ization there that has been making detailed reports. They were dealing mostly with the housewives and the retailers, including a survey made in your State, Senator. Their report was there was not much hoarding on the part of the housewives, contrary to popular belief. I think it would be a mistake to assume that there is a tremendous amount of hoarding, although, as Mr. Fleischmann says, there is undoubtedly some hoarding in individual cases.

Senator ČAPEHART. I doubt if there is much hoarding on the part of the housewife, but I question the statement there is not much or tremendous hoarding on the part of certain organizations and institutions.

Secretary SAWYER. I did not mean to say that. There may be. Senator CAPEHART. And on the part of manufacturers.

Secretary SAWYER. There may be, but I do not think that is general. There are many cases undoubtedly, but I think it would be a mistake to assume that everybody in the country, for instance, is hoarding. Mr. HARRISON. Could I add, please, sir, something to that?

If we are talking about hoarding at the retail level and at the distribution level

Senator CAPEHART. Will the gentleman yield?

Mr. HARRISON. Yes.

Senator CAPEHART. I am not thinking in terms of the retail level. I am thinking in terms of the manufacturers and the wholesalers, and the scrap dealers and the junk dealers, and that type of industry. My opinion is there is a tremendous amount of hoarding going on in those categories.

Mr. HARRISON. Senator, if for the minute we can separate hoarding as between finished products and hoarding as between raw materials that go into finished products, we have taken steps with respect to the raw materials that go into the finished products. With respect to the finished products we have not taken any steps.

Senator CAPEHART. I can well understand why you might not take any steps with respect to the finished product, because once it is finished, it is finished and there is nothing you can do about it.

Mr. HARRISON. But we have taken specific and direct steps. Senator CAPEHART. What steps have you taken with respect to hoarding steel and aluminum?

Mr. HARRISON. We have specific orders that limit inventories to specific time intervals.

Senator CAPEHART. Has that been published in the Federal Register?

Mr. HARRISON. Yes, sir. And those orders as a generalization now. I must generalize.

Senator CAPEHART. Yes.

Mr. HARRISON. They cover the field of steel, copper, zinc, which are several of the items that we have already gotten out orders on, and those orders specifically pinpoint time.

Now, they specifically suggest this and so indicate: That where any particular manufacturer or supplier has an excess of inventory, that he may not accumulate additional materials.

Senator CAPEHART. He may not?

Mr. HARRISON. He may work it out. He is not yet forced to transfer that to somebody, although we do have the requisitioning power and are prepared to use that if necessary.

But actually, I think, in the field of raw materials the point the Senator is making has been covered. It has not been covered in the field of the finished goods.

Senator CAPEHART. Will the General yield? Do you not think it might be wise to mail to each member of this committee a copy of all these orders?

Mr. HARRISON. We would be very glad to, Senator. We would be very glad to do so.

Senator CAPEHART. If we do not get them, we do not know.

Mr. HARRISON. And I would like to restate my original observation that one of the first steps was a general inventory which spelled outSecretary SAWYER. The first thing.

Mr. HARRISON. I do not recall whether the priorities order was the first or the second. But it was one of the first steps. Then as we have worked into each of the individual items we have pinpointed that in terms of specific time.

Senator CAPEHART. What have you done in respect to this fellow that is hoarding steel, for example and there are many other things involved-who is reselling it at a very, very high price?

Mr. HARRISON. No, sir, in the field of price we have not involved ourselves, and

Senator CAPEHART. Section 102-let's read it.

In order to prevent hoarding, no person shall accumulate (1) in excess of the reasonable demands of business, personal, or home consumption, or (2) for the purpose of resale at prices in excess of prevailing market prices, materials which have been designated by the President as scarce materials or materials the supply of which would be threatened by such accumulation.

Now, that is the thing I am interested in, No. 2.

I have reason to believe there is a lot of hoarded steel in the United States, and hoarding of aluminum and other basic materials.

Mr. HARRISON. Senator

Senator CAPEHART. We might some day take you out and show you some of it.

Mr. HARRISON. I am ready to get a railroad ticket and ready to go at any time.

I would like to say this: With respect to the price, I will ask Mr. Fleischmann, I think, if I might, to talk to that, but we did take and send out to several steel distributors, warehouses, in the last 45 days a selected list of questions to cover their inventories as of a certain date, as I remember, June 30, and then as of September 30. I may not be quite exact. And we do have the data on that and, incidentally, that data shows a decrease in the inventories of those particular firms that we checked.

Senator CAPEHART. If the General will yield, let me say this to you: We placed section 102 in here in order to try to control the black market, because it is my personal opinion-you may not agree with it, but it is my personal opinion you can control the black market on steel and basic materials better under this section than you can under price control; because under price control they will pay the additional price under the table in cash, and they are paying a lot of it under the table right now and it is hard to prove it, it is hard to get to it. Mr. HARRISON. Yes.

Senator CAPEHART. But here it ought to be fairly easy to prove whether or not they are hoarding for the purpose of selling at prices above the prevailing market price.

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Mr. HARRISON. Quite true, Senator.

Senator CAPEHART. And it ought to be easier to control the black market in steel under this section than it is under price control, in my personal opinion.

Mr. HARRISON. I would like the privilege of sending to the committee the particular orders that deal with the inventory control on steel and the other items.

Could Mr. Fleischmann say a word about the price angle of it? Senator CAPEHART. Let me finish this. For example, if you find an organization has a certain amount of steel on hand and they are not manufacturers, they are not processors, they simply have this steel in a warehouse and they are selling it at twice or three times the published list price, they are hoarding under this section and can be prosecuted.

Mr. HARRISON. Might I say, sir, please?
Senator CAPEHART. Yes.

Mr. HARRISON. At the time we issued our steel warehouse order, which was to make available to steel warehouses a given amount of steel each month, I did discuss the matter with Mr. Valentine, with respect to the pricing, and we worded in our press release recognition of this price phase.

Now, at that time, sir, it was our feeling in our shop that it would be unwise for us to go any further with respect to the price phase.

Senator CAPEHART. For example, suppose you found a warehouse some place at the moment that had X amount of steel, let's say 20,000 tons, or 10,000, or let's say five or let's say a thousand tons of steel, and they were selling that steel, or trying to, and they are, at twice or three times or four times the market price. Now, under this section you could prosecute. You could put a stop to it. There are quite a number of such cases in the United States at the moment. Mr. HARRISON. We have talked that over several times. Could Mr. Fleischmann talk to that point, please?

Senator CAPEHART. Yes.

Mr. FLEISCHMANN. Let me tell you the reason again, in a little different way, why we did not invoke it at the outset. This does not mean we will not invoke it.

Senator CAPEHART. I understand.

Mr. FLEISCHMANN. Of course, we are doing first things first, as well as we can judge them.

Senator CAPEHART. I know you have got a big job and it takes time. Let me say first that I appreciate that as much as you do, or anybody in this room.

Mr. FLEISCHMANN. Senator, one of the reasons which we have not mentioned why we did not invoke this at the outset was a technical difficulty which I think I should describe, and that is this: One of the things we did not want to stop, even for a minute, was the import of any of these scarce materials. Acting under section 101 we felt we could make an exception for the importation of all of the materials. In other words, we felt even if the man did hoard it, our international situation was such that it was wise to get this stuff into the country just as fast as we possibly could. So we have allowed in practically all of our orders an exception for anybody who imported; not that he could hold and hoard them, but that he could bring them into the country in any amount that he could.

Now, we could not see, the lawyers with whom I talked, including Mr. Kendall from NSRB and Mr. Hale and myself-we could not see that we could make that kind of an exception under section 102. We did not feel we had power to grant exemptions by regulation under that. So we have gone rather slow.

Now, what we did, addressing ourselves to this specific problem, was to send out a questionnaire to a very large group of these metal middlemen that I think you are talking about, sir, and that we are all focusing our attention on, to try to find out the location and the dimensions of the problem.

What we had in mind was this: If we located any of these hoards of scrap that there must be around the country, we were going to make an offer to purchase at a reasonable price, something like what he had paid for it; and if that was refused, we have the power to requisition. Now, up to date, as General Harrison has said, the returns we have had from this report have indicated declining inventories. Now, it is true, and here is exactly the point we are at now, some of these people did not answer the questionnaire.

The CHAIRMAN. Those are the people we are after. Those are the

ones we want.

Mr. FLEISCHMANN. We are at that point now.

Senator CAPEHART. You are talking, I think, about the legitimate steel warehouse, the legitimate man. I am thinking in terms of the fellow that does not deal in new steel, he deals in scrap, he deals in anything he can deal in, see.

Mr. FLEISCHMANN. Senator, if I may say a word on that?
Senator CAPEHART. Yes.

Mr. FLEISCHMANN. The list we got was primarily designed to hit exactly the people you are interested in-the fly-by-night broker, who advertises he will fly people to Texas to get steel. We have all heard those stories. We are trying to get those exact firms to report. We are going to make them report.

The CHAIRMAN. You say some have not reported?

Mr. FLEISCHMANN. That is right.

The CHAIRMAN. You are going to make them report?

Mr. FLEISCHMANN. That is right. When they do, we have legal means to make them disgorge what they have.

Senator CAPEHART. There is no reason why there should be any excess. In fact, there is no reason why there should be any steel in any warehouse in the United States today at all, if those hoarding it would sell it at the regular list price, because if they did, the legitimate manufacturers and processors who badly need it would pick it up right now.

Mr. FLEISCHMANN. Except that we are taking steps to see that legitimate warehouses are getting a steady flow of steel which they need.

Senator CAPEHART. I appreciate that, and that is the proper way to do it.

I know of a particular situation at the moment where if they would sell the steel at the regular published price, it would go out to people that badly need it, and it would put men back to work within 24 hours; that is if they would sell it at the regular price, but they are holding it for three and four times the published price.

Now we believe there are a lot of such instances in the United States. In fact, we are not so certain we do not have some of them cornered right now.

I am vitally interested in it because I know of a lot of little manufacturers and processors at the moment who are closed down and will be closed down because they cannot get steel at the regular published price. Yet I have reason to believe that there is a lot of steel that is being hoarded and being held for so-called black-market prices. And that is the reason I think-maybe the other members of the committee will not agree with me that is the reason we put section 102 in here. I think it is much more effective in catching those fellows than price controls.

Secretary SAWYER. May we have the names? I assumed from what said you had some names. Could we get them?

you

Senator CAPEHART. We might decide to handle it ourselves.

The CHAIRMAN. Let me ask one question. The law is sufficient for you to get whatever replies you need, and if you cannot get the replies, as in some instances you said they did not reply, you can make them do it. Mr. Attorney, you are certain you do not need any more law? Mr. FLEISCHMANN. We have ample powers, sir, under the two

statutes.

Mr. HARRISON. That is right.

As I recall it, sir, we sent out about 300 questionnaires, and thus far we have received about two-hundred-odd replies.

The CHAIRMAN. The honest fellow will reply.

Mr. HARRISON. That is right.

Senator CAPEHART. I would like to get an argument started here on the statement I made a moment ago: That you can better control prices in the United States under section 102 than you can under the price section, if we set the thing up properly and handle it properly. You may not agree with me.

Mr. HARRISON. There is no argument with me. I just do not know. Senator CAPEHART. That was the purpose in putting it in there. Correct me if I am wrong some of you gentlemen were here in World War II-but there was no such clause in any War War II act was there?

The CHAIRMAN. I believe there was.

Senator CAPEHART. It did not have as much teeth in it as this one did.

Representative BROWN. Suppose a small-business man has enough steel to do him 12 months and needs it. You would not take away any of his steel, would you?

Mr. HARRISON. Mr. Congressman, as I was explaining, we hoped that attrition would work off any excess inventory. Now, again, if there were some known cases where there was a considerable excess and if somebody else was in dire need of that material, yes, sir, I would think we would give consideration to our requisitioning powers. Again, we would try to be practical.

Senator CAPEHART. If Congressman Brown will yield, we are thinking in terms of the fellow that is not a manufacturer, is not a processor, he has simply rented a warehouse some place, or maybe it is out in the open.

Representative BROWN. In the black-market business.