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REQUISITION OF PROPERTY BY THE UNITED STATES

THURSDAY, JULY 17, 1941

UNITED STATES SENATE,
COMMITTEE ON MILITARY AFFAIRS,

Washington, D. C.

The committee met, pursuant to adjournment, at 2:30 p. m., in the committee room, United States Capitol, Senator Robert R. Reynolds, presiding.

Present: Senators Reynolds (chairman), Lee, Schwartz; Hill, Downey, Chandler, Kilgore, Austin, Bridges, Gurney, Thomas (Utah).

Also present: Lt. Col. D. A. Watt, military aide; Wayne Coy; and Judge Robert P. Patterson, Under Secretary of War; C. A. Jones, head of the shipbuilding division, Navy Department, and Commander Cololough.

The CHAIRMAN. The committee will come to order.

Senator CHANDLER. Mr. Chairman, since the adjournment I have been working constantly in an effort to meet the objections to the bill to authorize the President of the United States to requisition property required for the defense of the United States.

I have attempted to draw a bill that the Secretary of War and the Assistant Secretary of War and the White House believed would accomplish the purpose for which the original request was made. There are very few changes in the bill, it is a very short bill and I would like those of you gentlemen, who no doubt will recall the bill of yesterday, to follow the changes. There are no material changes, they are clarifying changes, and I think perhaps that you gentlemen who were here yesterday may find that you can go along with these new changes. This is a new draft.

That whenever the President, during any period of war, or the present national emergency, but not later than June 30, 1943, determines that (1) the use of any military or naval equipment, supplies, or munitions, or component parts thereof, of machinery, tools, or materials necessary for the manufacture, servicing, or operation of such equipment, supplies, or munitions is needed for the defense of the United States, (2) such need is immediate and impending and such as will not admit of delay or resort to any other source of supply

and, gentlemen, that supply means the need for the use of such property for the defense of the United States,

and (3) all other means of obtaining the use of such property for the defense of the United States upon fair and reasonable terms have been exhausted, he is authorized to requisition such property for the defense of the United States upon the payment of fair and just compensation in the mannerand so forth, and that is to take care of this lease-lend proposition, and to dispose of such property in such manner as he may determine is necessary for the defense of the United States.

Now, as I say, that is to take care of the lease-lend proposition. No. 2 is substantially the same as it was yesterday, so I will not read it.

No. 3 is a new section, which has nothing to do with the acquisition of property, because it says

The President from time to time, but not less frequently than once every 6 months, shall transmit to the Congress a report of operations under this act. The rest of the bill is precisely the same as it was yesterday.

I will say to you, Mr. Chairman and my colleagues, that I think this has the approval of the executive officers and has the approval of the War Department.

Judge PATTERSON. Yes.

Senator CHANDLER. Has it the approval of the Navy Department? Mr. JONES. Yes; that has been taken up with Mr. Forrestal and has his approval.

Senator CHANDLER. Mr. Chairman, I would now like to give the Senator from Vermont an opportunity to offer two amendments that he has prepared to this bill.

Senator HILL. Before you offer that amendment, I want to ask one question. I notice that the bill reads that

whenever the President, during any period of war or the present national emergency, but not later than June 30, 1943.

Those words "during any period of war," I think, should be taken out. I have no real objection, but I am always thinking in terms of the passage of legislation and I can see where those words might be seized upon by the opposition to say, "Why, they are already making ready for war." That is the first thing they would talk about-now, do not put this on the record.

The CHAIRMAN. Senator Austin.

Senator AUSTIN. Now, I think the following words should be put right in there, "that during such time that a state of war does not exist by virtue of a declaration thereof by Congress, or the present national emergency," my idea being that this is a period of war right now, and in order to differentiate between the present national emergency and that period during which we are under a declaration of war, we ought to so state. Now, I do not know whether this is worth anything to you or not, but I offer it in connection with the amendments I intended to offer later.

Senator CHANDLR. Mr. Chairman, let me change that to read, "that whenever the President, during the present national emergency, but not later than June 30, 1943." That will probably overcome some of the objections that were made yesterday.

Senator AUSTIN. Yes; then if the emergency of war does exist, then we will be able to talk about it then, but during this period we need not.

Senator CHANDLER. Senator, do you want to take up your amendments now?

Senator AUSTIN. Yes; if it is convenient.

The CHAIRMAN. Now, it is the understanding of the chair that you have eliminated the words, "any period of war" there; is that correct, to leave that out?

Senator CHANDLER. I believe so, if there is no objection.

The CHAIRMAN. If there is no objection we will leave that portion out, Senator Austin.

Senator AUSTIN. I move that the bill be amended by adding to the first paragraph, section 1, the following language, a copy of which you all have and which is marked "No. 1":

Provided, that during such time as a state of war does not exist by virtue of a declaration thereof by Congress, this authority shall not be exercised in any manufacturing plant, in operation, if the necessary and unavoidable consequence thereof would be the occasion of the business of such plant, or any parts thereof, dependent solely on the article or articles to be commandeered hereunder.

I have very little to say about it. There is not much that is necessary to say. In the testimony at page 104, the following occurred:

The CHAIRMAN. Suppose the Government deems it necessary for the defense of the country, to take over certain property, they would use a considerable amount of discretion in taking over that property, I assume.

General RUTHERFORD. By all means.

The CHAIRMAN. And if a man is manufacturing goods for the defense program, of course, 'obviously he would not be interfered with.

General RUTHERFORD. That is right. I think, probably, we have not made it clear that the small manufacturer is not the one that would suffer most. If a small manufacturer has only one tool of a particular kind in his stock, it being a tool which was not necessary to the running of his factory to a capacity, it might be taken.

My thought is to make it impossible to take that step because of the admitted fact that we must keep our nonmilitary business still alive. We cannot close them up entirely, and it is for that reason that I offer this.

The CHAIRMAN. Do you make a motion that that be accepted now? Senator CHANDLER. Mr. Chairman, Senator Austin and I have worked and talked together about this, and in view of the changes that I have worked out in the bill, I cannot accept the amendment, for the reason that we have taken out the second one now, and I am now assured by the War Department and the Navy Department that this bill will now accomplish the purpose I have no disposition to have a general law, but inasmuch as we have taken out the general right of requisition of property or any property necessary to national defense and have been more specific and held it to military and naval equipment or supplies, I do not believe you need that amendment to it now.

The CHAIRMAN. Senator Lee.

Senator LEE. Mr. Chairman, I cannot help but believe this amendment would destroy the object of the bill because it would then resolve around the question of whether or not the taking of certain property would cause a plant to close down, and in a case where it did cause to close down, it would be for the Government of the United States to decide which was more important, to keep the military activities moving and the national-defense program going forward, or to keep some private business going. Therefore, I must oppose that amendment.

The CHAIRMAN. Senator Hill.

Senator HILL. Mr. Chairman, lawyers have a way of trying cases in the extreme, and I think maybe that is the best way to try them. In other words, if you have a cosmetic plant operating and the Gov

ernment needed a machine tool that was used in that cosmetic plant, under this provision, you would not be able to take that tool.

Senator CHANDLER. I want to give Senator Austin an opportunity to offer his amendment.

The CHAIRMAN. Just a minute, we will hear Senator Thomas of Utah.

Senator THOMAS. Senator Austin, I would like to talk to you about those words "state of war." We have gotten into quite a discussion on international relations; you mean actual war, don't you?

Senator AUSTIN. No; I mean a state of war that existed by virtue of a declaration, it might exist even though there was no firing. Senator THOMAS. Then you mean an actual state of war?

Senator AUSTIN. Actual legal.

Senator THOMAS. Actual legal state of war, not just war.

Senator AUSTIN. No.

Senator BRIDGES. Is there any way you can get by without those words "state of war" and get this whole business out of it?

The CHAIRMAN. Could you not state "the present national emergency?"

Senator AUSTIN. I think that would be a bad thing

Senator BRIDGES. I think it would be wise not to take that out of the first bill

Senator AUSTIN. Here was the idea. If Congress should, tomorrow, declare war then this provision would not take effect and you could not exercise this authority. If it would shut down a plant and you do not want to do that and I do not want to do that, I want to leave the war powers untouched. That is what I want to do.

Senator THOMAS. But the emergency powers you are willing to touch.

Senator AUSTIN. Yes.

The CHAIRMAN. Senator Downey.

Senator DOWNEY. I would like to say a few words, and I am not going to take more than 5 minutes of the committee's time. I might as well get this out of my system so that the committee members will know how I feel.

In the first place, I want to say to you that I am utterly sympathetic with the viewpoints of the man who has the terrible responsibility of producing munitions and running the military machine, and he has to face this problem differently than a member of the Senate.

I have done a great deal of investigation work with Washington economists and they are of the opinion that by next April we will be out-producing Germany in airplanes and tanks; we will be so far ahead that Germany won't even be second.

I have been through our large airplane factories in Los Angeles, and the efficiency there and the power there are tremendous.

I believe Mr. Knudsen said that by January we will be-indeed that with England—we are already outproducing Germany, and by the first of January next we will be outproducing Germany without English production. All that we will have accomplished within 18 months. Now, we are turning over with more and more power. We have double the population of Germany, counting Canada with us. We have five times the per capita wealth of Germany; we have power that is unparalleled in mass production.

I cannot believe that a nation with a quarter of our wealth and half of our population imperils to such a great extent that we might have to ignore every other social and economic value other than national defense.

O. P. M. has told me that at the present we are producing a billion of goods for military purposes every month; in 1 year we will be produring 2 billion and looking ahead 2 years we will be producing 3 billion, an annual output of 36 billions a year.

Mr. Chairman, that is more manufacturing wealth, 36 billion, than we have ever produced in the United States in our very highest year. In 1940 we had 10,000,000 people totally unemployed and about 10,000,000 part-time workers. The O. P. M. believes that as a result of the speed-up of our technological processes and machinery that from now on, during this emergency, we are going to be able to increase that efficiency, so that we can produce the same amount of wealth with 2,000,000 less workers a year. We will probably bring into war industries 2 or 3 million women workers, large numbers of Negroes and farm workers-millions in the aggregate. When this war crisis ends, Hitler crashes, or perhaps there is a negotiated peace, why, I say to you, Mr. Chairman, the emergency that we will then face will be very much more terrible and disturbing than anything we have right now, one that we cannot even conceive of.

We dropped in the Hoover panic down to 35 or 40 billion dollars national income, and if we should drop down to that again, we would have not 15,000,000 unemployed as we did during Mr. Hoover's time but we may have 30,000,000 unemployed, and I might say to you gentlemen that that is the viewpoint of almost every economist in Washington today. We are faced with a problem of unparalleled magnitude when this war emergency ends.

Mr. Chairman, for 10 years we have failed utterly to solve the fundamental problems of our economic difficulties.

When this war era is over and we again must deal with our primary economic crisis, hugely aggravated by the secondary war crisis, then, we are going to be in a far more difficult position than we are now. Our statesmen are unwilling to prepare for war in time of time of war we seem unable to prepare for peace.

peace. In Now, I know this, that if the O. P. M. should reach its limit of two billion of production in 1 year and three billion in 2 years, I know what will happen in Los Angeles. I have made a study of 15 years of the economics of California and you are going to see one-half of our industries ruined in Los Angeles.

Hundreds of businessmen will be closing down factories employing thousands of men because they are not going to be able to keep those factories open; many of these men will be thrown out of work, many of whom will not be absorbed into war industry.

Now, I am not saying that, in my opinion, this amendment of Senator Austin goes to meet that situation, but I do believe it is a wise and a prudent measure and that it would not hamper the Army of the United States. We are in greater danger from internal collapse than we are from any external attacks and we should prepare our military defense with a consideration of existing business.

Now, I have enough confidence in the American people so that I am not surprised that in 18 months we will be geared to higher arms

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