XI. RIGHTS OF SOLDIERS AND SAILORS

23. Under the Soldiers' and Sailors' Civil Relief Act of 1940 (Public Law No. 861, 76th Cong., 3d sess.), many civil remedies against soldiers and sailors have been suspended for the duration of the war thus affecting creditors' rights.

24. Under section 8 (b) of the Selective Training and Service Act of 1940 (Public Law 783, 76th Cong., 3d sess.), draftees are entitled to be restored to their respective positions in private employment after the end of the war (unless circumstances have so changed as to make such restoration impossible or unreasonable) with seniority, participation in insurance or other benefits offered by the employer as if on furlough and freedom from discharge without cause for 1 year after restoration.

XII. POWER

25. Under section 202 (c) of the Federal Power Act (16 U. S. C. 824a) the Federal Power Commission has the right to order such generation, delivery, interchange, or transmissior of electric energy as will best serve the public interest. 26. The act of June 10, 1920 (16 U. S. C. 809), provides that the United States may take over certain powerhouses, dams, conduits, and reservoirs for the purpose of manufacturing nitrates, explosives, or munitions of war, or for any other purpose involving the safety of the United States "when in the opinion of the President * * * the safety of the United States demands it, paying just compensation for the use."

XIII. COMMUNICATIONS

27. Under the Communications Act of 1934 (47 U. S. C. 606) any communication station may be closed and any communication facilities may be used or controlled by the Government during the continuance of a war. Payment of just compensation is required.

XIV. CREDIT

28. Pursuant to authority granted by section 5 of the act of October 6, 1917 (50 U. S. C. App. 5), Executive Order No. 8843, of August 9, 1941 (6 Fed. Reg. 4035), places restrictions on credit transactions.

XV. FOREIGN EXCHANGE, ALIEN PROPERTY, AND EXPORT

29. Section 5 (b), act of October 6, 1917 (12 U. S. C. 95a), authorizes the President to investigate, regulate, or prohibit transactions in foreign exchange, and export, hoarding, melting, or earmarking of gold or silver coin, bullion, or currency during time of war or during any other period of national emergency and to control all dealings with respect to property in which any foreign country or national thereof has any interest.

30. Under section 6 of the act of July 2, 1940 (Public Law, 703, 76th Cong., 3d sess.) the President, whenever he determines that it is in the interest of national defense, may by proclamation prohibit or curtail the exportation of any military equipment or munitions, or component parts thereof, or machinery, tools, or material, or supplies necessary for the manufacture, servicing, or operation thereof.

XVI. SECURITIES EXCHANGES

31. Section 19 of the act of June 6, 1934 (15 U. S. C. 78s (a) (4)), authorizes the Securities and Exchange Commission summarily to suspend trading in any registered security on any national securities exchange for a period not exceeding 10 days or, with the approval of the President, to suspend all trading on any national securities exchange for a period not exceeding 90 days if in its opinion the public interest so requires.

XVII. TARIFF

32. Section 318, title III of the act of June 17, 1930 (19 U. S. C. 1318) provides that whenever the President shall by proclamation declare an emergency to exist by reason of a state of war, or otherwise, he may authorize the Secretary of the Treasury to extend during the continuance of such emergency the time prescribed in the (tariff) law for the performance of any act, and may authorize the Secretary of the Treasury to permit the importation free of duty of food, clothing, and medical, surgical, and other supplies for use in emergency relief work.

CITIZENS COMMITTEE FOR A NATIONAL WAR SERVICE ACT, By ERNEST L. BELL, Jr., Counsel.

FEBRUARY 3, 1944.

68966-45- -5

(Sec. 9 of the Selective Training and Service Act of 1940 is as follows:)

SEC. 9. The President is empowered, through the head of the War Department or the Navy Department of the Government, in addition to the present authorized methods of purchase or procurement, to place an order with any individual, firm, association, company, corporation, or organized manufacturing industry for such product or material as may be required, and which is of the nature and kind usually produced or capable of being produced by such individual, firm, company, association, corporation, or organized manufacturing industry.

Compliance with all such orders for products or material shall be obligatory on any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof and shall take precedence over all other orders and contracts theretofore placed with such individual, firm, company, association, corporation, or organized manufacturing industry, and any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof owning or operating any plant equipped for the manufacture of arms or ammunition or parts of ammunition, or any necessary supplies or equipment for the Army or Navy, and any individual, firm, association, company, corporation, or organized manufacturing industry or the responsible head or heads thereof owning or operating any manufacturing plant, which, in the opinion of the Secretary of War or the Secretary of the Navy shall be capable of being readily transformed into a plant for the manufacture of arms or ammunition, or parts thereof, or other necessary supplies or equipment, who shall refuse to give to the United States such preference in the matter of the execution of orders, or who shall refuse to manufacture the kind, quantity, or quality of arms or ammunition, or the parts thereof, or any necessary supplies or equipment, as ordered by the Secretary of War or the Secretary of the Navy, or who shall refuse to furnish such arms, ammunition, or parts of ammunition, or other supplies or equipment, at a reasonable price as determined by the Secretary of War or the Secretary of the Navy, as the case may be, then, and in either such case, the President, through the head of the War or Navy Departments of the Government, in addition to the present authorized methods of purchase or procurement, is hereby authorized to take immediate possession of any such plant or plants, and through the appropriate branch, bureau, or department of the Army or Navy to manufacture therein such product or material as may be required, and any individual, firm, company, association, or corporation, or organized manufacturing industry, or the responsible head or heads thereof, failing to comply with the provisions of this section shall be deemed guilty of a felony, and upon conviction shall be punished by imprisonment for not more than three years and a fine not exceeding $50,000.

The compensation to be paid to any individual, firm, company, association, corporation, or organized manufacturing industry for its products or material, or as rental for use of any manufacturing plant while used by the United States, shall be fair and just: Provided, That nothing herein shall be deemed to render inapplicable existing State or Federal laws concerning the health, safety, security, and employment standards of the employees in such plant.

The first and second provisos in section 8 (b) of the Act entitled "An Act to expedite national defense, and for other purposes," approved June 28, 1940 (Public Act Numbered 671, Seventy-sixth Congress), are hereby repealed.

Senator HILL. In the old days, when Mr. Root was testifying before the House on this question of war mobilization, and mobilization of industry and manpower, he used to use the expression "management by Government management." In other words, Government would manage management and industry as to what they were to do under our then war powers, wherever it was necessary. Am I right that the War Department, or the War Production Board, really manages management of industry?

Secretary PATTERSON. It always seemed to me, when we placed a war contract with the Chrysler Co., for instance

Senator HILL. Yes.

Secretary PATTERSON.

That we were in effect hiring that company to run the business for us. If the contract is on a cost-plus-a-fixed-fee basis, that is clearly so. We pay their cost and fair compensation for

the use of their premises and the management of it for looking after the business on our account, and in effect we say the same thing when it is for a fixed price, their profit represents compensation for the use of their property, and also for the management services of their personnel, because that is what they get as a profit, and under the Renegotiation Act we can cut that profit to what we think is a fair figure, and if they think it is unfair they have to go to the courts to get redress. We can do that even retroactively of course, that is usually the way we do it, retroactively. We are still collecting money on 1943 business by price adjustments.

Senator MAYBANK. Don't you go further than that with industry? For instance, you can tell them to go into a war activity, such as a stevedoring company, to load Army ships.

Secretary PATTERSON. We go down the line to subcontractors as well as prime contractors.

Senator MAYBANK. And therefore it is not too important where some small company, if it is required in any contract with the Government, to load ships.

Secretary PATTERSON. That is right. I think there is a great deal of work in this war for which fair compensation is to be paid.

Senator HILL. Well, the Government would pay these workers fair wages, would it not?

Secretary PATTERSON. Yes.

Senator GURNEY. I would like to ask the Secretary a question. As I understand it, all of these agencies of Government have their particular functions in the war effort. The War Production Board, for instance, allocates materials. Every Government agency that you can get to handle these matters that are outside of the actual fighting and transportation of war materials, every agency you can get to do that, and take that load off the War Department leaders, is very helpful to them, is it not?

Secretary PATTERSON. Yes, sir.

Senator GURNEY. In other words, the War Department would like to have just the job of actual contacting the enemy

Secretary PATTERSON. Plus the equipment of our troops with the end weapons, but we do not aspire to control of basic industries of the country, production of steel, copper, agriculture, or any of those things.

Senator GURNEY. That is the basis for your belief?

Secretary PATTERSON. We do not have anything to do with them, and I do not think that we should have.

Senator GURNEY. Then it seems to me that is the basis for your belief that the War Department should not recommend that these IV-F's, these physically unfit men, be drafted into the Army so that the War Department has then the added job of allocating them to industry.

Secretary PATTERSON. We do not want to draft any more men into the Army or recruit any more men into the Army than are needed for the actual conduct of military operations. We do not want to take men into the Army in the guise of soldiers, and then use them for industrial purposes, which is, I think, properly regarded as a civilian affair.

Senator GURNEY. In other words, if you take on more functions. here, then you decrease to some extent your efficiency in operating against the enemy; is that not right?

Secretary PATTERSON. Yes. Of course, if you take them in under the guise of soldiers, and then you use them in war industries, you are, by indirection, and not a very honest system, in my opinion, doing just what this bill is aimed to achieve. It is not sound, in our thinking, to take them into the Army under the pretense that they are soldiers, and then, having got hold of them, compel them to do something in war industry that you want done that ought properly to be done by those same men working as civilians, and on a civilian basis and under civilian direction. I think it would be a very unfortunate thing for the Army to move out of its own sphere and go into the productive source of this country. They cannot do it as well as the civilians can do it.

Senator GURNEY. Will you make this statement, Mr. Secretary? If you were to take on these additional functions, would it in any way cut down the efficiency of your fighting organization; would you have a bigger load to carry?

Secretary PATTERSON. I think it would cut it down.

Senator GURNEY. Make the job harder, would it not?

Secretary PATTERSON. Yes, sir; it would require more attention, at any rate, from our top military authorities, which would require allotting to that work a great many other personnel. That load ought not to be forced upon the Army.

Senator GURNEY. That is the point I want to bring out.

Secretary PATTERSON. I do not believe the civilians would want it done either. The Army has no desire to expand its activities and crowd over into civilian fields, and it would be a dangerous precedent. Senator GURNEY. You have a big enough job, anyway, to fight the enemy; is that correct?

Secretary PATTERSON. Yes, sir.

Senator HILL. Mr. Secretary, this legislation has been considered by some parties as a reflection on organized labor of this country. What have you to comment on that?

Secretary PATTERSON. I have paid my tribute, Senator, to labor, what they are doing in war.and essential industries. They have done a magnificent job. I think I said I would be the last to try to disparage that effort, because it has been a splendid effort.

Senator HILL. Isn't it true that the great bulk of the men who would be affected by this legislation, are not even members today of organized labor, organized labor has no control over them, they are as you suggested, men who are not in essential work, not organized, and perhaps do not even belong to organized labor at all?

Secretary PATTERSON. Yes, sir, Senator. I do not think a great many people would be affected by this legislation. It would do us a great amount of good, as the Secretary pointed out, in heartening the soldiers. It would also do a great amount of good in curing the acute shortages of workers in war plants. The work supply situation is spotty, particularly in war production. The great majority of plants have no shortage, as I see it. It would at the most affect only a few hundred thousand persons. The workers already in war industries, or those who are content to stay in war industry, would not be affected at all.

Senator HILL. Thousands who do not even belong would not be affected, would they?

Secretary PATTERSON. No, sir.

Senator HAWKES. The psychology of the thing itself would be the most effective thing, is that not true?

Secretary PATTERSON. I agree with you on that.

Senator HAWKES. It would do the greatest part of the job, in my opinion.

Secretary PATTERSON. The failures we have had on the voluntary transfers, I believe, come from a lack of sense or urgency on the part of people, thinking about two things that are somewhat hardships, although not very great ones, as the reason for not doing that. It seems to me that if the Congress were to declare it to be the duty of citizens to do their part in the war effort, that a great many men would be quite willing to do it. I have talked to young fellows, many of them friends of mine, white-collared workers, men in the 30's and 40's, making a fair living-this ought to be off the record.

(Discussion off the record.)

Senator MAYBANK. This might be on the record.

Senator HAWKES. I know, in New Jersey, of five men who are working as stockbrokers and other jobs in New York City, who realize the importance of this thing, who are going to work in war plants at 4 o'clock in the afternoon, and working until midnight, to help this cause. Now the point I wanted to bring out is that I don't say that is the way to do it, but I do say if you make these people conscious of the fact that there is a need, I think you will find a tremendous amount of cooperation in doing and accomplishing the results you are trying to accomplish in this bill.

Secretary PATTERSON. That is correct, Senator. I fear that if this bill were defeated, it would be interpreted by the people as meaning their work is not needed.

Senator MAYBANK. I have had quite a few fellows, clerks, from South Carolina, write me letters that they wanted to get into war work; they have been told that if they left they are not sure of getting their jobs back, that they will hire somebody else, whereas, if this law were passed, and they leave, then they can leave under the knowledge that when this war is over they can go back to their old jobs. Secretary PATTERSON. That is true.

Senator MAYBANK. Lots of them want to go to war work.

Senator HILL. I raised the question about organized labor a few minutes ago, and in that connection I would like to read into the record at this point your testimony before the House committee on this bill with reference to the question of strikes. That testimony was given under date of January 10 last.

Congressman Short asked you this question:

Knowing your views as I do, you certainly would not say that production has not been hampered or retarded because of strikes in certain types of war industries. Mr. PATTERSON. They have not been very significant. I do not defend strikes for a minute. There should be none in time of war. Just none. But the nostrike pledge that the national labor leaders have given has in the main been obeyed and observed by labor, and our production has not been materially affected by strikes and work stoppages. Bear in mind that I am not excusing a single one of them.

I take it those are your views today.

Secretary PATTERSON. Yes, sir.

Senator HILL. Thank you.

Senator BURTON. Mr. Chairman, I have a question on another phase of the bill, that has something to do with precedure. I would