The CHAIRMAN. I will now ask Judge Patterson, the Acting Secretary of War, to come around, please, for his statement in relation to S. 1579.

STATEMENT OF HON. ROBERT P. PATTERSON, UNDER SECRETARY OF WAR, ACCOMPANIED BY COL. JOHN P. DINSMORE, JUDGE ADVOCATE GENERAL'S DEPARTMENT, OFFICE OF UNDER

SECRETARY OF WAR

Mr. PATTERSON. Mr. Chairman and gentlemen, the bill, S. 1579 was introduced at the request of the War Department. I refer to a letter dated June 2, 1941, signed by me as Acting Secretary, requesting introduction of the measure.

That is the letter which Senator Reynolds has just quoted from. The bill authorizes the President, during the national emergency, to take over property useful for national defense, the owner of the property to receive fair and just compensation. If the owner is not satisfied with the figure determined by the President to be fair and just, he may take 75 percent of that figure and have the courts determine the fair value, recovering any additional sum which, when added to the money already received, shall equal the value so determined by the courts.

The United States is in peril from the aggressive designs of the Axis Powers. The Congress is alert to the peril and has taken action to meet it. It has passed the Selective Service Act, under which over 500,000 men have been inducted into the Army. It has appropriated in the current fiscal year for the Army and the Navy nearly $25,000,000,000, not to mention further billions for equipment to be loaned to nations whose defense is deemed vital to our own defense.

The peril being what it is, no time should be lost, no effort spared in equipping our armed forces. The task of equipping the armed forces is a draft on the entire industrial power of the Nation. We have not depended on a volunteer system to recruit our Army, and we should not remain in a situation where, for the most part, we have to depend on a volunteer system to get the materials necessary for the national defense.

In some quarters the present bill, a measure to enable the President to exercise eminent domain over property needed for national defense on payment of fair value, has been discussed as if the power of eminent domain had never been heard of. Eminent domain is recognized in the fifth amendment to the Constitution in the provision that private property shall not be taken for public use without just compensation. For many years the Government has used the power of eminent domain to acquire real estate for a post-office site or for a road. Within the past year the Government has acquired many tracts of real estate for camps and munition plants by eminent domain, taking the land without the farmers' consent and paying just compensation.

The present bill is designed merely to extend eminent domain to cover personal property in cases where such property is in the nature of supplies needed for defense of the Nation in a great emergency. At the present tine the President has authority, by section 9 of the selective service law, to take over industrial plants where the owner refuses to produce military supplies. He also has authority, under the act of October 10, 1940, to requisition supplies for which an

export license has been denied. But there are many cases covered by the proposed law that are not covered by the laws now on the books.

We need machine tools for production of defense articles. There are many machine tools in industries not manufacturing defense articles. There are many held by second-hand dealers at high prices. Under the proposed law these could be requisitioned at a fair price and sold or loaned to concerns making airplanes for example. There may be stocks of raw materials in the hands of persons who are not making defense equipment. Under this bill such raw materials could be taken over at fair value and devoted to the manufacture of munitions.

There are airplanes now used for pleasure by their owners which would be useful for national defense. Under the present bill these airplanes in case of need could be taken for the armed forces.

There are valuable patents, according to the Department of Justice, which are held by unfriendly foreigners and which play a part in controlling defense production. The Government should be in a position to take over any such patents, on payment of value.

Congress has recently passed the priorities law under which future production of machine tools, raw materials, and other things necessary for defense can be used so as best to serve our national defense needs. We should have the authority to accomplish the same purpose with our existing goods. Control over the disposition of future goods is not enough. We ask in this bill authority to determine priorities as to existing things.

The examples which I have given show that the power of eminent domain for the equipping of our armed forces in the period of emergency should be a broad one. Otherwise, it is probable that the cases to be dealt with will not come within the reach of the law.

In the World War there were some 17 separate requisition statutes, one dealing with coal, one dealing with timber, and so on. These acts were passed after the situation as to a particular commodity had become acute, and there were resulting delays. Mr. Baruch, who directed our industrial effort with matchless ability at that time, is of the view that a broad requisition statute would be much more effective. In his work, American Industry in the War, 1941 edition, he says, at page 402:

There should also be enacted a general commandeering statute giving the President plenary authority in the usual terms to commandeer in time of war any manufacturing facility or any supplies deemed by him necessary to the successful conduct of war.

The bill now before the committee was drafted by officers in the planning branch of my office. Such a measure has for years been part of the industrial mobilization plan prepared by the War Department under the directions contained in section 5a of the National Defense Act of 1920. I want to stress the fact that this is not a new measure. A bill relating to requisition of private property by the Government in a time of national emergency, the same in substance as the bill now before this committee, appeared in the industiral mobilization plan of 1931 and may be found in the documents of the War Policies Commission, House Document 271 of the Seventy-second Congress, at page 450.

That appears here, gentlemen. It is almost the same bill-the same in substance.

The CHAIRMAN. Pardon me, but may I suggest that when you complete the reading of your statement there that we have the report embodying that put in the record?

Mr. PATTERSON. Yes, sir.

Mr. HILL. In that connection too, Mr. Chairman, I am sure it would be interesting to have the record show who constituted that War Policies Commission. I remember some of them. Of course, I happened to be in Congress at the time, but it was a very outstanding Commission in many ways.

Mr. PATTERSON. As I recall it, it embodied both members of the Cabinet and Members of Congress.

Mr. HILL. Both Members of the House and of the Senate.
Mr. PATTERSON. Yes.

Patrick J. Hurley, then Secretary of War, chairman; Senator David A. Reed, vice chairman; Senator Joseph T. Robinson; Representative John J. McSwain; Senator Arthur H. Vandenberg; William D. Mitchell, then Attorney General, as I recall; C. F. Adams, I think then Secretary of the Navy; R. P. Lamont; William P. Holaday; Arthur M. Hyde; W. N. Doak, and Lindley H. Hadley, secretary.

Senator DowNEY. May I intervene to ask if that proposal was made on the hypothesis that we would be in war?

Mr. PATTERSON. An emergency.

Senator DoWNEY. But not war?

Mr. PATTERSON. During any national emergency declared by Congress.

The only difference I know is that this one was declared by the President and has been recognized by Congress.

Senator LODGE. This is a recommendation?

Mr. PATTERSON. Yes.

Senator LODGE. There has never been anything like this in effect before, has there?

Mr. PATTERSON. Similar power, Senator, in the World War; but as to specific articles, like timber.

Senator LODGE. Giving the items.

Mr. PATTERSON. Yes.

Senator LODGE. And this is blanket?

Mr. PATTERSON. That is right. This is general; those were specific acts.

Senator HILL. I might state too that the War Policies Commission, the membership the Secretary has just read to us, was set up by act of Congress. It was a joint resolution, as I recall, passed by Congress, signed by the President, setting up that War Policies Commission, and they devoted many months of time studying this question of what our policies should be in time of an amergency or in time of war, and as the Secretary said, the act to which he has referred, or the suggested act, was one of the things that they strongly recommended. Mr. PATTERSON. As I recall it, gentlemen, a similar bill was passed by the House in 1935 and was discussed a great deal in the Senate, but died with the end of the session, I think.

Senator HILL. The Secretary is right about that. We did pass such a bill in the House of Representatives. It was passed in the

House during the closing days of the session, and the Senate never did act on the bill; but it passed the House of Representatives.

Mr. PATTERSON. I take it that if the country were engaged in war, outright war, the case for this bill would be so plain that all in favor of vigorous prosecution of the war would support it. The need today of procuring arms for the troops in the field is as urgent as if we were in war.

The grant of power to take over property permanently has been criticized. If we are to requisition aluminum or steel and fashion it into airplanes, we cannot return the aluminum or steel. That is the reason for use of the word "permanently." Again, the grant of power to the President to sell materials requisitioned has been criticized. If a machine tool or a raw material essential to production of armament is requisitioned, it is probable that the best way to make use of it will be to sell it to a concern that has need of it for performing a contract to supply the armed forces with armament. That is the reason for including the power to sell materials requisitioned.

I hold no brief for the exact language of this bill. If the aim can be attained by better phraseology, I hope that better phraseology will be found. But if we limit too much, the cases that may confront us in the future will prove to be cases beyond the reach of the statute. We are drafting men into the service. Are we to refuse to draft materials into the service? If one who owns a rifle, an airplane, or a machine tool essential to our defense says that he would rather keep it for his own use than to receive the value of it, is his personal preference to override the Nation's need? Not if this bill becomes law. That is my formal statement.

In my opinion this matter was all decided last fall when the Selective Service Act was passed.

The CHAIRMAN. The Secretary has made mention of section 9 of the Selective Service Act, and at this juncture, I want to ask the reporter to embody section 9 of that act in the record, as it appears on pages 8 and 9 of this volume.

(The section above referred to is as follows:)

SEC. 9. The President is empowered, through the head of the War Department or the Navy Department of the Government, in addition to the present authorized methods of purchase or procurement, to place an order with any individual, firm, association, company, corportion, or organized manufacturing industry for such product or material as may be required, and which is of the nature and kind usually produced or capable of being produced by such individual, firm, company, association, corporation, or organized manufacturing industry. Compliance with all such orders for products or material shall be obligatory on any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof and shall take precedence over all other orders and contracts theretofore placed with such individual, firm, company, association, corporation, or organized manufacturing industry, and any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof owning or operating any plant equipped for the manufacture of arms or ammunition or parts of ammunition, or any necessary supplies or equipment for the Army or Navy, and any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof owning or operating any manufacturing plant, which, in the opinion of the Secretary of War or the Secretary of the Navy shall be capable of being readily transformed into a plant for the manufacture of arms or ammunition, or parts thereof, or other necessary supplies

or equipment, who shall refuse to give to the United States such preference in the matter of the execution of orders, or who shall refuse to manufacture the kind, quantity, or quality of arms or ammunition, or the parts thereof, or any necessary supplies or equipment, as ordered by the Secretary of War or the Secretary of the Navy, or who shall refuse to furnish such arms, ammunition, or parts of ammunition, or other supplies or equipment, at a reasonable price as determined by the Secretary of War or the Secretary of the Navy, as the case may be, then, and in either such case, the President, through the head of the War or Navy Departments of the Government, in addition to the present authorized methods of purchase or procurement, is hereby authorized to take immediate possession of any such plant or plants, and through the appropriate branch, bureau, or department of the Army or Navy to manufacture therein such product or material as may be required, and any individual, firm, company, association, or corporation, or organized manufacturing industry, or the responsible head or heads thereof, failing to comply with the provisions of this section shall be deemed guilty of a. felony, and upon conviction shall be punished by imprisonment for not more than three years and a fine not exceeding $50,000.

The compensation to be paid to any individual, firm, company, association, corporation, or organized manufacturing industry for its products or material, or as rental for use of any manufacturing plant while used by the United States, shall be fair and just: Provided, That nothing herein shall be deemed to render inapplicable existing State or Federal laws concerning the health, safety, security, and employment standards of the employees in such plant.

The first and second provisos in section 8 (b) of the Act entitled "An Act to expedite national defense, and for other purposes", approved June 28, 1940 (Public Act Numbered 671, Seventy-sixth Congress), are hereby repealed.

I also want to have inserted in the record an amendment introduced in and passed by the Senate, as section 2 of S. 1524. This amendment was introduced by Senator Connally and provides certain powers in reference to that section.

(The amendment above referred to is as follows:)

SEC. 2. That section 9 of the Selective Training and Service Act of 1940 is hereby amended by adding at the end thereof the following new paragraph: "The power of the President under the foregoing provisions of this section to take immediate possession of any plant upon a failure to comply with any such provisions, and the authority granted by this section for the use and operation by the United States of any plant of which possession is so taken, shall also apply as hereinafter provided (1) to any plant equipped for the manufacture of any articles or materials which may be required for the national defense or which may be useful in connection therewith, and (2) to any plant which, in the opinion of the Secretary of War or the Secretary of the Navy, is capable of being readily transformed into a plant equipped for the manufacture of any such articles or materials. Such power and authority may be exercised with respect to any such plant during the existence of the unlimited national emergency proclaimed by the President on May 27, 1941, or in time of war in which the United States is engaged, whenever the President finds, after investigation, (1) that the nationaldefense program will be impeded or delayed by an existing or threatened failure of production at such plant as a result of a strike or threatened strike, or lockout, or other cause, (2) that the exercise of such power and authority is necessary or desirable in the public interest, and (3) if such existing or threatened failure of production is due primarily to a labor dispute, that either or both parties to such dispute have failed to utilize existing Government conciliation and mediation facilities in an effort to settle such dispute, or that despite use of such facilities the dispute has not been settled and a failure of production exists or is threatened: Provided, That with respect to any plant of which possession shall have been taken under the provisions of this paragraph, such plant shall be returned to its owners whenever the President determines that such plant will be privately operated in a manner consistent with the needs of the national defense."