INFLATION IS AN INTERNATIONAL PROBLEM

The problem of inflation is one common to all free nations, and all will undoubtedly find it necessary to take measures to prevent a serious inflation. Indeed, some countries already have in effect more widespread and restrictive anti-inflation controls than the United States; other countries are not as far along as we.

The United States have placed price ceilings on both the goods we export and the goods we import. In the case of goods we import, however, the prices of many commodities are set in world markets and may well rise to levels above the United States ceiling prices. If we are to obtain essential imports in cases such as this, we have the choice of relaxing our price ceilings, subsidizing purchases abroad as was done during World War II and reselling them at the United States ceiling prices, or working out other arrangements with foreign sources of supply.

By designating Government agencies to act as exclusive importers of commodities, such as rubber and tin, and by working in international commodity committees to allocate scarce materials among free countries, we are helping to end the current scramble for these materials which has forced their prices unnecessarily high. The free countries of the world, however, will undoubtedly have or take still other cooperative measures to control the prices of goods moving in international trade.

We propose to extend economic aid to foreign countries only as part of a true cooperative effort. However, we have full confidence that this cooperative effort is gaining in momentum, and that the resources of the free world will be equitably distributed to assure the strengthening of the free world.

The first 9 months of the defense mobilization program have been-for the effort as a whole-a tooling-up stage.

The Congress has enacted the basic laws and the first big new appropriations. We have organized the necessary new agencies, planned the program, completed the specifications for much of the new equipment, begun ordering in quantity. and created the basic machinery for international collaboration.

In terms of military strength, we have achieved much since last June 25, but we are still far from achieving the strength we need. One year from now, with unflagging determination and effort, we and our allies will have achieved a formidable strength in many phases of modern warfare. Two years from now we should have military and economic strength sufficient to give us reasonable safety against aggression.

In terms of civilian standards of living, the impact of the defense program has hardly yet been felt. The coming year will be different. Shortages are bound to come for some civilian goods-particularly products made from metal. The following year, if our program is successful in preventing war, shortages may begin to ease and we can probably begin to talk about taking off controls. In 1953, we should be in a position to maintain a high level of military expenditures on top of a healthy civilian economy-which, at that time, will be free to resume its upward trend.

But the production side of our task is in many ways the less difficult. A tougher test of our ability to survive the present crisis lies in the other side of the problem-stabilization.

The success of our production effort demands that we win the battle against inflation. To win that battle calls for a subordination of selfish ends to the common welfare in a measure beyond what is commonly demanded in any period short of actual war. It calls for a fair presentation of its claims by every segment of society, an open and willing participation by all concerned, and a readiness to abide by decisions which are arrived at through fair and honest means. It calls for every organized group to consider the welfare and just demands not only of other organized groups but of the unorganized, the consumer, the public as a whole.

The Nation demands, and must be given, the same degree of support by its citizens now, in a period of peace, that it would receive in a war. The times are no less challenging.

All of us must remember in the months ahead that it is vastly better to prevent a war, if we can, than to win one-and the surest course toward prevention of world war III is through building the might of America and with it the might and the security of the free world.

Before we adjourn, we have again a communication from the Magma Copper Co., addressed to their, I assume, representative here, Mr. Cummins, supplementing the telegram we put in the record yesterday, and if there is no objection

Mr. ENGLE. I object.

Mr. REGAN. There is objection; the objection is heard, so we will hold that for further settlement.

If there is nothing else to come before the committee, we will stand adjourned and thank all of you for coming and hope that you are accomplishing something for the good of the country.

(Whereupon, at 4: 35 p. m., the committee adjourned.)

THE DEFENSE MINERALS PRODUCTION PROGRAM

FRIDAY, APRIL 20, 1951

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,

SUBCOMMITTEE ON MINES AND MINING,
Washington, D. C.

The subcommittee met at 10 a. m., Hon. Ken Regan (chairman of the subcommittee) presiding.

STATEMENT OF THE CHAIRMAN

Mr. REGAN. The Subcommittee on Mines and Mining will be in order.

We have a quorum present, counting those in the anteroom.

This is a continued meeting that we started some 3 weeks ago, following up the program concerning the law passed last September, to see what should be done about the encouragement, development, and acquisition of strategic minerals for our defense effort as well as our civilian requirements.

The general purpose of the hearing this morning is to develop further information with respect to the defense minerals-production program. The particular subject to be covered this morning concerns the proposed tungsten and chrome programs.

The tungsten program has been recommended by the Defense Minerals Administration and certified by the Defense Production Administration. However, it is reported that the General Services Administration has objected to and delayed the program as recommended and certified by these agencies. We wish to receive testimony on this highly important matter, for the issues resolved with respect to the proposed tungsten program may serve as a precedent and thereby affect all other programs of similar nature that have been or may be considered or proposed.

The subcommittee also is concerned with the fate of the proposed chromite program, particularly as it has been evolved and reportedly changed within the Defense Minerals Administration.

The subcommittee believes the testimony and discussion to be developed this morning will prove constructive and beneficial to the end of furthering the program for developing and obtaining additional production of strategic and critical materials and metals from domestic sources of supply.

We have with us this morning Mr. Jess Larson, of the General Services Administration. We know Mr. Larson has many duties and responsibilities. Since his administration is one which we understand has some connection with the proposed tungsten program, we would like first to hear from Mr. Larson.

STATEMENT OF JESS LARSON, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION

Mr. LARSON. Thank you, Chairman Regan and gentlemen of the committee.

I appologize for not having a prepared statement. I am busy, as you indicated, and maybe that accounts for my inability to get up a statement on this; but I think perhaps, to be very truthful with you, I haven't been well enough informed even up to now to have gotten a prepared and intelligent statement.

I appreciate the opportunity of coming before the committee, and I am no busier than a Member of Congress is these days, because the same people that come to town to see you-a part of them, at leastusually end up requiring a part of my time, and I am not complaining about that, because, as you used to say down in my country: "We hired out to work, and there are just so many hours in a day."

I really don't agree with the statement that you made, Mr. Chairman—and I want to explain why-that the General Services Administration objects to the program. We don't launch any objection to the program that has been promulgated by the Defense Minerals Administration, and certified to us by the Defense Production Administration.

REASONS FOR DELAY BY GSA IN CERTIFYING TUNGSTEN PROGRAM

We, as you gentlemen of the Congress know, have been created to be, among other things, the central purchasing agency of the Govern ment. We are supposed to have and develop the techniques of contractual relationship between the Government and its suppliers that will bring about economy and expeditious administration and in the case before us, as in any other case, to assure the contractor that he is going to be paid for those services which he performs for the Government, and it is our concern on this score that has caused us to ask for an extension of time in putting out this order in order that we may be certain that the mining industry that would take advantage of that offer can be assured of payment.

I wasn't here during the last conflict referred to as World War II-I mean, I wasn't here in Washington-and I don't have first-hand information about what some of the obstacles are. There are a good many people in the Government, I am happy to say, who were here and would have knowledge of what happened, and who feel, as I do and as you do, that we should benefit by our experience.

Now, it is my information that during World War II the Government made the so-called continuing offers to the mining industry and. as a result of such continuing offers, people in the mining industry went out and incurred obligations and made great sacrifices; and then, when the Government wanted to withdraw its offer, it withdraw its offer and there was no contractual relationship existing whereby those people who had incurred considerable expense in some cases, and who had, to say the least, made pretty big sacrifices of their own funds, et cetera there was no way that they could be paid under the offer that the Government made.