War Plants Corporation is, we favor the enforcement of the Antitrust Act, and we have a working arrangement with the Department of Justice, and we have as our general counsel a gentleman who was an assistant to the Attorney General, Mr. Dave Podell.

I want further to say that the Committee for Economic Development, headed by Mr. Paul Hoffman, have expressed themselves precisely in the same manner. Also the United States Chamber of Commerce, in a book written by Dr. Emerson P. Smith, said they favored the enforcement of the Antitrust Act, and the National Association of Manufacturers also say the same thing.

Senator MURRAY. That is very encouraging. With a strong small business organization such as yours and strong Antitrust Division in the Department of Justice, there should be an opportunity to protect the country from any of those dangers, it seems to me.

Mr. MAVERICK. I think that would be a good thing. Of course, I am naturally proud of my own organization and prejudiced in favor of my own organization, because I think it is one of the most important organizations in America. I started to say it is the best job I ever had in my life, but I might embarrass you gentlemen that are still in Congress. [Laughter.]

Senator TRUMAN. You could not embarrass the Senate, you might embarrass the House.

Mr. MAVERICK. O. K., Senator, but I have the best job in the United States.

Senator MURRAY. Is the average small businessman affected by what the Government does in the field of unemployment compensation?

Mr. MAVERICK. He is the first one to be affected, because when you don't have unemployment insurance and social security legislation, people just fold up; merchants have to stop buying groceries, shoes, hats and things of that kind-the small merchant is the first to be hit.

Senator MURRAY. That was demonstrated in the depression that we went through, starting in 1929.

Mr. MAVERICK. It has been demonstrated clearly in our economic history.

Senator MURRAY. The larger corporations and industrialists were able to curtail production and lay off their men and still continue to carry on their business without any substantial loss-a great many of them.

Mr. MAVERICK. One organization that I know of, without naming it, because I don't want to get into personalities one organization laid off 42,000 people one morning without notice, and it created in that area a very disastrous effect, because there was no social security legislation at that time. This depression spread to the whole country. Senator MURRAY. What was that year, Mr. Maverick?

Mr. MAVERICK. I think it was in 1928 or 1929.

Senator MURRAY. Of course, we were not really deeply into that situation until about 1932-1931 or 1932.

Mr. MAVERICK. Well, I think that there was a rising economic disaster and unemployment during that period of time, yes.

Senator MURRAY. Do you have any questions, Senator Truman? Senator TRUMAN. Mr. Chairman, I want to apologize for being late, but I could not get here any sooner.

SUB HAS NO PROTECTION; INSURANCE

Mr. Maverick, I have read your statement, and in this contract cancelation program is the subcontractor amply protected by this contract cancelation?

Mr. MAVERICK. He is not protected at all, he has not got any protection; he has got no protection. So everybody understands, and the Congress will act, the subcontractor has no protection.

Senator TRUMAN. What is the answer to it?

Mr. MAVERICK. The answer to it—I think I said just before you came in the hearing-that the procurement agency should be required to have the same clause for subcontractors as they have for prime

contractors.

Senator TRUMAN. I agree with you.

Mr. MAVERICK. I don't know whether you were here or not, but I said in the history of the insurance laws there were provisions in many policies where people could not collect on a certain basis. So the legislatures of the various States just put that protection in the policies by statute, and it was upheld by the courts. And I mean that protection for subcontractors, a uniform clause, would be upheld by the courts. There should be a uniform termination clause; it's got to be in there; it's legal.

Senator TRUMAN. Now, in these terminations-they are taking place now very rapidly—is there any effort made to allow these smaÏl subcontractors-not necessarily small, some of them are very big concerns, but they are still subcontractors to proceed with civilian production where it does not interfere with the war effort?

Mr. MAVERICK. No; there is no effort to do that. The effort is to stop them, to dry them up.

Senator TRUMAN. Is there a policy to prevent them from doing it? Mr. MAVERICK. Well, the policy that prevents them doing it is this operations memorandum I had here just before you came in, Staff Memorandum 42, issued by Mr. Boulware. I discussed that very thoroughly before you came in the hearing.

Senator TRUMAN. I won't ask you to discuss it again. I am sorry I was late. But it seems to me that the answer to that situation is to allow these people to go into civilian production where it does not in any way interfere with the war effort. It is my opinion that there is a tendency on the part of the big people who were first to succeed in getting into the war contract business, to try to get the first civilian contracts. Rather than that, I think there should be some chance given to the small man to have an opportunity to get in first, because the big ones got in there first on the other contract, and they can stand it a lot better to hold off than the small man can. Unless some means is found to protect these small fellows, I think it is going to be disastrous so far as small business is concerned.

AMERICAN PEOPLE SHOULD NOT BE DEPRIVED OF GOODS

Mr. MAVERICK. Let us forget for a moment about small business or big business and talk about the American people. I am not lecturing or anything, but consumers have the right to buy certain things, if you have the plant facilities, and if you have the materials, and if

you have the labor, and it does not interfere with the war effort-why should not the American people have that?

Some people have taken the viewpoint that you have got to hold off and let the American people do without so that certain big plants can get into it first, and that is wrong.

Senator TRUMAN. Hold off because they want to make the labor market a little easier. Is that one cause you find a lot unemployment; so that they can hire people a little cheaper than they have been doing? Mr. MAVERICK. I think there is an inclination of that kind.

I also want to say that the quit rate-the number of people that are quitting industry now is much smaller than it was 6 months ago, and that there are over 600,000 persons less in industry now than there was in November and that is going to continue. I want this to get in your mind, because you were not here: There will be a million unemployed at the end of the year-I don't want to say unemployed— strike that out. There will be a million less in industry employed at the end of the year. That includes having full draft quotas. The Bureau of Labor Statistics says 600,000 now. The figures of the Smaller War Plants Corporation show it is going to run up to a million before the year is over.

Senator TRUMAN. That is all.

Mr. KEFAUVER. Mr. Maverick, all of these bills contemplate that the Smaller War Plants Corporation will play a very important part in the matter of contract termination and also readjustment, but unfortunately the authority of the Smaller War Plants Corporation, of course, terminates with the cessation of hostilities. I think it is very important for Congress to give early consideration to extending the organization—not as the Smaller War Plants Corporation, but as an organization to assist small business and small plants and to give it extended authority, because it seems to me that the part your organization will play in the days to come after the war is over will be even more important than the part it is playing now. I wonder if you do not have the same idea about it.

A FARMER IS NOT A FARMER-HE HAS HAD BUSINESS HELP FOR 50 YEARS FROM DEPARTMENT OF AGRICULTURE

Mr. MAVERICK. Well, I think I can say without reference to any personal wishes or feeling on my part that some such institution as the Smaller War Plants Corporation which watches out for small business should be continued by Congress. I make that on the basis of the things that I have said about interim financing and insurance and subcontracting and all that, as well as the normal program of the S. W. P. C.

And I call attention to one thing that seems not to have registered in the mind of Congress and the minds of the American people, and it is this: The Department of Agriculture has given aid to farmers for the last 50 years. Now, the farmer is not a farmer, he is a businessman; he gets technical services from the Department of Agriculture; he has pamphlets sent to him. We used to joke about sending the farmer pamphlets and giving him help. But such service is now accepted and understood by all the American people. In the Smaller War Plants Corporation we have, for instance, technical advisory

service which gives the same aid to the small businessman as is given to the farmer, and it is nonconfidential information. We also have 45,000 alien patents that we have available to businessmen, small and big business could have it, too. All this information is given to them. It is absolutely essential. We look at it from the viewpoint of assistance-we don't believe, of course, in interfering with free enterprise, but we want to help them.

Mr. GWYNNE. How would you decide which plant should be first allowed to go back into civilian production? For instance, I know of a company making washing machines. It is your idea that any company that could get the material and men should be allowed to go back to manufacturing washing machines without too much control by the Government?

Mr. MAVERICK. Yes, sir; I would be in favor of them doing it, first, because the American people need washing machines, and second, because we want to keep people working, and third, because we want to keep full economy in the United States, and fourthly, because in the United States various businesses have changed and do not want to go back to the old peacetime business. Some big washing-machine companies may not want to go back to it, but if you find an area, whether it is in Iowa or whether it is in Texas, and they can build washing machines, they ought to be permitted to do it if it does not harm the war effort.

Mr. GWYNNE. Do you think it would be necessary to afford any protection to these companies who would like to go back to business but are still busy on war work or war manufacture?

Mr. MAVERICK. No; I don't think so, because I don't think the American people should be deprived of the washing machines, and I don't think the American people should be deprived of working on account of the fact that another plant, is engaged in something else.

We have got to keep people working; we have got to keep people employed; we have got to keep investment going; we have got to have necessary goods, and if it happens to inconvenience some big plant that did it before, what then? Why, they can go back into the washing-machine business again with a perfectly good chance when the time comes, because they have got the trade-marks and trade-names, sales and distribution outlets, and everything. The unlimited production of goods means a higher standard of living. If we keep production up, it just increases the standard of living of the American people. That is the American way.

Senator MURRAY. That concludes the testimony of Mr. Maverick.

(The following was submitted by Mr. Kefauver:)

STATEMENT OF HERBERT L. CARPENTER, PRESIDENT, CARPENTER CONTAINER CORPORATION, BROOKLYN, N. Y., AND CHAIRMAN, SMALL BUSINESS DIVISION, POST-WAR PLANNING COMMITTEE, COMMERCE AND INDUSTRY ASSOCIATION OF NEW YORK, INC.

(Before the War Contracts Subcommittee, Senate Military Affairs Committee, Washington, D. C., May 2, 1944)

Mr. Chairman and gentlemen, my name is Herbert L. Carpenter. I am president of the Carpenter Container Corporation, Brooklyn, N. Y. I am also chairman of the small business division, post-war planning committee of the Commerce and Industry Association of New York, Inc.

The Commerce and Industry Association of New York, Inc., is the largest chamber of commerce in New York and a charter member of the Chamber of Commerce of the United States. Its membership is made up of several thousand firms engaged in over 50 different lines of business and industry. The majority of these firms would be regarded as small enterprises although many operate on national and international scale.

The major field of interest of the association is in the development of local, national, and international conditions wherein private enterprise can operate effectively. Our post-war planning committee is devoting itself full-time to consideration of questions having to do directly and indirectly with employment in the post-war period. It is actively working upon legislation policies relating to cancelation of contracts and disposal of war surpluses.

Studies which have been made by our committee indicate that when hostilities end in Europe or the Pacific area, or both, there will be unavoidable unemployment due to the necessity of converting plants from war to peacetime production and to the wide readjustments of our economy. The extent of unemployment will be determined in large measure by the promptness and procedure in settling war contracts and disposing of surplus materials and properties. If contractors are able to get their claims settled quickly and to receive funds due them, they will be in position to convert their plants quickly and to get into peacetime production soon. Delays in settlements will slow up conversion and hence prolong the period of unemployment. Likewise, the speed and manner in which surplus materials and properties are disposed of by sale, lease, or transfer will also affect employment. If there are long, unwarranted delays encountered by contractors in acquiring plants, equipment, and related properties which are now Government-owned, they will be that much longer in undertaking peacetime operations and employing workers. Furthermore, if there are any indications that surpluses may be dumped on the market or will get into the hands of speculators, manufacturers will be hesitant to undertake production and such a course would prove a brake upon employment which would have ramifications into many fields.

The Congress is in a position to prevent serious unemployment which may occur upon contract cancelations. It is the only agency with the power to provide for quick and equitable settlements of contracts and for orderly and economically sound disposal of war surpluses. I am certain there is the will and the ability in Congress to do this job and I am sure you appreciate that sound solution of these problems is vital to the welfare of our Nation and second only to winning the war. In the opinion of great numbers of businessmen and industrial leaders with whom we are in constant touch, it is of the utmost importance that this Congress act promptly in determining measures to be pursued with contract terminations and settlements, disposal of probable war surpluses, revision of tax regulations so that business will be able to operate effectively and provide employment after the war, and means, based on business experience and practice, to accomplish the elimination of control of prices and goods as promptly as possible.

As the day of victory comes nearer and we come closer to the task of undertaking peacetime operations again, it is imperative that we have here in Washington an effective administration of measures to solve these problems. It is our view that Government faces a challenge as to whether it will be as efficient in aiding business and industry to win the peace as business and industry have been in aiding it to win the war. The attitude of Congress in approaching these problems is a very hopeful sign.

We have a long, hard pull ahead of us. Domestic and world needs must be ascertained and met. The necessity for speed in resuming peacetime operations should be a strong deterrent against pursuing untried schemes. Taxes will be heavy for years to come and there is no excuse for making them heavier through unnecessary unemployment and by the creation of unwarranted Government