Mr. STEVENSON. You are referring to a chart you have of the organization for national security? Mr. HENDERSON. That is right. Incidentally, while we are on such a subject of organization for the national security, I know you gentlemen must be familiar with the survey which the industrial mobilization and planning districts are making of small-business plants throughout the Nation. Mr. PATMAN. As to their availability in the event of a national emergency? Mr. HENDERSON. Yes. When M-day comes, all those plants that have been chosen by the Government have an agreement or contract signed in their possession, so that when the button is pushed, or the telegram is sent to them, they will stop making whatever they are making, and start making the product for which they have been given a contract to manufacture. I hope that will be the case, rather than that which happened at the beginning of the last war, when after assembling numerous and untold quantities of information, thousands of cards, and so forth were filed away, 32 large industrialists were called in and the President gave them all the business. Of course, the little fellow had to struggle around trying to get a subcontract now and then, and if he could. Mr. PATMAN. I can see some justification for that. I know when it happened. You had to have people who had the know-how and who had the facilities to get the job done. They had to do it quickly. You had to do it in volume. It just had to be that way; that is all. You take, for instance, the iron and steel branches in the War Production Board and the other branches of our Government, they were filled with big steel men. Every person we went up against to get this Dangerfield plant was a big steel man. I complained to the authorities about them, and I was told by the highest authority, Mr. Nelson, that they had considered that, too, but there is nothing they could do about it; they had to have people who had the know-how, and if you put those fellows out you would get somebody else in from the big steel companies, big steel company men. You had to have the people who had the know-how. So, in connection with this emergency we got into so quickly and so suddenly on December 7, 1941, I think the Government acted very wisely in calling the big industrialists in the country to do this job. I concur, and I believe you will agree, that was not a bad thing. Mr. HENDERSON. We can go along with that thinking. But we are ready now, and getting ready, and I hope that the machinery which is set up will be used. Mr. PATMAN. I agree with you. As much as I think of small business, and that we should be solicitous for their work and welfare, the security of our Nation comes first, you know, and we have to act according to what will be the best. Mr. HENDERSON. If the small business concerns are given an opportunity to participate in the program, then they will still continue to be in business. Mr. PATMAN. Eventually they did participate, and did a good job. Mr. HENDERSON. After a long time. Mr. PATMAN. Yes. Now we hope to have it mobilized, if it becomes necessary, and we hope it will not become necessary, to where they can participate again. Mr. STEVENSON. We thank you for your very fine report, sir. Mr. PATMAN. I want to express my appreciation to you for giving us a good plug for the steel mill over here in Texas. The arguments you have presented have been unanswerable in that direction. Mr. HENDERSON. That is all right. Mr. PATMAN. We want one for Louisiana, too. Mr. HENDERSON. I would like to say that I have lived in Texas for 2 years. The first time I ever voted in my life I voted in Galveston, Tex. I have forgotten now whether my man won or not, but that is where I voted first in Texas. (Witness excused.) STATEMENT OF CHARLES L. FLORI, ON BEHALF OF SOUTHLINE METAL PRODUCTS CO. Mr. FORISTEL. Give your name and your background, please. Mr. FLORI. My name is Charles L. Flori, manager of sales of the Southline Metal Products Co. of this city. Mr. FORISTEL. What is your product? Mr. FLORI. Steel drums, steel barrels, as some might refer to them. Before I go on with a statement for the record, I would like to read a telegram that came in to Mr. Foristel, executive director, room 717, Federal Office Building, which reads as follows: JAMES W. FORISTEL, ST. LOUIS, Mo., October 10, 1948. Executive Director, Congressional Select Committee, Small Business, Room 717, Federal Office Building: Regret that I cannot attend the hearing in Houston tomorrow. I firmly believe it necessary that your committee participate in a more intensified program following the meeting of a new Congress. Trade practices of monopolistic enterprises continue to threaten our free American system and the life of small business. Present investigations concerning the steel industry and the methods employed by them in connection with the distribution of their products should be continued and thoroughly pursued. In our own case, we have been unable to secure any definite assurance of steel supply for an important defense order. This despite the required certification authority and all the intents implied and expressed in the voluntary code for allocations of steel requirements of the armed forces. I have requested Messrs. W. F. Wackman and C. L. Flori, of our Houston office to attend. Regards. He is president of the Southline Metal Products Co. L. B. WACHMAN. As a small independent steel barrel manufacturer we are users of sheet steel and have experienced great difficulties in securing steel since 1946. Many times we have been forced to shut down our plant for lack of steel for periods of 2 to 3 weeks during this time. We presently have an armed forces contract and have had some commitments from a couple of the steel mills under the armed forces voluntary steel plan which will help toward fulfilling our contract. These commitments, however, are both small, and even though we have this armed forces contract for steel barrels, we have been unable thus far to secure enough steel under the armed forces voluntary steel plan to meet our minimum requirements of the contract. We can comply with all the rules, regulations, and ramifications of the voluntary plan which the steel industry voluntarily agreed to with the Secretary of Commerce and are therefore entitled to the benefits of it in regard to our armed forces contract. With all the promises of the steel industry to take care of the necessary steel requirements of certified armed forces contracts under the voluntary plan, why cannot we as a small independent manufacturer secure the necessary steel to meet our minimum requirements of the contract? It just doesn't make sense. Our situation is a typical problem of small steel fabricators today. We need more steel, but how can we secure it? In conclusion let me say that we appreciate the help your committee has given us and other small businesses and though our particular problem has not been entirely solved as yet, we do have hopes. Your committee must continue to carry the torch of small business, for without your efforts small business would have no chance at all. Mr. FORISTEL. Mr. Flori, as you recall, at the end of the session our committee, through our chairman, Mr. Ploeser, introduced two amendments to the Selective Service Act of 1948. Those provisions provided that the small business of this Nation was to have a fair and equitable share of the military procurement of the Nation. Mr. FLORI. Yes. Mr. FORISTEL. And the second amendment provided that the President had the authority to call upon the large producers of steel to furnish steel to any person holding a military contract. Shortly thereafter, a great furor went up in the country on the part of the steel mills. We called upon the military authorities to estimate how much steel would be required to fulfill all military needs for the year beginning July 1, 1948, and finishing on July 1, 1949. They said that their total needs would be 1,200,000 tons. Mr. FLORI. That is correct. Mr. FORISTEL. Thereafter, the President did not see fit to invoke his authority, but he did call upon the Department of Commerce, and he asked that they set up a voluntary planning committee of industry. This figure of 1,200,000 tons of steel is only 2 percent of our total production, and that is all needed to meet our military needs. The big steel producers have agreed that they will furnish steel any time you offer a contract, and certify that it is a military contract. Mr. FLORI. We did that, a certified military contract. Mr. FORISTEL. You have submitted those facts to the steel company? Mr. FLORI. We have submitted the orders, certified, giving the contract number, to the various steel mills, with no successful results. Mr. FORISTEL. If you will come to our committee with an order for steel on anyone, and if they are geographically a normal supplier, we are certain we can get you steel. I am certain of that. Mr. FLORI. Well, as we say there, we have small demands there for 100 or 200 tons. Mr. FORISTEL. You should not divide your orders among several companies. You should put it on one order, and come to us, and we will get it for you with the help of the Commerce Department. Mr. PATMAN. Mr. Chairman, I think the committee would be justified in calling this to the attention of the Chief Executive in the event they refuse to do it, because under the amendment of Chairman Ploeser, which was an excellent amendment, it could be compelled. There is no question about that. But the steel companies and other people were insistent that they be given an opportunity to try a voluntary plan first. That plan was adopted. Of course, if it does not work, we will have to change it. Mr. FLORI. The Navy is looking for their drums. Mr. PATMAN. I want to ask you a question: What about the Sheffield Steel Co.? It is here in Houston. Can you not get steel from them? Mr. FLORI. No, sir. Mr. PATMAN. Why not? Mr. FLORI. They will not accept an order. Mr. PATMAN. What do they do with that steel? Mr. WACKMAN. Ask Sheffield. Mr. PATMAN. They do not furnish the steel? Mr. WACKMAN. That is right. Mr. PATMAN. Sheffield is part of the American Rolling Mill Co. They have it some place; do they not? us. Mr. FLORI. It looks like it; yes, sir. It looks like a run-around with We have never been able to get steel from them. Mr. PATMAN. You do what Mr. Foristel suggested, and you will get the steel. Mr. FLORI. We have an armed forces contract. Mr. FORISTEL. Furnish us with all of the information, including the contract number, and we will get it for you. Mr. FLORI. Thanks a lot, Mr. Chairman. Mr. FORISTEL. Include it all in one order. Do not divide it up among 20, because that means 20 jobs for us. Mr. FLORI. We do not want 20 to come in. We would not know where to put it all. Mr. FORISTEL. If we do not get it on the voluntary basis, we will ask the President to invoke the authority he has. Mr. STEVENSON. We thank you. (Witness excused.) STATEMENT OF F. C. MUNDHENKE Mr. FORISTEL. Identify yourself for the record. Mr. FORISTEL. What is your business? Mr. MUNDHENKE. Representing foreign steel manufacturers. Mr. MUNDHENKE. You are talking about sheets. Mr. FORISTEL. Speak about any part of the steel industry while we are on the subject. Mr. MUNDHENKE. I would like to import some sheets, but it is practically impossible because the duty, instead of reducing, the duty has been raised immensely up to $20 a ton because the duty is based on the value of the goods. Before the war, the duty was, oh, maybe $5 to $10 a ton. It goes up now to $20 a ton. Mr. FORISTEL. Have you imported steel? Mr. MUNDHENKE. Yes. Mr. FORISTEL. From what country? Mr. MUNDHENKE. Before the war, mostly from Germany, Luxemburg, Belgium, and France, but now we cannot get anything from Germany because they do not allow them to manufacture. Mr. FORISTEL. However, some steel is coming in here from Belgium? Mr. MUNDHENKE. It is coming now from Belgium and Luxemburg. Mr. FORISTEL. And at the same time, you understand, we are exporting them steel? Mr. MUNDHENKE. Yes. Mr. FORISTEL. Quite a lot, too? Mr. MUNDHENKE. Yes. Mr. FORISTEL. It does not seem right; does it? Mr. MUNDHENKE. No, sir. Mr. FORISTEL. We are exporting them steel at our mill prices. It is being shipped back to this country, or at least, some steel is, at high prices. Mr. MUNDHENKE. The prices are higher than the domestic mill prices. Of course, it does not make any sense because you cannot get it. Prices don't mean anything here. Mr. FORISTEL. How much are you paying for imported steel right now! Mr. MUNLHENKE. About $110 to $115 a ton. Mr. FORISTEL. You would be very lucky to get it for that price. Mr. MUNDHENKE. They are eager to get it, but they cannot get any sheets or they cannot get anything, because the duties have been raised. Although we told the people in Geneva, at the Geneva Convention, we wanted them to reduce the duty, they raised the duty on account of our foolish tariff that we have. We had a convention at Geneva and we told those people to take off the foolish tariffs. They combined not to raise any tariffs at all. We raised the duty here from about $5 and $10 a ton to $20 a ton on account of the duty being based on the value of the goods, and the value went up. I had it up in Washington. They cannot do anything under the reciprocal trade agreement because the duty has already been reduced by 50 percent. Mr. PATMAN. The maximum amount? Mr. MUNDHENKE. Yes; but steel went up high. Mr. FORISTEL. You understand we are shipping about 6.5 million tons of steel abroad, which is about 10 percent of our total production? Mr. MUNDHENKE. I do not blame the steel people if they can get a good price abroad. Mr. FORISTEL. But it is pretty tough on the folks at home. Mr. MUNDHENKE. Yes. You I put the fabricators here out of business. Mr. PATMAN. How much is imported into this country? Mr. MUNDHENKE. I have not got that figure. You mean all around? Mr. MUNDHENKE. I do not know. I assume about 2,000,000 tons. Mr. MUNDHENKE. Not 2,000,000 tons; $2,000,000 the last few weeks. 83019-4948 |