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MOBILIZATION AND DEMOBILIZATION PROBLEMS

THURSDAY, APRIL 27, 1944

UNITED STATES SENATE,

WAR CONTRACTS SUBCOMMITTEE

OF THE COMMITTEE OF MILITARY AFFAIRS,

Washington, D. C.

The subcommittee met at 10:30 a. m., pursuant to adjournment, in the caucus room, Senate Office Building, Senator James E. Murray (chairman) presiding.

Present: Senator Murray and Representative Gwynne, member of the Committee of the Judiciary of the House of Representatives. Also present: B. M. Gross, staff director.

Senator MURRAY. The hearing will come to order.

The first witness this morning is Mr. Hinrichs, of the Bureau of Labor Statistics. Mayor LaGuardia was to have been the first witness, but he has not arrived as yet, so we will proceed with the hearing with Mr. Hinrichs as the witness.

But before we proceed with the hearing, I wish to insert in the record at this point a letter which I received this morning from Senator Vandenberg, of Michigan.

This letter, I think, covers the situation perfectly, and I am in accord with what the Senator has to say. It will be incorporated at this point in the record.

(The letter referred to is as follows:)

Hon. JAMES E. MURRAY,

United States Senate, Washington, D. C.

UNITED STATES SENATE,
COMMITTEE ON FINANCE,
April 26, 1944.

MY DEAR SENATOR MURRAY: I appreciate your letter of April 24.

I am unable to attend your hearings this morning (April 26) because of the fact that the Foreign Relations Committee is considering the lend-lease extension bill today (as you know). I shall try to join you Thursday morning. Nothing less than "lend-lease" could keep me away from your meeting this morning, because I think you are dealing with a subject upon which the total economic life of the United States depends and Congress must act before it is too late. I can fully understand the viewpoint of those who argue that contract termination should be dealt with as part of an over-all demobilization measure. That has been my own point of view for many months. I have felt that Congress should present a total answer to this entire challenge in one over-all measure. But I have been driven to the reluctant conclusion that if we have to wait for a total measure (including surplus-property disposal) it will still be many more weeks and perhaps months before we get any legislation at all. I do not believe we can afford to wait-and I do not want any part of the responsibility for "waiting" any longer.

It is perfectly obvious that the first demóbilization problems-in the order in which they shall arise is contract termination and plant clearance. Those are the matters effectively covered by S. 1718 (now pending before your subcommittee) which has been urgently recommended for immediate passage by the special Senate Committee on Post-war Economic Policy and Planning. Let me say again that I completely agree with those who rightly insist that the disposal of surplus property is inextricably linked with contract termination and plant clearance. We have only commenced to meet the problem of demobilization and reconversion when we deal with these two latter phases. But when we do deal affirmatively end conclusively with contract termination and plant clearance, we have at least started to answer this critical national problem. We shall have cleared the track to this extent. We shall then be able to immediately concentrate upon the final problems of surplus disposal.

It is my observation-based on the work of the Post-war Economic Policy and Planning Committee that there still remains substantial controversy in respect to "surplus disposal." In my view there has ceased to be any substantial controversey in respect to contract termination and plant clearance as contemplated in S. 1718. I repeat that I have been driven to the reluctant conclusion that we dare not any longer proceed on the "all or nothing" theory. I respectfully urge that we should start this legislative process in respect to contract termination and plant clearance so that our national economy may have this much reassurance immediately.

I come from one of the great industrial war production centers of the country. Indeed, it is the No. 1 area. Therefore, it is also the No. 1 area in respect to the tragic hazard which will confront this country if this war terminates (either wholly or in part) before Congress has laid down dependable statutory rules and regulations to govern swift effective and conclusive contract termination and plant clearance and then surplus disposal.

In my view, the situation is already critical. In my view, Congress should act, so far as it can, without any further delay. Otherwise, it will be Congress and not private industry which will have to take responsibility for what happens. We have been holding "hearings" on all of these related subjects for many months before many different committees of the House and Senate. Your committee-like the special Senate committee of which I am a member-has faithfully explored the field. I would not cut off any citizen from his right to be heard. But I respectfully submit that the time has come for action-immediate action-action before it is too late-action which will reassure American industry that Congress intends to act as well as to listen and to talk. If you can produce over-all action without further delay, I favor it and I want to help. But I am convinced that the need for speed in initiating this process is so great that the legislative covering contract termination and plant clearance should be given the immediate "go" sign. This cannot possibly interfere with further and immediate attention to the equal need for legislation dealing with surplus disposal. It simply takes these related problems in the order of their imminence. It seems to me that we ought to be able to get S. 1718 (in whatever form is satisfactory to your committee) on to the Senate floor next week for action next week. If this could be done, I think it would be the greatest possible reassurance we can give to our hundreds of thousands of war contractors (upon whom in turn millions of workers depend for their jobs) that we intend to protect and facilitate the demobilization and reconversion process upon which our total national economic life absolutely depends.

We cannot hold private enterprise responsible for reconversion results unless we permit private enterprise to function in behalf of reconversion; and private enterprise cannot even start upon dependable plans until Congress writes the laws under which it shall proceed.

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