In conclusion I would like to reiterate the specific proposals which I would like to make on behalf of our organization:

1. Immediate creation of a National Planning Board composed of representatives of industry, labor, and agriculture. This Board should be charged with the task of formulating plans and developing programs in cooperation with agencies of the Government to effectuate the new bill of rights.

This National Planning Board should encourage the establishment in each industry of a council composed of labor, management, or agriculture if the case requires, and Government to assist in the formulation and administration of plans for full production and full employment within such industry.

2. Congress should enact legislation to handle the problems of reconversion which have already arisen and will mount in the near future. Such reconversion legislation must provide for centralized national planning and reconversion and labor participation. It should provide and set up machinery for prompt reemployment of displaced workers and returning veterans. It must provide supplementary Federal unemployment insurance to take care of the displaced workers during the period of their idleness while retooling and reconversion of industry is taking place.

3. Legislation must be enacted which will provide for full protection of the public interest in the disposal of Government-owned plants equipment and facilities. A major guaranty must be that whoever purchases or leases the plants or facilities must fully utilize their entire productive capacity.

4. Opportunity for small business to flourish and grow is essential to genuine free enterprise and to the attainment of the goal of full employment. The Small Business Act of 1944-Senate bill 1913introduced by Senator Murray, should be promptly passed by Congress.

5. Our national policy should be one which seeks to guarantee a continued increase of the purchasing power of our people-a policy of high wages and guaranteed annual income.

Senator WHERRY. Thank you, Mr. Rathborne, for your statement.

Mr. RATHBORNE. I thank you for this opportunity of appearing before the committee today.

Senator WHERRY. At this point I would like to ask Edward Landells, representing the California State Chamber of Commerce, if he has any further comment to make with respect to the data he thought he might be able to produce, or any further explanation thereof.

FURTHER STATEMENT OF EDWARD LANDELLS, REPRESENTING CALIFORNIA STATE CHAMBER OF COMMERCE, SAN FRANCISCO

Mr. LANDELLS. In response to the question raised by Senator Wherry this morning, I have learned that during the year 1939, generally accepted as the last pre-war normal year, one California bank made 280,000 loans for industrial and commercial purposes to an aggregate amount of $475,000,000. Of these, 130,000 loans aggregating more than $254,000,000 were made to the categories of small business as classified by Senate bill 1913, the Murray bill.

More recently, during the single month of June 1944, this bank made 20,000 loans for industrial and commercial purposes to an aggregate sum of $96,000,000 of which 13,000 loans aggregating more than $61,000,000 were made to California small businesses.

These were all insured loans, excluding loans on real estate and other types of security.

Senator WHERRY. If you are in position to furnish any further data we would be glad to have you forward it to us and it will be included in the record at the point where you made your presentation. Mr. LANDELLS. I shall be glad to do so.

Senator WHERRY. We have two more witnesses to hear from, Mr. Charles F. B. Roeth, reporting for the War Manpower Commission, northern California office; and Dr. Louis Bloch, of the War Manpower Commission. Gentlemen, we have 15 minutes in which to conclude this testimony, and I wish you would decide among yourselves how you want to divide your time. If you have an extended statement to make you can submit it and it will be included in the record.

STATEMENT OF CHARLES F. B. ROETH, REPRESENTING THE STATE DIRECTOR OF THE WAR MANPOWER COMMISSION, SAN FRANCISCO

Mr. ROETH. I have here a statement prepared by Mr. Sam Kagel, who is absent in the State of Washington, and I will summarize the statement.

Senator WHERRY. Who is he?

Mr. ROETH. He is State war manpower director.

This statement deals with the very large demand for labor that currently exists and points out the fact that over recent months-the last 6 or 8 months-there has been a continued out-migration and reduction of labor force.

Senator WHERRY. How do you account for that?

Mr. ROETH. It can be accounted for by a great many factors. Since many public statements by people in high positions to the effect that the war is over, and in their desire to get reestablished, and their desire to purchase small businesses or to get jobs where they will have some seniority rights, or some rights after the war is over, the workers are returning to their former residences, or are choosing other localities where they think there is a better chance than in congested localities here.

They are also afraid, because of the fact that this area probably will be required to continue in war activity longer than other areas of the country, that reconversion will be delayed, and that subsequently to stay on the job here and keep working with the war effort would be to their disadvantage when the war terminates.

We think that is probably the most serious problem we have before us at the present time. Not only must the labor force be maintained in order to meet the expanding demands of the Pacific offensive, but it must be expanded if we are to meet the requirements of war production and supply the military in the Pacific theater of operation.

Senator WHERRY. You mean it must be expanded to include reconversion to some civilian production?

Mr. ROETH. I wouldn't want to say that. I would say that the military establishments here, the demands of transportation, the warehousing and transshipment of essential products, are requiring expansion of the labor force. We have demands for labor here that we cannot supply at the moment.

Senator WHERRY. But you have labor here that is not being utilized, too?

Mr. ROETH. We would like to know where it is, Senator.

Senator WHERRY. We have had some testimony here to that effect. For instance, there is a town within some 25 miles of here, Petaluma, that has facilities and has the labor.

Mr. ROETH. We would like to know about it.

Senator WHERRY. In Portland, a critical area, there was a statement made that in that area 31 percent of the laborers were eligible for open contracts.

Mr. ROETH. I am only talking about northern California, around the bay area here.

Senator WHERRY. That is in this district.

Mr. ROETH. But this particular statement deals only with northern California.

Senator WHERRY. You mean then that civilian production here on any scale should not be maintained at this time because there is a manpower shortage and we need all available labor for the development and the production of war materials?

Mr. ROETH. No; I don't mean that. I will take that up a little later on. That is covered in the statement.

Senator WHERRY. All right.

Mr. ROETH. I do mean this: There is no substantial supply of labor here at the present time that can be put into war activity over any other form of activity.

I will submit statistics that are available from the California Department of Employment, which handles unemployment insurance. During the month of June the California Department of Employment was paying over 400 claims in the bay area out of a working population here of around 750,000 workers. If that is the condition, it indicates a very, very small figure of unemployment in the area here.

Furthermore, we have made an analysis, in cooperation with the State department of employment, and we find that there are quite a number reaching the age when they are retiring from the labor market, and are finding it very difficult to obtain jobs. Women who have tried to come into the labor market, a lot of them haven't been able to keep it up and they are leaving because they are not fitted to handle the ordinary job available.

Senator WHERRY. They are leaving this area?

Mr. ROETH. Claims have been filed by persons who have left the labor market here, but it has been a very small number.

Senator WHERRY. I see.

Mr. ROETH. There are various factors which apparently contribute to the out-migration. Surveys indicate that one of the chief reasons is a desire for post-war security. Under such an urge many workers have left and are leaving their war jobs to look for jobs or circumstances that offer greater degrees of security.

Some have remained in northern California, investing their savings in small farms or orchards, or in small businesses. Others have gone to their former homes.

Agriculture has attracted and continues to attract many workers from industrial jobs in the bay area, due to the present increased earning opportunities and also to the fact that agriculture is not subject to present manpower controls, and the further fact that there are no withholding taxes attached to agriculture wages, that is, for income taxes, and no deductions for social-security attachés.

Senator WHERRY. Do you mean they can make more in net earnings by working on farms than by working in these industrial centers? Mr. ROETH. I mean very definitely so, Senator.

Senator WHERRY. Is that so?

Mr. ROETH. Under present conditions, even if you disregard the fact of the withholding tax, there is the situation that agricultural wages here in northern California compare very favorably with industrial wages.

Senator WHERRY. That is temporary, isn't it? That isn't [permanent?

Mr. ROETH. Is not permanent work; no. It is seasonal work. Senator WHERRY. Will they come back to the defense industry when the season is over?

Mr. ROETH. That has been the case in past years. What the case will be for this coming year, or this fall, we don't know.

I say that because one of the things causing workers to leave this area is, for instance, the housing conditions, coupled with the difficulties of transportation, and so forth. Many workers have come in from other parts of the State and have worked here for a year or a year and a half, and have lived in a trailer camp, and have come face to face with the difficulties of living in this congested area, and have made up their mind to leave the area.

Senator WHERRY. What do they pay an agricultural worker-there is no scale on that, is there?

Mr. ROETH. There is no scale in the sense of a scale being established, as in the case of industry, but I can give you some examples of what has been paid. For instance, in the San Jose area, where they raise a lot of apricots, they have paid $1.25 an hour, and the rate of $1 an hour is rather common.

Senator WHERRY. Do you mean to say that the workers in the sugar beet fields get $1.25 an hour?

Mr. ROETH. I am talking about things like apricots.

Senator WHERRY. What about sugar beets?

Mr. ROETH. I am not in a position to speak on those wages at the

moment.

Senator WHERRY. That is an industry here that you have in California.

Mr. ROETH. It happens that the Extension Service has the responsibility of supplying labor to that portion of California agriculture. I speak of this other because we have the responsibility for placing labor in the canneries, which are immediately adjacent to these orchard districts. We come in direct competition with agricultural labor in those spots.

Senator WHERRY. How do you think we can produce agricultural products that will compete with our neighbors if agriculture pays the prices you say they are paying?

Mr. ROETH. That is something I am hardly qualified to speak on. Senator WHERRY. You are an American citizen. Give me your personal observation.

Mr. ROETH. There might be many factors that would come into that.

Senator WHERRY. We are talking about bringing in 6,000,000 acres of land.

Mr. ROETH. Perhaps our workers may produce more; they may get greater productivity out of the workers.

Senator WHERRY. What about the markets?

Mr. ROETH. As I say, that is a field in which I am not qualified to speak.

Senator WHERRY. Go ahead.

Mr. ROETH. It is realized that much of the war load of the bay area and other ports of the west coast cannot be shifted. Transportation systems must be maintained and service functions operated to supply the troops at the front and to meet production and military requirements here.

Senator WHERRY. Every bit of our canned beef comes in from Argentine, every pound of it. Do you know that?

Mr. ROETH. I don't happen to know that.

Senator WHERRY. You ought to get wise to some of these things because it is all a art of the economy of this country.

Mr. ROETH. If you will take a look at the docks, which you can easily do if you will go to Oakland, or take a look at the San Francisco waterfront, you will realize that I am talking about the problem of shipping the goods and transshipping to the ships. The fact that Argentine beef is going to the armed forces may be a good thing so far as we are concerned if it reduces the immediate load. I am speaking of the situation here in San Francisco.

Senator WHERRY. On manpower?

Mr. ROETH. Yes.

Senator WHERRY. We have to use Argentine manpower to help produce beef so we can get it to the boys. All right.

Mr. ROETH. Manpower controls are effective only if the communities recognize the need for them and willingly comply with them. This area has been outstanding in its compliance, and we believe compliance will continue at a high level. Our controls, however, are effective primarily within the community and are not sufficient to festrain a heavy out-migration.

This fact has been emphasized in recent months by complaints of employers and unions that significant losses in working force have followed each public statement by various men high in the international councils that the war is about over.

Senator WHERRY. I do not agree. I think there is one discouraging thing that the people of this area have confronting them; that is, that the war is about over. I think if they would coolly sit down and think it over the fact that the European War might be concluded at an early date-they should realize that immediately the base of our operations on a heavy scale will be transferred to this particular area and we will need more manpower than ever to continue the war from out of these west coast cities.

Mr. ROETH. That is exactly what we are pointing out.

Senator WHERRY. I want to compliment you on that. That is right.

Mr. ROETH. Thus we are trying to perform our war job here with a labor market that is declining and where every existing condition is an