One justifiable criticism of the act was the delay of the Commission in raising minimum prices, which were based on cost, during periods of rising costs. In normal times the minimum price is always the maximum price in the coal industry, due to intensely competitive conditions.

General. Whatever method might be used to stimulate the coal industryincreased use by Government, private industry, or general public-a 5,000,000ton yearly production in this State would go far to offset any post-war readjustment. Here is a basic industry capable of great expansion. The labor absorbed by the actual mining is a small part of that which would be utilized generally in related activities. In other words, a healthy coal-mining industry should be looked upon as a cause of good business, furnishing the foundation upon which to build community activity, rather than the effect of an effort to retain wartime industrial activity in the area.

Senator WHERRY. I am interested, especially in what has been done by taking it up with the War Labor Board. I should like to have a brief memo on that with all the information, so that I can act more intelligently.

The next witness is Roy E. Schaub, of the Tacoma Chamber of Commerce.

STATEMENT OF ROY E. SCHAUB, POST-WAR PLANNING COMMITTEE CHAIRMAN, TACOMA CHAMBER OF COMMERCE, TACOMA

Will you state your name and your qualifications?

Mr. SCHAUB. Roy E. Schaub, representing the post-war planning committee of the Tacoma Chamber of Commerce.

I appreciate the opportunity of appearing before this conference which has as its motive that of aiding small business in the Pacific Northwest. Measured by the yardstick of 500 men per plant or less, most business in the Northwest may be considered small, and that probably holds true up and down the coast.

Assuming that you do not wish us to localize, it can safely be said that the following will aid small business:

1. Clear the way for a home-building program Nation-wide. This will materially aid business in the Northwest since forest products are one of our basic industries. The Government's policy on this should be announced forthwith so that private enterprise will know where it stands. The Government housing committee in Tacoma has already asked the Government to get out of the business and let private enterprise take over.

2. We have a large number of small shipyards around Puget Sound. They employ a sizable number of men. It will help small business. if they are given the green light to build private craft, particularly fishing vessels as soon as it is determined that no further Government orders are available.

3. It will help small business if west coast plants are given an even break with eastern and middle western plants in returning to civilian production. To penalize us because we are to be the center of the Pacific war is obviously unfair.

4. We are making about one-third of the Nation's aluminum. We want to hold that ratio when the war is over-one-third to the national production. We feel we must have a sizable alumina plant in the Northwest to service the reduction plants with raw material. It does not seem economically sound to ship this raw material across the country at high freight rates.

5. It will help small business if the Pacific coast retains its ratio of aircraft manufacturing to national production.

6. It will aid small business on the coast if we retain our ratio of shipbuilding and ship repairing to national production. We have the plants and equipment; we have the skilled labor, and these plants should not be wiped off the map as at the end of the last war.

7. It will help small business if the Government turns over shipping to private enterprise as soon as possible after the war. Foreign trade is a big factor in our economy and clear-cut decisions on Government policy should not be delayed more than necessary.

8. It will aid small business if the Government will establish a yardstick as soon as possible for the disposal of defense plants up and down the coast. Congressional delay on such matters is bound to create unemployment.

We feel strongly that the Pacific slope has done a grand job of production for the war effort. We have written new history in the production of merchant freighters, aircraft carriers, and in the construction of fighter and bomber planes. We probably have advanced a quarter of a century industrially since 1940. Dreams of half a century have been realized in the production of steel from our native ores, coke and coal. We have made great advances in the production of light metals-aluminum, magnesium, and steel alloys. Pacific coast businessmen are conscious of this and our ambition is to hold these gains and to avoid at all cost the role of being only the source of raw material for industraial plants in the East.

We have enough power at Grand Coulee and Bonneville to service a city of 1,500,000 people highly industrialized. Small business is looking to the Government for such aid as it can given in disposing of this power to private plants whose basic raw material is electric

energy.

I know, Mr. Chairman, that this brief story is not all conclusive but these are the thoughts that have come to me since I received your kind invitation to appear and say a word in behalf of small business in Tacoma.

Senator WHERRY. I note you state that you have the plants and equipment, with skilled labor, and that these plants should not be destroyed at the end of the war, or relinquished. Have you made any local survey to determine whether private people can take them over? Mr. STRAIN. I am not prepared to say. Some of them are large plants, and some partially privately owned.

Mr. MAGNUSON (interposing). Most of our shipbuilding plants are Government aid, and there is an amortization plan whereby they can take them over.

Senator WHERRY. We want to thank you for your statement. I should be glad if you would file a more extended statement. Just take it up with Mr. Nelson, and he will see that it is made a part of the record.

The next witness is Mr. James G. Boss, Defense Plant Corporation general counsel, Washington, D. C.

STATEMENT OF JAMES G. BOSS, ASSISTANT General COUNSEL, DEFENSE PLANT CORPORATION, WASHINGTON, D. C.

Will you state your name and your qualifications?

Mr. Boss. James G. Boss, assistant general counsel, Defense Plant Corporation, Washington, D. C.

In view of the time limit, I am going to submit the statement which lists the defense-plant facilities.

Senator WHERRY. That will be submitted.

(The statement referred to by the witness appears in the Kalispell, Mont., hearing, pt. 40, on p. 4801; lists setting forth industrial plants and facilities appear in the appendix of the Kalispell hearing on p. 4958.)

Mr. Boss. I will try to confine my remarks to the steps that are now being taken by the Defense Plant Corporation with regard to the disposition of such facilities as are of no further use to the war effort, to the end that those facilities may be used in peacetime production after the war is over, avoiding the dislocation, at the same time, of existing and new industries which have been greatly expanded during the war.

I should like to say that at the present time there are very few of these defense plants and facilities that are available for disposition. They have all been established for war purposes, and cannot be considered as available until the Army and Navy says they are available. For instance, many of the plants now idle are being held for stand-by purposes at the request of the War Department and the Navy Depart

ment.

At the present time, the Defense Plant Corporation owns in excess of 1,800 projects which have cost more than $8,000,000,000. These projects vary in size, ranging in cost from $1,000 or less, to $200,000,000, and include complete new plants, rearranged facilities consisting of expansions of existing plants; simple machinery projects involving merely the installation of additional equipment in a manufacturer's plant. They include projects for such varied purposes as the production of airplanes, guns, tanks, ships, machine tools, magnesium, aluminum, steel, copper, tin, synthetic rubber, aviation gasoline, radio equipment, and various chemicals, and also include petroleum and natural gas pipe lines, oil barges and tugs, tank cars, troop cars and other transportation facilities, and such projects as flying schools for the training of military personnel.

By industries the larger classifications of projects include approximately 500 projects for airplanes and airplane parts, costing in excess of two and one-half billion dollars; approximately 80 plants, costing approximately $800,000,000, for the making of aluminum metal and its fabrication; approximately 40 plants, costing in excess of $400,000,000, for magnesium and magnesium fabrication; more than 150 plants, costing $1,000,000,000, for steel, pig iron, and related projects; plants for the production of synthetic rubber, cost ing in excess of $725,000,000; and for aviation gasoline, costing approximately $290,000,000.

A substantial portion of the investment in such plants has been made in the Western States, particularly in the aluminum, magnesium, steel, and aircraft industry plants. For instance, the annual capacity of Government-owned aluminum metal plants is approximately 1,200,000,000 pounds, which is in excess of three times the privately owned annual capacity before the war; and of these, plants of annual capacities of 618,000,000 pounds, or more than half of the entire Government-owned facilities, are located in the States of California, Washington, and Oregon.

The annual capacity of Government-owned magnesium plants is approximately 500,000,000 pounds, which is 50 times the privately owned annual capacity before the war, and plants with capacities of nearly 200,000,000 pounds are located in Nevada, California, and Washington. Particularly in these industries, the abundance and availability of cheap water-generated power furnished by Boulder and Bonneville Dams is and has been of great value in the development of such plants. Further, Defense Plant Corporation constructed and Reconstruction Finance Corporation financed steel mills in California and Utah, including the well-known Geneva steel plant, are large contributors to the war's steel requirements. In addition to the foregoing, of course, Defense Plant Corporation, in the Far West, has constructed many aircraft, high-octane gasoline, synthetic rubber, and miscellaneous products plants, totaling several hundred million dollars.

Senator WHERRY. Do you have any idle plants in this section of the country?

Mr. Boss. We have one charcoal plant in Tacoma. We have another in Idaho.

When we come to the question of disposal, in the first place, the price at which they are disposed must be realistic and fair to the Government and purchaser. In other words, the price cannot be so low that the Government property is disposed of without proper return to the Government or that purchasers receive an unfair advantage over their competitors, nor can the price be so high as to prevent the sale or other disposition of the plant and its absorption into civilian economy.

Another factor to be considered in the disposition of plants which must carry a great deal of weight, is the guarding against monopolies and economic concentrations. Furthermore, the participation of local interests and of small business enterprises in the acquisition and use of the Government facilities must be actively encouraged.

In connection with all these matters, the establishment of one general rigid disposal method is not practical or desirable. In some cases, cash transactions will be feasible and desirable. In others, sales could be made on credit and where private financing is not available, the Reconstruction Finance Corporation stands ready to supply all necessary financing. The leasing of the facilities may be appropriate and can be effected in cases where an outright sale cannot or should not be made.

In order to be in a position to dispose intelligently of such facilities and to carry out the foregoing general policies, and such policies as may be laid down by the Congress or other proper authority, Defense Plant Corporation at this time is proceeding with many specific programs to garner the necessary information for itself and private

business. Industrial surveys are being made of every plant, which include detailed engineering reports describing the plan, the type of construction undertaken, and such customary information as areas, floor loads, clearances, bays, and so forth; details of cost, photographs, maps, plot plans, and plant lay-outs; detailed descriptions of each item of the equipment showing the manufacturer, type, condition, age, price, location, and so forth; information on taxes, housing, power, water, sewers, transportation, and other utility facilities; information regarding the availability and costs of necessary raw materials; information showing whether the facilities deviate from local building codes, whether they are single purpose or multiple purpose, whether they are scrambled or capable of independent operations, and whether they are capable from a physical and engineering standpoint of peacetime operation. Surveys including this detailed information have been completed for approximately half of the Defense Plant Corporation projects and are well under way for the remainder.

Senator WHERRY. As I got it from Dr. Engle, it was not altogether a question of credit in the purchase of these facilities, but it was a question of whether or not the purchaser got a monopoly.

Mr. Boss. He made two points: Whether or not the purchaser continued to operate, or would just operate temporarily and close the plant down, and the other question was the question of monopoly. Senator WHERRY. Which agency handles all the disposable surplus property?

Mr. Boss. It is presently set up under the Surplus War Property Administration.

Senator WHERRY. Under the Treasury?

Mr. Boss. Yes; so far as the plant is concerned, and the consumer goods. The industrial real estate is handled by the Reconstruction Finance Corporation. I understand that the real estate has been assigned to the R. F. C.

Senator WHERRY. Is there any available Government land, taken up by the Government, that has been sold?

Mr. Boss. I am not sure.

I don't have that information. Studies are being made of individual plants, such as the Geneva plant, and a determination will be made from the surveys.

Another step that is being taken is in the larger plants where we are studying the possibility of dividing them up into units. I think that is particularly important, in view of the fact that it may make it easier for the disposal of the property into more hands.

In addition to the plants, there will be available production facilities such as machine tools and other production equipment. The disposal of that equipment will be handled by the field offices. That does not mean that the sales will be limited to the area, but rather that the field offices will have authority to take care of sales of that type, and that will at least eliminate any unnecessary shipments. Senator WHERRY. Where will your field offices be located?

Mr. Boss. Portland is in charge of this area. In addition to that, there is Spokane, Helena, and Seattle.

I believe that about covers it. I am submitting my statement which goes into the matter in a little more detail.

Senator WHERRY. Are there any questions?

Mr. MAGNUSON. The aluminum plant in Spokane is being operated by the Aluminum of America?

Mr. Boss. That is right.

68053-44-pt. 41—11