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General RUTHERFORD. Admiral Land and Admiral Robertson are present representing the Maritime Commission and the Navy Department.
The CHAIRMAN. We will be glad to hear them right now. But I want to make inquiry of Senator Downey and Senator Kilgore if they have any further inquiries of these witnesses.
Senator DOWNEY. I have no further questions right now.
Senator KilGORE. I have no questions.
STATEMENT OF ADMIRAL E. S. LAND, CHAIRMAN OF THE UNITED
STATES MARITIME COMMISSION
The CHAIRMAN. Admiral Land, we are considering S. 1579. We would be glad for you to make any statement that you care to.
Admiral LAND. I notice particularly in the beginning of this bill that two things are essential before it becomes effective-(a) national defense and (b) requisition by the President.
In my judgment those are the only safeguards necessary under present emergency conditions. I mean, I am at a loss to understand the fears that some of the gentlemen and some of the press accounts express, when you have the background of the Merchant Marine Act of 1936, in which you not only are authorized to, but do, take away a ship from a man in the United States who owns an American ship under the American flag; and, if it is under a foreign flag, you also take it if it is owned by an American citizen.
That causes hardships. That has been on the books for years. It is being put in operation. It causes suffering, suffering to every coastal port and every seaport of the United States. We are up against the real thing. We are suffering from that right now.
So far as the workings of this bill are concerned, it would have been of value, if it had been on the statute books, to the Maritime Commission in our expansion of the yard at Chester, Pa.; and in the expansion of the yard at Baltimore, in which the Pullman Co. was involved; in our expansion of the yard at Los Angeles, Calif.; and in the expansion of the yard in Portland, Oreg.
We have, as was mentioned, the right of eminent domain. But it is a slow process. It runs into litigation of years standing in many instances.
Therefore in my judgment this is a proper bill, as amended, to put on the books in times of emergency under which we exist, when more serious contingencies are in prospect.
In my judgment, further, this is a potential bill, not a kinetic bill. It is a psychological bill. It says "Boys, you play ball.”
I also believe that it will be administered from a utilitarian point of view, the greatest good for the greatest number, and that the small businessman and the small machine man will be the last hurt and the least hurt.
I feel sure that in the administration of this act there will no doubt be exceptions. We all make mistakes. We are all human beings. But I have no fear that there will be any abuse of this authority on the part of the Government organizations concerned when you give consideration to the all-out national defense effort.
That, Mr. Chairman, is all that I have to say on the bill.
Senator DOWNEY. Admiral Land, in the case of the condemnation of a piece of property under eminent domain the Government has the power to immediately go into possession of the property, has it not?
Admiral LAND. In theory; yes. In practice it is a pretty difficult proposition. We are struggling with it right now in a number of
And time is of the essence in this effort. I am not concerned about what happens in 1943 or 1944. I am interested very much in 1941 and 1942.
Senator DOWNEY. I did not know that there were any technicalities of any very extensive nature that prevented the Government from going into property under eminent domain within a few days. All they have to do is file a suit and get an order from the judge, is it not?
Admiral LAND. That is all you have to do in theory, but it is a long, slow process of getting it into actual practical effect.
We are working on a contract at Chester, Pa., in which the people have a contract. They went in there on eminent domain. You are an expert lawyer and I am a layman. But I am telling you, the working out of the mechanics of it on eminent domain is a slow and painful process to get business done in an emergency.
The same thing was true of the Pullman plant over in Baltimore. They were willing to get out, but they had their definite things to do first. They had to refer it to their board of directors and to their general counsel. We ultimately got it, but time was lost.
We are all human. We all have the pocketbook nerve. You have to put some pressure on people, whether it is the Pullman Co. or the Morgan Line. I am talking about the big companies not the little ones. We can handle the little ones. It is the big ones that you have to put
the screws on. Senator DOWNEY. Admiral Land, I understand that under this bill as amended by Judge Patterson now the right to take possession of real property is out. Is that not right, Judge Patterson?
Secretary PATTERSON. Under the amendment there I submitted to you this morning, in response to the suggestions made last week by members of the committee, real estate is not covered. What we rely upon is the existing law on real estate.
Senator Downey. Mr. Chairman, I certainly would agree with Admiral Land that in the case of the taking over of real property by the Government for defense purposes the action of the Government should be made easy and facilitated in every possible way. I have very great sympathy for the tremendous burden of detailed work and harassment that the Maritime Commission is subjected to. I admire very greatly the wonderful work that Admiral Land has done in furthering our shipbuilding program. I have the same sympathy and admiration for Admiral Robertson.
I want it clearly understood that nothing that I am saying is critical of what these Governmet agencies have done. And certainly, if the present law of eminent domain is not satisfactory to Admiral Land, I think that whatever difficulty there is should be cleared away for the most expeditious action on it.
Admiral LAND. It is not the property taken, but what is on the property. It is all the little contingencies, from outhouses to manufacturing plants. That is what causes the complications in getting machinery buttoned up.
It is this contingent liability that runs into years there, the cases where you cannot reach a price in negotiating the thing without carrying it to the courts. That may run into years.
As I say, I am interested in the time element. The mechanics of eminent domain are all right. They have been on the books since the Constitution was adopted. But it is the slowing down process in an emergency that requires some additional legislation so that the Government can carry out its duty to its citizens and defend these United States.
I am citing these various instances not to show that we are unsuccessful but that we have lost time, time, time in these negotiations, because we are trying to treat the people as American citizens, like we would like to have them treat us; and in so doing we endeavor to get together and have a meeting of the minds. Then again comes in this contingent liability, the prospective earnings, that were mentioned. They are proper to be considered. But under the emergency that exists today I think we ought to be able to reach a deal and reach it promptly and go through with it.
The courts always give redress, even if it takes a long time, to any injured citizen. I am not worried about that. Let the future take care of that.
At the present time there must be a meeting of the minds; and if there are any recalcitrant citizens—and there are some we have here a way that we can put pressure on them to accomplish the nationaldefense effort.
Senator DowNEY. Mr. Chairman, if I may just state to Admiral Land the worry that is on my mind with respect to this bill, with particular reference to the people in my State of California. That is this: that undoubtedly in many cases the Government will have two alternative courses open to it. It may assist the prime contractor by helping him or forcing him to work out subcontracts, or it may assist that primary contractor by going out among the smaller units of his competitors and actually commandeering the machinery in the possession of the latter.
Now, I believe that the former policy is the much wiser and more equitable policy. It results in much less dislocation in the future.
What does worry me is that the Government may take this easiest way out, that would be the perfectly natural thing for human beings to do, and that is, instead of working for the letting of some subcontracts, may just go out and summarily seize the machinery that the primary contractor needs.
Admiral LAND. Senator, you cannot fight a war with willingness. You cannot make an omelette without breaking eggs. We are breaking eggs right now.
Senator DOWNEY. What I am concerned about is that we are not going to make an omelette at all, but just a sorry mess.
Admiral LAND. Most wars are sorry messes. God forbid, but they are. We are pretty close to being into it.
I feel that this bill is not going to be, as you say, a dislocation. I say it is going to be utilitarian. There is going to be a dislocation,
let us make it, a utilitarian use, the least damage to the least number and the greatest good to the greatest number.
I don't want to talk in general principles. I agree with you as regards these small people. But you can carry it to reductio ad absurdum. We are very sympathetic in helping to increase the amount of subcontracts. But when it resolves itself into excessive costs plus loss of time, I think you must count the thing off somewhere.
Now, human beings are going to be doing that. That means that errors will be made. But we will do the best that we can with the tools that we have. If you are not satisfied with what those in the administrative end are doing, I say by all means change them. The CHAIRMAN. Are there any questions?
Senator KILGORE. I just want to ask a question or two of particular nature. As to this Baltimore Pullman plant, were they a shipbuilding concern?
Admiral LAND. They were not a shipbuilding plant. They are now a byproduct of the Bethlehem Steel Co., a shipbuilding firm, who obtained some property across the bay, on which they had a remarkably fine assembly plant that was doing very little. You know, the Pullman business has not been so good for a number of years.
We negotiated with them. They are fine gentlemen. They had other Government agencies dealing with them in this particular case. I think they had some dealings with the War Department. They were smart people, and they wanted to play both ends against the middle. We had a little trouble. It was perfectly proper trouble.
But I would have solved that trouble in weeks less time by such a statute as this. All I would have had to do would have been to come in and say to the 0. P. M., “You determine the priority. If this is an ordnance plant, all right. I am out. If this is a shipbuilding plant, I am in. Now, you boys come across.”
They did ultimately, but we lost time.
Senator KILGORE. You were trying to get the facilities of that entire plant?
Admiral LAND. Yes, sir; and we have them.
Admiral LAND. No, sir. We took it over under this 5-year amortization facilities scheme that has been adopted by the Government agencies. Senator KilGORE. In other words, you leased it and did not buy it? Admiral LAND. We leased it.
Senator KILGORE. One of the troubles, then, is the fact that we still, in spite of everything that we have done, have three competing procurement agencies, do we not, or maybe several more than that?
Admiral LAND. That is true. And that was one of the major difficulties, as I understand it, one of the major causes of this difficulty—that they could not decide who would take priority. That could not happen under a proper priority system.
That difficulty is always going to obtain relatively, but actually that is pretty well removed. We scrap among ourselves, but it is settled by the proper administrator, and we go along.
Senator KILGORE. Now the Priority Administrator settles it or the 0. P. M.?
Admiral LAND. The Priority Administrator, as I understand it, is in the 0. P. M. He is a part of the three P's—production, priority, and procurement.
Senator KILGORE. In that case you were not after some tools out of the plant that would render the entire rest of the plant useless, were you?
Admiral LAND. No.
Senator KilGORE. That is not the thing that is worrying this committee.
Admiral LAND. I merely have been trying to be a shoemaker and stick to my own last. My shoemaking is shipbuilding and ship operations. But the shoe pinches just as hard every ship operator and pinches every shipper and every chamber of commerce and every port authority in the United States, including a good many of you gentlemen up here on the Hill, who are on my back all the time as to the curtailing of service due to lack of bottoms.
Senator DownEY. We do not have any ships left now, I understand, except Japanese.
Admiral LAND. You don't regret that any more than I do.
Senator Hill. If we give you this bill, you will give us more ships, will you not?
Admiral LAND. I will give them to you faster.
Senator Hill. The Admiral has indicated what has been worrying a good many of the members of the committee, and that is the thought that maybe this power would be used to go in and take machine tools and machinery away from the little operator and turn it over to the big operator. Do you folks see any such thing as that?
Admiral LAND. Only in very exceptional isolated cases. We have not had a case like that but I would like to say, if we do have a recalcitrant owner, I would like to be able to say to him, “Come across.
We can lick these fellows, but I say, the question of time is concerned. That is what this bill will do. It will increase production and reduce the time.
The CHAIRMAN. Are there any other questions, Senator Hill?
STATEMENT OF REAR ADMIRAL S. M. ROBINSON CHIEF,
BUREAU OF SHIPS, NAVY DEPARTMENT The CHAIRMAN. Admiral, will you be good enough to tell us why in your opinion this bill is necessary?
Admiral ROBINSON. I think I can state the position of the Navy Department in a few words, sir.
I can endorse everything that Judge Patterson has said, for one thing; and that pretty well covers the case.
I do think that the bill as written here is a little stronger than the amendment that Secretary Patterson has proposed, and we would prefer to see the bill as it is now written rather than the amendment.