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Mr. PATTERSON. If you mean that that could conceivably be done-
Mr. PATTERSON. Possibly. I have not studied it with that consideration in mind. The language is very broad. I said that it was drafted that way.
Now, if somewhat more restricted language would be more satisfactory and still would not cripple us, when we needed the power, well that, I think, would be a very good solution.
Senator LODGE. That is the whole point. We do not want to keep you from getting anything you need; at least I do not. I want to give you everything that you want.
Mr. PATTERSON. We are responsible for the military part.
Mr. PATTERSON. And it is our duty, as I conceive it, to come down and ask Congress for the powers we think necessary in equipping the Army.
Senator LODGE. Exactly, and what would be the draw-back, from your standpoint, to enumerating all of the different things that you think you might want to do in the next 6 months and then put that in the statute?
Mr. PATTERSON. Well, that could be done, but as I say cases come up—it has happened repeatedly in the last year, not only on equipment, but something else, and you look for the law, and you say, “Oh well, it does not cover the case.”
Senator LODGE. You mean that things will come up that you cannot foresee?
Mr. PATTERSON. We had to take over the North American plant last week. Someone said that section 9 of the Selective Service Act did not cover the case; covered only a refusal to produce. There was no refusal on the part of people to produce.
Senator LODGE. It did not take long to get legislation.
Mr. PATTERSON. The House is doing something else. We had to act without regard to that, but that is just an illustration of the situation you are in when the language is restricted, and then something comes up. I have no doubt from your own experience you have that come up constantly; all of us do.
Senator LODGE. Could you furnish for the record the recommendations Mr. Baruch made at the time of the last World War?
Mr. PATTERSON. That is in my statement.
Mr. PATTERSON. I quoted from his book. He did not make it at the time.
Senator LODGE. Was there any bill drafted to carry out his recommendations?
Mr. PATTERSON. That is the recommendation that he made in the book which is off of the press this year. I do not know when he made that recommendation. I discussed this problem with him and he tells me that his own views are that this is appropriate legislation.
Senator LODGE. I see, but no proposal was made at the time of the World War?
Mr. PATTERSON. I understand that there was right at the close of the war.
Colonel DINSMORE. That is right.
Colonel DINSMORE. I am reading from the report of the War Policies Commission.
The CHAIRMAN. Give the page, please; the citation.
Colonel DINSMORE. That is page 450. This is one of the exhibits of the industrial mobilization plan which the War Policies Commission had before it.
A bill relating to the acquisition of private property, in emergency, by the United States.
Various laws were passed during the World War along the same general lines. All were restrictive in character to a particular kind of property or particular commodity for a specific purpose. A bill of the general tenor of this draft was being considered by the Congress at the time of the armistice.
The principal difference between the proposed law and the World War legislation with respect to the same authority is that here all acquisition by the Government in war is covered in one piece of legislation, whereas in the World War the legislation was restricted to particular kinds of property and specific purposes.
In other words, it was felt at that time, in the World War days, that it was desirable to consolidate.
Senator LODGE. Who made that statement?
Colonel DINSMORE. This is a part of the industrial mobilization plan, Senator, that the War Policies Commission was then considering,
Senator LODGE. Well, to your knowledge, was any recommendation made during the World War for legislation similar to this?
Colonel DINSMORE. I have not checked that, sir.
Senator Hill. Now, going back to this language a minute, as I read it it says:
That whenever the President shall find it necessary to secure an adequate supply of necessaries for the support of the Army or the maintenance of the Navy, or for any other public use connected with the common defense, he is authorized to requisition and take over, for use or operation by the Government, any factory, packing house, oil pipe line, mine, or other plant, or any part thereof.
Well, I take it that a machine tool would be considered a part of a plant. It covers about everything connected with or anything connected with that plant.
Senator LODGE. It is very broad. I do not see why it is not broad enough.
Mr. PATTERSON. It did not touch raw material.
Senator Hill. There are two things I would say that it did not touch, perbaps from your testimony. It does not touch raw materials and it does not touch patents.
Senator LODGE. Well, we can put that in, Mr. Secretary.
Senator LODGE. Can you not think out just what you want to do and give us a list of them?
Senator Hill. You do not need legislation on electric power?
Mr. PATTERSON. I think so. Of course, the priorities bill does not touch this situation at all. It touches future production whereas this touches existing articles.
Senator LODGE. Existing supplies.
Senator KılGORE. There is one question I want to ask. On pgae 2, line 7, you use the words "to sell or otherwise dispose of, either temporarily or permanently, any property, right,” Now, under that, for instance, the equipment in a plant could be seized and sold, we will say, to the Bethlehem Steel Co., by the Government. Is that correct?
Mr. PATTERSON. Yes, sir.
Mr. PATTERSON. Suppose that you had some steel or raw material, you have to, as I see it, and the most convenient way at any rate would be to sell it, because it is going to be consumed.
Senator KILGORE. Right.
Senator KILGORE. But that also would apply to machine tools, and other equipment and what is there about that to prevent, in a very short time, there being practically a machine-tool monopoly in the hands of two or three concerns ?
The point that brings that up, Mr. Secretary is—I will give you a little history back of it-I have a letter in my files from a man who interviewed representatives in Richmond, Pittsburgh, and Cleveland, for the Office of Production Management, and he discussed with them a farming out policy, and was met flatly by those representatives with the statement "No; we are going to build these things in central areas around Cleveland, Pittsburgh, and Richmond.”
I have another from a man who applied to the Office of Production Management to see if he could get some contracts, and he had a pretty good sized plant, because the State I come from is an industrial State, and every community has machine shops in it, and they immediately wanted to buy all of his equipment, but could not suggest where he could go to get into the defense industry.
What I am afraid of is that this may be written in such a way that there is a possible chance for terrific abuses in this thing in which the individual plant has no protection.
Mr. PATTERSON. Of course, extreme cases can be imagined.
Senator KILGORE. But if there is some way that we can draft into it protection against those extreme cases and still protect national defense, that is what I am after.
Mr. PATTERSON. Some people voiced a fear at the time of the lendlease bill that the entire Navy would be given away. They said the power was there and it could be done. Of course things like that are fanciful.
Senator KILGORE. That, of course, was impossible and fanciful for this reason, that a step like that would precipitate revolution in the United States, whereas John Jones who has a shop with about 30 lathes or something like that in a small town down here is not in shape to stage a revolution if his plant is taken. He is just one man down there.
But, that is the situation that I foresee in this bill, a possibility of that. I realize that the War Department is sincere in this, but there is a danger, as Senator Downey points out there.
Senator Hill. In that connection, Mr. Secretary, I realize that you are a tremendously busy man. You cannot know all the details of this situation. It is humanly impossible.
I wonder if you have someone in the War Department who might give to the committee some examples or illustrations of situations more in detail that might be useful.
Mr. PATTERSON. Some of those have been checked already in the War Department. I have no doubt that Colonel Dinsmore could give you some and a fuller list could be made up.
I do not want to be understood here as overemphasizing the importance of incidents that have already occurred.
Some people say that the War Department lacks imagination; that it never plans ahead, and gets caught flat-footed with contingencies that come up.
I think this was aimed at the future, with the future in view and so this time we do it and then get knocked over the head again, for showing too much imagination.
Senator LODGE. May I ask you, Mr. Secretary, about this? The thought to have a bill like that, I suppose, was prompted by the occurrence of incidents that revealed a lack of it. There must be things happening.
Mr. PATTERSON. Yes; I have just pointed out that I do not want to be understood as saying that those things were overwhelmingly important.
Senator LODGE. But I do think that it would be very helpful to those who are for the bill as well as those who have not yet decided as to their attitude, to have the record show specific instances as to just why this power is requested and just how it would be used, because you can read anything you want to into it, and it would be of the utmost value, I think, to have instances in the record of why this power was needed and what situation could have been avoided in the past had this power existed. Can that be done?
Mr. PATTERSON. Yes, sir; some instances can be furnished. As I say, I am not saying that you might not say this is trifling; that is trifling
Senator DOWNEY. Now, Mr. Chairman, I would like to ask this, if representatives of the War Department and of the airplane industry and shipbuilding industry, and the Maritime Commission and the Navy, come before this committee and tell us, not in generalities what they intend to do, but exactly what they intend to do.
Now, Mr. Patterson, here you have referred to the airplane industry in southern California. I do not know nearly as much about that as I would like to know, but I know something.
Mr. PATTERSON. I do not mean to be referring to any particular area, Senator.
Senator Downey. I thought you did, but perhaps you did not.
Mr. PATTERSON. We have a shortage of machine tools in the airplane industry. There is no question about it.
Senator DOWNEY. I would like to know just exactly to what extent it would be expected that individual and private enterprise would be disturbed in southern California by seizures by the merchant marine, the Navy, the Army, the airplane and shipbuilding businesses. I think we are entitled to know. I think the business men of the country and the workers are entitled to know it.
As I said, Judge Patterson, to whatever extent it is necessary for us to exercise these extraordinary powers to defend our continent, why, I am for it; but on the other hand I am not for vast injury to our private citizens that is not needed, and I think we ought to know how far this is going to go; how far this is going to go.
Let me ask if the Bethlehem Co. should have avaricious eyes upon some lease that adjoins their property, can it go out and seize that lease?
Mr. PATTERSON. They cannot, of course.
Senator DOWNEY. Oh, “they,” but the Navy Department, or the President of the United States will not know anything about this power. This power will be exercised by Captain So-and-so, or Major So-and-So, or Commander So-and-So. We know how these things are done. They cannot be exercised by the Secretary of War nor by his able assistants, Mr. Patterson.
Mr. PATTERSON. I do not believe that a lieutenant or a sergeant-
Senator DOWNEY. Mr. Patterson, I do know of controversies existing right in southern California now in which the Bethlehem and the Consolidated and the Los Angeles want certain things that are owned by other people. I do know those particular things. I can see what is going to happen under this bill. We are going to have hundreds of thousands of private citizens in California affected, and if I may intervene to ask Mr. Patterson another question.
The CHAIRMAN. Yes.
Senator Downey, Mr. Patterson, I understood you to say that if a company owns a private manufacturing plant and the Government should go in and seize the machine tools out of that plant, or tools out of that plant, or machines, say one-fourth of what they have, and even though that would entirely prevent the operation of that factory and therefore would result in great consequential damage, in your opinion, they could only recover the mere value of the machines taken over by the Government.
Mr. PATTERSON. Well, I have not given that any study, but it would seem to me so. I would have to read the section and just give my own view which might not be worth any more than anyone else's.
Senator Downey. Let me ask what you think might be the case. We can easily enough change the bill. Is that your opinion of what it should be regardless of the losses or damages to a business by loss of its machines or a certain portion of its machinery to the Government-only the value of the machines?
Mr. PATTERSON. My own impression is that recovery would be limited to the value of the property taken directly. That is true right today under priorities. Congress has already voted priority powers. Suppose that aluminum is taken for airplanes and is cut off from a civilian plant. It may result in the curtailment of the business done by a civilian plant. I have no doubt it will. Does he get compensation? Not that I know of. And yet there is consequential damage similar to what you have suggested, as you foresee.
Senator DowNEY. That might possibly be so, but I am taking a totally different situation. When a man starts a factory he always has the chance that he may lose his material. He may not be able to buy the material in the future, because of acts of God or war or something of that kind; but you are assuming a case here in which a