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Mr, SHERLEY. This would indicate that the advisory commission reports direct to the Council of National Defense and, except through it, is not to be related to any other board or subcommittee of any kind.
Mr. F. A. Scott. That may be the case.
Mr. F. A. SCOTT. I can state to you the facts as I know them, although it may be that your question should be answered by somebody from the council rather than by me. Mr. Baruch is a member of the new War Industries Board and continues at the head of the raw materials section of the work; in fact, is designated to that particular work in this memorandum approved by the President. Mr. Rosenwald has been the head of the section of materials and supplies of the old advisory commission organization, and he still continues his work as the head of that section, although now he begins to report to the War Industries Board instead of direct to the advisory commission with respect to that work. Is that clear!
Mr. SHERLEY. Your chart is not quite accurate, then, because it would seem to show complete divorcing of the advisory commission. from any of these other bodies except in so far as the one person on it, Mr. Baruch, is also a member of the War Industries Board.
Mr. F. A. SCOTT. If the name of Mr. Rosenwald were put wherever it should come there at the head of that section of the committees of the War Industries Board, then it would be absolutely accurate.
Mr. GILLETT. Is he on the War Industries Board ?
Mr. F. A. Scott. No; as the thing stands now, he is the chairman of one section of the work of the War Industries Board, but is not a member of the War Industries Board.
The CHAIRMAN. He is the head of a subcommittee operating under it.
Mr. F. A. SCOTT. And he still remains a member of the advisory commission, as does Mr. Baruch.
Mr. SHERLEY. The advisory cooperating committees of industries which were supposed to report direct to the War Industries Board are in point of fact made up to some extent of men who are members of the advisory commission.
Mr. F. A. SCOTT. In those two cases Mr. Baruch continues at the head of the raw materials section and Mr. Rosenwald continues at the head of the section on materials and supplies, although now Mr. Brookings, by reason of his membership on the War Industries Board, becomes the Government's point of contact with that group of committees.
Mr. SHERLEY. Well, perhaps I can get at it in another way. What I really want to find out is the actual way it is proposed to work now. It seems from what you have stated that the fundamental idea, or that one of the fundamental ideas, in reorganizing these commissions and committees and their relationship to each other and to the council and the Government was to create an independent body, now designated as the War Industries Board, between the advisory committees, which might be interested in various supplies. which the Government was obtaining, and the Government.
Mr. F, A. Scott. Yes; that is right.
Mr. SHERLEY. So as to make this an independent tribunal through whom these subsidiary committees would report.
Mr. F. A. SCOTT. That is correct; " to make clear that there is total disassociation of the industrial committees from the actual arrangements of purchases on behalf of the Government."
Mr. SHERLEY. As I understand the chart, the advisory commission, as such, has no subsidiary committees of any kind that report to it?
Mr. F. A. Scott. There are certainly none shown on that chart, and I know of none.
Mr. SHERLEY. And its function as a commission is to advise the Council of National Defense touching any matters that it may seek advice on and which may have come to it either through the War Industries Board or the nine subsidiary committees that it has reporting directly to it. This chart shows that there are 10 committees, namely, administration and statistics, cooperation with State councils, medicine and surgery, commercial economy, research and inventions, woman's defense work, and committees on shipping, transportation, and communications; labor, engineering, and education, that report directly to the council and which have no subsidiary committees. Then there is the War Industries Board that you have spoken of, which has under it various subsidiary activities. Now, are any members of the advisory commission, other than Mr. Baruch, members of any of those subcommittees that I have enumerated or of any of the subcommittees under the War Industries Board ?
Mr. F. A. Scott. Mr. Rosenwald, you are not a member of any of those committees, are you? You are the head of a section, but you are not a member of any committee !
Mr. ROSEN WALD. No, sir.
Mr. SHERLEY. What do you mean by "head of a section"? Are these designations in three groups who report first to the advisory cooperative committees or industries, such as aircraft, automobiles, artillery, etc.-are they the bodies you mean when you you speak of sections?
Mr. F. A. Scott. Under the old organization, which is now displaced, each of the advisory commissioners headed a section of committees. Mr. Baruch headed all the committees on raw materials; Mr. Rosenwald all of the committees on materials and supplies, so called, but they were really quartermasters' stores; Mr. Coffin headed the committees dealing with those things which would go to the Ordnance Department; Dr. Martin all of the medical sector; and Mr. Willard those relating to transportation. Now, you see, when those things came over to the War Industries Board, so far as they came from the raw materials board, they go to Mr. Baruch, who is a member of the War Industries Board, and when we take over the committees on materials and supplies we either take the man who headed them up, Mr. Rosenwald, the chief of that whole section, or else we do not take him, as the case may be. As a matter of fact, we have taken him, but he is not a member of any one of these committees. He simply has charge of that section of the work.
Let us take these committees on industries that are related to supplies for the Quartermaster's Department: These communities have to a considerable degree been making their recommendations direct to a representative of the Quartermaster's Department. They will now be required on such matters as take the form of a recommendation to
transmit them to the War Industries Board through Mr. Brookings, who, by the desire of the council and of the President, is to pass on all such matters to see if there is any element of interest represented in the recommendation that it is eliminated before the recommendation passes to the Government department.
The CHAIRMAN. Under the old organization, the advisory commission had a numbr of subcommittees in charge of each different. character of materials or work, and they were grouped in sections with a man at the head of each. Is that correct?
Mr. F. A. SCOTT. Yes, sir.
The CHAIRMAN. And if horseshoes were to be purchased, the particular section that horseshoes would come under, or the subcommittee that handled horseshoes, would make a recommendation to the purchasing officer of the Government as to where they were available, the concerns that would supply them, and the prices at which they could be obtained, and the Government's representative made purchases in accordance with those recommendations. Now, if I understand what has been done
Mr. F. A. Scott (interposing). Well, Mr. Fitzgerald, no, sir. I do not know what you mean by that hypothetical case you have stated, but if you mean that I shall say “yes” to that, I can not say “yes” to all of that, because for the larger part it did not operate
The CHAIRMAN. It did in some things.
Mr. F. A. Scott. That may be, but if you speak of that as a general proposition, covering any committee, my answer would be “no.".
The CHAIRMAN. As I understand this arrangement, when all of these subordinate bodies, instead of making recommendations directly to the purchasing officer of the Government, have their recommendations submitted to the War Industries Board
Mr. F. A. SCOTT (interposing). Yes, sir.
The CHAIRMAN (continuing). Through the particular member who has charge of that particular purchase.
Mr. F. A. SCOTT. Yes, sir.
The CHAIRMAN. And the recommendation is transmitted to the purchasing officer. Then, a member of the board, or the board itself, passes on the question as to whether there is any interest that might be adverse to the government involved, and then makes the final recommendation to the purchasing officer as to what shall be done under the conditions? Mr. F. A. Scott. Mr. Brookings is that representative.
Mr. BROOKINGS. I should say that it is rather further than that, as I understand it from reading this resolution that created the board. It is rather difficult to interpret exactly what my duties are, which are somewhat differentiated from those of the board. In other words, as you will notice there, this places a certain responsibility upon me, certain other responsibilities upon Mr. Baruch, and certain other responsibilities upon Judge Lovett-upon the three of us. As nearly as we have been able to get them rather hastily interpreted, both by the council and the President, who has interviewed us to quite considerable detail in connection with this, I assume it to be their desire that I personally represent the Government, and that every contract that is made by any of those subcommittees shall be submitted to me; that I shall investigate them just as I would if I
were spending my own money in every way, both as to the parties named, as to the price, and everything else.
I must satisfy myself about it before I approve it. I am required to investigate and to ascertain whether any of these advisers were, or were not, directly or indirectly interested. As I interpret it, that is my responsibility. I have not been in active business myself for some years, and have no active interests of any kind, but I am supposed to have sufficient training to enable me to elicit the facts in some form or another. I must go to the bottom of all those things and ascertain them with reference to the things that the Government is being supplied with. I must ascertain when they are needed, where they are needed, and the minimum cost, consistent with an endeavor to derange the markets as little as possible. That is a small responsibility blanketed in a few words. I have been here only a week or 10 days, and have attacked a proposition that is entirely new, and I am carrying it out as far as I can. The first contract was brought to me and was signed this morning, after I had elicited all the facts and information which indicated to me that it was a good contract for the Government to make.
Mr. SHERLEY. You mean that it was approved by you?
Mr. BROOKINGS. I mean approved. I beg your pardon. I belong to the advisory part of it, because, after all, we have no authority, If you wish me to, I will interpret what I believe to be the origin of my duties, anyhow, on this committee. I rather gathered this in piecemeal, and I can not locate it with any person. I have been told that the enormous expansion from the activities of the Army and Navy Departments on a peace footing to those on a war footing has been such that the regular organizations of those departments would hardly be expected to cope with it, and that they should be supplemented by advice, as I understand it—that is all there is in it-from those who are familiar with the sources of supply of those things that they need, and that has been the duty of the variouse subcommittees that were appointed by the advisory council.
I gather that necessarily in the carrying out of that process there has been more or less confusion, more or less duplication of effort, and, in some cases, competition between the departments of the Gorernment themselves, the Navy Department bidding on the same thing at the same time the War Department was bidding, which hight result in a higher price on some articles amounting to 5, 10, or 15 per cent, brought about by both of them bidding at the same time. I do not think it was ever intended that anyone should be criticized in connection with that; it is simply the sort of confusion which has naturally grown out of the enormous undertakings of the departments. I have been told that we are expected, those of the new board- I do not know why I was selected, quite, but I suppose they have thought that our training was such and our disposition to serve was such that we would undertake to bring a certain amount of order out of this chaos; that we would coordinate all of the Gorernment's interests, as relating to the War Department and the Navy Department, and simply advise these departments where they can get the things they want, because the emergency feature of this sometimes means more than price, and the judgment that we are expected to exercise covers giving the Army and Navy what they need and when they need it. I approach it in that order, because to my mind