we may be able to enjoy, or how many sacrifices we may be forced to make. Not even if we adopt the 10-cent-per-day diet, worked out at the University of Texas, where educated minds ought to be thinking of something other than how little we can live on. On the other hand, let us turn away from this disastrous crusade under the banner of emotional but meaningless words, and give our attention to a realistic appraisal and the free operation of our own national economy-a factual determination of our physical assetsand a free utilization of those physical assets in an ever-increasing production of those things which will contribute to the happiness and comfort of mankind. Only that program holds out any promise for man's material well-being, or even for his continued existence. As a first step toward putting this program into effect, I urge you gentlemen of this committee to reject this un-American, unnecessary piece of legislation in its entirety. The CHAIRMAN. Is Mr. Shakespeare here? (No response.) The CHAIRMAN. Is Mrs. Curtis here? Mr. MOTE. I was asked to say on behalf of Mrs. Curtis that she would like to be heard before the committee. And Mr. Shakespeare is on his way here to testify. STATEMENT OF BENJAMIN C. MARSH, EXECUTIVE SECRETARY, PEOPLES LOBBY, WASHINGTON, D. C. Mr. MARSH. My name is Benjamin C. Marsh. I am the executive secretary of the Peoples Lobby, of which Bishop Francis J. McConnell of the Methodist Church is the president. Our offices are here in Washington. I have been here for 23 years watching the progress toward national disintegration under the system of private enterprise, to which Mr. Haake asked you to continue allegiance. America's defense and armaments program is suffering from sleeping sickness due to the dictatorship of private ownership and control of natural resources and basic industries. This dictatorship produced 106 flaming coffins in the way of airplanes, at a huge cost, in the last war. We seem to be largely in the "on order" and in disorder stage of armaments now, 12 months after the floodgates of the Treasury were opened to defend America. Mr. Reynolds' bill, S. 1579, should be amended to make it mandatory upon the President to take over every industry directly concerned in defense, and put such industries in charge of technicians and production engineers who will often be the present managers, but will never be banker parasites who can't achieve either efficiency or patriotism. Diplomacy will play a big part in ending the present war, and the early provision of ships, warships, planes, bombers, tanks, antiaircraft equipment, and so forth, will facilitate the use of diplomacy, if we have the sense to use it. The more defense America has, the fewer defenders in uniform. will we need. Conscription of men, without conscription of industries, transportation, natural resources, banking and credit, and of wealth, belies all claims to supermobility in our participation in the war. Congress can provide for parity of people, and of property in the requisition of industry, by stipulating that owners of industries requisitioned should not be remunerated for valuations due to profiteering, monopoly of natural resources, patents, tariffs, control of credit, or other antisocial privileges acquired by unwise or bribed legislation. Since post-war conditions will be even more serious than present conditions, title to requisitioned industries should be permanently vested in the Federal Government. To protect members of Congress and administrators from suspicion that personal considerations may affect their vote on such measures, the bill should provide for a public record of stocks and bonds owned by Federal employees getting $3,000 a year and over, and by their families, and of land owned except what they occupy-and of corporations with which they have been connected. This should be required also, of all dollar-a-year people, since patriotism should strive for the goal of Caesar's wife to be above suspicion. Mr. Chairman, I should like to read a few excerpts from last week's issue of United States News, which is a very conservative publication, showing the break-down in national defense in every field under private enterprise. The CHAIRMAN. Very well. Mr. MARSH. This was in an article in the United States News on June 27, 1941: Available is $45,000,000,000 to spend on arms for this country and on aid to Britain. This is an impressive total of dollars, even though less than half of Hitler's actual outlays on an equivalent basis. It includes a two-ocean Navy, equipment for an Army of 1,400,000 men, and funds being spent here by the British. The Army and Navy and British buyers, in 1 year of effort, succeeded in placing contracts for $18,000,000,000 of this total. American industry, during that same year, succeeded in turning $7,000,000,000 of this total into actual production. But: Of this $7,000,000,000, which represents British as well as American spending in this country, less than $3,000,000,000 went into guns and aircraft and ammunition and ships and the other things that represent the shooting instruments of war. The remainder of the $7,000,000,000 went into cantonments and clothing and nonmilitary construction and the many other activities that go along with war preparation in its starting phases. * * * The United States turned out arms and ships at an average rate of $250,000,000 a month during the past year and today is turning out arms at a rate of approximately $500,000,000 a month, or $6,000,000,000 a year. Aircraft: * * * Starting from near to scratch 1 year ago, this industry ended May with a record of nearly 10,500 military type planes produced, approximately onehalf trainers and one-half fighting craft. The aircraft and aircraft engine factories used up $1,300,000,000 out of the total of $3,000,000,000 spent during the year on all types of weapons. Shipbuilding: * The Navy with its own building facilities and the Martime Commission and the private shipbuilding industry, all combined, managed to turn only $850,000,000 into ships of all kinds during the last year. * * * The United States has laid down a merchant shipbuilding program that calls for 705 ships of 5,500,000 tons to be built at a cost of $1,500,000,000. This is in addition to the two-ocean Navy program. Included in it is an emergency program calling for quick construction of 442 ships. * * * Actually: The schedule calls for construction of only 770,000 tons, costing $210,000,000, this year, and 1,760,000 tons, costing $480,000,000, in 1942, and 2,970,000 tons, costing $810,000,000, in 1943. The first ship to be delivered under the emergency program is scheduled for November of this year. To date, actual expenditure of cash on this emergency program is less than $10,000,000. Ordnance: * * * This is the field of tanks and guns and ammunition. It is a field in which $5,000,000,000 already is available for spending and in which huge new programs are taking shape. Yet the record of actual production is not impressive. It is represented by an outlay of $750,000,000 in the past year. The goal, in tanks alone, is 30,000. Light tanks now are being produced at the rate of 15 a day. First real production of medium tanks will start in October. A heavy-tank program still is in the blueprint stage. The British are in crying need of tanks of all or any kind. Yet the American tank program has been seventh on the list of military priorities and has tended to coast along. An even less impressive record is found in other heavy ordnance. Almost no modern antiaircraft guns have been produced in a year of effort. * * * There aren't enough shells to supply guns in the relatively few tanks on hand and being built. It's the same story concerning antiaircraft weapons for warships. They simply are not available and are not being produced in quantity. The ordnance bottleneck still has to be broken. * * * Aid to democracies: This country is setting out to become the "arsenal of democracy." As an arsenal, the United States must be prepared not only to produce for its own needs but to produce enough to meet the needs of the British, the Chinese, the Dutch, and the Latin-Americans who may be in search of weapons. There is $7,000,000,000 available as a start in building the arsenal. President Roosevelt is prepared to ask Congress to appropriate further funds. Yes; during its first 90 days of effort as democracy's arsenal, the United States succeeded in providing $75,000,000 worth of aid to the British and Chinese. This included $65,000,000 worth of equipment already on hand and $10,000,000 worth of newly produced equipment. The war goods that the United States provided to the democracies in these 3 months represented less than 2 days of production for Germany's Europe. * ** ** Stock pile building: The United States is short of some vital raw materials that are required in war and in preparation for war. This country, through the Reconstruction Finance Corporation, set out a year ago to accumulate stock piles of these needed raw materials so that there would be no chance that the arms industry would get caught short in a period of crisis. This business of buying up raw materials is one of big figures. The Reconstruction Finance Corporation has committed itself to buy nearly $1,000,000,000 worth of rubber, tin, copper, manganese, wool, antimony, chrome, mica, tungsten, zinc, and asbestos. It actually has brought into this country less than $200,000,000 in materials of all kinds. For example: The Reconstruction Finance Corporation rubber stock pile is about 120,000 tons, with annual consumption running at 800,000 tons. The antimony stock pile is 7,000 tons, that of chrome ore 24,000 tons, and tin 36,000 tons. Delivered and in transit are 107,000 tons of copper and 238,000 tons of manganese ore, as well as 24,000 tons of wool. There is no zinc and no tungsten trioxide and no mica. Considering the vast quantities of raw material that war consumes, these stock piles are very unimpressive. Many details are given, and the conclusion reached: Absence of direction: One year after this country started in earnest to arm there still is no over-all planning and direction of that effort. A further conclusion we reach is: Workers in munitions plants and all defense industries, even if paid fair wages, have a just grievance against a Government which decrees "work or fight" for labor, but politely "requests" owners of plants to agree to make America an "arsenal of democracy." The article quoted states: There was a loss of 3 months' time between June 1940 and September 1940, when industry and Government were arguing about tax laws as they affect new plant and equipment built to fill defense needs. It was really longer-but there was no "arguing" over registering for the draft, and being drafted. The defense of our coasts and of bases that we have acquired, means antiaircraft, guns, bombers, cruiser, destroyers, aircraft carriers, and equipment for mining. On all these we are short. We want to make three specific suggestions with reference to this pending bill. We are well aware that the President has had full power to do practically everything that this bill authorizes him to do; and we are glad that the Congress of the United States now wants to assert or reassert its interest in defending America. Let us call attention to this fact: That if war be hell, postwar is going to be heller. This emergency won't be over, no matter when the war stops. The emergency won't be over for a decade. We make these three suggested amendments: First, strike out that provision about authorizing the President.. Give him orders. Direct the President to take over every war industry, every other basic industry-natural resources, and, of course, banking, and covering transportation and so forth. Second, protect yourself against what happened in the last war. You see, I was here then most of the time. We took over the railroads and paid them a rental. The late Senator A. B. Cummings, from the State where I went to college, Iowa, said the Government paid the railroads a rental which would shock the moral sensibilities of mankind. Now, we propose as a second amendment that you stipulate that in taking over these industries and enterprises the Government shall not bale out fictitious capitalizations; but that you shall stipulate that no payment, for instance, be made to the United States Steel Corporation for the $700,000,000 write-up which they put in when they were merged back thirty-odd years ago; to stipulate that they shall be paid only for bona fide prudent investments, and not a red penny, either in purchase or in rental, not a red penny for profiteering due to monooply of natural resources-which a merciful providence has put here for all of us, and not for a few-to tariffs, to monopoly of credit, or to patents. You have got to give that to a man who invents something. You have got to give him his payment. But not the corporation that capitalizes that patent or suppresses it. There is all the difference in the world. I followed Mr. Barlow's presentation with great interest. I think basically he is right. And we are not suggesting that we deprive the inventor, but the fellow who manipulates the invention. Then, third, in order to put Dr. Haake at rest, we don't propose that you let any politicians run these industries. Frankly I admit that production for politics is just as dangerous as production for profits. But in this article by David Lawrence-it is in his magazine, so I assume that he wrote it-where it says that industry held up the Government for 3 months-it was nearer 6-it was not the technicians, it was not the production engineers, in these various industries-airplanes, bombers, machine tools-that held it up. It was the private owners. We suggest for the enlightenment and the relief of the present owners and, let me add, for the relief of the mothers of America, that the better mechanized defense we have and the quicked we have that mechanized defense-and I think Colonel Taylor agrees with me on this-the less we need defenders in uniform. Therefore we suggest that it be made specific that these industries, when the Government takes them over, are not to be operated by any politicians-frankly, I watched some of these so-called braintrusters down here. I wouldn't want them to run the show. I want the best technicians and production engineers that you can get put in every enterprise. And there are a lot of them there now who would be producing if they had their way and were not held up by the nonpatriotic owners. Those are the three amendments that we suggest, which we think are practical. Personally, I would like to have this made permanent. But we are not going back to anything that we have had for the last 20 years after this war, I am pretty sure. If we put it for the period of the emergency and stipulate that the ownership shall be vested in the Government or complete control, for the period of the emergency, I think that is going to last until several of us have been gathered to our Father. I would like to make it permanent; but if we want to have an election on it, well and good. But, answering the other point of Dr. Haake's, that you will put men in power by this measure, that you are keeping men in power, my mind goes back to 1918. I was here. Woodrow Wilson, who had great powers, appealed to the country to elect a Democratic House. They turned around and elected a Republican House. As long as we have the free ballot-and God grant we may keep it, and also that we may get a little more sense in using it--but as long as we have the free ballot, we don't need to be afraid of any party perpetuating itself in power unless it delivers the goods to the American people. And if it does, it is entitled to stay in power. Thank you, Mr. Chairman. The CHAIRMAN. I believe that that is all the witnesses. STATEMENT OF DR. A. P. HAAKE-Resumed Mr. HAAKE. May I answer a point that Mr. Marsh just made? Dr. HAAKE. He made the point that after the last war we had an election of the Republican House due to the fact that we have the free ballot. I think that the argument of Mr. Marsh falls, as that situation. in 1918 and 1920 in many ways was vastly different than it is today. In other words, we called them free elections. But when you have placed the economic life of the country in the hands of a relatively small number of men, and when you have millions of people dependent directly or indirectly upon the bounty of the Government, the thing that we call a free election begins to fade into the distance. If I wanted to be a dictator, I should ask no surer step than that which lies before anyone who wants to make himself a dictator now. You give me the Federal Reserve Board and its control over the |