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Mr. PATTERSON. I don't think we have any inventory. The War Department has none that I know of, of the kind mentioned. Under the industrial mobilization plan we surveyed a great many plants over the years with regard to their usefulness for producing military equipment, but I take it that Senator Downey has in mind something more specific than that. But that is the only thing I know of that the War Department has. Isn't that right, Colonel Dinsmore?
Colonel DINSMORE. Yes, sir.
Senator DOWNEY. Let me ask Mr. Patterson this: Do you know whether the War Department needs the authority in this bill to commandeer a single piece of machinery in southern California ?
Mr. PATTERSON. I don't know that; no, sir.
Senator DOWNEY. Well, Mr. Chairman, I don't believe a bill of this character should be
Mr. PATTERSON. I wouldn't predict a single piece of machinery there would be commandeered under this bill. It is possible, but I couldn't say it would be. We just differ as to what is going to happen. The Senator is very fearful of something that I am not fearful of, but that is all I can say about it.
The CHAIRMAN. In other words, I suppose the Senator has in mind the question of whether or not at the present time any particular plants they contemplate taking over.
Senator DOWNEY. And yes, any particular machinery.
Mr. PATTERSON. I don't think the War Department has its eye on any particular plant, Senator.
Senator Downey. I am not disturbed about the War Department; I am disturbed about the Maritime Commission and the Navy.
Mr. PATTERSON. And that is beyond my scope.
Mr. PATTERSON. This bill is not restricted to the War Department. I mean there are problems with which I am not familiar. If others have any plans I don't know of them.
The CHAIRMAN. As the Chair understands from the statement made by the Secretary, as a result of the inquiries directed by the Senator from California, the War Department at the present time has no particular plant or machinery that they desire to seize under the bill.
Mr. PATTERSON. We are simply short of certain kinds of tools that we are trying to get for our producers, which are urgently needed, but we baven't got them spotted as being yours, or yours or mine, so far as I know.
The CHAIRMAN. And if it is possible to secure them otherwise this act will not be employed for their procurement?
Mr. PATTERSON. And they are an infinitesimal fraction of the machines that are now available in the country, as I understand it.
Senator JOHNSON of Colorado. And you have tried to purchase the machines on the market and cannot purchase them?
Mr. PATTERSON. They say they have been unable to get them.
Senator LODGE. In how many cases have they been unable to get them? A large number of cases?
Mr. PATTERSON. A considerable number.
Mr. PATTERSON. I can't say. I have some material bere before me. I was looking to see if it covered that but it does not.
Senator KILGORE. I am wondering if we couldn't get some informed representative of the procurement branch of the Army bere to tell us about this situation and give us some specific information. That is just a suggestion. The procurement branch will know more specifically what they are after
Mr. PATTERSON. Of course, we have a machine-tool committee in the Army and Navy and munitions that would be able to give you better information than I can along the line that Senator Lodge wants.
Senator Hill. Let me make this suggestion if I might, Mr. Chairman: I think the Secretary here undoubtedly knows pretty well what is in the minds of different members of the committee, the things that are troubling the members of the committee, the things that are causing fears in the minds of at least some members of the committee. Let me suggest if I may, that the Secretary, when he goes back to the War Department, get in touch with the Procurement Department-he is the commander in chief, so to speak, of the Procurement Division, let him get in touch with his staff down there and see just who he might send here to perhaps give a little more detailed information and perhaps clear up some of these questions that are now in the minds of certain members of the committee.
Senator LODGE. The Secretary is a very good lawyer; he might revise this bill and save us the trouble.
Senator DOWNEY. He is more than a good lawyer, he is a great lawyer.
Senator JOHNSON of Colorado. I was a little bit late getting to the hearing this morning. Before I came in did Judge Patterson discuss the terms in this bill which are found on page 2, lines 7 and 8? One of those lines reads:
“Or otherwise dispose of," and then the word “permanently." Was that terminology discussed?
Mr. PATTERSON. To some extent.
The CHAIRMAN. The Secretary made a general statement and his particular attention was called to the words "to sell or otherwise dispose of,': by Senator Kilgore at the time. If the Senator was not here at that time I am going to ask the Secretary of War to repeat it.
Mr. PATTERSON. The only point of the word "permanently" was if you took some raw materials and fashioned them into weapons and ammunition and shot the ammunition away, you obviously couldn't take that on a temporary basis. Some of these things would be things that might be consumed. If you took some food and some men ate it, that is another example.
Senator JOHNSON of Colorado. A moment ago the chairman of this committee tried to draw a parallel line between the conscription of men and the conscription in this bill, but under that language "otherwise dispose of,” and the word "permanently,” you cannot only conscript materials and machines and factories and plants, but you can turn around and sell them to a third party and the title passes permanently to that third party.
Mr. PATTERSON. “To sell or otherwise dispose of” was broad language used to cover a case of the type-of course, you can imagine abuses of it, but it was framed and designed to cover this kind of a case, and I think reasonably so:
Suppose you took a stock of raw material, let us say steel or copper or something of that sort, it might well be that the most efficient way
to use that would be to in turn dispose of it or sell it to one of our own suppliers who would fashion it into something in performance of his contract.
Senator JOHNSON of Colorado. I can see the necessity, I might say, for such language with relation to material, but this can also be applied to machines and to factories and to plants and in that I can see a very great difference between the parallel that the chairman of this committee attempted to draw between conscripted men.
Mr. PATTERSON. Of course we wouldn't do that, Senator; I don't see how anyone would want to do that.
Senator JOHNSON of Colorado. Well, I can't see why they would want to do that either and I can't see why you would want that kind of language in the bill.
Mr. PATTERSON. Only to cover a certain kind of case.
Senator JOHNSON of Colorado. Let us make it specific as to material then and supplies and not make it specific to all of the transactions which are provided for under this bill, because as Senator Downey has so well pointed out, under this bill all of the little industries could be gobbled up and transferred and sold to the larger industries and the transactions made permanent.
Mr. PATTERSON. I believe that the Army, or whoever was doing it, would not abuse the authority given, which I admit is broad.
Senator JOHNSON of Colorado. Just one further suggestion: It seems to me that if the Army or the Government is going to be granted this very broad power that they ought not to take the capital property of one person and dispose of it to another; that they ought to hold it permanently, that they ought to retain title to it and then after the emergency is over return it to him.
Mr. PATTERSON. That ought to be done in all possible cases. I think we are in agreement, all of us, as to the aims to be accomplished by this. I can't dispute the fact that the language is broad, sweeping, and that conceivable cases of abuse could arise under it.
If those cases can be guarded against by appropriate limiting language, I would welcome it. I don't think we are very far apart. My own view at any rate is, that none of us sitting around the table are very far apart.
Senator LODGE. You uttered a good phrase, Mr. Secretary, when you said you intended to use these powers to equip the armed forces. Would you have any objection to adding to that: “The powers enumerated in that act," and I am not giving anything verbatim, but roughly, “the powers enumerated in this act shall be used solely for the purpose of equipping the armed forces of the United States''?
Mr. PATTERSON. The direct answer is “No.' Of course I wouldn't have any objection to that. I think that could be included in the very first paragraph.
Senator Hill. I think that is what you had in mind when you used the words “national defense."
Senator LODGE. The words "national defense” are used to cover a great many things that no human being ever thought was national defense before. When you say "equipping the armed forces” it is much more definite.
Mr. PATTERSON. That is all right with me.
Senator KilGORE. I just want to ask one other question. Of course these prime contractors naturally expect to make a profit on
their contracts, a reasonable profit. Now the reason I am bringing this up at this point is because the comparison was made as between this and the draft. Under this they could procure machinery at its actual value from another man, thereby taking his means of earning a livelihood and profit away from him and use that to make a profit for themselves which wouldn't make it commensurate or comparative to the draft in any way. One manufacturer might be ruined by getting only the value of his machinery, whereas the other manufacturer would use the same machinery to get a profit. Wouldn't that be true?
In other words, the man fortunate enough to have a prime contract would not be in the draft, whereas the man unfortunate enough not to be a prime contractor would be in the draft. Isn't that the practical effect of this in case it was carried to its ultimate aim and conclusion?
Mr. PATTERSON. I haven't any ultimate aim or conclusion. Mine is a very direct aim for immediate purposes. Of course no one concern could go ahead and just move into another concern and say "give me this and give me that."
Senator 'KILGORE. No; but by cooperation with proper authority he would be unable to take the other man's capital and use it for his own profit. I don't think the comparison with the draft is analogous.
Mr. PATTERSON. I am sure there are not going to be roaming bands of army officers, roaming over the country, seizing and grabbing this and that. That just will not occur.
Senator KILGORE. I know that, Judge.
Senator DOWNEY. But what will occur, Mr. Patterson, is that the Navy, for instance, may want to divert all of the shipbuilding work to a few big companies. They have announced that and they are very impatient with the smaller men who want subcontracts. They are not for that. I have talked with them personally and I would like for them to be called before this committee. They will tell the committee the same things they told me. The Navy would immediately go out and say, "Well, we want that machine and we want it operated on the site of the Bethlehem," or whatever shipbuilding company it is. That is the way it is going to result, Mr. Patterson, and that it the purpose of this bill. If that isn't what you want, then the bill has no meaning as far as machinery is concerned.
Mr. Chairman, may I ask this: I understand that California has more defense contracts than any other State in the Union, except Pennsylvania, and I presume it is a representative State. Now, I would like to have representatives of the Government and the airplane industry come before this committee and tell us whether such a bill as this is necessary and if so, for what purpose, and how they expect the power under it to be carried out. Ships and airplanes are the great need of this Nation today and I think we should have representatives of the shipbuilding industry here.
I know something about conditions in California and as I say, I would like to have them called as witnesses, if it suits the committee and the chairman, and let us find out whether they need this.
Now, I declare to this committee that our airplane builders are going forward with tremendous power and energy, and that within 6 months or 12 months or 18 months we are going to be producing more airplanes than we can use. We don't have to go into dictatorial powers by the Government to do that.
Now, to whatever extent it is necessary to further the national defense by a military dictatorship I am for it, but as a member of this committee I am not for it until some showing is made that this is needed and there hasn't been any such showing yet, Mr. Chairman.
The CHAIRMAN. I will say to the Senator from California, that as soon as we dispose of the witnesses who are to testify before the committee, we will take up the matter of other witnesses, at which time we will be very happy to have any and all suggestions the Senator from California makes in regard to witnesses whom we shall deem proper to testify here, to provide the committee with such information as it desires in relation to this bill.
Senator DOWNEY. I thank you, Mr. Chairman.
The CHAIRMAN. Now, gentlemen, are there any other questions for answer by the Secretary of War.
Mr. Patterson, we thank you very much.
STATEMENT OF JAMES E. EMERY, GENERAL COUNSEL, NATIONAL
ASSOCIATION OF MANUFACTURERS OF THE UNITED STATES
The CHAIRMAN. Mr. Emery, will you please provide the official reporter with your full name and your title and with the name of the organization or association with which you are connected?
Mr. EMERY. James E. Emery, general counsel, National Association of Manfacturers of the United States.
Mr. Chairman, the National Association of Manufacturers is an organization of some 8,000 individual firms and corporations, with which are affiliated some 40,000 manufacturers in the various States of the Union, all of whom are largely engaged in production for defense at the present time.
These firms and corporations are in continuing cooperation with all the departments of the Government in respect to national defense. They view with considerable apprehension the terms of this bill as it is written. They recognize the necessity of granting broad powers to the Executive for the conduct of national defense, and we do not question the power of Congress to give such authority as part of the war power.
. We recognize with John Quincy Adams that, I quote: It is strictly constitutional but it breaks down every barrier so anxiously erected for the protection of liberty and property and life.
And I beg to call your attention to Webster's famous statement that:
Only the legislative power could determine the nature and extent and the purposes for which they would grant authority, but they alone could not determine to what uses it would be put.
Now, I beg to direct the committee's attention to the extraordinary operating effect of this bill. The fact is that no such authority has evern been sought or granted either when the Nation was at war or when war was eminent; and furthermore, that ample authority has been granted for the major purposes of defense and if necessary may be expanded, without authorizing the transfer to the United States in executive discretion, of all forms of private property and property rights possessed by the people of the United States.
I would like to call the attention then of the committee to what this bill does and in doing so, I venture to direct the attention of the