make up for the cancelations. Even at this late date, Mr. Kaiser expressed every conviction that every house under construction would be used and assured us that he would let us know promptly of any change in their plans that would affect the need for the housing. Because there was definite lag in the in-migration of workers for the Brewster plant in Johnsville, our field officials again made inquiry regarding the Johnsville situation. On December 31, 1943, our regional representative in New York interviewed Mr. Kaiser and other officials of the company and at that time, we were informed that they could make no claim upon us to ask for reservation of houses at Johnsville for the Brewster Co., and that if we could find tenants elsewhere, we were welcome to do so. He stated at that time that it would be impossible for the Kaiser interests to keep the Johnsville plant operating under the then-existing contracts. On February 12, 1944, we received a latter from the War Manpower Commission officially notifying us of the sharp reduction in Brewster employment. This letter came after a month or more of continuous oral discussions between our field representative in Philadelphia and the housing and transportation consultant of the War Manpower Commission regional office in Philadelphia, and regional officials of the Federal Works Agency. In this letter, we were advised that employment at the Brewster plant at that time was less than 4,600, and it was indicated that the number of employees would be reduced to 3,500 during the same month. When the original program for housing was approved early in June 1943, the War Manpower Commission reported a peak employment of 9,000 employees was expected for the Brewster Johnsville plant by March 1944. By this time the entire project had been practically completed, and it seemed better judgment to finish the job and utilize the housing for workers in the Budd plant in northeastern Philadelphia, which was at that time under consideration for a large contract for cargo planes. 7. Disposition.-In view of the change in recruitment plans and the declining employment at the Brewster plant, the National Housing Agency immediately took steps to adjust the locality's war-housing program. On February 26, 1944, the project of 200 public temporary family units (PA-36258) was terminated. The occupants of this project were to be rehoused in vacant units in the other projects. Also the 500 permanent units in PA-36435 were placed in stand-by status on February 28 and 400 of the 700 permanent units in PA-36434 were placed in stand-by status on March 1. Plans for the disposition of the 200 terminated temporary family units are now being formulated. Contracts have just been awarded for the transfer of 54 of the temporary units to Aberdeen, Md., and 104 of the temporary units to Front Royal, Va. No plans have yet been made for the disposition of the remaining 42 temporary units. No final plans have been made for the disposition of the 900 permanent family units now in stand-by status. As indicated above, it was believed that there would be a demand for such housing from employees of the Budd Co. While the Budd Co.'s contract for the manufacture of cargo planes has been canceled, some of the units in these projects may still be required for workers in the Budd Co.'s plant which has just been awarded a large contract for the manufacture of military shells by the Army. It is reported that C. Jared Ingersoll, chief of the Phila lelphia ordinance district, stated that between 3,000 and 3,500 workers will be required for these operations at the Budd Co. plant. If needed for this purpose additional units may be transferred from stand-by status to active status. As you know, under the Lanham Act, the Congress has declared the policy that housing built under that act shall be sold and disposed of as expeditiously as possible at its full market value but that such housing or any part thereof shall not, unless specifically authorized by Congress, be conveyed to any public or private agency organized for slum clearance or to provide subsidized housing for persons of low income. Further, under regulation No. 1 of the Surplus War Property Administration, the National Housing Agency has been designated as a disposal agency for all property of the class of housing property (including community facilities built by the Federal Works Agency on the sites of such projects) except housing under the control or jurisdiction of the War and Navy Departments. Under this regulation, disposal agencies are required to first ascertain if any surplus property can be used by other Government agencies. It is possible that some other Government agency, such as the Veterans' Bureau, might have some need for the project. 98534-44-pt. 9-7 NAVY DEPARTMENT, MY DEAR MR. WILSON: The Brewster Aeronautical Corporation has recently completed a survey to determine how existing schedules on the production of British and Navy dive bombers and Navy fighters can be met. This survey has been closely followed by the Bureau of Aeronautics. The results in general show that most of the obstacles in the way of meeting present schedules can be overcome through the application of vigorous, corrective measures by the contractor. This Bureau feels that Brewster Aeronautical Corporation, under the recently installed management of Mr. Henry Kaiser and Mr. Frederick Riebel, is proceeding satisfactorily in applying such measures. There is, however, one problem brought to light by the Brewster survey which cannot be corrected entirely by the contractor himself. This is the problem of providing housing at or near the Johnsville plant of the corporation, adequate to take care of the increased personnel which is needed here if schedules are to be maintained. Brewster Aeronautical Corporation feels that 1,400 new homes of the better type must be started at once in order to be ready in time to assist them materially in meeting their commitments for 1943. They feel that 600 of these homes should be of such a type as will be attractive to executive personnel, while the remaining 800 should be of a type which are attractive to supervisors, foremen, and skilled workmen, whose average annual income is in the neighborhood of $4,220. Exhaustive, exploratory discussions with the National Housing Agency, Federal Public Housing Authority, and the Federal Housing Authority, have led all concerned to believe that the 600 executive type homes can best be built by private contractors, working under Federal Housing Administrative agreements. It is believed that such homes would cost between $5,000 and $6,000. On the other hand, all concerned, agreed that the remaining 800 homes should be constructed as a Government project under the Federal Public Housing Authority. Brewster Aeronautical Corporation, however, feels that it is essential to have homes for supervisory personnel of a better quality than is provided for by the stereotyped Federal Public Housing Authority permissible plans. After inspection of housing projects currently progressing under the Federal Public Housing Authority program the Bureau of Aeronautics is in hearty agreement with Brewster's contention. All possible speed is necessary in providing Brewster with adequate housing at Johnsville, if the Bureau is to obtain the scheduled number of airplanes. Accordingly, this Bureau requests that the War Production Board waive the rigid requirements of the Federal Public Housing Authority permissible plans in this instance, so long as such housing is kept within full price limitations of the Lanham Act of Congress. Yours very truly, RALPH DAVIDSON, Rear Admiral, United States Navy, NAVY DEPARTMENT, Washington, June 1, 1943. MY DEAR MR. EMMERICH: It was a great satisfaction to learn this morning that as a result of investigations made under your supervision in conjunction with representatives of the National Housing Agency and of this Bureau, it has been decided to build 500 privately financed houses and 700 publicly financed family units to meet the urgent requirements of the Brewster Aeronautical Corporation for additional housing facilities at Johnsville, Pa. I am considerably concerned, however, in view of the unusual circumstances resulting from the necessity of housing exceptionally high-grade employees, that you have not been able to relax further the current construction limitations on the 700 publicly financed houses. I do not feel that houses of the design and construction now specified for this group of 700 will in any way help solve Brewster's problem. Brewster must do more than merely make living quarters available to its employees. To build the Corsair airplane in the quantities demanded by the Navy, the new management must induce its skilled mechanics, engineers, draftsmen, foremen, supervisors, administrative personnel-employees in the higher salaried brackets-to move from their present relatively convenient and comfortable homes on Long Island to rural Bucks County, Pa. They will not do this if PA-36258 homes (Fulmore Heights No. 2) are offered them. This is proven by the fact that out of 145 Brewster employees shown these homes, not a single person has been persuaded to take one. You will agree, I am sure, that it would appear to be a tragic waste of public funds to build these 700 additional homes, now approved, in this fashion when, in view of the reaction of the prospective tenants approached to date, it is doubtful whether it would in any way solve the peculiar problem involved. I urgently request that you reconsider Brewster's original proposal that the 700 publicly financed houses be of the PA-36251 type as in the case of Fulmore Heights No. 1. I believe that this type of dwelling represents the minimum in spaciousness and comfort, which Brewster will be able to offer with any success as an inducement to its employees to move themselves and their families to Bucks County, Pa. I am informed that regional officials of the Federal Public Housing Authority, the National Housing agency, and the War Production Board have indicated that homes of the type requested can be built for this project by the Federal Public Housing Authority and that materials sufficient for this number are available. The Bureau of Aeronautics stands ready to assist in this by extending AA-2X and AA-1 priority ratings, where necessary, under its War Production Board program determination 220. If Brewster is to build Corsair fighters in the quantities required by the Navy, additional high grade production and management personnel must be made available in Johnsville. To do this housing of the PA-36251 type (Fulmore Heights No. 1) is necessary, and it appears that providing satisfactory housing is the only way we can solve this critical war production problem. I cannot stress too strongly the importance of public housing of the better type to meet the unusual requirements at Johnsville, and I will greatly appreciate your usual cooperation in assisting us to make this available. Yours very truly, RALPH DAVIDSON, Senator MURRAY. That will end the hearings today. We will now adjourn. (Whereupon, at 12:55 p. m., an adjournement was taken until 10:30 a. m., of the following day, Wednesday, July 12. 1944.) MOBILIZATION AND DEMOBILIZATION PROBLEMS WEDNESDAY, JULY 12, 1944 UNITED STATES SENATE, WAR CONTRACTS SUBCOMMITTEE OF THE COMMITTEE ON MILITARY AFFAIRS, The subcommittee met, pursuant to adjournment, at 10:30 a. m. in room 457, Senate Office Building, Senator James E. Murray (chairman) presiding. Present: Senator Murray. Also present: Charles A. Murray, Bertram M. Gross, Kurt Borchardt, and Scott Russell, counsel to the Senate Post-war Planning Committee. Senator MURRAY. The hearing will come to order. Hon. Robert P. Patterson, Under Secretary of War, will address us this morning. STATEMENT OF HON. ROBERT P. PATTERSON, UNDER SECRETARY Senator MURRAY. You are Acting Secretary of War today? Mr. PATTERSON. I am Acting Secretary of War today, yes, sir. I have a short prepared statement that I would be glad to go over and then, of course, do my best to answer any questions. Senator MURRAY. You may proceed. Mr. PATTERSON. It is well recognized that the tremendous expansion of the aircraft industry during the war, as compared to industry in general, has placed it in an exceedingly vulnerable position with respect to contraction to peacetime operations upon termination of the war. The resulting financial problems, unless properly met, could result in seriously and permanently crippling the aircraft industry. The aircraft industry is of vital importance to our long-range national defense. Only through its preservation in sound health can we be assured of maintaining world leadership in aviation. It is for this reason that special attention and special consideration must be given to the problems presently under discussion before this committee. I am glad to give you the current thought of the War Department with respect to these problems. In presenting our views, I shall devote myself to the questions which accompanied your invitation to appear before you today. Those questions all pertain to the aircraft industry and our aircraft program. Question No. 1: To what extent is it necessary to achieve better coordination between the cut-back program of the Navy Department |