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materials necessary for manufacture of such equipment or munitions, or any patents, plans, designs or rights controlling the production of such materials or supplies and (b) to use on such terms as he shall deem satisfactory, or to sell or otherwise dispose of any materials so requisitioned or taken over, or any right or interest therein, pursuant to the provisions of this Act.

SEC. 2. The sale or other disposition by the United States of a patent or patent right acquired hereunder shall be consummated only upon a written finding by the Secretary of War or the Secretary of the Navy that such sale or disposition is necessary to insure production in sufficient quantity of the patented commodity or articles for defense purposes and that production thereof cannot be otherwise obtained.

SEC. 3. Whenever the President shall requisition and take over any property pursuant to the provisions of this Act, the person or persons having any right, title, or interest therein shall be paid as compensation therefor such sum as the President shall determine to be fair and just. If any such person or persons entitled to receive it are unwilling to accept as full and complete compensation for such property the sum so determined by the President, such person or persons shall be paid 75 per centum of the sum so determined by the President and shall be entitled to sue the United States for such additional sum as when added to the sum already received shall be determined as fair and just compensation for such property in the manner provided for by section 24, paragraph 20, and section 145 of the Judicial Code (U. S. C., title 28, sec. 41, par. 20, and sec. 250), but no recovery shall be allowed against the United States in any such action unless the action be brought within two years after the date on which notice shall have been given of the determination by the President of the amount to be paid as compensation.

SEC. 4. Appropriations available for the acquisition of property for nationaldefense purposes shall be available for the acquisition of such property under the provisions of this Act; and any moneys received by the United States as the proceeds of any disposition of any property sold or disposed of pursuant hereto shall be deposited to the credit of the current appropriations corresponding to that out of which was paid the cost to the United States of the property thus disposed of, and the same shall immediately become available for expenditure during the fiscal year in which the disposition was effected, and the fiscal year next following for the purposes named in such current appropriation.

Sec. 5. The President may, from time to time, promulgate such rules and regulations and is empowered to require such information as may be necessary and proper to carry out any of the provisions of this Act, and he may exercise any power or authority conferred on him by this Act through such department, agency, board, or officer as he shall direct or appoint.

SEC. 6. The provisions of this Act shall be effective notwithstanding the provisions of any other Act: Provided, however, That this Act shall not be construed as repealing, altering, or amending any provisions of Acts authorizing the acquisition of property by the United States, but shall be construed and considered as an additional grant of authority.

It may be noted that that confines the operation of the act to military or naval equipment or munitions or parts or tools or materials necessary for the production of such equipment or munitions. I think that quite clearly excludes any possible application of such law to the watch in a man's pocket or interference with freedom of the press or any such thing as that. Not that those were contemplated in the original act, but possibly on account of the very broad language in that act someone who was fearful of the dire consequences of it, and might foresee consequences never intended. In any event, such consequences are excluded under the terms of this suggested amendment.

I have only this to add to what I said last week:

I have given careful study to the machine-tool situation. It would seem that with the orders now on the books and the orders in prospect, and on account of the 500-a-month heavy-bomber program, the machine-tool manufacturers of this country will be manufacturing at full capacity for some 13 months before they can possibly fill all the orders they now have.

Senator DOWNEY. May I interrupt for a question?
Secretary PATTERSON. Certainly.

Senator Downey. Do you refer merely to orders for machine tools for military defense purposes?

Secretary PATTERSON. Yes, sir.

Senator Downey. That is, the machine-tool industry will not be able under this program that you suggest to produce any machine tools except for military defense purposes? Is that what you are saying?

Secretary PATTERSON. Yes, sir, in substance; although, of course, a great many of these tools are universal tools. You understand quite clearly what I mean by that.

Senator DOWNEY. Yes.

Secretary PATTERSON. They are standard tools that can be used either way. But the military and naval orders alone will fill their capacity for producing new machine tools for over a year from this date forward, in spite of the fact that they are now producing at four times the rate that they produced during their previous top year, 1937.

Senator DOWNEY. May I intervene with another question?
Secretary PATTERSON. Yes.

Senator DOWNEY. Your statement, however, does not mean that there will not be certain of the primary machine tools produced by which there will be an expansion of the machine-tool industry itself, does it?

Secretary PATTERSON. There are further expansions in the machinetool industry in process which might reduce the time somewhat. Of course, they have already expanded to quite a degree over what they had last July. This was largely financed at their own expense, although somewhat at Government expense. They are already operating, Senator, on an expanded basis.

Senator DOWNEY. Yes, I understand that. But the program that you have suggested does not mean that there will not be a continued expansion in the machine-tool industry itself over the next 13 months?

Secretary PATTERSON. No, sir; it does not. In fact, such a continued expansion is contemplated.

Senator Hill. Do you think that there will be this continued expansion in the machine-tool industry?

Secretary PATTERSON. I think it is safe to say that the orders now on the books or in present immediate prospects for the heavy bomber program will choke that industry for over a year.

Now, that means that we have to survey the situation in some way to try to increase, if we can, the use of machine tools now available without depending upon future tools.

It is obvious from out studies that there are three ways of accomplishing that.

The first is to work for more man-hours the tools already committed to the defense program. We have tried for months to get that stepped up, and with some success.

But I think further efforts are needed along that line.

The second effort would be to place more subcontracting out in the industry of the country. That has the obvious advantage of locating business where the tools are now and where the skill is present to operate them.

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That is a course that has not been overlooked by the War Department. In fact, we are using at all times increased pressure to try to bring that about.

The third one is the transfer of existing tools from nondefense use to defense use.

I think I mentioned that to some extent last week. But in my opinion we ought to have full authority and full power to develop all three of those sources.

Otherwise I can see that we will be considerably impeded in the vitally necessary job of speeding up the program and leaving no stone unturned to try to bring about at the earliest possible moment a situation whereby the industrial power of this country—and it is a vast industrial power, too—will be geared into the defense effort.

I want to refer once again to this suggested amendment which I am tendering in deference to the committee's views of last week. It is of much narrower scope than the original bill, and may commend itself to the views of the committee better than the original bill did.

On further reflection I may state that we do not really need any further powers as to real estate. Under existing law, through exercise of the right of eminent domain by the Federal Government, we feel that all our reasonable needs with regard to real estate will be met.

Also in this amendment the operation as to personal property is defined much more narrowly than in the original act.

I might say that the words that I have used there are in substance the same as the bill passed by the Congress in October of last year with regard to goods, the export of which had been denied by the President.

The bill to which I refer is the act of October 10, 1940, under which the President may requisition these same kinds of articles if he has denied an export license for their shipment abroad.

Senator Hill. Some of these goods were lying in our ports and we had no power to use them, and yet they could not be exported.

Secretary PATTERSON. There they were.

Senator Hill. There they were. So we passed this bill last October to give the Government the power to requisition and take over those goods. You say that this language follows very largely that language?

Secretary PATTERSON. So far as the description of the items covered goes; yes, sir.

The bill leaves with the President the fixing of rules and regulations for the carrying out of the law. I think that provides a proper flexibility.

My own view would be that under such a power the President might see fit to delegate the power to, say, the Office of Production Management, which already has the priority power by his delegation.

This is quite analogous to the priority power. This affects existing goods, whereas the priority power affects the production of future goods.

I think that would, by centralizing it in one agency, provide a ready means of useful and wise and restrained exercise of the powers given to us. There would not be a scramble among various agencies, such as the War Department, the Navy, and the Maritime Commission, or some others, for some of the goods.

I am sure that the administration of the act could be undertaken in a wise and proper spirit, with a minimum disturbance of any civilian production, and yet in a way that would satisfy the military and naval needs of the nation.

The CHAIRMAN. Senator Downey, have you any questions?

Senator DOWNEY. Mr. Chairman, just one or two comments might be in order here.

I want to say, Judge Patterson, that this change does not really meet the difficulty that was in my mind, because I do not fear that the Government agencies are going to interpret and act upon this law in any unreasonable way, or that they would try to take the watch out of a man's pocket or seize his bank account or something of that kind. I assumed that our Government authorities would act reasonably from their viewpoint under the terms of the bill. So this change does not meet the difficulty that I had in mind.

Secretary PATTERSON. The change does not meet the point that you made, Senator, about small machine shops. At least, the text of it does not alter the situation in that regard.

Senator Downey. Judge Patterson, of course, this goes into a very much larger issue; and we might as well fact it. If we are going to begin to produce within 6 months or a year two or three billion dollars worth a month of military equipment and we are going to give priority to materials and machinery for that as against the present producers for civilian purposes, we are going to produce a dislocation in this nation among the existing businesses and workers that will just be tremendous. That is what my mind has turned to—to what extent concretely the power given the Government in this bill will result in the disruption and dislocation of present business.

SECRETARY PATTERSON. I don't minimize the prospect of a general dislocation, Senator. Irrespective of the fate of this measure, we are going to have some very acute problems later on to deal with. I think, however, that the country is committed to do everything in its power to bring about the defeat of Hitler; everything in its power to bring about that object. That being the case, it seems to me that we cannot continue the business-as-usual theory or the practice of superimposing the defense load upon the normal civilian business of the country.

I think that to some extent, and to some degree, and I hope it may be as mild as possible, the substitution of defense business for civilian business must be brought about.

This measure, the priority power, the priority bill, means that. It does not mean anything else. The sending of an army of 1,400,000 men into training camps in the field means that. It does not mean anything else.

This measure is in perfect harmony with those bills. The immense appropriations that have been made very liberally by Congress for the military and naval defense of the country mean that. They do not mean anything else. We have piled up an enormous burden on the country

I do not minimize that at all. And yet I am quite sure that this is the present pressing problem, which, as I see it, and the Congress and the President and the country at large see it, is the defeat of power the like of which the world has not seen in a long, long time. And I think that we must gear up our industrial machinery and our manpower to bring about that end.

Senator DOWNEY. Mr. Chairman, I have no disposition to argue this matter out here in the hearing, and I do not mean to do that.

But I am interested in securing the reaction of the witness here. So, if I may make some further comments.

The CHAIRMAN. We will be very glad for you to do so, Senator Downey.

Senator DowNEY. Mr. Secretary, you have stated that there are three ways in which the Government is planning on bringing about increased defense production. The first one that you suggested was by utilizing the present machinery and equipment a greater proportion of the time than it is now being utilized.

Do you yourself have figures in mind or here by which you can show the extent to which present machinery is being used on an hourly basis per day and the extent to which you believe it could be reasonably used?

Secretary PATTERSON. I have here a tabular statement, Senator, prepared by the statistics branch of my office, which shows thé number of shifts according to items of production. Of course, the first shift is the biggest shift; and then there is a small second shift and then quite a small third shift.

I do not mean, of course, to suggest that in every case you could have a perfect division between the first, second, and third shifts. You cannot. The effective use of machinery would not permit it.

But we are making greater efforts already to try to get more manhours onto the machines that are already geared into the defense effort. That was the first factor that I have mentioned here, and the one that you just inquired about.

Senator DOWNEY. Yes.

But that table that you present, if I read it correctly, shows that there is an almost negligible amount of employment in the third shift. Is that so?

Secretary PATTERSON. In some industries it is almost negligible. Senator DowNEY. Is there any industry in which it is not?

Secretary PATTERSON. I think the top one shows up substantially on the third shift.

Senator DOWNEY. What does it show as compared to the first and second shifts?

Secretary PATTERSON. Of course, in many cases the contractors say--and it is undoubtedly true, because we have investigated itthat shortage of skilled labor requires them to confine their efforts to two shifts of, say, 10 hours each, rather than three shifts of 8 hours each, because they say that they cannot get the skilled workers to operate the third shift.

Senator DOWNEY. Then, Mr. Secretary, to that extent, of course, your bottleneck is in your mechanics and not in your machinery?

Secretary PATTERSON. In some cases.

Senator DowNEY. I mean, in the ones that you have just mentioned.

Secretary PATTERSON. In some cases that is true.

Senator DOWNEY. Mr. Chairman, I would suggest that this tabulation ought to be placed in the record.

The CHAIRMAN. If there is no objection, it will be printed in the record at this point.

(The tabulation referred to is as follows:)

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