ry and representatives of Government who are gathered around table, so that we may get the very best possible results out of the sentation of this problem.

ast night I wrote an opening statement and I want those present understand that the chairman is subject to the rule which I have just ounced. I have no objection to being interrupted at any time.

SURPLUS PROPERTY ACT A MANDATE

In passing the Surplus Property Act of 1944, Congress laid a mante on the Surplus Property Administrator to dispose of the property longer needed in the common defense in such manner as—

give maximum aid in the reestablishment of a peacetime economy of free, dependent enterprise to stimulate full employment

*

urage monopolistic practices ve position of small business

* disstrengthen and preserve the competiand promote production and utilization resources of the country.

*

the productive capacity and the natural These words of the statute itself leave no doubt of what the legislave intent was. This intent, however, was made doubly clear in section 9 of the act which provides not only that the Surplus Property Adminstrator should make a report to Congress with respect to all plants osting $5,000,000 or more before disposing of them but that a disposal lan shall be laid before the Congress "consistent with the policies and objectives set forth in this act."

Specific as this language is, it is not the only recent declaration of Congress on the subject. The War Mobilization and Reconversion Act of 1944 is equally definite. In section 205, this law directs the Attorney General

to make surveys for the purpose of determining any factors which may tend to eliminate competition, create or strengthen monopolies, injure small business, or otherwise promote undue concentration of economic power in the course of war mobilization and during the period of transition from war to peace and thereafter.

Thus by laws which are as yet scarcely 1 year old, the Congress has left no loophole for misunderstanding its purposes. It has instructed the executive arm of the Government to use the powers of government to help bring about reestablishment of a competitive economy in which it will be possible for "new independent enterprise" to develop. If new independent enterprise is not permitted to develop in the United States of America it is difficult to see where else in the world it can develop and can be protected, because the obvious trend in Russia, in Britain, in Europe, and everywhere except where the United States is endeavoring to carry out the policy of freedom in competition, it is becoming more and more difficult for the individual or small organization to compete with either cartels upon the one hand, or authoritarian government upon the other.

In compliance with the laws to which I have referred, the Surplus Property Administrator and the Attorney General have transmitted to Congress their respective reports on the aluminum industry and both of these documents have been referred to the Surplus Property Subcommittee of the Senate Committee on Military Affairs. This hearing is being held under the sponsorship of this subcommittee and jointly with the Select Committee on Small Business and the Industrial Reorganization Subcommittee of the Select Committee on Postwar Economic Policy and Planning. All three of these committees

Lt. Col. Owen C. Holleran, Air Corps, Office of the Under Secretary of War.

Robert L. Sebastian, technical adviser, War Production Board.

J. Morman Romoser, Chief, Facilities Branch, Aluminum and Magnesium Division, War Production Board.

A. H. Galbraith, War Production Board.

A. B. Menefee, War Production Board.

Walton Seymour, Director of Power Utilization, Tennessee Valley Authority.

W. K. McPherson, Chief, Industrial Economics Division, Tennessee Valley Authority.

Robert B. McCormick, Metals Division, United States Tariff Com

mission.

John C. Russell, Metals Division, United States Tariff Commission. Arthur Goldschmidt, Director, Division of Power, Department of the Interior.

Douglas G. Wright, Administrator, Southwestern Power Adm istration, Department of the Interior."

Robert M. Weidenhammer, Metals and Minerals Unit, Depart· of Commerce.

J. P. Albey, Bonneville Power Commission.

E. Robert de Luccia, Chief, Bureau of Power, Federal I Commission.

Alex. Daspit, Office of War Mobilization and Reconversion. Harrison F. Houghton, economist, Office of Reports, Smalier Plants Corporation.

W. D. McFarlane, Surplus Property Division, Smaller War Corporation.

Donald D. Kennedy, Chief, Commodities Division, Departi State.

Appearances on behalf of industry:

I. W. Wilson, vice president, Aluminum Co. of America. Leon E. Hickman, of Smith, Buchanan & Ingersoll, Pittsbu counsel for Alcoa.

Marion M. Caskie, vice president, Reynolds Metals Co., 20 ern Building, Washington, D. C.

J. O. Gallagher, president, Columbia Metals Corp., Seat E. N. Rousseau, Washington representative, Olin Indu Lawrence A. Harvey, executive vice president, Harve Co., Los Angeles 3, Calif.

Francis C. Cary, Hybinette & Cary, Wilmington, Del. Ernest E. Debs, member, California State Legislature man of State aviation committee, Sacramento, Calif.

STATEMENT OF SENATOR O'MAHONEY

Senator O'MAHONEY. Now it has been the experience man in the past hearings that little advantage is obtain presentation of a point of view depends solely upon the u testimony of a witness, or the reading of a paper. It is to we can develop this as a round-table discussion, and witnesses will be willing to be interrupted, not only by m committees, but also by informed members and represer

siana, and Illinois. Experimental plants for making alumina from clay and other domestic ores are located in Oregon, Utah, Wyoming, and South Carolina. Primary aluminum plants are in Washington, Oregon, California, Arkansas, New Jersey, and New York. Fabricating plants are in Washington, California, Arizona, Missouri, Alabama, Kentucky, Illinois, Indiana, Ohio, Michigan, Pennsylvania, Maryland, and Massachusetts.

Most of these plants are now closed down, and some of them are dismantled. Those which are in operation are running at partial capacity. The plants are new and modern but they were built during the war at high costs and, for security reasons or because of stringencies of power and labor, the location and size of some of them are not suitable for postwar competitive operation. Some will require alteration or relocation in whole or in part, some will be useful for only stand-by defense purposes. Others, and it is to be hoped this comprises the majority, are capable of immediate economical peacetime operation.

The issue of monopoly versus competition is more clearly presented in the aluminum industry than in others in which the Government owns plants. The United States Circuit Court of Appeals for the Second Circuit, sitting in lieu of the Supreme Court, held on March 12, 1945, that Alcoa is a monopoly in the production of primary aluminum. The court deferred decision on whether the company must be dissolved until it is determined whether effective competition results from the disposal of the Government-owned plants.

It would seem that to provide a healthy light-metals industry, in compliance with the law, the Government-owned plants, or at least the major part of them, must be sold or leased to competitors of Alcoa under conditions of equal opportunity. This, however, is one of the questions which this committee will examine as it considers the reports the surplus business.

The Small Business Committee and the Surplus Property Board in their reports submitted detailed recommendations for governmental action. The Attorney General approves generally the recommendations of the other two reports but takes the position in his report to the Congress that immediate dissolution of Alcoa is necessary for the disposition of Government-owned plants to achieve a strong and healthy competitive aluminum industry. A summary of the recommendations in these reports has been distributed. I hope that every person who intends to participate in this discussion has received one of these summaries, as it will afford a basis for the full discussion which the committee hopes will take place.

We shall begin the discussion of the reports first by calling upon Mr. W. Stuart Symington, the Surplus Property Administrator, and later by calling upon Mr. McGranery, the assistant to the Attorney General, perhaps today or tomorrow, and Mr. Sam Husbands of the RFC who was head of the Defense Plant Corporation during the war.

Before proceeding, however, it would be appropriate to hear from the chairman of the Small Business Committee under which the hearings upon the light-metals industry were conducted. I therefore call upon Senator Murray, of Montana, chairman of the Special Committee to Study and Survey Problems of Small Business Enterprises. Senator Murray.

STATEMENT OF SENATOR MURRAY

Senator MURRAY. Mr. Chairman, the Senate Small Business Committee is glad to join with the Military Affairs Committee and the Postwar Committee in this hearing. I want to say first that I am fully in accord with the views expressed in Senator O'Mahoney's opening statement.

The Senate Small Business Committee is particularly concerned with the disposal of the Government-owned plants so as to provide full employment, encourage small and independent business, and maximum development of the light-metals industry throughout the United States under terms of equality of opportunity to compete, and to remove all handicaps and discrimination against individuals, firms, localities, and regions of the country. We want to see quick action to turn the plants over to operators strong enough to provide active competition and to keep the plants in operation without any unnecessary curtailments or shut-downs in the reconversion period which lies immediately ahead.

In the hearings which were held by the Small Business Committee in February, March, and May of this year, there was a very full presentation of the status of the light-metals industry and its problems. The interim report of the Surplus War Property Subcommittee of the Senate Small Business Committee was sent to all parties who had expressed an interest in the subject, with an invitation that they submit their comments and criticisms. The numerous replies which have been received are available for the consideration of the joint committee.

There can be no doubt that, although difficult problems must be met and overcome, the light-metals industry is facing a brilliant future. I do not think it is extravagant to hope that we are in the early period of an age of light metals which will parallel the phenomenal growth of steel during the last 50 years. This will not be at the expense of, but in connection with, the increasing use of steel and other metals and nonmetallic materials, in an expansion of our whole ecenomy and standard of living to heights which we can now only dimly foresee. This is the goal which we must strive for.

RECOMMENDATIONS OF SENATE SMALL BUSINESS COMMITTEE

The Small Business Committee interim report recommends: That the Government adopt a unified light metals program to promote the maximum usefulness of the industry for production, employment, and national defense.

That the Department of State negotiate with foreign countries having bauxite, deposits, for delivery of bauxite to the United States in partial settlement of their lend-lease obligations.

That the bauxite reserves of the United States and deposits in other parts of the Western Hemisphere and in the islands and countries of the Far East, capable of supplying American industry, be fully explored.

That a Government stock-piling program for the national defense, which will also be the means of keeping aluminum plants in operation during the reconversion period, be undertaken.