Senator ROBERTSON. In the first place, I do not think that the amount that will be earmarked to help them is considerable as compared with the total. If they were democracies willing to unite with the total of 16, and under the guns, so to speak, of Russia when they did it, and the group in Europe that came to us with a well thought out plan and said that here is the minor items that these three nations should participate in, I do not think that it would have been good public policy for us to have said, "You did not contribute as much to the war effort as we thought you should and we are not going to let you have any of it."

Senator SPARKMAN. The program is a complete program for the rehabilitation, not merely physically, but economically, of all of western Europe, and these countries are naturally a part of that.

Senator ROBERTSON. I do not believe the Marshall plan will ever really work unless we have unity among those 16 nations in Europe. And if you are going to have unity, that is trade unity, break down those horrible barriers, break down some of those racial prejudices. We cannot pick out certain ones and eliminate the others, when they all answered our so-called request or suggestion and all united over there.

Our program should be now, "Well, we will treat you all as democracies that want to unite and be our future allies, but we want you to form a union over there among yourselves, and do what could be done in that way to help yourselves, because your self-help will be many, many times any help we can give you. We can just sort of get something over there."

The CHAIRMAN. I raised my eyebrows when I heard of that allocation, and I would like to be sold that.

Senator ROBERTSON. I have been studying the allocation in percentages of materials. I have not gone extensively into the allocations by country but I strongly endorse the proposal of the president of the World Bank, that they should carry through over there like they started with the European committee that will supervise the administration of this money, made up there of their own nationals.

The CHAIRMAN. I hope they will supervise it better than they did some of the supplies we sent over there, still in cases on the shores of Greece, where moths enter and rust doth corrode, and thieves do break into and steal.

Senator ROBERTSON. If they set up that kind of committee it would give strength to the Herter suggestion that we should have a committee of businessmen and put this on a business basis.

The CHAIRMAN. You are right.

Senator ROBERTSON. So Russia cannot say this is political and it is imperialistic, but if the businessmen here and over there use it like they would a bank loan, but it would not be one, because they will not have security, and much of it will be grants, we will take the sting out of the Russian propaganda that some imperialistic scheme by which we want to enslave those who accept our beneficence.

Mr. GREEN. Is not the proposal to help Sweden and Switzerland financially that it will be a loan rather than a grant?

Senator ROBERTSON. Definitely it will be a loan to those countries, yes. They would not get in on the grant.

The CHAIRMAN. I assumed they were grants. They are loans? Mr. GREEN. They will be loans.

Senator TAYLOR. I was just going to say that I am very happy to hear the Senator from Virginia say that racial prejudices are one of the main causes for worry in this world, but I would like to add that I think we should apply the same principle in our own country. Senator ROBERTSON. I cannot speak for any State except Virginia. We do not have it down there. We apply it there.

Mr. GREEN. I referred to the Marshall plan only as a danger that might cause further inflation here, because if our export trade is to be increased and increased and increased, it is bound to have an effect upon our inflationary program here.

The CHAIRMAN. There is not any question that the Marshall plan put into effect will be tremendously far-reaching but we must go into it under the knowledge and conviction that this country has got to make some sacrifices itself in this thing, and ask the people for the great cost with its great ideals, and we have to gear our economy into some degree in the light of the Marshall plan on a different plane than we had it before; is that not true?

Mr. GREEN. That is true.

The CHAIRMAN. You cannot spend this money and make an effort without making some sacrifice here. You cannot get something out of nothing. We will all feel it, but the stakes are high, and what is the alternative; that is the question.

Mr. GREEN. That is it. I do not want what I have said interpreted as meaning that we are opposed to the Marshall plan in any way, because the A. F. of L. is for it.

Senator SPARKMAN. I do believe, though, that we should be careful not to let the impression go out that the Marshall plan will actually increase exports, because as it is drawn up, there will actually be a decrease in exports. We will export less than we did export during the present year. My recollection of the figures is that we wouldduring the present year we exported $14,600,000,00 worth of commodities, the past year. If you add the services, it will bring it up to your figure.

Senator ROBERTSON. Sixteen or seventeen.

Senator SPARKMAN. But under the Marshall plan, if the $6,800,000,000 which has been requested by the President is appropriated, the exports will be approximately $13,000,000,000. The Marshall plan is a marshalling of the forces not only of the Western Hemisphere, but also those of western Europe to work together, and if I understand correctly your recommendation of export controls, is based on this, that there is enough to go around if it is properly handled. Mr. GREEN. That is right. If they handle it carefully and regulate it.

Senator SPARKMAN. I think that is what the Marshall plan is, too. Mr. GREEN. That is all right.

Senator ROBERTSON. In the emergency relief bill, there is provided the power for the President to clamp down on exports of scarce items to countries that were not to be included in the Marshall plan in order that we would have enough for the Marshall plan.

Senator SPARKMAN. I saw in the Wall Street Journal a few days ago, I believe, that an anouncement had been made that all items of

export would be placed under export control beginning March 1. I noticed, however, in this same article that a great many of those who were interested in exporting had said that such action on the part of the administration was not wanted. So it seems that any action which is taken runs into difficulties somewhere.

Mr. GREEN. Runs into difficulty, that is right.

4. Transportation facilities and equipment: The authority to allocate transportation facilities and equipment was extended by congressional action during the special session. It is evident, however, that consideration should be given to aditional steps to provide a more rapid supply of freight cars to take care of the needs of the immediate future. For a long time more freight cars were being taken out of service, because they proved no longer usable, than the number of new cars being supplied to the railroads. The resulting freight car shortage is a very serious bottleneck in the distribution of raw materials and finished products and is holding back increased production.

5. Inventory control and allocation of scarce commodities: Under the Taft-Wolcott bill the executive departments are authorized to conclude voluntary agreements for this purpose. However, our experience during the defense program and early in World War II demonstrated conclusively that voluntary arrangements, no matter how well-intentioned they may be, are not enough. Even though 90 percent of an industry may honestly desire to enforce a voluntary program, they are forced by the remaining 10 percent to resort to measures and devices which render the voluntary program useless. Voluntary public support is essential to the success of any such program. But enforcement sanctions are necessary to make it fully éffective.

6. Extension and strengthening of rent control: This is of the utmost importance to workers throughout the country since the existing rent control law is extremely weak. From June to November 1947, in the short space of 5 months, the rents rose 52 percent, according to the Bureau of Labor Statistics Index, or more than the increase which had occurred in the previous 6 years. Unless the present law is not only extended, but also strengthened, rent control will prove worthless and rents will increase drastically.

7. Rationing of consumer goods in short supply: Some method of rationing must be adopted as a temporary, yet an extremely urgent, measure. The Department of Agriculture estimates that available meat supply for 1948 will fall substantially below the levels set in 1947. The problem of meat supply will become particularly acute during the spring months. Rationing is needed to insure the equitable distribution of the available supply. Otherwise distribution is bound to be based on the ability to pay a high price, with prices running up to new heights.

The CHAIRMAN., So that we had Mr. La Roe, counsel for about 700 independent smaller meat producers, here yesterday, meat packers, and he decried rationing, and his argument, if you will correct me if I am wrong, was that if we start rationing, and the Secretary of Agriculture should put out a great number of stamps, that we simply would reduce the supply of meat.

Mr. GREEN. It would have that effect.

The CHAIRMAN. Yes.

He said you would increase the supply of stamps and there would be so many stamps that the supply of meat would be dissipated quickly.

Senator MAYBANK. Decrease the supply of stamps, and the meat would back up.

The CHAIRMAN. That was it. He would cut down the number. Senator MAYBANK. Cut down the number, and that would back the meat up in these small packing houses.

The CHAIRMAN. What do you say to that?

Mr. GREEN. I hardly am prepared to express an opinion on that, because I am not familiar with that detail of it. That is a little detail that I had never thought of.

The CHAIRMAN. He spoke of it.

Senator MAYBANK. He said that he would

Senator SPARKMAN. He was comparing the position of the small independent packers with the big packers.

Senator MAYBANK. He said to get the prices down, that the only way he could get prices down would be not to issue as many stamps as there was meat available, and therefore he would issue less stamps, and that would in turn cause the meat to be blocked up in the packing houses, and go to the black market. He said that could be done, but would not be done.

Senator SPARKMAN. They have the stamp but not the meat. He also said that under existing conditions, he thought that a serious black market would promptly eventuate, and get 60 percent of the meat if we had rationing.

Senator MAYBANK. Another thing he said that would be of interest to you, he said the great trouble with the small packers was the competition from the chain stores who could absorb those costs through the sale of other things, the big chains. They would be the benefactors, and the small packers would be out. That is his testimony. They would be out of business.

Mr. GREEN. They did not have that experience before under rationing.

Senator MAYBANK. He read a statement from Mr. Gilbert, at that time head of the OPA, decrying that.

Mr. GREEN. Experience is a great teacher. Why can't we find a remedy for that now if we learned that, then?

Senator SPARKMAN. Do you not think that these are things that develop from a long range program, rather than one of temporary nature, such as you recommend?

Mr. GREEN. I think so.

Senator SPARKMAN. Your program would simply bridge over this period of time which we hope will be very short, during which the meat supply will be very short.

Mr. GREEN. That is right.

Senator SPARKMAN. And Mr. La Roe himself said that if we should come to the point where the meat supply is greatly reduced below what we are accustomed to using, then rationing might be necessary.

Mr. GREEN. Yes.

Senator SPARKMAN. And we do know that the contention of the Secretary of Agriculture is that in the late spring and summer months, the meat supply will be down to 125 pounds per person, which is about

31 pounds below what we consumed during 1947, but that that will probably be just a period of some 5 or 6 months. The CHAIRMAN. Did you say 146?

Senator SPARKMAN. Spread over the year as a whole.

Mr. GREEN. Eight. Price controls. The thought of Government intervention in the private market is distasteful to the average American. Reliance on the maximum of freedom in our economic life is an ideal to which the American Federation of Labor is strongly devoted. We supported price control in wartime and made a large voluntary contribution through our affiliates in helping to make it work. This support was continued until price control was terminated in the fall of 1946. At that time we felt strongly that price control machinery, already established and functioning, should have been continued for at least another year. We are convinced today that if price control had not been repealed by Congress great progress would have been made in returning to a free market under stable prices.

We are equally convinced that the liquidation of general price controls in the fall of 1946 makes it impossible now to reinstitute general price control in all phases of our economy. Without adequate administrative machinery and a large staff extending over the entire country, any attempt at price regulation is bound to fail. Nor do we believe that imposition of a general price control at this time, even if workable, would be desirable. Changing conditions since the end of the OPA would require a vast amount of study and preparation in order to make such control anywhere near equitable. Without such preparation, the danger is too great to place upon American industry and trade controls that are arbitrary and that would impose a disproportionate burden upon production of goods and services so greatly needed.

We do believe that in the case of a few specific commodities which are in critically short supply and which most significantly affect the cost of living, study and consideration should be given to the feasibility of applying selective price controls on such commodities when all other means fail. We therefore recommend that limited authority be granted by Congress to the President on a temporary basis to place price ceilings upon specified commodities only when they are found to be in extremely short supply and only when a full justification is provided, after notice and hearing, for the imposition of price ceilings on such commodities as a last resort.

Let me make clear the American Federation of Labor's views toward the proposal to impose ceilings on wages. As I have already stated, labor would prefer to see a reduction in the level of prices than to press for an equivalent increase in wages. In seeking upward wage adjustments to date labor has had no alternative. Pressed with continuing and accelerating increases in living costs, workers have insisted on preserving their standard of living. This they were doing, aware of the absence of any effective anti-inflation program which would hold out to them a promise of price stability.

Because of the lack of proper anti-inflation measures current wage levels have fallen far behind the living costs. Unless this condition is corrected and the upward march of prices is halted, workers will again be compelled to seek additional wage increases.

The proposals for wage control pending the consideration of your committee are made a part of the proposed price-control system. Such