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Mrs. ROGERS. I believe she can get tin and certainly rubber. And, I think England could make aluminum; and I understand you have stated your department is suffering a shortage of aluminum.

Mr. KNUDSEN. Well, England could not make much aluminum for us. Mrs. ROGERS. I mean when I say England, the British Empire. Mr. KNUDSEN. Are you talking about after the war?

Mrs. ROGERS. I mean right now, as collateral in exchange for the materials that we furnish them.

Mr. KNUDSEN. I would have to have a statement of resources before I could give you an answer to your question, Mrs. Rogers. Naturally it is nice to have collateral, but are we not a little bit beyond that at this time?

Mrs. ROGERS. I feel we ought to do all we can to protect this country financially. You are a great businessman. I am very much worried and I believe you must be worried as to the ultimate cost if we are going to try to police the world. Do you not believe that if this bill is enacted, plus the President's message, that we would be embarking upon a policy of policing the world?

Mrs. ROGERS. Pardon me.
Mrs. KNUDSEN. No: I do not.
Mrs. ROGERS. Would you mind stating why you do not believe so?

Mr. KNUDSEN. I feel that the protection of this country is the primary thing we have got to think about.

As far as I am concerned, whatever we get here, it is for American goods for defense material, that is to be made up for the protection of this country; whether we do it directly or indirectly I do not think is the question for me to answer. But I think any article of war should be made at the American standard and can be made for the protection of our own country.

Mrs. ROGERS. Yes; but my point, Mr. Knudsen, is that in doing so are we going to police the world; we are making commodities in order to police the world, all other democracies.

Mr. KNUDSEN. I do not think it is to police the world, Mrs. Rogers; I think it is just simply to take care of ourselves, our own country, and our own borders.

Mrs. Rogers. But in doing so it seems to me—and am I not correct-it may well lead to policing the world?

Mr. KNUDSEN. To me that is so abstract; I feel that it is to protect the United States, and that is what I am going to try to do.

Mrs. ROGERS. I know we are all tremendously interested in that, Mr. Knudsen.

Mr. Knudsen, how much do you think—of course, you cannot give the exact estimate, but you can give us an approximate estimate of the cost of making these commodities for Great Britain ?

Mr. KNUDSEN. You mean those that are in process?
Mrs. ROGERS. In our present plants.

Mr. KNUDSEN. No; I have not been furnished with enough quantities to be able to give you an intelligent picture. We know, of course, what our present program is, what is needed, being about $11,000,000,000. But I do not have any figures from the British yet except some general

over-all statements. They say they want so many planes, but we do not know what types of planes, and consequently I cannot estimate the cost of them. It is a sizable program.

Mrs. ROGERS. Do you not feel, Mr. Knudsen, that it would be helpful to us to ask the British Defense Commission to come before the committee as it did

Mr. JOHNSON (interposing). I object to the question.
The CHAIRMAN. The objection is sustained.

Mrs. Rogers. Do you not feel, or will you state, Mr. Knudsen, apart from airplanes, what commodity we need the most?

Mr. KNUDSEN. You mean what articles of war?
Mrs. ROGERS. Yes.

Mr. KNUDSEN. I think machine guns, powder and its ingredients, and shells. I would say then, of course, ships. We have recently, as you know, been told to get ready to build 200 cargo ships. They will be built to standard patterns.

Mrs. Rogers. Do you feel that both industry and labor are cooperating in this program?


Mrs. ROGERS. And are you finding the War Department and Navy Department cooperating with you?

Nr. KNUDSEN. Yes; they have given me everything I have asked for, Mrs. Rogers, since I came here.

Mrs. ROGERS. Ánd Congress is giving you all you need ? Mr. KNUDSEN. Indeed; yes. Mrs. ROGERS. Have you gone into the aspect of the bill as io whether the convoying of ships would be allowed under this bill?

Mr. KNUDSEN. I feel the Secretary of the Navy should have knowledge of that rather than I.

Mrs. ROGERS. You would rather not answer that question?

Mrs. RoGERS. Mr. Chairman, that is all, if I may be permitted to ask one or two other questions later on.

The CHAIRMAN. You had better ask them now, I think Mrs. Rogers.

Mrs. ROGERS. Well, I will conclude. I can ask those questions of Mr. Knudsen in his own office, but I should like to have the whole committee have the benefit of Mr. Knudsen's testimony.

The CHAIRMAN. That will give you a very good opportunity to do so.

Mrs. ROGERS. Thank you.
The CHAIRMAN. Mr. Chiperfield.

Mr. CHIPERFIELD. Mr. Knudsen, so far as continuing the aid to Great Britain is concerned, the difficulty is lack of dollar exchange, is it not? In other words, they do not have the dollar exchange to continue purchasing their share of the materials that they need.

Mr. KNUDSEN. I think that is so.

Mr. CHIPERFIELD. Why cannot we then overcome this lack of dollar exchange by repealing the cash provision of the Neutrality Act, and then allow them to purchase materials over here, but perhaps by barter or trade, and so on. Why could we not do that?

Mr. KNUDSEN. Of course, you could do that, but are you any better off in doing it?

Mr. CHIPERFIELD. All right. If we decided to do that, then could we not go further and give England further credit through private individuals by repealing the Johnson Act; could we not do that!

Mr. KNUDSEN. I guess you could. Mr. CHIPERFIELD. All right, if we should repeal the cash provisions of the Neutrality Act and repeal the Johnson Act would not that accomplish just the same objective as this bill!

The CHAIRMAN. I want to get this right. I do not know of any cash, or mention of cash in the Neutrality Act.

Mr. CHIPERFIELD. The cash-and-carry legislation then.
The CHAIRMAN. That is a different thing.
Mr. CHIPERFIELD. Will the Chair allow the witness to proceed?

The CHAIRMAN. Well, the gentleman is asking the witness about something that does not exist, something that is not in the Neutrality Act, and if you can show me any such provision in the act I would be glad to have you do so.

Mr. CHIPERFIELD. Let me ask the witness to answer.

The CHAIRMAN. Let you ask about the cash provisions of the Neutrality Act, when there are no such provisions; there is no cash mentioned in the Neutrality Act?

Mr. CHIPERFIELD. I do not have the act before me.

The CHAIRMAN. You are asking the witness something that does not exist.

Mr. CHIPERFIELD. Mr. Chairman, now that you are through, may I proceed? The CHAIRMAX. Proceed.

Mr. CHIPERFIELD. If it can be arranged so that England can get credit, would not the same objective be accomplished as is being attempted to be accomplished by this act!

Mr. KNUDSEN. I do not see any difference between the act and your statement.

Mr. CHIPERFIELD. I do not either and that is essentially what I am trying to get at, and then besides we can accomplish this without giving all these vast powers to any one man, if my premise, as a hypothesis is correct.

Mr. KNUDSEN. Well, I cannot answer that question, sir. That one man happens to be my boss.

Mr. CHIPERFIELD. If there is no cash provision in the Neutrality Act, as the distinguished chairman claims, then what is there, what reason is there why England has to pay dollars for what she purchases? Why can she not get credit through the Neutrality Act if it does not require cash?

Mr. KNUDSEN. There is no difference in credit, is there, whether it is cash or for parts.

Mr. KNUDSEN. Is it not credit?

Mr. CHIPERFIELD. That is what I would like to see happen. I would like to see England be able to barter and trade and give her all the help we can. And I am trying to see if you do not agree with me that there is some other way to accomplish that very thing without what I would call giving these vast powers, concentrating them in one person. That is what I am trying to find out. Let me put it this way. Do you feel there is any way

we can accomplish the purpose of this act, to give credit to England, without those powers ?

Mr. KNUDSEN. Well, I imagine that that has been thought of before the proposition was put before you gentlemen. And, I am frank to say, that as far as I am concerned the only thing I am waiting for is tools to get under way. How they are going to be paid for I think is for you gentlemen to decide, and not me.

Mr. CHIPERFIELD. I take it that without question you and your associates are doing everything possible to increase production not only for our own defense but to bring about aid to England.

Mr. KNUDSEN. But I want first of all to produce for our own defense.

Mr. CHIPERFIELD. I understand. The mere passage of this bill is not going to increase the effectiveness of what you are doing now, is it?

Mr. KNUDSEN. I will have to take a vote on that.
Mr. CHIPERFIELD. Thank you, Mr. Knudsen.
The CHAIRMAN. Are you through?
The CHAIRMAN. Mr. Vorys.

Mr. Vorys. Mr. Knudsen, aside from the credit feature, does this bill give you any authority in your work that you do not now have and that you need?

Mr. KNUDSEN. I have not thought of that. My authority is entirely covered by this Executive order that was issued at the date of appointment, and I have not read the bill closely enough to find out.

Mr. Vores. I will ask the question this way then: Are you conscious of any legal limitation on your present authority which is embarrassing or hampering to you in getting your own job done?


Mr. VoRys. That is, you have sufficient power now to coordinate the procurement of materials ?

Mr. VORYS. And to make decisions with reference to priority?

Mr. KNUDSEN. Yes. Of course, you understand, that we have only had this job since the 7th of January; this is the 17th. But, I have not found any limitation, as far as I am concerned.

I feel this concerns—the procurement of this material, would be entirely in the hands of the Procurement Sections of the War and Navy Departments of the United States Government. Consequently it would be a great deal easier to handle than it was before when they were doing it with several separate British organizations and our own organization. In this case here it will all be handled through one office.

Mr. Vorys. Do you know whether this bill is needed-and I appreciate that these are more or less lawyers questions—but I was wondering if you felt more legislation was needed than we now have in order to coordinate the procurement between our Government and say, the British Government?

Mr. KNUDSEN. In this particular case, in this instance, after the bill is signed, all procurement is combined. We take over the buying of all of this material for ourselves and Great Britain. They are now using a purchase program of their own today; the British organ

ization is buying separately through their own organization, and we are buying through ours.

Mr. VORYS. Under this bill the British would still be able to buy separately, so long as they bought for cash. Now would that be any embarrassment to you?

Mr. KNUDSEN. No, no; because the amount of material they buy along that line will be rather small; it would be special materials that we do not need for American arms. In other words, we have certain ammunition that is a little off size which they need for themselves, for what they have on the other side, and they could have what they pay for.

Mr. Vores. They could have what they want to buy. The coordination, though, with the British is more a matter of mutual self-interest than a matter of legal compulsion, is it not?

Mr. KNUDSEN. I do not understand.

Mr. Vores. You get coordination in working with the British because it is to their interest to coordinate in this country and it is to your interest, too. Is not that the way you get coordination in purchasing, or is there competition between the British purchasing and the American purchasing?

Mr. KNUDSEN. There is now; yes. In fact, they were in the market before we were; you remember that.

Mr. VoRys. I know that there has been. I wondered if that still continued.

Mr. KNUDSEN. Well, everything is stopped right now.

Mr. VORYS. Because they have ordered all that they have ready cash for? Is that right!

Mr. KNUDSEN. That is correct.
Mr. VoRys. You work with the British Purchasing Commission ?

Mr. Vores. You are working on attempting to standardize-oh, airplanes ?

Mr. KNUDSEN. Yes, sir.
Mr. Vorys. Or parts, and everything you buy, is not that true?
Mr. KNUDSEN. Yes, sir.
Mr. Vorys. Everything you make!
Mr. KNUDSEN. Yes, sir.

Mr. Vorys. So that what is produced by way of war materials can be used either by us or by the British or by anybody else we want to have use it?

Mr. KNUDSEN. Yes. Mr. Vorys. In your judgment, is some change in the law or some additional law needed in order to secure coordination or cooperation?

Mr. KNUDSEN. No, sir. . Mr. VORYS. Working together?

Mr. KNUDSEN. I would not think so. But with this bill and the procurement coordinated, making it all American standard materials, the procurement problem becomes a great deal simpler.

Mr. VoRys. It becomes simpler because under this bill we turn over finished materials, that you procure; materials are turned over to any other country.

Mr. KNUDSEN. That is right.

Mr. VORYS. And, therefore, you talk it over, but they take what we give them?

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