The CHAIRMAN. No; of course not.

Mr. UMSTATTD. Nor is it possible for a privately owned business to compete with a Government-financed business. Again the question naturally suggests itself, Cannot American business handle this load without placing in the hands of one man, the President of the United States, the tremendous power that the bill contemplates in this respect? It is noteworthy that the bill expressly provides that the President shall not have authority to ration consumer goods at the retail level. If the situation warrants resort to the arbitrary powers over business sought by the bill, surely rationing of retail goods is just as essential and will undoubtedly follow in short order.

I am fearful, frankly, that this bill will be only a step in the direction of the nationalization of industry; a step which many persons have been advocating either by degrees or on an all-out basis. The accomplishments of American industry are well known. They have resulted in substantial measure from the fact that the citizens of the country have been free to do the things that appear necessary to them in the exercise of their private initiative.

The question which this bill poses is whether or not we should run the risk of nationalization in the absence of a showing that the steps contemplated by the bill are necessary to meet the existing situation.

I recall that before this country entered World War II, there was a declaration of a national emergency by the President of the United States sometime in 1939. As of this date, there has not been any declaration of a national emergency by the President, nor has there been any declaration of war by Congress.

Of course, I may say, Senator, that your explanation about the UN has perhaps cleared that up.

The CHAIRMAN. That was not exactly in connection with the declaration of war. That was in connection with the police action. There was not a declaration of emergency, or whatever you want to call it. We were told in executive session the reason why that was not done, and while Senator Capehart stated that he doubted it

Senator CAPEHART. What I said was that I do not agree with it. The CHAIRMAN. And I might say

Senator CAPEHART. We were told why, but I certainly do not think it is a legitimate excuse.

The CHAIRMAN. While we agree on many, many things, we disagree on that.

Senator CAPEHART. My position is

The CHAIRMAN. And it is an honest disagreement.

Senator CAPEHART. My position is that if there is no national emergency, we do not need this legislation. If there is a national emergency, the people should be so told. Then the people would make the sacrifice of necessities.

Mr. UMSTATTD. I would gladly forego any of the statements I have made if there is a national emergency or if there is a war. I believe there should be drastic controls placed on our business as well as other businesses if there is a war. It is a war,

Senator CAPEHART. The fact is that there is a war. and is not a police action.

The CHAIRMAN. Definitely.

Senator CAPEHART. And no one at the moment knows

The CHAIRMAN. In fact, this was brought out in executive session, in what was said. The Senator differs with me on it. But it is an honest difference of opinion.

But there is a war. There certainly is a war going on in Korea, and I hate to see it. It is no police action, to my way of thinking. Mr. UмSTATTD. Unless there is information concerning the international situation that has not been disclosed, it seems to me that the necessary supplies required in the present situation can be handled adequately by private industry on a voluntary and cooperative basis without intervention of the extreme controls proposed by this bill.

Our company has already expanded its facilities since the conclusion of the last war. We are at the present time in the process of further expanding our facilities and you may be sure that if the requirements of national defense make necessary a further expansion of the productive capacity of our company, those steps will be taken at once. It will not be necessary to have the drastic measures proposed in this bill become law to induce us to take such steps. As a matter of record, we placed our plants on a 6-day basis beginning with the week of July 9. I feel sure, when I refer to the activities of our own company, that the viewpoint of American businesmen generally is the same as mine in that regard.

The record of production of American industry during the last war was the marvel of the entire world.

I might say, Senator Maybank, at that point, that I was in Russia in 1945, and that is the one thing that apparently impressed the Russians, the ability of our plants to turn out material. They had people in practically every American plant of any consequence, Russian inspectors, Russian men on lend-lease, checking. They marveled at that, and that was one thing they reported back to their principals in Moscow. And I offered it to them.

The CHAIRMAN. I want to pay my respect to what American business did in the last war. I do not think anything greater could have been done. If it had not been for the American workingman and businessman who backed up the boys on the fighting front, we never would have had the success we had.

Senator CAPEHART. We taught them how to produce, did we not?

Mr. UMSTATTD. No, sir; we did not teach them how to produce. We showed them the technological advances that we had made, but you cannot teach a man who is a slave how to produce.

Senator CAPEHART. My point is that we showed them everything under the direction of the Government?

Mr. UMSTATTD. Yes, we showed them, and they took those blueprints home with them; and in most instances they were afraid to utilize them, because they could not understand the processes that we used. They were afraid they would make a blunder; they would be accused of sabotage; they would be banished to Siberia, or perhaps executed.

So they did not take full advantage of what they had learned. Senator CAPEHART. I am a little fearful that maybe they did. Mr. UMSTATTD. That was in 1945 that I was there. I would say that in this 5-year period, perhaps their production has accelerated.

Senator CAPEHART. After the war ended, you know, they came over here, and sent hundreds of engineers over here, at the instance of our Government, so that we might teach them production.

Mr. UмSTATTD. Yes, sir.

Senator CAPEHART. And under point 4 now, we are doing the same thing throughout the world, even to the North Koreans.

Mr. UMSTATTD. From Afghanistan to Zanzibar.

Senator CAPEHART. So that they can learn how to better their techniques.

Mr. UMSTATTD. Yes.

That record was achieved without resort to use of controls nearly as drastic as the ones proposed in this bill.

It has been suggested that the President does not expect to make immediate use of the system of controls that this bill contemplates. This statement seems to me to support the argument that the proposed system of controls is presently unnecessary. We all realize that a change in circumstances may make it necessary or advisable to adopt an all-out system of controls of the type provided for in this bill. I feel, however, that the decision as to the time and character of such controls should be made by action of Congress rather than to have, the authority to make such a decision vested in one man—the President of the United States.

I ask you gentlemen to give American business an opportunity to demonstrate its willingness and ability to meet the demands of the existing situation and not to rush headlong into a program of control of all industry with the consequences associated with that sort of program. I have a firm conviction that the resort to a more reasonable program will satisfy the current needs of our Government and I strongly feel that American industry should be given the chance to show that it can measure up to the requirements of the Government. The CHAIRMAN. We want to thank you for your most excellent statement, Mr. Umstattd.

Mr. UMSTATTD. Thank you very much.

The CHAIRMAN. Senator, are there any questions?

Senator BRICKER. No.

Senator CAPEHART. I think Mr. Umstattd has been here all day, and there are many things that we might discuss with him. But it is unnecessary in view of the fact that he has been here so long.

The CHAIRMAN. I want to apologize for keeping you so long.

Mr. UMSTATTD. That is perfectly all right. I am willing to spend any amount of time here if I can be of any help at all.

The CHAIRMAN. Thank you.

Mr. UMSTATTD. Thank you very much, gentlemen.

The CHAIRMAN. We will now hear from Mr. Edward Jerome, representing the National Economic Council, Inc.

STATEMENT OF EDWARD JEROME, REPRESENTING THE NATIONAL ECONOMIC COUNCIL, INC., NEW YORK, N. Y.

Mr. JEROME. This bill seems to us to be a clear attempt to put something over on the American people.

The National Economic Council fayors all measures necessary to give President Truman the military, naval, and air power necessary to win the war.

But this bill clearly gives powers which in the hands of some of Mr. Truman's advisers would be used to socialize the American economy.

In World War I various voluntary controls worked well and left the citizens free. A good example is the gasless Sundays. The President asked the people not to use their cars on Sundays, and immediately it became a point of honor with 99 percent of the population not to be seen out in their cars on those days.

In World War II, many of the compulsory Government controls absorbed manpower that was needed in the field or in production. This bill goes much farther than any bill passed in World War II. It is clear to us that this bill was drawn by the administration. This means it was drawn by men overzealous for more power-men sympathetic with socialism and hostile to the continuance of our free institutions which the bill would go a long way to destroy. It was perhaps drawn by the very men whose mistakes have brought about America's present predicament.

I think this committee and the House Committee on Banking and Currency ought to draw their own bill after listening to what the administration desires. Then the Congress will put into the bill those provisions that it clearly sees will be needed. It will not include vague provisions such as are in this bill, under which administration representatives are given carte blanche to do anything they please.

Frankly, we mistrust any legislative measure that comes from the left-wingers in the administration.

Why should the Congress give the President so much power when the Congress is in session and expects to remain in session, and can at any time entertain and promptly vote a further extension of powers that is genuinely needed?

We must not only win the war with military, air, and naval forces, but we must keep up the morale of our own people. Our people are patriotic, and will make any sacrifice necessary to win. But they should not be asked to make unnecessary sacrifices. They should not be asked to turn over to the President powers to be exercised in his discretion or that of his advisers, unless and until it becomes clear that such powers are necessary.

The passage of a bill with these extraordinary stand-by powers would be justified only if the Congress was preparing to liquidate itself, leaving all power in the hands of the President, or if the Congress was preparing to adjourn and go on an indefinite vacation.

Under the Constitution, in peace or war, "all legislative power" granted is still "vested in the Congress.'

Americans have become the world's greatest producers because they have been the freest people on earth. Leave them free, with only the very minimum of regulation, and they will continue to produce. In the last war, American steel production was great enough to fill our own needs and those of our allies. We produce, roughly, half the steel of the entire world.

Can Government regulation or restriction add to this production? Is it not a needless, and will it not be a costly, thing to give the Federal Government power to build what will be after, if not during, the war, competing plants? We can possibly lose this war by cluttering up American life with an excess of Government machinery.

We view with the greatest suspicion the declaration of policy in the preamble to this bill. Under its broad provisions the administration might commit us to almost anything in foreign policy. And, knowing the disposition of many of the internationalist-minded in the administration to involve us with other nations, it is perfectly clear that we could be so involved that the identity of the American Republic could be utterly lost by the time the war is over-even if we win it militarily. The American people have very little confidence in the United Nations. They were tricked into it by internationalist propaganda. Since then they have discovered that the men who framed it and forced it through were largely led by Alger Hiss, recently convicted of perjury under circumstances that make his offense tantamount to

treason.

The American people are awakening to the fact that their period of great prosperity occurred when the United States was a unit in itself, utterly independent of other nations. It has been during the period when the administration has been fooling around with all sorts of international commitments that we became involved in this unholy mess of the present moment. The people do not feel, so far as we can gage their opinion, that for us to get more deeply enmeshed with other nations will tend to improve their well-being. They see nothing ahead except heavier taxes, more wars, and voluntary bankruptcy, and a socialism that would be little better than communism. Since socialism is merely the last stop before communism, if the administration is to start out by trying to assure the socialization of our economy, what is the use of fighting Soviet Russia?

The measure of the feeling of the American people may be had by observing their reaction under the propaganda for world government. This was brought up several years ago; and, before the people had awakened, the legislators of some twenty-odd States had passed resolutions endorsing it. Such world government would, of course, mean the end of the independence of the United States. Recently the people have awakened to the meaning of this, and, as is well known, within the past year five of the States that so hastily had ratified the idea have rescinded their ratification.

The declaration of policy in this bill indicates that its authors propose to take a shortcut to securing the world government that it is apparent the American people do not want at all. It indicates also. an attempt to give the Supreme Court an opportunity to interpret the intention of Congress so as to expand power.

This bill should be rejected in toto. There is not a thing in it that requires haste, and there is much that is dangerous. If a bill is needed, the committees of the two Houses on Banking and Currency ought themselves to draft it.

That the people of the United States have been misled into a dangerous predicament through the mistakes of their Government is an undeniable fact. Many of us believe that the advisers of the President who prepared, or are sponsoring, this bill are primarily to blame for those mistakes. Indeed, recent acts taken by the President are sufficient proof that he admits our statements.

The common sense of the American people demands that these advisers be dismissed. To entrust them with greater power would be folly.