SEC. 19. (a) The Board, in cooperation with the various disposal agencies, shall prepare and submit to the Congress within three months after enactment of this Act, a report as to each of the following classes of surplus property (not including any plant which cost the Government less than $5,000,000); (1) aluminum plants and facilities; (2) magnesium plants and facilities; (3) synthetic rubber plants and facilities; (4) chemical plants and facilities; (5) aviation gasoline plants and facilities; (6) iron and steel plants and facilities; (7) pipe lines and facilities used for transporting oil; (8) patents, processes, techniques, and inventions, except such as are necessary to the operation of the plants and facilities herein listed; (9) aircraft plants and facilities and aircraft and aircraft parts; (10) shipyards and facilities; (11) transportation facilities; and (12) radio and electrical equipment:

(A) Describing the amount, cost, and location of the property and setting forth other descriptive information relative to the use of the property;

(B) Outlining the economic problems that may be created by disposition of the property;

(C) Setting forth a plan or program for the care and handling, disposition, and use of the property consistent with the policies and objectives set forth in this Act.

(b) In the event that it is not possible within such period to prepare and submit a complete report to the Congress as to any class of property, the Board shall submit an interim report three months after the enactment of this Act, and shall submit a complete report as soon thereafter as possible. If the Board determines that it is desirable to alter or change any such plan or program or to prepare a report on any other class of property, it shall prepare in accordance with the provisions of this subsection and submit to the Congress an additional report, setting forth the altered or changed plan or program or a plan or program relating to the new class of property.

(c) Whenever the Board may deem it to be in the interest of the objectives of this Act it may authorize the disposition of any surplus property listed in classes 9 to 12, inclusive, of subsection (a) of this section. With respect to the property listed in classes 1 to 8, inclusive, no disposition shall be made or authorized until thirty days after such report (or additional report) has been made while Congress is in session, except that the Board may authorize any disposal agency to lease any such property for a term of not more than five years.

(d) The Board may authorize any disposal agency to dispose of any materials or equipment related to any surplus plant covered by this section, if such materials and equipment are not necessary for the operation of the plant in the manner for which it is designed.

(e) This section shall not apply to any Government-owned equipment, structure, or other property operated as an integral part of a privately owned plant and not capable of economic operation as a separate and independent unit.

SEC. 20. Whenever any disposal agency shall begin negotiations for the disposition to private interests of a plant or plants or other property, which cost the Government $1,000,000 or more, or of patents, processes, techniques, or inventions, irrespective of cost, the disposal agency shall promptly notify the Attorney General of the proposed disposition and the probable terms or conditions thereof. Within a reasonable time, in no event to exceed ninety days after receiving such notification, the Attorney General shall advise the Board and the disposal agency whether, in his opinion, the proposed disposition will violate the antitrust laws. Upon the request of the Attorney General, the Board or other Government agency shall furnish or cause to be furnished such information as it may possess which the Attorney General determines to be appropriate or necessary to enable him to give the advice called for by this section or to determine whether any other disposition of surplus property violates the antitrust laws. Nothing in this Act shall impair, amend, or modify the antitrust laws or limit and prevent their application to persons who buy or otherwise acquire property under the provisions of this Act. As used in this section, the term "antitrust laws" includes the Act of July 2, 1890 (ch. 647, 26 Stat. 209), as amended; the Act of October 15, 1914 (ch. 323, 38 Stat. 730), as amended; the Federal Trade Commission Act; and the Act of August 27, 1894 (ch. 349, secs. 73, 74, 28 Stat. 570), as amended.

Senator O'MAHONEY (continuing). These sections contain the language which the Surplus Property Board and the other disposal agencies must follow. They have already received their orders from Con

gress, and in connection with this particular point it is well to bear in mind that they have been instructed to submit a positive programto give maximum aid in the reestablishment of a peacetime economy of free, independent private enterprise, the development of the maximum of independent operators in trade, industry, and agriculture, and to stimulate full employment.

In other words, the Surplus Property Administration would not be carrying out the instructions of Congress unless it brought to us a suggestion, the object of which was to stimulate the development of the maximum number of independent operators. That is what we told them to do.

Now, whether or not they can do it, that may be an altogether different question. I assume that the Aluminum Co. of America may have something to say about that before these hearings are over.

MONOPOLY EXISTS IN INGOT INDUSTRY

Senator HAYDEN. Naturally, whether the Aluminum Co. of America remains an entity or whether it is broken up, you have to consider how best to dispose of these plants to accomplish the general purpose of Congress. What I was trying to get at was the legal effect. The monopoly exists in the ingot industry, and if that is the case that is where you are tied up until you dispose of this question of monopoly and production, by one agency, of the ingot, as it was before the war. You can't do anything else. But after that, there is nothing to prevent you from disposing, to the Aluminum Co. of America as a whole, or any of its integral parts if it is divided up, of any particular fabricating plant. There is nothing in the law to prevent that, as I understand.

Mr. Cox. That is correct, with the condition that for any plant that cost $1,000,000 or more-not $5,000,000-we must get the approval of the Attorney General.

Senator O'MAHONEY. I might say that there is pending before the Surplus Property Subcommittee a bill amended by Senator Maybank, amending the law to require reports on plants costing a million dollars

or more.

Senator REVERCOMB. I was very much interested in Mr. Symington's statement that he was reluctant to cancel the leases or the contracts of Alcoa because it would create an unemployment situation. Well, the cancellation does create an unemployment situation, does it not? Mr. SYMINGTON. That is correct, sir.

Senator REVERCOMB. Why did you cancel at that time, and why did you not wait until a later date to do it, when you could find some other company to buy these plants? Why did you not wait?

Mr. SYMINGTON. Senator, I would rather have Mr. Husbands answer that question, or Mr. Cox.

Mr. HUSBANDS. I think probably Mr. Cox should answer the question.

Mr. Cox. The reason we did that was because we were convinced if we did not concel the leases before the end of August, that we would be unable to cancel them until 1948, or in some cases until 1949.

Senator REVERCOMB. You mean that your leases were so written that you had to cancel at that time or run on to 1948 or 1949? Mr. Cox. That was our judgment.

Senator REVERCOMB. Was that the term of the contract?

Mr. Cox. It arose in this way: Our right to cancel rested upon the production of the leased plants falling below a certain figure-40 percent for a 6-month period. It had fallen below that figure for a 6-month period ending August 31. We were almost certain that that could be the situation

Senator REVERCOMB (interposing). You based your action upon your belief that in the future there would be no falling down in production that would permit cancellation, no certainty of that?

Mr. Cox. We are never certain of anything in that sense, Senator. But we were deeply, firmly persuaded that we must either cancel then or wait until 1948.

Senator REVERCOMB. And the cancellation brought about a rather extensive unemployment situation, did it not?

Mr. Cox. It certainly has brought about unemployment; how extensive, I cannot answer.

Senator O'MAHONEY. Of course, that was the result of all cut-backs of the war program.

Mr. Cox. Yes. Of course, as Mr. Symington said, he made some efforts to have these plants continue their operation on a temporary basis.

ONLY THREE COMPANIES ENGAGED IN CREATION OF ALUMINUM

Senator REVERCOMB. Mr. Symington, how many private companies are engaged in the creation of aluminum, beginning with the production of bauxite, the ingots, alumina, sheet aluminum-how many companies, altogether, are engaged in those various enterprises?

Mr. SYMINGTON. The three companies that are engaged in the processing of aluminum are Olin Industries, Reynolds, and Alcoa.

I don't think, Senator, you could say Olin was a completely integrated company. Is that correct, Mr. Husbands?

Mr. HUSBANDS. That is correct.

Mr. SYMINGTON. Would you say that Reynolds was a completely integrated company?

Mr. HUSBANDS. Yes.

Mr. SYMINGTON. I would, too.

Senator REVERCOMB. You meant that produced the ore and went through to the finished product?

Mr. SYMINTON. Yes.

Senator O'MAHONEY. We might ask the executive secretary of the Small Business Committee

Senator REVERCOMB (interposing). I would like to have put in the record all companies that produce bauxite, all that produce ingots, all that produce alumina, and all that produce sheet metal or any part of aluminum.

Senator O'MAHONEY. How many fabricators of aluminum were there?

Mr. ANDERSON. When we sent out our first questionnaire, we had over 1,500 names of business firms in the business of light metals, most of whom were in the aluminum field.

Senator REVERCOMB. You mean 1,500 companies?

Mr. ANDERSON. Fifteen hundred companies in various types of aluminum business.

Senator REVERCOMB. I wish you would furnish for the record the names of those, and put them in here.

Mr. ANDERSON. I would be glad to do that.

Senator WHERRY. The Reynolds Co. is a completely integrated company that is a competitor of Alcoa, is it not?

Mr. SYMINGTON. I would think it was an integrated company; yes, sir.

Senator WHERRY. On your recommendation that we need more competition to lower the price-which is the third paragraph from the bottom of your report-if we had other competing companies like Reynolds-and I was deeply impressed with the competition that Reynolds was giving Alcoa, throughout all of these Small Business Committee hearings, a well-organized company-do you feel, if we had four or five or six companies, we would get a better price on aluminum than we would now?

Mr. SYMINGTON. That is a personal question?

Senator WHERRY. You may answer it any way you like.

Mr. SYMINGTON. I would say yes; the more competition, the better price you are going to get.

Senator WHERRY. That probably answers the question, but would you get any more competition, so far as price is concerned? You would get more production, but would you get any lowering of price? Mr. SYMINGTON. It would be my opinion that you would, sir.

Senator WHERRY. What is the price of aluminum now compared to, say, 1939?

Mr. SYMINGTON. That I couldn't answer.

Senator WHERRY. Well, it is a very definite thing to consider, in establishing this policy. The price of aluminum today is cheaper than it was in 1939.

Mr. SYMINGTON. I would think so. They have had one customer, and an awfully heavy volume.

Senator WHERRY. That is the United States.

Mr. SYMINGTON. Yes, sir.

Senator REVERCOME. Will you let me interrupt, Senator?

Senator WHERRY. Yes.

Senator REVERCOMB. Would you have any reason to believe that the price would go up when aluminum has many customers and there is a great demand in the postwar world for that product?

Mr. SYMINGTON. Well, Senator, it would seem that in normal peace times you would have less volume and more sales expense than you would selling the Government.

Senator WHERRY. Would it cost you more money to produce it then? Mr. SYMINGTON. I would think so.

Senator WHERRY. Then how would you get a lower price?

Mr. SYMINGTON. There are other aspects of the price situation I would like to present to you. I don't know the aluminum situation, but let's take nickel. The price of nickel never varied during the depression and prosperity, and if you have one company I think the chances are there is more of a chance to control the price than if you had ten.

Senator WHERRY. Competitively, I will agree that the more competitors you get, possibly the more chances you have to shop around. But after all, the use of aluminum will govern, to some extent, its

price. My theory is that if you make the statement that you are going to get lower prices because you have more competition, that does not cover the field. So many other factors come into it. And I think you have got two competing companies. They are producing all the aluminum that they can take today, more than they can take. So where are you going to be if you subsidize or put in independent operators, where you guarantee them against loss? Where are we going to come out in the end?

Mr. SYMINGTON. You only asked my opinion as to whether, the more competitors you have, the better price you get; and that opinion, from the standpoint of my business experience, still stands.

However, we won't argue about the third competitor if we can get the second, based on what we understand we are supposed to do under the act.

Senator REVERCOMB. Mr. Symington, will you produce, with the present facilities for the production of aluminum, more aluminum than the market will consume?

Mr. SYMINGTON. I would like to answer that a little indirectly, Senator, if I may.

The largest volume of aluminum in any prewar year was in 1939, and 330,000,000 pounds were used in 1939; and today the total capacity runs into billions.

Senator REVERCOMB. Then with that great production, and with the facilities for that great production, there is not much chance of the price going up, is there? Haven't you got an almost glutted market? Mr. SYMINGTON. I would say that the question of whether the price goes up would be primarily whether the price was controlled, and not the productive capacity of the industry, sir.

"CONCENTRATION OF CONTROL OVER PRODUCTION HAS INEVITABLY BEEN FOLLOWED BY INCREASING OF PRICE," SAYS SENATOR O'MAHONEY

Senator O'MAHONEY. The innumerable investigations into economic problems which have been held by committees of Congress, and in the courts and elsewhere, throughout our economic history, have, I think, demonstrated beyond any possibility of rational contradiction that concentration of control over production has been inevitably followed by increase of price. The hallmark of monopoly is the restriction of production in order to maintain price.

I think Senator Revercomb's question points up the very central problem with which we are confronted in the disposal of war plants. We were able to build these plants by Government investment because we needed the output in order to win the war. Now, unless we develop another market, we will have to padlock them; and if we padlock them, then we must expect to endure a reduction in the standard of living in America.

It seems to me to be clear beyond any possibility of doubt that if we are going to have a prosperous business economy, we have got to have a market; and the only way we can get a market is by promoting consumption, and not by turning back to the old system of monopolistic controls by which production has been maintained at such a point as to enable the producer in control to get the price they want.