ment. So far as the public utilities and common carriers are concerned, what we propose is exactly what was done in the last war; so that we are not asking for anything more in that field than was done in World War II. So far as the other three areas that you have mentioned are concerned, such as control of existing housing and commercial rents, the information we have from the Federal Reserve Board, so far as control on credit on existing housing is concerned, is that it would be highly desirable to keep the prices within reasonable bounds, if you could extend credit controls to additional areas.

The purpose for doing this is to try to avoid direct controls. Senator ROBERTSON. In this resale of houses, a man bought a house built in 1947 and he thought he could sell it to anybody he pleased. You are going to say, "No; you cannot sell it to anybody but a veteran." Would you like to add there if it is in a defense area, and a veteran wants to sell it and move somewhere else, he could not sell it to anybody except a defense worker? Would you put that in there, too?

Mr. BERGSON. The extension, so far as credit controls are concerned, is that you can require higher down payments, as it were, on the sale of existing houses, such as they have used so far as new housing is concerned. It does not extend the Housing and Rent Act of 1947 any further than it is already extended.

Senator ROBERTSON. I did not read the language in the bill that way. I read it as a direct limitation upon the market that would be available to the owner of that house. Here is the way that bill reads:

No housing accommodations designed for single-family residence, the construction or conversion of which has been completed since June 30, 1947, shall be offered for sale or resale, or sold or resold, to persons other than veterans or their families.

That does not say anything about how much they should pay down on it.

Mr. BERGSON. That is the present law, as we understand it.

Mr. L'HEUREUX (counsel for the committee). What I have in mind is that certain bills or acts, such as the Wherry housing bill, may not have contained a restriction upon rerenting or reselling houses such as contained in this bill. In that case we should consider whether we want to impose this type of limitation now when the purchasers of such housing have bought without such limitations.

Mr. BERGSON. My understanding of the purposes of this is merely to reenact existing law and, so far as the credit controls are concerned, to permit the extension of credit controls on housing that were started before August 3, 1950. If it goes beyond that, it probably unintentionally went beyond that.

Mr. L'HEUREUX. There would be no objection if clarification of that were made in the bill?

Mr. BERGSON. That is right.

Senator ROBERTSON. Mr. Wilson, there is one paragraph in your statement that I know came straight from your heart, and that reads as follows:

Our determination to remain free and our magnificent production system are great deterrents to further Communist aggression. These are the sources of our might. We must maintain and strengthen them.

When you say "maintain and strengthen them," you are talking about both of them; are you not?

Mr. WILSON. That is right.

Senator ROBERTSON. We have in a bill here, which you personally sponsor, an antihoarding provision and the control of commodity exchanges, and other provisions of the bill came from other administrative sources. You would be willing to trust us to analyze those very carefully to determine whether we are carrying out your objectives to maintain and strengthen both freedom and our productive system. Mr. WILSON. Yes, but I think I recognize, as I am sure you do, Senator, that in a period of emergency there are compromises we must make in order that ultimately those freedoms we treasure are going to continue.

Senator ROBERTSON. We recognized that when we passed the Production Act of 1950.

Mr. WILSON. You would make certain restrictions there, and I do not think these changes, generally speaking, which I ask, substantially cut into those things. I think it will be helpful to give flexibility.

Senator ROBERTSON. I am definitely of the opinion that 3 or 4 months from now, when defense spending is probably two or three times what it has been this past spring, there will be greater pressure of an inflationary character than we have been up against before.

Mr. WILSON. That is what I am afraid of.

Senator ROBERTSON. The fundamental law of supply and demand will not take care of us; it cannot successfully function, and it is necessary for us in that emergency to continue some type of control. As our chairman announced when he introduced the bill, we want to give very full hearings to conflicting viewpoints. You said there are going to be some conflicting viewpoints, but you said that is the essence of democracy which pleased you.

Mr. WILSON. That is right.

Senator ROBERTSON. Thank you very much.

Senator BRICKER. May I ask one question here of Mr. Bergson or Mr. Hale; either one?

Under title II you give authority to the President to condemn property to be taken over by the Government. Was that authority in the law in the Second World War?

Mr. BERGSON. Yes, that is in title II of the Second War Powers Act. Senator BRICKER. You have that in addition to authority requested for the period?

Mr. BERGSON. That is right; that is in title II.

The CHAIRMAN. Senator Schoeppel asked to be heard at 2 o'clock. Senator Douglas, do you want to proceed now or do you want to come back at 2.

Senator DOUGLAS. Mr. Wilson has been testifying for some time, and I do not wish to subject him to many more questions, but there is one question I would like to ask.

The CHAIRMAN. Senator, we are going to be here this afternoon. Senator DOUGLAS. I will be perfectly willing to waive asking any questions, but it so happens that I cannot be here this afternoon, and there is just one question I would like to ask for the record.

It is true, Mr. Wilson, that you may have originated only two of these proposals. Did you review the proposals which were submitted by others?

Mr. WILSON. I am glad you asked the question, Senator. I do not want to appear to be running out on any one of them. Of course, I

studied the propositions that were made by the various agencies as they saw the requirements and approved them; in fact, put in a lot of hours of skull practice on them myself as to the necessity of them, and rejected many.

Senator DOUGLAS. In other words, you have not taken recommendations made by subordinates and passed them on, but they have gone through your mind and after considering the matter you believe that the recommendations which you make are sound?

Mr. WILSON. That is right. I probably rejected more than 50 percent of those that came in, and those that are here cover it, and these seem necessary and desirable to me during the emergency.

Senator DOUGLAS. Without wishing to probe too deeply into the causes of your distinguished industrial and business career, when you were head of General Electric, did you originate all the proposals which the General Electric Co. put into effect?

Mr. WILSON. You can be sure I did not, because the company is pretty successful.

Senator DOUGLAS. But you reviewed the recommendations made by others and if they met with your approval then you put them into effect?

Mr. WILSON. That is right, and I had to take the final responsibility for them if I wanted to hold my job.

Senator DOUGLAS. In other words, there has been nothing unusual in this case for your taking recommendations from subordinates and then deciding whether or not they were sound?

Mr. WILSON. I would not think so, sir.

Senator DOUGLAS. I am very glad to have the record clear on that point.

The CHAIRMAN. I think, if it is agreeable, we should recess until 2 o'clock, because Mr. Wilson has to have his lunch.

(Whereupon, at 12:50 p. m., the committee recessed until 2 p. m. the same day.)

AFTERNOON SESSION

The CHAIRMAN. Mr. Wilson, I am sorry we had to bring you back, but these gentlemen have a few questions they wish to ask.

Senator Dirksen, will you go ahead?

Senator DIRKSEN. Mr. Wilson, just to keep my own thinking straight on this subject, this bill, if enacted into law and added to the powers delegated under the original Defense Production Act, will virtually delegate power that could amount to an economic strait-jacket if, in your judgment, that is necessary, or shall I say, in the judgment of the President.

Mr. WILSON. Well, it has some strait-jacket capabilities, I will have to admit, but since they are only to be used in an emergency and then only for a short period, I would not think that they were too serious, as one who does not like controls.

Senator DIRKSEN. Just to make certain, of course, that we understand, because I do believe there is a tremendous interest all over the country as regards this delegation of power, this calls virtually for a surrender of economic freedom in America, so that the power which you exercise or would exercise under this measure over materials, prices, wages, rents, inventories, transport, utility rates, and other

things that are in the bill, constitutes in effect, an almost total power over the American economy if, in the judgment of those who wield that power it had to be exercised.

Mr. WILSON. But substantially those items you mentioned, sir, are in the bill already.

Senator DIRKSEN. I am adding the proposed amendments, plus the authority delegated under the original bill.

Mr. WILSON. Yes.

Senator DIRKSEN. I believe the second thing in which I would be interested, Mr. Wilson, is how long this power is going to endure. I noticed in your statement that first you call for a 2-year extension of all of these powers, and secondly, you indicate at the end of that time they can be reexamined to determine which of them may have to be retained and which of them can be disposed of. I am rather interested in your philosophy of this thing because I went back to examine an observation you made in 1944 before the Army Ordnance Association-to be exact it was January 19, 1944. At that time you

said:

The thought may be unpleasant, but through the centuries war has been inevitable in our human affairs. Perhaps we should even abandon that false phraseology of a war economy and a peace economy.

Then you added:

Of equal importance is the fact that this must be done at oncespeaking of such a program

and for all a continuing program and not the creature of an emergency.

Is it your thought that these powers are going to have to be retained upon the statute books and exercised, even though a pressing emergency may disappear?

Mr. WILSON. May I answer that question in two parts?

Senator DIRKSEN. Yes.

Mr. WILSON. First, as to the speech I made then, all I can say to you is that the point I made there-if we would have done what I said I do not think we would have been in an emergency. I do not think we would have been taking the emergency measures that are here being recommended, because we would have been militarily stronger and being militarily stronger, indeed, I think mighty, as we might have been, then I don't believe we would be talking about the things we are talking about here today.

As to the length of time the powers would be retained, my own view is they should be retained for the shortest possible time consistent with the determination to make America strong enough to stand up in case of war, or to make it so mighty that there will not be war. Beyond that I hope we will toss all of these things overboard just as quickly as we can.

Senator DIRKSEN. The difficulty, of course, there is this: Some weeks ago General Marshall made the observation that we may be confronted with as many as 10 to 20 years of tensions. Let us assume there are 10 years of tensions; is it your conviction then that these powers to be exercised on a stand-by basis, if necessary, should be kept upon the statute books?

Mr. WILSON. I would not keep them any longer than each individual one of them seemed necessary to the Congress. I think Con

gress should determine the terminal point of each of the items. My own guess is that if we do a good job in the next 2 or 3 years, the job of rearmament and mobilizing our defense properly, that even if the tensions keep up 10 or 20 years, as the illustrious General said, that we would not have to keep the economy in a strait-jacket to maintain our strength.

Senator DIRKSEN. The second question, of course, relates to the impact of this power upon the American economy, for if all this power is delegated what you are in fact doing is to transfer the making of free economic decisions which are commonplace, and transferring them to Government, so that somebody in Government is making those decisions for the American people and especially those who are identified with the business world. Consequently, they will have a tremendous interest in materials, prices, all those other things.

The other day a businessman sent me a copy of a letter that is issued by one of the so-called business advisory services. I will not identify the date or name of the town, because, among other things, it is a plug to subscribe to the service. But here is a rather interesting paragraph. I say it is interesting because I happen to know the man that runs this service. He has been coming in and out of Washington for 15 years and has built up a very steady clientele. I have been on the radio networks with him once or twice way back before 1940. But here is what he says:

For the past 4 months I have been spending 3 days each week in Washington working with some of the Capital's most responsible men, and I have been thunderstruck by the scope of the Government's plan for business mobilization. Regardless of the outcome in Korea Washington has thrown your organization's chart out of the window and is assuming the key spot in running your company. The controls going into effect during the next 90 days can only mean that someone in Washington will be checking your every move in production, new plant facilities, wages, prices, and sales. The crucial Washington story has already begun to pose serious problems affecting not only businessmen's immediate income, but possibly the very existence of many companies during the next 12 or 24 months.

Do you agree with that estimate, that that is going to happen to the American economy, starting within the next 90 days?

Mr. WILSON. It has happened, to a degree. It is all a matter of degree. Certainly, once you put on the controls, even those controls we have of course, you take some of the freedoms of operation away— but I do not know any other way to build military strength and the equipment that is needed for military strength, by just some haphazard plan other than the extent of the planning that we have already done, and I admit you can make a case for the point that fellow covers in the letter.

Senator DIRKSEN. I am interested also in the terminology that he uses, whether or not if people had knowledge of what lies in the immediate future they would be "thunderstruck" by the impact upon American business.

Mr. WILSON. I do not think they would, myself. If I got that letter when I was back in business, I would toss it in the wastepaper basket. I do not think so much of it.

Senator DIRKSEN. Mr. Wilson, that could be, except, of course, for the powers that are delegated here, and if those powers were abused you could socialize America.