It represents, as I said in my original statement, I think, a proper compromise between those who say that we should come in and mobilize everything and those who say that we should handle the whole thing by voluntary effort on the part of business.

Senator SPARKMAN. Of course, we hear both complaints. Some say you have not asked for enough.

Secretary SAWYER. Yes.

Senator SPARKMAN. And others say you have asked for too much. Secretary SAWYER. Too much.

I do think that we should have enough power, for those who may administer this act, so that they will not have to come back to Congress every week or two and get a little more power. I mean, it should fairly recognize the present situation and how it may develop in the near future.

Senator SPARKMAN. It should be fairly comprehensive and yet recognize the fact that as we go along, changes may be necessary?

Secretary SAWYER. If vast changes take place, undoubtedly the Congress will have to be asked to do other things. At the moment, it would seem to me that that would be sufficient, although nobody is wise enough today to know what will happen or what we may need. Senator SPARKMAN. Mr. Secretary, you did not mention electric power. How are we situated with reference to electric power? Secretary SAWYER. We have not any too much.

Senator SPARKMAN. May it become necessary to allocate that? Secretary SAWYER. I would not say that it would not. I assume that would be done by the Interior Department, which has been closely in touch with that. But my information is that even with the increase in electric power which has taken place recently, there still is not enough.

Senator SPARKMAN. May I get this clear in my mind? I did not quite get it from you. Is it your thought that with reference to these materials that are scarce, taking steel as an example, because I think perhaps that is certainly one of the basic materials and one that was tight even before we got into this additiontal trouble, or did you say that it would be your hope that it could be carried out through a system of voluntary allocations?

Secretary SAWYER. What I said was that if I were given any part of this program, the first thing I would do would be to get the businessmen on a voluntary basis and see what we could do. I would do the same thing I did in connection with steel in the voluntary agreements program, where we had a committee who sat there and listened to the statements as to what was needed for the Military Establishment, what was needed for freight cars, for instance, what was needed by the Atomic Energy Commission and by many others, and then having heard that, definite allocations were made which the members of the steel industry agreed to. That is, that was allocated among the mills. Now, in my judgment at the moment, that would probably accomplish the purpose, because there is every indication, as far as I am concerned, that the steel group want to cooperate and want to go along with whatever is needed.

One of the problems is, as Senator Flanders indicated a while ago, that we do not yet have-and you indicated it, too-a complete statement of what we need, or what the Military Establishment needs. So that would require a continual and a developing program.

But my personal approach to the thing would be to do everything we could by voluntary methods.

Senator SPARKMAN. When we had the voluntary allocation of steel products at the time you mentioned, I do not know whether or not there came to you many complaints from the smaller processors as to their inability to get supplies.

Secretary SAWYER. "Many" is a rather broad term. But there were plenty.

Senator SPARKMAN. I know there were many in my State that came to my attention, and I assume that it may have been a zero condition. Secretary SAWYER. Yes.

Senator SPARKMAN. In this allocation program, either voluntary or involuntary, would it be the policy of the Government to require that these scarce materials be used only for essential products? We had a good bit of complaint back during the last war and after the war about materials going into race tracks and cocktail bars, and so on and so forth.

Now, what would be your idea with reference to that? Would they be eliminated as being nonessential?

Secretary SAWYER. The language of the act would give the power to designate as between nonmilitary purposes-for instance, on page 2 at the end of the declaration of policy, as Senator Capehart has already quoted:

It is the intention of the Congress that the President shall use the powers conferred by this Act to promote the national defense, by meeting, promptly and effectively, the requirements of military and other programs in support of our national security and foreign policy objectives, and by preventing undue strains and dislocations upon wages, prices, and production or distribution of materials for civilian use.

It would seem to me that that would, perhaps, give us the power to decide as between what was a preferable and a nonpreferable use, assuming that the needs of the military had been met completely. As I said, I think this program will have to be administered as an over-all program, and that as between the civilian and the military, I believe that the civilian economy should not be lost sight of, because in the long run that must be maintained.

Senator SPARKMAN. I believe in his discussion before us yesterday, Mr. Symington, in response to questioning by someone-I forget just now who it was-indicated that there probably would be considered different classifications: Military; civilian essential; civilian nonessential, perhaps.

Secretary SAWYER. I think it is almost inevitable that something of that sort will be done, because when you consider the question of allocation, if you put it in this place, you take it away from some other place. So I would not want to sit here now and say that that consideration would not enter into the thing.

The primary consideration, of course, would be to get the material for the military needs.

Senator SPARKMAN. Mr. Secretary, during the last war, we set up a Smaller War Plants Corporation by an act of Congress.

Secretary SAWYER. Yes.

Senator SPARKMAN. Now, in this act, we give the President the right to set up different corporations, and apparently some such corporation as that is contemplated.

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Would you think so?

Secretary SAWYER. I do not know what the President may have in mind with reference to the particular corporations. I do know that his feeling is that, so far as possible, these powers should be exercised through existing agencies, and that we should not set up a lot of alphabetical agencies which would be just one layer of authority, and perhaps duplication, on top of one another.

As to whether or not he would plan to set up immediately a Smaller War Plants Corporation, I do not know. The power is there, certainly.

Senator SPARKMAN. Senator Robertson mentioned this $2,000,000,000. Is that not pretty much the same program that we had all during the Second World War in making these V-loans available to business?

Secretary SAWYER. Yes.

Senator SPARKMAN. And as a matter of fact, the same program that the Federal Reserve Board recommended that Congress enact for peacetime purposes?

Secretary SAWYER. That is right. And I think that the language is almost identical. I was told that.

Senator SPARKMAN. Is it not true that practically all of these powers given in this bill are lifted out of the various war powers acts of the Second World War?

Secretary SAWYER. I think that is generally true. And what has been done, as I said before, is to subject those various pieces of legislation to careful scrutiny by an authority like Mr. Kendall, who is with the NSRB, to see that mistakes which were made during World War II may be avoided, and to produce a result that will be the most effective from the administrative standpoint.

I myself feel that they have done a good job on it. I did not draw the bill; so I can say that.

Senator SPARKMAN. Mr. Secretary, there are many questions I would like to ask, but for the sake of time, and letting some of these others ask some questions, I want to quit on just this one.

We have heard a good bit here about stating in the bill, or having the President declare, that there was a national emergency.

Now, within the last few days, and certainly the last few weeks, both Houses of Congress have passed and sent to the President bills to allow him to remove the manpower limitations in our armed services, to extend the term of service of our young men who are already in service, and even to call in others.

Did you hear any discussion during all of that time as to the necessity of placing it on the basis of an emergency?

Secretary SAWYER. No; I did not.

Senator SPARKMAN. No. I do not think any of us did.
That is all.

The CHAIRMAN. Senator Bricker?

Senator BRICKER. I have just a question or two, Mr. Sawyer.
You administered the voluntary allocation program in steel?
Secretary SAWYER. Yes.

Senator BRICKER. What percentage of the companies refused to go along with that voluntary program?

Secretary SAWYER. I do not know that any of them did.
I am told there were a few, but very few.

Senator BRICKER. Very few; a very small number, as I remember it. Secretary SAWYER. Yes.

Senator BRICKER. Under the conditions prevailing at the present time, you expect almost complete cooperation from the steel-producing industry; would you not?

Secretary SAWYER. I expect almost complete cooperation, but “almost" is a pretty big word when you are dealing with the situation. that we have here.

I do not think it is fair, if I may answer what I believe is involved in your question, to permit those who will not cooperate to make money at the expense of those who will.

Senator BRICKER. I grant you that. But would not the chances be greater for full cooperation now than they were when you were administering the allocation program before in peacetime?

Secretary SAWYER. From my standpoint, it would seem so. I do not know whether it would be greater or less, but I certainly think that it would be greater. And I certainly see no reason to assume that the steel people will not, in the main, cooperate. They have said so to me repeatedly.

Senator BRICKER. You say it is your intention to carry out the voluntary allocation program in steel and other essential materials, such as metals and maybe chemicals, and so forth. Are you confident that there is power sufficient in this bill to protect them against violations of antitrust laws if they do cooperate with the voluntary program? Secretary SAWYER. Yes; if the bill passes as a whole.

Senator BRICKER. What I am thinking about is an incident when one industry was asked to cooperate in a program and then later was prosecuted by the Department of Justice for doing what they were asked by the Government to do.

Secretary SAWYER. My understanding is that that type of thing was taken care of by the careful drafting of this bill.

Senator BRICKER. I wanted to be assured that you are confident that that is true, because the freer American business is, the more production you are going to get. I think you will agree with me.

Secretary SAWYER. I agree with that completely. I think, as I said once before, that it is highly desirable to put into the bill the amendment which Senator Maybank put forth, which would be to permit the executives and top management to know what they are doing, and to do it without the fear that they would be subject to penitentiary sentence or heavy fine or something like that because of some law which is perfectly proper in peacetime.

Senator BRICKER. There are a lot of things in this bill that I would like to discuss with you. We do not have the time. But I would like you to explain to us how the real-estate credits—and this may be out of your province or how the control of real-estate credits will be administered and what will be the effect of it.

Just what do you mean by control of real-estate credits?

Secretary SAWYER. I can only answer that in a most general way, because I certainly would not expect to administer it, and I do not know much about it. I think the objectives is to tone down the rapid development of housing which has been responsible for certain shortages in connection with these critical materials, and also with refer- ence generally to the over-all effect of a dampening of credit upon the inflationary pressures which we are under today.

Senator BRICKER. Of course, the President has tremendous power in that field at the present time through the Government lending and guaranteeing agencies.

Secretary SAWYER. He has done quite a bit already, I understand. Senator BRICKER. And I think that it is very real and very substantial. I might suggest that we go further and let private industry take care of the 30,000 houses that have been allocated to the public housing bill. But that is a controversial question.

Do you intend to utilize the present plants primarily, or will it be the purpose of the Government to emphasize the building of new plants by the Government?

Secretary SAWYER. Personally, I see very little need to build new plants. I have demonstrated pretty clearly, it seems to me, that our plant capacity is so great that if we utilize it for the primary purpose of defense, there will be very little need for new plants.

But as in answering another question a while ago, or in answering the same question, I would not want to say that under no circumstances will it be necessary to build new plants. I do not think that that is among our great needs at the moment.

Senator BRICKER. The fact is that you could not get enough built during the life of this bill to get production, anyway?

Secretary SAWYER. No. That is another problem, anyway. Why divert materials to build those plants when you need these very materials at the moment for other purposes?

Senator BRICKER. This is just a general question. Under this bill, you could build a steel plant such as you built, the New England steel plant, which there has been so much controversy about, could you not? Secretary SAWYER. I do not know that you could lend money for that purpose. But

Senator BRICKER. Could you not set up a Government corporation to do it?

Mr. HALE. No; the Government could not construct a plant.

Senator BRICKER. The opinion of the Department of Justice is that you could not, under this bill, construct a steel plant?

Mr. HALE. The Government could not.

Senator BRICKER. The Government could not. That is what I mean. That is what I am getting at.

Mr. HALE. Yes.

Senator BRICKER. That likewise would apply to the construction of public power facilities?

Mr. HALE. Not under this bill.

Senator BRICKER. Not under this bill?

Mr. HALE. Yes.

Senator BRICKER. That is what I wanted to get at.

Now, does this bill contemplate the pooling of patents and secret processes that we had during the war in some industries?

Secretary SAWYER. I think it mentions processes under that definition of "materials."

Senator BRICKER. Secret processes?

Secretary SAWYER. Yes, I think so.

Senator BRICKER. That would cover pooling of patents, would you think?

Secretary SAWYER. Off-hand, it would; yes.