sistent with the primary purposes of sec. 301 (a) of the Act, to expedite production and deliveries or services under Government contracts for the national defense, the following policies shall be followed insofar as practicable in relation to the Guaranteed Loan Program. 1. Full information concerning the Guaranteed Loan Program shall be made available to small-business enterprises. 2. Special effort shall be made for the expeditious handling of all applications for guaranteed loans involving small-business enterprises. 3. Due consideration shall be given to avoiding any action which would tend to eliminate competition, create or strengthen monopolies, injure small business, or otherwise promote undue concentration of economic power. STATEMENT OF THOMAS F. FARREI L, DEPUTY ADMINISTRATOR FOR RESOURCES EXPANSION, DEFENSE PRODUCTION ADMINISTRATION (This statement is submitted in accordance with numbered par. (5) of letter of Hon. John R. Murdock to Mr. W. H. Harrison, Administrator of the Defense Production Administration, March 29, 1951.) RÉSUMÉ OF EMPLOYMENT DURING RECENT YEARS 1926-41: New York State Department of Public Works, as Commissioner of Canals and Waterways and as chief engineer. 1941-46: United States Army, in various engineering and administrative assignments, including deputy, Manhattan Engineer District. 1946-47: Chief engineer, New York State Department Public Works. 1947-50: Chairman, New York City Housing Authority. 1950-51: Commanding general, Three Hundred and First Logistical Command, and post commander, Camp Rucker, Ala. March 3, 1951: Present Deputy Administrator for Resources Expansion, DPA. (For duties, see DPA Administrative Order No. 3, included as schedule I in Mr. Woodside's statement.) (a) Authority.-Responsible, in the matter of minerals and metals, for certification of projects developed by the Secretary of the Interior for encouraging the exploration, development, and mining of strategic and critical minerals and metals. (b) Problems.-Necessity of bringing together all agencies concerned with resources expansion, either general or specific, requires utilization of a committee of representative agencies, to advise and assist in expediting the expansion program. The Resources Expansion Committee, through its regular meetings, is expected to assist in the solution of the administrative problems encountered. (c) Funds.--Statement of budgetary requirements for balance of fiscal year 1951, as submitted to Senate Appropriations Committee, is attached as schedule I. Estimates for 1952 are currently under study. SCHEDULE I Mr. Chairman and members of the committee, this statement introduces our request for additional budgetary authorization to implement sections 302 and 303 of the Defense Production Act for the balance of this fiscal year. Section 302 provides for loans to aid in carrying out Government contracts for the procurement of materials or the performance of services for the national defense. These loans are for the expansion of capacity, the development of technological processes, or the production of essential materials, including the exploration, development, and mining of strategic and critical metals and minerals. The loans are to be made only to the extent that financial assistance is not otherwise available on reasonable terms. Section 303 provides for the purchase of (or commitment to purchase) metals, minerals, and other raw materials, including liquid fuels, for Government use or for resale. It also provides for the encouragement of exploration, develop ment, and mining of critical and strategic minerals and metals. In addition, it provides for the installation of equipment, facilities, processes, or improvements in Government plants, and for the installation of Government-owned equipment in privately owned plants and other industrial facilities. Section 304 is the section which authorizes the money for sections 302 and 303. It authorizes the recommending agencies, subject to the certificate of the Defense Production Administrator and the approval of the President, to borrow from the Treasury such sums as may be necessary to carry out sections 302 and 303. The total amount to be borrowed is not to exceed an aggregate of $600 million outstanding at any one time. Under section 302, the Administrator has already approved loans totaling approximately $44 million. Under section 303, certifications by the Administrator total $337 million and include a $150 million revolving fund to acquire and resell natural rubber for national defense purposes, $10 million for the purchase of domestic castor beans for castor-oil lubricants, $10 million for the encouragement of domestic exploration of strategic and critical minerals and metals, $60 million for revolving fund for tin purchases, $100 million for a machine-tool program, $5.7 million for aluminum sheet, and $1.3 million for the procurement of oxygenfree copper. In addition, the sum of $240 million is committeed for the fourth. quarter of this fiscal year to cover contingent liabilities arising out of contracts in the aluminum expansion program. Accordingly, as of the fourth quarter of this fiscal year, $44 million will have been approved for direct loans under section 302 and $577 million will have been approved for projects under section 303, for a grand total of $621 million. To carry out the mandate of Congress for the expansion of productive capacity and supply under the Defense Production Act, we have endeavored, with the complete cooperation of the recommending agencies and the Bureau of the Budget, to arrive at an estimate of budgetary requirements for the balance of the fiscal year. Your committee will recognize the difficulties involved in reaching such an estimate. You will also understand there are imponderables and uncertainties. But we have proceeded with the information at hand. For example, in the case of section 302 loan applications, the known factors were the number of applications filed to date, the rate at which they have been filed, and the average amount of each application. These estimates were reduced, having in mind that there would be denials, participation in the loans by the Reconstruction Finance Corporation in some instances, and lag in processing of applications. This procedure was applied to all loan estimates of the four recommending agencies. In some cases, the agencies were able to specify programs of anticipated approvals, such as in nickel, copper, and fertilizer. Every effort has been made by the agencies concerned to arrive at estimates which were fair and representative of the funds that will probably be required. The same may be said as to estimates under section 303. In these cases, the estimates were even more specific and were presented on a program-by-program basis. All section 302 and section 303 estimates have been compiled and result in a total figure of about $3.9 billion. This figure represents approvals by the Administrator as well as estimates received from the recommending agencies. The projects covered by these estimates, other than those already approved, have not yet been examined by the Administrator and he does not know at this time whether approval will be forthcoming. The sum of $1 billion in additional borrowing authority for the balance of this fiscal year is requested to cover all loans and projects not yet approved. Together with the $600 million already authorized, this will total $1.6 billion and will be $400 million short of the $2 billion total present legislative authorization provided in section 304 of the Defense Production Act. The Administrator is asking now for $1 billion and, in the light of requirements which may eventuate before the expiration of this fiscal year, it may be necessary to request an emergency authorization of part or all of the remaining $400 million. 82354-52-20 STATEMENTS PRESENTED BY THE OFFICE OF DEFENSE (SUBCOMMITTEE NOTE.-The letters and information from the ODM, which appear below, were submitted in response to the following letter from the committee chairman :) LETTER TO THE DIRECTOR, OFFICE OF DEFENSE MOBILIZATION, REQUESTING THE APPEARANCE OF ODM OFFICIALS AT HEARINGS AND INFORMATION DESIRED FROM EACH HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERIOR AND INSULAR AFFAIRS, Washington, D. C., March 27, 1951. Mr. CHARLES E. WILSON, Washington, D. C. DEAR MR. WILSON: The Subcommittee on Mines and Mining of this committee has scheduled hearings on the defense minerals production program for April 4, 5, and 6. The purpose of the hearing is to determine, among other things(a) What has been accomplished and is being done or proposed under the Defense Production Act of 1950 to stimulate the exploration, development, and production of strategic and critical minerals and metals from domestic sources; (b) The reasons for the delays in executing the necessary programs; (c) The authority and responsibilties of each unit of the Government having any jurisdiction over various phases of the defense minerals production program; and (d) The policies formulated and decisions rendered by each unit of the Government in reference to such program. It is respectfully requested that your assistants, A. E. Howse and Fred Searls, Jr., appear at the hearing to be held in room 1324, New House Office Building, on the morning of April 6 to furnish information desired by the subcommittee. Their appearance is entatively scheduled for 11 a. m. Please have Mr. Howse and Mr. Searls prepare and submit written statements for the record, with the subject matter given appropriate headings and subheadings for easy reference. Each statement should (i) contain a résumé of their industry and Government employment or connections, whether with or without compensation, since 1940-including membership on industry advisory committees and reports written for Government agencies, and (ii) give their present title, duties, and responsibilties. In addition, the statements should contain the information requested below. 1. The statement submitted by Mr. Howse should (a) Describe the functions, responsibilties, organization, activities, and ae complishments of the Office of Defense Mobilization; (b) Set forth and explain each policy, procedure, or program laid down or being developed by the Office of Defense Mobilization for the Defense Production Administration or other administrative units of the Government to follow in reference to loans, contract commitments, purchase programs, above-market prices, exploration assistance to private industry, accelerated tax amortization, or other means of encouraging the exploration, development, and mining of critical and strategic minerals and metals, as authorized by the Defense Production Act of 1950; and (c) Give the basic data or evidence developed and reasons used in justification of each policy, procedure, or program-including each major point or item of an over-all program-set forth in reply to (b) above. 2. It is requested that Mr. Searls' statement— (a) Set forth the nature of his recommendations to the Defense Mobilization Director in reference to each type of assistance enumerated in 1 (b) above, give his reasons for such recommendations, and furnish the basic data or evidence he uses in support of such recommendations; and (b) Explain how the present and future shortages, including the drastie shortages that would result from the cutting of supply lines to or enemy sabotage or seizure of overseas sources of supply, are to be overcome with respect to each of the following materials: antimony, chromite, copper, lead, manganese, mercury, mica, tungsten, and zinc. In view of the large number of witnesses to be heard and in order to save time at the hearings the witnesses should be prepared to summarize their statements before the subcommittee. In order to expedite the hearings further, please have 50 copies of each statement delivered to the committee on or before the morning of April 4. This will enable members of the subcommittee to prepare themselves for the hearings. Should Mr. Howse or Mr. Searls have any questions regarding the statements requested to be submitted, I suggest that they communicate with the committee's technical assistant, Mr. George H. Soule, Jr., at National 3120, extension 2067. Your cooperation will be appreciated. Yours very truly, JOHN R. MURDOCK, Chairman. LETTER OF APRIL 3, 1951, TO THE COMMITTEE CHAIRMAN FROM THE DIRECTOR, OFFICE OF DEFENSE MOBILIZATION EXECUTIVE OFFICE OF THE PRESIDENT, HON. JOHN R. MURDOCK, Chairman, Committee on Interior and Insular Affairs, House Office Building, Washington, D. C. DEAR MR. CHAIRMAN: I have your letter of March 27, 1951, in which you request that Messrs. A. E. Howse and Fred Searls, Jr., appear before your Subcommittee on Mines and Mining on the morning of April 6. You also request that they furnish by April 4 written statements not only of their personal histories and present duties and responsibilities, but also covering in considerable detail practically the entire scope of the defense mobilization effort. It would be impossible to compile such a statement within the time specified. However, I believe my report to the President, dated April 1, 1951, 50 copies of which are being transmitted to you under separate cover, contains most of the information you are seeking. A separate statement concerning the background and present duties and responsibilities of Mr. Howse will be furnished by April 4. Mr. Searls has given up his position as Assistant to the Director for Materials and will not be in Washington until April 6. A statement concerning his background and his former duties and responsibilities will be furnished on that date when he and Mr. Howse appear before your committee. They will be accompanied by Mr. Herbert A. Bergson, general counsel of this Office. Sincerely, CHARLES E. WILSON. (SUBCOMMITTEE NOTE.-The report referred to appears below.) LETTER OF APRIL 4, 1951, TO THE COMMITTEE CHAIRMAN FROM A. E. HowSE, ASSISTANT TO THE DIRECTOR, OFFICE OF DEFENSE MOBILIZATION APRIL 4, 1951. HON. JOHN R. MURDOCK, Chairman, Committee on Interior and Insular Affairs, House of Representatives, Washington, D. C. DEAR MR. MURDOCK: Reference is made to your letter of March 27, 1951, to Mr. Wilson, with respect to the hearings on the defense minerals production program, scheduled for April 4, 5, and 6, by the Subcommittee on Mines and Mining. You have requested a written statement for the record of my industry and Government employment or connections, whether with or without compensation, since 1940. You have also requested a list of advisory committees and reports written for Government agencies. You have further requested an outline, including my present title, duties, and responsibilities in the Office of Defense Mobilization. In addition you have requested: (a) Statement of the functions, responsibilities, organization, activities, and accomplishments of the Office of Defense Mobilization; (b) Statement and explanation of each policy, procedure or program laid down or being developed by the Office of Defense Mobilization in reference to loans. contract commitments, purchase programs, above-market prices, exploration assistance to private industry, accelerated tax amortization or other means of encouraging the exploration and development and mining of critical and strategic minerals and metals, as authorized by the Defense Production Act of 1950; (c) Statement of the evidence developed and reasons used in justification of each policy, procedure, or program set forth in (b) above. With respect to my industry employment or connections since 1940, you are advised as follows: Chairman and director: The Howse Co., Inc., Wichita, Kans. Successor to the Southwest Merchandise Mart, Inc., the Wichita Wholesale Furniture Co., and subsidiaries: The Ponca Furniture Co., The Brown Furniture Co., The Texas Furniture Co., the Western Couch & Bedding Co., the Nodaway Mattress Co., Cardinal Distributors, Diamond Supply Co., Atlas Distributors. President and director: The Forest Hills Estates Co., Wichita, Kans.: the Forest Hills Development Co., Wichita, Kans., company inactive at this time: the Forest Hills Improvement Co., Wichita, Kans., company inactive at this time. Vice president and director: Johnston & Latimer, Inc., and subsidiaries, Wichita, Kans.; Boles, Inc.; Boles Oakley Dry Goods Co.; Boles Eureka Dry Goods Co.; Boles Dry Goods Co. Partner: Howse Construction Co., Wichita, Kans., company inactive at this time; Howse Insurance Co., Wichita, Kans., company inactive at this time: Howse Investment Co., Wichita, Kans., company inactive at this time. Director (position not held at this time): Industrial Capital Corp.. San Francisco. Director: J. H. Ramussen & Co., Chicago, Ill. With respect to my Government employment or connections, you are advised as follows: Colonel, United States Air Corps and Army Air Forces: Executive for Procurement for Matériel Command, in which capacity exercised senior staff supervision of Air Corps procurement program. It is impossible to recall the various command, intercommand and interservice committees, boards and reports involved in connection with the functions of procurement, production, facilities expansion, priorities, allocations, manpower, contracting, financing, terminations, renegotiation, property disposal, transportation, warehousing, defense aid (air), and standardization of equipment and supplies. Acting Chief of Staff, Thirteenth Air Force, South Pacfic supply program (Air), USAFISPA. Similarly, it is impossible to recall the various staffs. boards, coordinating committees and reports in connection with the South Pacific and Southwest Pacific supply operations, USAFISPA and SOWESPAC. Area representative, San Francisco area, Matériel Command. Likewise, it is impossible to recall the various service committees and interservice boards and reports connected with duties within and without the continental limits of the United States. Special consultant: National War Agencies. Special consultant: Smaller War Plants Corporation. Administrator: Surplus Property Board, Office of War Mobilization and Reconversion. Adviser: Contract Termination Board. Adviser: Office of Contract Settlement. Adviser: Joint Terminations-Surplus Property Committee. With respect to my present title, duties, and responsibilities, you are advised that I have been appointed as Assistant to the Director of the Office of Defense Mobilization, in which capacity I am concerned with stabilization matters, including price controls, wage controls, credit controls, construction controls, rent controls, monetary controls, rationing, and fiscal matters. With respect to your inquiry (a) above, you are referred to a letter dated April 3, 1951, addressed to your office, from Mr. C. E. Wilson, Director of the Office of Defense Mobilization, enclosing agency to the President on April 2, 1951. With respect to inquiries (b) and (c) copy of a complete report made by this Copy is attached for your convenience. above, it is respectfully suggested that |