to be a bill for the purpose of peace. It turns out to be a bill which facilitates our entrance in and our effectiveness in war.

I don't quarrel with that particularly, if there were not the element of misrepresentation. The people don't know just what to believe. I think honestly we should be forthright on all occasions in all directions.

That argument holds with respect to this bill. It seems to me that forthrightness requires that the public clearly understand that this bill gives one man the power to socialize all property within the United States.

I have had personally enough contact with a good many executives and officials, lesser as well as some of the more important ones in Washington, to believe in my heart of hearts that there is a conviclion in the minds of many men of power that we must have socialism of our economic structure. With that I quarrel most emphatically.

Finally, I say it is not necessary, because, unhappily, it is, while businessmen have been accused from time to time of being profiteers and being more interested in profits than they are in the support of their country, there has never been a greater libel perpetrated on any group of men.

You will find among businessmen and I have no doubt that you have had that experience yourself, Senator-just as abiding and keen


a sense of loyalty to our Government as one will find anywhere. They are not trying to make enormous profits. They are trying to keep their concerns going, to provide employment, to keep this economic structure of ours alive. And we are concerned, and we must be concerned, with what will be the conditions and the status under which business operates when this war, the next war, is over.

We saw what our difficulty was after the last war to remove powers that had been given to bureaus in the course of that war. And had it not been for the intelligent and rather forceful action of President Wilson and several others, it may be that the governmental control which was fastened necessarily upon us during that war might then have become permanent.

At that time, if you please, we had a public which was much less susceptible to socialism than it has become today. You will find a curious conflict, a contradiction, in the minds of many people. If you ask them two questions you will get answers that are directly contrary to each other.

If you go and ask the average American, “Do you believe that the individual citizen should have the right to work?” he will say, “Yes.” If you ask, “Should he have the right to keep and use the proceeds of his earnings as he sees fit?" the answer will be "Yes." If you ask, "Should he have the right either to use them or to deny himself and to invest them; and if he invests them, shall he have the right to the returns on that investment ?" the answer will be “Yes.” If

you ask him, “Shall we retain democracy in our economic life which gives the individual the right to make free contracts and control his own property ?" the answer is “Yes."

And yet, on the other hand, the same citizen can become so enamored and so carried away with enthusiasm over the specter of a German coming over here-a rather silly specter in my imagination, and destroying our country or destroying his economy-when that picture is held before him, he is prone to forget the deep convictions which he held with respect to free enterprise, and to become disposed to go along and give the President, or any other person so delegated, the necessary power, even to the point of socializing our property and destroying the very thing which to him means America.

We have a horde of new bureaucrats in prospect. I say that without any disrespect, because, having been one on one occasion myself, I think I understand something of their psychology.

Those men, like any other citizens, are earnest and anxious to do what they can for their country. It is also inherent in every man to hold on to his job as long as he can, and to make his job as important and effective as he possibly can. We saw that under the N. R. A., which started out on a very modest program. I recall General Johnson making the remark one day in the United States Chamber of Commerce, when he was asked a question, he made the remark that he didn't expect that he would need more than 50 people for the entire set-up. By the time the thing got well under way we all remember that there were thousands, something over 6,000 employees.

And from having started out with fairly well defined objectives, the powers reached out in all directions, and in my judgment, the N. R. A. destroyed itself by trying to do too much.

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