The record of these men proves conclusively that they do not believe in the principles of government upon which our Nation was founded. Their ideas of government and law and their whole philosophy are eastern in origin. We are in a struggle of the East against the West. Every Member of Congress ought to study the record of these men and then draw upon his knowledge of history for the answer to this question. Does not any government lose the power to protect its people as soon as it undertakes to regulate them? We believe that the answer to this question must be "yes." One of our original principles was that the sole purpose of government is to protect the people against external aggression and internal disorder. Had the United States Government adhered to this principle, our soldiers would not now be dying in Korea. And let me say, in conclusion, that I look with suspicion on the attempt to railroad this bill through the Congress. When we first heard of the measure, we applied to be heard before the House committee. We did not get the courtesy of even an acknowledgment of our telegram to the chairman. Then it became known that no one but public officials were to be heard on the matter. No citizens in this supposedly free country were to be allowed to say a word on one of the most important measures ever introduced in the Congress. That by itself is a suspicious circumstance. We hope this bill will be rejected, and time taken to prepare one which the Congress can explain and the people will understand. The CHAIRMAN. Thank you. Mr. JEROME. Thank you. The CHAIRMAN. At this time the hearings will be closed. There will be an executive session tomorrow at 10: 30 in the morning. (Thereupon at 5: 20 p. m., the committee adjourned.) APPENDIX The following letters, statements, and telegrams were ordered inserted in the record. Hon. ALLEN J. Ellender, AMERICAN FARM BUREAU FEDERATION, Chairman, Subcommittee on Potato Legislation, Committee on Agriculture and Forestry, United States Senate, Washington, D. C. DEAR CHAIRMAN ELLENDER: The American Farm Bureau Federation did not ask for an opportunity to testify at the hearings which your subcommittee recently concluded on legislation to authorize marketing quotas for potatoes for the reason that time did not permit consideration of this legislation by our board of directors prior to the date the hearings were closed. We are therefore taking this means of presenting to you the recommendations on potatoes which were developed in Chicago last week by our board of directors immediately following a meeting of our national fruit and vegetable advisory committee. We have serious misgivings relative to the practicability of marketing quotas for a perishable commodity such as potatoes. Marketing quotas have worked fairly well on some of the basic commodities. With a storable commodity it is not necessary that production be brought exactly into line with needs each year for the reason that the carry-over of such commodities provides a buffer against shortages or surpluses in current production. As a general rule, existing law does not permit the application of marketing quotas to any commodity until substantial reserve stocks have been accumulated. Furthermore, existing marketing quota laws generally provide that quotas shall be set at a level which will make possible a substantial carry-over of the commodity in question. We have had no experience with marketing quotas on a crop such as potatoes where there is no carry-over from year to year and where consumer supplies must come solely from current production. Because of the variability of potato yields it is inevitable that surpluses will occur from time to time if farmers plant the acreage needed to insure consumers against a shortage. As we see it, the problem is to develop a program which will assure consumers an adequate supply of high-quality potatoes, provide price protection for producers on the potatoes needed to supply the market, and permit diversion of any surplus that may occur at a minimum cost. With these objectives in view, our board of directors have developed the following recommendation: "We recommend that potatoes have a 60 percent of parity price-support program in 1951 and that the use of marketing agreements by producers be required as a condition of eligibility for price support, also as a means of encouraging an effective marketing job to raise commercial prices above the support level, and to facilitate a disposal program on surplus and low grades within the areas of production. "In those areas where marketing agreements are in effect we recommend that the United States Department of Agriculture develop a program for the disposal of surplus and low-grade potatoes in areas of production through the marketing agreement committees. "Where potatoes below the grade of U. S. No. 1 are diverted under marketing agreements, we recommend that the support price for such potatoes be at the minimum necessary to bring about diversion. Support prices should reflect grade differentials." The basic difference between these recommendations and the present program is that our proposal provides for diversion of potatoes below the grade of U. S. No. 1, through marketing agreement committees at less than the statutory minimum support price. Since most of the potateos purchased under the 1949 pro gram were below U. S. Grade No. 1, this recommendation would make it possible for the Department of Agriculture to reduce the cost of the potato program to a fraction of the 1949 outlay. In lieu of marketing quota legislation, we recommend that legislation be enacted directing the Department of Agriculture to operate the potato support program in accordance with the above recommendations. If you have any questions on the above recommendations, we shall be glad to discuss them with you at your convenience. Sincerely yours, ALLAN B. KLINE, President. AMERICANS FOR DEMOCRATIC_ACTION, Senator BURNET R. MAYBANK, Chairman, Senate Committee on Banking and Currency, DEAR SENATOR MAYBANK: The Americans for Democratic Action have not requested time to present its views before your committee on the pending measure due to the fact that we appreciate the urgency of the situation. However, the national officers of ADA have today issued the attached statement on economic mobilization. This statement, of course, is not a rounded full presentation of the views of ADA on the over-all questions of mobilization. In the attached statement we do not go into detail on the economic questions nor do we deal with manpower and civilian-defense problems. We hope to present to the appropriate committees of the Congress our views when the specific legislative proposals are under consideration. We would appreciate your making this letter and our attached statement a part of the hearings. Very truly yours, JOHN GUNTHER, Legislative Representative. ADA MOBILIZATION PROGRAM The President has called for a step-up in industrial and military mobilization. The members of ADA, like all other patriotic Americans, applaud this step, but it is important for us to look beyond the end of fighting in Korea to the future. We must be ready to meet local aggression quickly and effectively; we must also be ready to move if need be into a state of total mobilization with speed and without friction. The higher level of military and industrial mobilization that we so clearly need cannot be bought cheaply. We cannot buy it by reducing or stopping shipments of arms under the military aid program. That would weaken our allies. We cannot do it by calling an end to our economic assistance program. While in Europe our aid program has been successful, it is still needed there and in many other places and will be for a long time to come. We must concentrate now on adequately developing the potentialities of the underdeveloped areas of the world. The peoples of those areas seek relief from the misery in which they have lived for so many centuries. We can help them to help themselves. Our technical assistance program, now going forward in cooperation with UN, must be expanded and pushed. But technical assistance alone, though it is indispensable, is not enough. Direct aid wisely guided must be provided. In 1939, when we first started to mobilize for the war against Germany and Japan, we had 9,000,000 unemployed. Until almost the end of the war we presented the astonishing spectacle of a nation increasing its military output and building up its military manpower, while also increasing the standard of living of the great masses of people. Today in July 1950, our unemployment is low. Almost all our factories are going full blast. Our mines are at work; our farms are producing at record or near-record levels. We must face the fact honestly that the resources we devote to strengthening ourselves and our firends will be paid for in goods that will not be available to civilians in the United States. The burden need not be intolerable, but it will be intolerable if it is not equitably shared. Our Government must take whatever steps are needed to make sure that the burden of sacrifice is fairly distributed. This is no time for the Government to indulge in pork-barrel expenditures; neither is it time for the Government to be half-hearted about undertaking the great development projects for our human and natural resources that will strengthen us now and for the long pull. In 1939 and 1940 there were those who cried that President Roosevelt was using the threat of war as an excuse for developing the "socialistic TVA." The TVA dams that we built then were the dams that made the power for the development of the atom bomb. They were the dams that made the power for the production of aluminum that went into our bombers and fighters. We cannot think of this as a brief emergency. for a long period of effort and sacrifice. We must be willing now to plan The ADA believes that the American people will accept whatever controls are necessary to keep our economy in balance and to build up the strength of the free forces of the world. In the following statement we propose a program which represents a beginning and not an end of mobilization. I. EXPANSION OF PRODUCTION FACILITIES FOR STRATEGIC MATERIALS Even though our productive capacities are at a very high level they must be increased in several strategic areas, such as steel, light metals, power and housing. Steel. For several years both private and government experts have urged the steel industry to increase its productive capacity to keep pace with an expanding economy. Limited expansion has taken place since 1945, and the industry has decided to increase capacity by the end of 1952 to the extent of five to six million tons over the present 100,000,000-ton annual output. This is a step in the right direction, but it is still at least 10,000,000 tons below the projected civilian needs for 1952. Since military needs must be added on top of this, such expansion plans are dangerously low. The shortage is complicated further by the lack of ore transportation on the Great Lakes and the dwindling of the Lake Superior reserves. A comprehensive program is needed for the building of ore boats, the development of new sources of supply as well as the expansion of producing capacity. Testimony this spring demonstrated how essential is construction of the St. Lawrence seaway if our ore supplies are to be assured in time of emergency. There should be no further delay in launching this project. Production can be increased both by technological improvements and by building new factories. ADA urges that the Government immediately undertake to develop new processes and build new plants. The new plants should be operated under lease arrangements similar to those of the Defense Plant Corporation in World War II. Light metals.-Light metals which are so vitally needed in defense production are already in short supply. Increased production of these metals should be encouraged by Government plant construction and lease arrangements. Specifically, in respect to copper, there is a major problem of securing adequate imports, which involves improving labor relations in the Chilean mines and elimination of tariff barriers. With respect to aluminum production, an increase in electric power is urgently necessary. Power. The end of the war found the electric power industry woefully lacking in plants for expansion. Even now, 5 years later, there remain areas of the country where there is no extra margin of supply or the margin is narrow. Private and cooperative utilities should be encouraged and assisted in accelerating their current programs to expand capacity. The Federal Government should accelerate its own power-project construction in line with sound resource development particularly in the Pacific Northwest where serious deficits already threaten. The power phase of the St. Lawrence dual-purpose project would provide a tremendous block of power. Both this project-essential for iron ore as well as power and the redevelopment of Niagara power should be authorized without further delay. Housing, rent control and community facilities.-There must be effective controls placed on housing and the entire construction industry. The President has already issued certain emergency restrictions. Unfortunately, there is grave danger that unless these are substantially modified, our limited resources for housing construction will be used primarily for those who can afford luxury housing rather than for those in the low and middle-income group whose need is the greatest. The low-rent public housing program, which had been planned to provide an annual average of 135,000 units over 6 years, has been cut back to 30,000 units for the next 6 months. This action strikes at the only source of housing available to low-income families. This trend should be immediately reversed. The aim of a restricted housing program should be to build for those who need it most, first for the vitally needed low-rent public housing program and secondly for the cooperative housing program for the middle-income families which should be passed by the Congress. program is needed particularly because it will provide a yardstick to help reduce construction costs. This For cutting down the construction boom, primary emphasis cannot be placed on credit controls, for these merely ration construction according to ability to pay. We must make certain that no critical materials needed for the defense program are utilized for nonessential construction. Certain types of nonresidential construction can well be eliminated entirely. Emphasis in any program of control must be placed upon priority and allocation powers together with sufficient authority to prohibit certain types of construction. A maximum dollar limitation might well be placed on each unit of housing construction, provided price ceilings are placed on building supplies. In certain defense areas a critical housing shortage is likely to develop. In addition, we must not neglect as we did last time the construction of adequate community facilities. In any defense housing program factory built mobile housing will play an important part. Production of this type of housing should be encouraged. It is most unfortunate that the rent control program has been so severely curtailed. With curtailed housing construction, the present housing shortage will be intensified and rent controls will certainly be needed wherever they now exist and probably in many other communities as well. The present Congress should continue the present law beyond December 31, 1950, and permit recontrol of rents in any decontrolled community where housing shortages have become more acute. II. ALLOCATION AND PRIORITY DISTRIBUTION OF STRATEGIC MATERIALS Materials for our full defense and necessary civilian needs must be allotted in strict Government programs so as to insure equitable distribution. The gray market in steel must be wiped out. Gray and black markets in other areas of basic materials must be avoided. III. TAXES Government revenues must necessarily be increased. The estimated national income over the next few years should be high enough for the projected level of military and civilian expenditures to be met through a sound tax program. The new tax burden must be distributed in accordance with the principle of ability to pay. Congress should immediately restore the excess profits, gift, estate, corporate and individual income taxes that were either repealed or reduced by the Seventyninth and Eightieth Congresses. There should be immediate enactment of excess-profits taxes to cover wer profits already in the making. Equality of sacrifice means retroactive application of such taxation to cover at least the period of actual involvement in military operation in Korea. Congress should promptly begin studies looking toward improvement of tax laws and a determination of the Nation's revenue-raising potential. Together, these steps should provide immediate and long-range solutions to the revenue problem. IV. DIRECT CONSUMER CONTROLS We believe that the Congress should enact legislation giving the President standby authority to impose, whenever and wherever necessary, rationing and price controls. Such authority should include powers to roll back prices to June 25. Public policy should be directed toward achieving an ever-increasing level of real wages. It must be recognized, however, that when prices have been rolled back and placed under firm controls the area for negotiation of wage increases through collective bargaining will be limited to employers' ability to pay within the fixed price ceilings. Wage increases which exceed employers' ability to pay should not be used as a basis for adjusting price ceilings excepting situations where wage and price increases are found necessary to raise substandard wages to prevailing wage levels. We urge further that the President use these controls if the price and wage structure of the country appears to be in jeopardy by uncontrolled or ill-controlled inflation. We urge the immediate enactment of this stand-by legislation so that both retailers and consumers will realize that adequate protection is available if needed, and also to remove this highly controversial question of controls from the political arena of the 1950 elections. |