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PRESENTED BY
SUPERINTENDENT OF DOCUMENTS

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INVESTIGATION OF THE

NATIONAL DEFENSE PROGRAM

HEARINGS
BEFORE A

SPECIAL COMMITTEE INVESTIGATING THE

NATIONAL DEFENSE PEOGEAM

UNITED STATES SENATE
SEVENTY-SEVENTH CONGKESS
FIRST SESSION
PURSUANT TO

71

S. Res.

A RESOLUTION AUTHORIZING AND DIRECTING

AN INVESTIGATION OF THE NATIONAL
DEFENSE PROGRAM

PART
DECEMBER

4, 5, 11, 12, 16, 17, 18,

JANUARY
LABOR
U. S.

10

28,

IN

FEBRUARY

1941;

12,

AND

1942

DEFENSE PROGRAM

ARMY RECREATIONAL

FACILITIES

AND ACTIVITIES
NONFERROUS METALS
LOBBYING
DOLLAR-A-YEAR MEN

CONTRACT REVIEW BRANCH, W.

P. B.

Printed for the use of the Special Committee Investigating

the National Defense Program

UNITED STATES
311932

GOVERNMENT PRINTING OFFICE

WASHINGTON 1942
:

SPECIAL COMMITTEE INVESTIGATING THE NATIONAL

DEFENSE PROGRAM
HARRY

S.

TRUMAN,

TOM CONNALLY,

CLYDE

Missouri,

JOSEPH

Texas
JAMES M. MEAD, New York
MON C. WALLGREN, Washington
CARL A. HATCH, New Mexico

Chairman

H. BALL, Minnesota

RALPH O. BREWSTER, Maine

STYLES BRIDGES, New Hampshire

HERRING, Iowa
M. KILGORE, West Virginia

L.

HARLEY

Hugh

A. Fulton, Chief Counsel

Charles P. Clark, Associate Chief Counsel

Marjorie S. Ebt, Secretary

Lydia Lee, Editor

CONTENTS
Testimony of
Bank, Maj. Theodore
War Department

Pago
P.,

Chief of Athletic Section, Morale Branch,

3759-3760

Basor, David, general welder representative, United Brotherhood of

Welders
3731-3742
Cardno, Cornelius, special welder representative, Bremerton, Wash.,
3742-3747
Navy Yard
Church, John A., senior consultant. Copper and Zinc Branch, Office of
Production Management
3844-3857
Cohen, Frank, treasurer. Empire Ordnance Corporation. _ 3965, 3968-4024
Corcoran, Thomas G., attorney, Washington, D. C
3869-3928
Dowd, Benjamin S., president Empire Ordnance Corporation. _ 3966-3968,
4009-4010, 4016-4018, 4020
Eaton, Fred, assistant counsel. Materials Division, Office of Production Management
3836-3837, 3843
Fernald, Henry B., chairman, tax committee, American Mining
Congress
381 8-3825
Hayes, Maj. William B., Chief of Budget and Fiscal Division, Morale
Branch, War Department
3768
Kellogg, Charles W., president, Edi.son Electric Institute
3857-3868
MacKeachie, Douglas C, Director of Purchases, War Production
Board
4049-4074
Montgomery, Col. Murray M., Chief, Welfare and Recreation, Morale
Branch, War Department
3768, 3772, 3777-3778
Nelson, Donald M., Chairman, War Production Board
4025-4047
O'Brian, John Lord, General Counsel, War Production Board
4039-4040
Osborn, Brig. Gen. Frederick H., Chief of Morale Branch, War
Department
3757-3779
Peterson, Eric, general vice president of the National Association of
Machinists
3749-3753
Reed, Philip D., Deputy Director, Materials Division, Office of Production Management
3827-3843
Rice, Neil W., president, United States Smelting, Refining & Mining
Co
3803-3817
Riskin, Benjamin, director of research. International Union of Mine,
Mill, and Smelter Workers
3781-3803
Voves, Raymond, vice president and secretary. Empire Ordnance
Corporation
1
3968-3969, 40 10, 4020
Wegener, A. L., assistant to the International Brotherhood of Electrical Workers
3748
West, Charles, attorney, Chevy Chase, Md
3929-3964
Statement of
Mead, Senator James M., New York, acting chairman
3755-3757
Attempts of welders to form an international union
3731
Army recreation facilities
3755
Functions and plans of Morale Branch, United States War Department-. 3757
Delay in construction of recreation facilities
3761
Selection and training of recreation officers
3765
Question of control of prostitution
3768
Operation of post exchanges
3771
Army educational program
3773
Treatment of enlisted men and draftees in public places
3775
Necessity for survey of equipment and production capacity of mines
3783
Failure of certain mines to operate at present capacity
3786, 3803
Use of multiple-shift operation
3789, 3805
Use of available labor to increase production
3793
-

.'

in

CONTENTS

IV"

Page
o[ price iuoiva.scvs lo actual prDdiictiun
MlVccl. of social security and niiniuuMu wnge legislation on block leases
I<]|l"e(tt of (>xc(\'^s-|)ro(its tax du production
Produclion of uonferrous metal
linporlance of copper in coiuiection with electric power
tjuestion of activiticvs of Thomas G. Corcoran in national defense projects, _
Connection of Thomas C. Corcoran with Savannali iShipvards Corpora]\('lalioii

37i)!)

380!)

3811

3827
3857
3870

tion
^
3872,3988
Connection of Thomas G. Corcoran with Vimalert Co
3892
Con n(>c lion of Thomas G. Corcoran with Henry J. Kaiser magnesium
'1
sy ndicate
3898
Qui>stion of propriety of former Government employees practicing before
Government departments
.
3901
Coiuiection of Thomas G. Corcoran with China Defense Su{)plies, Inc
3917
Connection of Thomas (!. C\)rcoran with Ilavenstrite Oil Well ii\ Alaska.
3917
(\innection of C'harh-s West with I'hnpiri' Ordnance Co. and Frank C-ohen,3929
Ornaiii/ation and operations of Mmpire Ordnance Co
3966, 4010
l^'raiik (-oh(M\'s business association with C-harles West
3982
Fees i)aid (^harl(>s West by Kraiik Cohen
3999
Trior connin-tions of ollieials of I'lmpire Ordnance Corporation
4005
4025
War Production lioard |H)licy regarding dollar-a-ycar men
Production of light m(>tals
4030
Plans to assist small business
4033
Possible obstructions in (jroduclion and procuremiMit program
4037
Plan \o establish ind(>[)(Mident agency to assist small l)usiness
4044
Formation and functions of Contract Review Branch of War Production
4050
Board
"

Schedule ami sunimarv of exhibits

Thursdav, December -b 1941
Frida v. )ec(mb(>r 5,1911
Thursdav, December 11, 1941

3731
_

December 12, 1941.

December 10, 1941...
Wednesdav, December 17, 1941
i''ridav,

Tues.lav,

W^Hlnesdav, -lanuarv 2S, 1912

Thursday, February 12, 1942..

Appendix
Supplemental data.
Index!
>

Nnnio and compnuy only,

boarini^s.

si

3755
3781
3827
3809
3929
4025
4049
4075
4249
I

consoliilatod siibject-nuvttor index will appear in the final

volume

of these

SCHEDULE OF EXHIBITS
Intro-

Number

anil

summary

duced

of exhibits

at page

219-233. Documonts supportinR statement of

United Brotherliood of Welders,

Dave

Basor,
before the

committee

3733

234-240. Documents supporting statement of

T'liited
Brotherhood of Welders,

Dave

Basor,
before the

committee
241-203. Documents supporting statement of
Unitcfl Brotherhood of Welders,

Dave

Basor,
before the

committee
204-207. Documents supporting statement of
United Brotherhood of Welders,

Dave

Basor,
before the

committee
208-209. Documents supporting statement of
Ihiitefl
Brotherhood of Welders,

Dave

Basor,
before the

committee
270-294. Documents sujjporting statement of Dave Basor,
United Brotiierhood of Welders, before the

commit t(>e
295-322. Documents supporting statement of Dave Basor,
United lirotheriiood of Welders, before the

committee

by international union
representing welders
324. Memorandum re recreational program of the United
States Army
325. B(>gimen(al Recreation Officers Guide, United
Stales Army, iirepared by the Morale Branch,
323. Odlcial statement issued

War Department
320. Historical

Branch,

account of operations of the

Morale

War Department

327. .'\rmy recreational area program outlined by

Services Division, Morale Branch, War Depart ment
328. Account of the operations of the Army Exchange
Service
329. Program of the Welfare and Recreation Division,

Morale Branch,
330.

\>'ar

D(>par(ment

Amateur
Naval

Tlieatrical Manual for use in Military and

]''slablishments liy personnel of the armed
forces of the United States, prepared at the suggestion of the Morale liraiich, War Depart-

ment, by the National Theater Conference

comi)iled by the Adjutant Gen(M'al's Oilice in collaboration with the Lii)rary of
Congress, second edition, revised, 1941
332. Program for increased product ion of vital nonferrous
metals, prepared by the International Union of
Mine, Mill, and Smelter W^orkers

331.

'

On

file

Army Song Book,

with the committee.

Appears
on page

CONTENTS

VI

SCHEDULE OF EXHIBITS Continued

Intro-

Number and summary

duced

of exhibits

at page

Appears
on page

December 11, 1941, from Russ Nixon,

Washington representative of the United Electrical, Radio and Nachine Workers of America,

333. Letter, dated

334.

335.

336.

337.

International Union, to Hugh Fulton, chief

counsel for the committee, submitting a statement by the union re nonferrous metals
Statement of Senator Edwin C. Johnson of Colorado, from Congressional Record, September
4, 1941, re his proposed amendment to the excessprofits tax with reference to a credit based on the
normal profit per unit of mining production
Tabulation showing copper use for all purposes by
the electric utility companies, 1941
Letter, dated December 6, 1941, from Thomas G.
Corcoran to Senator Harry S. Truman requesting an opportunity to testify before the committee
Affidavit, dated December 15, 1941, signed by

Benjamin

S.

Dowd,

president.

Memorandum, dated March

28, 1941,

Department,

3819

4222

3860

4225

3869

3869

3876

4225

3876

3876

3877

4226

3892

4227

3896

4227

3896

4229

3896

4233

3896

4234

3913

4236

3918

4238

from David

E. Scoll to Commissioner H. L. Vickery, Maritime Commission, re conference on Savannah

Shipyards, Inc
340. Letter,' dated December 30, 1940, from G. S. Murray, British Purchasing Commission, to the
Vimalert Co.. Ltd.. re an order for Liberty engines
341. Letter dated Mav 15, 1941, from Robert Cuse,
president, Vimalert Co., Ltd., to Lt. Col. W. W.
Warner, Chief of the Artillery Industrial Service,

Ordnance

4217

Empire Ordnance

Corporation, stating that Thomas G. Corcoran is

is in no way affiliated with that corporation
338. Letter, from Commissioner H. L. Vickery, Maritime Commission, to Hugh A. Fulton, chief
counsel for the committee, re meeting of maritime Commission officials with officials of Savannah Shipyards, Inc
339.

3802

War Department,

re

British Purchasing Commission order for Liberty

engine parts
342. Letter, dated July 1, 1941, from Bernard J. Flynn,
vice president, Vimalert Co., Ltd., to Douglas C.

MacKeachio, Deputy Director of Purchases,

O. P. M. re British order for Liberty engine parts
343. Letter, dated July. 8, 1941, from Thomas G. Corcoran to Maj. Edwin Clark, Defense Aid Division,
Office of Under Secretary of War, re British order
for Ijberty engine parts from Vimalert Co., Ltd344. Letter, dated July 28, 1941, from Thomas G. Corcoran to Julius Amberg, Assistant to the LTnder
Secretary of War, War Department, re British
order from Vimalert Co., Ltd., for Liberty engine
parts
345. Laws and rules governing the appearance of former
Government officials and employees before Government departments and agencies
346. Excerpt from Interior Department appropriation
bill, 1942, before a subcommittee of the United
States House of Representatives Committee on
Appropriations re exploration for oil in Alaska^.

CONTENTS

VII

SCHEDULE OF EXHIBITS Continued

Intro-

Number and summary

duced

of exhibits

at page

347. Letter, dated May 6, 1941, from Harold L. Ickes,

Secretary of the Interior, to the editor, St. Louis

Post Dispatch, re an article published in that

paper on oil e.xploration in Alaska
348. Editorial from St. Louis Post Dispatch, May 2,
1941, re development of oil wells in Alaska
349. Map of Alaska submitted by Thomas G. Corcoran,
copyrighted by Knoll Map Co., Inc., Seattle,

Wash
350.

of Richmond Times, January 21, 1942, reprint

of St. Louis Post-Dispatch editorial re the DoUar-

Copy

A-Year

Man

SUPPLEMENTAL DATA
Unnumbered. Army

circular No. 170, dated August 16, 1941,

re procedure for invoking the May Act
13, 1941, from Henry B.
Fernald, chairman, tax committee, American Mining Congress, to Senator Harry S.
Truman, re copper, lead, and zinc produc-

Unnumbered. Letter December

tion for 1940-41

L^nnumbered. Letter, dated December

12, 1941,

from E. W.

Pehrson, Chief, Economics and Statistics

Branch, United States Bureau of Mines,
to Julian D. Condver, secretary, American
Mining Congress, re copper, lead, and zinc
production for 1940-41
Unnumbered. Letter, dated February 16, 1942, from Stanley
F. Teele, consultant, Division of Purchases,
War Production Board, to Hugh A. Fulton,
counsel for the committee, re status of Ships,
Inc.. and contracts for crane manufacturers.
Unnumbered. Letter, dated February 16, 1942, from Senator
Harry S. Truman, to Donald M. Nelson,
Chairman, War Production Board, re dollara-year men
Unnumbered. Letter, dated February 16, 1942, from Donald
M. Nelson, Chairman, War Production
Board, to Senator Harry S. Truman, enclosing two administrative orders and a memorandum to War Production Board division
heads covering appointments of dollar-ayear and without-compen.sation personnel.

3918

Appears
on page

INVESTIGATION OF NATIONAL DEFENSE PROGRAM

THURSDAY, DECEMBEB

4,

1941

United States Senate,

Special Committee to Investigate
the National Defense Program,
Washington, D. 0.

The committee met

Tuesday, December
ator

at 10 45 a. m., pursuant to adjournment on

2, 1941, in room 318, Senate Office Building, Sen:

James M. Mead presiding.

Present: Senators James M. Mead (acting chairman), Joseph H.

Ball, Harley M. Kilgore, and Clyde L, Herring.
Present also Mr. Hugh A. I'ulton, chief counsel Mr. Charles P.
Clark, associate chief counsel.
;

Acting Chairman Mead. The committee will please come to order.

Who

is

the

first

witness

Mr. Dave Basor. Mr. Basor.

Acting Chairman Mead. Mr. Basor, whom do 3'ou represent?
Mr. Basor. The United Brotherhood of Welders.
Acting Chairman Me.\d. Mr. Basor, will you take the customary
oath? Do you solemnly swear to tell the truth, the whole truth, and
nothing but the truth, so help you God?
Mr. Basor. I do.

TESTIMONY OF DAVE BASOR, GENERAL WELDER REPRESENTATIVE, UNITED BROTHERHOOD OF WELDERS, SEATTLE, WASH.
attempts of avelders to form an international union
Acting Chairman Mead. Will you give your full name, your posiand the organization that you represent to the reporter?
Mr, Basor. My full name is David Basor. I represent the United
Brotherhood of Welders, Cutters, and Helpers of America, as a repretion,

sentative.

Senator Ball.

How many

members has that organization?

Mr. Basor. At the present time there are about 49,000.

Acting C'hairman Mead. Are you affiliated with any of the other
organizations, such as the A. F. of L. or C. I. O. ?
Mr. Basor. The 49,000 I named are not affiliated. There are others
who are affiliated, which would bring the total to around 80,000, and
the rest of those are affiliated with either the C. I. O. or the American
Federation of Labor.
Acting Chairman Mead. So that I may understand it, you are speaking for all of them, or just for the 49,000 unaffiliated?
3731

3732

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Basor. No we are speaking for all of those who have expressed
a desire to have an international of their own.
Acting Chairman Mead. That includes?
Mr. Basor. A. F. of L. and C. I. O.
Acting Chairman Mead. Some in both groups.
Mr. Basor. Yes.
Senator Ball. Those in the A. F. of L. are in thei building trades ?
Mr. Basor. They are in the building trades, metal trades, and even
in many of the Federal charters issued A. F. of L,
Senator Ball. But there is no dual membership? Your 49,000
are not members, some of them, also of the A. F. of L., in the metal
trades ?
Mr. Basor. Of that 49,000; no. They make up the arsenals and
navy yards and places where it is not necessary to belong to eithei
one of the organizations.
Acting Chairman Mead. When you asked for an international of
your own, would that international organization remain independent]
or would it be liable to affiliate with either the C. I. O. or A. F. of L.?
Mr. Basor. Under the set-up as it is today, it would be an impossibility for it to affiliate with either the C. I. O. or the A. F. of L. unless
both made changes in their present structure.
Acting Chairman Mead. But if the changes were made, there is a
;

possibility

Mr. Basor. It would be possible; yes.

Acting Chairman Mead. It would have a

choice, then, of affiliating

with either one or the other?

Mr. Basor. That

is correct.

Senator Ball. You have a majority ? You say there are about 80,000
welders working?
Mr. Basor. There are more than 80,000 welders. We have been able
to contact that

many.

Senator Ball. I see. But you have approximately half, then, probably, of the total number of welders in the country in your organization?

Mr. Basor. That is correct.

Acting Chairman Mead. All right; you may proceed now with your
written statement.
Mr. Basor. In order to expedite this, I would like to read
and then go back.
Acting Chairman Mead. All right.
Mr. Basor (reading statement)

it

through

On October

178 welders at the Lake Washington Shipyard, Kirkland,

Wash., were locked ont by the metal-trades department of the American Federation of Labor.
On October 22, 1941, the welders in the Seattle territory were
called out in an effort to cause the American Federation of Labor to abandon the
During the next 2 weeks, the welders throughout the United States
lock-out.
ceased their work in progressive numbers, the total men having walked out at
the end of the 2-week period numbering some 19,0C0, and their ranks were
increased by 1,000 per day. Three days after the men in Seattle walked out they
were joined by many journeymen of the American Federation of Labor crafts who
were in sympathy with their cause, resulting in the West coast shipbuilding and
steel fabrication industries being brought to a standstill.
This situation was not
localized on the west coast, but was national in chai-acter, including the shipbuilding and steel industries throughout the Southern States, reaching as far south as
Birmingham, Ala., and the movement was rapidly spreading eastward.
20, 1941,


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAIM

3733

On October 29, 1941, Mr. Sidney Hillman, of the Office of Production Management, plioued to Karl Morris. Welders" representative in Los Angeles, Calif.,
requesting that representative welders be sent to Washington to meet American Federation of Labor representatives with the Office of Production Management acting as mediator. Subsequently, an agreement was reached between
the representatives of the Welders and a representative of the metal trades
department of the American Federation of Labor, based on the assurance
of Mr. Hillman that all welders on strike or locked out and all other workers
sympathizing with them would be reinstated in their former employment
without discrimination, intimidation, coercion, or interference of any kind by
On the basis
their employers or either of the two major labor organizations.
of this agreement the welders returned to work on November 6, 1941. An
essential part of this agreement included the promise to convene by Mr. Hillman, after the men returned to work, a conference of representatives of the
weklers' organizations, representatives of other interested labor organizations,
of the Office of Production Management.
The meeting called for in the agreement was set for November 17, 1941.
However, it became apparent in the 10 days following the agreement that the
discriminations and lock-outs had not ceased, although this was in direct
opposition to the express agreement reached and confirmed on November 6,
1941, by John Frey. representative of the metal trades department. American
Federation of Labor. On November 14. 1941^ the representatives of the welders cominnnicated by letter with Mr. Hillman stating the cases in the localities in which discriminations were still practiced and informing him that
while these outrageous conditions existed the representatives of the welders
could not take part in any conference with the American Federation of Labor.
Mr. Hillman wired the representatives of the welders informing them of his
desire to hear their grievances and stating that he had apiMtinted an imIn reply to this telegram welders' reprepartial mediator for this purpose.
sentatives informed the Office of Production Management that they were ready
to meet: with tiie impartial mediator and after liie present discriminatioi.s
were cleared up they would then be ready to proceed to the next steps but
maintained their position that conferences with the American Fedei'ation of
Labor would be useless under existing circumstances.
On November 18, 1941, representatives of welders met with Commander Kellar,
a presumed impartial mediator loaned to the Office of Production Management by
the Navy Department in hopes that through his good offices the present discriminations practiced would be eliminated and the subsequent step of meeting with
representatives of the major labor organizations could lie taken. After several
days of conferences Commander Kellar stated that he could do nothing for the
welders and further activity along this line was therefore suspended.
At the present time, with the exception of instances in which the welders are
still locked out, the welders have been at work in the factories and shipyards in
every city throughout the United States, thus living up to their agreement in every
respect.
It is the desire of the welders to further the national-defense effort by
aiding in continuity of production as good Americans. This desire has been frustrated by the discriminations against the welders which resulted in their being
refused the right to work, which precipitated the walk-out. The underlying
necessities of the situation, however, which flared into this Nation-wide walk-out
of last month are still present and the welders' representatives are here today
before the Senate Committee on the National Defense Program to again continue
their 25-year search to achieve industrial democracy by peaceful means.

and repi'esentatives

tliere. 15 exliibits for tlie record, if you please.

Acting Chairman ISIead. They will be acce])ted.
(The documents referred to were marked "Exhibits Nos. 219 to 233"
and are included in the appendix on pp. 4075-4087.)
Mr. Basor (continues reading statement)

I have to be inserted

In order to clearly present the iX)sition of the welders, the events which have
led up to their problems, and the solution suggested to solve these difficulties, the
follcwing headings will be used
"A. The grievances of the welders are
"I. They have been denied the rig;ht to organize and bargain collectively through
:

representatives of their

own

choosing.

"(a) The American Federation of Labor has consistently refused to recognize

the welders as a miit appropriate for the purposes of collective bargaining within


3734

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

framework. They have engaged in a concerted plan of interference, restraint,

or coercion against the organizational efforts of the welders.
"(b) The Congress of Industrial Organizations by its very make-up does not
offer the welders an opportunity for organization into a representative group
within its framework. They have also engaged in interference, restraint, or
coercion against the organizational activities of the welders.
"(c) The National Labor Relations Board, while in some instances recognizing
the welders as an appropriate bargaining unit, has in the cases involving the
vast majority of the welders refused to designate them as an appropriate bargaining unit where the powerful American Federation of Labor crafts have an
existing closed-shop contract.
"II. The American Federation of Labor and the Congress of Industrial Organizations have engaged in discriminations against the welders.
"B. The solution to the industrial unrest caused by the problems of the welders
lies in granting to the welder industrial democracy which involves the recognition by government, industry, labor, and the public that
"I. Welding is a craft and an appropriate unit for the purposes of collective
bargaining.
"(a) This requires an abandonment once and for all of the unrealistic position as embodied in the infamous Wilson award.
"(&) The National Labor Relations Board should grant to the welders their
legitimate rights under section 9* (b) for the National Labor Relations Act in
the Closed Shop cases, which come before the Board by recognizing that the
particular circumstances existing in these cases with respect to the position of
the welders be granted their proper weight.
"II. The American Federation of Labor and the Congress of Industrial Organizations should cease and desist from interference, coercion, or restraint
against the rights of self-organization and freedom of association among the
welders.
"III. The welders of the United States should be granted recognition as an
independent autonomous craft within the American Federation of Labor or the
welders should be recognized as entitled to organize independently into a National Welders' Union outside the framework of the American Federation of
Labor.
"A. The grievances of the welders are
"I. They have been denied the right to organize and bargain collectively through
representatives of their own choosing.
"(a) The American Federation of Labor has consistently refused to recognize
the welders as a unit appropriate for the purposes of collective bargaining within
Its framework. They have engaged in a concerted plan of interference, restraint,
or coercion against the organizational efforts of the welders."
The welders have attempted for many years to peacefully secure for themselves the right to bargain collectively through representatives of their own
choosing within the American Federation of Labor, all of which efforts have
been fruitless. They have lacked representation, and wholly unrepresentative
groups, unfamiliar with their problems, have claimed to represent them.
Although today welding is one of the most vital of all processes in the steel
industry, the first use commercially of welding in this country occurred between
1914 and 1916. The vai'ious American Federation of Labor crafts saw in this
infant industry an opportunity to strengthen their own unions and immediately
became involved in a jurisdictional squabble among themselves. In 1918 the
then Secretary of Labor, Mr. William B. Wilson, appointed a Board of Arbitration to attempt to settle this question, which referred solely to repair work done
upon railway equipment. The Board of Arbitration decided that welding could
not be conceded to be a separate art or craft, based upon the unrealistic argument
that "the exclusive use of a tool or process cannot be conceded to a single craft
or group of workmen." It was this infamous Wilson award which has been seized
upon by the American Federation of Labor as a justitication to disperse the
welders so that they would remain a disorganized, disunited, and important
group scattered among its numerous ci'afts, using the principle of "divide and
rule." The welder's position was never listened to.
its

I have 7 exhibits which I wish to offer for the record.

Acting Chairman Mead. They may be entered.
(The documents referred to were mai-ked "Exhibits Nos.
and are inchided in the appendix on pp. 4087-4091.)

23-1:

to 240"

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Basor (continuing

3735

to read statement)

consistent position of the American Federation of Labor (see exhibits 21

and 22)^ even in the face of resolutions properly presented by organized American
Federation of Labor welders was reafhrmed by the 1941 convention which met

The

last

October

13.

One

of the most outrageous cases of coercion against the organizational activities of the welders is the case of Cornelius Cardno, of Tacoma, Wash., who was
suspended by the Boilermakers Union of the American Federation of Labor
metal trades, without trial on the charge of deliberately attempting to destroy
the metal-trades crafts of the American Federation of Labor, because he had
given all possible aid to the attempts of the welders to organize into a union.

(See Exhibits 16 and 17.)='

A second outstanding case is that of David Basor, of Seattle, Wash., who,
while being a welder representative within the American Federation of Labor
and belonging to the machinists' union of the American Federation of Labor
metal trades, was suspended without trial on the charge of promoting a dual
organization, when he was merely obeying the orders of his membership, all
members of the American Federation of Labor, who were protesting against the
discriminations, to be mentioned hereinbelow, which were practiced by the
American Federation of Labor. (See Exhibit 18.)^
L. L. Lanyk, of Long Beach. Calif., was discharged solely for "talking united
welder to other men." (See Exhibit 19.)*
In Pascagoula, Mi.ss., on October 12, 1941, the welders had to call off a meeting
to be held at the city park due to threats of the boilermakers' union, American
Federation of Labor. A similar meeting scheduled to be held on October 15 was
also postponed at the request of the sheriff of Jackson County. On November 25,
1941, a room was engaged for a meeting of the welders to be held the following
Sunday. The boilerniarker.s' union threatened the members, and the business
agent of the boilermakers said that he would see to it that the meeting was not
Although the rent for the mom was paid, the chief of police of the city
held.
The meeting
took the keys and refused to allow the welders to have them.
finally had to be held at the home of the sheriff.
(See Exhibit liO.)'

I hiive here 22 exhibits to submit for the record.

(The documents referred to were marked "Exhibits Nos. 241 to 263"
and are inchided in the appendix on pp. 4093-4105.)

Mr. Basor (reading statement)

Abundant evidence

of these practices of the American Federation of Labor (see

Exhibits 2.3 45)" proved that the aitove pra<tices are widespread. They further
show that the American Federation of Lab(?r have refused to work on jobs where
these welders have engaged in legitimate trade-union activities. The result of
this position where a closed-shop contract is in force is in effect to lock out the
members of the welders' union. The unions have threatened even by violence, as
evidenced particularly by Exhibit 20 above, the right of self-organization among
'

the welders.

The well-known and widespread policy of the American Federation of Labor of

maintaining closed-shop contracts between itself and the employers and the
yearly renewal of such contracts has resulted in depriving the welder employed
in such a plant from ever organizing into a welders' union without also being a
member of the American Federation of Labor Contracting Union.
The American Federation of Labor has consistently attempted to classify the
welders' problem as an internal one thus coloring the welders' case as a jurisdictional prc/blem to be settled by itself alone, whereas the problem is obviously
not of that character at all but is broader than that being national in scope. After
the meeting which was arranged by Mr. Hillman referred to earlier the metal
trades department of the American Federation of Labor released an official statement dated November 18, 1941, clearly taking the position that they were attend1
==

'

*
^

"
'

Committee
Committee
Committee
Committee
Committee
Committee
Committee

Exhibits Nos. 2."0 and 240, appendix, p. 4091.

Exhibits Nos. 234 and 235, appendix, pp. 4087, 4088.
Exliibit No. 236, appendix, p. 4089.
Exhibit No. 237, appendix, p. 4000.
Exhibit No. 238, appendix, p. 4090.
Exhil)its Nos. 241-263. appendix, pp. 4003-4105.
Exhibit No. 238, appendix, p. 4000.

3736

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

ing the meeting solely to henr the grievances of their welder members thus throwing a false light on the entire situation
(6) The Congress of Industrial Organizations by its very make-up does not
offer the welders an opportunity for organization into a representative group
within its framework. They have also engaged in interference, restraint, or
coercion against the organizational activities of the welders.
In an industrial union such as the Congress of Industrial Organizations there
is no means whereby the welder's voice may be effectively heard due to its comprising all workers of any industry, whereas the welders" problems are craft
in nature.
Practices similar to that referred to above to discourage the organization of
the welders have occurred in the case of the Congress of Industrial Organizations.
:

I have liere 4 exhibits to submit for the record.

Acting Chairman Mead. They may be aclmittech
(The documents referred to were marked "Exhibits Nos. 264 to 267"
and are inckided in the appendix on pp. 4106-4107.)

Mr. Basor (reading statement)

The National Labor Relations Board, while

in some instances recognizing

(c)
the welders as an appropriate bargaining unit, has, in the cases involving the
vast majority of the welders^ refused to designate them as an appropriate
bargaining unit where the powerful American Federation of Labor crafts have
a closed-shop contract.
The National Labor Relations Board has, in direct opposition to the position
of the Wilson award, recognized the welders as a unit appropriate for the purposes of bargaining collectively under section 9 (b) of the National Labor
Relations Act (Douglas Aircraft. Board No. R. 1427, 16 N. L. R. B. 131; North
American Aviation, Board No. R. 105S, 13 N. L. R. B. 107; United Aircraft
Welders, 21 R. 1082).
However, in the vast majority of the cases, those in which the powerful American Federation of Labor unions have closed-shop contracts, and those which
involve the vast majority of the welders, the Board has never recognized the
welders as the appropriate bargaining unit. The Board treats each case as it
comes up in actual controversy and puts great weight on the bargaining history
of the appropriate iinit. However, it is pointed out that where there is a closedshop contract in the picture the Board has never carved out a special unit for
the welders. In this manner the welders are denied their legitimate rights under
section 9 (b) of the Wagner Act.
The plight of the welder has never been
accorded adequate weight.
II. The American Federation of Labor and the Congress of Industrial Organizations have engaged in discriminations against the welders.
In order for a welder to keep employed in one locality the American Federation of Labor ruling that welding comes under the jurisdiction of the particular
craft in which the work is done forces him to belong to more than one union and
thus he must pay multiple initiation fees, dues, assessments, and penalties, all
of which has swollen the treasuries of the powerful national unions and has bled
the welders. An instance of this situation is the case of Nick Bosko who has
been a welder for 21 years and is now employed in Tacoma, Wash. He originally belonged to the Boilermakers, an American Federation of Labor union,
and in the course of 2 years had to change jobs seven different times and in the
course of these changes of jobs he had to join two other organizations in his home
town.
(See Exhibit 50.)'

I wish to submit 2 exhibits for the record.

(The documents referred to were marked "Exhibits Nos. 268 and
269" and are inchided in the appendix on pp. 4107-4109.)
Mr. Basor (reading statement)
:

The case of Peter M. Peterson, Kirkland, Wash., is even more striking. He

had to belong to tlie following unions in order to practice his trade of welding:
International Seaman's Union, American Federation of Labor: Longshoreman's
Union, American Federation of Labor; National Maritime I'^nion. Congress of
Industrial Organizations; Blacksmiths' Union. Congress of Industrial Organiza^

Committee Exhibit No. 2C8, appendix,

p.

4107.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
tions
51.)^

and Boilermakers' Union, American Federation of Labor.

Numerous other cases may be

3737

(See Exhibit

presented.

I offer for the record 25 exhibits.

(The documents referred to were marked "Exhibits Nos. 270 to 294"
and are inckided in the appendix on pp. 4110-4140.)
Mr. Basor (reading statement)
:

Even after payment by the welders of these assessments, receipts as evidence

of such payment have been denied to the welder in order that they might not
be able to expose the multiple membership card racket.
I submit for the record 28 exhibits.
(The documents referred to were marked "Exhibits Xos. 295 to 322"
and are included in the appendix on pp. 4140-4157.)
Mr. Basor (reading statement)
:

Local unions have denied to the weklers who are traveling craftsmen, in many
cases, ti'ansfer privileges from one local of the same union in one locality to a
local of the same union in another locality, which practice makes it impossible for
the transient welder to practice his vocation without becoming a member of each
Other local unions have denied transfer privileges unless
of the local unions.
special permit fees were paid.
(See Exhibits 51, 52, 69, 70, 71. and 85. )
Neither the American Federation of Labor nor the Congress of Industrial
Organizations has established a central examining and license bureau, with
the result that regardless of his qualifications the welder must take another
examination and test on each subsequent job. This results in loss of time and
is a definite economic waste.
B. The .solution to the industrial unrest caused by the problems of the welders
lies in gi'anting to the welder industrial democracy which involves the recognition by government, industry, labor, and the public that
I. Welding is a craft and an appropriate unit for the purposes of collective
bargaining.
(a) This requires an abandonment once and for all of the vuirealistic position
as embodied in the infamous "Wilson Award."
The recognition by the National Labor Relations Board that in certain cases
the welders are an appropriate unit for colective bargaining clearly should end
for all time the position of the "Wilson award."
It is high time that this fact be
recognized.
(ft) The National Labor Relations Board should grant to the welders their
legitimate rights under section 9 (b) of the National Labor Relations Act in
the "closed-shop cases" which come before it by recognizing that the particular
circumstances existing in these cases with respect to the position of the welders
be granted their proper weight.
The recognition of the welders' union in the aircraft cases, cited earlier, indicates that the issue is one squarely of the closed-shop situation. There is nothing
in the Wagner Act which requires the position so consistently held by the Board
in numerous cases that the presence of a closed-shop contract precludes the i-ecognition of a union such as the welders' under the particular circumstances sur-

rounding their situation.

II. Tlie American Federation of Labor and the Congress of Industrial Organizations should cease and desist from interference, coercion, or restraint against
the rights of self-organization and freedom of association among the welders.
The .spirit behind the Wagner Act is that employers should not interfere with
the rights of the workers to organize and bargain collectively. This is our declared
national policy. The powerful labor organizations should not do that which the
law has declared the employer shall not do.
III. The welders of the United States should be granted recognition as an independent, autonomous craft within the American Federation of Labor or the
welders should be recognized as entitled to organize independently into a
national welders' union outside the framework of the American Federation of
Labor.
1 Committee Exhibit No. 269, appendix, p. 4109.
Committee Exhibits Nos. 269, p. 4109 270, p. 4110
;

p.

4146.

2S7-289, pp. 4123-4124

and 303.


3738

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

This 25-year aim of the welders is the ultimate end sought by the rank-andwelder. The facts stated hereinabove point inevitably to self-organization

file

as the solution to the welders' problems.

The recognition by the National Labor Relations Board in all cases, even where
a closed-shop contract is in force, that welding is an appropriate unit for the
purposes of collective bargaining under section 9 (b) of the Wagner Act; the
cessation of the American Federation of Labor and the Congress of Industrial
Organizations' interference with the organizational activities of the welders
and the organization of the welders into either an autonomous, independent craft
within the American Federation of Labor or into a national welders' union outside the framework of the American Federation of Labor would eliminate the
abuses and discriminations to which the welders are now subjected and would
result in the maintenance of continuity of production and removal of the causes
of the difl3culties which have threatened to impede the national-defense effort.

That is the brief, Mr. Chairman.

Acting Chairman Mead. Have you completed reading your brief ?
Mr. Basor. Yes, sir.
Acting Chairman Mead. I wonder if you would tell the committee
when the welders came into prominence in industry.
Mr. Basor. The welders came into prominence in industry during
the last World War, brought about by the sabotaging efforts of Germany on their great liners. Welding was used to repair those engines
and that equipment to such advantage that from that day to this it has
never ceased and has improved constantly.
Acting Chairman Mead. I understand that the welders were more
or less an offshoot of what might be called the riveters, the boilermakers, that preceded the welders.
Mr. Basor. No; not entirely, because in many cases there was no
method of fabrication where riveting could be used where welding is
used today.
Acting Chairman Mead. Well, I just meant in the beginning, the
very beginning, the original welders were taken from either riveters
or Boilermakers, before welders were trained.
Mr. Basor. No they were taken originally from men who were interested in it sufficiently to try to learn to do it themselves. Some of
these men might have been riveters, some of them might have been
boilermakers, m,achinists, and so forth, but it was the question of selfinterest that brought welding to the front.^
Acting Chairman Mead. How long does it take to train a man to
become a fairly good welder?
Mr. Basor. It requires a minimum of 5 years for a man to become a
He can be trained to do one of the operations in approxireal welder.
mately 1 year's time.
;

Acting Chairman Mead. Does it require the use of numerous tools,

considerable equipment ?
Mr. Basor. Contrary to popular opinion, the welder's tool is tlie
same on every job. It is the only craft, to my knowledge today, in
which only certain tools are used and those tools are used .on every
job, the sam,e.
Acting Chairman Mead. What is the reason given by the C. I. O.
for denying the welders a charter ?
iMr. Basor subsequently informed the commitece that
"Further check on this (juestion reveals that tlie eiuployees themselves ask their most
progressive workmen to study the process, and that .t^e American Federation of Labor
metal trades unions actually placed a boycott on the process, the same as has been done
in later years by the painters on the air-spray guns."

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAIVI

3739

Mr. Basor. The C. I. O. is not capable, under its present structure,

of granting a craft charter.
Acting Chairman Mead. Will j^ou explain the reason to* the committee ?
Mr. Basor. I would have to use the words "vertical" and "horizontal." However, I will explain this. A. F. of L crafts are vertical.
That means that they are occupational organizations. The C. I. O.
are horizontal crafts, which is an industrial occupation. In other
words, C. I. O. takes in a whole plant in itself. A. F. of L. takes in
the occupations in the plant and places them under one union, and
the C. I. O. places the whole plant under one union. Therefore, there
is no place in the C. I. O. for craft organization of welders.
Acting Chairaian Mead. And do you claim to be a craft organization?
Mr. Basor. It is the finest craft organization today.
Acting Chairman Mead. And you make that claim when applying
for entrance into any of these organizations?
Mr. Basor. That is correct.
Acting Chairman Mead. What answer do you receive from the
A. F. of L.?
Mr. Basor. The A. F. of L. takes the position, based on the Wilson
award, that welding is a process and that the torch and the stinger are
tools of the trade to be used by the journeyman upon whose jurisdiction the

work

is

done.

Acting Chairman Mead.

man ?

And what

do they mean by the journey-

Mr. Basor. Presiunably they mean the journeyman I will take a

We have a machinist who runs a lathe. That machinist is supposed to be able to do welding also.
But common practice is that that machinist doesn't want any part of the welding because welding in itself, in its ramifications, is so large that it takes
specific instance.

as long to learn

it as it does to learn to run that lathe.

Acting Chairman Mead. So that in reality they deny that welding
by itself and alone is a craft organization?
Mr. Basor. That is correct. They deny it even in the face of the
fact that major companies spend thousands and hundreds of thousands
of dollars developing the science of welding, that metals today are
bought on the basis of whether they can or cannot be welded, and that
we have in this country a group of professors and scientific men known

as the American Welding Society, so I believe that it is the finest

craft in existence.
Acting Chairman jNIead. So you are telling the committee that you
can't join the A. F. of L because they hold that you are not a craft?

Mr. Basor. That is correct.

Acting Chairman Me.\d. And that you can't join the C. I. O. because
they do not take craft organizations?
Mr. Basor. That is correct.
Senator Ball. Tha^; is a new one.
Acting Chairman Mead. Well, they don't take old craft organizations, either.

Senator Ball. Not the C. I. O. I was thinking of the A. F. of L.

Acting Chairman IVIead. In the C. I. O. you are denied a charter
because of the fact that you and your people insist that you are a craft
organization. They would take you if you would join along with the
2
311932 42pt. 10

3740

INVESTIGATION OF THE NATIONAL DEFENSE PKOGRAM

other employees of a given plant in this horizontal organization which

they belieye in.
Mr, Basor. That is correct.
Acting Chairman Mead. You could join the A. F. of L. too if you
would merge with a craft organization, thereby losing your own
identity.

Mr. Basob. That is correct.

Acting Chairman Mead. And the craft would be one of several
crafts, would you say, that you would have to merge with?
Mr. Basor. It would be 1 of 157 different crafts. I should say not
"1 of," but "1 or" 157. We have counted as high as 27 different crafts
to which welders have to belong now under the A. F. of L. structure.
Acting Chairman Mead. Well, would it work a hardship on a welder
if he became an independent craftsman's organization of his own and
found that as such he was denied work where part-time boilermaking
was available and part-time machinist work was available, and he
being only a welder could only work when a welder was needed?
Mr. Basor. There might be specific instances of such, but generally
it wouldn't hurt the welder one bit.
Senator Ball. When a welder has to join the boilermakers' union,
for instance, does he have to take an examination on the boilermaking
trade ?

No he takes only an examination to weld.

Senator Ball. He does?
Mr. Basor. That is right.
Senator Ball. So they do recognize it as a separate craft then,
Mr. Basor.

actually.

Mr. Basor. They presumably recognize that the welder is a trade

but do not wish to release it from their craft.
Senator Ball. Is that true of the others, the blacksmiths and ma-

itself,

chinists ?

Mr. Basor. That

is

right.

Senator Ball. When you go into the blacksmiths' union you don't
necessarily have to be a topnotch blacksmith, you go in as a Avelder?
Mr. Basor. That is right.
Senator Ball. Similarly, I take it, the blacksmiths in the blacksmiths' union or the machinists in the machinists' union or the boilermakers in the boilermakers' union are not required to know welding.
Mr. Basor. In most instances they are not. In fact, it is only where
they themselves have taken it upon themselves to learn to do welding
that they become welders. They are not required to do it according
to their trade at

all.

Acting Chairman Mead. I want to say for the record that the
primary interest of this committee hearing you this morning is the
welfare of the national-defense program. Otherwise, so far as this
committee is concerned, we would seek no jurisdiction or consideration
of your problem; we would leave you to settle your difficulties out
in the industrial field among the various labor g;roups that you have
mentioned. But in view of the fact that the welders might liold up a
very substantial portion of the defense effort should they become
engaged in strike or lockout, it recommends to the committee the consideration of this case and the committee exj^resses the hope tiiat it will
be ironed out so that there will be no stoppage of the defense program.
Mr, Basor. Thank you.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3741

Acting Chairman Mead. Have any other members of the rommittee

:any questions to ask

Senator Ball. Mr. Chairman,

A.

i^

are

it strikes me that in this whole

cralts set-up, you need, I think, craft organizations,
but you
bound to have disputes like this rising right alonoas new

develop and new trades develop. The answer"

probably
over-all metal-trades union with sections and
a card in
one section entitles you to work on any job where
the Metal Trades

prociisses

would be an

Lnion have the contract.

Acting Chairman Mead. You don't believe that the
break-down into
too many separate crafts will solve the problem
because of the possibility of added new crafts that do not cover
a wide enough variety
ot work to keep the worker constantly engaged?
Senator Ball. That is right. I think^ou are bound
to run into
trouble on that, and then, as the witness has
stated, vou oet these
powerful craft unions fighting to keep these
members^in their own
unions so they would draw their dues, wliereas if
they are fll in one
metal-trades union, it seems to me it would be very
'simple to work
out a system of allocation of dues, whatever
he happens to be doinoSenator KiLGORE May I ask a question there?
One of your troS^
bles, isn t It, IS the fact that welding,
both electrical and ox^cetylene
is used as a side line in a whole
lot of industries also, particulai-ly in

small industries, the small boiler shops.

The boilermaker will go in
and weld a few tubes, in the small machine sliop
the machinist will
weld a shaft together, and in a garage a man
will weld some stuff in
a cylinder to build it up. At some
places they couldn't use a full-time
Melder.
lot of crafts have taken up welding
as a side line.
One
httle phase of it happens to fit their
shop. Isn't that one of the
oppositions you run into?
Mr. Basor. That happens to be the very basis
on which the A. F
o L says that, welding is not a craft.
However, they fail to tell you
at the same time that in these selfsame
small shops the machinist
does tke pipe fitting; he also does the
blacksmithing and he does the
'""'^ "^""^ "^*^' ^'' '" ^'''^' no argument hi

itself whatsoel^e^^^

Senator Kilgore. But the question was.

Isn't that one of the

arguments
Mr. Basor. That
5

wl^pff wnf ^.

m^^ZZ^r
nn

n^l

an argument that they present; yes, sir.

A few years back the position
''!' '"'" ^'^"/"^' ^^ y'^'' '^^"' ^' ^^^-^-^^^ but today
^'''' ^'''''^''^ mechanics
any more that
""""l ^'^r/"
is

.J ^'
}

^^'' ^^?]!ittee.

ehtr ,^.VT""'V7'^'\
"?'*''^
to

tW

^-^^^^

^"^

^^'''^

it ^'

better for

them

to

buy

^ they get specialists

do heir .work, and]'f^'T^
by obtanimg those specialists to cfo their work
'^"^^

""''''''^'^^ it'

eveiything goes to be welded, and a welder

remains tTiere constantly
ld"^' "} fact, today I don't know
of any machine shop
^'7^^"-^,f
unless It IS the size of a real small
single-lathe shop, wherein the
welding,^oo. And t^i'e lame t".ing
?^
ITZ7Z"']
of course, holds
1 rT^''
true for "^r^.
the boilermakers, decidedly.
Of course
''
^^t' and that is 'that the estS
Jishment
iZe'nt'of
J welders'
w Jl ^"^'T"
'"".^.T'
of a
craft would
draw from these various A. F. of L.

Zit

3742

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

organizations a considerable membership which they do not wish to

lose.

If the committee pleases, there are other witnesses here.

Cornelius Cardno is a welder and has been following the welding game
ever since its beginning, and he can probably give yon a better picture
than I can on lots of things.
Acting Chairman Mead. Well, it is agreeable to the committee; you
may summon the witness that you just mentioned.
Mr. Basor. Brother Cardno.
Acting Chairman Mead. You will be sworn. Do you solemnly swear
to tell the truth, the whole truth, and nothing but the truth, so help

you God?
Mr. Cardno. I do.

TESTIMONY OF CORNELIUS CARDNO, SPECIAL WELDER REPRESENTATIVE, BREMERTON, WASH., NAVY YARD
Acting Chairman Mead. Will you give your full name and the title
of your position in the union to the stenographer?
Mr. Cardno. Cornelius Cardno, sj^ecial representative sent here

from Bremerton, Wash., Navy Yard.

Acting Chairman Mead. How long have you been employed in the
navy yard?
Mr. Cardno. Approximately 2 years.
Acting Chairman Mead. Two years, just recently.
Mr. Cardno. Yes.
Acting Chairman Mead. And you are now representing the welders of the navy yard?
Mr. Cardno. Of the navy yard.
Acting Chairman Mead. Have you been a welder yourself long
Mr. Cardno. Yes. I first started in with the welding in 1912.
Acting Chairman Mead. 1912?
Mr. Cardxo. Yes.
Acting Chairman Mead. When did welding start, back in 1912?
?

Mr, Cardno. Well, the commercial production of gases for acetylene

welding wasn't available in this country until 1907. At that time the
Linde Air Products Co. began to put their gases on the market
so tliat they were available for commercial application.
Acting Chairman Mead. Go ahead, you may proceed with any statement you may want to make.
Mr. Cardno. Since my fii'st contact with welding, rather at the time
that I first contacted the tools, my method of learning to weld was
the simple process of the master mechanic coming into the shop
was working at the Rustin Smelter at that time, in Tacoma, Wash.
He gave us a book which told us all about how to proceed with welding.
He said the tools would be there in a day or two and we vshould take
the book home and study it. We had heard of the process but we had
never seen it up to that time. That is a fairly good picture of how we
started to do welding. I was a boilermaker at the Rustin Smelter at
that time, and we were required to change our methods of repairing
tlie water jackets that were used in tlie furnaces of the Rustin femelter.
The old method of repairing these furnace water jackets was a very
lengthy one, and a great deal of labor was involved, and the master

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

3743

mechanic visioning the application of ^Yelding could see that he was

going to greatly reduce that labor charge in repairing the water jackets
of the furnace. That situation, of course, caused me to become very
much more interested in welding than I had been prior to that time,

and we succeeded, after a great deal of difficulty, in making it applicable to the job that was to be done then.
However, we found that it had a much wider range of application
than merely repairing water jackets, and we were very soon repairing
a lot of the heavy equipment of the smelter where we could master the
detail and procedure required to bring out satisfactory repair.
From that position I became interested in welding. I had been in
former times required to go on strike against the application of new
tools in industry.
In 1908, 1 believe, if I remember 1907, 1 believe it
was, the fall of 1907, we were called out on strike to resist the application of the pneumatic tools to the railroad shops where we were working.
I personally didn't feel that that was the proper procedure for
us to follow, and finding this new tool coming along, I tried to apply
myself to become efficient in its use, because I recognized its efficiency
and economy in the repair of the material that we were working with
in the smelter, and could also see that it had wide application in the
future in commercial productive programs, and consequently, becoming interested, I applied myself to learn the whole process as nearly
as it was within my range of ability to do so. "WHien the Kustin job was
done and we had rebuilt that smelter and put it in shape, there was a
lay-off of the men that were used at that time, and that put me into a
machine shop. I went into a machine shop, not very well trained in
welding, but knowing a great deal more than the people around me
knew of it, and the manager of that plant was desirous of applying
the methods to his work, whicli consisted mostly of building up and
repairing pulleys and gear wheels and building up shafts that weire
worn in the sawmills, and so on, and mucli of that work was new to me
because I had started in simply using it on milled steel and the work
in that shop took in a much wider range of application.
I was required to take a permit out in that shop because the A. F.
of L. in their 1912 convention declared that acetylene welding was a
tool and the acetylene torch was a tool and acetylene welding was a
process that could not come under the trade jurisdiction of anj^ one
However, I wasn't particularly resentful at that time because
trade.

everything was more or less in a stage of develo]:)ment. A little time

after that, about 2 years later, I was again out of employment and I
took a job welding pipe, and it was required of me that I would take
another permit out from the pipe fitters. Of course. I began to get a
little annoyed at that because for 12 years prior to these things happening I had been actively a member of the one union, had paid my
dues faithfully, and considered myself entitled to union recognition
in any plant that I would go into. However, that wasn't allowed, and
under the attitude of the American Federation of Labor there was a
continual change of affiliations through the years.
Knowing, as I did, that men couldn't successfully make any progress
with the tools that they were using unless they were grouped together
for the promotion and advancement of these tools, I found a continual
opposition from the people that I was compelled to affiliate with. I was
told, among other things, that I would become sterile as a man I was
;

3744

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

would ^o blind; and above all else I was told that I was
destroying the trades by handling these tools. Naturally, one can
easily understand if that was the attitude of these trades that they were
not promotional of the thing that I wanted to promote. I wasn't concerned in the old methods; I was concerned in the new methods. I
had lost 3 months of time on a strike trying to hold back old methods,
and I made my mind up that that kind of program was not proper,
it wasn't logical, it wasn't in any way something that I should be a
party to; and I insisted on doing welding and applying welding
wherever I could find an opportunity to do so.
The result of the opposition was that I was put off a job at the
Marine Ways, Winslow, because I was a welder, by the boilermakers'
told that I

craft.

Senator Ball. You had been a boilermaker originally?

Mr. Cardno. Yes. I had been an active boilermaker. I knew well
the business agent that came over there, Mr. Joseph Reed. He is dead
now.
I knew him well, and I had served in the capacities of an active
member in that union to promote the union and had succeeded in organizing a number of men on the Union Pacific at La Grande, Oreg., for
the boilermakers prior to that time. So I was definitely not one of
those men that they recognized as simply what we call a card man. I
was actively a union member. If I didn't like the thing that was being
done, I would say so. I still have that capacity left, although I am often
suppressed in saying so. And from that attitude of opposition that I
found in the trades that I was dealing with, I definitely advocated that
the welders should have their own organization. In lots of places I was
prohibited from working on a particular job because I would perhaps
have a pipe fitter's card or a Boilermaker's card when the work was
some other trade, and that attitude is still held up until this recent time
they have been forced away from it because of the threat of the welder
to succeed in forming his own organization.
Now, I had learned the history of the American Federation of Labor
fairly thoroughly in the years. I knew its background; I knew why it
was formed. It grew out of the objection of the trades to the system of
orp-anization known back in 1880 as the Knights of Labor. Samuel
Gompei's toured this country in the interests of the American Federation of Labor trade idea, and declared, on numerous occasions that "that
trade or occupation that is not organized for its own protection and
promotion will be reduced to beggary"; and if that was the foundation
upon which the American Federation of Labor was built, I felt that
this new problem would certainly have to have its own autonomy to
promote its own interest or we would be continually hindered, as has
been the case down through the years.
Many of the officers, to my personal knowledge, of these trade-unions
have deliberately attempted to force by threat of action detrimental to
the employer, the abolishment of the welding processes, and the substitution again of the older methods. Today they are not so able to make
these threats because of the advancement of welding against all the
forces that were trying to hold it back. The American Welding Society has done a great deal to promote welding, and the American
Society is very definitely in favor of the welders being grouped as a
welders' organization because, amongst ourselves, we can spread the
knowledge of welding amongst ourselves we can promote those things
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3745

that will help our industry, our particular part in

industry.
we are continually subject to the present program that has Without
become so
obnoxious where men have been required to pay
hundreds of dollars a
year where they would come under the influence
and had to work under
that influence
closed shops and consequently had to
become members ot different unions, the welder has consequently,
as a result of that,
never been able to group his strength and actively
promote an efficiency
within the organization, as has been pointed out.
are compelled
without any assistance from the union, to take tests
on every job we o-J
on. The employer has a right to know what
the man can do, and welding is ot that nature that unless he knows what
the man can do his visual inspection of the work will not reveal any
very real weaknesses in it.
It he doesn t know what the man can do, the man
can put a iob up that
will be of no value and may cause him
a great deal of trouble
VVe have had very many instances of that
nature wliere because an
infenor welder was permitted, prior to the testinir
of him, to oq ahead
and do a job. it was found after it was ]nit in place
at great'expense
that It wasn t what they wanted and thev
had to tear it out and have
It

We

it

done right.

We

are interested in the wii,ing out of these

things and the definite
men so that they can do their work efficientlv and
in the present program of national
defense we feel that this is a time
when we must be able to control these things if ant
are goincr
"" to make
the progress we should.
When you sto]) to consider that the men are being discriminated
against and forced out of this union into that
union, and then forced
under a jurisdict-on that in no case has any
sympathv with them
in their work, it becomes a question in
a man's mind,
does this
exist
American industry.
is it that a law is set up in
which
we are protected from the em])loyer but we are not
]n-()tected from the
man who has an adverse attitude towar<l us and has a stronunion
behind him by which he can enforce that attitude,
when men are compelled to pay as I know they have paid, into
four different unions to
continue working at the trade. They will tell
vou emphaticallv that
If they are going to work they
must have affiliation in this trade and
that trade^and the other trade, if they are going
to stay in the community
ho my interests have been the i)romotion of the
idea very
dehnitely that the welder is entitled to and
must have the union of
representation of his own choosino-.
I was discharg;ed f^-om my wo^k in the ship
industry in

education of the

Why

Wash on December

Why

Tacoma,

by

16, 1940,

a special order of the international

piesident in which he sent this information
to the yard where I was
employed, and in which he gives his position as
a Hitler in the labor

movement He has it worked

power. Here is what he said

into the constitution so that he has that

:

the authority vested in the international

president in
of the international constitutional
bvlaws lines 9-10
^'^^^*^^" ^"^^ supervision of all
''""
suboriinale and
Sslnc'tloct'e
distiict
lodges/'f/i
with power"r
to suspend their individual members or
lod-es when
in his judgment it is for the best
interests of our internationarbrotherllSod
'''*,^

nvJlli^f'Tv'^''"'*/^
article
IV section

1.

And because of that position he required that I be discharged from

the industry wherein I was employed,
against the wishes of my foreman, against the wishes of the manager of the plant.
Mho came to me

3746

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

and asked me in the rough language that we use, "What in hell's the
matter now?" There you have it. I don't know anything else. He
doesn't state a reason for his attitude. Later I asked him for that
reason and his answer was that I had for years attempted to wreck
the metal trades and consequently he felt justified in requiring me
to be discharged from my emj^loyment in the shipyard in Tacoma.
The matter was taken uj) by the local union, who have known me for
25 years, willing and anxious to put me back to work, and they were
informed by their international ])resident that the matter was something they had nothing to do with that he would handle that and
would give no reason to the local organization for his attitude toward
me. That is not an isolated case, men. They are being discriminated
against in the shipyards today for the very same reason. I have seen
a number of those letters, the identical letter, with only the change of
the man's name on top, sent to men in my part of the country.
I think there is a number of them. They are showing the same attitude toward these men, not of 1940 but of November 1941, in which
;

the

men

are deliberately cut off

from participation in the defense pro-

gram because they have it under control and the men consequently will
have to look for work somewhere else. You can readily understand
that those of us who have decided that that is our right, that we have
a right to organize according to our choice, that we have a right to
promote our interests, that we have a right to work to the best
interests of the defense i^rogram, are resentful of that attitude and
I may say with all sincerity that the information that we get continually from those points is that the men are becoming more and
more restive under that thing, and are looking for some help from our
visit, our stay here in Washington, to try to get that thing ironed out.
It must be ironed out.
Senator Ball,. Mr. Cardno, I notice he says in his letter that you
have a right to appeal to the executive council and then to the next convention of the International Boilermakers. How would that appeal
work ? How often does the executive council meet, and where would

you have had to go to appeal ?

Mr. Cardno. I think he states

in that letter that his action is with

the consent of the executive council.
Senator Ball. Yes.
Mr. Cakdno. I felt in view of that position iihe had done something
within his power and the executive council had agreed to it that I
would be wasting my money to travel to Kansas City from the Pacific
coast and put that same question before them and ask them for consideration, so I wrote directly to him and pointed out that would be an
expensive procedure for me and in the name of decency would he give
me a trial in my own district, amongst the members of his organization
who were capable of judging the matter better than the executive
council, because they have known me for 25 years.
Senator Ball. He turned you down ?
Mr. Cardno. He answered me very emphatically that he wouldn't do
anything of the kind. Now, the convention of that organization was
put off this last September for 2 years, so of what value would an
appeal in those premises be to anyone of us that are thus discriminated
aeainst ?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJM

Senator Ball.
boilermakers ?

How

3747

long has Franklin been president of the

Mr. Cardno. About 35 years.

Senator Ball. How do they hold their elections?
Mr. Cardno. In convention, just when they hold a convention; they
don't hold a convention regularly; they are supposed to hold it, but
they don't. They have put it off again this last year, and they hadn't
a convention for 7 years prior to 1937.
Senator Ball.
calls the convention the executive council ?
Mr. Cardno. The executive council meets on the call of the president at any time.
Senator Ball. But who calls the convention? "Wlio calls jour international convention ?
Mr. Cardno. The international office, I presume. They stated when
they j)ut the convention off that they had put out a referendum asking
the membership if they would agree to it. However, I never saw any
of the referendum ballots or anything of that kind, but I know that
was the statement made in the journal.
Senator Ball. They don't have an election like the typos, where
they send ballots to every individual member?
Mr. Cardno. There is some referendum in there, but it is of a very
limited character and controlled entirely by the international office,
whether they will or not.
Senator Ball. What is the final answer to this thing? After all,
even if you set up a separate welders' union, industry is developing
new processes, new crafts right along. Aren't you going to run up
against this thing inevitably again ? It is a recurring dispute under
the present set-up of the craft unions in the A. F. L. Maybe you
need something rather fundamental in the way of reorganization
there.
I would like tlie craft union idea and I think it fits in certain
places but these jurisdictional disputes are becoming more and more
frequent among^the crafts, particularly in the building trades where
the plasterers and cement finishers get into a row.
Mr. Cardno. The real trouble there is that the American Federation
of Labor gives complete autonomy to their international unions and
they have within themselves no ability to force any question. You
don't have to in becoming an international union, becoming affiliated
with the International Federation of Labor, make it subject to any
change of jurisdiction without a great deal of trouble having to be
entered into by the executive council of the American Federation of
Labor and frequently they find themselves unable to enforce jurisdictions that they have granted because affiliation with the American
Federation of Labor is entirely voluntary.
Senator Ball. Doesn't give the A. F. L. any power?

Who

Mr. Cardno. No; has no power.

Senator Ball. As for instance when the typos went into the C. I. O.,
dropped out of the A. F. L. ?
Mr. Cardno. At the last convention the machinists asked for the
executive council of the American Federation of Labor to exercise the
power inherent in it to order the carpenters to cease and desist from
encroaching on their established jurisdiction and they were unable
to do so.
That is where the weakness of the jurisdictional situation
comes.

3748

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Acting Chairman Mead. The committee would be inclined now to

have some testimony from the other side of the case, and of course the
committee would appreciate efforts that you are putting forth, the
efforts that we hope will be put forth by the C. T. O. and A. F. L. to
settle this matter at least temporarily for the duration of the emergency. The committee cannot offer its services as a mediation board.
It can only air the controversy and because of the importance of the
defense program express the hope that you will get together. Right
now I would like to call Mr. Brown, president of the International
Brotherhood of Electrical Workers of the A. F. L.
Mr. Wegener. Mr. Brown isn't here. My name is Wegener and I
represent Mr. Brown.
Acting Chairman Mead. All right, Mr. Wegener, you will answer
the purposes of the committee. Will you be sworn ? Do you solemnly
swear you will tell the truth, the whole truth, and nothing but the
truth, so help you God ?
Mr. Wegener. I do.

TESTIMONY OF A. L. WEGENER, ASSISTANT TO THE INTERNATIONAL PRESIDENT, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS
Acting Chairman Mead. Mr. Wegener, will you give the title of
your position and your full name ?
Mr. Wegener. A. L. Wegener, assistant to the international president. International Brotherhood of Electrical Workers.
Acting Chairman Mead. You may proceed, Mr. Wegener, with anything you may have to say in rebuttal or otherwise of what you have
heard.

Mr. Wegener. Well, Mr. Chairman, at the present time I am not

entirely familiar with what this hearing is all about, and, therefore, I
have no rebuttal statements to make until possibly some time later on.
Acting Chairman Mead. The committee's interest, as I explained before, and as given to me by the representative of the chairman, was
that the matter was important enough to be aired here because of the
work stoppages that have been resulted by the recurrence of controversy between tlie welders and various C. I. O. and A. F. of L. units.
It is hoped that as a result of the airing of the controversy a plan
might be progressed to the end that some rules or principles will be
adopted to avert work stoppages from now at least until the end of the
emergency.
are in hopes you might offer some helpful suggestions
along that line or may tell us what the A. F. of L. thinks about the
separate identity of the welders' organization.
Mr. Wegener. Well, I am not prepared at the moment to make any
statements, Mr. Chairman.
Acting Chairman Mead. All right, Mr. Wegener, if you care to
prepare a statement at a later date you will take it. up with representatives of our committee.
Perhaps after you i-ead the testimony
and if arrangements can be made we will be glad to hear you. I call
Mr. Eric Peterscm, general vice president of the National Association
of Machinists, Mr. Peterson. Please be sworn. Do you solemnly

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

swear you will tell the truth, the
truth, so help you God?
Mr. Peterson. I do.

Acting Chairman Mead.

Go

3749

whole truth, and nothing but the

ahead, Mr. Peterson.

TESTIMONY OF ERIC PETERSON, GENERAL VICE PRESIDENT OF

THE NATIONAL ASSOCIATION OF MACHINISTS
Mr. Peterson. Like Mr. Wegener, I am not really familiar with
^ hat the committee is endeavoring to develop here this morning. We
were advised by the general counsel that it would be helpful if one
of our representatives could be here. However, I shall be glad to
answer any questions that members of the committee may have in
mind that have a bearing on the situation that has been discussed at
length this morning by representatives of the welders' group.
Mr. Fulton. Well, the committee was simply interested in, as Sena-

'

tor Mead said, giving both sides, for neither of whom the committee
held a brief, an opportunity to state the problems and pro])osed solutions so that there would not be a strike which i)resumably either party
would have the right in ordinary times to have. For example, the
A. F. of L. would have a perfect right to insist on any set-up it saw
fit, and similarly the welders w^ould have a perfect right to insist on
theirs, and those situations in ordinary times would probably be
settled by a knock-down battle which M'ould culminate in strikes and
other things, and the more powerful group would have the right
to win.
In this particular instance either group would shut down, say, the
shipyards. The committee was interested in trying to find out what
the problems were, what the possible solutions would bo, and whether
it isn't possible to find some middle ground, not which the committee
would ask you to undertake but which )'ou and all of you together could
work out yourselves. It w'as for that reason we desired to hear from the
various federation unions as to what they thought about the matter, or
what they suggested shoidd be done.
Mr. Peterson. As a representative of the International Association
of Machinists I am hardly qualified to si)eak for the American Federation of Labor or the Metal Trades Department.
Mr. Fulton. That is wliy the several different international crafts
were offered an opportimity to speak for themselves, because we found
that ordinarily the Metal Trades Department itself disclaims any
power to bind the internationals, and it was simply to give you an
opportunity to state whatever your position migh.t be in these matters,
either that there was no solution or that you have a solution worked out,
or that you are about to work one out, or whatever the fact may be.
Mr. Peterson. I think it might interest the committee to learn that
in the International Association of Machinists we haven't had much of
a problem so far as welders are concerned. In our laws we provide for
the universal transfer of members from other A. F. L. organizations
and to our knowledge at the general office there have been very few
complaints, if any, coming in from members of our organization or
other A, F. L. organizations over the fact that they have been required to pay additional initiation fees and permit fees to work in
plants where our organization has an agreement with employers.

3750

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

As I understood some of the statements made by Mr. Basor he indict

the A. F. L., C.

I.

O.,

and National Labor Relations Board for having

deprived welders of the right to be recognized as proper bargaining

units. I would like to point out that in our organization, where we have
members affiliated that follow welding work, they have the same right
of presenting their problems in local lodges, and grand lodge conventions, as other members of our organization. We take the position that the structure of our organization affords full opportunity
for a member, whether he follows welding all of the time or part of
the time, to get not only fair representation but the full benefits of the
organization, so I just want to again stress the point that we don't
have any particular problem in our organization so far as welders are
concerned.
I might add to that statement that I am somewhat familiar with
welding, having worked at it in the railroad industry. I have on
some occasions assisted in instructing our apprentices in the rudiments
I think it will interest the committee to learn that
of welding.
where we have apprenticeship programs established with employers,
especially in the railroad industry, we insist that an apprentice be
given an opportunity before he completes his apprenticeship to learn
something about the welding processes. I am not here to offer any
solution for the problem that has been presented to the committee by
the welders' representatives, but I think the committee might be interested in the statement that was released by the international presidents
of unions having welder members. I have one copy with me and should
like to read it for the benefit of the record, as it presents the viewpoints, and I think the policy, of the organizations known as the metal
trades in the American Federation of Labor.
Acting Chairman Herring. There are so few members of the committee here I think you might as well offer it for the record and perhaps more members will get it that way than by having you read it to
just a couple of us here, unless you have some statement to make. It
seems to me that a case has been stated here that ought to interest
you and the other members of the American Federation of Labor to do
more than merely come here and say you have nothing to say.
(The statement referred to was marked "Exhibit No. 323" and is
included in the appendix on p. 4158.)
Mr. Peterson. I should like to learn from the committee member
if he has any particular matter that he thinks we can be helpful on.
We know a problem has been created by the desires of men who follow
what they call the welding trade to have an organization of their
own. We know that they have applied to the A. F. L. for a charter
as a national organization.
We know that that application has been
rejected.
We also are aware of the fact that because of that rejection
welders decided to stage a demonstration that possibly would throw
the spotlight of publicity on what they call their problem, and in
that manner bring about a change in the position of the A. F. L.,
but when it comes to deciding what the policy is going to continue
to be of the A. F. L. I say that I, as an officer of the International
Association of Machinists am neither authorized nor qualified to state
that policy.

That

is

determined in conventions of the A. F. L. by the delegates

who comprise

the convention.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJM

3751

Acting Chairman Hekeing. Is it your opinion that your craft, would

object to the welders organizing as a separate craft within the A. F. L, ?
Mr. Peterson. Yes; our organization has supported the position
of the A. F. L, in denying to groups of welders an international
It is our contention that there is no need for such an organicharter.
zation to be established because welders in our organization are privileged to get full representation throughout the structure of our organization in the handling of any problem that maj'^ confront them in
either a local lodge, a district lodge, or those coming up at conventions.
I might point out to the committee that the welding problem
in the railroad industry has been fairlj^ well solved in that on most
railroads welders hold membership in the shop-craft organizations,
comprised of the machinists, boilermakers, blacksmiths, electrical
workers, and sheet-metal workers. Welding has been pooled in a
large number of railroad shops and it isn't necessary for men who
follow welding exclusively to hold membership in more than one
organization.
I might also add that in the railroad industry a Avelder as a rule
is a craftsman in that he has been trained either as a boilermaker,
AVelding is not conblacksmith, machinist, or sheet-metal worker.
sidered a trade in the raih'oad industry. It is part of a trade. There
is welding that is directly connected with machinists' work, welding
directly connected with blacksmiths' work, boilermakers' Avork, electrical workers' work, and so on, so in the railroad industry we find
that there isn't much of a problem as far as welding is concerned.
have solved it in my opinion in a manner that would lead me to
believe that the same solution could possibly be applied in other
industries.
I think maybe I should make a statement about welding processes,
although I don't claim to qualify as an expert on welding.
know
that employers are specializing even when it comes to welding.
know that there are operators in mass-production industries who do
spot welding and flash welding, where they operate huge machines
that weld bodies, automobile bodies, at one throw of an electric
switch.
know that there is welding in the jewelry industry
where girls use the acetylene torch in welding processes on jewelry.
know that in contract shops welders are also qualified
craftsmen. They are capable of doing machinists' work when it comes
to operating machine tools or erecting machinery or assembling machinery, and also welding.
know that in some industries they have men who use nothing
but the electric-arc process. They are not familiar with acetylene
welding and possibly could not qualify when it comes to welding
alloys.
know there are men that specialize in what we call highpressure welding, welding of tanks and containers that have to withstand pressures running up as high as 3,000 pounds to the square inch.
know there are men who are confined to just building up processes,
where they build up worn parts. In other words, employers have
specialized even in the welding field until we find that there are a very
limited number of welders who can be said to be general all-around
welders, men who can qualify where they have to pass examinations
and do what is called X-ray work, so, in our opinion, the welding
problem isn't as complicated as it has been presented here, and doesn't

We

We

We

We

We

We

We

We

3752

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

constitute a problem that should continue to interrupt work in the

defense industries.
I gathered the impression here that representatives of the welders
were more concerned in establishing an independent organization than
they were in improving conditions and establishing better wage rates
for those who follow the welding woi'k. In that connection I might
point out that in the railroad industry, again using that as an example,
we have established a differential for men who do welding. That
differential is 5 cents an hour over the rate set for journeymen of
man may weld for 1 hour during the day or 2 or 3
various crafts.
hours or more, and he gets 5 cents an hour above the rate for journeymen in the various crafts while he is on that work.
If he is employed continually on welding, of course, he gets that
differential all of the time that he is performing that work, so again
I say that so far as the International Association of Machinists is
concerned, we believe that the welding problem is one that has been
very much exaggerated, one that has been solved fairly satisfactorily
in the railroad industry, and we believe that if the men who are interested in keeping defense production going will sit down with representatives of the organizations that they have held membership in or
may be members of yet, that this problem can be worked out.
Acting Chairman Herring. I think it has been correctly stated that
the interest of this committee is in the defense program and as you
know, by experience in welding, there have been great advances made
just recently and in the defense program. I think even as late as yesterday it was called to the attention of the press in New York by Mr.
Knudsen of the advantages that could be gained by use of spot welding
and other types of welding in the defense program, and I assume that
is the interest of this committee.
Mr. Peterson. I think that is generally recognized by all of the
organizations comprising the metal trades department of the A. F. L.
I don't presume to know what the figures are but I would say that at
the present time the boilermakers organization represents a larger
number of welders in the ship building industry than any other organization, and I assume that the committee has asked a representative
of that organization to be here to present to the committee his views
on this problem that has been called to your attention by the welders'
group.
Mr. Fulton. We offer an opportunity but fundamentally the committee's big interest was in this question as to whether there is a possibility of a strike which might tie up all the shipbuilding and other
similar defense industries by reason of say the walk-out or lock out,
whichever it might be, of some large proportion of the welders. That
would of course react against the machinists themselves because they
wouldn't probably be able to work in some of the shipyards if there
were not enough welders to keep the yards going, so you have the same
interests that the committee has. Do j^ou feel such a strike is imminent
or possible, or what reaction have you ?
Mr. Peterson. I understand that threats have been made by representatives of the welders that another strike is imminent unless the
O. P. M. can bring about an understanding that suits their desires.
Mr. Fulton. Tliat is why it is important. There is some half-way
place where the two could meet and the committee's only interest is not

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

in tTjing to

forward

3753

the. interest

of either side but in trying to see that

benefit try to get a middle grouncl
solution or

nv\?[
'fl W^'f'il''''^
any
solution
that they can work out between themselves
so that the
shipyards wouldn't be shut down by such a strike
Ml-. Peterson. I presume the committee
is familiar with the fact
that hearings are now being held on the
Pacific coast in the various
shipbuilding centers by representatives of the
O. P.
and to these
hearings have been invited representatives of
the welders' groups and
also representa ive^ of the employers and
international unions, interested
the shipbuilding industry.

th^re

'

^'''^''- ^''"^

"^"^

^" ^^^'^^^ ^^^^ so^e solution can be found

Mr. Peterson. I think some solution can be worked

out
Herring. Thank you, unless you have'
something

elstto oSe?''''"''''"
Mr. Peterson. I ^^'ould like to leave a copy of
the statement that
was recently released by the metal trades unions ^
Acting Chairman Herring. That may be placed
in the record
Is
there any other representative here that desires
to be heard
If not
the committee will adjourn until 10 30 tomorrow
mornino(WbeTeupon at 12: 15 o'clock a recess was taken
until 10: 30 a
:

December
*

5,

1941.)

Previously entered as Exhibit No. 323, see

appendix,

p.

4158.

'

IJ

PEOGKAM
INVESTIGATION OF NATIONAL DEFENSE
FRIDAY, DECEMBER

5,

1941

United States Senate,

Special Committee to Investigate

the National Defense Program,

Washington. D. C.
to adjourmnent on
pm-suant
Tho committee met at 10:38 a. m.,
Ofhce Building,
Senate
318,
room
in
4. 1941,

Thursday

D^^^^^^^^^^^^

^^^^ei-^"j';-

M^llead (act.g

^^S^^^^t'^'^F^^.

chairman),

chief counsel;

Mr. Charles

sW

Osborn, will you be

truth,
will tell the truth, the whole

"^^ASin'S^i^nlsf^r General
you soTem^y swear that you

trod
nothing but the truth, so help you
General Osborn. I do.

R
Do

and

STATEMENT OF ACTING CHAIKMAN JAMES

ARMY

Styles

M.

MEAD

RliCREATION FACILITIES

has been authorized

Chairman Mead. This particular session
the recreat.ona
into
looking
of
Shainnan for the purpose
Duiing our

ActincT

by

it

boys at the various camps.

we had opportunity to ook at the
u?vfy last August and September,
camps and sites and to talk to the
fadUties available in some of the
U^
facilities, the P-se-e of the^n^and
officers and moa about the
less at that time leit lo ine
or
more
was
it
that
r.i fbpm
We learned
case we learned that
tl^^lni Jf the commanding officer, and in one and perhaps mv te
chances
take
to
willing
was
he commanding officer
and
in advocating athletic games
d 'c-pUrby bet'oming an extremist
morale
facilities that would buoy up the

fno'lities available for the

recreational
them to like their 3obs a
the boys phvsically fit and cause
the commanding office^'
by
told
were
we
Stle^eter In other places
things, and we took it for granted
hat thev were interestil in other
or baseball and probably never
football
thai he wa^n^ an advocate of

fo^S\^on^n^\

an7mle

the

analysis showing
"t^^tSrfrantToTit in the record an
facdities of each of the
the
and
posts
prospective
^trtS of the
ridiculous situations: Camp

l^Wino-

Dosts

which I think reveals

^^:;^:S^:^
gymnasium, no swimming
no

311932 42 pt.

bf

of 17,000 men has 2

pool, no football

10

^^tball -urt^^^^^^^^

field,

no handball

3756

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

courts Camp Blandin^, with a strength of 50,000 has 3 tennis courts,

no basketball courts, no football fields, no handball courts, no gymnasium. They have taken care of the spiritual needs of the camp,
which I am very, very glad of they have 25 chapels there, and I think
that is a very, very necessary adjunct to the Army.
Fort Leonard Wood, with a strength of 40,000, has 1 football field,
no handball courts, no gymnasium. The only camp in the list possessing
a gymnasium is Fort Meade, which has 1. that involves the list of the
camps that we checked. Only 4 camps out of 12 have swimming pools,
and Fort Meade alone has 3 of them. Indiantown Gap has listed us
part of its equipment on hand 39 basketballs and has no basketball
court, and Camp Stewart lists 50 footballs as part of its equipment and
has no football field. For a strength of 17,000 men it purchased, in
1911, 1 handball. It possesses 2 basketball courts, and, in 1941, 121
basketballs were purchased. Camp Davis lists 18 basketballs and has no
basketball court. Pine Camp possesses 13 basketballs, 15 baseballs.
51 baseball bats, and has no baseball fields or basketball courts. That
was at the time we were there.
comparison of Fort Meade with 27,000 men and Camp Blanding
with 50,000 men is interesting. Meade has 3 cement swimming pools;
Blanding has a lake. Meade has a football field; Blanding has none.
Meade has 11 tennis courts Blanding has 3. Meade has 31 volley-ball
courts: Blanding has 2. Meade has 10 bowling alleys; Blanding has
none. Meade has 9 boxing arenas Blanding has 3. Meade has ll^ft;

Blanding has 2. Meade has a gymnasium; Blanding has

Meade's allotment of funds for welfare of enlisted men in the
for the year 1941 was $28,029.03; Blanding's allotment was

ball fields;

none.

Army

$23 663.24.
so

Anyway, I want to put this in the record. That paragraph of it was

much to the point that I thought it ought to be emphasized by

having

read.
clearly understood at the outset that the committee has no
criticism to offer so far as your work is concerned.
realize that
it may have been a congressional oversight or omission in passing the
I

it

want

it

We

necessary appropriations, but it occurs to us that there should be someuniformity, some directive from the Department, that Avould require at
least a minimum of athletic competition and recreation of this character, and it occurs to us that in keeping with the directive the funds
should be provided. If it was an established policy it probably would
be less difficult to secure the appropriations than 'is the case now. I
don't believe that it is a matter that ought to be left to the individual
post commander or camp commanding officer. I think where they take
the boys out and run them up and down the lot, asking them to' jump
over barricades and crawl under tunnels to harden them up, they could
do a much better job and have tlie boys enjoy it a little better'if they
took them out on a football field or a baseball diamond or a volley-ball
court and let them harden up while at play.
At one of the camps the hardening lane was a very difficult series
of obstacles. You might have been hurt in negotiatiiiir it. Very
often you got good and dirty; you went in the mud and had to pay
for your own laundry bill. All together it seemed to me that that
course could have been eliminated or diminished if they had the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3757

necessary facilities to harden the boys up the easy way. At any rate,
M^e are not criticizing you. General we want to help you.
You may proceed.
(The menioraiulum referred to was marked "Exhibit No. 324" and
i.s included in the appendix on p. 41()0.)
;

TESTIMONY OF BRIG. GEN. FREDERICK H. OSBORN, CHIEF OF

MORALE BRANCH, UNITED STATES WAR DEPARTMENT
FDNCl'IONS

AND PLANS OF MORALE BRANCH, UNITED STATES WAR

DEPARTMENT

General Osborn. Senator Mead, how would you like me to proceed ?

of statement do you want a somewhat historical statement
covering the development of this work, or
Acting Chairman Mead. You might tell us, if you will, in your own
way, just what is being done now to provide these facilities and this
You might put in
recreational program to the boys in the service.

What kind

the history of

it, if

you wish,

also.

General Osborn. If I may, I will give you

a little history very

briefl}'.

Acting Chairman Mead.

had to overcome.

And

emphasize the obstacles that you have

General Osborn. Yes, sir.

In the last war the recreational activities in the Army camps were
carried out by civilian organizations. Toward the end of the war the
Army set up a morale branch under General Munson, but that branch
was concerned solely with studies on the psychology of the soldier,
looking toward developing better methods of leadership and training.
At the end of the last war, Mr. Fosdick, who had been in chaige of the
civilian activities, and Secretary Baker both recommended that the
Army do the job if another similar occasion should arise; that is, the
job of recreation in the camps. Accordingly, the Army in its plans
for a possible mobilization included in the constrnction of every camp
certain recreational facilities and included in its personnel the appointment of morale officers with post and with every division. The
central direction of these activities was left in a Morale Division of the

Adjutant General's office.

On January 1 of this year, Mr. Stimson appointed a civilian committee to advise with him on these activities in the Arm}', and shortly
thereafter Mr. Knox asked to be let in on the committee, and the committee became known as the Joint Ai-my and Navy Committee on
Kecreation and Welfare. Mr. Stimson, whom I had known for many
years, asked me to be chairman of that connnittee. Mr. Knox appointed the vice chairman. We were given offices on the ground floor
of the Munitions Building. I had frequent access to Mr. Stimson and
to General Marshall, whom I found to be very much interested in this
whole problem.
In February General Marshall told me that he had come to the conclusion that if the Army was going to do its job well, a separate branch
should be set up with a general officer in charge, reporting directly' to
Accordingly, Mr. Stimson set up the Morale
the Chief of Staff.
Branch early in March, under a directive assigning it the two functions
of recreation facilities and of studies on factors affecting morale, the

3758

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

functions carried out by Kaymond Fosdick in the last war and the
functions of General Munson in the last war. Also, there was assigned to the Morale Branch the responsibility for the Army Motion
Picture Service and the Army Exchange Service, supervising the
enormous business of the post exchanges.
General Ulio was appointed head of the Morale Branch, and his
offices, the offices of his staff, were immediately adjoining mine, so that
I had intimate opportunity to observe their work, and as the men camo
in assigned to athletics in the Army, Major Bank assigned to education
in the Army, Colonel Young, and the others, General Ulio generally
brought them in and introduced them to me and later asked me what
had a very intimate relationship.
I thought.
I appointed on my joint committee civilian subcommittee on athletics, composed of 9 or 10 of the leading athletic directors of the
United States on education, composed of the leading university presidents and administrators; and so forth. These subcommittees work
directly with the corresponding officer in the Morale Branch on his

We
;

specialty.

In July General Marshall told me that General Ulio was sick and
to go to the hospital and would ultimately go on to another job in
the Army, and that he was looking for somebody for his successor, and
very unexpectedly asked me, in September, to take the job, so I have
seen this operation over a considerable period of time.
The original construction plans of the Ai-my provided for a day
room, a small barrack, between the company barracks and the company mess hall; provided for a regimental recreation hall for every
regiment, a hall seating between 350 and 400 people, equipped with
a stage and dressing rooms, with a motion-]:)icture projector room,
a room for small amateur motion pictures or small training films, and
benches for the audience. When the benches were removed the room
could be used for dances or. in manv cases, for boxing bouts, by constructing a small ring in the middle. At that time the Army did
not expect to construct separate chapels, and the recreation hall was
also provided with doors on the stage which opened to make the
recreation hall as a cha])el, with an altar and a cross on the stage.
Later, chapels were provided.
Every division is equipped with a service club. You have probably seen them, very fine buildings on the inside, and on the whole,
well adapted for that purpose; cafeteria and big dance hall, library
upstairs; adjoining the service club for every division, a guest house

had

accommodating 54 guests; 2-story barrack, and also accommodating

the 3 hostesses and the librarian, the usual charge for the guest
house being 50 cents a night to anybody who is introduced by a
soldier as a relative or friend, and usually they are not permitted
to stay more than 3 nights.
The Morale Branch began to get its offices in and its set-up organized by May. It found itself operating six divisions The Army Exchange Service; the Army Motion Picture Service; the Recreation
Service, under Colonel Montgomery; the Services Division, having
the hostesses, libraries, and service clubs, under Colonel Watrous; an
Editorial Division and Research Division under Major Munson, the
son of General MuTison, in charge of research in the last war. One
of the first things that the branch developed was that wliile the recre:

INVESTIGATION

OF.

THE NATIONAL DEFENSE PROGRAM 3759

ational facilities construction was of the highest grade, there was not
construction going on. Immediately, in June, I got
in touch with the quartermaster's office and began plans for the design of large field houses. There was a good deal of delay because
the buildings had to be built out of materials which weren't too
But noAV 37 field houses have been authorized, and of these
scarce.
All of them have wooden
a large number are nearing completion.
part
of the country which
northern
the
in
10
except
roofs
arched
will carry a heavy snow load so that the field house at Pine Camp
and, I think, the field house at Indiantown Gap, which have to have
steei roofs, are behind in construction. I have just seen the completed
field liouse at Bragg, and it is a superb building, 180 feet long and
100 feet wide, all clear space, a great arched roof, and proper dressing
The athletic
rooms, storing rooms for benches, able to be used.

sufficient athletic

director at Bragg told me it wouM be used continuously with its 3

basketball courts in operation, and it is going to be of immense value
to the camp.
Acting Chairman Mead. When will these facilities be available,
;

General, at Pine

Camp and Indiantown Gap?

General Osborn. Pine Camp, I know the steel has arrived, and
Major Bank,
the construction of the field house has commenced.
you can perhaps tell me when it should be completed.
Major Bank.i ^ should be completed, the quartermaster told us,
by the middle of January.
Acting Chairman ISIead. We were told when we were at Pine Camp
that the boys who were to be retained in the service 1 year would be
home, out of the service, before these facilities were available. That
is probably true, isn't it?
General' Osborn. That is probably true.
Acting Chairman Mead. So the difficulty was this program didn't
get under way as quickly as the general camp construction program

was

started.

General OsnoRN. It was altogether that, almost 8 months later.

Acting Cliairnum Mead. Faceliously, if I may just interject here,
we heard quite an interesting jnin at one of the camps. Somebody
who had served in the Spanish War said, "We remember Alger's
swamps, and, of course, I went through Pershing's mud, but," he
It was
said, "these bovs will always remember Marshall's dust."

game at which the' shortstop couldn't see the first baseman

for dust; they were playing on an impromptu diamond, and all these
camps were in the course of construction. It was a marine camp.
The boys Avent out and fixed u]) a diamond as well as they could. I
guess tiiey were playing with a ball they tied up some v;ny so as lo
keep it in shape. Camp Elliott it was, I am informed. It was a
marine camp, not an Army camp. It struck the committee as though
the whole program ought to be stepped up a little bit, and these boys
at a ball

on their own time could have been authorized to go out and fix up
a diamond that would be much better than the one they had.
General Osborn. I think you are undoubtedly correct in that, Senator Mead.
The Army construction programs for recreational buildings to be built at the same time as the barracks on the whole have
1

Major Theodore

P.

Bank.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3760

proved very satisfactory.

cilities

came

37 of these

late
field

r.

The

I think I

houses

size for the large posts,

construction

program for

am correct n saying that.

we should

athletic fa-

We have got

have at least another 20 of this

and the small posts need some kind of indoor

We

athletic facilities, especially the smaller posts in the North.

have now completed, I think, the preparation of plans for the smaHcr
field

house for posts of 15,000 or

less.

Major Bank. Ten thousand or less.

General Osborn. Ten thousand or less and we are working on plans
;

for the construction of outdoor athletic facilities; if any new camp

should be built the construction of outdoor athletic facilities to be
built at the same time as the camp is built.
The ground would be
prepared and the sites laid out, which was not done with these first

camps.

The other recreational buildings have proved quite satisfactory,

we have seen them in operation, we are suggesting moderate
changes for their design.
The regimental recreation halls, which
but, as

have been provided in great numbers, are just a little bit too small,
with slightly too .small a room to play basketball in. Our new design
calls for a recreation hall in which you can play basketball.
Acting Chairman Mead. General, why were they originally designed
too small?

General OsnoRN. They were to be used as recreation halls and chapI think the Army thought if they were designed as athletic halls
as well there would be too much conflict for their use. Now we have
the chapels, and it is felt that they should be designed for recreation
and athletics. I don't know the early history, but I am sure it is along
els.

those lines.

The

service clubs have proved superb buildings for their chief funcbut the library is not properly placed it is too noisy, and there
isn't sufficient reading room; and at some extra expense the service
clubs are being redesigned with an enlarged wing for the complete separation of the library and providing additional reading rooms.
We also have plans for an entirely separate library, but we are not
tion,

sure

that is wise.
the side of personnel, it very early developed that one morale
officer per division and one morale officer per host as the only fulltime officers were not going to be a sufficient staff to supervise and
develop the recreational activities in the field.
Last winter, morale
officers were increased to give each morale officer with posts and
divisions two full-time assistants.
During the summer we recognized
the need for full-time recreation officers with every regiment.
Up to
that time they had been part-time officers not even part time; an
officer who perhaps w^as also too busy was told he was also recreation
officer with the regiment.
On October 10 The Adjutant General, at our request, issued an order
assigning a full-time officer with every regiment in charge of recreation, athletics, and amateur dramatics.
Those men presumably are
only now getting into their jobs because, during maneuvers, they
wouldn't have had a chance to operate.
The selection of those recreation officers and their training on their
jobs, I believe, are the things which, more than anything else, are going
to determine the success of the Army's recreational program, and the
tliat

On

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3761

We

have
Morale Branch is making every effort to train those men.
recently completed a tentative Regimental Recreation Officers' Guide,
which has just been sent out to the field. I would like to put it in the
record, if you would like to see it.
Acting Chairman Mead. All right.
(The document referred to was marked "Exhibit No. 325" and is
on file with the committee.)
Acting Chairman Mead. General, do I understand that these men
are not yet at their tasks; they are just being prepared for them?
General Osborn. No; they are at their tasks, probably just now. I
have said that the order came out on the 10th of October. Most of the
Army in the East was on maneuvers, and their task would be of different nature on maneuvers than it would be on the posts. They are all
on their job, I presume, as they get back to their posts, and they will
find this manual waiting for them.
DELAY IN CONSTRUCTION OF RECREATION FACILITIES
Acting ChaiiTnan Mead. When we made this investigation which
evidently was not for the purpose of ascertaining the athletic or recreational or service facilities, we noticed that there was a lag in the
U. S. O, building program, at many cantonments there weren't any
U. S. O. facilities within a radius of usefulness, and the committee
announced that they were going to take that matter up as soon as they
returned to Washington, but before we got back I believe they announced that they were going innnediately to start construction of a
certain number of buildings and they would be all ready by December
or January. I don't suppose this order that you are talking about
issued on October 10 with reference to the appointment of these recreational representatives had anything to do with the committee's
publicity at that time.
General Osborn. No, Senator Mead. I had been working on this
myself since June, when I was a civilian.
Acting Chairman Mead. I see.
General Osporn. And pushing the officers in the Army very hard,
and the mistake I made was that I didn't go high enough; otherwise,
As soon as I went to the Staff
I would have gotten it through then.
officers, even before I got to the general officers, they saw the picture at
once and said, "Of course, you have to have full-time recreation officers.
You can't do the job unless you have," and the order followed almost
immediately upon my appointment. Prior to my appointment I had
been only to officers below the General Staff officers, the heads of the
Staff, and I had worked pretty hard on them but hadn't been able to
get it through. General Ulio twice made the same reconnnendation.
In May General Ulio recommended full-time recreation officers but
was turned down by the Staff, and he simply didn't go high enough.
Acting Chairman Mead. The connnittee is very happy over the fact
that U. S. O. resolved their differences and got busy immediately with
their building program.
General Osborn. Might I correct and make a brief statement about
the U. S. O., because I believe there is a good deal of misunderstanding and blame on the U. S. O. which is unjustified. To my mind the
U. S. O was in no way responsible for the delay in the construction

3762

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

by the Government of these buildings I was in the whole IT. S. O.Government situation from the start when Charlie Taft agreed that if
appointed he would come to Washington and be Assistant Coordinator
under Mr, McNutt. I was told to get a joint agreement by Mr.
McNutt, Mr. Knox, and Mr. Stimson on the division of responsibility
for the recreation of the soldier and sailor, and send it to the President,
and we prepared a memorandum which was agreed to by those three
Cabinet officers, providing that the Army would look after the recreation facilities in the camps, the Navy would look after the recreation
of the sailor in the naval reservations, and that the Federal Security
Agency would invite the U. S. O. to provide the personnel for the
operation of buildings to be built by the Government in defense communities the U. S. O. to have a cam))aign to raise funds for that purpose, and to sign a lease with the Government for the operation of
;

these buildings, provi-ding the personnel.

We took that memorandum

to the President, General Marshall, Admiral Nimitz, Mr. McNutt, and

myself, I think early in February, subject to correction as to exact date.

Acting Chairman INIead. Yes.

General Osborn. The President approved the memorandum.
Charlie Taft was appointed Assistant Coordinator. The U. S. O. was
then brought in and told that their offer of service was accepted and
this was their specific job. A bill was introduced immediately for the
necessary appropriation. For various reasons, with which I am not
it was 3 months before the bill was finally passed,
and then the money was appropriated to the Federal Works Adminis-

at all acquainted,

tration instead of the Federal Security Administration. Taft, in the

all of his plans, specifications, and selection of
sites for the construction and location of these buildings in defense
communities. The Federal Works Agency had made no preparations.
They naturally felt that they had a responsibility for the construction
and location of these buildings, and there was another long delay during which they were trying to agree with Taft and the Federal Security
Agency whether Taft had picked the right sites and drawn the right

meantime, had made

specifications.

At that time, Mr. Dewey, who had been very disturbed at the delay
in the construction of these buildings, because he had been chairman
of the finance committee of the U. S. O. and had raised not the $10,003,000' which w^as their original purpose, but $13,000,000, had been
telephoning me constantly saying that he was getting increasingly in
an embarrassing position because they wanted to know why the
U. S. O. wasn't operating and what they were doing with their money.
Finally he came to Washington on September 24. He came to my
office at half-past 8 in the morning, and he was pretty disturbed.
I
said to him, "We will just go all over Washington and let you make
up your mind where the delay is and what should be done about it,"
and we saw everybody. By the end of the first afternoon, Dewey said
It is perfectly clear to

We

me

that there are just too

many

cooks

in this situation.

have two immense Government agencies, each apparenlly confiised as to the

division of their responsihility for the construction of these buiidin.tis, and at this
rate we will never get them done.

We went to Mr. Stimson and so reported just that to him. Mr.

Stimson said, "I can see that i)erfectly. I am going to talk to the
President about it at once." This was Thursday at 2 o'clock, on the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

the second day that Dewey was
Mr. Stimson called me np and said

25tli,

liere.

3763

The next day, Friday,

The President has transferrpd that $20,000,000 for the coiistrnction of the
U. S. O. buildings to the War Departuicnt. I want you to be in my oflBce with
Taft and General Somervell at 9 o'clock tomorrow morning.

We

Mr. Stimson said to General Somervell, "Here is

out and build these buildings. When do you think

were there.

the money.
you will oet

Go

them done?''

General Somervell said. "I think I will have most of them done
before Christmas."
The construction was commenced by the Army about the 5th of
October, within 10 days, we having reached an agreement as to the
specifications and the sites Avith Taft's organization in every case,
working very closely and rapidly with them.
At tlie present time, of the two-hundred-and-twenty-odd buildings
77 are ahead of schedule, 7 are actually completed this is as of Djcember 1
49 are on schedule and 67 are behind schedule, and 19 are not

yet started.
I attended the opening of the first two buildings at Fayetteville,
which is one of the places where they are most needed to take care of
the enormous population at Fort Bragg. The buildings were opened
on Friday, one a colored U. S. O. building and one for w^hite troops.
The building is fine and was completed 2 weeks ahead of schedule and
4 weeks ahead of the time General Somervell promised to have them
finished.
These l)uildings will, practically all of them, be available
Only a few specially constructed
to the soldier In' Christmastime.
large buildings needing steel in their construction are going to be
delayed until much later in the winter.
Acting Chairman Mead. The committee was of the impression that
the U. S. O. organization in the field were very anxious to get into
these buildings.
The trouble wasn't there. The trouble probably was
in getting the work started here by the right agency.

General Osf.orn. That

is

right.

Acting Chainnan Mead. And there was conflict that required coordinator's effort, and perhaps, as is the case in housing and some other
agencies of the Government, when a coordinator is called in there are
usually delays not caused by the coordinator but caused by inability
of the coordinator to get the Government agencies together. Personally, I l)elieve the responsibility ought to be made more direct and we
ought to eliminate, as far as ])ossible, the coordinator.

Go

ahead, General.
General Oshorn. Well, the Army would not have been able to do
this extraordinarily rapid job if it hadn't been for the fine preparation
made by Taft and everybody else in the situation.
Acting Chairman Mead. But it wa: all unfortunate in that it wasn't

We

finished the camp, we moved

started when the camp was started.
the selectee in, we are discharging him now at the end of his first
year, and we haven't got the recreational facilities, we haven't got the
U. S. O., we haven't got the athletic facilities ready yet.

General Osborn. That is right.

Acting Chairman Mead. That is unfortunate. But, as I said in
the beginning, it isn't your fault it wasn't the fault of the U. S. O.
It is just probably the lack of a prearranged plan,
officials in the field.
;

3764

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

and then the centering of responsibility in some one individual's lap

so that he couldn't avoid it.
General Osborn. I should think, Senator Mead, there was lack of
The things that the Army had prepared to do
sufficient foresight.
they did well. The Army Motion Picture Service, I think, expanded
That is almost a
just as rapidly as the men came into the barracks.
correct statement, I think. The Army Motion Picture Service wtis
a going concern, and they knew that was their job. The construction
of service clubs, the day rooms, and the recreation halls which the
Army had planned went forward, and the appointment of hostessesand the activation of those buildings went forward and have beeu
So that it is fair to say that even w^ith the weaksuccessful, very.
nesses, such as they were, in the athletic program, the other programs
were better than any the Army has ever had before. There was everything in the world to be done, and the training of these officers, which
is, as I say, going to make the success or failure, is all ahead of us.
There is, however, this situation, which very much concerns me, that
in the smaller camps the camps from 20,000 men down, and then particularly in the camps from 10,000 men down I am certain that the
recreational facilities are inadequate. It is very much harder to get
an adequate sum of money for a gymnasium, a field house, for a group
of 5,000 men than it is for a group of 20,000 men, and yet the smaller
group, because they are more isolated, because they have fewer resources, may need these extra facilities more than the larger groups,
and the whole question of the smaller camp is one which greatly

concerns me.

Acting Chairman Mead. General, what use was made of the plans
that were drawn up after the World War for recreational, athletic
It seems to me that we had adequate plans
facilities of this nature ?
formulated, prepared. Was anything done about those plans at the
beginning of this building program?
General Osborn. At the beginning of my appointment as chairman
of the joint committee, I telephoned Ray Fosdick in New York. He
came down to Washington within a couple of days and spent 4 days
with the joint committee, and also met a number of Army officers. He
He said that the building faciliw^ent over the program of the Army.
ties were far superior to anything they had even at the end of the last
war; while some of their buildings were larger, they weren't scattered
through all the camps. He had, for instance, field houses and theaters which would hold three or four thousand men, but there weren't
enough of them, whereas the Army this time had provided motionpicture theaters in every camp on the basis of one seat for every six
men, and it had provided these service clubs and other buildings. By
the way, he has now^ become a member of the joint committee himself
and attends their meetings and visits the camps.
Acting Chairman Mead. Fine.
General Osborn. He felt that Avith the advent of the motion ])icturo,
with the greater time that there was for the training of troops, because
went over
we weren't actually at war, the ]ncture was ditFerent.
his report. He had some hesitation, some doubts, about our athletic
program not going rapidly enough, but on the w^hole seems pleased
with the development, thinks it has been better done as a result of the

We

experience of the last war.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3765

SELECTION AKD TRAINING OF RECREATION OFFICERS

Acting Chairman Mead. AVoiild you say to the committee now that
you have an athletic director now in every cantonment and camp of
any size?
General Oseorn. No, Senator Mead. I am afraid that is not the
case. I think it will be the case. In the larger camps I am sure there
In some
is an athletic director or morale officer in charge of athletics.
cases we got some of the best men for that job that we could have
picked in the United States. I have just come from Bragg. The
morale officer, Captain HoUaday, has been post morale officer at Bragg
since January when I first saw him there. He has developed his activities with a great deal of administrative ability and imagination. He
has just brought in as athletic director a Captain Broyles, who is one
of the best -looking athletic directors I have ever seen, a Regular
officer called to active duty, a physical director in a university
or high-school group, a very high-grade fellow. Now, those are the
men we are looking for, and we have a lot of them who are Reserve
officers, but it is going to be some time before we get the right men
at the right tasks.
Acting Chairman Mead. In the meantime, why couldn't somebody
in authority issue a directive to all the camps and cantonments and
barracks, advising them of a minimum })rogram that must be instituted at once and authorizing them to select, temporarily, a morale
officer or an athletic director, or whatever the title is, to take over this
program and to begin work on the minimum program outlined in the

Reserve

directive. Now, for instance, in one camp we found an All- American

football player who M'ould have made a great athletic director in that
camp, but who was assigned to other work, and in other camps there
were graduates of the various universities of the country, letter men
in baseball, football, and they could make their own programs up if a
general directive were issued at once requiring a minimum athletic and
recreational ])rogrnm and calling for the a|)i)()intment without delay.
That is the trouble with this ])rogram. I don't know who is at fault,

there yet, and if we \\-ait until we select and train these

be there and we will have another sorry paragraph like
the one following the World War. and that paragraph will be our
athletic, recreational, and other facilities weren't quite up to date, and
it probably was the Congress' fault, it might have been the Department's fault, but it seems to me that it isn't anybody's fault everybody
is trying to do this job, but the Secretary ought to issue a directive,
I think, calling for the immediate initiation of this program and for
the selection within the personnel of that camp of someone to direct
it, and he might be a private, he might be a noncommissioned officer
it isn't necessary that he be any ])articular type of service man, as long
as he knows something about the responsibility.
General Osborn. I didn't make myself entirely clear. There is in
every post and with every tactical unit down to a regiment a man who
is responsible.
He is a morale officer with the larger unit and the
recreation officer with the smaller unit. In all of the larger units the
morale officer is supposed to have as his assistant an athletic officer

but

men

it isn't

it Avon't

full-time.

Acting Chairman Mead. All of the smaller posts?

3766

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

General Osborn. In all of the larger units.

Acting Chairman Mead. The larger posts.
General Osborn. Yes. IVIy doubts were as to whether all of those
assistants who are athletic officers have been appointed, but in the
meantime the morale officer is responsible for the athletic program in
the post or in the unit, and all those men have been appointed.
Acting Chairman Mead. Then how do you account for the situation
that we find in one camp wliere the camp commander is an enthusiast
for athletics, and he has a team vying with the other teams in the
Ancorps area for what equals the little world's series championship ?
other camp commander has no particular interest in athletics at all,
and he says it is just a waste of time. Now, in one camp the boys are
enthusiastic over their team, over the possibilities of being the champions, of winning the championship, while in the other camp they
have to go off some place by themselves and play catch back of a
building instead of coming right out in front like the other boys do
in the other camp and enjoying a good lot of lusty lung exercise,
shouting for their team in tlie afternoon. What's the reason for that?
That experience came to us only last September.
General Osborn. I have no doubt that is the case. Senator Mead,
and it is due to the policy of the Army of decentralized control, and,
personally, on the whole, and with exceptions, I believe in that policy
because I think in the long run it puts the responsibility for everything
within limits defined in Washington on the commanding officers, and
unless you do that you are not going to develop the qmdity of men
who can lead fighting men away from their source of authority. Now,

may be some delays there, and in different individual instances

may be necessary to limit more nearly and exactly the room which

there
it

the

commanding

all

division

has to move

We

are having a meeting of

on the 15th, a four-day
meeting. It is the first time they will have all been brought together
since last winter in Washington.
We are going to get quite a picture
from them as to how great the gaps are between the different camps.
Acting Chairman Mead. General, I take it, then, that you believe it
would be better to leave considerable authority with the post or camp
commander rather than to have an order issued by the Secretaiy to the
post and camp commanders, reinforcing the authority of the morale
and recreational officer and ordering a minimum recreational and
athletic program.
You believe that would be better?
General Osborn. I think that would be desirable. Senator Mead.
I think what you are suggesting may be desirable
Acting Chairman Mead. You think that my suggestion would be
desirable rather than just to leave it as a hit-and-miss proposition
based upon the attitude of the local commander.
General Osborn. Yes.
Acting Chairman Mead. Well, then, that is what I am in favor of,
and it occurs to me that if a directive were issued such as we have
just outlined, and temporary officers were appointed and it were put
into effect, the facilities, many of them, could be made available by
the voluntary effort of the men under the direction of the morale
or athletic officer, and before these boys leave for their homes with
their service behind them and perhaps some impressions that ought
not to be there, we would have these facilities available and we
officer

and corps-area morale

in.

officers

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3767

could, I think, make it more enjoyable for the boys and improve
the morale.
There are literally thousands of the finest type of men who are
experts in every sport, who are anxious to go in there on a voluntary
could have the stars of the
basis and help the morale officer.
American League and of the National League and of the football
leagues and every other league spending consideable time with the
morale and athletic director, encouraging the boys during their recreational period and making their camp life far more comfortable

We

now.
a boy who was a star at college, and he hasn't been able
He says they
to get a glove on his hand since he went to camp.
He said to me, "If we don't get facilijust haven't anything tliere.
ties pretty soon I think they are going to have someone break out
at camp.'"' That ought not to be. A situation like that ought to
be eliminated by a minimum directive calling upon these commanders to organize immediately under the authority granted in this directive to put over such a program.
I am just reminded that in the posts that are located in Alaska
and in the distant Caribbean Islands, Newfoundland, and other
places, facilities like this, where there are no other recerational
facilities, ought to be encouraged, and encouraged at once.
General Osborn. There has been delay there, not through any lack
than
I

it is

know

of effort, very laigely as a result of difficuties of priority of shiphave drawn heavily on Genping and construction materials.
eral MarshalTs c<mtiiigency funds to ship recreational materials to
the bases, and the Ked Gross has been very generous in making
allotments of money for the purchase of recreational materials, but
we haven't got the facilities in the bases yet that we ought to have,
there is no doubt of that.
Acting Chairman Mead. AVell, this minimum program could be
It couldn't take very much to set up
])ut into o])eiation at once.
a volley-ball coui-t, and it wouldn't take very much to set up a baseball diamond such as the boys might be satisfied with, and the same
is true all along the line.
I think that your Department ought to be supported and reinfoi'ced by the intense interest in it on the part of your superiors,

We

I think is due now.

General Oseokn. AVell, the difficulty of getting moneys for these
things is all along the line. There is not so much difficulty for
the Army, but we are next door to the Bureau of the Budget and
there is always a question there. And then it comes to Congress.
So that there are three hurdles, three appropriation hurdles, to jump
Last spring we were so short of recreational
in getting money.
equipment that there just were no baseballs, basket balls, footballs,
available, and no money anywhere to buy them, and the Red Cross
gave us a gift of a million dollars because of this critical situation,
Mnth which we purchased recreational materials for the Army.
Acting Chairman Mead. And the V. S. O. raised millions of dollars
and they were only waiting for the Government to build the buildings
so that they might invest it in recreation for the boys.
General Osborn. Yes.

which

3768

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Acting Chairman Mead. Well, now, the Congress has never refused
any money for recreation or for athletic programs, has it?
General Osborn. I am trying to think. Senator Mead. We had a
seven-and-a-half-million-dollar request for the construction of athwhich was cut to three and a half.

letic facilities

Acting Chairman Mead. By whom?

General Osborn. And that was the reason we haven't got more field
houses or more smaller gymnasiums or more equipment in the field.
Acting Chairman ]\Iead. Was that cut by the Budget?
General Oseoen. Well, I am not sure. I think it went through the

Army,

all right.

Acting Chairman Mead. Colonel, do you remember where that cut

was made ?
Colonel Montgomery.^ No. sir; I do not.
Major Hayes.- Senator, most of the shaving of funds available
was made either in the advisory committee of the War Department or
the Bureau of the Budget. These cuts are merely based upon the fact
that all funds appropriated for War Department purposes are relative and that in determining the policy a certain percentage of that
We can't exceed
is applicable for welfare and recreational purposes.
our quota.
Acting Chairman Mead. That is all right.
General, Senator Bridges would like to ask you a few questions.
question of control of prostitution
Senator Bridges. General, you remember that the Congress passed
the so-called prostitution bill here sometime earlier in the year.
General Osborn. The May Act?
relaSenator Bridges. Yes; and the mail that I have been getting
tion to that indicates quite an anxiety on the part of many people, as
to what has been done, and certain national organizations that are
concerned with that claim, rather state, that they haven't been able to
get any satisfaction out of the War Department as to what has been
done. Will you tell us what you are proceeding to do on that, what
has been done, and what you are proceeding to do ?
General Oseorn. In February Mr. Stimson sent me a copy of a
telegram he had received from some community advising that prostitution was rife in the comnnmity, and wanting the Army to do something about it. As a result, the joint committee called a meeting on
At the time we were having morale officers' convenereal disease.
We got an expert from
ferences in Washington early in February.
the office of the Surgeon General of the Army and from the office of
the Surgeon General of the Navy, a Dr. Moore from Johns Hopkins,
who is one of the leading experts in this country on venereal diseases
and its control. Bascom Johnson, who was concerned with this in
the last war; Dr. Snow, of the American Public Hygiene Association;
and four or five others of the people who know most about sup-

pression of prostitution and reduction of venereal diseases.

Col.

Murray M. Montgomery,

War Department.

Chief, Welfare

They

and Recreation Division, Morale Branch,

Maj. William B. Hayes, Chief of Budget and Fiscal Division, Morale Branch,
Department.
2

War

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3769

The unanimous opinion of

spent a day with these morale officers.
the Navy surgeon and the Army surgeon and all of the civilian experts
was that in the continental United States, at least, the idea that a
segregated district was a protection against venereal disease was a
fallacy, an entirely exploded theory; that any statistics supporting
such a fallacy were undoubtedly incorrect, as they had been proved
many times; that the Army should tolerate no segregated districts,
should simply fight prostitution in every form and especially in every
This was already the policy of the Army, but
commercial form.
as a result of this meeting, because the meeting had crystallized opinion, The Adjutant General was directed by General Marshall to send
out a notice repeating previous notices that the Army would not
tolerate segregated districts, and that no Army personnel would take
any part in permitting such a condition to continue.
That letter w^as sent out by The Adjutant General I imagine at
the end of February. I know that General Marshall sent a personal
message to the leading officers of the Army under him telling them that
he meant business witli this message and that it was done on his order.
Taft, meantime, was charged with the setting up of a civilian agency
imder the Federal Security Agency to do the kind of job that Bascom
Johnson did for Ray Fosdick in the last war in that field. Taft and
I, since I have been in as Chief of the Morale Branch, have had a
number of talks. Half a dozen times Taft has called me up and
said, "Watch such and such a situation; it may get so bad that we
are going to call the Army in to help us do something about it.''
He hasn't yet said to me, "This is the situation which we are going

make an example of."

Sanator Bridges. Well, General, there are a lot of reports around
some of these Army camps about trailer camps being set up and that
(hose are the centers of commercial prostituti(m. Has the Army, as
a result of this legislation which has been passed, taken any definite
steps to get rid of these trailer camps, and these centers of commercial prostitution which are within reasonable distance from Army
to

camps ?
General Osborn. I don't believe that the Army has invoked the
as yet. Senator; I think that they have in numerous cases
declared certain districts out of bounds and put M. P.'s at the head
of a street or a building or something like that, so as to see that the
rule is enforced and that the district is out of bounds.
They have had
any number of conferences with community authorities and Taft's

May Act

representatives.
Senator Bridges. Well, the answer, as I see it, is that under that
act, so-called, you have taken no definite steps to enforce the prov'sions
of the act. Are you working on a procedure for doing that, or are
you just going to let the matter slide in that respect? There is a real
concern on the part of many ])eo])le in this country about this, and
they have the idea that the War Department hasn't attempted to
enforce the act and carry out the provisions, and the point of my
questions is that in order intelligently to answer them and to know
what is going on, Is this act just going to be ignored, or are you going
to proceed to lay out some general plan to carry out the provisions?
General Osborn. I am perhaps not sufficiently informed to give you
a fully satisfactory answer, because this isn't directly a part of my job.


3770

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

I know a good deal about it

It isn't the job of the morale branch.
because of my contacts with Charlie Taft.
Senator Bridges. May I ask, General, whose job it is?
General Osborn. Well, it is the job of the Surgeon General and the
Staff in cooperation with the Surgeon General.
Senator Bridges. I w^as under the impression it would come under
you.

General Osborn. No, no.

^
Senator Bridges. That is why I was directing the questions tayou.
General Osborn. No; it doesn't come under me. It is the job of
the Surgeon General.
Senator Bridges. I don't want to be unfair to you. I was just asking for information. If it doesn't come under you I don't want to
press the questions at this time.
General Osborn. I am glad to give you my opinion but it would be
only what I have gathered from talking with Charlie Taft rather
than talking from the Army standpoint.
Senator Bridges. What is Taft's connection with the Surgeon

General ?
General Osborn. Oh, Taft has an enforcement squad under the FedHe first had Bascom Johnson in charge of it,
eral Security Agency.
the same fellow who was in charge of Ray Fosdick's enforcement of it,
but Bascom Johnson belongs to a previous generation. Taft then got
a man in from Cleveland who had been a safety director, a very finelooking fellow. He had me meet him before he ])ut him on. Taft has
his agents, and whenever the Army or his Federal Security people tell
him of a bad condition, he sends the agents to that conununity, as I
understand it. Then his agents and the Army and the community
the mayor and the authorized heads of the community get together
and discuss what steps they can take and should take to get after the

vice conditions.
As I understand

it, the May Act is invoked when the community

doesn't cooperate. It is to force the community to cooperate. And
Charlie has told me and this is not official; he has just told me personally.
I asked him about it, and he said, "We haven't gotten to the
place where we haven't gotten the cooperation of the community and
where we have a real good chance to put the May Act into effect."
Senator Bridges. Then if we want to get the exact information, we
would have to go to the Surgeon General of the Army, who would liave
direct charge of that.
General Osborn. That is right. Colonel Montgomery tells me that
some weeks ago the Armv issued a circular stating exactly the circumstances under which the May Act could be invoked and describing the
steps and methods and procedure for invoking it.^
Senator Bridges. Could we have a copy of that put in the record of
the committee,^ and perhaps I would like to have a copy personally.
General Osborn. Surely.
Acting Chairman Mead. Not so very long ago I read an article in a
newspaper I believe it was followed up by being contained in some
publications in which the Public Health Service severely criticized the
Army for lack of cooperation in the control and elimination of venereal

'

Sul)s<'(|uently subniittod

and IneUulcd

in Uin ap|)oii(lix

on

p.

4249.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3771

Was there any answer, any explanation of that from Army

sources? Was this apparently widespread criticism published all over
the United States merited, or was there any ground for it?
General Osborn. I think if you are referring particuarly to the criticisms which were voiced in the review of Dr. Parran's book
Acting Chairman Mead (interposing). That is right.
General Osborn. I have known Dr. Parran for years very intimately.
Acting Chairman Mead. And, I believe, later confirmed by authentic sources in press releases.
General Osborn. Yes.
Acting Chairman Mead. They very severely criticized the Army
and said that they were responsible for breaking down the strong barrier that was so eifectively built up in the World War under Secretary
Baker and continued on, evidently, until just recently.
General Osborn. I haven't read the book, and I didn't read the reviews, but I am quite clear on this, Senator Mead, that this attack
and I am not sure that he did attack, but I think he indicated, certainly,
or the reviews indicated
Acting Chairman ]\Ie.^d (interposing). I think "indicated" is better
than "attacked." It really wasn't an attack.
Geneial Osborn. Indicated that the trouble with General Marshall
and Mr. Stimson was tliat they were not convinced of the necessity of
enforcing the May Act. you see. Now that, to my personal knowledge,
was highly unfair, and that is the reason that I know the book has
actually been circulated. I know there has been a terrible lot of going
back and forth between Federal Security office and the War D^^partment, because in that respect I think that if the book does say that, it
was grossly unfair.
Now, if the book says there are Army officers who don't concern
themselves with the supi)ression of prostitution, undoubtedly the
book is correct. This is a large Army, and there are lots of officers and I am perfectly sure there are officers as there are civilians
of high caliber who believe that a segregated district is a good thing;
that it is a way to reduce venereal, and so on. Those officers are
being told tlu\y are wrong and the staff won't stand for it, but it
takes some time. So, in that respect, I think there was real unfairness because I know the otfoi-ts that Mr. Stimson and General Marshall have made iu this diiection. intensely sincei'e.
I feel quite
strongly about it.
Acting Chairman iMe-Vd. I understand the book was sent to Members of the House and sent from some source that evidently wanted
action taken.
diseases.

OPERATION or POST EXCHANGES

Acting Chairman

morning

INIead.

Another matter

would

like to

bring up

the question of post exchanges and the system that

governs their operation. For instance, it is my understanding that
in some of these posts the Army is exempted from tax payments on
cigarettes and other articles, but they in turn charge the boys the
retail plus the tax prices. In some cases they charge them more than
they would have to pav for the same article in a neighboring store.
Why is that ?
General Osborn. Colonel Montgomery?
311932 42 pt. 10
4
this

is

3772

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Colonel Montgomery. They are not exempt from the tax in the
exchange.
Senator Herring. Unless Federal reservations, according to the
law ?

Army

Acting Chairman Mead. There are certainly many of them on

Government reservations. Do you know of cases where cigarettes
are tax exempt?
Colonel Montgomery. None whatever in the Army; only outside
of continental limits on the Navy ships, after they have passed the
zone; then they can sell them without tax, but in our Army camps
the cigarettes are not tax exempt.
Acting Chairman Mead. What about State taxes?
Colonel Montgomery. I think there are probably other cases of
exemptions, too, that may slip our mind for the moment.

Acting Chairman Mead. What about exemptions in Alaska, Newfoundland, outposts in the south? At any rate, there are certain
exemptions, even though they be only State. Now, why is it that
they are not sold at cost ? Why is it necessary to make a profit on
these sales ?

General Osborn. Until May the Army post exchanges were small
stock companies belonging to the units using them and run at a
profit, the profit being distributed to the unit and comprising a part
of their company funds. That system was immensely valuable in
many cases. The company had pride in the profits and in their
company funds and it meant the officers of tlie company had some
discretionary fimcls to use when they moved around the country, or
had some critical thing come up.
In May it was realized that with the enormous growth of the Army
the system should be somewhat centralized; that you couldn't multiply your post exchanges as rapidly as you were multiplying the
size of the Army, so the stock system Avas done away with. The post
exchanges on each post were consolidated, so instead of there being
separate post exchanges for each unit, maybe a dozen on one large
post, they were in effect made small chain stores on each large
post, one central chain-store operation on each post.
They were
made trusted organizations and not stock organizations, and a central control was set up in the form of the Army Exchange Service,
which is the Morale Branch.
That central control has wide powers under regulations issued last
May. It reaches price agreements witli large manufacturing companies on standard articles and sends those price agreements out to all
of the ])ost exchanges as the price at which they can buy these goods.
It can determine what goods within limits, what standards goods the
post exchange, local post exchanges, will buy. It can also fix the selling price on all these standard goods. It can describe the type and
specify the cost of the e(|uipment used in tha post exclianges.
It can limit them in their inventories and it can specify limits to
their profits as well as in the write-up or mark-U|) before they sv^ll
the goods, so it lias very broad powers, ample, sufficient for ])rofit con
trol, I believe.

It also audits all of the post exchanges, central audit system. These
regulations for the chains were drawn up toward the end of May, I
think. They changed from stock companies (o a trusted organization

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3773

and the chain store sort of operation in the posts began to take place
in July, from the 1st of July. It was supposed to go into effect the 1st
of Jnly, but actually it took a little while. The profits of the old
outfits were turned over to the outfits and the new post exchange took
over the inventories with a debt for them, you see, so that the process
of turning over wasn't a very rapid one; couldn't be because if a new
central post exchange took over a regimental post exchange it paid
for its inventory and it took a little while to build up its own standard.
It had to finance itself afresh. Now in part that financing has been
done out of the profits of the operation and in part it has been done
out of the advance of funds from the Army Exchange Service. The
Army Exchange Service has negotiated a loan up to $2,000,000 with
the R. F. C. for this purpose. At the present time, however, it has only
got $200,000, to small exchanges.
Acting Chairman Mead. That profit matter ought to be eliminated
as rapidly as possible.
think there should be 8 or 9 percent profit on
General Osr.ORN.
the post exchanges. That would still enable them to sell cheaper than
any store because so much of their overhead is covered.
Acting Chairman Mead. I mean that original more or less unleasonable profit ought to be eliminated as rapidly as possible.

We

General Osborn. That is right.

Acting Chairman Mead. What is your agency able to do with
profiteers who prey upon the service men by overcharging them in
their own private enterprise located not far distant from tlie camp?
For instance, at one Army post we paid 5 cents for Coca Cola at the
service club, and just a short distance away we paid 25 cents for the
same brand of Coca-Cola. Now I was wondering if these big national
organizations would permit their agents or their customers to profiteer
at the expense of the service men to that alarming, and I might say,
disgraceful degree.
General OsroRN. So far as it is a connnunity problem one of the
jobs of the post morale officer is to be in touch with Mie community
people, the local political officers of the community, the local recreational director, and the local U. S. O. or other recreatioii group in the
community, and in great numbers of cases the communities have
worked with the morale officer of the post on such matters as rents
and other things where prices teiuled to rise exoi-bitantly. I don't
know that there is much you can do on a matter like this Coca-Cola
thing.

Acting Chairman Mead. Except perhaps you could take it up with

the national organization and they may prevent it as far as possible.
They are a patriotic organization, I understand they are doing some
building operations for the War Department, building a big ordnance
plant, and certainly they are interested in the defense program, and
it occurs to me that you might communicate with companies like that
and insist that they use their influence to cut down this profiteering on
the boys.
:

army educational program

Acting Chairman Mead. There was another matter, the matter of
education.
these boys;

We
we

are interrupting the education of a great many of

are taking them out of high schools and colleges and

3774

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

AVhy isn't it
universities and we are training them for tlie Ai-my.
possible for an educational program to be instituted in which these
couldn't
boys might learn Spanish or other helpful languages?
they initiate a correspondence course that would be helpful in all these
couldn't they give them refresher
camps and cantonments?
Now I understand they
courses in various engineering vocations?
have educational activities in some places, but in others they haven't.
What do you think about that ?
General Osborn. Well, there are so many aspects to that problem. I
wish I had Colonel Young, in charge of education in the Morale Branch,
have had an
here, but I can give you some of the salient points.
excellent civilian committee on education, of which Dr. Dykstra was
originally chairman, working as a subcommittee, joint committee, and
have done some of the things they wanted us to
advising with us.
have set
haven't been able to get all of them through.
do.
up an Army institute correspondence school got it through the staff
last week. It will cost $500,000.
Acting Chairman Mead. Army Institute Correspondence School ?
General Osborn. It will cost that, roughly.
Acting Chairman AIead. And what courses will it suggest?
are going to use the ma-^
General Osborn. Any type, of course.
terial, the standard material of some of the big correspondence schools
as our teaching material so we will have every course available.
Acting Chairman Mead. Such as Scranton or La Salle, one of those
correspondence schools ?
General Osborn. But we are going to use Army personnel because
of the great reduction in cost. There are some 6,000 college professors
in the Army and I don't know how many more men who are teachers,
who are qualified to handle the papers in the correspondence course.
There are going to be two branches of the institute set up, one in the
Ninth Corps Area on the coast and one in the Second Corps Area in
New York. They will be in effect two separate correspondence schools.
have just this past week been interviewing the men for those
major jobs. Colonel Young of the Morale Branch is a specialist in
university correspondence school work himself and knows a great deal

Why

Why

We

We

We

We

We

We

about them. Plans were delayed somewhat because by bringing in

civilian teachers there would have been other advantages, either civilwere 3 or 4 weeks trying to decide
ian teachers or soldier teacb.ers.
which; the civilian teachers would have been more expensive. That
would have weighed against it. It also would have been less elastic
because they couldn't be moved in and out. The staff finally decided,
and I think very wisely, on the Army teachers for the school. Those
schools will be in operation shortly. There will be a $2 charge which
will cover all the courses a man wants to take. I think the actual cost
is something like $20, so we will be coming to Congress to ask for the

We

other $18 in supplemental appropriations.

Senator Herring. During the past 7 or 8 weeks while these boys
have been on maneuvers there hasn't been much chance for schooling.
General Osborn.
are just in under the ro])es on this.
Now
other educational activities have been local. We have cooperated,
and the corps areas and the posts have cooperated, with local agencies
so that there has been a great deal of sporadic educational work being
done in the camps. Local universities have sent teachers in to teach

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3775

courses; some States have appropriated funds to provide teachers for

I think the State of Mar\dand provided some funds for
teachinr.
teaching in Meade and some other camps. There is a group at Harvard
who have been supplying lecturers and teachers. The College of

William and Mary has been doing a good deal. Princeton is planning
a series of lectures and teaching schedules, and in addition, arrangements have been made in this correspondence institute by which the
universities will give courses to men in order to enable them to complete their university or continue their university curriculum.
I can't make as specific a statement on that as I should but arrangements have been made so if a man wants to continue his college
curriculum and take college courses which will be credited at the
college, that provision is made for that in the Army Institute.
Acting Chairman Mead. I suppose the same is true insofar as vocational courses are concerned, if you are going to have a mechanized
Army you want to have an ever increasing force of skilled workers and
no doiibt you are making arrangements for the education of men in

the

skills.

General Osborn. Well, the Army, of course, as part of its training

has one of the most immense educational programs there ever has
been, all the mechanical skills for the men actually in their job.
There is a real demand for training mechanical skills on the part of
the men who are not in that particular service and we expect that
demand will be met through the corr('S])ondence school.
Acting Chairman Mead. But nothing has been done yet insofar as
fitting the men to skilled trades in civilian life after they leave the
Army. They train them to do a specialized job in the Army, but in
the Navy they give them a more general training, so that they are
fitted for skilled occupations in civilian life, but your correspondence
course is going to treat that insofar as your department is concerned?
General Osborn. Yes; that is right. 'I'hat is all we will be doing of
hat sort.
Acting Chairman Mead. When we consider the attractiveness of the
service in the Navy and the fact that they have been able to secure all
the necessary personnel on a voluntary basis and assuming that their
wants are not as high as the Army, we must attribute some of it to the
educational program, the training program, and perhaps the facilities
for education and for recreation that are perhaps a little more available in the Navy than in this new, ra])idly developing selective army.
General Osborn. And the travel and sense of adventure.
Acting Chairman Mead. But you can see that the education and the
training has something to do with attracting personnel.
1

TREATMENT OF ENLISTED MEN AND DRAFTEES IN PUBLIC PLACES

Acting Chairman Mead. Now, another matter. General, that I am
and it is attaining more and more interest in the Congress
every day, and that is the debarment of our service men from hotels
and restaurants and public places because they wear a uniform. I
understand that a bill has Iready been introduced in the Senate
bearing upon this apparent boycotting, and it occurs to me that it is
becoming rather widespread and will have an effect upon the morale.
I know of cases where the boys come to Washington and they have to
find a place to change their clothes, take off their uniform and hide it,
interested in,

3776

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

as it were, in order that tliey might take their dates to some of the
restaurants and some of the hotels here.
That has an effect upon the morale and probably is a problem that

you have been considering in your department. What do you think

about it?
General Osborn. We have considered it a lot and it is highly personal with me because my son, who is a private, came down to spend
Sunday with me and I was staying at one of the reputable hotels in

Washington
in

at the time.

my uniform

He

said, "I had better not come in to dinner

me in there," which brought it home

they won't want

to me.

Acting Chairman Mead. The same experience occurred to me. My

who is a private, brings several of his associates home and if they
want to go to a so-called swanky club or hotel they bring their civvies
with them and change their clothes out at my home and then go in to
son,

their hotels.

General Osborn. It is shocking.

Acting Chairman Mead. I don't think that is quite right.
General Osborn, One verj^ fine thing that we have had a little to do
with, and the Army rather than the Morale Branch has had a great
deal to do with in these maneuvers in the South, particularly the
recent maneuvers in the Carolinas. There was a maneuvers headquarters set up 2 months in advance of the maneuvers and the maneu.ver headquarters, two very competent officers, got in touch with the
staffs of regional recreational directors and the U. S. O. sent Strawbridge down to represent them, and they went to every town in the
two Carolinas and set up a community counsel, canvassed the town as
to who would take soldiers in to spend the night with them, and
practically every single town in the two States set up a quota of beds
for soldiers and they literally all of them covered pretty nearly every
extra bed in the town; extraordinarily small towns said they would
take in two or three or five hundred soldiers. Arrangements were
made with the unit commanders during the rest periods in the maneuvers, which, of course, were very frequent, for the appropriate number
of men to be convoyed in to each one of these towns, and the men were
taken in two, three, five hundred at a clip turned into central headquarters, given their slips and addresses and sent to the homes of
;

these people.
I have just

come from there. I talked to literally hundreds of the

boys and while not to many householders, to all of the representative
southern people, representative of the householders in connnunities,
and they said that it was an extraordinary performance; that the
southern peo])le were delighted with the soldiers, their behavior; that
all of the soldiers had written letters of thanks, most appreciative,
a great many touching stories, and the only place that the system
broke down, and then it broke down very badly, was from a very
unexpected source.
The men at each rest ]ieri()(l were a neAv grou]) of men because the
maneuvers kept changing. The firsl week everything went wonderfully.
The second week the men who had been in the connnunity and
then moved on in the process hitchhiked back so as to spend the week
end with the same people, so when 203 soldiers were brought into a
town a hundred soldiers had come back from some other connnunity.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3777

and there was a good deal of confusion, but the soldiers in the Yankee
Division, many of whom I talked to, said, "If the rest of the country
had the kind of hospitality and attitude toward the soldier the South
has we would enjoy our stay in the North a lot more."
Senator Herring. Mr. Chairman, I don't want to be left out of this
proud fathers' club being formed here. I have a boy in the service,
I stay at a hotel down here in Washington.
too.
I wonder if there
is any definite experience where a boy has been refused admittance.
It seems to me it is the price on the menu card that keeps them out of
most of these hotels in Washington more than the fact they have a
uniform on.
General Osborn. I have had no personal experience myself. I have
read about and been told about signs, "Xo soldiers allowed," "No dogs
and soldiers allowed." That sounds to be humorous.
Senator Herring. I have seen in the Mayflower they seem to be made
I wonder if there is any case
as welcome as anyone who comes in.
where a boy has been excluded simply because he has a uniform.
Acting Chairman Mead. Senator Green has a bill in. I think the
basis of it is the signs you talked about and the positive instances of
exclusions that have occuired. Now, my son told me definitely to
bring the son in again that he only got in a hotel with his uniform on
under the pretense that he Avas looking for me. and he definitely told
me that the boys that came over with him were denied the right to
enter this particular hotel, and he said that was rather commonplace,
and I put an article in the Record yesterday by Major Newcombe, of
Fort Rodman, in which he pointed out that the morale of the boys was
all right but if the boys were treated, as. for instance, you said they
were treated in the southern connnunity, the morale would be much
better, and so he said the difficulty isn't at the camp; the difliculty is in
the community outside of the camp, and if the morale of the people
will rise and if they will think more of the boy and of the uniform he
wears, they won't have to Avorry about the morale in the camp.
I am sure there are definite instances where, as you have indicated
and as I have indicated, the uniform is not welcome in the public places,
some of them, here in Washington, that is ]);nticularly the uniform oi
a private. Now, my son and your son probably have private uniforms.
Senator Herring. Mine doesn't.
General OsroRN. Mine is at the candidate school now.
Acting Chairman Mead. General, not to neglect the problem or the
subject, have you made any investigation of denying soldiers the right
to enter hotels and restaurants?
General Osborn. No. Colonel Montgomery says he investigated

one case.
Colonel Montgomery.

One

case came to our attention a soldier in a

tried to enter a dining room and was denied
admission.
sent a rej^resentative to that hotel merely to find out
why, and they said that they had a rule that no man could enter, no
gentleman could enter the hotel dining room without a coat, and we
explained to them that under the unifoim regulations the coat was not
a part of the equipment, the way the man was then dressed, and he
said lie was very sorry indeed and would rescind his regulation and

hotel in

Washington had

We

admit them.

3778

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

That is the only case that has come to our attention. Many cases
have come to our attention in which the hotels to some extent, but
mostly motion-picture houses and other points of recreation, have been
very hospitable and have given soldiers reduced rates, if in uniform.
Acting Chairman Mead. If any further instances come to the attention of the committee or to my personal attention, will you be very
glad to investigate them?
Colonel Montgomery. Yes,

sir.

Acting Chairman Mead. General, it occurs to me wlien that son

brought that matter to your attention there was something back of it
at least the boys were of the impression they were not welcome.
General Osboen. Yes.
Acting Chairman Mead. Instead of having these boys going around
looking for their fathers or in some surreptitious way getting into
these places with their uniforms on, are there any rules about taking
the uniform off if the hotel will not allow them to enter the dining
room with it on and change their clothes into civilian clothes?
General Osborn. I believe a soldier is not required to wear uniform
when off duty at the present time.
Colonel Montgomery. He can go in civilian clothes if he wants to.
Acting Chairman Mead. It is unfortunate he has to make the change,
and it is regrettable that he is barred in some few instances, but it
occurs to me that it is a problem for your agency to look into. In
view of the progress being made in expanding our recreational facilities and our athletic activities, it occurs to me that there is only one
thing necessary and that is something to make it instant and univei-sal,
rather than to wait until you have these recreational officers trained
and designated to the various posts, and the only way that could be
done would be for the Secretary to issue an order that would require
a minimum of recreational and athletic activity and the immediate
designating of someone in the post or camp or barracks to act in a
temporary capacity until you are able to have one of your men appointed for that particular location.
General Osborn. There are recreation or morale

officers in

every

place responsible. Some of them aren't good enough but they are
responsible and getting better all the time.
Acting Chairman Mead. Some camp commanders are opposed to
their program and others favor it and they still need the authority
of the directive to reinforce their own position, so it occurs to me that
before these 12-month boys are discharged and sent home that we
really get this program into operation.
By reason of the fact that
we didn't have a plan we are just getting our U. S. O. buildings
finished and by reason of the fact that we didn't have a plan we are
just getting our guest and hostess houses finished, and our recreational
halls and our gynniasiums, but some of them won't be ready until the
year is up, and that is unfortunate.
Your agency is doing a good job, even wnth a late start, even with
an inadequate amount of money, but I still believe that we have the
talent, we have the facilities, although they are not as adequate as
they might be, if only instructions were issued for them to be put
That is all I had. That will be all. Genin operation immediately.
eral, and we appreciate your presence here this morniuir.
If you
have anything further to go in the record we will be glad to receive it.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3779

Genei-al Osborn. I luive a historical count of Morale Branch's present operations and of the divisions and services, if you would like to
have them in the record.
(The documents referred to Avere marked Exhibits Nos. 326 to 329"
and are included in the appendix on pp. 4162-4197.)
Acting Cliairman Mead.
will appreciate it.
General Osroiin. I have some of the manuals on amateur theatricals which Me have been active in developing, the song book, and
shortly we Avill have the athletic manual.
(The manuals referred to were marked "Exhibits Nos. 330 and 331"
and are on file with the committee.)
Acting Chairman Mead. I have here a statement from Mr. Charles
F. Palmer, the Coordinator of Defense Housino-, which has been submitted by him to the committee with a request that it be inserted in
the record, and at his request we will have it inserted in the record.^
Acting Chairman Mead. The connnittee will now adjourn until
Thursday of next week, when we will hold hearings on copper, lead,
and zinc production. That will be all.

We

(Whereupon at 12:20
December 11, 1941.)
1

Appears in Hearings, Part

8.

o'clock a recess

appendix,

p.

2849.

was taken

until

Thursday,

INVESTIGATION OF NATIONAL DEFENSE PKOGRAM

THURSDAY, DECEMBER

11,

1941

United States Senate,

Special Committee to IN^'ESTIGATE
the National Defense Program,
Washington, D. C.

The committee met at 10:40 a. m., pursuant to adiourmnent on

Friday, December 5, 1941, in room 318, Senate Office Building, Senator Harry S. Truman presiding.
Present: Senators Harry S. Truman (chairman), Carl Hatch,
James M. Mead, Joseph H. Ball, Harley M. Kilgore, and Ralph O.
Brewster.
Present also

Senators

Utah; Mr. Hugh A.

Edwin

x\be Murdock,
Mr. Charles P. Clark, asso-

C. Johnson, Colorado

P'ulton, chief counsel;

ciate chief counsel.

The Chairman. The committee will come to order. Mr. Riskin

will be the first witness.
This committee has been somewhat alarmed
at the falling off in production of copper, lead, and zinc over the
last 10-year period and particularly were we somewhat distressed that
the production of lead this year will be the smallest since 1926, I believe.
It will be smaller than last year, and the production of zinc,
while it is greater than it was last year, is still under the former
production figures for 1926 and the years following that. There has
been a gradual decrease in domestic production in all these strategic
metals, and what this committee is particularly interested in is to
find out what the cause of that decrease is and what the remedy is to
get production back to the point where we can domestically produce
the necessary strategic metals for use in the present emergency.
have got to have these metals to win this war. That is what we are
interested in, to see that the war is won and won as quickly as

We

possible.

Mr. Riskin, will you take this seat right here?

Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, in the testimony you are about to give before
this committee, so help you God?
Mr, Riskin. I do.
The Chairman. Be seated, Mr. Riskin, and give your name and
title to

the reporter, please.

TESTIMONY OF BEN RISKIN, DIRECTOR OF RESEARCH, INTERNATIONAL UNION OF MINE, MILL, AND SMELTER WORKERS, CONGRESS OF INDUSTRIAL ORGANIZATIONS, WASHINGTON, D. C.
Mr. Riskin. My name is Benjamin Riskin. I am the director of
research of the International Union of Mine, Mill, and Smelter
Workers. I am stationed in Washington.
3781

3782

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Tile Chairman. Mr. Riskin, you had a statement and an outline

which you wanted to lay before this committee. I would appreciate
it if you would put that before the committee as intelligently and
briefly as you possibly can.
Mr. EiSKiN. I wnll be glad to do that. I have sent to you already
a couple of copies and I am getting other copies for you now, for
the other Senators on the committee, of a program for production of
This program was submitted to the
the vital nonferrous metals.
President of the United States as a contribution of our organiza-

tion in a positive fashion for the all-out production that is necessary for our victory over the Axis Powers. Our union feels that
the time for discussion over what took place, over the failure, is
past; that every American must rise to meet the dark emergency that

confronts our Nation, our liberties, our lives.

The American people must answer strongly and quickly the attack upon us. We must join with our allies in Britain, the Soviet
Union, and China, and w^ith all the other anti-Fascists throughout
the world everywhere to guarantee the absolute destruction of the
Fascist Axis. And in this fight, the battle for production assumes
new significance. In the effort to outproduce the Axis Powers, to
turn out the huge quantities of materials of war which will guarantee
our victory, labor's role is fundamental.
The International Union of Mine, Mill and Smelter Workers recognizes its responsibility to our Nation in this crisis. Even before
the outrageous attack by the Japanese partner of the Axis upon our
peaceful Nation, it had become evident that the democracies of the
world were faced with serious shortages of vital base metals, the raw
materials for war. The measures taken to date fall far short of the
needs even of all-out aid to our allies; today obviously all past concepts of our needs, all past concepts of the sacrifices we must make,
fade in the face of reality we know now w^e must exert every energy,
use every bit of knowledge, every production trick, to produce in
quantities never before dreamed possible.
Toward this end, our union has prepared this program and stands
ready to participate in the true essence of national unity with management and government to guarantee our final victory, and we are
offering this memorandum to this committee, as we diet to the President, not as a complete panacea for the problems involved, but more

as a

new approach to this whole question.

would like to call attention to the fact that our own whole pro-

gram

discusses the industry on a national, integrated basis, because

is the only national organization of labor in the entire nonferrous-metals industry starting at the mines, following through the
mills, the smelters, the refineries, and the primary f;ibricating plants,
and for that reason we see the picture on an integrated basis.
Before going into our recommendations, Senator, I would like to
summarize the broad measures already taken by industry and the deGenerally speaking, there were six measures taken
fense officials.
thus far:
(1) The importations of available supplies, as from the
South American mines; (2) sympathetic assistance to the industry's pressure upon labor to work a 6-day w^eek; (3) curtailment
of existing fabricating j)lants handling consumer goods, so as to save
raw materials for defense needs; (4) large-scale expansion of fabri-

our union


INVESTIGATION' OF

THE NATIONAL DEFENSE PROGRAM 3783

eating capacity for defense production; (5) the use of price increases
as an alleged incentive to greater output; and (6) finally, loans to
mine operators for expansion of existing properties.
Of these six stei)s. broad approaches to the problem, only the first
and the last steps, namely, the importing of copper from South
America and loans for expansion of properties here, only those two
steps really serve to increase supplies of needed metals.
All the other measures clearly demonstrate a failure on the part of
the individuals and agencies involved to get at the root of the problem to increase production of the necessary metals.
We find, therefore, curtailment of existing fabricating capacity,
side by side with large-scale expansion of new fabricating capacity
an obvious and absurd paradox; moreover, a complete evasion of the
essential task of expansion of capacity at the very start of the industry, at the mine.
'Put first things first" has become a well-worn phrase around the
defense offices, })ut first things have not been ]iut first in the consideration of this major j^roblem confronting our Nation, and briefly,
as an o^'er-all attitude, our organization contends that prices do not
lyiine ore and will not bring rock to the surface; that expansion of
fabricating capacity in our industry will not bring more rock to the
surface; curtailment of existing capacity will not bring more rock
to the surface; and that since no other major approach has been made
to this problem either by the Federal agencies or by industry itself,
no more rock is going to be brought to the surface until and unless
drastic and immediate changes are made in the entire program for
product i(m.
More rock will be brought to the surface, more metal recovered,
only if the miners, the smeltermen and other workers in the industry
become an integral part of the whole production ])icture, and, therefore, basic to this entire discussion is the understanding that there can
be increased production starting at the mines, only if conditions of
labor are improved by the various means to be suggested to make it
possible for men to j)r()(luce more rock and get it to the surface.
Now, our recommendations. Senator, cover some 27 pages, and I
have a sort of brief of this which I will refer to, and if you and the
other members of the committee would like further explanation, I
Avill be glad to go into greater detail.
The CiiAiniMAN. We will make this brief of yours a part of the

record.

Mr. RiSKiN. All right.

(The document referred to was marked "Exhibit No. 332" and
inchided in tlie appendix on p. 4203.)

is

NECESSITY FOR SURA'EY OF EQUIPMENT AND PRODUCTION CAPACITY OF MINES

Mr. RiSKiN. In the place of the measures already discussed, our

union offers the following basic points:
Stranselv
First, we must have an industry-wide inventory.
enough, over the period of time of the defense ])rogram, neither the
industry nor the Government has assembled a completely detailed
and comprehensive summary of our industry's capacity and equipment. Now, it is terribly hard to figure out how much co])per you
are going to get next year if you don't really know how many

3784

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

copper mines you can be working next year, and yet we find as a
is no general agreement either in industry or in Government, no general knowledge, as to precisely how many copper
mines can be put into operation immediately.
We suggest that we must ascertain the number of mines in opera-

fact that there

tion, the present real capacity of those mines, at full-time operation,

number of miners at work, the potential capacity of those mines

the

if new equipment were installed, the availability of new mines.

Such information has never been assembled, with the result that very
little is known about the production ])otentials, and there is no correlation between mine capacity and fabricating capacity.
Senator Hatch. May I interrupt you?

Mr. RiSKiN. Yes.

Senator Hatch. It wouldn't be a great task to assemble that information would it?
Mr. RisKiN. I don't believe so, Senator.
Senator Hatch. Do not most of the mining States have their
schools of mines and their geological services wliere they keep right
in touch with that situation?
Mr. RisKiN. Yes.
Senator Hatch. I have before me right now a rei)ort made to the
Governor of my State on strategic minerals in New Mexico, a very
extensive report, and giving most of the information that you are
discussing there now.
Mr. RisKiN. Yes.
Senator Hatch. And I imagine in most of the mining States you
could obtain similar information.
Mr. RisKiN. There are so many angles to this, you see. First of
Now, the Bureau
all, you have to determine what a copper mine is.
of the Census uses a definition of a copper mine, and the Bureau
of ]\Iines uses a completely different definition of what constitutes a
copper mine. The question is whether you are going to say that
only the copper mines, that is, only those mines which the Bureau
of the Census includes as co])per mines, are to be taken into our
National inventory, or whether all the mines that the Bureau of
Mines considers to be copper mines are to be considered.
One of the reasons we say that this isn't a problem of copper alone,
or of zinc alone, or of lead alone, is that our industry, as you know.
Senator, is a complex one. The ores are complex ores you will have
lead and zinc in the same rock, or zinc and copper in the same rock,
plus other metals. Therefore, to determine how much more copper we
can get next year it is necessary to know the actual production of all
the mines whether they are considered copper mines or lead and zinc
mines or primarily zinc mines or primarily copper mines, you see, because we want every possible single pound of copper, of lead, and of
;

zinc.

Senator Hatch. I am still of the opinion that if the facilities in the

States were used inmiediately, the greater part of that information
could be obtained without too much loss of time,
Mr. RisKiN. I feel the same way I agree with you. I am glad you
stressed that point. Senator, because I don't believe that these proposals that we are making are proposals that are impractical. I think
they are all obvious, simple things which if done will help us meet this
;

problem.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3785

The Chairman. We have had some difficulty getting that informafrom O. P. M. I don't think O. P. M. has it, but I believe these

tion

agencies to which the Senator from New Mexico refers do have that
information, and if it were gotten together we would have the answer to

what you are stating there.

Mr. RiSKiN. That is right.
The Chairman. Go ahead.
Mr. RiSKiN. I would like to point out that unless one has, unless our
Government has. this coordinated picture of what the industry is, how
many production units there are, or how they can be used, or what is
needed to use them at maximum efficiency unless you have these basic
factors to work witli, you are liable to get into an awful lot of trouble
and pull a lot of obviously incredible moves. Now. I would like to
give one instance of what seems to be absolutely unexplainable.

Defense officials a year ago faced an industry situation in whicli our

fabricating capacity, brass falirication. was greater than mine output
from both domestic and foreign sources under existing production
techniques; that is, our brass mills could })roduce more brass than our
domestic and imported copper and our zinc could meet yet, without the slightest exphuuition of their action, the defense officials
suddenly aimounced the gi-anting of $85. ()()().( )00 to the bi-ass industry
to expand brass ))roducti()n by anolliei- 79 percent, adding to its i)resent
95,000,00() pounds of cartridge-brass monthly capacity another 75,000,000 pounds. There wasn't the slightest indication of concei'U in this
step as to how tJie necessary copper and zinc supplies would be found
to produce 170,000,000 jiounds of cartridge bi-ass if we camiot even
meet the present capacity of 95,000,000 i)()unds. The results were inevitable.
By early October defense officials were forced to issue an
industry-wide order curtailing the use of copper for consumer goods
in more than a hundred different uses, and by October 23 the War
De})artment itself ordered major curtailment of shell cases because of
overproduction of this vital defense article in comparison with loading
;

facilities.

I think

it

is

fair to

knowdedge of the cuts

assume that during November 1941, from our

and the lay-offs, .and the trans-

in production,

fer to one shift instead of three shifts, not more than 70 i)ercent of
our present brass capacity was being utilized.
The Chairman. They were doul)ling the capacity, were they?
Mr. RiSKiN. Seventy-nine percent new capacity is being added.
The Chairman. And still we can't use the 100 percent that we have
got.

We feel that this thing is scandalous and inexcusable.

shows lack of plan and is ihe result of no integrated
picture of the industry from beginning to erd, and the capacity of one
end of the industry as compared to the other. We feel, as we will
jwint out later, that if the $35,000,000 were available from the United
States for expansion in the industry, it should have been used where
expansion is necessary, precisely at the base of all these operations, at
the mines for increasing mine output, and we would have more raw
Mr. RisKiN.

We

feel that

materials.

Senator Hatch. Of course, that is what some of us from the

Western States have been contending.
Mr. RisKTN. I agree with you there.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3786
Now,

in order to

make

full use of

our industry's resources, there are

two major sources of additional production which must be immediately

brought into operation. First are the mines- which were shut down
during the depression and never reopened second are work places in
the mines now not being exploited. Now, according to the Bureau of
the Census, which I think has a fairly good definition of what a
copper mine is, there were 180 operating copper mines in 1929 by 1939
there were only 49 mines produchig copper 49 copper mines, so-called,
and the total output of recoverable copper had dropped 28 percent
below the 1929 figure.
In lead and zinc, the mines had dropped over the same period from
;

375 to 254.
Incidentally, in iron ore the same was true; 208 iron-ore mines in
1929 only 174 in 1939.
Certainly it is worth while surveying this particular field to determine how many of the 131 copper mines that have been shut down
since 1929, how many of the 121 lead and zinc mines, hoAv many of
the 34 iron-ore mines, stopped because of depletion; how many
stopped because of the general economic collapse, but are still
potentially productive.
Now, obviously, Senators, a certain amount of cai^ital expenditure
may be necessary to bring these mines back into productivity we may
need new equipment, we will have to reopen shafts and do other things.
But it would not be correct to assume merely because the mines closed
down during the depression when i)rices were low and there was no
demand for their raw materials, that they cannot o])erate or that they
are marginal mines or liigh-cost mines. They may be very good mines
but simply haven't gotten back into ])roduction. Their ])roduction
wasn't needed.
;

FAILURE or CERTAIN MINES TO OPERATE AT PRESENT CAPACITY

Mr. RisKiN. In addition to this problem, there may be found

throughout the industry specific instances of failure to operate at
capacity in thg mines which are operating. Now, we have had our
members in the field submit to us, our national office, instances of
where there are mines operating not at capacity, and I will give you
two or three..
The Chairman. I think you ought to give us a large number of
those if there is a large number. We want those for the record.
Mr. RiSKiN. The Bunker Hill & Sullivan Mining & Concentrat'iig
Co., an important lead and zinc producer in Idaho, owns the Bunker
Hill mine and operates on one shift. This was as of a week or two ago
w^hen I received the report. This mine has 23 levels, of which levels
Developmental work
10, 11, 12, 14, 15, and 16 are not being worked.
is being carried on in levels 13, 17, and 19.
Ore reserves, according to a publ'c statement by the president of
this corporation about a cou])le of years ago, are indefinite.
The
levels mentioned have slopes, drifts, and numerous work faces that
carry rich ore bodies. This com])any has two mills, the south mill
and the west mill. The south mill, with a ca])acity of 600 tons ])er day,
The west mill, with a capacity of 1,200 tons a day, has
is now idle.
added a new department which is supposed to increase the capacity of

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

the mill
capacity.

by some 600 tons per day.

This mill

is

3787

not working

at

The same com])any has one smelter with

a capacity of 350 tons of

out about 195 tons of lead per day.
The company operates at capacity when all three of its blast furnaces are working full time. Its No. 3 blast furnace has about the
same capacity as No. 1 and No. 2 combined, but the No. 3 furnace
is not operating.
The Douglas mine, owned by the Douglas Mining Co., has four

lead per day.

It is

now turning

levels.

Senator Murdock.
Mr. KiSKiN. Yes.

May

I interrupt

you there ?

You spoke first of Bunker Hill INIining Co., and

of the Douglas Mining Co. Have you any information whatever on the interest, if any, that your big copper companies have in
the particular mines that you have mentioned there?
Mr. RiSKiN. You mean interlocking directorates, and so on? Not
do, of course, have the
in this specific case, Senator Murdock.
financial break-downs of the major corporations in the field which
have been made available to Government study, and so on, but not
I don't know, myself, of any direct rein this particular instance.
lationship between Bunker Hill, for instance, and Anaconda, or
Phelps-Dodge, if that is the point.
The Chairman. Where is this Bunker Hill mine?
Mr. KiSKiN. In Idaho.
Senator Murdock. IVIay I ask this? Just what is their system of
mining? Is this a fissure vein that they are working on?
Mr. RiSKiN. Senator, I couldn't tell you that. I don't know the
mine at first hand.
report from the men was along these lines
Do you have in your mine, regardless of the mining technic, available
levels that are not being used, available work places on levels that
are not being used, available reserves that should be exploited now?
That was the way in which I went at the problem.
Senator Murdock. The reason I asked the question was this. In
our hearings at Salt Lake City about a month or 6 weeks ago, it was
stated by Mr. Snyder, of Salt Lake City
Mr. RiSKiN. I know Mr. Snyder.
Senator Murdock (continuing). That he expected in the near future many fissure vein mines to close down, and pointed out at the
fixed price at that time, mines like the Utah Copper would be able
to carry on at the price fixed for copper, but fissure vein mines would
of necessity have to close. Have you any information on that?
Mr. RisKiN. Oh, yes; I see the question now. In that sense, the
Bunker Hill & Sullivan is an underground operation rather than an
open-pit operation. I am sorry I misunderstood your question.
I would like to go into that part of the question in some great
detail.
I think here, if I may be so bold, is where the union has a
contribution, the question of the relationship of price to purchase
and production problems, and I deal with that at some length later,
if you don't mind.
Senator JMurdock. That is all right. I do think that is important,
however, to make that distinction.
Mr. RisKiN. I agi^ee with you.
311932 42 pt. 10
5
Senator Mtjrdcck.

now

We

My

3788

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Mukdock. And if it is true that we have many lissure

mines in this country that can't operate at the present price, that
certainly we should look into that phase of it.
Mr. RisKiN. I will take that up.
The Douglas mine, which I just mentioned, has four levels whicli
are said to contain the best zinc-ore bodies in that district. It has
Today there
all the necessary equipment and a camp for operations.
should know, it
is a watchman taking care of an idle camp.
seems to me, if the Douglas mine is being kept as a future reserve
for the company instead of operating for our national victory today.
The Federal Mining Co. owns and operates the Morning mine with
two shifts. It has four levels currently operating and producing
lead and zinc. The miners assert that in levels such as 2,400 and 3,000
feet, the company is employing only enough men to keep the places
open, producing almost no more, even though these places carry good
commercial grades of ore and production could easily be increased

We

substantially.

The Morning mill currently averages 18 trains a day with about

year ago, according to the men, the mill
20 tons of ore per train.
averaged 22 trains a day, or 80 tons a day more than it now handles.
In the rich Butte, Mont., mines of the Anaconda Copper Mining Co.,
monthly copper production has declined about 2,000 tons a month
in the last few months as compared with the average monthly output
during the first half of this year, our local leaders report.
Senator Hatch. May I interrupt you again?
Mr. KisKTN. Yes.
Senator Hatch. What explanation do you have for that decline?
Did you go into that ?
Mr. EiSKiN. I am glad you asked that question because from labor's
viewpoint there have been no stoppages, no slow-downs, no strikes,
no labor trouble whatsoever that would have warranted or explained,
from that easy way out, a cut in production. Now, Senator, I have
a number of ideas about why there is a slow-down in production
throughout the industry that you referred to. These, however, are
interpretations on my part and not factual, and I think in a body of
this sort perhaps such interpretations should be kept rather than
expressed as facts, because the things I give here are not personal
interpretations, they are factual statements of what we think can
be done.
Senator Hatch. Do any of your facts, aside from the interpretations, give any explanation of that?
Mr. I?iSKiN. Yes. I have an over-all industry picture wliich I personally feel but that doesn't enter this problem.
Now, I would like to mention one more shut-down or one more lack
of production which I think is very important for this committee's
consideration. It is a different exam]:)le entirely, but it is equally
valid as an instance of failure to produce in the face of our needs,
and tliat is the shutting down of the Walker mine in California by
the Walker Mining Co. directors, because the company couldn't show

profit at 12-cent copper.

Now, our union floes not dispute the facts of the losses incurred by
the company, but it does want to point out tliis: This comjiany lost
nionoy in 1935, 1936, 1938, 1939, 1940. but it operated all but C) nioiiths
in all these years.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3789

price of copper in 1935 was 8 cents a ponnd in 1936,

than 91/2 cents; in 1938, 11,296; but in 1911, with copper constantly
about 12 cents (Connecticut Valley), the company shut down.
In 1940, when copper was 11.296, the Walker mine was willing to
work at capacity and lose money. The price was lower than today
when Walker shut down. Now, we are not questioning the company's losses. We do say it is interesting to note that in Poor's
Industrial Manual for 1937, Walker's cost of production of copper per
pound sold, after credit for silver and gold in the ore and with the cost
of smelting, freighting, and refining added, was estimated at 9.399
cents a pound. This is mentioned because we have been advised that
Walker's cost of production is estimated at 20 cents a pound.
Now, frankly. Senators, I suppose that any company can say that
its costs are anything, because I sat here a year ago when Senator
O'Mahoney's committee was holding hearings on cartels in coppter^
and when Mr. Cornelius Kelly of Anaconda Copper said in his testimony that, well, you can't tell what the costs of production are; it all
depends upon the bookkeeping system you use in that particular
company. I am merely reviewing this fact, that here is a mine
that is closed down Avhen we need copper.
Now, in 1940, Walker produced more than 10,500,000 pounds of
copper. That mine is shut down. Our Nation needs tliat 10,000,OCO
pounds of copper now\ We feel that that mine should be put back
into operation. The paramount thing is copper prodtiction.

The average

less

USE OF MULTIPLE SHIFT OPERATION

Mr. RiSKiN. Now we get to the point that you raised. What is the
answ^er to the question of drops in production instead of capacity
production, and liow can we change this trend in the industry?
The union has this dynamic approach to the problem. .
feel that
today we sliouldn't be talking in terms of putting labor to work 6 days
a week, for reasons I will explain.
feel that today every single
production unit in the industry must operate 7 days a week, 24 hours
a day, and anything that is under that is less than maximum capacity.
start with that fundamental approach, with that objective, with
that goal, and we see how we can try to reach it and what interrupts

We

We

We

this goal.

Inseparably bound to the question of capacity production is the

need for unbroken operations and for ])utting an end to conditions
which result in the astonishing turn-over in the working staff. We
hold that our national crisis requires drastic overhauling of views and
technics and that industry, government, and labor should work together to bring about that continuity of employment and production
which will eliminate not only week-end black-outs but day after day
black-outs in our industry.
Now, I think it is fair to say that mining operators and defense
officials have repeatedly brought pressure on our union and our membership to work a 6-day week.
Our union cannot understand why employers should want to pay for
12 hours' work for only 8 hours' production on the overtime day; nor
why Government officials should support that position.
1

Hearings before Temporary National Eeonomio Committee.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3790

Payment of 12 hours' pay for 8 hours' production ^Yill not mean

bringing 12 work-hours' more copper, lead, or zinc to the surface. This
will not produce for our Nation, therefore, the metals which we must
have. It merely means that the operators wdll be able to use this
increased labor cost as (a) an excuse to win exemptions from the penalties of the Wage-Hour Act by getting permission to work 48 hours
without overtime (still, it won't produce more) or (h) an excuse to
get O. P. A. to agree to higher prices for the metals for 6-day, overtime
;

production.

Now, why should the United States Government be forced to pay

more for metals without getting more metal for national defense?
Why should the Government be party to paying higher prices without
increased production a price based on 12 hours' work for only 8 hours"

output ?
Countering this illogical and unproductive measure is our proposal
that the basic 8-hour day and 5-day week be maintained, with over-all
operations expanded not to a mere 6 days, but to 7 days, 24 hours a
day.

And

I want to repeat here that

we

realize this

is

a goal, that

it

cannot be achieved immediately. It can be adopted and realized only

after certain of the measures we are discussing now have been taken
into consideration.

The Chairman. In other words, you would increase the shifts, have
more shifts of 5-day workers?
Mr. RisKiN. That is right. Under present conditions in most mines,
we can't work on a 3-shift basis, for reasons I will explain. In some

may be used in a modified form, as in three

6-hour shifts to permit the air to clear; or in two 8-hour production
shifts and three service shifts so that the production men ma}' work at
top speed while they are working.
Now, in making continuous operations possible, two problems are
interlocked and inseparable the essential technical, engineering needs
cases, the 3-shift technique

and the improvement of working conditions.

In one of the world's largest mining camps, a recent survey revealed
the amazing fact that half of its 5,000 workers on the pay roll worked
less than half the month.
These are regular employees, mind you,
Senator. These are not men who come and leave the camp. Of the
regular pay roll of 5,000 men, more than half the men worked less than
half the work-month.
Yet in this camp, the management's major campaign has been to put
its workers on the 6-day week
apparently indifferent to the fact that
even under a 6-day week, if the same turn-over continued, the company
would actually be getting an average of 3 days' work per man, more
than 50 percent of the men working less than 50 percent of the time.
The same solutions which would bring about a greater continuity of
employment in the regular and present work-shift would make possible
the complete operation of the camp on a full time 24-hour-a-day, 7-daya-week basis. Under no other conditions is an unbroken production
schedule possible, and under no other conditions is efficient production
possible even under our present single-shift basis.
So then we come now to our practical proposal. Is this too lengthy ?
The Chairman. No, sir. Go right through. This is information
we want in the record. I don't care how long it takes give it to us

so that

we can understand

Mr. RisKTN.

V^'e

urge

it.

first

the use of multiple shifts.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3791

Various mine operators continue to assert that mines cannot be

operated on a multiple-shift basis. But multiple-shift operations may
be found in every type of metal mining, and idle mine capacity today
is undoubtedly just as wasteful, if not more wasteful, than idle plant
capacity.

The Bureau

of the Census

had

a report of the

mineral industries

copper ore for 1939

The 49 copper mines then oi^erating 22 operated on a 3-shift basis, 15 on

a 2-shift basis, and 12 on a single shift. Virtually all copper-concentrating mills
operated 3 shifts.
However, most of the employment in mining and milling was during the first
shift.
Of the total number of man-shifts worked at mines by wage earners, 66
percent were worked during the first shift and only 5 percent of the man-shifts
were working the third shift.

The corresponding percentages

the

first

shift

for the mills were 67 percent for

and only 16 percent of the man-shifts on the third

shift.

Senator Kilgore. Could I ask a question just there?

Mr. RiSKiN. Yes.
Senator Kilgore. In the metal-mining industry, can one work shift
succeed another one or must j-ou run a service or clean-up shift after
each work shift?
Mr. RisKiN. Tliat

is why, Senator, I said in some cases it might be

necessary to have two production shifts and three service shifts, that
is, having the service crews working 24 hours a day through and the
production shifts working only 16 hours of the day, so that the servicing could be continuous and production could be at top speed during
the production shifts. I mean that all depends upon the particular
mine and the particular conditions, and the speed with which new
equipment can be provided for those mines that cannot now operate
three production shifts directly.
Now, I would like to point out that these questions of multiple
shifts aren't true only of copper, that a similar study of the lead
and zinc industry showed exactly the same trend. Twenty-eight
percent of the mines and 67 percent of the mills operated on a 2- or
3-shift basis during 1939, but of the 254 mines in lead and zinc, 27
operated on a 3-shift, 43 on a 2-shift. Seventy-seven percent of the
mine work-shifts were worked during the first shift and onl}^ 2 percent of the man-shifts were on the third shift. In the mills, 54 percent
of the work shifts were on the first, and only 19 percent of the work
shifts were on the third shift.
Now, what does this show ? It shows three things, in my opinion.
It shows, first, that multiple shifts
and I mean multiple shifts,
even three-shift operations are not only possible, but are common
in the industry; secondly, that full utilization of the multiple-shift
operations is not being made by the industry; and third, that, therefore, right here, obvious and great possibility for increased production
is possible in the existing operating mines alone.
Why aren't we getting more production out of these mines ?
do we have this lack of capacity use of these mines and mills? To
guarantee that a miner will remain at work, intolerable conditions
of employment must be rectified. Again I would like to get this
across. Senators.
are posing some of these coming points not
solely from the viewpoint of improving the working conditions of

Why

We


3792

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

men (that is important), but primarily on the basis that only

through improving these working conditions can increased producthe

tion take place, because unless we can make it possible for men to
work in the mines underground a full 8 hours or a full 16 hours or
a full 24 hours, unless we can get the men to work there, we can't
major factor in this respect is that of
get the rock broken.
ventilation.
On November 15, Senators, four miners employed at Butte, Mont,,
in the St. Lawrence mine of the Anaconda Copper Mining Co., Nick

Butko, Fred Bugni, Charles Makela, and Charles Thomas, were suffocated to death at their workplace underground.
This tragic development is but the latest and most striking proof
of the union's contention that adequate ventilation is essential. The
four dead workers remain grim reminders that the men still alive,
the half-suffocated men still working in the mines, cannot be expected to work efficiently and to produce as much as they could

under normal working conditions.

This problem can be met. It isn't something that

is simply incapable of solution.

In Arizona, the Engineering and Mining Journal reported in its
last month's edition about Magma Copper Co., in Superior, Ariz.
Magma Copper has just installed three new 140-ton centrifugal machines to provide air-conditioning down to the 4,600-foot level in its
Superior Arizona mine. This is its third extension of the original
air-conditioning system which was installed first in 1937. As a result
of this installation. Senators, temperatures in the deepest working
places will be cut from 150 to 90 and permit increased copper

output.

Now, as a union man, I will say it is too bad they didn't install
a fourth unit and cut the 90 to 70 and make it still better for the
men to work, but that isn't the point. The point that I am now making
is that this shows that the approach is possible, that a company by
itself can make this approach and can attempt to make a solution
to the problem of ventilation in the mine.
Ventilating doesn't always require expensive air-conditioning units.
In some cases, cutting more airshafts more holes to the surface
so that fresh air can come into the mines and spent air can go out

would be adequate.

Now, adequate ventilation and efficient fans in the mines become

an immediate aid to increased productivity in two ways: First, fresh
air and lowered humidity and temperature make possible more
vigorous work by the individual miner in workplaces that are now
difficult or impossible to work in,
I think that is obvious. This
would also do away with a great reason for "quits" and make pos'
sible mining in such levels where work has not been possible at all,
as in the case of the Magma Copper mine just cited.
Secondly,
fresh air and efficient fan systems would clear the levels of the dust
and the gas caused by blasting at the end of the shift and would
thus permit the use of multiple shifts in the mines.
In other words, you see, this would not only make it possible for the
men to work efficiently on the shift they are working on, but it immediately nuikes possible the use of more shifts in the mine, the two
problems being settled by the one improvement.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3793

At present, the main talking point of the operators against the

multiple-shift system is that it is impossible for men to be sent to work
after blasting on the previous shift. And that is true under present
conditions.
Obviously, one argument against this proposal is the expense involved in the installation of such new equipment where holes cannot
be punched through to the surface, and there are two answers to this.
First, if Magma Copper can do this in Arizona, so can Anaconda and
Phelps Dodge, the important companies in the industrj'-, for example.
The Chairman. Isn't that primarily a matter for the O. P. M. and
Ihe operators to work out. You can't expect a mine operator to make
a big investment unless he is sure he will get the money back.
Mr. RiSKiN. That is my other point. Aside from the financial

ability of the operators, the second point is this

The Chairman (interposing). It is up to the O. P. M. to work this
thing out so that you can all get together and produce the copper.
Mr, RiSKiN. Right. If the operators themselves can't do it or won't
do it, if the Government wants to advance the money for such
improvements to get the copper, the money is far more wisely spent
here than $35,000,000 for brass expansion when we don't need the extra
brass capacity and when we can't meet the present capacity because
we don't have enough copper, lead, and zinc, you see. That is exactly

Here is where O. P. M. here is where Government, and

and management can decide where, if money needs to be spent,
should be spent to make possible expansion of primary production.

the point.
labor,
it

USE OF AVAILABLE LABOR TO INCREASE PRODUCTION

Mr. RiSKiN. Another problem is the contract system. Many of the

major operators in the mining industr}' have a contract system in their
wage payments. I won't discuss here the various grievances which
arise between the union and management on the contracts.
The Chairman. We have another board for that purpose. We want
to find a way to get copper, lead, and zinc.
Mr. Riskin. Right. But from the management's and the Government's viewpoint, the greatest weakness in the contract system is that
it is the greatest single incentive to breaking down contiTUiity of employment and of production. It is an incentive system which works
backwards. I will tell you why.
The contract system tlieoretically encourages a miner to st?y at work
constantly, because he is supposed to get a wage higher than the base
rate in proportion to the number of feet of rock that he breaks above
an established norm. In practice, it is profitable for a miner to work
only in those workplaces where (a) the temperature and humidity
permit him to work full speed ahead all day long; (b) the nature of
the rock allows comparatively easy results; and (e) the methods of
servicing and access to supplies are conducive to efficient work.
Whenever any one of these prerequisites is missing, whenever the
miner's ability to break rock quickly and to make a bonus on his breaking rock is interfered with, he quits his job, goes back to the surface,
and rustles for another mine, getting a job in another level in another

mine.

3794

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The record shows in the instance of that major camp I ah^eady referred to that among the regular employees there is a terrific fluctuation in the continuity of employment, more tlian 50 percent of the men
working less than 50 percent of the month in this particular instance.
Let the operators explain to the Government which needs more mine
output and to the public generally why this type of management is
the best they are capable of demonstrating. For our part, in this one
item alone lies one of the most important causes of the inefficient and
unproductive nature of present mining operations.
The contract system, therefore, has to be modified to stop the pressure which forces men to quit ihe'r jobs rather than to continue working in a stope in which they cannot "make their rate." When these
men quit, no one ]:)rofits the company has no production, the man
loses his pay, the Government loses its vitally necessary metal.
So that is another question which I think, through a logical and
friendly conference such as you talked about of management, O. P. M.
or Government, and labor, a problem like this can be settled. It
isn't insuperable.
Basic to the multiple shift operations, of course, is the question
of whether you are going to have enough men the labor supply.
Even in the face of unemployment figures in the hands of local. State,
or Federal agencies, the operators continue to insist that they cannot
get a sufficient number of skilled miners.
Checking with the Bureau of Labor Statistics and with the Census I don't mean to break these figures down, but I will make the
statement here that in copper, lead, zinc, and coal, about 130,000
skilled miners have been thrown out of jobs in the last 10- or 12-year
period. Anyone acquainted with the mining industry knows that
there is a constant interchange of miners from coal to metal and from
metal to coal, from copper to lead and zinc, and so on. I mean they
go all around the industry, and you will find miners of all tyi:)es in
every mining camp.
Not even the most extreme can argue that all the 130,000 copper,
lead, zinc, and coal miners have died, have become too old, or don't
want to work any more. Indeed, the "rustling lines" at the mining
camps give first-hand i^roof of the availability of miners.
serious factor which the Government must face if it agrees that
every available skilled miner should be employed producing vital
base metals is the practice of the operators in the im])ortant Southwest copper-producing area in refusing to hire experienced miners,
known to be union members. Now, a few months ago, the ShattuckDenn properties were flooded and had to close down. That released
temporarily 300 skilled miners from that unionized property. When
those men became available for work, the em])loyment offices of PhelpsDodge, Miami Copper, and Ins])i ration Copper shut down to avoid
hiring the experienced union miners in the face of our defense requirements. I mean you have an open-shop situation there, and that is
something wliich can't be met by scoffing at it.
That is an issue that has to be recognized.
Where the operators have accepted the union's cooperation, experi-

enced unemployed miners have been supi^lied and production has been
increased. I have a report, and this is iProm an iron ore mine situation
in Bessemer, Ala., at the properties of tlie Tennessee Coal, Iron &

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3795

Railroad Corporation, and at the Bessemer and Irondale mines of the

Sloss- Sheffield Co. in Bessemer, where the union proposed the hiring
of "swing" men on all shifts to permit 6-day operations instead of 5,
wh'le retaining the 40-hoiir, 5-day week. The union furnished experienced miners for this work from its unemployed rolls. More than
500 men were so employed, and the resultant increased production
balanced the increased furnace capacity in that area, which the com-

pany had built up as a result of the war program.

Another instance of our union's effort to encourage uninterrupted
production through effective use of available labor is the work of
our local committees to get our men not to lay off the day after pay
day. This is a strange thing, perhaps, to raise, but anybody who
knows mining camps knows that when the boys get paid they take a
couj^le of

days

work

in the

off.

We have cut these

deci-eases as

much

as 50 percent

shifts.

available there are considerations which excam])s will not get men.
The Tri-State lead and zinc fields of Kansas and Missouri and
Oklahoma have constantly paid substandard wages, 95 cents to $2.50
a day below the industry generally. The ^lichigaii copper range wage
scale is between $2 and $3 a day below the industry rate. The industry
average itself, which is a little above 80 cents an hour, is far out of
line with the average hourly wage rates in coal mining and steel and
auto and rubber and oil refining, the other basic industries of our
economic structure which average around $1 or more.
The result is that the skilled miners have obviously gone into other
Now, remember, it has been
industries which pay higher wages.
commonly assumed that because of the hazardous and unattractive
nature of the mining industry that miners got more pay. That isn't
a fact, and as a result of that, a number of skilled workers, craftsmen,
and so on, have deserted the mines for other industries. The operators
will have to decide to meet the wage scales, not as a union question
now of negotiation, but as a ]n-actical question of getting the workers
that go to other industries where they can be used.
Now, there are other technical ]:)roblems. There are numerous mining camps where housing is both inadequate and insufficient to permit
increasing the working staff, even though miners are available. An
illustration is the Mountain City Copper property in Nevada. The
comi)any prefers to work the miners on a 6-day week. The men work
a 6-day shift because there are not enough houses there to house more
miners. Therefore, you can't put in the multiple-shift operation;
therefore you can't increase production.
The Chairman. Defense housing ought to take care of that.
Mr. RisKiN. Certainly. T say none of these problems are insuperable. This is a factual statement.
The Chairman. Let the defense housing move in a few trailers.

But even with miners

plain

why some

They put them everywhere

else.

Riskin. Experienced miners can be found throughout the

Nation. The INIichigan copper range is an area where unemployment
has continued as a result of mine depletion. But no long-range or
adequate guaranty has ever been proposed to these hundreds of
miners available in Michigan that might get them to risk leaving
their only known homes and friends to seek out new homes and new
IVIr.

3796

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

this question of transfer of men from one section

no work to other sections wliere their skill can be
used is something, too, that is capable of solution.
In addition to the available experienced miners, we must take into
account the new crops of young men in the mining areas and camps
ready and eager to work, able after a little experience to become the
experienced miners of the coming decate.
Now, we reach a number of other fundamental points. Senator,
There are some mines in the country where the miner does every job;
he drills, he blasts, he shovels, timbers, hauls his tools, and so on each
service part of his assignment taking away from his basic production
job.
There are other m'ines in which there is a degree of job
specialization, where miners primarily drill and blast, others "muck"
the rock, and still others do the necessary timbering. But in no mine
has the whole question of work specialization been carried out in the
most efficient manner possible. The operators have always worked
on the assumption that if they can get one man to do more than one
job at a time they are saving money.
In terms of total output and highest productivity per man-shift, as
compared to, let's say, the Ford plant, the mining operators are of
course an anachronism in industrial engineering and labor relations.
The reason for this, I think, lies in the fact that mining operations
have always been more profitable even under poor efficiency than factory operations, and that profits per worker tend to be larger in mining
than in manufacturing, so that the pressure for this division of labor
which manufacturers have always felt has, for the most part, been
lacking in mining operators.
If special service crews were constantly available to see that the
necessary auxiliary work was done, the miners could continue their
production job without delay.
jobs.

mean

where there

is

Aside from more efficient division of work and the other problems
already touched upon is that sim]:)le question of servicing.
Necessary supplies and tools are too often either inadequate or difficult of access to the miner. In many mines, a miner has to carry his
tools a considerable distance on foot underground; in others, long
delays are incurred waiting for the ore trains to take the men.
Increased efficiency in these matters is sorely needed in all parts of
the metal mining industry. We had iron ore miners in Alabama report a situation wherein some 80 handloading workers are forced to
transfer the ore some '25 to 30 feet before being able to load the ore into
cars. If the company w^ould lay the tracks right up to the face, a job
easily and quickly done, the men claim they could load six ore cars in
the same time they now load three. In every case we are trying to give
practical illustrations of w^hat can be done.
Another problem is the haulage system, the taking away of the ore.
committee of our miners from Butte Miners' Union No. 1, go into
some lengthy detail in describing why this haulage system is inefficient
and how it can be simplified.
The Chairman. We will make that a part of the record. That has
been introduced as an exhibit.
Mr. KiSKiN. Yes; that doesn't have to go in again. I would like to
point out that in some instances, two, at least, at our union's request
and insistence two companies added 100 cars each to their properties

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3797

and tlms were enabled to have more efficient and more rapid haulage
of their rock.
Another jjroblem is the hoisting bottleneck. Some operators toss
the question of multiple shifts aside with the comment that their
hoisting capacity is too limited to handle all the rock that can be
broken in three shifts, that they cannot get all the rock out through
tlie small shafts in their mines.
Even in the cases where it is not practical to enlarge the shafts, to
add new shafts, or to improve the hoisting equipment generally, this
does not necessarily waive the possibilities of continuous operations.
There are some mining operations which operate 24 hours a day
using two production shifts, but three service and hauling shifts.
In cases where more rock can be broken per shift than can be hauled
away through the shaft, the shaft can be operated three shifts a day
while drilling and blasting goes on two-shift operations.
These, gentlemen, are some of the specific problems which we propose and which

we

discuss.

Senator Johnson of Colorado.

May

I interrupt to ask a question,

Mr. Chairman?

The Chairman. Certainly.

Senator Johnson of Colorado.

jNlr. Kiskin, in this study of underproduction, have you given any thought to the destructive policy of
Have you
taxation which has been adopted by the Government?
treated on that or made a study of that ?
Mr. RisKiN. I tell you, Senator, I have concentrated this study,
that is. the union has concentrated tliis study, on the practical question
of production itself rather than on some of these other supplementary
features, because, as a matter of fact, despite the taxation, despite
the heavy increase in taxation, a review of the corporation profit
returns will show that their profits had increased despite the taxes
so that hasn't, to me, been an immediate problem.
Senator Johnson of Colorado. Taxation, of course, and production are tied so closely together, I don't see how you can avoid a
study of taxation. For instance, why should an industry increase
its capacity in one particular year three times, as you suggest there,
when they know that the taxation policy of the Government will cause
them to pay it all, mostly in taxes? They deplete their ore bodies
in 1 year instead of taknig a normal 4 or 5 years' time to do it.
Isn't that one of the reasons that some of the mines are not operating at full capacity at the present time ?
Mr. RiSKiN. You raise a very important point.
The Chairman. I am going to ask INIr. Rice, the president of the
United Smelting & Refining Co. to testify after you do, and I think
he will take up that point very completely.
Senator Johnson of Colorado. I hope he does, Mr. Chairman.
Mr. RisKiN. I would like to say just this much in that respect.
The Chairman. Go ahead.
Mr. RisKiN. The Senator raised a very important question. Why
should the mining operators de})lete their ore. use next year's reserves,
the reserves for the coming 3 or 4 years, right now, if they are not
going to be able to make a profit out of it ? Senator, our approach is
this, that our Nation is at war and that we need every pound of
rock that we can get on the surface. Now, I don't consider any

3798

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

corporation as being justified in saying, "Why should I mine next

year's copper now?" There is no such thing as next year's copper
now. I say that every pound of copper we can get to the surface
now, is this year's copper that is needed by the Government for its
And I just can't understand the terms. By
total defense effort.
what God-given right have they to say that they are not going to
use next year's or the year's after copper, lead or zinc today? Who
gave them the rock? The United States Government has permitted
them to mine those properties in the private fashion instead of taking
them over. As far as I can see, they were public land once. And they
have no right to assume that this is their rock and that they can
decide when they are going to mine it, if the Nation needs it today.
Senator Johnson of Colorado. Haven't they a right, Mr. Riskin, to
expect cooperation on the part of the Government? That is all they
are asking.
Mr. Riskin. And on the part of labor, and I am here to say that
labor wants to cooperate with management and with Government
on these problems, but the thing we want to cooperate for is getting
rock to the surface for national defense.
Senator Johnson of Colorado. Yes and you can't do it unless you
have cooperation on the part of everybody, including the tax agencies
of the Federal Government.
Mr. Riskin. I say to you. Senator, that insofar as labor is concerned, by our coming here, you have had a chance to listen to me
for about an hour.
You haven't seen me destructively criticize
either industry or Government. I think you will agree that labor
here is offering constructive suggestions to show that it is willing to
cooperate in this war effort of our country. And I say that in my
opinion, if we are going to lick Japati and Germany, where the
consideration is maximum efficiency for war purposes, in my opinion,
my consideration can only be how are we going to get more copper,
;

lead, and zinc out, more bullets, more tanks, more battleships, more
airplanes.
I can't think in any other terms but more production ; I

that is my problem. The companies may have the problem

of taxation, and this is a question that should be handled through
round-table conferences.
Senator Johnson of Colorado. I think labor has a great interest
in confiscation just the same as the mine operators have an interest
in it.
I don't think you can separate yourself from the problems,
from such problems as destructive taxation.
Mr. Riskin. I don't say we can separate ourselves from that, Senator.
I said that the emphasis of the union's discussion must be on
increased production.
The Chairman. As quickly as you can, finish.
Mr. Riskin. I will go through the rest very quickly.
Senator Murdock. May I ask this question?
Mr. Riskin. Yes.
Senator Murdock. In connection with the statement I made a
while ago coming from Mr. Snyder of New York City, that fissure
vein mines would have to close down.
The Chairman. I wish you would answer the Senator's question
before you quit.

mean

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3799

Senator Murdock. The question is, whether or not there has been
a material rise in labor costs which is resulting in the closing down
of some of these mines.
Mr. RiSKiN. I would like to point out that a survey made by the
United States Government, Technology Employment and Output
Per Man, has shown conclusively that despite increased wages per
hour, the labor costs in the industries have declined. There is a
regular trend there and the thing is definitely established. It isn't
an opinion on our part. But labor costs have not increased, despite
the increase in wages, in relationship to total cost. There has been
a declining trend there because of your increased productivity of
your mechanical introductions to the mine and so forth. But on the
question of the increased cost, that plays a very important part in

our analysis.
I

would

like to

mention from the viewpoint of the men, that

far as this whole question of

new

inso-

brass fabricating capacity

is

concerned

The Chairman (interposing). Proceed. The reason I am anxious

for you to get through is that it is absolutely essential that the
Senators be on the floor at 12 o'clock. "We can't hold much longer
than 5 minutes more, and I want to say at this point that Mr. Nixon
Just as soon as
is ill and has sent his statement for the record.
the Senate adjoui'us, we will hear Mr. Rice; I think 1 will be safe
will continue the hearing at 2:30, but there
in saying at 2:30.
is a possibility there will be another declaration of war on the
Senate floor this morning and we will have to be there this morning.

We

RELATION OF PRICE INCREASES TO ACTUAL PRODUCTION

Mr. RisKiN. I will be through

in just a

few minutes.

would

I would like to
like to point out that this isn't going to end here.
discuss the problem of priorities problems on our w^orkers, how

that can be avoided, what needs to be dcme, the fact that in a number of these cases, a lot of these problems can be handled easily without any national troubles at nil, through elementary collective bargaining, and come down to the point raised by Senator Murdock.
It is impossible to discuss the question of increased output of copper,
lead, and zinc, as the Senators here have continued to raise the question, without coming head-on into the question of price.
Now I want to say this thing because of the history of wage and
price relations in this industry. It is necessary for labor to make
very clear that in our discussion of the price of this metal, we are
basing our discussions solely on considerations involving production
and the Government's purchase policies. Labor does not seek price
increases to raise its own wages. In the past Ave had the sliding scale
and wage payments in our inclustiy, and any time that an emergency arose, management was able to say that labor is demanding
higher prices in order to get higher wages.
want it clearly
understood that this is not so. In the last year and a half, as a
result of our convention position on the wage question, we have
broken the backbone of this wage payment.
are getting in more
and more of our contracts, wage paj'ments for labor disassociated
from price.
stress this so that it will be clear, labor does not
seek price increases to raise its own wages.

We

We

We

3S00

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Now, fundamentally, we maintain, of

course, that prices themselves

do not dig rock. Until the conditions we discussed are remedied, you
w^ouldn't be able to get more rock. But there is a question involving
price, three problems, three relationships. The nature of industry in
relation to price, the time element in relation to price, the type of price
increase that should be given. Now, your industry is a complex one as
Ave agreed at the beginning.
The question of a rise in the price of
copper, zinc, or lead is complicated by the fact that Jione of these metals
is isolated from, or independent of the others, as it is in coal.
Metalliferous ores are complex ores, they contain all these various metals in
some combination or other. If an over-all price increase is to be used
to expand output, the Government must inevitably find itself in the
position of meeting demands from tlie major operators in the industry
for price increases for each of the different metals taken from the same
ore. For example, O. P. A. on October 9, granted a 1 cent a pound increase in the price of zinc. On October 10, v/hen reporting the price
of zinc, the Wall Street Journal foreshadowed the fact that zinc and
lead are mined together and there the producers, the operators, are
going to ask for a price increase in lead because too often there is more
lead in the rock than zinc and therefore the lead producers aren't getting a good break.
On October 18 the Wall Street Journal reported the copper industry wanted the same treatment as the other nonferrous metal producers
were going to get, a straight line advance in prices. Now, that is a
problem w^hich I must discuss in a minute. Here I would like to point
out simply that mine operators having zinc lead mines, or zinc copper
mines, are pressing for straight price increases on the lead or on the
copper in their ores, having already received a 13 percent price increase on the zinc in the same ore, ore that is dug from the same rock,
by the same work shaft, using the same machinery and same operation.

The operators, be it noted, don't argue that since their particular

ore has more lead than zinc they should therefore be given a higher
price for the lead alone, and not receive a higher price for the zinc,
no; they want higher prices for both metals, they want to get paid
twice for the same rock.
Now, it must be understood that the producers who supply tht.
great bulk of the nonferrous metals in our nation and exert the major
influence in the industry, are tightly integrated concerns dominating
copper, zinc, and lead production and distribution as well as fabrication.

Thus, having won an over-all price increase in zinc, the major

operators return to Washington again in their capacities as lead producers and ask for the same treatment that the zinc producers got.
Going out of one door, they return to O. P. A. through the other door,
this time in the guise of copper producers and demand the same treatment as the zinc and lead interests.
This, then, is one consideration that we have to weigh when we talk
about price changes in nonferrous metals. Just how many times
should the United States Government pay any one company for the
same piece of rock without in any way guaranteeing increased output?
Now, the second factor, the time element in relation to price. Indicative of the gamble involved in giving a price increase to win more

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3801

production is the fact that in the important tri-State lead and zinc
producing area of Kansas, ]\Iissouri, and Oklahoma, the press statements, official statements of the Tri-State Zinc and Lead Ore [Producers Association, when they dealt with the announcement of the
price increase in zinc, announced significantly, that this price increase
would not permit increased production, that it would permit merely
the continuance of the present scale of operation and that if the Government wanted more production, it would have to raise prices still
further, this in view of the fact that the eight and a quarter cent a
})ound zinc price not only is 13 percent higher than the price was
before it was raised, but is the highest price since January 1926, the
highest for any month in 15 years, and higher than any average
annual price since 1917.
have a right to know, in view of such a generous price policy
by O. P. A, we have a right to sugo:est that O. P. A. should demand
to know of the industry just when tlie Government will get increased
zinc output, as a condition of keeping that price increase they have
raise this question because the operato'i's assert that a
got.
price increase by itself is not sufficient to bring forth increased pro-

We

We

duction, since they must know how long they can count on enjoying
the increased price in order to be able to decide how much they are
willing to spend on expanded production. Since no guarantee was
given by O. P. A. of the duration of the price increase, there is little
ground to hope that the operators will take any widespread measures
to enlarge that i)roductive capacity.
The final point is the type of price increase. Even after we
consider the duplication of ])rices for the same metals and the same
rock, and the guaranteed period for price increases is disposed of,
the type of price increase remains a problem.
Granting for a moment that we liave to buy tlie coojieration of
the operators for increased production through a price increase,
price officials must decide whether to give a price increase on a
straight-line basis or in tlie form of a subsidy for increased production only. Now, O. P. A. has taken two steps already along
those lines.
In the case of the Michigan copper country, high-cost
marginal producers were given an over-all price increase for their
total production, and then again in the case of the zinc producers,
an industry-wide price increase for all production was granted.
From the production viewpoint, which is the only viewpoint our
organization is interested in, an over-all price increase is not the
answer to increased production. Let it be repeated that such increases as have been mentioned were given by O. P. A. without any
guaranty in return from the mine operators that production would
The mine operators were in no way requested or
be increased.
committed to undertake any changes in production technique, in
quota, in complete utilization of their properties and equipment.
Actiudly the mine operators were merely given more money for their
identical output.
I would like to point out this to you. Senators, a number of
you coming from the mining States and knowing the mining industries, it is important to note that this is an industry in which
the operators are able to take advantage of higher prices by mining
lower grade ores, leaving their rich ore in the ground for the
future, when prices may be lower.

3802

No

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

price increase,

it

seems to

should be given except deliber-

us,

and directly as payments for additional production to each

individual producer for an amount above an established quota. In
the case of proved high-cost, marginal producers, an outright subsidy may be permissible, supplemented with a guaranty that it
may be maintained long enough for 2 or 3 j^ears to enable the producers to make the improvements and investments necessary and
possible only under long-term operations. But the operators should
ately

made to guarantee that these steps will be taken.

Thus used, the price increase becomes a direct payment for each
and every producer for a production above and beyond present
it would not increase profits for copper already being
levels,
profitably produced at 12 cents. This is paying for what you get,
be

not for a promise.

And now, Mr. Chairman, basic to this whole study was the fact
that there could be increased production starting at the mines, only
if conditions of labor are improved by the various means suggested
to make it possible for men to produce more rock.
It is our firm conviction that the best guarantee of capacity operation is complete cooperation of labor in this victory effort, a cooperation given wholeheartedly by us and wholeheartedly accepted by management and by Government, and our organization has proposed to
the President of the United States the creation of a general Nationwide nonfeiTous metals victory production committee of labor and
management and Government to blanket the entire industry with all
its problems and the creation on a local scale of mine production committees or plant production committees to deal with these problems
right down there at bedrock, such committees to be joint managementunion committees, personnel to be selected on a plant or mine basis
by the management and by the union, Government-approved engineers to be assigned immediately to all the mines; the major mines to
cooperate with these mine production connnittees in the key mining
camps and to decide upon what measures ought to be taken right awa}^
the local committees to function and to gear their work through this
national nonferrous metals victory production committee.
Our union has set up this committee and awaits merely the request of
offer you
the Government to come in and to start work with them.
any cooperation in further questioning or explanation of our problem.
The Chairman. At this time the connnittee is going to have to take
I would appreciate it if you will come back at
a recess until 2: 30.
that time so that the Senators may question you if they desire.
The statement of Mr. Nixon will be printed at this point, together

We

with his letter.

(The documents referred to were marked "Exhibit No. 333'' and are
included in the appendix on p. 4217.)
(Whereupon the committee recessed at 11:55 a. m. to reconvene at
2: 30 p. m.)

AFTERNOON SESSION

The committee reconvened at 2

The Chairman. The committee

vou continue?

37

]).

will

ni..

Senator

come

Truman

to order.

Mr.

presiding.

lliskin, Avill


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3803

Mr. RisKiN. I am involved in negotiations with the Phelps-Dodge

at the Conciliation Service Office as soon as I can be free here.

The Chairman. At what time?

Mr. KiSKiN. It was recessed to allow me to come here.
The Chairman. I wish yon wonld wait nntil some of the Senators
come in because they want to ask you some questions, all right.
Mr. Rice, will you be sworn? Do you solemnly swear to tell the
truth, the whole truth, and nothing but the truth, so help you God, in
your testimony before this committee?
Mr. Rice. I do.
The Chairman. Mr. Rice, if you will give your full name and connections to the reporter for the record; will you, please?

TESTIMONY OF NEIL W. RICE, PRESIDENT, UNITED SMELTING,

REFINING & MINING CO., BOSTON, MASS.

W. Rice,
& Mining Co.

Mr. Rice. Neil

Refining

president of the United States Smelting,

The Chairman. Mr. Rice, you

& Mining Co. ?

are president of the United Smelting,

Refining

Mr. Rice. Yes, sir.

The Chairman. Have you any comments to make on the metal situation, particularly as outlined this morning by Mr. Riskin?
Mr. Rice. Well, there were just a few high spots that I picked up
as I was listening this morning. I haven't had a chance to see anything.
to

The Chairman. If you have any further comments that you want
make for our record you are perfectly welcome to make them in

the record, as they will be in the record as published.

Mr. Rice. In the first instance, I thoioiighly agree that mine production is the fundamental question involved.
all agree to that, I think.
The Chairman.

We

FAILURE or CERTAIN MINES TO OPERATE AT PRESENT CAPACITY

question was raised of reopening old mines and a comMr. Rice.

parison made of the number of mines operating today as compared
with mines operating in 1929, I think it was. Since 1929, business
has been poor, prices have been low, and there has been very little incentive to the mining industry to find new mines. Many of the mines
mine has
that were operating in 1929 have died a natural death.
so much ore in it and when it is worked out, it is worked out and the
mine is closed down. I think that is part of the picture of the reduction of the number of mines operating.
If you had low-grade property and low prices and not much demand for metal and some of the
old mines were shut down and filled with water, they are not worth
reopening. I think the picture Avas painted this morning of two or
three hundred mines, whatever it was I have forgotten the figures
operating in 1929 and maybe only 60 percent of them operating now.
Just in itself it doesn't mean that those mines could and should be
reopened. Each mine is a separate question. It may not be a mine
any more; it may only be a hole in the ground.

3119.32 42pt. 10

3804

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The question also was brought out that in some of the mines certain levels were not being worked, certain working places were not
operating. That is a question of and by itself and I don't think
necessarily means that that property can produce more ore.
The Chairman. Well, how do you account for the fact that there
is a smaller tonnage of lead and copper mined this year than last?
That is particularly true in certain mines, but it is true also of the
whole picture.
Mr. Rice. Well, the copper situation I don't know very much about.
I think the lead-zinc production
The Chairman (interposing). Well, there is an increase in the
They usually
2inc production, but a decrease in the lead production.
come out of the same hole.
Mr. Rice. Well, not altogether.
The Chairman. No that is not true in Missouri, particularly southeast Missouri.
It is true, though, in the tri-State district, down in
southwestern Missouri and Oklahoma, lead and zinc come out of the
same hole in southeast Missouri it doesn't.
Mr, Rice. But the zinc is higher than the lead down in that country.
;

The Chairman. That is true.

Mr, Rice. Whereas up in Utah,

for instance, the lead

is

generally

higher than the zinc.

The Chairman. That

is

true.

Mr. Rice. I think the i)roduction of ore in Utah has dropped some,
whereas the production of ore in the other places lias come up.
The Chairman. That isn't true in southeast Missouri. The production of lead in southeast Missouri, the biggest mine down there,
v/as fewer tons this year by 40 percent than last year,
Mr. Rice. Well, I can't answer that question because it is not one
of our mines.
The Chairman. I thought maybe you were speaking for the industry.
Mr. Rice. No, sir. On this question here I have no prepared statement and I didn't know I was expected here until 5 o'clock last night
when Mr. Fulton reached me, or about 5, on the phone. I was in
the middle of a Massachusetts defense committee meeting, and that
lasted until I got on the train.
The Chairman. As I said before, if you have any further statement
you want to make to this committee, you are perfectly welcome to

do it.
Mr. Fulton.

And you expected to discuss tax matters rather than

these matters, probably.
Mr. Rice. As I understood, you wanted some comments, if I had
any, on this discussion this morning.
The Chairman.
want those comments, too, but I was anxious
for you to make a comment on what had been heard by the committee
this morning, and then go into any special matter in which you were
interested later.
Mr. Rice. Well, to continue on this qnostion of certain levels being
shut down or certain working places being shut down, that is always
the case in underground mines, i)articularly underground mines, because the safety of the men and the safety of the mine are involved.
You may have to shut down at a certain jdace for a certain length of

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAIM

3805

time to work the ore above, get a cave, and then proceed. You have
to lay out your mining carefully, systematically, and with due regard
to getting the ore out of the property without accident and with fair
continuity.
The question was raised of the 7-day week and the 24-hour operaIn most underground mines you can't work effectively more
tions.
than two shifts. You have to, as was pointed out this morning, give
time to ventilate, make necessary insp'X'tion of the shaft and your
equipment and the hoisting eciuipment, your ropes, and so forth; you
can't just keep running them 24 hours a day until they crack and drop
a

whole crew of men.

The Chairman. That

is true.

Mr. Rice. You have to have inspection. It is required by the

Kifety rules, and it is the only sensible thing to do.
With a 7-day week you will not get a i)ercentage increase, a direct
])ercentage increase. If you work 5 dajs a week and you go to the
6-day, you may be able to increase your production approximately
fcomeAvhere between 15 and 20 percent.
USE OF MULTIPLE SHIFT OPERATION

The Chairman. I was particularly intrigued this morning by the

tatement of Mr. Riskin that only 50 percent of the time at Butte had
the 5,000 men worked; that half of the time 5,000 regular miners
How do you account for that ?
v>ere operating.
Mr. Rice. I can't account for that. I mean I think that the people
that are operating in Butte can give you the answer for that. I
wouldn't want to answer for them because I don't ]:nov.' th.eir condis

tions.

'J'he Chairman. Well, in the lead mines

where are your mines?
Mr. Rice. In Utah, most of them. Our lead-zinc mines are in
Utah.
The Chairman. Do you operate on a 24-hour basis?
Mr. Rice. We operate two shifts.
The Chairman. Two shifts, 16 hours?
Mr. Rice. Two shifts, and we are now operating 6 da,ys a week,
nd the men are working 6 days a week. The "swing" shift is not a
practical matter in a great many places underground. Men don't
want to go into the face or into the stope behind a crew that they
don't know and have not been working in conjunction with.
The Chairman. I understand that.
Mr. Rice. It is too dangerous. They don't know whether the men
ahead of them have bogged down the rock or whether they report
missed holes, and I wouldn't want to go in and I don't think you
^ould, into a face to start mucking up the mud behind someone I
didn't know and might have missed a hole.

The Chairman.
ment

this

I think that

is

absolutely true.

morning was that the chances were that two

But the

state-

shifts properly

operated could keep the top crew going three. How does that work
f'ut. in your mine, where you work two sliifts?
Mr. Rice. We work two shifts on production, and some of the repair work is done in between times. Some of the checking of the
ropes and safety work, and so fortli. is done in between times by the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3806

shift bosses, who check over.

to three shifts.

I don't think Ave could

go

in

our mines

The Chairman. When did you go on

a 6-day week?
went on 6 days at the beginning of November at the
request of O. P, M.
Senator Mitisdock. Why couldn't you go to the three-shift basis

Mr. Rice.

in

Utah

We

mines'^

Mr. Rice. AVe have got to give time for ventilation and inspection and necessary repairs and oiling of machinery, and so forth.
The Chairman. Are these deep mines?
Mr. Rice. Yes, sir; deep mines and the working places very scattered.
In Utah and everywhere now, as I understand it, you have
the 8-hour collar-to-collar law. At many of our working faces the
men don't work more than 6 hours, 6 hours and 20 minutes. It takes
men 40 to 50 minutes to get from the collar to the face.
The Chairman. In a deep mine, 6 hours is about all they can spend
underground unless you have special ventilation ?
Mr. Rice. The depth hasn't anything to do with it. It is a question
of ventilation.

The Chairman. But the depth makes the ventilation much more
expensive and difficult?
Mr. Rice. Well, in some mines that are hot it does, but all mines
I think there is very little difference in the temperature
aren't hot.
in our mines 500 feet underground or 3,000 feet.
The Chairman. You are so far above the ground to start with, I
suppose it wouldn't.
Mr. Rice. Well, it is a question of ventilation, and of course that
is the problem that has to be studied, and studied all the time.
Senator Murdock. Well, if the temperature situation is as you have
stated in your Utah mines, that condition itself would be more conducive to three shifts than, say, the situation that we have in Arizona
as described by Mr. Riskin.
Mr. Rice. Well, it is not so much a question of temperature; it is
a question of clearing out the gases and the smoke.
Senator Murdock. I understand that. I have done some mining
I am just wondering what you have done in your mines in
to that end toward making it so that you could operate three

myself.

Utah

Have you done anything at all ?

Mr. Rice. We couldn't operate three shifts.
Senator Murdock. You mean that it is just impossible?
Mr. Rice. We coiddn't operate three 8-hour shifts.
Senator Murdock. By the introduction of air conditioning, and so
on, couldn't that be done ?
Mr. Rice. Well, when you say couldn't it be done, I suppose that
anything can be done.
Senator Murdock. Just a moment. Was there ever a time in the
history of this country when there was such a necessity of resorting
to anything to get this job done as there is i-ight now ?
Mr. Rice. To rearrange our mines so that we could run three 8hour shifts would probably i-equire 8 or 4 years' time and probably
at least
months' shut-down. That is offhand. We have never made
shifts.

a study of

it because I don't think it is practical.

Senator Murdock. You say you haA-e never m-.uh
Mr. Rice. No, sir.

study of

it?

INVESTIGATION OF THE NATIONAL DEFENSE PROGTlAM

3807

Senator Murdock. Never called in an air-conditioning engineer

or an expert to go into the thing with you ?
Mr. Rice. No, sir.
Senator Murdock. Don't you think that that might be one of the
first things to do in this crisis ?
Mr. Rice. That won't get us production now. In the first place,
I don't know where we could get the equipment.
The Chairman. If you can't do the three-shift program, how can
you increase production in your mines?
Mr. Rice. The only way we can increase production in our mines
is to go to 7 days.
Senator Murdock. Go where?
Mr, Rice. Seven days. We are operating 6 days now. By operating 7 days, that would increase our production somewhere under
10 percent. We would have to be shut down, probably, that is, no
production probably every third Sunday anyway, and maybe more
often.
That is something that you just have to feel out.
The Chairman. Proceed with your statement, Mr. Rice.
Mr. Rice. Suggestion was made of a three-shift 6-hour day if a
three-shift 6-hour day
three-shift 8-hour day wasn't practical.
with a collar-to-collar law a man wouldn't have time to get a round
of holes in it wouldn't speed things up it would slow things down.
The Chairman. And that is just true of your set-up?
Mr. Rice. I think that is true in general with most underground
mines.

The Chairman.

Is it?

Mr. Rice. I think so. There might be some mines, as I say certain faces in our mines where the men aren't working 6 hours,
anyway. There might be a mine newly opened up where a man can
get to the face in 5, or 10, or 15 minutes, and he might actually get
in practically as much working time on a 6-hour shift as our men
get in on an 8-hour shift, but I think that those cases are rather

rare.

There is a shortage of skilled labor, of skilled miners. They have

been going into other industries, and I don't see how we can get them
back from the other industries. In Utah they have been leaving the
mines and going to other defense industries that are paying a lot
higher wages and working 7 days a week and paying overtime and
double time.
The Chairman. Is that true particularly of the defense construction industries where they are building ordnance plants and camps?
Mr. Rice. Yes, sir.
The Chairman. And things of that sort?
Mr. Rice. I think so.
The Chairman. It makes it pretty hard on the mine operators to
keep help. Is that it?
Mr. Rice. It is very difficult.
Some statistics were given this morning with regard to the percentage of men working the first shift, the second and third shifts. The
third shift in underground mines is pretty nearly out, anyway. I
mean there are very few that I think are trying to work the third shift
except for repair work, maybe but the statistics as such I don't think
are a fair comparison because there is a certain amount of work on the
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3808

clean-up work, shop woi-k and a certain amoiuit of work

underground that can be done all in one shift. I mean one 8-hour
shift can do all that is necessary of that type of work to carry over for
24 hours, and those men are usually working on the day shift. They
would rather. So the number of men on the job at mines, also in
mills and smelters, is always larger in the day shift than other shifts.
The Chairman. That is, they are the auxiliary workers.
Mr. Rice. They are the auxiliary workers. Now, we run a big mill
Our day shift is always larger than our night shift, not
in Utah.
because we are treating any more ore in the daytime, but there are certain types of work that can be done for the whole 24 hours in 8 hours.
Now, at our mill in Utah, our coarse crusher can crush all of the ore in
surface

We

run the coarse crusher plant

8 hours that the mill can handle in 24.
8 hours a day, and that is the mid-day shift. There is no use in running it more than one shift. So the statistics are not a fair picture of
whether we are running full the second shift.
The Chairman. What this committee is trying to find out, Mr. Rice,
is how can we increase the output of lead, zinc, from the ground for
the whole country, and that is the reason that we are trying to get
every point of view on this subject so that we can make a recommendation which will get results.
Mr. Rice. Well, every mine is a problem by itself. You can't lay

down any general rule.

The Chairman. I agree with that. I know something about the
mining business myself. But there are fundamental rules that affect,
we will say, all underground mines and all strip mines, and these fundamental rules can be applied in each instance. Then, of course, each
individual mine is a problem in itself, but what we are trying to do is
to find out what the general problem is and to see what we can do to
get more lead, zinc, and copper. We have got the lead, zinc, and copper in the ground if we can get it out.
Mr. Rice. Well, I don't think we have as much lead, zinc, and copper
in the ground now as we had 10 years ago.
The Chairman. I think there is as much lead, zinc, and copper in
the ground in Missouri and Oklahoma as there ever was.
Mr. RiOE. Whatever was taken out isn't there any more.
The Chairman. We discovered just the other day another Montreal
mine southwest of Joplin, and they are taking it out just as fast as they
ever did out of Montreal. They took a million tons out of that mine
in less than 3 weeks back in 1916.
I am sure we can find all the necessary metals in the ground if we can find a way to get them out, and
is what we are interested in.
Mr. Rice. It takes time to find them. We are hunting
We are doing exploration work all the time, but we find

that

new properties.
The Chairman. Have you made any prospects

all
it

the time.

very hard

to find

or drillings or things
of that sort in the last 5 or 6 years that would lead you to believe that
there are still unexplored areas that can be mined successfully?
Mr. Rice. You mean in our own properties?
The Chairman. Yes.
Mr. Rice. Well, we are always doing exploration work in our properties.
do it all the time.

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3809

The Chairman. Do you think there is any chance of your present

ore bodies giving out before this emergency is over, from the explorations that 3'Ou have made?
Mr, Rice. No we feel that our present properties will continue to
produce at approximately their present rate.
The Chairman. I think you will find that is true of nearly all these
properties.
are doing outside exploraMr. Rice. Well, I wish I thought so.
tion work all the time, trying to find other properties.
The Chairman. Of course, you have to if you are going to keep your
organization going.
have to.
Mr. Rice.
;

We

We

EFFECT or social SECURITY A>D

MIKIMUM WAGE

LEGISLATION ON BLOCK

LEASES

Mr. Rice. There is one question that I think has reduced the production of metal in the last 2 years quite considerably.
The Chairman. Tell us what that is. That is what we are interested
in.

Mr. Rice. That is the application or the way the Government has
interpreted the wage-hour law and the social-security law with relation
to block leases.
The Chairman. Now explain that in words of one syllable so that
Senators can understand it.
Mr. Rice. It has been the general practice in the AVest for the last
75 years to give block leases; in other words, a lease on a certain
area of your property, often an area that the company has practically
finished with, which it cannot do company work on on day's pay any
longer, to exceptionally good miners, able men. They go into that
urea, which they know, which perhaps they have been working in
before, and take a lease on it and go ahead on their own, with their own
capital, with their own work, their own partners, two or three men
rhat they hire, and work in there.
They have always been considered lessees. They take their chances.
If they don't find ore, it is their loss; if they do, it is their profit,
subject to a reasonable royalt)\
The Chairman. What is the remedy for that? In other w^ords, you
say that sort of thing is handicapped by the wage-hour law.
Mr. Rice. That is because the Government bureaus have decided that
those people are employees of the company and are subject to the
social-security taxes

hour law

and the minimum-wage provisions of the wage-

and they are not employees at

all.

The Chairman. Did you ever see a bureaucrat who didn't want to
extend his power and authority over a thing of that sort?
Mr. Rice. But that has thrown 2,500 men out of the mining industries in the

West.

The Chairman. The wage-hour law ought

them if that is the case.
Senator Murdock. I doubt very much,

to be

amended

so that it

doesn't affect

ISIr. Rice, whether you are

giving us a true picture on this block lease situation. As I understand
the situation in the Utah mines, it wasn't because of some bureau here
in Washington interpreting your leases it wasn't because some bureau
;


3810 INVESTIGATION OF THE NATIONAL DEFENSE

PROGR.iIM

here in Washington said that your lessees were employees. What the
bureaus in Washington did was to follow a supreme court decision of
the State of Utah. Isn't that right ?
Mr. Rice. Well, there have been decisions in different places
Senator MuRDOCK (interposing). But particularly in Utah, take the
fact that the supreme court of the State held, in a case directly involving one of these block leases, that your lessees were, by reason of the
restrictive clauses in your lease, by reason of the supervisory powers
that you reserve, by i-eason of other qualifications, by reason of the
fact that you reserved the right to discontinue the lease, not giving the
lessees any set amount, and because in your lease itself you reserved
the right to cancel it, I would say, arbitrarily, that your lessee was not
an independent contractor but, by reason of the very lease that you
people insisted on, was an employee of the company.
Now, isn't that a fact ?
Mr. Rice. It was decided that they were employees of the company,
but there had to be certain restrictions in the lease in order for safety
provisions and so that we would have coordinated operation.
The Chairman. Evidently it was the same sort of lease that the
Standard Oil Co. make with their filling stations.
Senator Murdock. It was the type of lease, I would say, that gives
you absolute supervisory powers power to cancel the lease arbitrarily
to the extent that the Supreme Court of Utah just said, "We can't
consider these miners as independent contractors, but they are of necessity employees."
There is that situation, and I think that the Wage-Hour Division
was bound, under the decision of the Supreme Court of Utah, to take
that position.
I agree thoroughly with you that the block leasing system in Utah
is of necessity a very vital necessity and part of our mining economy,
but I think in order to carry it out, it is not only the lessees chat have
got to make concessions, but the employers themselves have got to
modify and change that lease so that they are contractors rather than
employees.
The Chairman. Can't that be worked out according to the court
decision. Senator?
Mr. Rice. I know that we are perfectly willing and want to have
the block leasing system go back into effect. It will result in more
production.
The Chairman. Can't you reword that ?
Mr. Rice. And we are perfectly willing to modify the lease.
The Chairman. Can't you reword that lease so that it will meet
the requirements of the Supreme Court of Utah ? I am not a lawyer
I am trying to find out.
Mr. Rice. I can't tell you what the Supreme Court of Utah will

say, sir.

Senator Murdock. Well, the Supreme Court of Utah will say what
the law of

Utah

is.

might make the observation that in my last visit to Utah, I conferred with John Jensen, of the firm of Cheney, Jensen & Marr, on
this very thing, and I made several observations in this connection
which, in my opinion, could be adopted by your companies out there
I

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3811

to bring about the situation of independent contractors rather than

employees of the compan3^
Mr. KiCE. Mr. Jensen, as I understand it, drew up a suggested lease.
Senator Muedock. And I will say that Mr Jensen exhibited a very
cooperative attitude in this thing, and that is why I mentioned this
morning to Mr. Riskin that I felt he should have treated what has
become a very important part of our mining in the West, and that
in this block-leasing system.

Mr. EicE. Mr. Jensen is our attorney and advises us.

has reduced production, and if something could be done

The Chairman

(interposing). It

is

bound

to.

We

Well, that
are getting

something concrete now. That is what we want to know.

Mr. EioE. We will be glad to amend our leases in any way that is
necessary to get b}^ the technicalities of the law, provided they contain
certain things that we have got to maintain, and that is certain control
over the operation of the leases for the safety of the property and the
safety of the other men working on company properties.
The Chairman. That goes without saying.
Mr. Rice. And for the coordination of hauling and hoisting and
so forth, and power. Beyond that, we have always considered them
independent contractors, and they can do as they please, provided they
keep mining. I think that reservation of canceling the lease was
always kept primarily so that you could force a man to go into the
ground and keep working. There is no use in giving a block lease to
a fellow who just sits down and only works a few days a month if you
can get someone else who is willing to go up there and work.
EFFECT OF EXCESS PROFITS TAX ON PRODUCTION

The Chairman. Your time is getting short, and I want you to tell
us something about the tax situation and whether or not that has cut
down production.
Mr. Rice. The tax situation, I think, has a very fundamental bearing on ))roduction. It does not, fortunately, affect our company.
The Chairman. Well, tell us how it does affect those others.
Mr. Rice. But the present tax law has a normal earnings base. The
normal earnings base is the average of the past 4 years. That is earnings in dollars. Now operators are being asked to increase their production as much as they possibly can, and whatever increase in earnings they make out of it is taxed under the excess-profits tax. If those
increased earnings are made in a year when they increased their production by 50 percent, it is not in the true sense increased earnings in
that year it is bringing forward into this year earnings that you
would normally be making the next year or the year after.
You have, let's say 10 years' life at the rate of 100,000 tons a year,
and you are asked to increase it to 150,000 tons a year. Then you are
only going to allow T years.
The Chairman. Well, if you don't make that increase, you are not
going to last at all, because if the people who want to take it away from
the Government of the United States put the Government out of business, you won't be in business, either. You will belong to them.

8812

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Rice. Let nie point out the difference between mining and industry. Part of what we are taking ont what we have always been

taking ont

is

our capital.

The Chairman.

Sure.

is that instead of a base of so many

dollars a year in the last 4 years, to say that our nonnal profit is so
many cents or so many dollars or whatever it is per unit of production.
The Chairman. That sounds reasonable.
Mr. Rice. In other words, if for the last 4 years we have produced
100,000 tons a year and we have made a profit of $2 a ton, then that is
our normal base, and if we increase to 150,000 tons at the request of
the Government and use up our capital, taking it out in a shorter
period for the present emergency, give us a normal base of $2 a ton for
pay the normal tax on it in any case, and
the excess-profits tax.
if the price ip raised in order to bring out production from other properties and we make $3 instead of $2, that additional dollar is excess
but give us a normal base of so
profits and is taxed as excess profits
much, whatever a normal is per unit of production, and not per year
of earnings.
The Chairman. I see the point. It sounds reasonable to me.
Senator Murdock. Now you are allowed certain depletion under
the present law.
Mr. Rice. The same as under the j^resent law yes, sir.
Senator Murdock. And on the basis of that de])letion, most of your
mining operations today have already been allowed depletions in
excess of 100 percent, have they not ?
Mr, Rice. Depletion, as I understand the principle of taxation,
is that we are allowed depletion and depreciation just the same as
Now, the theory of the
other depletion for a return of capital.
excess profits is that no one should make an vmdue profit out of the
emergency. Isn't that right ?

Mr. Rice. All that we want

We

Senator Murdock. That is right.

Mr. Rice. Now% by increasing our production 50 percent and making 50 percent more money this year than the year before, to the mining industry that isn't making more money due to the emergency.
It is just taking it out and using up its property so much faster.
The making of more money out of the emergency to the mining industry is making more dollars per unit, not making more dollars due
to an increased unit production.
Senator Muedock, And as I understand you, as a result of the
present excess-profits tax, the mine operators of the country have
failed to increase their production. Is that right?
Mr. Rice. I think that that is a deterrent to increased production.
It is a deterrent to opening up mines or trying to open up mines that
have been closed down for quite a mmiber of years and have no base
period of earnings to go on. And it is a deterrent to spending money
on exploration and development to find more or to increase production over a base which, for the mining industry, it seems to me is
a false base.
Senator Mi^rdock. And will continue to be a doteri'ent?
Ml'. Rice. Will continue to be a deterrent just as long as it is in the
tax law.
if

Senator Murdock, Notwithstanding the crisis that now faces us,

we are to understand you today, then, the excess-profits tax, with

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3813

its present application to the mining industry, will continue to be a

deterrent in the way of increased production?
Mr. Rice. Well, it is naturally a deterrent when you can't make
any money at the business that you are at and you are risking your
capital and using up your capital.
Senator Murdock. The mining industry, in my opinion, may find,
however, if they follow that policy, that our friend Hitler might not
be as willing.
Mr. Rice. As I said to start with, our company is not faced with
that problem. I am just telling
Senator Murdock (interposing). But you are expressing, as I understand it, the attitude of the mining industry and representing one
of tlie big mining operations of the United States.
feel, in the mining industry, that the tax law as it
Mr. Rice.
stands is putting a burden on the mining industry that it is not putting
on other industries and an unfair burden. It is being taxed more
severely than any other industry in the country.
Senator Murdock. Let's look at that in my State of Utah out
there in connection with your mining industry. Your mines are taxed
in Utah on the basis, as I understand it, of twice the net profits plus
Is that true ?
1 percent of your gross profits.
Mr. Rice. You are talking about State taxes.
Senator Murdock. Yes I am talking about State.
Mr. Rice. I am talking al)0ut Federal income tax.
have to look at the entire tax structure. I
Senator Murdock.
just want to point out or, if I can, to draw you out on some fair taxation of mining properties in Utah. If I can't, I want you to convince
me that you are unfairly taxed.
Mr. Rice. I didn't say the mining properties in Utah. I said the
mining industry as a whole.
Senator Murdock. Yes. Let's take up the tax in Utah to begin with.
I want the country to get this picture of taxation. You are taxed out
there on twice your net profits plus 1 percent of your gross profits.
Is that right ?
Mr. Rice. I am not a tax expert.
Senator Murdock. But you don't need to be an expert to know that
that is the basis of taxation in Utah. You know that, don't you?
Mr. Rtce. No, sir. I don't know exactly the basis of Utah's tax.
Senator Murdock. That is the basis in Utah. As an occupation tax,
^ou are taxed 1 percent of your gross profits, plus twice your net
income.
Compare that basis of taxation with the tax imposed on the farmers
It doesn't make any difference to the farmers in Utah
in Utah.
whether they make any net profit at all. It doesn't make any difference
to them if they lose over the period of a year.
They pay the same
taxes on their farm lands whether it is a good year or a bad year.
But under the tax laws of Utah, your mining properties don't pay
unless they make a net income. Isn't that right ?
Mr. Rice. They pay certain taxes.
Senator Murdock. If there is any unfairness out there, it is unfairness to the farmer, as I see it.
Now let's look at your block system leasing and see what you do on
that.
Under every lease that you have executed under your block

We

We


3814

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

leasing system, you passed the burden of taxation on your property

on to the lessee. Do you know that?
pay the taxes on our share of what we get out of it.
Mr. Rice.
Senator Muedock. I will make this statement and challenge its
contradiction that every block lease in Utah carries the provision that
the lessee shall pay the net profits tax on the ore that he takes out
Then I will make the further
also that he pays the occupation tax.
itself

We
:

when you file your income tax with the Federal Government and when you file your income tax with the State of Utah^
you take credit for the very taxes that you have passed on to your
If that isn't a truthful statement, I ask you or Mr. Dickinson
lessees.
or anyone else that is expert in the taxatioii of mines to put the cor-

statement that

rect statement into the record.^

It seems to me that under the system of taxation of mining property
in the State of Utah, for the mining operators to take the position
that they are unfairly taxed and, as a result of that taxation, that they
are restricted in production is rather an unfair statement.
Mr. Rice. Well, I don't think I was talking, about the State of

Utah. I was talking about the mining industry as a whole and the
Federal excess-profits tax.
Senator Murdock. Yes; I understand that.
Mr. Rice. And its effects on the mining industry.
Senator Murdock. But I am talking about the tax picture as a
whole and am calling to your attention that this afternoon when you
tell me that it is by reason of the excess-profits tax that you people
are not producing all that you could, I think it is just a deplorable
situation.

mining

member

of it, but what I would like to see the

to go into every State in which this metal
and find out what the basis of taxation is and

I don't happen to be a

Truman committee do

is

carried on
whether the mining industry

is

is standing its burden along

with the other industries of the State.
The Chairman. We expect to do that. Senator.
Senator Murdock. You should do it. They come in here and want
They want to point
to give us half a picture of the taxing situation.
out to us that for certain reasons the excess-profits tax levied by the

find out

In this connection Mr. Rice subsequently Informed the committee that

Section 4 of chapter 101, Sessions Laws of Utah, 1937, -which relates to the assessment
*
*
of mines provides that "*
the owner shall be entitled to deduct and remit to the
State tax cominissinn any tax chargeable upon tlie operations conducted by lessees or other
parties." This provision authorizes the company to deduct and remit to the taxins; authoriUnd r the
ties all occupation taxes thnrgeable against operations conducted by lessees.
Utah law the company, in order to protect its property, must report net proceeds realized
from all ores extracted from its property whetlier extracted by the company or by Iess?es ;
and the company, therefore, under the lease contracts, deducts for net procrds taxe.s
chargeable against operations conducted by lessees.
The company only deducts from
lessees a sufficient amount to cover the net proceeds tax on tiie lessees' net proceeds after
deduction of the company's royalty on ores prodiicel by lessees, and a sufficient amount to
cover ,the occupation tax on lessees' net smelter return after deduction of such royalty on
ores produced by lessees.
The company pays the occupation tax and the net proceeds tax
on such part of the proceeds from the ore mined by lessees as is represented by the comreturns
made by the company "under the net proceeds and occupation
pany's royalty.
The
tax law include not only all ore produced by the company but also all ore produced by
Ilnder the corpoi'ation franchise tax law in Utali the company is entitled to deduct
lessees.
from income all n(>t proceeds and occupation taxes paid or accrued. The compiny taUeS
deduction only for such net proceeds and occupation taxes as accrue on company operations
and on that part of lessees' operations represented by the royalty on wliicli this company
pays the net proceeds and occupation taX(\s. The company takes no deduction for occupation and ne.t proceeds taxes chargeable upon lessees' operations and withheld from lessees
and remitted to the taxing authorities. Deductions on the company's redeial income tax
Tlil.s
returns are the same as those taken under the Utah corporation frnncliise tax.
en.tire procedure is strictly in accordance with Utah and Federal laws.
'

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3815

Federal Government

is a little unfair, but in order to get at the true

picture of this situation you have got to go right to the bottom of it
and see what you are doing in the way of taxation not only in the
States but under the Federal tax system.
The Chairman. Proceed, Mr. Rice.
Have you a concrete example that you could give the committee
on how the Federal tax works out to stop production ?
Mr. Rice. I haven't got one with me. I came down here, as I say,
absolutely unprepared, but there are a good many of them, and I

think

The Chairman (interposing). I don't necessarily mean any specific

company, but I mean just the method. How does it work ?
Mr. Rice. Well, may I ask Mr. Fernald, who is chairman of the
tax committee of the American Mining Congress, to answer that question ?
He is much more an expert on the actual workings of the tax
than I am.
The Chairman. We will call Mr. Fernald, who is our next witness,
anyway. Do you have any further statement that you wish to make
to this committee ?
Mr. Rice. There was a statement made that prices had nothing
to do with production.
The Chairman. I think that is substantially true, but I want you
to show me that it isn't, if it isn't.
Mr. Rice. Well, the suggestion was made, as I understood it, that
there should be different prices made for different properties, and

dependent upon whether they were making money

The Chairman (interposing). The suggestion, I think, was

that the price ought to be made on the basis of production.
Mr. Rice. On the basis of production ?

made

The Chairman. That is right.

Mr. Rice. That question, I think
it, it

was a

it is fair to state, as I understood

criticism of the O. P. A. for not doing something of that

kind.

The Chairman.
Mr. Rice. Now,

Tliat is right.
the O. P. A., as I understand

it,

had that feeling

very strongly.

We

The Chairman.
are going to let O. P. A. talk for themselves.
I w^ant you to talk to us about the mines.
Mr. Rice. I mean they have talked to me. They have talked to
others, and they went very thoroughly into that subject before they
made any price change at all. That I am certain of because they
called me down here several times on the subject, and I have talked
with them over here. I personally think that there are a great many
complications in making a different price for increased production
because we might be running full in the month of October and produce, say, the equivalent of a million pounds of lead, and we might
be running just as full in the next month and produce the equivalent
of only 800,000 pounds of lead, depending on the ore content and
the amount of lead that is in the ore that we happen to have to mine
that month. I mean that is just one of the problems that is involved.
You may be running just as full, but the grade of your ore differs
from month to month, from day to day.
have no control over
that absolutely none. You have got to take the ore that you have

We

3816

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

it.
We might rim into hard hick and rim to the
end of a stope and have to do work, and our production increases
and decreases. I don't see how it could be placed on production.
I don't think we could take 1939 costs. Our costs today are a great
deal higher than 1939, and they are going up all the time. Wages
have gone up. Wage scales have gone up. The cost of supplies has
gone up, and is going up some more. And price with relation to
supply is a fundamental problem. It always has been, and it seems
to me it is always going to be.
As far as we are concerned in our mines in Utah, we have never
asked for favor. We can produce if anyone can produce in the
country, I think. We always have.
But to get more production out of properties, either by opening
up new properties or reopening old properties or operating or continuing to operate properties that are right on the edge now, price
The law of supply and demand is still more
is a very vital question.

got as you come to

or less operating.
The question of a joint committee was suggested.
The Chairman. The question now, Mr. Rice, in my opinion, is the
question of supply to save the country. I don't think it is a question
of supply and demand. It is a case of getting the metal to save the
United States of America, and it must be gotten under any conditions,
I don't think it is a question of supply and demand.
Mr, Rice. I think it is a fair statement that management is just as
much interested in production of metals and the saving of the country
as labor or the Government or anyone else in the country.
The Chairman. That is what I want you to say, and I want that
to be true.

Mr. Rice. Well,

it is

true,

and

it

always has been true, and

it

always

will be true.

Senator Murdock. How does that square, Mr. Rice, with your statement a few minutes ago that the excess-profits tax assessed by the
Federal Government is restricting your production ?
Mr. Rice. I did not say it was restricting my production. I said
it had no effect on my production.
Senator Murdock. I didn't so understand you. I understood you
to say that the excess profits tax did not affect your production.
Mr. Rice. That is so.
Senator Murdock. But I asked the specific question if we wei-e
to understand that the assessment of the excess profits tax was having a restrictive effect on the production of metals, and I think your
answer was "yes."

Mr. Rice. I think it is, on the production of metals, the application of the excess profits tax as it stands in the law today, an undut'
hardship on the metal industry. I think if you want to take all
of the profits out of the metal industry and take all of the profits
out of all other industry, you will find no kick from the metal industry; what the metal industry wants is to be treated fairly in relation to the rest of the industries in tlie country.
iiave liud
suggestion, an offer of an amendment to tlie excess profits tax law,
submitted by Senator Johnson whicli I think would fit the bill.
Senator Kiixjore. In what way does the excess ])rofits tax law

Wo

bear down harder on the metal indnstrv tlian

industry ?

it

;i

does on other

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3817

Mr. EiCE. Well, I tried

to explain that.

Senator Kilgore. I wasn't here and I am apologizing for it,

Mr. Rice, We feel in the metal industry that instead of having the
past 4 years as a base on which to determine excess profits tax, the
past 4 year's profits per year, that we should have a base of a profit
per unit, because we are taking out of our properties our capital,
we have a limited amount of ore in our property whatever it happens to be, and when that is taken out we are through. In the
manufacturing industry there is no such situation because they can
go out and buy their raw materials just as long as they can stay
it may be 10 years or it may be a hundred years, but a
in business
mine can only last so long as there is ore in the ground at that spot.
Senator Kilgore. That applies equally to oil, coal, to any natural

resource, then, doesn't it?

Mr. Rice. I think so, yes, sir; but we are in the situation that
our base years, the years in which let's say we have a mine in the
last 4 years has averaged production of 100,000 tons a year, and they
have averaged to earn $2 a ton. Your base under the present law
Now you ask us to produce more. Let's say
is $200,000 a year.
we produce 100 percent more, for easy figures. Instead of 100,000
tons, 200,000 tons, and we still make $2 a ton on that 200,000 tons.
don't feel we have made an excess profit this year; we have just
brought forward into this year profit that we would make perhaps
8 yeais from now and then be over, if we have only 3 years of ore
have brought that forward. If we made $3 a
in our properties.
t^on as against $2 a ton in the base ])eriod. then we should be taxed
excess profits on tliat additional dollar, but not on the $2 per unit.
feel that in the natural industries where you are limited with
your stuff, you can't go out and buy your raw materials, and our
base should be a unit base, a unit of production and not per year of

We

We

We

operation.

The Chairman. Mr.

1

am going to

let

Rice,

you go.

if

if

you

you want
like,

U) catch that plane at 3: 55,

unless 3ome Senator wants to ask

a question.

We

are going to have Mr. Fernald as a tax expert discuss this substill have time to catch the plane.
Mr. Rice. If you have any questions I would rather answer them
now and not have to come down again.
The Chairman. Do you have any further questions? That is all,
Mr, Rice. Does any Senator want to ask Mr. Riskin a question about
this morning's testimony? I asked him to come back so you could if
you so desired. If not, he has another meeting he wants to attend

You

ject.

and

want

to let

him

go.

Senator Mcrdock. I would like to suggest this, Mr. Chairman, that

Mr. Riskin submit something in the way of a statement or a brief on
the block-leasing system in Utah and Colorado and in any other States
Avhere it is being practiced.
The Chairman. You do that, Mr. Riskin, and we will excuse you
for the rest of the afternoon. If you want to come back in the morning
we will be glad to have you.
Mr. Fernald, do you solemnly swear to tell the truth, the whole truth,
and nothing but the truth, so help you God, in your testimony you are
about to give before this committee?
Mr. Fernald. I do.

3818

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chaieman. Will you be seated, Mr. Fernald, and

name and connections to tiie reporter ?

give your

TESTIMONY OF HENRY B. FERNALD, CHAIRMAN, TAX COMMITTEE,

AMERICAN MINING CONGRESS, MONTCLAIR, N. J.

am Henry B.

Fernald, of Montclair, N. J., chairman

American Mining Congress.
The Chairman. Mr. Fernald, you have heard the testimony of
Mr. Kiskin and Mr. Kice, and I think you understand that this com-

Mr. Fernald.

of the tax committe of the

mittee is interested in increasing the production of nonferrous metals,

particularly copper, lead, and zinc, and we ^Yere interested very much
I understand that you are a tax
in the tax phase of the matter.
expert. If you want to go into that ^Yit]l this committee I would
appreciate it.
Mr. Fernald. As chairman of the tax conmiittee of the American
Mining Congress I have conferred with a great many in all sections
of the country in the mining industry as to the tax proposition. I
agree with what Mr. Rice has said as to the general feeling that this
does have a deterrent effect. Let me tell you the situation as it has
come up to me.
We had in 1940 an excess-profits tax imposed which carried with it
the general thought that it was a penalty Inx against those who were
undesirably making excessive profits out of the defense program. I
am not denying that it had certain revenue aspects urged, and so forth,
but it did carry that general thought, people should not be makingexcessive profits out of this emergency.
The Chairman. We all agree with thai. I think you will agree

with it.
Mr. Fernald. I agree with that. Then we came to the time when
there came the sudden urge to increase production in every way.
The mining industry stands in this way There are some companies,
as that of Mr. Rice's, who are not concerned with this particular
production feature, as he told you. There are others, however, who
found that if they increased their production they would immediately have been placed in the class of those who are making excessive profit out of this emergency and be subjected to the heavy penalty
:

tax.

Without conflicting with Mr. Rice's illustration, let us put it this

way. If we have our profits running normally $1 a ton, with a normal production of 100,000 tons, we double that production and make
no more than the normal profit on that; yet the entire increased production, because it is realized in a single year, is treated as being
excessive profits.
So we have felt that in fairness to the miningindustry we ought to have it recognized that the simple realization
of a normal profit per unit does not constitute excessive ])rofits.
It should not be subjected to a penalty tax. We agree it should be
subjected to normal tax, yes; normal and surtax as we have it now.
There is no question on that, but the objection is to putting the penalty
tax on it as if this were excessive profits.
Now, sometimes mines may have an increased price without having corresponding increased costs.
Some of them may have an
increase in cost that more <han offsets any increase in price. That
may be on account of various conditioiis. But if there is no more

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

made than normal profits, that oughtn't to be classed

If they make more than the normal profit, yes.

3819

as excess profits.

If instead of
the $1 a ton there is $1.50 or $2 per ton profit, the half dollar or dollar
of that is undoubtedly excess profits and should be taxed as such.
There is no protest on that.
The Chairman. Was this situation laid before the Finance Committee of the Senate when they were considering this tax bill?
Mr. Fernald. Yes; it was. I referred to it briefly in my presentation.
Some others also referred to it, and Senator Johnson presented his amendment which expressed the thought involved, and
I should be very glad, if you wish, to submit for the record a copy
of the statement from the Congressional Record that Senator Johnson made at the time of presenting it, which I think explains that
briefly.

The Chairman.

It will be

made

a part of the record at this point.

(The statement referred to was marked "Exhibit No. 334" and is

included in the appendix on p. 4222.)
Senator Johnson. Mr. Chairman, I might say in that connection
therewith that this proposal was presented rather late in the hearings on the new tax bill. They were referred to the Treasury Department. Senator George, chairman of that committee, said that
he was convinced that the mining industry should be treated on a
different basis from other taxpayers insofar as excess-profits taxes
are concerned, but the proposal came rather late in the hearing; it
was not presented in the House, and the Treasury had not had an
opportunity thoroughly to study the matter, so they took it under
advisement.

The Chairman. And it didn't get in to the bill?

Senator Johnson. They took it under advisement

the last few

days of thq hearing, and it is understood that the matter will be
brought up when another tax bill is considered, and an effort will
be made to have the Treasury adopt some such plan as the unit
plan of excess-profit taxation.
The Chairman. In the meantime, production is on the bum partly
as a result of this failure to accept your amendment.
Senator Johnson. That is right. I think that is true. We pointed
that out to them, but they didn't accept that theory.

The Chairman. Proceed.

Mr. Fernald. Mr. Chairman, may I say I quite agree with the
statement the Senator has made. It is quite in accord with my
understanding of the present situation.
Senator Murdoch. May I just interpose this. Do you agree, then,
that the existence of this excess-profits tax as applied to mining is
today deterring the production of metals so needed in this war
crisis?

I wanted
is the next point I wanted to state.
of those with whom I have discussed this pretty
generally through the country, I know no one who is deliberately
saying, "I will not produce the metals I should be producing on
accoimt of this law."
The Chairman. Let me say this, Mr. Fernald, at this point, that
mine after mine and mine company after mine company that we
have questioned are producing less this year than they did last.

Mr. Fernald. That

to say this.

3H932

Of

42

all

pt.

10

-7

3820

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Fernald.

May

I just finish the statement

The Chairman. Proceed.

Mr. Fernald. We do have the situation here, and I agree entirely
with what you have said, Mr. Chairman, that it is a time when every

must be driven to increase maximum production. It is not a

question of holding back it is a question of whether you can get not
merely the effort you would expect but more and more and more, the
extraordinary effort. You do not and you cannot hope to get that
when there is a feeling of injustice rankling with people and they
feel that the Government is on one side saying, "Increase your production," and the other side is saying, "If you increase your production, we are going to consider you as profiteers."
Now a person can't do his utmost under that kind of a feeling. I
think for that reason it is hurting the situation, it is deterring the
fullest possible efforts that might be made.
The Chairman. Well, it has been the experience, I think, that tlie
Congress, the Senate and the House both, have made every effort to
be just in these tax matters, and I am very sure that there will be no
policy on the part of the Congress to penalize anybody for doing his
patriotic duty, even if under present laws it may cost him a little
something; and it seems to me that under present conditions, no
matter what the situation may be from a tax standpoint and there
are other tax bills coming up in which this matter can be equitably
adjusted every effort ought to be made by j'our people to get us
more metal. Metal is going to win this war.
Mr. Fernald. I agree thoroughly.
Senator HerrinCx. Mr. Chairman, in justification of the Finance
Committee's action, let me say that Senator Johnson's amendment did
come in late, like dozens of others; hundreds, in fact. The understanding at that time was that an administrative bill wgs to follow
that one through the Congress to be passed probably within 4 or 5
weeks, and every provision of the administrative bill was to pply
to the tax measure which was passed at that time, and it was on that
understanding that we left many of these inequalities in the present
tax bill, and if that is passed, it is our understanding that it will be
retroactive and protect those who are now being penalized by what
you consider an unjust provision.
The Chairman. I was sure of that.
have never willfully inflicted an injustice on anybody.
need metals now, and t am
trying to urge you gentlemen, tax or no tax, to do something about it.
Go in with these labor fellows. You heard the statement of the labor
effort

We

We

man

this morning.
Mr. Fernald. Yes,

sir.

The Chairman. And

get this metal out here.

is the sentiment of the mining industry,
and, of course, we, all of us, recognize that.
The Chairman. That is the reason we are giving this thing an
let's

Mr. Fernald. I think that

airing.

Mr. Fernald. What might have been expressed a year ago or a few
months ago might not be just the same things we would say under the
situation of the last few days.
The Chairman. It is all out the window now.
are trying to
save the country. The Senate just met. I adjourned this committee

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3821

meeting so that the members of the committee could vote for two more
declarations of war. We are at war in the whole world, with Germany, Japan, and Italy officially. We can't win this w^ar without
metal, the metals that we are discussing right now.
Mr. Fernald. I agree entirely with that.
The CiLMKMAN. What good is your tax or anything else going to
do you if we don't win this w^ar?
Mr. Fernald. I agree entirely with that, but I think you will agree
with me we will do better if we can avoid as far as possible a feeling
that there is an unjust tax
The Chairman (interposing). Clear your mind.
Mr. Fernald (continuing). On the part of the Government, and
I think if we can meet in this way
The Chairman. You have been working under a psychological injustice which the Senator from Iowa said was going to be corrected.
Forget that and let's get that corrected.
Senator Johnson. Senator Truman, may I make one other observation with respect to the tax bill recently enacted?
It will be very
brief.

The Chairman, Take

as long as you like. Senator.

Senator Johnson. In prior tax legislation, there was an exemption
made to strategic minerals from the excess-profits tax on the basis
that strategic minerals were of wartime production, and that they
would come into the picture very briefly, flourish during the war, and
disappear after the war was over. So they were left out of the excessprofits tax picture by previous legislation. The House included them
in excess tax legislation and the Senate Finance Committee and afterward the Senate itself again excluded them, but in conference the
House had its way and strategic minerals for the first time in this last
tax bill Avere taxed as in the excess-profits category, which, of course^
was a very unfortunate thing, but it did happen.
The Chairman. As usual, the Senate was right.
Senator Johnson. The Senate was right; yes, sir.
The Chairman. Proceed, Mr. Fernald.
Mr. Fernald. I think, Mr. Chairman, that is all I need to say to
express the thought of that particular amendment, is it not? If
there are any questions, I would be glad to answer them.
The Chairman. Has any Senator any questions to ask Mr. Fernald ?
Mr. Fernald. There is one other point I would just like to mention,
if I might.
Reference has been made here to this question of new
equipment. It has run all the way from new ventilating equipment
to new houses, new treatment plants, and there has been the question,
of course, of how much any mine can try to do with priorities Shall
it get new equipment here and so take equipment from other places?
I am not trying to discuss all that subject. We do have a situation,
however, which comes u)) under the tax law. It is now under consideration in the recent amendments which were made by H. J. Res. 235
in the amortization provisions.
We haven't yet the regulations under
that.
We do not know tg what extent that present situation has been
fully straightened out. But I do want to point out that if you are
going to install 100,000 or 200,000 or a million dollars of new plant and
equipment simply to give additional capacity for the emergency
beyond anj'thing 3^ou expect normally to use, so that 3^our investment
:

3822

INVESTIGATION OF THE NATIONAL DEFENSE PR0<3IRAM

at the close of the emergency period will just be surplusage and have
no real value, you must have the opportunity to have that taken

into account as part of the cost incurred for this production. I don't
want to press that. I do want to call that to your attention, and
we have not so far gotten that very satisfactorily straightened out.

We understand

that, Mr. Fernald, and we know a

and what we are trying to get now is
the necessary procedure to get some more lead, zinc, and cop]3er and get
It won't do any good if it stays in the ground.
it out of the ground.
Mr. Fernald. There is just one thing more I might say. I referred
to this fact that what we have got to have is not merely the routine
efforts, we have got to have the super efforts which come from the
most intense possible cooperation..
The Chairman. The all-out effort.
]\Ir. Fernald. We have perha])s one situation with the now producing mine. We also need some new mines brought in, mines that were
It
closed down. How are we going to get the incentive, the urge?
isn't for the industry, it is for the particular person to go in and do
that, and it is hard to expect a man to feel a responsibility on himself to go out and see if he can develop something new if he feels by
doing so he is going to be thrown into this class of people who are
making excessive profits, which after all there is the general feeling
we don't want people to make.
The Chairman. That is right.
Mr. Fernald. It does hurt the situation.
Senator Kilgore. Don't you think that the sliding scale, paying a
higher rate on new and expensive ]3roduction, would be the solution,
rather than an over-all rise in price?
Mr. Fernald. That is a very big question, and it is a very difficult

The Chairman.

lot of these troubles are real,

how to work out.

The Chairman. It would be almost impossible

one to see

for a man who

represents the whole mining industry to answer it. It has to b
answered by each individual mine, doesn't it?
Mr. Fernald. I don't know whether that broad question does.
As chairman of the tax committee of the American Mining Congress,
that has not been particularly in my field, but I don't want to run
away from this general expression on my part. It is a very difficult
thing to try to take each particular mine and say this mine shall
The mere time inreceive one price, that shall receive another.
volved in going around to consider each and every one of these questionable mines in the country may mean that we will not get the
answers until after the emergency is over.
The Chairman. How about giving a bonus for all new or all
increased production, as suggested by Mr. Riskin ?
Senator Kilgore. Give a bonus price for excess production.
Mr. Fernald. Well, I am just not ready to try to express an
opinion at the moment on it. It is a new thing.
The Chairman. Think about it, and get somebody Avho represents your organization to give us an expression on it.
That is

what we want.
Mr. Fernald. I should be very glad
Senator Brewster. I suppose that

to.
it is

not feasible to adopt the

in the expansion of

arrangement which the Government has made

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3823

other industries by the Government's building or furnishing the
equipment. It isn't feasible in a mining enterprise to have the Government furnish this additional equipment that is necessary and
retain title with some opportunity of acquisition if you desire.
Mr. Fernald. Sometimes it is and sometimes it is not. Let me make
a very brief illustration to answer a big question. If it is a matter
of furnishing some new cars, some new equipment which is movable
and the Government can have title to, that is one situation, but if it is
a matter of having the Government install some increased machinery
in a mill or to provide for some additional ventilating equipment in
your mine, it is going to be very difficult to have the Government keep
It
title to this particular part right in the midst of your mill or mine.
brings up an almost unsolvable situation, you see and if it is a matter of
building a new mill, the Government might do it; if it is a matter of
just sticking another piece in here they will be right in the midst of
your own mill, and you know what happens when you are getting title
We get an imm^ense confusion which is very difficult.
to real property.
Senator Brewster. I appreciate the difficulty, but, after all, it is a
question of doing the impossible now.
Mr. Fernald. I thoroughly agree with that, and I do think it will
be much more sensible for the Government to be liberal in its allowance of depreciation rates to meet some of these situations rather than
to try to go into all the involvements of having the Government furnish it and keep title to it. Does that answer it ?
Senator Johnson. The most important part of your capital is your
;

ore bodies, of course.

Mr. Fernald. Yes,

sir.

And

the Government cant possibly add to them

or detract from them by any investment of their own.
Mr. Fernald. That is perfectly true.
Senator Johnson. It seem^ to me, Mr. Chairman, that the bonus
idea would perhaps solve this excess-profits-tax problem as well as
some other problems.
The Chairman. That was the suggestion of Mr. Riskin.
Senator Kjlgore. That will take care of all of it.
The Chairman. Has any other Senator any other question he wants
to ask Mr. Fernald ?
Mr. Fernald. I can't quite agree that the giving of a bonus for increased production is going to quite answer the excess-profits-tax
problem, because what is going to happen to it if you are going to give
a bonus and take back 75 or 80 percent of it, possibly ?
The Chairman. Now didn't I say to you awhile ago, after what Senator Johnson had said, that I think you are going to get justice on that
when the tax committees meet? I think that is going to be out of
the picture.
Mr. Fernald. Thank you very much.
Tlie Chairman. Are there any other questions for Mr. Fernald?
Senator Murdock. Let me just discuss the giving of a bonus. That
would have the same effect, would it not, so far as the depletion of the
ore body is concerned, as the excess-profits tax?
Mr. Fernald. Not if you are going to give a bonus and take back 72

Senator Johnson.

percent of

it.

Senator Murdock. Do you think in this

this bonus that you are talking about ?

crisis

anybody

is

entitled to

3824

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. The bonus would merely

offsetting the profits tax.
ing at an increased cost.

It

be for the purpose of

might take the incentive away for min-

Mr. Fernald. I thought one particular thing you were referring

to in the bonus, was the situation of trying to bring into production,
ores which were not good enough to be worked on a commercial basis.
The Chairman. That is true.

Senator Kilgore. Or increased production which would add otherwise unnecessary expense to the operation of a going mine.
Mr. Fernald. That is the same thing. Or where there was a cost
of equipment which would probably only be of temporary use, and a
bonus might stimulate that.
The Chairman. Even when you are trying to save an industry or
tr3dng to save the country, you have to give some people an incentive
to do it.
So we want the result.
Mr. Fernald. Of course, you understand that I am not sitting here
and talking to you as one who has control of all the mines of the
country.
The Chairman. I understand.
Mr. Fernald. There are the individuals.
do want to get them
active and the spirit, the feeling that the Government intends to be fair
And I think you can
all the way around is of the utmost importance.
count on the response of the mining industry to do that.
Senator Murdock. But you are willing to agree to that, aren't you,
Mr. Fernald, that when the bill is finally passed, even though it is a
tax bill, carrying the excess profits item that when Congress has acted,
it has acted fairly as it has seen the light, and once it has acted, it
seems to me that no group has a right to slow down its production
simply because they feel they have been unjustly treated.

We

Mr. Fernald. May I make it perfectly clear? There is absolutely

no group slowing down production.
The Chairman. But the figures prove that production has been
slowed down in the last year. I don't know who is to blame for it.
Mr. Fernald. I can't speak with any authority on that.^ I think
that is a question of individual mines. I do know some mines went
ahead with their production without doing the companion development that was necessary to keep up that continuous volume. Now, I
do know that some companies, or at least some companies advised me,
that they have been hurt by the difficulty with priorities. I think
that situation has been greatly improved. But there was difficulty
in getting that worked out as everyone knows.
The Chairman. If we can get these metals out of the ground, it is
going to help priorities tremendously.
Mr. Fernald. We know that and yet a copper mine has to have a
priority even to get the copper pipe it may need around the plant, you
know, and you can't get it unless you get around to it through a priority. It is a terribly big subject. I am not criticizing anybody when
I say it takes time to work some of these things out.
;

In this connection see domestic mine production statistics subsequently furnished by

in appendix on p. 4250.

Mr. Fernald, whicli apiwars

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3825

The Chairman. It is a tremendously big subject, and that is th

reason we are holding these hearings. We are trying to find the
answer, trying to be helpful to get the answer, and I am hopeful we
are going to find it before we get through.
Senator Brewster. You do recognize and you will counsel, I presume, your associates that in time of war such as this, there are
inevitable inequities. We have taken something like a million boys,
all of whom I am sure were worth more than a dollar day, but we
have them in there at a dollar a day. My own son has enlisted. They
are getting a pretty tough break, and when that prevails, capital
inevitably is going to suffer. You fellows, perhaps, are in a tougher
spot than some armament producers, but it is going to be awfully
difficult for the Government to do complete justice to everyone. You
realize that, of course.
Mr. Fernald. I realize that thoroughly, and I realize all you say
about the young men and their problem, and have the utmost sym-

But the very unavoiclableness of the injustices is one

I think that when we do see some of them, we are warranted in bringing them to your attention.
Senator Kilgore. There is one other thing, you know. Even the
money that represents the profits, if we should lose, this engagement
would be of no value, nor would the title to the property
Mr. Fernald (interposing). I am very well aware of that, and I
am not minimizing in any way the seriousness of the thing, and the
wholehearted supereffort that it means to do it.
The Chairman. Any other questions, gentlemen? That is all, Mr.
l^atliy

with

reason

why

it.

Fernald.
The O. P. M. called up at 12 40 and said that the Anaconda Copper
Co. had made an agreement with the unions to go on a 7-day week.
That was done last night. The O. P. M. also cautioned this committee
about discussing imports of copper and other strategic metals, a precaution which we didn't need, but I think they are rather uncluly
alarmed, for I believe that the Japanese probably know a good deal
more about what we are doing than we do ourselves. The committee
will recess until tomorrow morning at 10:30, when we will proceed
with Mr. Kellogg and Mr. Batt, of the O. P. M.
(Whereupon at 4:05 p. m. a recess was taken until 10:30 a. m.,
:

December

12, 1941.)

INVESTIGATION OF NATIONAL DEFENSE PEOGKAM

FRIDAY, DECEMBER

12,

1941

United States Senate,

Special Committee to Investigate,

THE National Defense Program,

Washington^ D. G.
pursuant
to adjournment on
10
a.
m.,
committee
met
at
37
The
Thursday, December 11, 1941, in room 318, Senate Office Building, Sen:

ator Harry S. Truman, presiding.

Present Senators Harry S. Truman (chairman), Mons C. Wallgren,
Ealph O. Brewster, Tom Connally, Joseph H. Ball, and Styles Bridges.
Present also: Mr. Hugh A. Fulton, chief counsel; Mr. Charles P.
Clark, associate chief counsel.
The Chairman. The committee will come to order. Mr. Eeed, will
you be sworn ? Do you solemnly swear to tell the truth, the whole truth,
and nothing but the truth, so help you God, in the testimony you are
about to give before this committee ?
Mr. Reed. I do.
:

TESTIMONY OF PHILIP

D.

REED, DEPUTY DIRECTOR, MATERIALS

DIVISION, OFFICE OF PRODUCTION

The Chairman. You

MANAGEMENT

are in charge of the Materials Division of the

O. P. M.?
Mr. Reed. Well, I

am one of the deputy directors. William L. Batt

the director of the Materials Division, as I believe you know.
The Chairman, Yes.
Mr. Reed. And I am one of his assistants, as it were, deputy director
in charge of certain of the commodity branches which make up the
Materials Division.
is

production or nonferrous metals

The Chairman. Mr. Reed, we have been very much interested in the
situation of the nonferrous metals, particularly copper, lead, and zinc,
and the condition of production now, and we have been in touch with
your office, I think, on this information, and if you have anything that
you can tell us along that line we would like to hear it.
I don't know whether you heard the testimony yesterday or not,
or read it.
Mr. Reed. No; I wasn't here yesterday, Senator. I perhaps can
give you a general statement of the functions of O. P. M., particularly
in its Materials Division, in relation to these nonferrous materials, and
3827

3828

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

addition to that you would like some specific information beyond

what we have already furnished, why, if I can't give it we can supply
someone here who will be very glad to answer any questions that you
if in

have.

The Chairman. All right proceed.

Mr. Keed. We had intended to prepare very much more fully than
we have been able to for this hearing, and when we were advised
of it we wanted to take this opportunity to give a broad, comprehensive objective view of the job, the problem, the way we have approached it, the kind of job we have done, good, bad, or indifferent.
The events of the last 4 or 5 days have so completely taken our attention and our time that we haven't been able in this last week to do
nearly as much as we would like to do in order to be ready.
The Chairman. We appreciate that.
Mr. Reed. For that reason I am simply going to make an extemporaneous and very brief statement to you here and then will be glad
to go on to the extent that you would like to have us do so.
The very fact that we are now at war, it seems to us, makes it unde;

sirable to give details concerning figures, production figures, particularly where they relate to foreign sources. Any of this material is
available to you, you know that, but we think perhaps it should be
made available to you through the military rather than in a public
hearing of this sort.
The Materials Division is divided into a number
Senator Connally (interposing). Let me ask a question right there.

Mr. Reed. Yes, sir.

Senator Connally. You said the war in your opinion has brought
about a situation where you can't tell us much. Is that it?
Mr. Reed. I beg your pardon ?
Senator Connally. You say the war situation has created a posi.tion, according to your mind, that you can't tell us much about these
things. Is that the substance of your testimony.
Mr. Reed. Not at all. Senator. I simply question
Senator Connally (interposing). That is what we wanted to find
out, to find out something. If you are going to come up here and
say we have a war now and you can't tell us and you are going' todecide whether we can help, there is no use of our going on.
Mr. Reed. Anything you want to know we will be very glad to see
that you find out. As far as we are concerned we are an open book,
Senator. We leave it to you to decide, perhaps, whether or not at a
public hearing data should be given with reference to foreign sources
of our
The Chairman (interposing).
are not asking you to do that at
all.
We are interested in the domestic source of supply.
Mr. Reed. I know that. Senator.
The Chairman. There has been published in the Wall Street Journal a lot of information in which we are interested, and if it is in the
Wall Street Journal evidently it is not secret information, so it
wouldn't hurt to go into our record. I would suggest you go ahead
and make your statement and we will question you along that line.
Mr. Reed. The Materials Division of O. P. M., is divided into socalled commodity branches, each with its chief. The branches are divided up into what seem to be logical classes. For example, one com-

We

mVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAIVI 3829

modity branch has copper and zinc, another one has tin and lead, a
third has ahnninum and magnesium. The branch chiefs in each case
liave complete responsibility for the material or materials assigned to
them, and the chief and his staff review the situation with respect to
tliem and deal with all matters relating to those materials. Anyone,
the general public, wishing to be advised concerning the status of a particular material, may address himself to the branch chief regardless
of whether the problem is one of priorities, production, conservation,

or of supply.
O. P. M. having no money to spend or to lend, having no control over
prices at which these commodities may be produced or sold, is in effect
u coordinating, a stimulating organization. Its function, as we view
it, is to analyze the problem, to consider every source that is available
to it, to estimate the requirements, the apparent estimated supply, and,
observing from those data the apparent shortage, if there is one, to
plan to balance the difference between supply and demand in any way
that may be at its disposal. The ways in which that is possible are
two, principally First, to increase the supply by approaching every
producer of that material, whether he be domestic or foreign, explaining the problem, undertaking to secure his complete cooperation in
stepping up production in every way that he can. Having reached a
point where a producer feels that he is doing all that he can as a private enterpriser under existing conditions of price and of costs, O. P.
M. then does indicate and has in a good many cases indicated to the
producer that if Government help in terms of loans or of defense
plants or of facilities will be effective in stepping up the production
of that material, O. P. M. is prepared to recommend and refer him to
the R. F. C. or to the proper agency of R. F. C. with its recommendation that arrangements be made for ]:)roviding special help in the form
of loans, subsidies, or the like.
Senator Brewster. Well, now, Mr. Reed, this is all pretty elementary. Of course, we have been over many phases of this for a long
time, so that I think we understand something of the procedure. The
question we are concerned with, for instance, is whether or not you
found the necessity of any more lead this last year. Did you or did
you not?
:

Mr. Reed. Excuse me, sir?

Senator Brewster. Any more lead.
Mr. Reed. The necessity for any more lead ?
Senator Brewster. Yes.
Mr. Reed. There is a shortage of lead.
Senator Brew'Ster. There is a shortage. Now, whether or not production this past year, this present year, has increased over last year.
Mr. Reed. The production so far in 1941 is ahead of the production
for the same months of 1940, according to our estimates.
Senator Brewster. How much?
. RriD. I can't answer that specifically.
I haven't the figures

before me.

Senator Brewster. Aren't you jirepared to testify on that? I

thought that was what we were going to discuss.
Mr. Reed. No I do not have with me specific figures of production
in lead or copper or zinc.
;

INVESTIGATION OF THE NATIONAL DEFENSE PRO'GRAM

3830

The Chairman. We have specific figures here, Mr. Reed, which

show that the production of lead this year is behind the production
of last year, very substantially; and we also have the figures here
which show that the production of copper is only 15,000 tons greater
than it was last year, and that the whole increase is in one company's
mines and I have here a statement from the Joplin Globe of Sunday,
January 26, in which the secretary of the Lead Industries Association
makes the statement that there need be no apprehension as to the
adequacy of the supply of pig lead despite the variety and size of
lead requirements. Then he goes on to say that domestic mines in
;

that field alone could supply all the lead the country could possibly
need, and yet that production of lead in that very field is behind what
it was in 1940 and is far below what it was in 1926.
That is true of
the mines in Idaho, that is true of the mines in Utah, that is true in
every lead-producing part of the country that we have got before us
right here. I just want to know what the difficulty is. You gentlemen knew that we were going to need lead, that we were going to
need zinc, that we were going to need copper, and what we are
anxious to know is what you did to increase production out of the
ground. It doesn't seem to .have been done. This fellow has made
exactly the same statement here about lead, singing us to sleep just
like the Aluminum Co. did, and we are exactly in the same kind of
situation in lead, copper, and zinc that we were in aluminum. I don't
think there is any excuse for it, for I think there is enough lead,
copper, and zinc in the ground in this country if we can get it out,
to meet all the shortage that the whole world needs.
Mr. Reed. I don't think you can talk in general terms as applied
to all three of the materials.
Senator Brewster. Let's stick right to lead, then. You say there
How long have you known there was a lead
is a lead shortage.
shortage ?
Mr. Reed. The indications from the data that we have had before
us that there was a shortage in lead, an actual shortage, have been
only within the last two or three months.
Senator Brewster. Up to that time you didn't appreciate that there
would be any necessity of additional lead ?
Mr. Reed. Up to that time all the indications were, and I must say
this has been true of many other materials
as you recall, a year
ago aluminum was believed to be plentiful.

Senator Brewster. We have been into that.

Mr. Reed. And we all thought there would be plenty of copper,
and copper has since turned very tight. By the same token, lead,
which is the last of the materials approximately in the order of their
tightness, was not tight last spring, it was not tight during the summer. There were indications that it was becoming so, but until the
last 2 or 3 months there hasn't been any serious indication of a shortage of lead.
The Chairman. From the information that we can get from the
big producers, every one of them has cut down production, I will
say a majority of them. The counsel corrects me and says not every
one of them, that most of them have cut down production. But the
general result is that the production for this year is not any greater
than it was for last year in any substantial figure, and it was below

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

last year in lead production.

very

In copper and zinc

it is

up

3831

a little,

little.

We

are by no means satisfied with the production situaThere is no question about that.
Senator Brewster. How long have you been that way ?
Mr. Reed. We have wired, as you know, Mr. Knudsen and Mr. Hillman wired, all the lead producers back in November, urging them to
take every step that they could to increase the production of lead by
any means known to them, whether it be
Senator Ball (interposing). When did you wire them?
Mr. Reed. That was early in November very early in November.

Mr. Eeed.

tion in lead.

Senator Ball. Are they increasing production? Is November production up any?

Mr. Reed. We are advised that it is. The St. Joseph Lead Co., for
example, has gone to a 6-day week, and in a good many cases the reports
to us, in any event, indicated that the labor situations were interfering
to a degree; the cost situations, and then the price, were the three
elements which were interfering.
Mr. Fulton. Which labor situations were interfering with
production ?
Mr. Reed. Difficulties in going to more than a 5-day week.
Mr. Fulton. You mean the general question ?
Mr. Reed. That is right.
Mr. Fulton. In lead, as I recall it, it was November that this telegram was sent out asking the companies to go from a 40-hour 5-day
week to a 48-hour 6-day week.
Mr. Reed. Yes it was broader than that we asked them, in any way
they knew of, to increase lead production because it was very essential
that we get more lead, whether it be done by going to a 6-day week
or a 7-day week or by putting on more shifts or by using any other
means that they knew how to use, that we wanted it done, and wanted
it done very badly; and that was signed by both Mr. Knudsen and
Mr. Hillman.
Mr. Fulton. What was done before that, if anything?
Mr. Reed. Before that it was a matter of the chief of our lead branch
in private, personal consultation with the lead producers, urging them
to step up their production of lead.
There was no general, industrywide appeal, so far as I know.
Senator Hall. Wlien did this personal consultation start?
Mr. Reed. These personal discussions?
Senator Ball. Yes.
Mr. Reed. Well, Mr. Vogelsang, who is the chief of the lead and tin
branch, can answer that better than I.
Senator Ball. Is he here?
Mr. Reed. He has been in touch with that industry since last
;

spring.

Senator Ball. Is he here?

Mr. Reed. I don't think he

He could be
is here in the room.
like to talk to him.
Mr. Fulton.
sent out a request to the larger producers of
lead as listed by Mr. Vogelsang, asking them to give us the actual
lead that they produced during the months of July to November,

available if you

would

We

1940,

and for the corresponding months of 1941, and company after

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3832

company has reported a decrease during those months. Did the

O. P. M. know that such decrease had taken place?
Mr. Keed. Well, I can't answer that specifically.
We knew
surely whenever the figures of production came in, and we get them
monthly.
Mr. Fulton. Do you have those figures in the O. P. M.?
Mr. Reed. These figures that you are speaking of now?
Mr. Fulton. Yes.
Mr. Reed. We get figures from the industry each month.
Mr. Fulton. From each company each month ?
Mr. Reed. I am not sure whether they come from each company
or whether they come through the association, but we get data each
month from them now. We put a lead order out, you know, in
October, in which they are now required to file questionnaires with
us each month giving a great deal of data concerning their production, their stocks and shipments, and requiring them also to apply it
first,

of course, to defense purposes.

Senator Ball. Have you anybody out in this lead zinc field just
riding this thing and following through on it and seeing that tliey
put on double shifts or triple shifts and go to a 6-day week and
get this production ?
Mr. Reed. Yes, sir; we are following it. As I tried to explain to
you, O. P. M. has no authority over the industry; it has nothing
that it can do to industry to command them to do this or to do that.
Senator Ball. Who has?
Mr. Reed. Our job is to present the problem to them, to urge
them, persuade them, and there is no lack of willingness I am
dead certain of that on their part to play ball.
Senator Brewster. Just a moment.
Mr. Reed. Yes, sir.
Senator Brewster. I think you would have been very much illuminated if you had been here yesterday and heard the testimony
that they didn't want to increase production because they felt they
were not dealt with fairly by the Government. They testified to
that. They didn't want to increase production. So I think it is very
late in the day to come here and say that they want to when they
They feel they are not getting a fair deal.
testified they didn't.
Well, that is not our immediate province; our immediate province
Now, is there anybody in your organization
is lead to win the war.
who is familiar with the fact that lead production has declined in
the last 5 months over a year ago? You testified that you thought
it had increased, which indicates that you. at any rate, have not been
in touch with the facts.
Mr. Reed. My impression is that for the first 10 or 11 months of this
year the total domestic production of lead is ahead of the similar 10
months of 1940. I recognize, and I know to be true, that in September
and October the lead production for those months fell off as against
the similar corresponding mcmths of last year, and I am speaking only
from memory and from impression, but the point I was trying to make
to you was this That there is no power or authority in O. P. M.
Senator Ball (interposing). Wlio has this property requisitioning

power ?
Mr. Reed. Property requisitioning power?
Senator Ball. Yes.

INVESTIGATION^ OF

THE NATIONAL DEFENSE PROGRAM 3833

Mr. Reed. The O. P. M. has the power to requisition stocks.

Senator Ball. Isn't that an ultimate power to do so ?
Mr. Reed. It has nothing to do, as I understand it, with production.
Senator Brewster. I would like just to finish this question. I have
now estimated apparently
belVn'e me the figures for the 12 months
for December estimated at 40,000 tons, following the totals, showing
that the January production in 1941 exceeded the October production
by 46 percent. In other words, there has been a progressive decline.
Apparently you have some knowledge of that.
Mr. Fulton. That includes refining from scrap, too. You should

put that in.

Senator Brewster. That includes the refining from scrap.
Mr. Fulton. Yes; and mining is a little bit better if taken alone
than it is if you take the combined primary from mines plus secondary
from scrap. We haven't been able to obtain from any source monthly
figures on mining alone, but this is the nearest that we can get in this,

and

it is

impossible to reconcile the two figures.

Senator Brewster. Well, according to these figures, then, the

monthly average which I have before me of 1940 was 38,116 tons, and
the monthly average from January to October 1, 1941, was 37,785 tons;
in other words, you are 400 tons a month in 1941 average under 1940.
Mr. Reed. I haven't seen those figures.
Mr. Fulton. The first figure which Senator Brewster read, giving
that larger showing of loss, came from Vogelsang of your department.
We have never received any further figures along that line from him.
The second figure which the Senator read came from the Bureau of
Mines. The two fire not capable of reconciliation as far as we can
see. but using the more favorable figures, which he did, and assuming
that scrap production has accounted for most of the loss, there is still
a net loss in lead this year.
Mr. Reed. In primary production?
Mr. Fulton. Yes. Noav, didn't you know that, Mr. Reed?
Mr. Reed. No. My personal figures that I looked over just this
morning before coming over here were that for each month up until
August, at least, the domestic production of primary lead, not including the secondary, was ahead of the corresponding month of last year.
I don't think there is any need to argue about it, because the figures
are figures and I don't propose to be dogmatic about it at all, but that
is still my impression.
Senator Wallgren. My suggestion is that if this Government wants
a greater production as far as lead is concerned, they had better increase the price of it. Do you know anything about the price of lead
during the last war?
jVIr. Reed. Well, I know it was very greatly above the present prices.
I don't know just what the prices were.
Senator Wallgren. All of the other strategic metals have increased
tlie price considerably while lead has been held back, hasn't it, as far
is concerned ?
Reed. Copper and zinc prices, as vou know, were raised in October by the O. P. A.
Senator Wallgren. What is the present price of the metal?
Mr. Reed. The present price is 5.85.

as price
j\Ir.

3834

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Wallgren. I don't recall myself wliat the price was in the
last war.

I can tell the Senator,

It was about $125 a ton.
had a lead mine at that time.
Senator Wallgren. Don't you feel, Senator Truman, that the price
of lead today is down compared with the price of other material ?
The Chairman. Yes; I think the price of lead is a little lower than
it ought to be, but I don't think that is what is the matter with the sit-

The Chairman.

for I

uation at

all.

Senator Wallgren. I think it is, and I think the people engaged in

that industry are not going to buckle down to it unless
The Chairman (interposing). If you read this article to which I
referred a while ago, the mining operators were making this speech,
that there was no possible chance of a shortage in lead, so that there
wouldn't be any tariff reduction for the lead imports from Mexico and
Canada that is what they had in their minds. The present price of
lead is perhaps a little lower than it ought to be, maybe a cent a pound,
but if what this statement says is true, that should not have created
the present shortage. We have been importing about 140,000 tons of
lead from various places, most of which has been exported before this
war came along. We have used our own domestic lead for our own
domestic supply. Now, we suddenly find here, along in November,
that there is a shortage of lead, and orders were issued to cut off the
5 percent that supplies little industry and close up that little industry
because somebody has overlooked a bet, either the operators or O. P. M.
or somebody has let this shortage accumulate while we are living in
;

the false idea that we had all the lead we wanted and could get it any
time we wanted it. I think we can still get it.
Senator Wallgren. Are there any operators who will testify here?
Senator Brewster. We had the operators yesterday. Now, here is

what
The Chairman (interposing).

We

are going to give

to clear themselves if they can.

them a chance

Senator Brewster. As it appears to me and I would like to have

the comment of Mr. Keed I don't see how we can hold operators or
labor or anybody but O. P. M. responsible for any lead shortage if, as
Mr. Reed testifies, he had no knowledge there would be a shortage until
a month or two ago. Certainly if O. P. M. didn't know that you
couldn't expect operators or unions or anybody else to know it, and
Mr. Reed has so testified. Now, I think the question we want Mr.
Reed's comment on is how this shortage so suddenly developed, why
have been through it with
there wasn't earlier information.
aluminum, magnesium, with various other metals, always the same
Then all of a sudden we
story, the song that everything is all right.
come plunk up against the fact that there is a shortage. How do you
explain it, Mr. Reed ?
Mr. Reed. Well, these shortages develop, Senator, in lead just as
they did I assume in the case of copper and these other materials they
develop from a number of different things. First, they develop because tightness in one material causes a trend toward the other, substiThe minute one material becomes tight it
tution, in other words.
Lead happens to be the last one,
affects all the others down the line.
and so from aluminum to copper to tin to lead. Lead is under pres-

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3835

many different points because all of those matethan lead are forcing people into using lead where
they would normally use the other metals.
What about the shortage for defense
Senator Brewster. Oh, that
requirements as distinct from other domestic civilian requirements?
What can you say on that ?
Mr. Reed. There is no shortage for purely defense requirements.
There will be ample lead to meet all defense requirements as we know
them today and as we have been advised by the services of those
sure

now from

a good

rials that are tighter

requirements.

Senator Brewster. For how long a period ?

Mr. Reed. For an indefinite period.
Senator Brewster. At the present rate of production?
Mr. Reed. Yes, sir.
Senator Brewster. And then your difficulty is in the

civilian

demand ?
Mr. Reed. That is right.
Senator Brewster. For other than defense requirements.
Mr. Reed. That is right. It is very difficult, as you know, to draw
the line between defense and nondefense. They meld, they are so
closely interrelated that it is awfully difficult to draw the line between
them, but generally speaking, I say to you that there will unquestion.
ably be enough lead for all direct known military requirements and
there will be enough lead for both direct and indirect military requirements.
Senator Brewster. Do you think you can substantiate the proposition that this shortage is a result of increased civilian demand?
Mr. Reed. I think this shortage is the result, as I have said, of a good

many

things.

Senator Brewster. I asked

if

you could substantiate that position.

Have you figures that would indicate that

demand that you have not anticipated?

it is

the increased civilian

Mr. Reed. No; it is a combination of demands, a combination of

both military direct and indirect, and civilian.
Senator Brewster. Do you recognize the responsibility of O. P. M.
for other than defense requirements ?
Mr. Reed. Yes, indeed.
Senator Brewster. You recognize that you are responsible for our
whole economy?
Mr. Reed. Yes.

The civilian supply division of O. P. M. is directly interested in civilian supply.

Senator Brewster. Have you any figures on this situation with
you?
Mr. Reed. On the lead situation?
Senator Brewster. Yes.
Mr. Reed. No I have no figures with me.
Senator Brewster. On any other situation.
Mr. Reed. I have no figures with me this morning. I Avould be
glad to get anything that you would like.
Mr. Fulton. The committee has been trying to get figures which
the O. P. M. says it is not able to give the committee. It is some
reflection, I think, that they are not able to compute figures on these
;

various items.
311932 42 pt.

10


3836

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Reed. We furnished the committee with a large vokime of

Mr. Fulton, as you know, of course, in the past 10 days.
Mr. Fulton. We have figures, but we haven't any fraction of the

figures,

rather simple requests that we made as to the figures of production

of various companies. Now, do you have with you or have you seen
the figures that Mr. Vogelsang and Mr. Ayer gave us on materials?
Mr. Reed. No; I haven't any figures with me, as I say. Whether
I have seen all the figures that those gentlemen sent to you, the
answer is I believe I have. Certainly copies of all of them were
sent to me, or should have been sent to me.

Mr. Fulton. Did you have any figures this morning which were
not sent to us and which you have not brought over ?
Mr. Reed. No, sir.
Mr. Fulton. You are sure any figures that you saw this morning
were figures that we had ?
Mr. Reed. I am sure that any figures that I have seen are figures
that are available to you. Whether all the figures that I have seen
have been sent to you I can't answer, I don't know.
Mr. Fulton. Will you send over to us the figures you looked at
this morning so that we can see whether they are among those which
the O. P. M. is unable to furnish the committee although requested
some 2 or 3 weeks ago to do?
Mr. Eaton.^ We anticipated having the individual chiefs of these
branches go on to answer any information you want that we have available to you, so that my suggestion would be that for specific figures,
either for companies or for industries, to the extent that w^e have them^
those will be with the branch chief and with our Bureau of Research
and Statistics, and it wasn't my purpose I am responsible for this
If you would like
to have Mr. Reed go into the detailed figures.

him do so
Mr. Fulton (interposing). You recall that the request was not for
Mr. Reed but was for anyone, no matter how low his position might

to have

be,

who knew

the figures.

Mr. Eaton. Correct. We understood this morning that you wanted

Mr. Batt or Mr. Reed to start off.
Mr, Fulton. No; that is definitely a misunderstanding because the
O. P. M. said they wanted Mr. Batt and Mr. Reed. We said, "We will
take whoever you have. It matters not to us."
Mr. Eaton. I am sorry there was a misunderstanding, but I want to
make perfectly clear that Mr. Reed didn't come over here prepared
to go on with detailed figures. That is a mistake in our office, perhaps,
and I regret it.
If you like, Mr. Church is here who will take up specifically your
copper figures.
Mr. Fulton. Is Mr. Ayer here ?
Mr. Eaton. We will have Mr. Vogelsang and Mr. Ayer as soon as
Mr. Church is through. I would suggest that Mr. Church go on first
and have them or anybody else come over while he is testifying, in any
order you wold like.
Mr. Fulton. I think it might be well that we hear from Mr Reed
along any line that he cares to make a statement The committee's
Fred Eaton, Assistant Counsel, Materials Division, O. P. M.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

3837

would be in asking specific questions on specific matters, as I

understand it.
Mr. Eaton. I would suggest that Mr. Church take up the copper
picture, and we will have Mr. Vogelsang before you whenever you
care to heai' him on lead and on tin, and we will have Mr. Ayer on
production of copper, so that you may go into the detailed figures.
The Chairman. That will have to be at a later date because the committee has another witness who will have to be heard this morning.
Anything Mr. Reed wants to add to his testimony we will be glad
to have him do so this morning.
Senator Ball. Mr. Reed, if I understand this O. P. M. set-up, the
function of the Materials Division was to see to it that we had enough
raw materials when we needed them; that is its primary function,

interest

isn't it

Mr. Reed. Yes; that is its objective; there is no question about it.
Senator Ball. And, of course, they have failed completely, as indicated by the testimony we have had up here. It seems to me that in
this kind of emergency when an agency flops that way, if I were running it I would give it to somebody who could do the job. But that
is water over the dam.
At least, you know now that there is a
shortage.
I wasn't here yesterday afternoon, but the chairman tells me these
lead operators told us that production could be doubled in the present
mines.

Mr. Rfj:d. That what?

Senator Ball. That production could be virtually doubled.
The Chairman. Substantially increased, at any rate.
Mr. Reed. At present prices ?
Senator Ball. I don't care how you do it. It seems to me that it is
the job of O. P. M. to see that the total increase possible is brought
about in the shortest possible time, and the Government ought to
find somebody who can do it.
Mr. Reed. You recognize the limitations on O. P. M.'s authority
to act, don't you ?
Senator BiVLL. I haven't heard anybody coming up here asking for
more authority. They seem to be content with what they have got.
They just run around in circles and O. P. M. passes the buck to the
Army and the Navy, and they pass it back.
Mr. Reed. I know.
Senator Ball. Or give it to Jesse Jones, and nobody gets anywhere.
Senator Brewster. Well, I think that Mr. Reed has very definitely
taken a responsibility. He says that until, shall we say, 30 or 60
days you had not appreciated there would be any shortage. Is that
correct ?

Mr. Reed. I said that

statistically a matter of 90 days ago there

actual excess of demand over supply.
Senator Brewster. It was 90 days ago that that first appeared?
Mr. RpD. Within the last 2 or 3 months, I can't tell you exactly.
It was in October that our lead order was issued, and that was
when the shortage appeared.
Senator Brewster. You would very definitely recognize your responsibility for finding that out as against any other agency or
private group ?
Mr. Reed. Yes.

was an

3838

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. Under the present function ?

Mr. Reed. Yes.
Senator Brewster. That certainly doesn't require authority.

That

just requires facts.

Mr. Reed. Unquestionably the job of the O. P. M. Materials Division is to find out whether a shortage exists and to prognosticate
one, if it can, in advance of its coming into being.
Senator Brewster, Please emphasize prognosticate. You will recognize, I suppose, it takes more than a couple of days to get some

You have to anticipate.

Mr. Reed. There is no argument between us about that.
Senator Brewster. Now, that being your responsibility, you now
say that when you discover that you have no authority really to

lead.

deal with

it

is

that correct

Mr. Reed. That is right. We have no way by which we authoritatively can increase the supply. All we can do is to urge and to
recommend. Beyond that we have no authority. We recognize the
problem. We have the authority to distribute the existing supply
to points where it will do the most good, but as far as net increasing
it from the production standpoint, we have no authority to do that.
We have authority to increase the supply in reverse by cutting off
nonessential uses and saving it thus for essential uses or military
But at the source end there is
or highly essential civilian use.
no way that O. P. M. can, except by encouragement, urging, persuasion, by recommendation on other Government agencies, actually
increase the tonnage output of copper or zinc or lead or of any
other material.
Senator Brewster. Now, you do recognize the imperative necessity of some such authority somewhere in Government under this
current crisis, do you not ?
Mr. Reed. The necessHy for some such authority?
Senator Brewster. That such authority shall exist somewhere.
Mr. Reed. Well, I don't think the authority is so important as it
is that cooi'dination between the various agencies that are interested
in this problem be obtained.
Senator Brewster, Yes.
The Chairman. I want to ask you one question I notice that the
problem seems to be a shortage for domestic use. The first thing to
do is to cut off the users. Wouldn't it have been just as easy to go to
the other end and produce some more so we would have enough for
those users?
Mr. Reed. Our experience has been that we have to do both, Senatoi-.
Certainly in copper we have projected some very substantial increases
At tlie same time we have had to conserve at
in our copper output.
the other end by cutting off a great many desirable but unnecessary
uses of copper, and we are still short.
The Chairman, The first thing you do, though, is to cut off the use
and then try to get production. Did you ever try to get production
first and then cut off the use?
Mr. Reed. No; that isn't the first thing we do. The first thing
we do is to try to get more production. Actually, we move together
with these things because we have found that wlien a shortage develops
we have got to take every step we know at both ends.
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3839

Mr. Fulton, Do you know when the first Government assistance

for increasing the production of cop])er became effective ? Have you
any idea when that first became effective?
Mr. Reed. The first Government assistance, you mean, in terms of
a subsidy or of an advance grant of money?
Mr. Fulton. In terms of anything, subsidies, advance in money, or
assistance of any kind. When did you first make that available to

any producer company ?

Mr. Reed. I don't know of any Government arrangement whereby
financial help was provided for until this last summer, late July or
August.
Mr. Fulton. Was there any ]:)rovided in August ?
Mr. Reed. There were a good many negotiations pending, I know,
Whether any contracts were actually
in August between the R. F. C.
closed, deals- closed, I don't know, but I do know that progress was
being made physically and actually in the direction of increasing
supply or enlarging facilities.
Mr. Fulton. Tlie only progress, I assume, would be in actually
starting to produce.

Mr. Reed. Oh, no;

it

takes

months and years

to get

ready to do

these things.

Mr. Fulton. Well, you think the O. P. M. in August made a

recommendation to the Defense Plant Corporation, and, if so, what
recommendation ?
Mr. Reed. Well, I know that in July and August
Mr. Fulton (interposing). Which one was recommended in July
to the Defense Plant Corporation?
Mr. Reed. I'm sorr}^, I can't get into specific ones because if I
mention any I will certainly miss out on some, but there were, I
would say, a dozen specific projects referred by us, that is to say by
O. P. M., to Metals Reserve or to Defense Supplies, to W. L. Clayton
or Mr. Jesse Jones during the months of July and August of this
year, projects involving either recommendations for the purchase of
copper at prices above the ceiling or recommendations of funds to be
advanced by way of R. F. C. loans to help them equi}) or build new
mine or mill facilities or the outright expenditure of Government
funds to build a defense plant.
Mr. Fulton. Let's take probably copper as an example and go
through with it so far as the O. P. M. has given us information on it.
When did you first realize in O. P. M. that there was a shortage of
copper, or would be one ?
Mr. Reed. About May.
Mr. Fulton. Then why was it that you didn't even address an
inquiry to the producers until July 9 ?
Mr. Reed. That is not an accurate statement. You are talking
about the July general meeting in which substantially all producers
were invited to come to Washington to discuss the problem as a
whole, Mr. John Church Avill tell you that long before that discussions with individual producers were in process examining into and
investigating the possibilities for their increasing the supply.
Mr, Fulton. You have records of those discussions?
ISIr. Reed. Mr. Church can answer that question better than I.

3840

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Fulton. I mean, do you know of any discussions? You place

the knowledge of the shortage in May. What part of May ?
Mr. Reed. I can't answer that.
Mr. Fulton. Was it before or after this committee held hearings
on aluminum ?
Mr. Reed. I can't answer that. I have forgotten just when your
hearings on aluminum were held.
Mr. FuLTON. Did Mr. Batt ever tell you of his conversation with
me about copper in May ?
Mr. Reed. No, sir.
Mr. Fulton. But you knew of the shortage of copper in May.
Mr. Reed. The shortage of copper became very apparent in the

month of May.
Mr. Fulton. I asked for the first time that the O. P. M. took action
with respect to copper, and I was furnished with a letter dated July
9, which Mr. Henderson and, I think, Mr. Knudsen or some other
official signed, addressed to the 12 largest copper producers, and only
to the 12, and that letter called for a meeting in the Washington Hotel,
I think, on July 17.
I not correct ?
Mr. Reed. That is right, if I recall correctly.
Mr. Fulton. And that letter simply said, be prepared to discuss
the extent to which you can increase copper either by price or tax or
other changes. Now, that meeting was held. At that meeting, did
you ask these copper producers to present to you a written statement
of proposals of increase, or was it only an informal discussion?
Mr. Reed. We asked each of them to make a statement at the
meeting.
Mr. Fulton. An informal statement?
Mr. Reed. Yes; that is right.
Mr. Fulton. Which you agreed to accept confidentially?
Mr. Reed. I don't recall that there was any agreement to accept
confidentially. "Wliat we did was this We asked them to state to us
in general terms, because this was quite a large meeting, and obviously
we couldn't conclude anything in a meeting of that character, but
we wanted all of the large producers to be represented and to know
and to hear at one time and from one group how seriously this matter
was regarded, so that they would each know that all of them had been
urged to take steps. Then each of them having responded and made
a statement specifically or generally as to what they thought might be
done or what avenues called for further investigation, we appointed
several individuals to follow up with each of the companies and to
explore with them in much more detailed fashion the steps they could
take to increase production and the manner in which Government help
might be required to do that.
Mr. Fulton. Then wasn't that the first time when you started any
detailed action to get any increase in copper, after the 17th of July ?
Mr. Reed. I don't knoAv Avliat you mean by detailed action, Mr.
Fulton. Certainly that was the first general industry approach.
Mr. Fulton. That was the fiist time you asked the copper producers for a specific proposal from each of them, and I haven't been
able to find any specific proposals that were received at that time in
the form of a definite proposal to enter into a contract with practical
and definite terms known.
(Senator Brewster took the chair.)

Am

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3841

Mr. Eeed. Well, no contracts, of course, would be made between

O. P. M. and the copper companies. Those would be made between
the Defense Plant Corporation or one of the R. F. C. defense financial
agencies.

Mr. Fulton. I mean where you had the specific proposal for at
your ratification so that they could go over and talk with the
Defense Plant Corporation on a basis of actually having had a clearance from O. P. M., there was nothing of that kind done prior to the
17th of July, was there ?
Mr. Reed. Prior to the 17th? Well, I am not certain about it. I
didn't get into this materials end until July 1 and that would be
least

hearsay before that.

Senator Ball. Mr. Reed, a few minutes ago Senator Brewster asked
you whether you didn't think it was about time somebody hacl authority really to do something about getting more materials, and if
I heard your answer correctly, you said that you felt what was needed
was somebody to coordinate. It seems to me that is what O. P. M.
was set up to do, to coordinate Jesse Jones and the Army and the Navy.
Senator Brewster. Mr, Ickes.
Senator Ball. And Mr. Ickes. And so far as we have been able to
discover up here, coordination is just another name for the good old
army game of passing the buck. We never could find out who was responsible for not getting more aluminum production, for instance.
The O. P. M. blamed somebody else, and somebody else blamed Mr.
Ickes, and somebody else blamed Mr. Jones, and we didn't get anywhere.
Mr. Reed. I think tlie answer to all of these cases has been a mistake in the estimate of the demand. Production in almost every case
has either equaled or exceeded the estimates whicli industry has given.
Certainly that was true in aluminum and it has been true in copper.
It has been true in zinc.
Senator Ball, It is pretty obvious that on the planning end of this
job, on forecasting needs, you have done a terrible job.
Mr. Reed. It has been poor.
Senator Ball. But on this coordination job it seems to me that has
fallen down because you began a year ago trying to get more aluminum
production, and the negotiations dragged along, there was a conference and first one agency held it up, the Federal Power Commission,
and then Ickes, and tlien Jones. You were just going around in circles.
Isn't it about time that somebody, some one agency, had the responsibility and the authoritj^ to do this job, and then if it wasn't done you
could at least get rid of one guy and get another and tell him to do it or
else. Isn't that what is needed right now? Coordination is no answer,
it seems to me, and Government with bureaucracy coordination is just
another name for passing the buck.
Mr. Reed. Quite right. You are talking now of the over-all plan,
the program, governmental, as far as the various agencies of the Government are concerned that are delegated responsibilities for some part
of this defense effort.
Senator Ball. We can't take 2 months to pass this project to increase lead production around to this agency and that agency and let
this little bureaucrat over here raise some little objection and it goes

3842

INVESTIGATION OF THE NATIONAL DEFENSE PROGR/VM

We

will iron
around and around and we never get more production.
out this stuff later.
Mr. Reed. But you recoonize that in order to get to production a
great many things have to be right.
Senator Ball. Oh, sure, but I don't think you have to take months
and months to iron them. out. You can get six individuals together
and lock them in a room and tell them that they are to come out with
the answer.
Senator Brewster. Isn't this the essence of the thing, that there is
no one outside the President who can tell everyone where to get off?
You have the responsibility of finding out shortage, but having done
that, all you can do is tell Mr. Jones or Mr. Ickes or somebody else,
"We need some more can't you do something about it?" Now, if they
don't do something about it (and we have had the aluminum case where
there was very considerable delay) there is nothing you can do about
it; all you can do is continue to talk and write letters and tell them we
need aluminum, we need lead, we need these things, but tJiere is nothing you can do to get it; you can go to the President, but you can't
keep running to the President of the United States telling him that
Mr. Jones is falling down on the job or Mr. Ickes and Mr. Jones are
calling each other names you can't do that.
could go further than simply to reiterate the need.
Mr. Reed.
could indicate the manner in which we believe
We could plan it.
it could be gotten.
Senator I3rewster. Yes; but you still could not execute it and there
is no power under heaven outside of the White House desk where this
thing can integrate. Is that correct ?
Mr. Reed. You mean any one desk.
;

We

We

Senator Brewster. That is right.

Mr. Reed. There is no one spot that I know of or any one man who
can deal with that whole situation.
Senator Truman resumed the chair.)
Senator Brewsiisi. Have you read the experiences of our last war in
procurement ?
Mr. Reed. Yes.
Senator Brewster. Are you familiar with the industrial mobilization plan of the War and Navy Department ?
Mr. Reed. Yes, sir in general.
Senator Breavster. And was not the whole essence of those that we
must have one such individual who could be held responsible for this
'

Mr. Reed. Yes; I believe that is the recommendation in it.

Senator Brewster. Yes. And has there been anything in your experiences this past year to indicate that that wasnt a pretty wise
recommendation ?
Mr. Reed. Well, my experience has been limited to O. P. M. The
difficulties of O. P. M. have been, I think, the kind of difficulties that
almost always are met when a group of men are thrown together and
required to do a job in a whale of a hurry.
Senator Brewster. And with no authority to do it.
Mr. Reed. That is right, and without complete authority located at
any one spot to do that.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3843

Senator Brewster. What was your business background, Mr. Reed ?

Mr. Reed. I think the reorganizations that have taken place as we
have proceeded have been in the right direction.
Senator Brewster. Oh, yes.
Mr. Reed. I think we are improving. I don't think we are perfect
by a very long way.
Senator Brewster. But unfortunately Mr. Hitler isn't waiting.
Mr. Reed. That is quite right.
Senator Brewster. What is your background of business experience?

Mr. Reed. In private life I am with the General Electric Co. I am

chairman of the board.
Senator Brewster. How many years have you been in that position ?
Mr. Reed. I have been with the General Electric since 1926. I have
been chairman since January 1, 1940.
Senator Brewster. In that organization there is very definite centralization of authority and responsibility, isn't there?
You don't
hold a man responsible for a job unless he has the authority to carry
it

out?

Mr. Reed. Quite right.

Senator Brewster. And so we can't really say O. P. M. is to blame
for not getting aluminum and copper if O. P. M. has no authority to
get aluminum and copper. That is right, isn't it?
Mr. Reed. That is a generalization. Senator. We aren't seeking to
avoid responsibility at all.
Senator Brewster. I feel that our whole war effort is at stake, and
There
I think the sooner we get the whole thing cleared the better.
has been somewhat of a tendency on the part of the boys to play
soft.
Now, I think the time has arrived when they have to talk
plainly, and I think everybody has got to call them just exactly as
they see them. If you can't get lead, we have got to find out why
it is.
That is what I understand our function is.
Mr. Reed. Quite right.
Mr. Fulton. Now, with respect to July 17, that being the first day
on which you held a meeting, have you looked over this work sheet
that the O. P. M. prepared to show the date on which it first found
certain problems to exist, and the dates on which it first did something
about it?
Mr. Reed. I don't recall having seen that work sheet that you speak
of, Mr. Fulton.
Mr. Fulton. Well, I had assumed that you would be looking over
the material that the committee had asked for and which was sent.
Mr. Eaton. Mr. Fulton, I will again remind you that Mr. Reed
didn't come up prepared to testify on the details, and whoever prepared that sheet we would be very glad to have appear here and
testify as to what appears on the sheet.
The Chairman. We will ask you right now, at a future date to ask

him

to

come up

here.

Mr. Eaton. Fine.

The Chairman.

Is Mr. Church here?

Mr. Eaton. Yes he is here. I never saw the sheet myself.
The Chairman. Let Mr. Church come over here and tell us about
it.
That is all, Mr. Reed.
;

3844

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Church, do you solmnly swear to tell the truth, the whole truth,
and nothing but the truth, so help you God, in the testimony you are
about to give before this committee ?
Mr. Church. I do.
The Chairman. Will you give your name and connections, Mr.
Church, to the reporter?

TESTIMONY OF JOHN A. CHURCH, SENIOR CONSULTANT, COPPER

AND ZINC BRANCH, OFFICE OF PRODUCTION MANAGEMENT
Mr. Church. John A. Church; I am senior consultant of the
Copper and Zinc Branch of O. P. M. Up to November 17 I was
the chief of the branch.
Mr. Fulton. In private life what was your occupation ?
Mr. Church. I was a consulting engineer with an office of

my

own.
Mr. Fulton. And what was the nature of your clientele?
Mr. Church. Mostly the copper companies.
Mr. Fulton. When did you first start work on copper in the
O. P.M.?
Mr. Church. I came down on October 28, 1940, as a member
of the staff of the National Defense Commission, O. P. M. not having then been organized. Upon the organization of O. P. M. I was
transferred to the production department. There was a change in
the organization set-up as of July 1 when the commodity branches
were formed, which included what the production division had not
previously had in its hands, and that was advisory work on allocations of metals.
Mr. Fulton. Did you work on the questions that arose in the fall
of 1940 with respect to offers by various people to import copper
into the United States?
Mr. Church. Yes.
Mr. Fulton. What position did you take with respect to whether
that copper should or should not be imported ?
Mr. Church. I advised its being brought in.
Mr. Fulton. Was there a difference of opinion by others in the
O. P. M. at that time?
Mr. Church. None.

Mr. Fulton. You know of no difference?

Mr. Church. I know of no difference.
Mr. Fulton. And was all of it brought in that was offered, or
did you sign a contract for a lesser amount?
Mr. Church. We signed no contracts, Mr. Fulton.
Mr. Fulton. Were arrangements made for all that was offered
or only for part?

Mr. Church. Recommendations were sent over to the buying

agency, Metals Reserve Co., a subsidiary of the Reconstructiom
Finance Corporation, and those recommendations were rapidly increased as to tonnage, and the Metals Reserve Co., we have found,
has cooperated completely in getting in all the foreign productions
that were offered to them.
Mr. Fulton. The first time that arrangements were made, did you
make arrangements for all that was offered or were those arrangements made only after a period of some time elapsed?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Churoh. Let

taken.

On November

me go back

to the successive steps that

3845
were

1940
(interposmg). I didn't want to bring in the
7,

Mr. Fulton
name or
the source or the quantity.
Mr. Church. I understand.
Mr. Fulton. Because of the request that those be kept quiet, although I think, as you know, they have been rather widely published.
Mr. Church. I presume that they have.
On November 7, 1940, the representative copper producers were invited to a conference with the representatives of the National Defense
-Commission. The whole question of requirement was gone into at that
time. I should like to add, in that connection, that the requirements
of the Army and Navy were estimated by the services at that time at
The estimate is possibly four or five
less than 200,000 tons a year.
times that now. So it seemed advisable at that time to bring in some
foreign copper, and a recommendation was made to the Reconstruction Finance Corporation to act through its subsidiary to bring in
such copper and make it available for domestic use.
Mr. Fulton. To bring in some or to bring in all that could be
brought in?
Mr. Church. Some. At that time it was only some because no one
wdio had examined the requirements of the services could find reason
for more than Avhat was at the moment regarded as a revolving stock.
Mr. Fulton. Even for a stock pile.
Mr. Church. Even for a stock pile. It shortly developed, when I
say shortly I mean about January and February 1941, that require]nents were going to be considerably greater on the part of the services
than they had estimated in November of 1940, and the ante was raised
correspondingly with Metals Reserve Company by recommendation,
and Metals Reserve Company immediately responded by buying all
the copper that was offered.
Mr. Fulton. Could you place more nearly tlian Mr. Reed the date
when this shortage of copper was first ascertained, that is what part

May was it ?
Mr. Church. Well, that there was a tremendous demand for copper
was apparent as early as March 1941.
Mr. Fulton. Now. by apparent, do you mean that your office reached
that conclusion, put it down in the recommendations to Mr. Knudsen
or Mr. Stettinius, and if so, could the committee see a copy of it?
Mr. Church. No; the course of events was not just what you have
outlined, Mr. Fulton.
Mr. Fulton. I mean by the time when you recognized the shortage,
the time when you first took the position that there was a shortage that
the O. P. M. had to correct, when was that, when you informed Mr,
Knudsen, for example, that there was a shortage?
Mr. Church. I should say that by May it had become apparent that

of

the total defense requirement plus a very much inflated civilian denot going to be met by the copper available.
Mr. Fulton. And was that followed by a statement sent to Mr.
Knudsen to the effect that there was such a shortage?
Mr, Church. I do not believe that any formal statement was made
to Mr. Knudsen. We were in touch with our superiors and they with

mand was

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3846

Mr. Knudsen, and whether that was publicly in the form of a memorandum or not I do not know.
Mr. Fm.TON. Do you know when there was, for the first time, a
memorandum of any kind that you can show us in your office constituting a recognition that there would be a shortage?
Mr. Church. No. I can look it up, Mr. Fulton, but I don't remember that there was. The shortage to date is not a shortage for defense
requirements. It is a shortage for defense plus a very large civilian
requirement. It should be remembered that as

Mr. Fulton

(interposing). It

is

true that

most of the^e

miv-

terials

Mr. Church. As one metal is devoted more particularly to defense,

requirement, a great deal of the private manufacture, that is, manufacture for private use, of articles made from that article is transferred to another metal, so that as aluminum became tight, a greater
load fell upon copper.
Mr. Fulton. That is true; and the O. P. M. asked these people to

make

transfers ?

Mr. Church. It did.

Mr. Fulton. And substitutes?
Mr. Church. It did. However, the substitution was not asked for
specifically in copper. In this particular instance the mere facts of
physics took care of that. The copper has an electrical conductivity
greater than that of any other metal except silver. The conductivity
of aluminum is considerably less, but aluminum has been used in
long-distance transmission for certain other economies, notably that
of weight. As aluminum was devoted to defense requirement, it was
obvious that the only substitute could be copper, so there need be no
request in the case of long-distance transmission
Mr. Fulton (interposing). You were speaking generally of materials and these substitutions are not substitutions which the O. P. M.
was not aware of ?
Mr. Church. No that is true.
Mr. Fulton. They were substitutions which the O. P. M. was
requiring ?
Mr. Church (interposing). Well, they were inevitable in large
;

measure.

Mr. Fulton. Not only requiring, but calling companies and telling
them to substitute?
Mr. Church. That is true.
Mr. Fulton. For example, in the question of foil substitution of
lead for aluminum, very properly, and in the substitution of die
castings.

Mr. Church. I can't give any testimony on

has not been

lead,

Mr. Fulton.

That

my province.

Mr. Fulton. In the question of die castings, there was a request

that they substitute plastics for die castings?
Mr. Church. Yes.
Mr. Fulton. And that could be added to indefinitely?
Mr. Church. Indefinitely; yes, sir.
Mr. Fulton. Well, then, if you can find the first memorandum where
there was a written recognition of the existence of a shortage in requirements, will you do so?
Mr. Church, t will certainly look that up.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3847

Mr. FTJiiTON. In metal or zinc. In respect to that July 17 meeting,
there thereafter occurred, as I understood Mr. Reed, discussions for
the purpose of getting something specific as a proposal from the specific producers of copper,
Mr. Church. Tliat is true.
Mr. Fulton. Now, was that largely confined to the 12 largest copper
producers or did it go down to cover all copper producers ?
Mr. Church. No; it covered all the copper producers. I should
like to inject in there, if you will permit me, Mr. Fulton, the statement that production is a function of many things, among them price.
Now, O. P. M. has nothing to do with price. That is not within its
powers or within its province, and it was not until arrangements had
been completed with the Office of Price Administration looking toward
methods of raising the price on certain productions that there was
any possibility of bringing in marginal mines unable to operate at
the previous 12-cent ceiling.
Mr. Fulton. When for the first time did you get a submarginal
price for copper?
subnuirginal on I see what you mean.
Mr. (Church.
Mr. Fulton. The second price level.
Mr. Church. Over and above 12 cents?
Mr. Fulton. Yes.
Mr. Church. That first applied to three Michigan producers, not
by way of increasing their production but by way of protecting the
productions that tljey were already bringing out and which were
threatened by increasing costs and rapidly becoming marginal by the
mere operation of cost factors.
Mr. Fulton. When was that done the first time?
Mr. Church. It was done, I believe, as the immediate consequence
of the July 17 meeting.
Mr. Fulton. I asked for the date when it was actually accomplished.
Mr. Church. Well, I should say that it was proposed to R. F. C. in
the latter part of July. I can't give you the exact date.
Ml*. Fulton. Was it accomplished before October or November ?
Mr. Church. Yes.

Mr. Fulton. When was it accomplished?

Mr. Church. It was accomplished for production from October 15.
That was the first production, from October 15 onward, on which
prices above 12 cents had been arranged.
Mr, Fulton. So that was 3 months less 2 days to get that through.
Mr. Church. Three months from what ?
Mr. Fulton. July 17 to October 15 would be 3 months less 2 days
would it not ?
Mr. Church. Yes.
Mr. Fulton. Now, with respect to this proposal of changing from

By the way, Mr. Fulton, I should like

am trying to remember. It was from Octo-

Mr. Church (interposing).

to correct

myself there.

ber 15 forward that those sales at higher prices were made through one
channel. There had been a previous production, which I had forgotten in answering your question, sold through another channel at
prices higher than 12 cents, and I will have to look it up to see. I have
I
it in my records, and I will look up and see when that was done.
believe it Avas done shortly after the July 17 meeting.

3848

INVESTIGATION OF THE NATIONAL DEFENSE PRO'GRAM

Mr. Fulton. Is that even today generally applicable to any prowho can show submarginal conditions, or is it a matter of specific

ducer

negotiation in each instance?

Mr. Church. It is a matter of specific negotiation in each instance.
Mr. Fulton. Have you explored the possibility of providing thtit
for mine which can increase production the increase only will be purchased at a higher price by the Metals Reserve so that any mine, without having to make a special trip down to Washington and spend from
2 to 3 months getting it, can know that he can attain such a price
increase ?
Mr. Church. I haven't explored the matter, Mr. Fulton, but it does
not lie within my province, nor, for that matter, within the province of
anyone in the branch that is, it is a proposal that has been examined
with a good deal of care by us. It has so far not been adopted by the
people who hold the money bags.
The Chairman. Well, Mr. Church, your statement there sounds very
familiar to this committee, that you have not the autliority nor has
anyone else in your branch the authority to do what ought to be done.
Don't you think, though, as your own personal opinion (I want your
personal opinion as an engineer and not as an employee) that this is
a practical suggestion and would in all probability increase the production of both lead, zinc, and copper ?
Mr. Church. I believe that with the proper safeguards, it is a practicable suggestion and would increase production.
Mr. Fulton. With respect to those cases where you have had these
detailed matters under consideration, are you familiar with the work
sheet which the O. P. M. furnished to the committee as being part of
the work sheets of the O. P. M. on that ?
Well, that problem which you had with respect to not holding what
you termed the "moneybags" so that you couldn't put in effect this
other policy would also apply, so far as your branch is concerned, with
respect to labor, would it not?

Mr. Church. That is true.

Mr. Fulton. You had a situation, I believe in Butte, where you
estimated that some 24,000 tons of copper annually could be obtained
as an increase if you could switch from a 5- to a 6-day week.
Mr. Church. That is true.
Mr. Fulton. And I noted on this work sheet that this, I believe^
came to the attention of O. P. M. in June. Isn't that the date?
Mr. Church. That is right.
Mr. Fulton. Now, we were informed yesterday that that was accomplished, that is on the 10th or 11th day of December, the change
was finally accomplished for a period of some 5 months, 5 to 6 months.
Mr. Church. I am informed that the situation has been considerably eased much earlier than that by an increasing supply of skilled
mining labor at Butte. The men coming back to the camp for the
winter, which has had the effect of supplying
Mr, Fulton (interposing). A part of the difference.
Mr. Church. A part of the difference; yes, sir.
Mr. Fulton. It was particularly interesting to the committee because we have received a number of inquiries from small manufacturers who were being dej)i-ived of small quantities, to whom 24,000
tons looked rather large. One of them in particular wanted 14 tons

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3849

in order to keep 100 men employed for a year, and I suppose you found
similar situations in examining your work there in connection with
the demand for copper.
Mr. Church. I am receiving appeals of that sort daily and weekly.
There are appeals coming in to us all the time.
Mr. Fulton. Well, the question that arose to Senator Truman was
why it took 4 or 5 months to make that kind of adjustment instead of
a few days or weeks, and if there was a fundamental problem, why
wasn't it brought out by the O. P. M. publicly and specifically or even
something which the O. P. M. would furnish to this committee so that
the committee could assist in ending the problem ?
Mr. Church. Mr. Fulton, I can give you only my personal contact
with that situation and my own personal views. The difficulty arose
primarily from an action by the union in a matter which is entirely
within its jurisdiction, putting a fine on the man who worked more
than 40 hours a week. Now, I am not by any means offering any
criticism of anybody. I am simply saying that that was a physical

fact

Mr. Fulton (interposing). That was an action in which the union

was either justified or unjustified in taking.
Mr. Church. And that is one in which I cannot offer an opinion one

way

or the other.

And all you could do was refer

M.
Mr. Church. That is it exactly.
Mr. Fulton. Which was the maximum, of
Mr. Fulton.

it

to the

Labor Divi-

sion of O. P.

course, of your au-

thority.

Mr. Church. That is true.

Mr. Fulton. And yet the problem took months before

it

was

finally

resolved.

Mr. Church. Yes; it did.

Mr. Fulton. And the labor people, in testifying yesterday, said
that in Butte more than half the men had worked less than half the
month, so that there may have been two sides to it.
Mr. Church. As I say, I know nothing about the facts out there.
Mr. Fulton. But it was a problem that should have been brought
out in the open and ended one way or the other in favor of whoever
had the right position instead of being allowed to lie still and dormant
for 4 or 5 months.

Mr. Church. In the first place, it did not lie still and dormant. If
you will permit me to offer something in correction, it was under constant negotiation out there by Washington representatives of the
Labor Department. I do not see exactly how O. P. M. could have
expedited negotiations between third parties, which is exactly what
the situation would have called for had we been able to do anything.
Mr. Fulton. But do you think it wouldn't have been possible to
find the legitimate positions so far as they were legitimate and the
illegitimate positions so far as they were illegitimate of both the mine
operator and the mine labor there to bring it out in the open and try
to force them, through public opinion or otherwise, to do whatever
was right so that we could get the copper that we needed ?
Mr. Church. My impression is that publicizing of that situation
might conceivably have slowed up the solution rather than expediting
one.

3850

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Fulton. Well, that of course is a perfectly proper opinion, but

is that after this committee began questioning that, the problem was settled, possibly due to the war instead but at least it didn't
stop it from being settled, and it wasn't settled when we first heard
of it 2 weeks ago.
Mr. Church. It has been gradually ameliorating, because there
were two factors there. There were enough skilled men in Butte, as
the facts were presented to us, to permit a swing shift system so that
the mines were operating regularly 7 days a week.
Mr. Fulton. Then you mean there is no necessity
Mr. Church (interposing). But they were not able to man all the
working faces with the supply they had. As the supply of skilled
mining labor increased by the men drifting back into the camp, they
were able to expand their operations and take in more working faces
and bring out more ore.
Mr. Fulton. That is the point you already saved, part of the 24,000,
but the other part was being lost.
Mr. Church. The actual formal settlement of the matter came only
the fact

recently.

Mr. Fulton. In fact, day before yesterday.

Mr. Church. Yes.
Mr. Fulton. Now, with respect to numerous of those other problems
there, would you look particularly at thoste instances where the
O. P. M. was asked to assist in obtaining Government fiancing, and
will you point out the very first date that you can find (I believe it
is August 30, on the second page) where the O. P. M. made either a
formal or an informal authorization?
Mr. Church. Quincy is the one at the top of the page.
Mr. Fulton. Was there any date earlier than August 30 with
respect to any request for Government assistance ?
Mr. Church. No. Well, that was brought to our attention on
August 29.
Mr. Fulton. Well, that is the first one, isn't it, in that ?
Mr. Church. That is, I believe, the first one, the first date showji
here.

Mr. Fulton. The other dates are

all

September and October or

later.

Mr. Church. That is right.

Mr. Fulton. When the O. P. M. for the first time even informally
approved Government financing.
Mr. Church. You will note that most of these, Mr. Fulton, or
many of them, are productions which were either under way the
big productions were all under way months ago.
Mr. Fulton. Those were the private companies, privately financed.
Mr, Church. That is right.
Mr. Fulton. Now, with respect to those where you did make these
recommendations on August 30 and in September and October, which
of those have resulted in any contract to date with the Defense Plant
Corporation ?
Mr. Church. I will have to run over the list because it is a con-

siderable one.

Mr. Fulton.

And

tell

us

tract actually being signed.

when

it

finally got to the point of a con-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3851

Mr. Church. You do not include in tliat, of course, the production

of the Phelps Dodge Corporation at Morenci, which was beg:un in
1937 as a development and is just now coming into production.
Mr. FtTLTON. Of course, that was before the war and was privately
financed.

Mr. Church. That is right.

Mr. Fulton. I was talk'ng about any case wdiatever where the
O. P. M. has recommended Government financing where the Government has actually got it today.
Mr. Church. Well, the additional development at Morenci does not
come under your question because there is a physical question of
water supply there which has not yet been worked out.
Mr. Fulton. As far as I know, there are only two that do, aren't
there?
At least, those are the only two we have received information
on to date from the Defense Plant.
Mr. Church. What are they?
Mr. Fulton. The Castle Dome and the American Zinc Co.
Mr. Church. The Castle Dome was brought in in September.
Mr. Fulton. What time in September?
Mr. Church. September 11 is the date shown on this tabulation.
Mr. Fulton. Noav, the Defense Plant said that was recommended
to it on October 31 and the contract was finally signed on November
Does that conform with your i-ecollection?
18.
Mr. Church. I am going here by this working sheet. These
things hiive to be investigated, Mr. Fulton, because after all, we
are taking what responsibility we do take in recommending the
expenditure of public funds.
Mr. FuLi'ON. We realize that.

Mr. Church. You -realize that.

Ml'. Fulton. You had been studying this from May or April and
talkiiig to these ])eo]de about what could or couldn't be done, and on
July 17 you held a conference. Now, why does it take from July
to September to have a thing ))roposed to O. P. M., from September to October before O. P. M. can send it to tlie Defense Plant,
and fiom October to November befoi-e the Defense Plant can sign
a

contract?

Mr. Church. Well, my answer to that is that in July for the

time we found that we could get past the 12-cent ceiling. In
the case of Castle Dome that doesn't seem to have been necessary,

first

but in

many

of the other cases here

it is.

Mr. Fulton. Take Castle Dome. They were asked on the 9th
of July to make a proposal to you on the 17th of July. Why does
it take until nearly the middle of September for the O. P. M. to
have a concrete proposal and another month to consider it?
Mr. Church. Because I think if I were the chief engineer of any
one of these companies, I would want at least that time to investigate
the proposition and to prej^are plans.
Mr. Fulton. And you feel that Ave nnist have this lag from July
to November in cases of that kind?
Mr. Church. From July to September, from July 17 to September 11, is 2 months. Usually where there is to be a detailed
work in an elaborate construction, the expenditure in this instance
being over $8,000,000, ])lans for such a thing even in a very general
form would require at least two months to work cut. In other words,
311932 42 pt. 10
9

3852

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

these propositions, Mr. Fulton, do not spring full panoplied from

the head of Jove they have to be worked out by human beino^s and
it takes time to do so.
have gone through a number of propositions.
Mr. Fulton.
does it take another month until you can make a recommendation to the Defense Plant ?
Mr. Church. It took exactly 3 weeks when we made our informal

We

Why

approval. These formal recommendations, Mr. Fulton, frequently

confirm conversations held sometime before with R. F. C. in which
the matter, in personal conversation, is brought to their attention,
the parties brought together, and negotiations begun. If the R. F. C.
feels that they themselves are going to see a reasonable prospect of
something being done, they then ask us for our formal recommendations, but the date of the formal recommendation does not represent
the first date in which a matter is taken over to R,. F. C. We are
working with those people every week, almost every day. The formality of recommendation is simply for the record. The work is
going on all tlie time.
Mr. Fulton. That means in this case 2 months and 3 weeks instead
of 3 months that,- then, is with the R. F. C.
Mr. Church. Two months on the part of the company, which I
do not consider at all excessive, knowing engineering work, being a
mining engineer myself, and it represents 3 weeks on the part of
O. P. M., which 1 do not consider excessive in view of our responsibiliThe fact that
ties for recommendations of the use of public funds.
it took another 11 days for a formal letter of approval to go over
That is simply for the record.
is to my mind beside the point.
Mr. Fulton. And then it took another 36 days to get the contract signed.

Mr. Church. Well, that is a matter that at this point is completely

outside O. P. M.'s province, as you realize.
Mr. Fulton. Now, if you recognize the shortage existing back
in May or earlier I think you even mentioned a day as early as
March did you have informal discussions back at that time? Take
Castle Dome, when did you first talk with them?
Mr. Church. Castle Dome came in, as I said, on September 11.
That copper, that production, will not be ready until June 1943.
There was nothing in a proposition of that sort or in any of these
other large propositions which meant immediate copper.
I would like, if the committee will indulge me, to point this out,
that during the latter months of 1940 and during the months of
1941 up to the time that the arrangements had been completed in a
sister organization for prices to be paid for copper higher than the
ceiling of 12 cents
Senator Brewster (interposing). You refer to Mr. Henderson, I

assume ?
Mr. Church. I do. The country was producing at the mines as
much, in my judgment, as could be produced at the price. In other
words, for immediate copper, there was very little that could be
done, and, as far as I know, nothing that had not already been done
to maintain the mine production at its top.
It sliould be brought out very clearly at this point that there is a gap
of at least 3 months fi'om the time that ore is broken down in the stope
down in the mine to the time that it appears as a refined product.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Tliat time of 3
is raised to the

3853

months can be roughly broken down in this way. Ore

mouth of tlie shaft. It is frequently put into a bedding

system in order to assure uniform charge to the furnaces. It may have

It is smelted.
Most of it is produced in the Rocky
to be milled first.
Mountain region most of the market is in the east. It must be moved
eastward, which is a period of aj)proximately 3 weeks, and then for 2
months, on an average, it goes through the refining process.
Now, it should be realized that in that movement there is a quarter
of a year's copper in motion all the time between the mine and the exit
from the refinery. That is a large tonnage. In years when the
Senator Brewster (interposing). Right at that point, to what extent is it practicable to shorten that period ?
Mr. Church. I fear not at all. Senator.
Senator Brewster. By any transportation or other arrangements?
Mr. Church. No the copper moves forward in a steady stream. I
don't think that the 3 weeks on the railroad cars from the western
mining camps to the eastern refineries can be improved substantially,
and let us only hope that in the growing movement of materials during
this emergency, it will not be worse.
Then in years when the market is slack, this movement of copper in
process, so to speak, between the mine and the end of the refining operation tends to pile up copper. Frequently it tends to pile up copper in
raw form at the refineries, ready to be refined. That was the case
Avhen the country entered the year 1940. During 1940 that stock was
materially reduced. In 1941 it has now become reduced to the point
where I can best explain by a simile we have stopped living on our
fat and must live on what we are currently being able to produce in
the way of copper from the mines. We have used up our inventory of
raw copper at the refineries. The effect has been to make an apparent
decline in the production of copper, that is, of refined copper, because
we have been putting our inventories into process and bringing out the
refined production in the early months of this year far in excess of our
current supply from the mines. Today we are very near exhaustion
of stocks, and we are down to our basic mine production of this country
in regard to domestic copper.
So that although we are pushing the production of the mines of the
country to their top and have been all this year, the actual figures of
refined production has shown a decline simply because, in the early
months of the year, we were able to smelt the copper of other years, to
refine the copper of other years, and add it to our refining production.
Mr. Fulton. And if it weren't for that, our comparative figures of
1^40 would still be worse than that.
Mr. Church. That is right.
]\Tr. Fulton. And it is today a net increase of II/2 percent.
;

Mr. Church. Yes.

Senator Brewster. Does that mean even taking into account
use of our stock piles, that we have only increased refining by

this

1^

percent?

Mr. Church. The stock pile. Senator, was copper imported and
does not affect those figures that I have given you of domestic production. That increase, Mr. Fulton, is a small one simply because
both in 1940 and 1941 the companies were producing at about the
maxinnmi that could be produced at the 12-cent ceiling.

3854

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mv. Fulton. Except that I noted that the Kennecott Co. alone
an increascicl production of 55,458 tons, which was more than
three and a half times greater than onr total increase of only 15,000
tons, so that without that increase by that one company, we would be
much worse off as compared with 1940 than we are today.
Mr. Church. Could I see those figures you are quoting from, Mr.
Fulton ?
Mr. Fulton. I took those from Mr. Ayer's paper, furnished to us by
Mr. Ayer, and the Kennecott figure comes from the Kennecott Co.
Mr. Church. Well, there is a good deal of background for that
difference. I am familiar with this tabulation of Mr. Ayer's.
Mr. Fulton. The figure which I read, 54,519, is the increase which
the Kennecott Co. informed the committee that it had made. That
roughly corresponds with your knoAvledge, does it ?
Mr. Church. It roughly does; yes. That was done by pressing

liacl

their operations to the utmost.

Mr. Fulton. But if the other companies had made similar increases,
whether that was possible or not
Mr. Church (interposing). They have all been pressing their increases, but several things have entered there to prevent a greater]H"oduction. We are, as I say, producing our maximum.
Now, it is purely the physical practical experience of life that you
cannot continue a maximum production indefinitely.
Mr. Fulton. Without immediately making increases of various
kinds to take the ])lace of what you used up.
Mr. Church. That is right. That is important.
Mr. Fulton. And it is those increases that the committee is interested in.

Mr. Church. That is in part the case, but there is another factor.
Mining is not a purely manufacturing operation. In the ordinary
course of peacetime, wnth a fairly assured supply of raw material,
manufacture goes on year after year at the same plant with only those
changes made necessary by fluctuations of public demand, the demand
of consumption. In a mine you are dealing with physical factors
which at any time may trip you up and stop your production or curtail
your production for quite a while. As an instance, one of the mines
of this country which is producing a very considerable part of our
total production ran into an underground pocket of water. The water
rose very rapidly, drowned out levels producing 750 tons a montli,
and was within 10 feet of the bipgest ):>roduction level of the lot. The
copper and zinc branch dove head first into the situation and got
a double A rating for a quarter million dollars' worth of pumping
equipment and they got the water out. MeanAvhile, we had lost the ]iroduction of the drowned-out levels for 6 weeks or 2 months. Those
accidents must be expected all the time. Mining is an art; it is not a
science.

Mr. Fulton. Those things, of course, took jdace

in })rior

years as

well as this year.

Mr. Church. This particular one did not.

Mr. Fulton. Yes. But I mean others which didn't occur this year
did occur last year and the years before that.
Mr. Church. Yes; but you nuist remember that in prior years they
were not producing to the limit. If that level had been drowned out
in prior yeai's, they could have gone some place else and got goin"-.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3855

Mv. Fulton. But, Mr. Church, presumably they had those problems
before and those problems resulted in just stopping production,
whereas now they go ahead and do their utmost to get production,
and we should have an increase.

Mr. Church. I would like to see this broken down into companies,
because, frankly, I have been watching that situation very closely,
and I do not know of any slackness.
Mr. Fulton. Well, the committee, of course, got those figures from
you and would have preferred to have had them by companies.
Mr. Church. I understand that completely.
Mr. Fulton. Wliich I understand you didn't liave.
Mr. Church. But I am familiar and have been familiar for 30
years with the fact that the over-all production of the country varies
much less than the production of the individual mine.
Senator Brewster. Xow. Mr. Church, is it a fact that companies
would have been penalized by the tax provisions for increasing their
production?

Mr. Church. My information is that increases in production in a

number of the companies would have meant substantial increases in
income and might have lifted them into a separate bracket on excessprofits tax.

Senator Brewster. That was testified to I think rather clearly yesterday, and that, naturally, is not, let us say, a stimulus to production.
Mr. Church. True. I am very glad to hear you ]nit it that way,
Senator, because these peo))le with whom I have been in contact now
for over a year are earnestly desirous of bringing out every pound of
copper they can, but as you put it, it is not a stimulus.
Senator' Brewster. Yes. Would it not be fair for Government
officials, at any rate, to present that situation to us frankly if in any
way it was affecting production?
Mr. Church. I think it is the only thing for Government officials
own information so far is that it has not made any
to do.
material difference in production, but where it is threatening to do
so. Ithink the thing should be presented, as you say.
Mr. Fulton. Well, we have only had replies from eight companies
that we sent our requests to, comjiaring the 4 months' period in 1940
witli the 4 months' period in 1941.
Of those eight, five reported that

My

their production

was

less.

Mr. Church. Can you show me the statements, Mr. Fulton ?

Mr. Fulton. I have only a sunnnary of them, but the companies
reporting less are Howe, Sliattuck Denn Mining, Copper Range Co.,
Consolidated Copper Mines, and Isle Royale Copper; and then in
the case of lead and zinc particularly lead there is company after
company.
Mr. Church. As you know, of course, lead is outside my ken. I
am interested in that list of productions that you speak of. What
was the period of 4 months that you referred to, Mr. Fulton ?
Mr. Fulton. July to November in '40 and July to November in '41.
Mr. Church. I am very much interested because you mentioned
Shattuck Denn, when it was one of the mines affected by that flood

in Arizona.

Mr. Fulton. Which would be an explanation for

that.


3856

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

With respect to Howe Sound I

a small one.
Mr. Fulton. It is just significant that there are so many of these,
the majority of them, in fact, who did report.
Mr. Church. The little chaps, I think the small productions
almost inevitably have felt the changing conditions perhaps more
than the big ones. That is just as inevitable as it is that a wave
should be felt more in a rowboat than in an Atlantic liner.
Mr. Fulton. But there is only one way to get around the fact that
production, even without a slow-down, will diminish, and that is that
the company actively get out and try to increase it, to make new
increases, that is, open up new shafts and exploit new territory. Isn't
that true?
Mr. Church. The answer to that first, Mr. Fulton, is that every
pound of copper that we can get is important. More than that, every
pound of copper that we can get in the latter part of 1941 and the
early part of 1942 is worth 4 pounds obtainable in 1944.
Mr. Fulton. With respect to copper, is there any copper other
than that we talked about a few minutes ago as to which there has
actually been a contract signed for Government assistance?
Mr. Church. Of course yes. The three Michigan mines Quincy
Mining Co., the Copper Eange Co., the Isle Koyale Copper Co.
have all arranged for an increase in the price paid to them.
Mr. Fulton. That is for the price paid ?
Mr. Church. That is for the price paid, and of course that, again,
was to protect existing production.
Mr. Fulton. And not to increase.
Mr. Church. Not to increase more production. I should say in
that connection, however, that Morenci also appears on this list with a
proposition for the working of unused ground. That would be an
Mr. Church. I think

don't know.

it

would.

The production

is

increase.

Mr. Fulton. But that has not been accomplished in the sense of
a contract.

Mr. Church. That has not been accomplished. As a matter of

proposal was made immediately after I think the next
day or 2 days after the meeting of July 17. It was made to me by
a vice president of the comp.any, and I took him right over to R. F. C.
and started the ball rolling right that afternoon as soon as I heard
about it. The review of the proposal has apparently developed some
possible snags. That is all I can say. The matter was referred
right back for a concrete engineering and financial picture, and no
reply has been received. I suspect that the thing was found to be
more submarginal than it had originally appeared.
Mr. Fulton. Has there been any discussion with anyone needing
Government assistance of, say, two or three hundred thousand dollars,
or some small amount, whereby he has even started his negotiations
fact, the

over at the Defense Plant?

Mr. Church. As rapidly as we can get to them, every producer
who has any possibilities of bringing in marginal or submarginal
material has been invited to come in.
Mr. Fulton. Have you actually got to one of them in the sense that
the O, P. M. has sent a recommendation over to the Defense Plant

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3857

sum like two or three hundred

thousand dollars?
Mr. Church. Well, I see none on this record.
Mr. Fulton. Do you know of any ?
Mr. Church. I don't know of any.
The Chairman. That is all, Mr. Church.
Mr. Kellogg, I believe you have been sworn.
Mr. Kellogg
Mr. Kellogg. No, sir.
The Chairman. Do you solemnly swear to tell the truth, the whole
truth, and nothing but the truth., so help you God, in the testimony
you are about to give before this committee ?
Mr. Kellogg. I do.
ior a person, asking for a small

TESTIMONY OP CHAKLES W. KELLOGG, PRESIDENT, EDISON

ELECTRIC INSTITUTE,
The Chairman. Please

give your

NEW YORK
name and

CITY
connections to the

Mr. Kellogg.
Mr. Kellogg. My name

reporter,

is Charles W. Kellogg.
I live in New York
I am president of the Edison Electric Institute, which is the
trade association of the electric light and power industry of the
United States.
The Chairman. You asked to be heard by this committee, and we
are giving you that opportunity, Mr. Kellogg, at your own request.
Mr. Kellogg. That is correct. Senator. The reason I asked for the
opportunity was that I understood from the newspaper that you were
investigating copper at this time.
are not investigating copper.
The Chairman. That is right.
are investigating the alleged shortage in copper.
Mr. Kellogg. Well, what I have to testify I think would be of
interest to your committee, sir.

City.

We

We

The Chairman. Thank

you.

importance of copper in connection WITH ELECTRIC POWER

My

Mr. Kellogg.
reason for asking to appear was not to explain
the necessity for electric power in connection with the defense activity, but the particidar importance of copper thereto.
The electric
industry has to have copper on account of its peculiar ability to conduct electricity. There is literally no other metal at anywhere near
the price and the bulk which can l)e used for the purpose of conducting electricity as it is now maiuifactured. For example, the only
metal w^hich has a higher conductivity for a given-size wire than
copper is silver, which is obviously too expensive. Aluminum, for
the same size wire, has 60 percent more resistance than copper, but
per pound weight, on account of being so light, it is twice as good as
copper. That is why it can be used during ordinary times for transjnission line purposes to very good advantage.
The Chairman. You use a bigger wire and it doesn't weigh any
more than a copper wire does, and you don't get any more resistance
when you use a larger wire.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3858

Mr. Kellogg. You get one-half the resistance per pound of metal
aluminum and copper, and if the price of aluminum were
twice that of copper, you would have more or less an offset on cost.
Mr. Fulton. You also would make a saving on steel transmission

as between

towers.

Mr. Kellogg. On account of a saving in weight, right. Aluminum

cannot be used, how^ever, for most of the manufacturing and transmission devices because of its bulk. It would be too large and there
would be change in designs entirely.
Iron, for example, which is about the only other metal which could
be used, has five times the resistance of copper.
Now, ]\Ir. Chairman, I have prepared a statement with some care
for this, which I think I could run through fairly quickly and which
I

am

sure will save time.

The Chairman. I will appreciate it very much if you will save as

much time as you can, because the Senate is in session at the present
moment and it is considering a $10,000,000,000 defense appropriation.
I happen to be a member of the Ai)i)ropriations Committee, and I am
giving you this courtesy because when I adjourn the committee today,
want to meet again until Tuesday.
Mr. Kellogg. I appreciate that very much. Why don't I get along
as far as I can, and what I cannot get in can go in the record, if
you will be so kind.
The Chairman. That will be all right.
Mr. Kellogg (reading)
I don't

In view of the reported limited availability of copper to meet the present

aggregate military and civilian demand for that metal and because electric
utilities, upon which devolve a very important industrial role in America's war
effort, are important users of copper, the following information concerning copper
use by the electric light and power industry has been assembled and is submitted
in the hope that it will prove helpful in malfing possible the soundest allocation
of copper to meet the more pressing needs of the Nation for this metal at tlie
present time.

One official of the Office of Production Management has recently said, "The
biggest copper mine available to us is conservation of our existing supply." As
one measure to lielp promote such conservation, the Edison Electric Institute
has recently collected data from the industry and made studies of copper use
by electric-utility companies. The
chietly from the data thus collected.
been supplied to O. P. M.^

information presented lierein is derived

Copies of sucli basic data have previously

present time the entire electric-light-and-power industry in the United

serving approximately 31,500,000 customers, including about 1,.SOO,000
added in 1941. Electric utility companies serve approximately 26,700,000 customers, or 85 percent of tlie total, including about 900,000 added in 1941. A
large percentage of these additions were made to supply new housing in areas
where shipbuilding plants, airplane and other munitions factories are located.
The important role the electric-light-and-power industry is playing in the
defense program is indicated by the fact that industrial power sales in 1941
rose 32 percent above the already high 1940 level. This enormous new load falls
heavily upon all systems, but especially upon the electric-utility companies serving the large industrial areas. They have been able to liandle the job successfully because they had the facilities already operating and the trained organizations and personnel witli wliich to do it.

At

tlie

States

is

The Chairman. Mr. Kellogg, didn't you make the statement one
time that we had all the electric power we needed ?
Mr. Kellogg. Yes, sir; and I still believe that is true.
^Thi.s paraRraph was not road, but the paper
tion of the chairman.

is

included in the record in toto by direc-


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3859

The Chairman. Yet we

Mr. Kellogg. No; that

are carrying a 32-percent overload,

is not a 32-percent overload.
You misunderstood me, Senator. I said that the load had increased 32 percent
were able to carry it without difficulty. I would
over last year.
be very glad, if you want me to digress, to say a word or two about
the adequacies of power supply, but I think it will come out gradually
as I go on in my statement.

We

The Chairman, Proceed.

Mr. Kellogg. I will say ])arenthetically that I am more satisfied
I was when I first made the statement that with the plans
which are now under way, the provision for generating capacity
should be adequate for the defense effort. The last 6 months, I think,
have definitely confirmed that.

now than

In 1941 '.-such companies are adding abont 2,100,000 Ivilowatts of capacity. In

1942 tbey luive planned to add 2,:^00,000 kilowatts, and in 1943 they planned to
add another 2.50(J,000 kilowatts to keep abreast of the expanding munitions
of this program, of course, must depend upon
by the Federal Government, especially upon the relative
need for turbines for ships as compared with that for turbines for industrial

program.

The accomplishment

priorities established
use.

COPPER REQUIREirKNTS OF EI.KCTRIC-IJOIIT-AND-POWER INDUSTRY

Based on quite detailed reports from electric-utility companies, municipal

plants and other governmental power systems representing two-thirds of the
electric industry throughout the United States, it is estimated that the copper
use In 1941 of ;ill company, municipal, and Government power systems, but exclusive of rural cooperatives under the Rural Electrification Administration, will
amount to 152,000 tons. That is the consumption this year. This estimate
covers all copper uses, including wire and cable, copper bars, shaixis, tubing,
switches, copijer in various alloys the entire situation with respect to our
industry.
This 152,000 tons compares with a total supply of copper available to this
country, as estimated by O. P. M. on October 21, 1941, of approximately
1,650,000 tons for the year 1942 and estimated needs for defense and nondefense
purposes for that year of 2,400,000 tons. The 152,000 tons is about 9 percent of
the available supply. The use by the privately owned utility systems Is slightly
imder 8 percent of such available supply.
The Edison Electric Institute does not have information on the copper use of
These cooperatives, however, serve less than 3 percent of the
riu-al cooperatives.
total number of customers and sell less than one-half of 1 percent of the total
electric energy sold by tlu' Industry, but their copper requirements have been
proportionately very much larger than for the rest of the industry

The Chairman (interposing). Isn't that brought about by the fact

that their lines are very much extended?
Mr. Kellogg, Right. I was about to explain that it wa.s
because they have been expanding much more rapidly and because it takes three
to foiu' times as much copper per customer on the average rural line as is
required for the average of ail customers.

Mr. Fulton.
projects.

And you have

mean

also had to expand to cover defense

part of your expansion has been necessary for

defense, too.

Mr. Kellogg. Yes, indeed.

Mr. Fulton. Which you woiddn't otherwise have' had
Mr. Kellogg. Very true.

as a burden.

If they embark upon a program of building their own generating and tranmission systems rather than continuing to take wholesale service from the existing systems, as well as building distribution lines in rural areas, which has been
Under
their basic function to date, their use of copper will be even greater.
present Office of Production ^Management iiriority restrictions, extensions into

3860

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

new

rural territory by electric companies is practically stopped.

Presumably
similar limitations apply also to extensions by Rural Electrification AdministraThis would be in line with
tion cooperatives into heretofore unserved territory.
present practice in Canada where the Government has required both public and
private electric systems, according to an official announcement, to "eliminate
further rural extensions."
129,000

TONS EI^CTEIO UTILITY

CO.

COPPEK USED IN

li)41

The electric utility companies, exclusive of Government-owned systems, according to data collected from these companies, and supplemented by calculationj.
based on manufacturers' data, in the calendar year 1941 will have used 129,000
tons of copper for all purposes. This use of copper is divided according to purpose approximately, as follows
For construction projects

additional generating capacity, substations,

transmission lines directly and indirectly occasioned by national
defense loads
For ordinary extensions of electric service to new customers
For maintenance and repair of existing systems

Tons
000

34,

43,000-

52,000
129,

OOO

Detailed figures supporting that are on an attaclied sheet appearing

as an appendix to this paper.
The Chairman. It will appear as part of the record,
(The paper referred to was marked "Exhibit No. 335" and is included in the appendix on p. 4225.)
Mr. Kellogg (reading)
:

STEPS ELECTRIC UTILITY COMPANIES TOOK TO ANTICIPATE THE PRESENT COPPER

SITUATION

In 1989 and 1940, the electric utility companies, in response to Government

requests, expanded their plans for installation of generating capacity above
existing needs as a measure to promote the national defense. This undertaking
alone amounted to 1,000,000 kilowatts of generating capacity in 1939 and 500,000
kilowatts in 1940.
In 1940 about the middle or fall of that year these companies began surveying their facilities and the possible war-emergency requirements with a view
to providing so far as feasible an ample supply of spare parts and materials and
emergency stocks before either copper or manufacturing facilities became lieavily
tied up with defense emergency production, thus by advance planning relieving^
subsequent shortages to an important extent. They were advised and urged
to take these steps by Federal agencies, including the War Department, the Federal Bureau of Investigation, and the Federal Power Commission, at conferences
held in Washington and at jjoints throughout the country, as well as during
field inspection of utility operating properties by Government representatives.
good supply of parts for the more critical equipment was thus procured and
is therefore already on hand as a safeguard to electric service ngainst sabotage,
acts of war, or break-downs of equipment subject to heavy loading.
In the case
of bulk items like wire and cable, however, due partly to the necessity to foi-ego
the use of aluminum wire altogether and substitute copper therefor, and partly
to the necessity of using available material for quick service to the new Army
camps and defense plants, it was only feasible to increase a normal 4 months'
supply of these materials to about 6 months' supply. Much of this udded supplj'
has already been used up since midsummer, leaving stocks which may yet prove
too short in 1942 to meet further emergency expansion for defense projects;
especially if the defense program is 'again doubled, as Mr. Donald M. Nelson, on
December 3, 1941, indicated it would be.
As a conservation measure, electric utility companies have also intensified
their usual practice of salvaging and reclaiming material, especially copper wire,
so as to reduce the norm'al demand for fabi-icated items of all kinds. They are
using this means to h(4p meet the riMluction in copper for maintenance, repair,
and operation, as required by Oflfice of Production Management's Order P-46.

INVESTIGATION OF THE NATIONAL DEFENsis PROGRAM

3861

Electric utility companies are further cooperating and will continue to cooperate with the Conservation Branch of Office of Production Management to move
sci"ap copper promptly as it accumulates from the companies to designated deWith replacements held to a
positai-y agencies to help meet the 1942 demand.
minimum, however, less scrap will be available than would normally be the case.

COPPER PEIORITIES

Early in 1941 priorities became necessary to procure new turbines. On May 8,

1941, the Office of Production Management issued an order placing copper on
the critical list and on May 29, 1941, it was placed under full priority control.
By midsummer it was not possible to purchase copper except under defense
priority ratings and at and since that time no such priorities have been available
to electric utility companies except to serve defense loads.
Defense loads, as you know, cover only those for Army and Navy contracts,
contracts pertaining to the shipbuilding program, those relating to the lendlease program, certain contracts of the Coast Guard, Civil Aeronautics Authority,
and similar vital loads given defense ratings by Office of Production Management.
PD-1 forms for requesting priorities on specific items of equipment were made
available by Office of Production Management in March 1941, but it was not until
the middle of September 1941 that Office of Production Management issued Order
P-46 setting up a basis for priorities for essential maintenance, repair, and operating supplies for utility s.ystems, and granting A-10 priority for such materials.
This priority, which applies to copper supplies as to other materials, has since
been available to all utility systems, including the pri^-tite utility companies,
municipal systems, and Rural Electrification Administration cooperatives.

Senator Brewster. Can you secure things under A-10?

Mr. Kellogg. Yes, sir.
Senator Brewster. I mean there is no lack of supply for A-10? I
heard some question about that.
Mr. Kellogg. I will say this. Senator, there is a defiiiite lag, which
I will mention later, of from 4 to 6 months between the day that a
pound of copper goes to a factory and the day that, as a completed
finislied article, it comes out for use as a meter or transformer or some
other piece of equipment.

I should not say yet that there has been

any substantial difficulty with those general priorities under P-46.

Senator Bkewstkr. That is ^hat I mean.
Mr. Kellogg:
However, in general, any materials purchased under this P^6 crder with
A-10 rating will not be delivered before another 4 to 6 months. It is a factor,
therefore, to be considered in estimating requirements and supply for 1942, but
its effect in 1941 has been chiefly to limit use of materials already on band and to
freeze existing stocks and existing systems so far as construction of extensions
its

is

is

concerned. This is particularly applicable to the copper situation, since copper

a determining material both in utility maintenance and in utility construction

work.

Order P-46 carries with it strict control not only over inventories, but also over
and withdrawals from stocks of supplies used by utility systems for the
purposes of maintenance and repair and of minor extensions, which arc arbitrarily
defined as being those using less than $.')C0 of material on all overhead system
receipts

jobs.

Inventories are required to be reduced to 1940 levels and an over-all limitation

on both receipts and withdrawals is imposed which holds these in any one quarter
down to 25 percent, on a dollar value basis, of such receipts and withdrawals
during 1940. Thus, even if stocks are on hand, they can only be used on projects
complying with such strict priority regulations. This limitation is equivalent to
a reduction below the 1941 rate of use of supplies of about 30 percent, because
not only was 1941 use below 1940, but an increased price level averaging some
15 percent, in view of the dollar-value basis of the limitation, makes a corresponding reduction in the actual feet or pounds of material or number of items
that can be received or withdrawn from stores.

3862

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

With loads and number of customers increasing and with increasing iiroportions
all equipment and facilities operating at higher capacities and for longer hours,
such restrictions will be increasingly severe in 1942. They will incAitably mean
that the task of maintaining safe operation and service in the year ahead will be
one to try even the skilled and experienced operating and engineering personnel
of

of the existing utility systems.

The problem is, however, somewhat less serious for the present rhan might
otherwise have been the case were it not for the fact that su'h systems have
entered this emergency period in a high state of oi>erating efficiency, both as to
equipment and as to personnel. Such conditions, coupled with stringent limitations on use of copper for system extensions, will tend to make fundamental
utility needs for copper in 1942 correspondingly less than would otherwise be the
case.

REQUIREMENTS FOR 194 2

Copper requirements of electric utility companies for the construction of new
projects in 1942 and subsequently will depend primarily on the expansion of
munitions factories and of other facilities for the defense program. In any case,
it will depend upon prior O. P. M. approval of each new construction project
even for short distance line extensions.
Ordinary extensions of service are sharply limited by existing O. P. M. orders.
New distribution lines can only be built after prior approval and upon satisfactory
showing of direct importance to the defense program. On this basis it is impossible to estimate precise requirements for such extensions in 1942, but it would
seem that requirements for such uses are not likely to exceed 20 percent of
similar use of copper in 1941.
If this be so, requirements will be of the order
of 8,600 tons in 1942. The utility companies are already cooperating on such
basis and are advising their customers publicly of such policy and of its necessity

under an

out" defense program.

O. P. M. orders the use of copper for maintenance and repair
purposes is expected, as already outlined heretofore, to be reduced in 1942 about
30 percent below the 1941 level. The aim is to achieve the full amount of such
reduction if reasonably compatible with defense service requirements.
It is estimated, therefore, that as O. P. M. orders now stand, electric utility
companies in 1942 will require about 36,400 tons of copper for maintenance, repair,
and operating supplies of existing systems.
"all

Under existing

That compares with 52,000

this year.

Parenthetically, about S,0D0 tons of copper would be needed to take care of

similar requirements for the systems of municipal and other governmental
agencies, exclusive of rural cooperatives, which are not included in this estimate.

What

Senator Brewster.

percent were those offerino;; very

little,

I presume.
INIr.

Kellogg.

It

depends entirely on what proo;ram they follow,

Senator.

Senator Brewster. Has that been determined yet?

Mr. Kellogg. No. I think that is being followed by the Appropriations Committee in the House, perhaps, at the present time. I
will cover that a little bit further in what I am saying here in a general

way and

will refer to

it

at that time.

Because of lack of information concerning further expansion of munitions factories and other defense facilities, neither the electric utility companies nor the
Edison Electric Institute is in a position to estimate actual copper requirements in
1942 to carry out construction projects and increases of system capacity under
Tiie preliminary construction program of such utility
stands, would require about 10 percent more copper
for such construction projects than was used in 1941 for similar projects. If so,
such requirements will be about 37,000 tons. On such a basis, with strict economy
of use coupled with drastic limitations and priorities, copper use by the electric
utility companies in 1942 might be hold to as low as S2,000 tons.
specific project priorities.

companies for 1942. as

it

now

That corresponds to 129,000 this year.

The Chairman. Forty-seven thousand tons

less.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3863

Mr. Kellogg. That would be the minimum.

However, any extensive program of further emergency interconnections of
present transmission systems and parts of systems might alter tliis estimate
upward l)y a considerable amount, possibly by as much as 2;">,000 to 35,000 tons.
If so, the aggregate 1942 copper requirements of the electric utility companies
would be raised to about 107,000 to 117,000 tons, as compared with 129,000 tons in
1941.
On this larger basis, 1942 requirements would amount to 7 percent of the
total estimated available copper supply of 1,650,000 tons.
CONSEKVATION OF COPPER IN 194 2

Emphasis may again properly be directed to the previously quoted and very
applicable remark of one O. P. M. official that, "The biggest copper mine available
to us is conservation of our existing supply."
One of the most effective ways to apply this principle under 1942 emergency
conditions is to make the greatest feasible use of those systems and facilities
already in place and in operation. Wherever it is possible by able engineering and
operating skill to make such facilities meet loads beyond those now carried by
them, the need for additional copper use and other similarly critical materials
is correspondingly reduced.
This applies to all industry, but it has particular significance with resi)ect to
the electric utility company systems and their needs for copper in 1942. The
staffs of electiic utility companies have made and are continuing to make the
most careful engineering studies to get the most out of their facilities so as to
meet developments in the country's war program as they are decided upon by
Government (officials. To this end they have consistently cooperated with and
sought guidance from the various Government agencies concerned directly with
their operations.
Good engineei'ing and trained and coordinated oi)eration applied to well-engiueered utility systems permits the taking on of new loads with minimum requirements for additional generating capacity, transmission lines, and critical
materials generiilly. It is obvious that the increment construction requirements
to expand such existing systems are, in general, very much less than the material
expenditures required to serve new or increased loads by any other means.
The staffs of the electric utility companies of the United States have built and
are running the highly coordinated facilities wliich are today serving some seveneighths of the Nation's total electrical requirements. These companies have
always operated on a 24-hour day and a 7-day week.
The electric utility companies will help all they can in order that the critical
If, as present figures and
situation as to copper in 1942 may be met successfully.
estimates indicate, 1942 military and other needs for copper will exceed foreseeable supplies by some 7o0.000 tons, the electric utility companies will do
everything possible to avoid adding any capacity or building any tran.*;mission or
distribution lines which can reasonably be avoided by making more intensive use
of present facilities and of the minimum po.ssible increment additions thereto.

Senator Brewster. Now. as I understand it, Mr. Kellogg, 'the

O. P. jNI. or the industry have not recognized any increase in powev
requirements other than for defense piu'poses; that is, if there is an
increase in domestic demand, O. P. M. will not recognize that as
requiring an increase in facilities.
Mr. Kellocg. That is correct and the only amendment to that is
the $500 drop-line business for individual customers.
Senator Brewster. Yes that is the next one.
Mr. Kellock;. Outside of that, no additional facilities can be built.
Senator Brew.ster. To what extent has the curtailment of domestic
:

use assisted or

is

practical to substitute for increase?

Mr. Kellogg. It is not a very large thing. I can give you the
approximate figures for an ordinary year. That would give you a
measure of it.
Senator Brewster. What proportion is domestic and what is industrial, ordinarily?

3864

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Kellogg. I can give you the exact figures. That is probably
way to do it. The year 1940, I think, might be taken as rea-

the best

sonably typical. Out of total sales of 118,643,000,000 kilowatt-hours

residential and domestic was 23,000,000,000.
That would be the order
of magnitude about 17 percent, I should say.
Senator Bkewstir. xlbout 4 to 1 a little more than 4 to 1.
Mr. Kelloog. It is more like 5 to 1 less than a fifth of the total.
Senator Brewster. Well, that would be 4 to 1.
Mr. Kellogg. Oh, yes; right.
Senator Brewster. Now, how has that worked out in the southeastern area where they have tried it?
much curtailment have
they found feasible? Are you familiar with that?
Mr. Kellogg. I haven't detailed figures. I will not try to testify

How

about them.
Senator Brewster. If they should save five to seven billion in domestic use, would that make a material difference in the demand for

new

facilities?

Mr. Kellogg. Country-wide?

Senator Brewster. Yes.
Mr. Kellogg. Well, it would make just that much
to seven, you say ?

difference.

Five

Senator Brew^ster. Yes.

Mr. Kellogg. That would be around 4 percent.

Senator Brewster. I understood it was 15 to 30 percent they hoped
for on this domestic saving, which would be around four to five
billion, possibly, if it were country-wide.
Mr. Kellogg. It would be something, not very great, of course.
Senator Brewster. What is your opinion on the wisdom of such
campaigns? Those, of course, are voluntary campaigns. I guess the
O. P. M. has issued orders, but they possibly haven't authority.
Mr. Kellogg. As I am going to say in one of my later paragraphs, it
becomes the choice now. Senator, between electric-power service for
the people and turbines for battleships and naval
Senator Brewster (interposing). And the answer to that would
seem to be pretty clear.
Mr. Kellogg. That is the choice. May I read the last of my statement? I am practically to the end of this, and I will bring that
very point out.
^
Senator Brewster. All right. Then I will make some comment.
Mr. Kellogg. There are just 10 lines here.
Senator Brewster. I will say whatever you have can be printed,
anyway, but I would like to get your answer on that.
Mr. Kellcgg. The answer is in this last paragraph, I think.
Those companies will pledge now that, to make every possible pound of
copper available for shell cases, they will avoid all necessary duplication oif
copper-using equipment or extensions, even to the extent, if essential, of curtailing use of present electric supply facilities by nondefense customers, to any
And
extent which appropriate Government officials decide to be necessary.
finally, they suggest that most earnest consideration be given to the basic operating need for fullest coordination, which can only come by leaving the
tremendous job ahead to the skilled and experienced operating staffs of the
presently existing systems.

Senator Brewster. Now, we have this same problem in connecit.

T am speaking now of the generating apparatus as

tion with


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3865

from extension of facilities for domestic customers. That

^oing to be one of your major problems, isn't it?
Mr. Kellogg. Yes.
Senator Brewster. The generation.
Mr. Kellogg. May I answer both your questions and the Chairman's with respect to this power supply situation because this is a
good place to bring that in.
Let me say, first, with regard to the effect of this defense effort
industrially on the country, my own opinion definitely confirmed in
distinct

is

the last 6 months from all the statistical figures that come in, is
that electric power is used primarily working on materials and
labor to make things, whatever they are, for war or for peace.
The amount that can be made, as you are finding before your committee here and as O. P. M. knows, is rigidly limited by the physical amount of these raw materials, and it is also a fact that our
labor supply by and large is pretty fully employed; practically
everyone who can do anything is doing something. So that this
tends to put a ceiling on the total amount of power that can be
used, except to the extent that more material now is found, and
it is a slow job, or more labor is found, and that is also a slow job,
so that the effect of increased volume of defense production is necessary to make a corresponding decrease in amount of civilian or
nondefense ])roduction.
All of the other countries at war have
found that. They are unable to get beyond a certain maxinumi
production of all kinds, and the only way they can increase their
war output is to take that much out of civilian activity.
I have been following some of these indexes pretty carefully to
Here, for example, is
see how my theory checks with the facts.
the index run by the Department of Commerce of the United States
on total new orders received by manufacturers for producers' goods
that is about as good a measure as you can get of what is actually
coming into the factories of the country to be done, either for the
Government or civilian use and that index between June 1940,
when the Defense Commission was first set up, and eJune this year
no, and January of this year, went from 157 to 240, a very substantial increase, a very steep, steady, substantial increase during
those 8 months.
Since that time, to wit, since January of this
year and through October, which is the last month I have a record
from the I)ej)artment of Conmierce, that index has been up a little
bit, but it is today, in the month of October, actually 4 points less
than it was last January. In other words, the grand total, limited
by the fixed amount of materials and labor, the amount that defense
gets, comes very largely out of the hide of civilian activity.
Senator Brewster. That is extremely interesting, Mr. Kellogg, but
My question
it applies to your distribution of industrial output.
was addressed to the domestic, which I take it is a distinct problem,
that is, the 23,000,000,000 against the 118,000,000,000; that is the point
I wanted to pursue for a minute.
Mr. Kellogg. In regard to domestic, in total industrial power it
wouldn't amount to a great deal in percent. It would help, it would
be something which the
Spnator Brewster (interposing). What is your opinion about
the wisdom of these companies curtailing domestic use in order to
increase the power available for industrial purposes?

3866

INVESTIGATION OF THE NATIONAL DEFENSE PROORAiM

Mr. Kellogg. I don't see any sense in doing it until it is necessary.

It could be done very suddenly.
Senator Brewster. I thought you had indicated very clearly that
they were not going to be able to get the power that we need, that
turbines were either going to battleships or to supply electric power
needs domestically.
Mr. Kellogg. I wasn't trying to decide what O. P. M. would do,
Senator; I was saying that that would be the decision that would
have to be made.
Senator Brewster. You did predicate it on the fact that in '42
we are going to face a shortage of power, aren't we?
Mr. Kellogg. No, no. I said there woidd be a shortage of power
in 1942

Senator Brewster. Yes.

Mr. Kellogg. If present orders for generating equipment which
are in process of being made were all suddenly canceled and that
machinery was not delivered.
The Chairman. Is there any likelihood of that
Mr. Kellogg. I don't know. I would like to know the answer to
(

that question, too.

Senator Brewster. Well, I would like to get mine answered. If

you can save five to six billion output for domestic purposes, isn't
that going to be available for some other purposes?
Mr. Kellogg. Yes; it will be.
Senator Brewster. Now^ wouldn't that be worth while?
Mr. Kellogg. If you needed it, it certainly should be something
that the public should be asked to sacrifice.

The Chairman. It isn't a sacrifice entirely by the public because

there is a difference of kilowatt price for industrial electricity and
that for private use. Isn't that really what is at the base of it?
Mr. Kellogg. No; I don't think it would be at the base of it
from the Government's point of view.
The Chairman. From the utilities' point of view.
Mr. Kellogg. From the utilities' point of view, they would earn
money.
Senator Brewster. Wouldn't that dissipate your dividends?
Mr. Kellogg. Yes; but I wasn't thinking about dividends.
Senator Brewster. I didn't mean to intimate that you were.
Mr. Kellogg. I was thinking about the availability of power.
Senator Brewster. We have to have this whole (question before us,
and I would say that you didn't indicate any gi'cat interest in discussing the matter. Would that be a fail' statement?
Mr. Kellogg. No; I don't think so. You misunderstood me entirely. Senator.
I did mean this, that if the mere saving which
could be made by curtailing domestic consumption were all the
country had to lean on for additional ])owei', it would be pretty
That is all I mean.
small.
Senator Bkkwstir. That is \\]\\ I have asked you tiie results of this
experiment in the Soutiieast, and 1 get no ini'onnation. That is what
|)uz/,le(l me.
I thonglit thai was a good experiment we were carrying
out down there. Fiankly, I don't want to see it n\) in our section
because it would be quite a serious thing in a lot of ways. I am not
anxious to see it. I am anxious to see justice done all around, but
less

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3867

the fact remains tliat while one-fifth of your power goes to domestic
Isn't that apuses, two-fifths of your income comes from domestic.

proximately correct ?
Mr. Kellogg, I guess so I dcm't know that exactly.
Senator Brewster. So that you, in other words, have just the same
problem we found with the lead and copper fellows yesterday. In
other words, if we move with purely patriotic purpose to solve this
problem, there is what may be seen as an inequitable penalty on the
company. I think the sooner that is laid right on the table and that
you lay all the cards on the table and show them, the more quickly we
will get the right answer.
The Chairman. You are as correct as you can be.
Senator Brewste::. No reluctance to sacrifice should affect your
;

judgment of this case,

Mr. Kellogg. Well, frankly. Senator, I wasn't thinking about income at all. I thought you were addressing yourself to how much
power could be, in the last analysis, obtained in this way if it were
not obtainable in any other way.
Senator Brewster. That is why I asked you about that Southeast
experiment, which I really would assume, Mr. Kellogg, that in your
position you would have quite a lot of information about, I am sure
that the utility

men with whom I have discussed it have Avatched it

known a great deal about it and would be a little
That is the only possible comment I would have on

very closely and have

nujre specific.

your statement,
Mr. Kellogg.

I would like to say this. Senator, that the biggest

gain made in the Southeast was not from the curtailment of domestic
use, but from the enormous amounts of power that were brought in
from the outside, all the surrounding States, from steam-generated
equipment. What hapi)ened down South was simi)ly tliis. There has
been a tremendous amount of powei" developed down there, as you
know, as an incident to improving navigation and flood control and
that sort of thing; that is to say, hydroelectric power. Of course,
hydro-power, when I'ains don't come in sufficient volume, is just short,

that

is all.

Senator Brewster. We found that out in INIaine,

Mr. Kellogg. Yes; in Maine and all along the seacoast it has been
very serious this year. I should say, I don't know the detailed figures
because I haven't seen them, but my guess would be that the relief
that came from bringing in steam-generated power from surrounding
States was 10 to 1 what they got by curtailing domestic consumption
in the area affected.

Senator Brewster. I frankly would like the facts, and if, as I

assume, you have them available from your membership, I would like
to know about it.
Mr. Kellogg. I will see that you get them. I will be very glad to.
Senator Brewster. Frankly, I am simply seeking light.
Mr. Kellogg. I will see that you get that.
May I go back to this matter of power supply just a moment, Mr.

Chairman ?
The Chairman. Surely. I hope you will be as brief as you can
because it is 1 oclock and the Senate is going to adjourn directly.
311932 42 pt. 10

10

3868

INVESTIGATION OF THE NATIONAL DEFENSE PKOGRAM

Mr. Kellogg. Well, I will simply say this. We have made a recent
check within the last week of the status of all of these various generating units which are going through the shops of the country at the
jDresent time, and we have found very slight variations at the time
that check was made of the promised dates which existed 6 months
ago.

Ihe Chairman. Then you feel that you will get delivery on them?
Mr. Keli.ogg. I hope that O. P. M. will not find it necessary to step
in and change that situation.
I think it would be a desperate situation to change.

The Chairman. You know since day before yesterday battleships

are not quite as important as they were previous to that date.
Mr. Kellogg. Right. Electricity will always be important.
The Chairman. If you have any other matter to place in the record
we will be glad to have you do it.
Mr. Kellogg. Thank you.
The Chairman. The committee will recess until 10 30 Tuesday.
(Whereupon, at 1 04 p. m., the committee recessed until 10 30 a. m.,
:

Tuesday, December

16, 1941.)

mVESTirxATION OF NATIONAL DEFENSE PROGRAM

tuesday, december

16,

1941

United States Senate,

Special Committee to Investigate

THE National Defense Program,

Washington, D. C.

The committee met at 10:35 a. m. pursuant to adjournment on

Friday, December 12, 1941, in room 318, Senate Office Building, Senator Harry S. Truman presiding.
Present: Senators Harry S. Truman (chairman), James M. Mead,
Clyde L. Herring, Ralph O. Brewster, Joseph H. Ball, Styles Bridges,
Carl Hatch, and Tom Connally.
Also present: Senator Raymond E. Willis, of Indiana; Mr. Hugh
A. Fulton, chief counsel Mr. Charles P. Clark, associate chief counsel.
The Chairman. The committee will come to order.
Mr. Corcoran, you will be sworn.
Do you solemnly swear to tell the truth, the whole truth, and nothing
but the truth in the testimony you are about to give before this com;

you God?
Mr. Corcoran. I do.
The Chairman. Be seated, Mr. Corcoran, and give your
and connections to the reporter, please.

mittee, so help

TESTIMONY OF THOMAS

G.

full

CORCORAN, WASHINGTON,

name

D. C.

Mr. Corcoran. My name is Thomas Gardiner Corcoran.

I have
no connections.
The Chairman. I have a letter from you here, Mr. Corcoran, dated

December

6,

1941, addressed to me.

It says

You

will recall that at the beginning of November I requested that you afford
an opportunity to appear before the Senate National Defense Committee, of
which you are chairman, to testify as to alleged activities of mine in procuring

me

national defense contracts.

You indicated that such an opportunity would be aJTorded

me by

the end of the

year.
I

would appreciate

it

if

you could set

me

a specific date before the Christmas

holidays.

My

reply was

Appreciate your letter of the fith very nmch, and I will be glad to have you
appear before the committee on December 16, as I told you over the telephone.

This letter will be made a part of the record.

(The letter referred to was marked ''Exhibit No.

336"'

and appears

in full in the text.)

3869

3870

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

conversation referred to in November was the

a lot of statements that had
been made regarding the committee's intention to investigate nationaldefense lobbying, and you asked for that interview with me to discuss
that situation, as I remember it. That is correct, isn't it ?

The Chairman. That

resiih of the

to

newspaper publicity and

Mr. Corcoran. Yes; as I remember it. Mr. Chairman. I came down

you to ask you if this committee would have jurisdiction to go not

only into national-defense contracts, but also into the Sterling case,
You will
antl the powers of the committee didn't reach that far.
remember I then told you that as soon as the Sterling reorganization
was finished I wanted to come to you again. I think it was on the 6th
that I came down to Mr. Fulton's office, after the Sterling business was
finished in New York.
I called you, with Mr. Fulton, out in Kansas
City, told you I was going to send you this letter, and asked if I
might have a favorable reply, and sent you the letter. That accords
with your recollection?
The Chairman. That is exactly as I remember the proceeding.
You have a statement that you desire to make to this committee?
Mr. Corcoran. ]\Iay I. Mr. Chairman, make a prepared statement
first, in order to get the details on the record?

The Chairman. That is all right.

Mr. Corcoran. And then you may ask me any questions you want.
The Chairman. Proceed.
QUESTION OF ACTIVITIES OF THOINIAS

G.

CORCORAN IN NATIONAL DEFENSE

PROJECTS

Mr, Corcoran. I am requesting this connnittee to hear me not for

any mere purpose of vindicating my ])ersonal reputation. The time
of you, Mr. Chairman, and of all the other members of the c(munittee
ancl of all the Senators who are willing to come here and hear me is
An
far too important to be occupied with problems of an individual.
individual pilot who manages to get a dive bomber into a Japanese
battleship is important, but an individual lawyer is not important.
I feel as strongly as anyone else does that defense-contract
})rokerage, increasing the cost of the Government and the burden of
the taxpayer, is an outrageous evil. T^ut I am. here also to suggest to
the committee that because of tlieir ert'ect on j)ublic cynicism and ])ublic
morale, the dissemination of false rumors as to contract brokerage is
in itself an equal evil and a real concern of your connnittee.
I think that is particularly true when an individual is attacked
not for himself but as a symbol of many other people.
Now, that is Ihe only reason whicli justifies my coming before y<ni
today.
There are five stories wliich have ])een whispered about me as a
symbol in comiection with defense activities. Tliey concern (1)
Savannah shipyards; (2) the Vimalert Liberty enijine contract; (3)
the magnesium ])lant at San Jose. Calif.; (4) the Havenstrite oil well
in Alaska; and (5) Cliina Defense Supplies.
Since I think the only answei' to innuendoes is facts, T will give
you the facts about these situations as I see tluMU. including what
fees T made in these cases.
I have prepar(>d this statement to make
T shall try to sinnmarize it orally
a detailed i-ccoi'd of tliese facts.
as briefly as possible, and then be glad to answci' your (|Uestions.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3871

Before I fjo into these specific cases, just let nie give you a word
about the background of my private activities.
I resigned from tlie Government service on September 22, 1940,
some 15 months ago, and gave up the R. F. C. position I had held for
many years. I did that, frankly, because I thought the choice of the
President as the Commander in Chief was desperately important. I
had then been in the Government service for some 10 years, all
during President Coolidge's administration in 1926 as the law
told
clerk to Mr. Justice Holmes; with President Hocn^er's administration
in 1932 as counsel to the Reconstruction Finance Corporation; and
with President Roosevelt's administration from 1933 to 1940 in the

same capacity.
I resigned to work without compensation as a director of the Independent Voters' Committee foi- Roosevelt and Wallace, the so-called
Norris-LaGuardia Committee, and after election, until January 1, I
spent most of my time clearing up the aflFairs of that Committee
again without compensation. On January 1 I had to go to work.
Because the man I hoped would be my partner, ISIr. Benjamin
Cohen, was summoned to go to London as the counsel to the United
States Ambassador, and because I was very sure from the very
beginning that there was a grave risk that war might liquidate all
private plans at any moiniMit. T conducted my affairs in the simplest
possible way.
To compensate for my caution about not l>uil(ling up a big administrative resj)onsibility for myself, I made it a ])oint in every really
large situation to be associated with another lawyer or a firm of
first-class ability and reputation, and I worked with that lawyer or
firm in team as I had also worked in team when I was in the Gov-

ernment.

or at least the
chief business of business today is Government
aa'Iio see things clearly enough to have them worth having as clients are all involved with the Goveinment. I could not
and, franldy, I would not liave wanted to stay completely out of anything with any possible Government or defense relation; insofar
as I could help outside of the Government, I wanted to help.
But I am sure I can say these things categorically
(1) I have never rece'ved a fee and I have no arrangements for
receiving fees in the future, on percentage or otherwise, for contract
brokerage or for any other form of soliciting defense contracts.
(2) I have received no fee and I have no arrangements for receiving any fee that has in any way directly or indirectly increased the
cost to the G )V'ernment of preparing for this war.
And I may say parenthetically something else. I had a very definite })hilosophy when I was in the Government.
I haven't struck
that flag. I have never taken a case or a situation which in any
way conflicted with or compromised what I stood for when I was in

The

minds of men

the Government service.

I don't know, and I don't believe anybody knows, what influence means. If with respect to me it means experience in knowing
what the Government likes and does not like, I cannot understand
why it should not be utilized to make the burden of the Government
lighter.
If it means confidence of Government officers in my ability
to get performed what I undertake to get performed by corporate

3872

nsn^ESTiGATioN of

the national defense program

and others outside the Government in return for commitments

within the Government, and confidence that I will see through what
I say I will see through, I cannot remember when I have betrayed

officers

that confidence.
I think the real test by which to judge the

by
tlie

whom

know but by whether what

Government and the defense

way I have acted is not

have done has helped or hurt

effort.

to fees, as I have said, no fee that I have taken has added one
the other hand, I have tried
penny to the cost of Government.
client and myself
to charge fees directly in proportion to what
have together agreed were the benefits to him from such imagination

As

On

my

or energy or experience or technical skill as I may have Avhich he

asked I throw into any particular situation.
I think, Mr. Chairman, I have proved I can work many years for a
cause, for little.
I think it is no secret in Washington that I have constantly been
ready for many months to serve that cause again anywhere I could
really function.
But I have never understood that, in this country, when Avorking
to help other men earn money, it was wrong for me to eai-n money, in

proportion, too.
In discussing specific cases, I am not unaware of the privilege of
my clients to expect a lawyer to keep their confidences, and I want
to make it clear that I liave been authorized by each of those involved
to say what I am going to say in this statement.
I will take up the specific cases in the order in whicli they have been
most luridly talked about.

CONNECTION OF THOMAS

G.

CORCORAN WITH SAVANNAH SHIPYARDS

CORPORATION

Mr. Corcoran. I think Savannah Shipyards is the case which you

first because you have other witnesses this week on

M'ant to hear

Savannah Shipyards.
The Chairman. That is correct.
Mr. Corcoran. This is the case in which it has been stated that in
concert with Mr. Charles West or otherwise I acted as an agent to
procure a Maritime Commission contract for tlio Savannah Shipyards Corporation.
There was an article in the press the other day, just yesterday, which
stated as a flat fact that I had pi'ocured a contract for Savannah
Shii)yards for the Maritime Commission.
The president of Savannah Shipyards Corporation is Mr. William
Crowley, a member of the Board of Education of the City of New
York. The treasurer of Savannali Shipyards is Mr. Frank Cohe.'i.
The interests that own Savannah Shipyards also own Empire Ord-

nance Corporation.
I liave never had anv business relationshi]) of auv kind with Charles
West.
I liave had a professional comicclion with the all'airs of Savannah
Shipyards Corpoi-ation under the folh)wing circumstances:
Sometime in February of hist year, Mr. Fiank Cohen, the treasurer
of Savannah Shii)yar(Is, recjuesled my opinion in a hurry on the validity of a proi)osod issue of revenue bonds of the Port Authority of
the City of Savannah.
It liad been proi)osed in substance that

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3873

Siivannah Shipyards should construct a shipyard for the Port AuSavannah to cost between two and a half to three million
dollars, and as pay,ment therefor, receive revenue bonds of the Port
Authority. The facilities were then to be rented to the Savannah
Shipyards Corporation.
Mr. Cohen stated that he was leaving for Savannah that afternoon
to decide on the investment, that he wanted my opinion as to the

thority of

validity of the bond issue,

I replied that I was not in a position to accept his business. There
were very peculiar as well as ordinary reasons for that. I had just
been retained by the Todd Shipyards Corporation in connection with
the promotion of a magnesium plant. As other witnesses have testified before this committee, Senator, I have had absolutely nothing to
do with the shipyard or ship contracts of Todd Shipyards Corporation, but since that client liad shipping interests I was in a position
where I could not, except with clearance from them, accept anything
that had to do with an}^ other shipyard business.
Cohen then asked me for a recommendation, and I replied that in
my judgment the most competent counsel available to him within his
time necessities was Mr. William Koplovitz, of St. Louis, of the firm
of Dempsey & Koplovitz in Washington. Dempsey, of Dempsey &
Koplovitz, is the son of the former Representative from New Mexico.

The Chairman. I am acquainted with him.

Mr. Corcoran. Now, this reconnnendation was a purely professional
i'udgment. The bonds in question were of the type laiown as revenue
Some years before,
fonds, a new kind of bond in municipal finance.
Mr. Koplovitz had been the W. P. A.'s legal expert on municipal
revenue bonds, and he had held a key position in the section of the
P. W. A. organization which assisted State officials in drafting new
laws concerning revenue bonds, in Georgia among other States. He
was, therefore, particularly competent on problems arising under
the legislation applicable to the Savannah Port Authority.
I remember pointing out as a matter of free advice to the client at
the time, that if you buy a mimicipal bond Avhich is declared invalid, you don't get 90 cents on the dollar, you don't get 80 or 50 cents
on the dollar, you get wiped out and I advised Mr. Cohen that he had
better take some counsel who would have the courage to lean over
backward to make sure that he didn't lose his $2,500,000.
Mr. Cohen thereupon retained Mr. Koplovitz, and the latter accompanied him that afternoon to Savannah. A week later, Mr. Koplovitz
informed me that after his investigation of the situation in Savannah,
the company, on his recommendation, had decided to postpone the
signing of the contract to accept the bonds of the Port Authority in
payment for the shipyard, pending a conference of lawj'ers in Washington representing all interests involved, and he then asked me to
study the question with him and to participate in the forthcoming
;

conference.
During the conference which followed, at which the question of the
validity of the proposed bond issue was discussed, Mr. Koplovitz called
me in, because, frankly, he foimd that the other lawyers at that moment
didn't agree with him.
Six or seven other lawyers were present, together with Mr. Crowley, the president of the corporation, Mr. Cohen,,
the treasurer of the corporation, and Mr. Charles West.
Senator Ball. Was Mr. Butler there, from the Port Authority?

3874

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

I don't know, Senator.

I tliiiik he was.
Senator Ball. Was Vickery, of the Maritime Commission, there?
Mr. Corcoran. No; he wasn't there. This was a conference in the

Mr. Corcoran.

Dempsey

office.

later, in the end, Mr. Koplovitz's opinion was adopted

opinion of the group. I concurred in that opinion. He was then
retained by Savannah Shipyards to readjust in conformity with that
opinion, some tentative commitments entered into in Savannah.
few days later Mr. Koplovitz asked me to continue to work with
him on the matter. We advised the Savannah shipyards that the
questions as to the legality of the bonds were so serious that the corporation would be well advised to abandon this proposal. The corporation accepted the advice and abandoned the plan of constructing the
yard for the Port Authority, and, instead, bought a site from the Port
Authority and constructed its own yard with its own funds. This is
one of the very few new shipyards I know of constructed with purely
private funds.
Before I accepted Mr. Koplovitz's request that I come in to help him,
vis-a-vis the others, in view of my conflicting relationship with the
Todd Shipyards, I very carefully called up Mr. John Reilly, the president of Todd Shipyards, and from him received permission on this
narrow matter of hel])ing Dempsey & Koplovitz, to undertake that
relationshij) with Koplovitz for that purpose only.
Now, for my work as associate counsel in this matter I was paid
$5,000 by the firm of Dempsey & Koplovitz.
1 have had no other compensation, directly or indirectly, that derives
from Empire Ordnance Corporation or Savannah Shipyards, Inc., or
anyone connected with them,
I have since given Mr. Koplovitz and Savannah Shipyards, again
with Mr. Reilly's permission, free advice on several occasions with
relation to personnel proposed for the yard, the possibility of the
general adoption of a new type of ship for volume building that is,
the ''sea otter" and the possibility of finding another shipbuilder as a
partner in that enterprise.
So far as the ]\Iaritime Commission's relation to Savannah Shipyards is concerned, I have also understood that long before I met
either Mr. Crowley or Mr. Cohen they had had conferences with representatives of the Maritime Conunission.
From their conversations
I gathered that it was their understanding that the need for ships was
so great that no adequate shipbuilding facilities would be left muised,
and tliat if the Savannah Shipyards constructed an adequate shipyard
and found suitable oi)ei'ators for it, with its own money and witliout
asking for facilities and funds from the Commission, the corporation

as

few days

tlie

would

a. contract for the construction of shi])s.

did I represent Savannah Shipyai'ds Corporation before
the Maritime Commission, and I Avas never retained either directly
or indirectly, nor did I ever receive any fees, in connection Avith the
ship-construction contract which the Commission awarded that corporation.
'Jlie Chairman. Some of the Senators want to ask a few questions.
Mr. (/ORCoran. May I just finish on this Savannah matter^
Tlie Chairman. Yes. finish that and thev will ask questions about

receive

At no time

that.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3875

Mr. Corcoran. Senator, I have another release which I didn't have

time to get bound, in the hurry of getting this bhieprint ont this

mornmg.
The Chairman. Do you want

to read this to the committee?

Mr. Corcoran. I will read it.
I have always understood that even at the height of so-called personal journalism, the first duty of a reporter to get his facts straight
and to get all of them required him, if he were accusing an individual
of public dereliction, at least to ask the accused individual for an
explanation before it went to print. It has accordingly interested me,
and in view of what I think the relation of this committee to false
rumors is, I think it should interest you, that in all the months of this
attack on me no reporter accusing me has bothered to ask me about his

alleged "facts."
Now, in the light of that attitude, I am going to ask you to have
the investigators of this committee check this story as I have told it
to you against the Savannah Shipyards story as it has been told in its
most widely circulated form.
The story that I have been serving as a "defense broker'' for the
Empire Ordnance Co. and for its shipyard subsidiary is the latest and
most detailed that has been circulated about me. I wish, therefore,
that your committee shall use it as a particular test of the reliability
and competence of the reporting of facts in the series of stories of
which it is a part.
Now I am quoting from an article appearing in a Washington newspaper of December 3, which I just distributed to you
(1) Mr. Corcoran is lield marslial of (Mr. Coben's) Washington brain and
influence corps, drawing an animal salary, it is learned today, as an oflicer of tbe

company.
(2) When Mr. Butler, Senator Ball, went before Maritime oflScials a month
later he raised the question of IMi-. Coiien's record. But he got nowhere. He sat
looking into the faces of a group witli powerful influence. He was aware of that.
Among the 21 persons present, it is learned, were Howard \Mckery, Maritime

Commission member, Mr. Corcoran. Mr. Kopjovitz, Mr. West, and other lawyers
and officials. The arrangements were satisfactory to the Commission.

Now, here are two clean-cut allegations of fact concerning me,

I think the only specific ones in the entire article, and I think pretty
nearly the only specific ones in the entire series. Their truth or falsehood is readily susceptible of proof. Your determination as to their
accuracy will serve a valuable public purpose, as well as a guide to the
general degree of credibility you may ascribe to other stories about
me from the same source.
In the first instance, it is asserted that I am an officer of a corporation which is known to have a shipbuilding contract with the
Government, a corporation which in the same article of December 3.
and in a preceding article of the same series on December 2, is designated as a "broker in defense contracts" paying "fees to persons in the
'influence' business like Thomas Corcoran and Charles West."
In the second instance I am pictured dramatically as having been
present in concert or at least in company with jNIr. West, who has sued
to collect a brokerage fee, at a meeting before officials of the Maritime
Commission, together with others who constituted "a group with
powerful influence," for the purposes of helping to get a shipbuilding
contract.


3876

INVESTIGATION OF THE NATIONAL DEFENSE PROGRA?j;

Now, both of those statements, Mr. Chairman, can very objectively

be proved by your investigators either to be true or not true.
I say I am not, and I never have been, and I have no arrangement
to be an officer of Empire Ordnance Co. or of its shipbuilding subsidiary, or of any other affiliate of the company, and I say that since
I left' the Government service I have never been in any office of the
Maritime Commission, nor have I ever appeared at any meeting before
Maritime Commission officials, as is specifically alleged in that article.
Now, the records of the Empire Ordnance Co., to which your investigators have access, are the answer to the first question. The records
of the Maritime Commission are the answer to the second question,
and I feel sure, Mr. Chairman, that this connnittee will not object to
my disclosing that I have by letter specifically requested the committee to make this sample determination as to whether I am telling
the truth or whether the statements in those articles tell the truth.
The Chairman. Pursuant to your request, the committee made
some investigation and we have an affidavit here, signed by Benjamin
S. Dowd, president of the Empire Ordnance Corporation, in which he
says
That your deponent's attention has been diiected to the fact that various
statements and claims have been incorporated in several newspaper articles
wherein it is slated that one Thomas Corcoran draws an annual salary as an
that your deponent specifically denies
officer of Empire Ordnance Corporation
that the said Thomas Corcoran is either employed, or holds office in Empire
Ordnance Corporation, or receives any salary from said corporation, and
further categorically denies that the said Thomas Corcoran is employed or
holds office in any corporation affiliated with said Empire Ordnance Corporation or receives any salary from any of said corporations, and that any statement that said Thomas Corcoran is so employed, or holds such office, or receives
any salary, is untrue.
;

That is subscribed and sworn to before a notary, and will be made

part of the record.
(The deposition referred to was marked "Exhibit No. 337" and is
included in the appendix on p. 4225.)

The Chairman. Then we have a letter from the Maritime Commission addressed to Hugh Fulton as Chief Counsel for the Committee Investigating the National Defense Program, and signed by
H. L. Vickery, Connnissioner [reading "Exhibit No. 338"]
:

Dkar Mb. Fulton

To

reply to your telephone inquiry of yesterday, I have

seen the story which appeared in the \Vashlugtt)n News on December 3, 1941,
concerning an alleged meeting with representatives of Savannah Shipyards, Inc.,
at the Commission.
I am enclosing a copy of the memorandum of a meeting
that took place at my office on Rlarch 28, 1941. whicli I believe is the meetiug
referred to in the newspaper story. This memorandum was made immediately
after the meeting ended and is taken from my files.
To my knowledge, the INIareh 28 meeting was the only one ever held at the
Commission whieli I\Ir. ISntler attended accompanied by representatiA'es of
Savaiuiali Shipyards.
The memorandum speaks for itself. Mr. Schmeltzer,
Mr. Slacks, and Mr. ScoU are officials of the Commission.
Mr. French and
Mr. Crowley are officers of Savannah Sliipyards, Inc.
Captain Court is a
retired naval officer who was acting as lecimical adviser to Savannah Shipyards
at the time, I believe.
For your further information, I handled the entire negotiations with Savainiah
Sliipyards myself, and as yon know, I have kept your committee informed of
their jiiogress.
At no time did Mr. Corcoran ever participate in any meetings
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3877

with the Savannah people at the Commission, nor did I learn of his association
with Mr. Frank Cohen until several months after Mr. Cohen's first appearance.

(The

letter referred to

was marked "Exhibit No. 338" and appears

in full in the text.)

The Chairman. Now, the memorandum is three or four pages, and

I won't read that, but it is available to all the members of the committee, and I will make it a part of the record at this point.
(The memorandum referred to was marked "Exhibit No. 339" and is
included in the ap])endix on p, 4226.)
Mr, Corcoran. Now, Mr. Chairman, you have, yourself, prima facie
evidence, if the people, including the Maritime Commission, who sent
you those memoranda are telling the truth, that these two specific
allegations of fact are untrue. I don't mean to presume on the time
of the committee or on the procedure of the committee. But I think
the reporter who wrote those articles is in the room. Do you want
to swear him to ask what authority he had to make those statements
an officer of the corporation or about my being present
Maritime Commission meeting?
Senator Brewster. I think Corcoran had better finish first.
Senator Connally. I think we had better proceed in the regular
way.

my being

about

in the

The Chairman. All

right.

Mr. Corcoran. Do you want to ask me some questions about the

Savannah Shipyards?
The Chairman. Have you any questions you want to ask about these
specific transactions?
Senator Connally?
Senator Connally. I have just come in. I will ask some questions
later,

but I will wait.

The Chairman. Senator Mead ?

Senator Mead. Not at this time.

The Chairman. Senator Ball ?

in

Senator Ball. Yes; I would like to.

You first contacted Cohen
February?
Mr. Corcoran. Yes, sir.
Senator Ball. And when did you finish your work ?
Mr. Corcoran. I think the business of getting him out of this

commitment

in Savannah was finished sometime late in March, and

the contract with the Maritime Commission is dated, as I understand

it,

about November 20.

Senator Ball. November 20 of this year?
Mr. Corcoran. Yes.
Senator Ball. Then, for that 1 month's work, approximately, your

fee

was

$5,000.

Mr. Corcoran. That is right. I don't know what Mr. Dempsey's

fee was and I don't know what Mr, Koplovitz's fee was.
But for
that $5,000, so far as I was concerned, I kept a man from making a
mistake that might have cost him two and a half to three million
dollars.

Senator Ball, I notice you say here that later for Savannah Shipyards you gave them free advice with relation to personnel proposed
for the yard and the possibility of the general adoption of a new
type of ship,
Mr. Corcoran. That is right.

3878

INVESTIGATION OK THE NATIONAL DEFENSE PROGRAM

Senator Ball. Wouldn't you have had to get the latter informa-

from the INIaritime Commission from some source?

Mr. Corcoran. No; I got the latter information from other shipyard builders whom I knew, making it perfectly clear to them why
You know there was a great deal of talk around here
I was asking.
in the last 3 or 4 months about a completely revolutionary new type
tion

of ship.

Senator Ball. The sea otter.

Mr. Corcoran. Which was designed by Burgess of the Enterprise^
the last Cup defender. There was a great deal of excitement in ship3^ard circles as to whether this particular ship would be used in place
of the Liberty ship because it short-circuited the propulsion problem.
Instead of requiring the building of steam engines and the rest of
steam-propulsion machinery, this sea otter wnis going to use ordinary
autoniobile engines that came off the assembly line.
Now, there was a point at which Cohen had to make up his mind
which kind of shipyard he was going to build. If he built the sea
If he built the ordinary
otter, it would be built on a railroad track.
Liberty type of ship, he would build it on a shipway. Cohen was at
the point where he could build the shipyard one way or the other.
He had almost decided to build the shipyard for the sea otter, and
Koplovitz came to me and asked me whether I thought there was any
chance that the sea otter was going to be adopted by the Maritime
Commission in place of the Liberty ship. I talked to my shipyard
friends and advised Koplovitz "No."
Senator Ball. I notice you say flatly here that you have never been
in the office of the Maritime Commission.

Mr. Corcoran. That is right.

Senator Ball. Since you left the Government service.
Mr. Corcoran. That is right.
Senator Ball. How about telephone work ?
Mr. Corcoran. The telephone work with the Maritime Commission
can be summed up in one conversation. It is connected with this
business of personnel for the yard. There was a vacancy at the head
of the Savannah shipyards. A friend of mine was proposed for that
vacancy. He was in a shipyard in San Francisco. I knew that he
had been an assistant to Ca])tain Vickery. I thought that possibly
Vickery had sent him out to the other yard. Since it was known he
was a friend of mine and since Savannah Shipyards wanted to get
him very badly, Koj)lovitz came to me to ask me if I would introduce
Koplovitz and Mr. Cohen to my friend in San Francisco.
Befor(^ I would do that T very carefully called Connnander Vickery
and asked him if the Maritime C^xmmission had any objection if I
made an introduction which might shift that particular man from
the yard in San Francisco, where the Maritime (Commission may have
wanted him to be, to the yard in Savannah.
(\)nunan(ler Vickei'v told me lu' had no objirtion and that he would
himself call my friend in San Franc"sco to say that I had the ]hm'mission to make the call for Connnander Vickery. T made the call.
My friend canie on. He met these peo|)le. He decided he didn't
want to l;ike the job and he went back to San P'rancisco. That is the
extent of m\' calls to the Maritime Commission.


INVESTIGATION" OF

THE NATIONAL DEFENSE PROGRAM 3879

Senator Ball. Have you held any conferences with members or

-cials

of the Commission outside of their

office

offi-

Mr. Corcoran. No. I have met Commander Vickery once at a

dinner to which I was invited on the Washington Roof. The only
conversation at that dinner concerning this particular shipyard was
that he was concerned with a tanker contract for private builders that
he wanted to see placed outside the yards that w^ere doing the Maritime Commission business, and he advised me that Savannah Shipyards, still building, might well apply for that contract. You can
check all this with Conmiander Vickery.
May we go on ?
Senator Brewster. I wanted to ask you about the article with which
you have furnished us a copy and on which you commented. It covered someAvhat more details than you mentioned in connection with

we say, somewhat "shadowy" practice.

Mr. Corcoran. As long as you don't say "shady." I don't mind if
you say "shadowy,"
Senator Brewster. I tried to use the words very carefully. That
suggests that your official connections were somewhat more intimate
"Mr. Corcoran," I quote now the
tlian your statement has im])lied.
article, and then I wouhl like to comment, "is field-marshal of (Mr.
Cohen's) Washington brain and influence corps, drawing an annual
salary, it is learned today, as an officer of the company."
I understand you to say that that is incorrect, to say the least.
your, shall

Regulations of

tlie

War

antl

Commission (which handled

tlie

Navy Dpiiartmeuts, as

well as of the Maritime

Savamuih case), forbid the payment of a fee to

get contracts.

The drama of the Sainmnah case opened in a law office here last February
the offi e of the fiini of Denipsey & Koplovitz. The partners are William J. Dempsey and William ('. Koplovitz, formerly chief counsel and assistant counsel, respectively, of the Federal Communications Commission. Like other young Government lawyers, they moved into the more remunerative Held of private practice.

Now. you developed

at some length, Mr. Koplovitz' authority in the

of municipal finance.
Mr. Corcoran. I think he was witliout any question the Federal
Government's expert on revenue bond matters.
Senator Brewster. So that you wouldn't assume exclusive credit
for keeping Mr. Cohen out of this difficulty in Savannah.
field

Mr. Corcoran. No.

Senator Brewster. You made a rather extreme statement. You said
you saved him two million and a half.
Mi-. Corcoran. I think I said that the opinions probably saved him.
I wouldn't even say that I am sure they saved him, because you never
can be sure of the laAv on a municipal revenue bond.
Senator Brewster. I am referring to what you said.
Mr. Corcoran. Very well.
Senator Brewster. You said, when Senator Ball asked you about the
I think Mr.
$5,000, that 3^ou saved them two million and a half.
Koplovitz probably helped.
Mr. Corcoran. I have no doubt that he did.
Senator Brewster. Now, in recommending Mr. Koplovitz, which I
understand was your recommendation to Mr. Cohen
Mr. Corcoran. That is right.

3880

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. As a law firm capable of handling this affair, did

you by any chance mention Mr. Dempsey's connections and position
also?

Mr. Corcoran. Yes.

Senator Brewster. And what did you explain about Mr. Dempsey's
possible assistance ?

Mr. Corcoran. Mr. Dempsey

also

was

in the P.

W.

A. in the same

organization.
Senator Breavster.

He was also an authority on municipal finance?

Mr. Corcoran. Yes; but not as exclusive an authority on the revenue-bond problem as Mr. Koplovitz was.
Senator Brewster. Did you mention, by any chance, his connection with the Maritime Commission ?
Mr. Corcoran. Oh, yes; I remember very carefully pointing out to
Mr. Cohen that in these connections this firm could not accept anything that had to do with the Maritime Conimission except on the
most strictly legal basis because Mr. Dempsey's father was a member
of the Maritime Commission. I think it was perfectly understood
that particularly because any overstepping would be very apparent
because of the relations of Commissioner Dempsey, nobody was to
"lobby" before the Maritime Commission.
Senator Brewster. In other words, the closer you get to officials in
Washington, either through family or personal connections, the better
because the more careful they will be not to overstep.
Mr. Corcoran. I think you will find that normally that happens,
because everything, it is assumed, is going to be investigated.
Senator Brewster, Now, the article goes on and says that "When
Mr. Corcoran began the private practice of law here several months
back he did not open an office, but availed himself of the privilege of
a desk and a place to park his coat in the Dempsey & Koplovitz office."
What do you have to say to that ?
Mr. Corcoran. You mean whether it is true?
Senator Brewster. Yes.
Mr. Corcoran. Oh, yes; it is true, not in quite the sense in which it
has been put here.
Senator Brewster. You had a desk there ?
Mr. Corcoran. When I went out into private practice and the magnesium business, which I am going to describe to you, came to me
a hurry, I looked aronud for si)acc to locate an office in Washington.
I couldn't find :in office in Wasliington without going to more trouble
than I then had tinie to go to. The only ofiice space I could find downtown which art'oi-ded me the use of a conference room and comfortable
office facilities while I was arranging for other office space happened
to be this particular office and these two men were friends of mine.
They had space they were saving for ex])ansion. I used that space,
I think, for about 5 months, until I had finished the magnesium deal;
then I moved to an office of my own, which is one of the nicest offices
it is

town.
Senator liRKWSTKR. I had understood that it was extremely difficult
to get into your ofiice, Mr. Corcoran. Where is it located?
Mr. Corcoran. My ollice is in lOlG in the Investment ]>uilding.
Senator Brkavster. 1016. The stories have been that you were very
in this

difficult to see.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Corcoran. Very purposely, Senator, I have been very

3881

difficult

to see.

Senator Brewster. So that story is correct.

Mr. Corcoran. Certainly.
Senator Brewsi-er. That doesn't imply anything about the price?
Mr. Corcoran. Oh, no.
Senator Brewster. Well, I think that covers all that I have.
Mr. Corcoran. I think, if you want to know why I have been difficult to see, the gentlemen who are sitting at this table will understand.
From September until January of last year I was in political life,
hard, the way you people have to be in political life. From November until January, while I was cleaning up the aifairs of the political
committee of which I had been the most active head, I saw probably
50 people a day who thought they had reason to be able to talk with
me because of association with me in the political campaign, and they
were quite right about it. I lived in a goldfish bowl. My office was
jny apartment at that time and when I decided to go into business
and thought of the 50 people that had been waiting, justifiably, outside the door every mcn-ning, I both moved my apartment and took
my number out of the telephone book, with no number nor no name
on the door in any other place, I had to decide whether I was going
to take care of 50 more people a day or I was going to practice law,
and I decided to practice law.
Senator Brewster. In other words, in private life you sought that
same passion for anonymity that you reconnnended for the White

House.
Mr. Corcoran. I don't want. Senator, to involve anybody l)ut myself.
I never liave had my name on a dooi- tliat I can ever remember since I
came to Washington. I figure on the theory of Emerson's mouse-trap
maker; if people want to come to me, thej' will find me.
Senator Bridges. Mr. Corcoran.
Mr. Corcoran. Yes, Senator.
Senator Bridges. Before you had any connection with the so-called
Cohen companies, did you investigate or make any effort to learn about
the personnel or any of the men associated with him as to their reliability or their reputation or anything of the kind?
Mr. Corcoran. All I remember is the circumstances which I have
detailed to you. Mr. Cohen came to me one morning when he was
leaving for Savannah that afternoon.
I gave

him

I couldn't take the business.

a reference.

The next time I saw him was at a lawyers' conference, and the president of the shipyard, to whom I was introduced, was Crowley. I think
Crowley is a man of impeccable reputation.
After that I heard a great many stories. I don't knoAv whether they
are true or not. For the purposes for which I was working, as an
associate counsel for somebody else, it didn't make any difference
whether the stories were true or not.
You are going to investigate, as I understand it, the relationships of
those companies during the remainder of the week, and you can determine whether or not the stories are true. All I know is that this
shipyard is one of the most extraordinary shipyards I have ever known
because it is the only one I know of that has been constructed with
private funds in this emergency.

3882

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Bridges. Mr. Corconm, do you know

John

man by

the

name

of

Roberts'^

Mr. Corcoran. No.

Senator Bridges. Never met him ?
Mr. Corcoran. No.
Senator Bridges. Did yon meet a man by the name of Frank Hale,
the so-called boss of Indiana^
Mr. Corcoran. No; I have known a man for a long while named
Frank McHale.
Senator Bridges. Did he have any connection with this company?
Mr. Corcoran. He has, as I understand it. a connection with the
Empire Ordnance Co., and I think the same people own the Savannah
Shipyards.
Senator Bridges. Then did this knowledge come to you after your
association oi- before ?
Mr. Corcoran. This knowledge came to me after the lawyers' conference in the Dempsey office.
Senator Bridges. Did you ever hear of Mr.
ciate or having
of Al Capone?

any connection with

Cohen having an

man who was

ussoa close associate

Mr. Corcoran. No.

And would your assf)ciations with him have been

enough so that if that were true you probably would have learned
of it ? Did he take you into his confidence that way ?
Mr. Corcoran. No; my association has been with the firm of Dempsey & Ko])lovitz, and not with Cohen.
Senator Bridges. May I ask you, do you have any knowledge of
Senator Bridges.

close

Cohen's inability

The Chairman (inter})osing). 1 will say, Senator, that Mr. Cohen

wdll be on the stand, and you can ask him all those questions if you
so desire.
(juestions were d'rected more
Senator Bridges. All right.
toward Mr. Corcoran's knowledge of whether he went into this with
a knowledge of some of the men he was to be associated with or
whether he was an innocent victim.
Mr. Corcoran. Senator, isn't it important that wdiat I went into
wasn't any genei-al l)usiness of Empire Ordnance or Savannah Shipemi)loyment was em])l<)vment from another law firm, of
yard ^
real respectability.
Senator J^RuxiES. I should think that

My

My

Mr. Corcoran (interposing). And my employment has been limited

law firm.
Senator r>RiD(iES. My thought would be, due to the position that
you have held in Washington in years past, that you would take a
great deal of care whom you rej)i'esented, and I just wondered
whether you walked into this with you eyes o])en or not.
Mr. Corcoran. So far as I am concerned, I have never represented
anybody in this thing. 1 have been associate counsel of other counsel
whom I simply recommended to somebody who asked me who the
What investigation they
best nnmicipal bond lawyei- in town was.
made, I don't know, Senator, 'i'his is a very small item in my alfairs
to one transaction with that

of this year.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3883

Senator Bridges. In other words, if you are approached by a party

needing an attorney, you don't inquire a great deal as to their reputation
to

Mr. Corcoran (interposing). Senator, it is up to the other attorney

make such investigations as he deems proper in view of what he

asked to do.
Senator Bridges. And you went ahead on this on the assumption
that the people with whom you were to be associated had properly
investigated and were acting for reputable clients.
Mr. Corcoran. Senator, I went ahead when I was requested by the
firm to which I had made a recommendation, and let them investigate their own client. When I was asked by them to back them up on
a purely legal question in which many other lawyers disagreed with
them, it didn't seem to me that it was my business to find out what
their client was doing outside of the particular business I was asked
is

to

work

with.

Senator Bridges, Well, getting

down

to the principle that I

was that you don't consider

wanted

necessary for you, as

an individual, considering your past associations in Washington,
which have been generally known, to take care in the type of work
in which you are engaged for which you will receive a fee.
Mr. Corcoran. Oh, yes, Senator; I think that is desperately
important.
Seiiator Bridges. I mean you didn't do it in this case.
Mr. Corcoran. I wasn't in this case in any relationship which required me to do any looking into that sort of thing. Senator.
Senator Bridges, I mean, although your association was with another law firm, you were representing the Cohen interests.
Mr. Corcoran. I was representing a Savannah shipyard which
was deciding whether it would buy some municipal bonds from the
Savannah Port Authority, and I decided that it shouldn't buy the
bonds, or rather I didn't decide it, but, as Senator Brewster says, I
was associated in an opinion that recommended that the bonds
shouldn't be bought.
Senator Bridges. But nevertheless, it is true that you went into
this outside of the integrity of the firm you were associated with,
without any knowledge or investigation of the ultimate client you
represented.
client was a firm of recognized integrity, I
Mr. Corcoran.
think.
Senator Bridges. They were associated, in turn, with other people,
and you didn't investigate their clients, with whom you were assoto get clear, it

it

My

ciated.

Mr. Corcoran. Senator,

my

client was associated with a proposal to

I didn't think were good. That is

buy or not buy some bonds that

If I were going into a general representation of a client,

would be very, very careful about the client hiinself unless, as has
been the case in many a situation, I was to act "in rem," or I was put

the answer.
I

in to straighten a situation out.

Senator Bridges. Assume, today, Mr. Corcoran, that the A. B. C.

firm approached you, of lawyers whom you believe to be reputable,
and they asked you to become associated with them on a certain
case involving high governmental officials here in Washington on
311932 42 pt. 10
11

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3884

the one hand and perhaps some private concern on the other, regardless of the reputation of the private concern or regardless of
their past or their actions in the past or regardless of their association with the high Government officials, as long as you had conjfidence in that firm that asked you to be associated with them, that
would be your determining factor, would it?
]Mr. Corcoran. Well, Senator, remember the beginning of the sentence you said, "If you are retained to represent this corporation
in matters before high Govermnent officials." Please understand that
so far as this Savannah Shipyards situation we are talking about is
concerned, this was a closet job between two lawyers, sittin<^ down and
working over the words of a statute and the application of the words
of the statute to the construction of a shipyard. I think you will find,
Senator, in this situation no contact with any Government officials.
Possibly, Senator, I didn't follow the sentence. If so, I am very

sorrj'.

Senator Bridges. Xo but I asked you if, today, you were solicited
by a firm of attorneys in Washington, New York, or anywhere else,
to be associated with them representing, we will say, a private
business or a private corporation, that the question of whether or
not you believed in the reputation and integrity of the firm
Mr. Corcoran (interposing). Certainly I can answer that question.
;

Certainly, Senator.
Senator Bridges. That would make no difference the reputation
or the action of the private corporation.
Mr. Corcoran. Oh, it would make all the difference in the world.
Senator.
Senator Brewster. Mr. Corcoran, you have emphasized a great deal
that this M'as a closet job. I should say, as consulting counsel.

Mr. Corcoran. That is right.

Senator Brewster. Do you have the impression that Mr. Cohen
sought you out in the first instance because you were an authority in
the field of municipal finance ?
Mr. Corcoran. I don't know what
Senator Brewster (interposing). Did vou have a great reputation
in that field?
Mr. Corcoran. No, Senator. I think this is probably what happened. I think probably he had gotten conflicting opinions on that
business from several lawyers and that he was very much puzzled
about what he had to do, and he was up against a deadline where he
had to decide his course the next morning. But no matter what he
may have had in the back of his mind, I didn't take the business.
Senator.
Senator Brewster. You took the $5,000.
Mr. Corcoran. I didn't take his business. I didn't take his $5,000,
either.

Senator Brewster. Where did it come from ?

Mr. Corcoran. I don't know where it came from.
Senator Brewster. Do you think Dempsey & Koplovitz were just
doing this as a charitable thing
Mr. Corcoran. I think this is probably what happened. Mr. Cohen
came to me and I said, "I can't take the business.' I did not reflect
on Mv. Cohen wlien I said that; I knew nothing about Mr. Cohen
i

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3885

at that time all of the talk about Mr. Cohen is something that has
followed since. When I said to Mr. Cohen, "I can't take the business.
I am sorry,*' my easy answer was that I had another client interested
"Well," he said, "is there anybody else to whom you
in shipyards.
can refer me?"
;

him

somebody else.
somebody else has gone into the situation,
has decided that he wants to take the client, and finds himself in conThen that lawyer comes to me.
flict with the opinion of other lawyers.
Senator Brewster. I think it is clear from there on as to what
happens. Do you refer in your statements otherwise to the Empire
Ordnance affairs ?
Mr. Corcoran, Oh, yes; all through here.
Senator Brewster. I mean subsequent to Avhat you have said so
I referred

week or

to

so later, that

far.

Mr. Corcoran. No,

Senator Brewster. You have concluded your statement on that
phase ?
Mr. Corcoran. That is right.
Senator Brewster. Are you familiar with what are alleged to be
delays in the functioning of the Empire Ordnance Co.?
Mr. Corcoran. No, Senator; I am not.
Senator Brewster. That they greatly hampered, supposedly
Mr. Corcoran (interposing). Those are things I don't know.
Senator Brewstt<:r. The war effort. You have no knowledge of
that?

Mr. Corcoran. No.

The Chairman. Did Senator Willis want to ask a question?
Senator Raymond E. Willis (Indiana). No.
Senator Bridges. I want to ask one more question. I want to make
it clear, because there have been various reports made about it.
Did
the firm of Dempsey & Koplovitz whatever the name is call you.
Mr. Corcoran, or did you call them in and become associated with
them? Who took the initiative?

Mr, Corcoran. They called me in.

The Chairman. Proceed with your statement, Mr. Corcoran.
Mr. Corcoran. Any more questions?
Senator Mead. Mr. Chairman, I am not very familiar with the Savannah project or with the Empire Ordnance Co. I just about know
geographically where they are located. But I would like to find out
if this Savannah plant has been constructed,
Mr. Corcoran. Yes.
Senator Mead. I believe you said there wasn't a dollar of Govern-

ment money

in the construction.

Mr, Corcoran. That is right.

Senator Mead. So that we haven't lost anything to date.
Mr, Corcoran. No.
Senator Mead. Now have they a contract, and if so, from whom?
Mr. Corcoran. They have a contract, as I understand it, from the
Maritime Commission, a contract granted only about 2' weeks ago.
Senator Mead. And what type of contract is it ?
Mr. Corcoran. For the Liberty ship.
Senator Mead. For the Liberty ship. Similar to contracts that have
been awarded to other shipyards for the same type of ship ?

3886

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Corcoran. I should think a much more difficult contract than

has been awarded to other shipyards.
Senator Mead. More difficult?
Mr. Corcoran. Very frankly, I will tell you, from my little business
judgment and from what I know of the shipyard business, I think
only a very courageous man would have accepted the contract in the
terms the Maritime Commission put it up to the Savannah Shipyards.
Senator Mead. Then you would say it is a tighter contract?
Mr. Corcoran. Very much tighter.
Senator Mead. Mr. Chairman, I presume the committee could ascertain for the record the difference between the contract awarded in this
instance and other contracts awarded along the same general plan.
The Chairman. We will instruct the counselor to get that information and make it a part of the record.
Mr. Corcoran. Understanding, of course. Senator, for the record,
that I had no part in the slightest in the relations leading to that
contract.
it would be well to establish the type of conawarded in this instance, because of the prominence given to the
Savannah shipyards and, Mr. Chairman, perhaps the counsel for the
committee would have some information or he could get some in-

Senator Mead. I think

tract

formation.

Mr. Fulton. That contract has been a matter of investigation by the

committee, and I think that Mr. Corcoran is right in saying that it is
somewhat tighter than the ordinary one, partly because in April I had
told the Maritime Commission, on behalf of the committee, not that
they should or should not grant a contract but that they should be
exceedingly careful in granting it to make sure that they protected
the interests of the Government, and they told me that, because of that,
they took especial
Senator Connallt (interposing) The Maritime Commission is supposed to do that without any instructions.
Mr. Fulton. The reason, Senator Connally, was the fact that I
had some familiarity with Mr. Cohen.
Senator Herring. Wliat business is that of ours ? It is none of our
.

business.

Senator Connally. I don't think you have any right

Senator Herring (interposing). The Maritime Commission can run
their business without any instructions from this committee.
Senator Connally. You went down and told them they should be
exceedingly careful. I didn't know that counsel for this committee was
running all the departments. I think that we had better go on with
this witness and hear the counsel later.
The Chairman. That is what we propose to do, Senator, if you will
give us a chance.
I thought Senator

Senator Herring.

Herring said something.

has nothing to do with the testimony of

It

this

witness.

The Chairman. Not

at

all.

Senator Mead. Mr. Chaii-man, as a member of this committee, I

want inserted in the record the information tluit I have just requested,
and that is the type of contract awai-ded to the Savannah shipyard.
The Chairman. That will be carried out.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAA-I

3887

Senator Mead. I don't care for the moment whether it interferes

with the routine that is in the mind of any other member of the committee or not. I jiist want to ask for that and have that inserted in the
record for

my own

benefit.

Along the same line, Mr. Chairman, I want to know if this other
company that has been mentioned I only know of its geographical
location the Empire Ordnance Co. have a contract with the Army
or the Navy or any other Government agency.

Mr. Corcoran. I don't know. If they have a contract it is a very

unimportant contract. The contracts of the Empire Ordnance Co.,
I understand and I only know this by hearsay; it is none of my
business are with the British Government.
Senator Mead. With what?
Mr. Corcoran. With the British Government.
The Chairman. We will get that information for you, Senator.
Mr. Corcoran. That is what "Empire" stands for in the na,me of

the corporation.

important, in view of the prominence given

we know something about the contracts that
have been awarded them, and the information I now have, which is
very helpful to me, is that the Savannah shipyard, which was built
without Government funds, has a contract from the Maritime Commission. The type of contract will be explained in the record later
on. I learn that the Empire Ordnance Co. has a contract with the
British Government.
Mr. Corcoran. That is all I know about it.
Senator Mead. I see.
Mr. Corcoran. There may be some small straggling contracts on
the side, but I understand and the only reason I have any infonnation is my inqur}- into what the West suit was about that Empire
Ordnance has no contracts with the United States Government.

Senator Mead. It

these

two

is

projects, that

Senator Mead. In both,

cases,

however, this Government hasn't

any money out of it.

Mr. Corcoran. This Government hasn't lost any money I haven't
any percentage fee I haven't any brokerage fee. I have a $5,000 incidental fee for backing another laAvyer up in a ticklish question about
lost

municipal bonds.
Senator Brewster. You don't mean to intimate that the British
contract with Empire Ordnance is not substantial.
Mr. Corcoran. I don't know.
Senator Brewster. I didn't want to leave that impression. Do you
know whether or not the United States Government is furnishing
the funds for that?
Mr. Corcoran. I don't know anything about it.
Senator Brewster. Wouldn't it be fair to assume that we were ?
Mr. Corcoran. I don't know. Those contracts, I would guess, were
pretty old contracts.

Senator Brewster. Yes.

British

Aren't we substantially financing the

now?

Mr. Corcoran. I don't know whether you are financing the British
on their contracts that were let a couple of years ago.
Senator Brewster. I think, in that light, it might be well for you
to verify whether or not it is correct that they have delivered less

3888

INVESTIGATION OF THE NATIONAL DEFENSE PRO'GRAM

than one-fifth of the gun mounts, recoils, and guns they were scheduled to deliver to the Pressed Steel Co. and the Pullman Co. That
was a statement which I received.
Mr. Corcoran. I don't know anything about those matters.
Senator Connally. The point I am making is that this doesn't
relate to the witness's testimony.

The Chairman. Proceed, Mr. Corcoran, with your statement.

Mr. Corcoran. I think there are other people
Senator Connally (interposing). Wait a minute, Mr. Chairman.
I want to ask the witness some questions before he leaves this.
The Chairman. Fire away.
Senator Connally. Mr. Corcoran, I wasn't here in the first part of
your statement. Do I understand you now to say that your only connection was with some particular proposed transaction about the purchase of municipal bonds by this shipyard ?
Mr. Corcoran. That is right, Senator.
Senator Connaix>y. Did vou represent them in anv other matter at
all?

Mr. Corcoran. No.

Senator Connally. Did you get this contract with the Maritime
Commission?
Mr. Corcoran. No.
Senator Connally. You had nothing to do with that ?
Mr. Corcoran. No.
Senator Connally. You had been, I assume from the press, an
attorney for the R. F. C. for a number of years.
Mr. Corcoran. For nearly 8 years.
Senator Connally. Well, did the functions of the R. F. C. include
the passing upon securities of various kinds State and municipal?
ISir. Corcoran. Yes, sir.
Senator Connally. Did you recommend that they buy these bonds?

Mr. Corcoran. No.

Senator Connally. You recommended that they didn't?
Mr. Corcoran. That is right.
Senator Connally. So they still have their money.
Mr. Corcoran. That is right.
Senator Connally. Is that what your testimony covers here?
haven't been here

all

the time.

Mr. Corcoran. That is right.

Senator Connally. Is that all of it on this point?
Mr. Corcoran. That is right, sir.
Senator Connally. That is all.
The Chairman. Proceed, Mr. Corcoran.
Senator Bridges. Just one more question, now, along that line. I
asked some questions here, Mr. Corcoran, as to your knowledge of the
Cohen interests, and I think that you developed a line of thought in
testimony that you were confident in the fii-m of Dempsey & Koplovitz
that you were associated with, and therefore, you didn't look into it
further

somet hing to that

earlier in

effect.

your testimony you

But

testified

is it not true, or is it true, that

here today that you recommended

Koploviz to Cohen?
Mr. Corcoran. Cohen asked me to recommend some expert in Washington on municipal l)onds and I told him the best man in town was
Mr. Koplovitz.

INVESTIGATION OF THE NATIONAL DEFENSE PROGTIAM

3889

Senator Bridges. Doesn't that make your testimony here, of not

interests, and so forth, a little ambiguous, to say

knowing the Cohen

the least ?

Mr. Corcoran. No.

A man comes in to me

I can't take your business." He says,

And I pick him the best lawyer in

say, "I am sorry

of a good lawyer ?"

and I

"Do you know

town for the specific purpose he

has in mind.
Senator Bridges. Then this law firm comes back and retains you
after you have recommended them.
Mr. Corcoran. The law firm comes back and retains me to back them
up on an opinion on which many other lawyers differ with them.
Senator Bridges. Indirectly, then, although you told him you could
not represent him at first, by a backhanded method, you finally did
represent him.
Mr. Corcoran. No I am not representing him, Senator.
Senator Bridges. You are passing on the case which you refused to
pass on at first, aren't you?
Mr. Corcoran. No; I am simply corroborating another lawyer's
opinion. The lawyer hires me not Mr. Cohen.
Senator Bridges. Yes; but at first, Cohen approached you. You
refused to take the case.
Mr. Corcoran. That is right.
Senator Bridges. You recommended Koplovitz?
Mr. Corcoran. That is right.
Senator Bridges. Then after Koplovitz got the case upon your
recommendation, he turns around and employs you.
Mr. Corcoran. Senator, that is 3 weeks later.
Senator Bridges. But the facts are that he employed you on the
;

and recommended him for.

Mr. Corcoran. That is right.
Senator Brewster. Mr. Corcoran, you said that you determined very
definitely, without consulting the Maritime Commission, that the seaotter type would not go.
Mr. Corcoran. That Cohen shouldn't try to build it that is right.
Senator Brewster. Who were some of the authorities you determined that from ?
Mr. Corcoran. Very frankly, I talked when I said the sea-otter
type would not go, it represented the judgment of shipbuilders that
case which you refused

the sea otter^

Senator Brewster (interposing). That is what I am asking.

Mr. Corcoran. I talked to Todd shipyards.
Senator Brewster. To some of their ship experts ?
Mr. Corcoran. Yes.
Senator Brewster. Did you talk with Newell ?
Mr. Corcoran. No; I know Newell well, but I talked to Reilly
I didn't talk to Newell. Newell is head of the yard up in Portland,
where you are acquainted. I think that judgment has been corroboratecl; I don't know.
Not that there is anything wrong with the
I think it is a brilliant idea.
Wliat I asked some of my
sea otter.
other shipbuilding friends and I know a great many of them. Senator was for their judgment as to whether a new man in the shipbuilding field ought to put his cards, commercially, on the sea otter
or on something else. That is all.

3890

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. Proceed with your statement.

Senator Connally. One question in connection with what Senator
Bridges brought out. You say this man Cohen approached you first?
Mr. Corcoran. That is right, Senator.
Senator Connally. And you declined ?
Mr. Corcoran. That is right.
Senator Connally. Why ?
Mr. Corcoran. Because, first of all, I couldn't take the business.
I had too much to do at that particular moment. And, secondly, because, as I have explained very carefully to the committee, I had conflicting interests on anything that related to shipyards.
I wasn't able
even to come in and help on this narrow question of municipal bonds,
until I had expressly cleared my professional relations up in New York.
Senator Connally. That is why I asked you. The first approach
was for general representation, was it?
Mr. Corcoran, No the problem was on these bonds.
Senator Connally. This bond problem ?
Mr. Corcoran. This problem about the bonds.
Senator Connally. Well, did you have any reason other than your
engagements with other people ?
Mr. Corcoran. I would have had to have looked into the whole
history of the man and the enterprise and find out what it was about.
Senator Connally. I mean was there anj^thing at the moment that
made you think that it would have been improper to have taken employment if you could have done so consistently with your duties to
;

other clients ?

Mr. Corcoran. There was nothing at the moment, but I didn't have
make the decision, because I couldn't take the business anyway.
Senator Bridges. You did take it later, didn't you, Mr. Corcoran?
Mr. Corcoran. No; I didn't take that business. Senator. I took
some other business.
Senator Ball. Mr. Corcoran, can you tell us approximately how
many days you put in on that Savannah shipyard ?
Mr. Corcoran. On this business?
to

Senator Ball. Yes.

Mr. Corcoran. The problem involved not only a decision on the

municipal bond purchase but also of finding a way how the negotiations which had gone on in the municipal bond business could be terminated without too bad a breach of personal feelings. I should say
probably we worked on the problem off and on for about a month.
When you consider charges on these things, you always want to remember that in computing what you charge, you always compute what
is coming out of it net; that is, after taxes and expenses.
I don't
think I have ever worked on anything for less than $5,000 because

very frankly I can't afford to.

Senator I3all. You didn't do quite that well in the Government,
did you?
Mr. Corcoran. What?
Senator Ball. You didn't do quite that Avell in the Government,
did you?
Mr. Corcoran. The xnen who didn't go into the Government at the
time I went into the Government have, I am sure, over the course of


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3891

the 10 years I have been in the Government, made much more than
I have.
Senator Connally. Mr. Chairman, I would like to ask him a question about this matter.
The Chairman. Proceed, Senator.
Senator Connally. How much was involved in the purchase?
Mr. Corcoran. Two and a half minimum, five million maximum.
Senator.
Senator Connally. The bonds, I mean.
Mr. Corcoran. That is right, of the bonds.

Senator Connally. You got five thousand ?

Mr. Corcoran. That is right.
Senator Connally. For a fee?
Mr. Corcoran. That is right.
Senator Connally. Do you have any recognized schedule of fees,
percentages, when they pass on these bonds?
Mr. Corcoran. I don't know, Senator.
Senator Connally. You don't know? You just figured that
$5,000 would be a fair fee ?
Mr. Corcoran. This was a more complicated problem than the mere
passage on the bond issue. It was a problem not only of whether the
bond issue was good or bad it was a problem of getting unentangled
from relationships that had been created on the assumption that the
bond issue would be good.
Senator Connally. That is all.
Senator Bridges. Mr. Corcoran, what was the fee that Dempsey &
Koplovitz charged?
Mr. Corcoran. I don't know. Senator.
Senator Bridges. You didn't discuss with them what they were
charging for this thing?
Mr. Corcx)ran. No.
Senator Bridges. Let me ask you again if what happened wasn't
exactly what we have outlined here, that you, having first contacted,
or Cohen contacted you for some reason which you have not disclosed, at least I haven't heard it, refused to represent Cohen directly,
but you represented Koplovitz & Dempsey for obvious reasons, and
you said that the reason you were recommending Koplovitz was that
he was an expert on bond financing, and then they turn around
Mr. Corcor^vn (interposing). That can be objectively determined
what I have told you about Koplovitz.
Senator Bridges. All right.
Then they turned around and employed you as associate counsel for advice on a bond which you
recommended Koplovitz as an expert on, to determine a case which
you refused at first. Isn't that true ?
Mr. Corcoran. That is true. Senator.
Senator Bridges. Then I can't understand your denying here
earlier it made no difference, or something to that effect, whom you
represented or anything about Cohen; that you were confident in
Dempsey & Koplovitz, and, therefore, you didn't take any particular
interest in the Cohen companies or Cohen associates.
I should think
that you wouldn't have wanted to have been connected in any way
;

with that

outfit.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3892

Mr. Corcoran. In the course of this last year, I suppose I have

turned away 10 times as much business as I have taken. In recognition of the confidence of the man who asked me to take his business,
and as token of jny thanks to him for tliinking of me, I have always
referred that man whose business I couldn't take to as outstanding
an expert as I knew in the problem that he was talking about.
Senator Brewster. And has the expert always reemployed you?
Mr. Corcoran. No, Senator.
Senator Brewster. That was what he did in this case.
Mr. Corcoran, No, Senator; it isn't true.
Senator Brewster. Yes; he did.
Mr. Corcoran. I say it is not true that the expert has always reemployed me.
Senator Brewster. But he did in this case.
Mr. Corcoran. But what we are talking about here is a very narrow
problem. We are talking about a transaction of buying some bonds
of a municipality in Georgia, and there is no evidence to counteract
in the slightest what I have told you; beyond that, nothing was
involved.

The Chairman. Proceed.

CONNECTION OF THOMAS

G.

CORCORAN WITH VIMALERT

CO.

Mr. Corcoran. Now, the next one involved is the Vimalert case.
This is the so-called junk-dealer case, and in connection with this case
I have been accused, or at least the story is told to support an inference that I solicited a contract for defense supplies from the United
States Army on behalf of a small engine manufacturer, the Vimalert
Co. of

New

Jersey.

in this case was that I managed by negotiation to reduce an $8,000,000 order of the British Purchasing Commission to a $1,000,000 order with satisfaction to all parties and
that is not the way a percentage broker operates.
The important fact in the case is the letter of intent dated December
30, 1940, sent to this company by the British Purchasing Commission,
and although the photostat was procured in such a hurry that it is
not a good photostat, I have given this letter to you in photostatic
form and there is the contract right before you.
You notice this letter of intent of the British Purchasing Commission authorizes the company to proceed with an order for the manufacture of a thousand tank engines at a cost-plus price not exceeding
$8,000,000, and provided for the drafting of a formal contract in due
In other- words, the solicitation of this order had been comcourse.
pletely negotiated between the British and Vimalert prior to the date

In

fact,

what happened

of the letter,
( The letter of intent referred to was marked "Exhibit No. 340" and
included in the appendix on p, 4227.)
Mr. Corcoran, Now, I was not retained to represent the seller in
this matter until January 4, 1941,
I had not participated in or even
known of the negotiations which had already crystallized, and my
task was to represent that seller in working out the numerous details
wliich obviously would have to be covered in the fonnal contract.
Technically, "the preparation of this $8,000,000 contract for a small
manufacturer with limited working capital on a cost-plus basis and
with a guaranteed maximum, with costs rising, presented the probability of very substantial difficulties.

is

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3893

The engine to be manufactured

so-called Nuffield Liberty, a British adaptation of the American World War Liberty engine, and the greater portion of the comThis was a very peculiar situation.

was the

ponent parts of the American Liberty engines were interchangeable,

with some machining, with parts specified for the Nuffield.
In the course of its operatitons the Vimalert Co. had acquired
from time to time over many years, by purchase, exchange, and otherwise, the largest stock in the country of unused Liberty engine parts,
which had been kept in first-class condition. This was an experiIt developed the mosquito-boat engine
mental engine company.
which is now manufactured under license by the Sterling Engine
Co., and the easiest material to work from always was the parts of
these Liberty motors.
In its search for war materials, the British, prior to the order
for the engines expressed in the letter of intent of December 30, had
bought sets of these parts from Vimalert for assembly in Nuffield
tank-engine plants in England, and the December 30 letter seems to
have represented a British decision that it was easier to utilize
Vimalert's parts by having that company build the entire Nuffield
engine around the parts in Vimalert's inventory than to ship the
Vimalert parts to England for incorporation in British-made engines
in British factories.
retainer I recommended that the client
Now, at the time of
also retain Mr. Stuart Guthrie to assist me, particularly in the drafting.
Mr. Guthrie was a very old and very dear friend of mine.
He was at that time living in New York. He is the individual with
whom I now share offices over in the Investment Building.
Senator Ball. Was he also formerly employed by the Government ?
Mr. Corcoran. Mr. Guthrie was at one time the counsel in charge
of self-liquidating contracts of the R. F. C. Then he was the public
utility counsel at the S. E. C.
Then he was general counsel of the
C. A. A., and before he left the Government, about the same time
I left the Government, he was not the adviser to the Under Secretary

my

of Commerce.
Senator Connallt. Mr. Chairman, may I ask a question?
is the purpose about recessing at 12 o'clock ?

The Chairman. The committee

will recess at 12 o'clock

What

and meet

again at 2 30.
Mr. Corcoran.
:

How much time does that give me ?

The Chairman. About 5 minutes. It is very close to
Suppose we recess now until 2 30, and you can proceed.
Mr. Corcoran. Or do you want to finish the Vimalert?
The Chairman. How long will that take ?
Mr. Corcoran. I don't know it depends on you.
The Chairman. We will recess until 2 30.

12 o'clock.

Mr. Corcoran. All

(Whereupon, at 12
of the same day.

right.
o'clock, the

committee recessed until 2: 30

p.

m.

afternoon session

(Whereupon, at the conclusion of the recess, the committee reconvened at 2 32 p. m.)

The Chairman. The committee will come to order. You proceed,
Mr. Corcoran, where we left off this morning.
:

3894

INVE.STIGATION OF

THE NATIONAL DEFENSE PROGRAM

Mr. Corcoran. All right, Senator.

We were on page 8 of the Vimalert statement, were we not?
The Chairman. That is right.
Mr. Corcoran. Shortly after the drafting started it became apparent
that the British were running short of American balances that is,
through the United States Treasury, in the application of American
balances to American materiel contracts and that difficulties would
be encountered in making the contemplated down payments which
the manufacturer needed for working capital and as insurance against

the possibility of a short war. The seller also encountered difficulties

in placing its contracts for materials.
Mi*. Guthrie and the officers of the company came to me for advice,
and in subsequent discussions I met and discussed with officials of
the British Purchasing Commission the financial problems created
by these situations.
After several weeks of discussions, cumulative disappointments
and urgencies on both sides created a situation in which both Mr.
Guthrie and I elected to withdraw from the case, and we so notified
the clients.
We were then urged both by the British, because of their pressing
need fof the engines, and by Vimalert, to reenter the situation and endeavor to work out a satisfactory solution of the many problems
involved. We were to be employed by the company, but in a general
way it was understood that we were to develop arrangements that
would be fair and equitable to both parties. In view of the British
participation in this request, we accepted a new proposal from
Vimalert, in which Vimalert gave us full authority to work out a
solution with the British, and agreed that for seeing the situation
through we could each be paid a flat fee of $25,000.
Extended discussions followed, and numerous drafts of a contract
were prepared. Many difficulties were settled. Some seemed almost
insurmountable. Eventually relations were worked back to the basis
on which the parties had successfully done business prior to the December 30 letter of intent that is, the purchase of parts as such,
rather than assembled engines.
In the intervening time the Lease-Lend Act was introduced and
eventually passed. Somewhere in those proceedings it developed that
instead of paying Vimalert out of British funds which it had been
expected would be released after the act, the British would be required by American Government policy to apply for the purchase of
the parts by the United States for the British account under the
Lend-Lease Act.
Accordingly, in the end, the British commission
filed requests asking the United States to purchase these parts for
them.
Despite the reluctance of Mr. Guthrie and myself to participate
in any transactions involving sales to the American Government, we
had
did not feel tliat this situation quite fell within that category.
not participated in soliciting anybod}^ to buy anything. At the express request of the officers of the British Purchasing Conunission we
had undertaken a difficult assignment on a sale that had already been
agreed upon before we ever heard of the case. The fact that because
of subsequent events over which we had no control the British were
required to ask the United States to buy the parts for them did

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3895

not seem to justify us in again withdrawing from the case and compelling the client, at that late day, to engage new counsel who were
AvhoUy unacquainted with the cause.
The prices settled upon with the British were comparable to the
prices at which they had previously purchased from this company
The British asked the Lencl-Lease Administration to purin 1940.
chase at these prices and certified the prices to the United States Ordnance Department as reasonable. But the United States Ordnance
Department differed with the British on the prices. After 2 months
of deadlock the matter was finally settled by the British getting authority from the American Government to utilize their own funds for
part of this purchase.
The order was thereupon split. The United States committed lendlease funds of an approximate total of $500,000 to pay for British
lend-lease requisitions for items whose aggregate cost Avas within the
United States Army's standard inventory valuations for such parts.
The British paid approximately the same amount out of their own
funds for the rest of the parts.
The entire negotiations took nearly a year.
There is a blueprint copy of that photostatic letter of intent on the
next page of the statement.^
The Chairman. Senator Ball, did you have any questions on this?
Senator Ball. Yes; I would like to ask some. You say that you
did Induce the total contracts from eight million to one million?

Mr. Corcoran. That is right.

Senator Ball. I take it for granted they didn't order 1.000 complete engines in the final analysis ?
Mr. Corcoran. Oh, no, they took the parts instead- of the engines.
Senator Ball. But not complete parts for a thousand engines?
Mr. Corcoran. I don't know. I should think probably the parts
were 65 percent of the parts for a thousand engines. What had happened was that the Liberty engine had been cut down to get it into

a tank which meant the bottom had to be shortened up and squeezed

up around the sides. The running paits of the engine were the same.
It was a matter of bringing the oil pan up around the sides and
shortening up the crankcase.
Senator Ball. They went on buying parts as they had oeen buying
them before ?

Mr. Corcoran. That is right.

Senator Ball. Except that they did part of it under lend-lease and
part with their own funds.
Mr. Corcoran. That is right.
Senator Baix,. As I understand, they bought with their own funds
those parts on which the prices were above the standard list.
Mr. Corcoran. That is right.
Senator Ball. Of the Army.
Mr. Corcoran. That is right.
Senator Ball. And, of course, that way the company had no assembly or any of that sort of expense.
Mr. Corcoran. That is right.
Senator Ball. AVhen was this final deal made splitting the purchase?
^

Previously entered as Exhibit

No

340, see appendix, p. 4227.

3896

INVESTIGATION OF THE NATIONAL DEFENSE PROORAM

Mr. Corcoran. I think it was along sometime at the beginning of

September.
Senator Ball. September? So you had worked oflf and on since
January on it.
Mr. Corcoran. Yes as a matter of fact, it wasn't completely tied up
until a few days ago.
Senator Ball. And your $25,000 fee was paid.
Mr. Corcorn. Oh, yes.
Senator Ball. You say here in one place that the British Purchasing
Commission asked you to get into this and you and Guthrie withdrew
once and then you got back in.
Mr. Corcoran. That is right.
Senator Ball. Had you ever represented the commission before on
;

any other work?

Mr. Corcoran. No.
Senator Ball. How many days would you say you put on this whole
thing?
Mr. Corcoran. I don't know. Senator it is very hard to tell ; it was
Sometimes you
off and on, off and on, over a long period of time.
would work 24 hours a day and 48 hours in a row and then the rest
of the week you have to wait for a board to act. I would like to put
in the recorcl, if I may, several letters, one a letter of May 15 from
Vimalert to the Chief of the Ordnance Department another a letter
of July 1 to the O. P. M., which at one stage had the power to pass on
One of the difficulties was that in the beginning of the
this contract.
lease-lend operation it wasn't clear who really did have authority to
work out these lease-lend purchases. Another one is a letter of July 8
to the Defense Aid Division in the Office of the Under Secretary of
War, and another to the assistant to the Under Secretary of War.
The Chairman. These letters will be made a part of the record.
(The letters referred to were marked "Exhibits Nos. 341 to 344"
and are included in the appendix on pp. 4227-4234.)
The Chairman. Was Mr. Guthrie also paid $25,000?
Mr. Corcoran. Yes, sir.
The Chairman. The attorneys' fee in this case then wound up at
about 5 percent of the total contract.
Mr. Corcoran. Well, I don't know. These things weren't figured
on a percentage basis.
Senator Ball. Fifty thousand is 5 percent.
Mr. Corcoran. Arithmetically that is right.
Senator Ball. O. K. That is all, Mr. Chairman.
The Chairman. Senator Hatch, did you have any questions?
Senator Hatch. No; I wasn't here this morning, Mr. Chairman,
and I very much object to a Senator's coming in at the last moment
and attempting to cover all the ground that has been covered. 1
am reading the testimony now, trying to catch up with it. I may
want to ask some questions after air.
Senator Brewster. The only question I had was about rumored
connections with the British before you became connected with tl^e
Vimalert.
Mr. Corcoran. No; I had no connection.
Senator Brewster. Had you any conversations with them?
Mr. Corcoran. No; T met the British in the course of the conversations representing Vimalert.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. But prior to Januarj^ 4, 1941, j^ou
versations of any character concerning this affair?

3897

had no con-

Mr. Corcoran. No.

Senator Brewster. With the British or anyone else?
Mr. Corcoran. No.
Senator Hatch. I do want to ask just a general question, Mr.
Corcoran. I have noticed already here, as far as I have read, referring to contract brokerage and things like that, and you mention
"influence" here, it is hard to define, and those things. I think we
both understand what each is talking about. What has been the
nature of your practice since you left the Government ? Has it been
as a lawyer?
Mr. Corcoran. Yes it has been as a lawyer.
Senator Hatch. Or broker?
Mr. Corcoran. No. As I think I have made clear to the committee
this morning, the only way I can answer that is to go through the facts
of each case.
Senator Hatch. That is right.
Mr. Corcoran. And I don't know what a broker is, either.
Senator Hatch. I could not be here this morning, as I say, and
I did want to hear your testimony very much, and I will wait and
let you develop it and then perhaps we will have some questions.
Senator Ball. Mr. Corcoran, in your preliminary statement you
said you had never dealt directly with procurement agencies. In
;

you state you originally came in to draft

the contract which had already been agreed upon, but later you
actually did negotiate the final contract for the Vimalert Co., the
revised contract?
Mr. Corcoran. I moved between both sides, between the British
and the Vimalert. Of course, the British passed that contract as
it had been negotiated between them and Vimalert.
Senator Ball. But you were actually representing Vimalert in
negotiating that final contract?
Mr. Corcoran. Well, with the British.
Senator Ball. And the Army?
Mr. Corcoran. Well, when it got to the Army it was the British
negotiating with the Army.
Senator Ball. Yes?
Mr. Corcoran. The British put their contract in the form of a
requisition from then on the British were negotiating with the Army.
Senator Ball. What I am getting at is in this final $1,000,000 contract you actually did the negotiating for the Vimalert Co. ?
Mr. Corcoran. Yes; after the British and Vimalert had agreed.
Senator Ball. And in this case your fee must necessarily have come
out of this million dollars.
Mr, Corcoran. Let me put it this way. The same price would
have been paid no matter what my fee was. The price was fixed by the
Army. Now, I don't deny that my fee came out of the company, what
the company got out of the contract, but I am saying the price to the
War Department and the price to the British would have been the same
whether the company had paid me or the company hadn't paid me.
Senator Ball. That is probably a true statement, but that is also
true of almost any negotiations, but nevertheless the final terms of the
contract quite often depend on the negotiator.
this case, I realize that

3898

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Corcoran. I am sorry, maybe you and I are trying to make different points. What I am trying to say is that what I took out of this
contract didn't increase the cost to the parties, either to the United
States or to the British.
Senator Ball. Oh, yes; that is true.

Mr. Corcoran. Magnesium is next.

The Chairman. Magnesium. Proceed.
CONNECTION OF THOMAS

G.

CORCORAN WITH HENRY

SYNDICATE

J.

KAISER MAGNESIUM

Mr. Corcoran. From January to June of this year I was employed

by a group which had become interested in a new process that they
thought would produce metallic magnesium at a new cost and of a
new high purity and desired to build an experimental reduction plant,
together with a fabricating plant large enough to handle its output.
The enterprise was undertaken as a joint venture by several interests,
one of which was the Todd Shipyards Corporation of New York. My
employment was for the latter company and its associates through at(As has been previously
torneys who regularly represented Todd.
testified by representatives of Todd Shipyards before this committee, I
have not been employed by this corporation in connection with its ship-

building contracts.)

The

significant fact about this venture is that the private parties bore
of the risks involved in constructing the first plant, at a cost of
upward of $3,500,000, which would prove or disprove the feasibility
of the process. If it worked the United States would have the jump
on the world in the production of this war time metal. If it failed
the entire loss would fall on the collateral the private parties deposited
with R. F. C. There was no commitment of any kind for defense
orders for the product.
Many defense plants and extensions are built at the risk of Government funds, either through a so-called Defense Plant contract or,
at an earlier stage, through a so-called Emergency Plant Facilities conThe construction of the test unit of this plant through this
ti'act.
unusual risk of })rivate funds was undertaken after a request for the
building of a plant under an Emergency Plant Facilities contract
under the management of the same syndicate had been refused by
the Govermnent. In that request I had no part.
As the plan for the use of private funds was worked out, the
long process of the organization of tlie venture included as two incidents two relationshii)s with the Government.
The first was the
issuance of a so-called cei-tificate of necessity. This is a privilege
to amortize the cost of the facilities for tax purposes OA'er a period
of 5 years. It is a privilege freely granted to any worth-while enterprise in the defense effort, particularly if the enterprise is risking
its own money in the new facilities.
The second relationshi|) with the Government was tlie obtaining
from the Reconstruction Finance Corporation of a fully collateralized
all

loan.

The loan was a consti'iiction fund loan, drawn down against construction as comi)leted. The counnitment was for $;5,500,0(K).
The security was an assignment of fees amounting to $4,800,000
payable by the British Government to the borrower, a California
shipbuilding corporation, the coi-poration's patents and a moi'tgage

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3899

on the plant. The loan was negotiated personally by Mr. Jones

with the chief parties in the syndicate, who had had other business
relations with R. F. C. long before the mattei-' of this loan ever came
up.

The

On

quality of the loan

February

is

by its subsequent history.

commitment of $3,500,000 was

attested to

21, 1941, the original

made.

On June 30, 19-11, the Reconstruction Finance Corporation increased the loan by $5,750,000 to double the size of the plant.
On November 10, 1941, the R. F. C. further increased its loan by
$12,500,000 to quadruple tlie size of the original plant, refunding the
earlier commitments of $3,500,000 and $5,750,000 in a single new loan
of $21,250,000.
I sat in conferences between the principals of the syndicate and
ISIr. Jones in the course of the negotiation of the first loan of
$3,500,000.

So far as it is charged that political influence or my influence,

rather than the quality of the loan, determined the granting of the
commitment for $3,500,000, I think the cold arithmetic of the subsequent history of the loan speaks for itself.
Neither the application for the certificate of necessity nor the
application for the loan to the R. F. C. constituted the difficult spots
of the enterprise in which many men spent time and energy and
imagination together.
The undertaking started from scratch. Far more difficult than the
relations with the Goverinnent were the acquisition of basic patents,
clearance of relations with inventors, organization of the engineering
force we had to send to Europe for one man the internal arrangements and relations between syndicate members, the adaptation of
the collateral to put it in form acceptable to the R. F. C, the obtaining of priorities on materials, and the plans- for commercial utilization of the patents.
This undertaking has been recognized as perhaps the most
significantly daring risk of private finids in the defense program.
I like to think I played some part in the decision to dare.
compensation was paid to me by the lawyers who retained me
to assist them and who were in turn paid by their own clients. No
part of their compensation nor my compensation for my services in
the enterprise was pa>d out of the proceeds of the loan from the
Reconstruction Finance Corporation, nor out of any other funds of
the applicant to the R. F. C, nor otherwise out of Government
funds.
The Chairman. Senator Herring, any questions?

My

Senator Herring. No,

ISIr.

Chairman.

The Chairman. Senator Ball?

Senator Ball. This is the Henry
Mr. Corcoran. That

is

J.

Kaiser Co. syndicate?

right.

Senator Ball. Who were the lawyers?

Corcoran. Fitzgerald, Stapleton & Malion, in New York.
Senator Ball. And they were attorneys for the syndicate?
Mr. Corcoran. Yes, sir.
Senator Ball. What was your fee on that?
Mr. Corcoran. To date, oii that I have had $65,000.
Senator Ball. And for that, what did you do for this firm of
lawyers ?
^Ir.

31193242 pt.

10

12

3900

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. CoRCX)RAN. I have done nothing for

had known them for a long, long while.

this firm of lawyers.

Senator Ball. I mean for that fee of $65,000; what services did

you render?
Mr. Corcoran. For that fee of $65,000 we started from scratch

to

organize this enterprise as a private venture after the application to

organize it as a public venture had failed. I worked in the entire
operation from the beginning of acquiring the patents right straight
down through. It was the kind of organization work I used to do
for a Wall Street banking house when there were enterprises and Wall
Street banking houses 15 years ago.
Senator Ball. Then you weren't concerned only with negotiating
this loan?
Mr. Corcoran. Oh, no the loan wasn't hard to negotiate, Senator,
because the loan was too well collateralized to be hard to negotiate.
Senator Ball. But they had been turned down once before by the
Emergency Plant Corporation.
Mr. Corcoran. No.
Senator Ball. I thought I read that in your statement.
Mr. Corcoran. What I meant was this. They had been turned
down going to the Government asking the Government to build a
plant for them.
Senator Ball. I see.
Mr. Corcoran. Which they would manage that is, a plant which
was to be built with Government funds.
The Chairman. On the same basis as the aluminum plants have
been built.
;

Mr. Corcoran. That

is right.

Senator Ball. Well, these lawyers were hired by the Todd Shipbuilding Co., or by the whole syndicate, this firm that hired you?
Mr. Corcoran. As I understand the situation. Senator, the syndicate arranged with Todd Shipyards to hire Todd Shipyards' lawyers
My relations were with the Todd
to be the syndicate's lawyers.
Shipyards' lawyers.
Senator Brfavster. That was the basis of the statement here of the
Todd people that they had never employed you.
Mr. Corcoran. I said they had never employed me with relation
The only relationship of employment
to any shipbuildmg contract.
that I have had with them, indirectly or directly, is in connection with
the magnesium enterprise.
Senator Brewster. That is the basis of their testimony before us,
that they had not retained you.
Mr. Corcoran. That is right.
Senator Ball. When were you retained on this?
Mr. Corcoran. Very early in January. I should say it wasn't
later than January 10.
Senator Ball. Then you are still on it, or when did you finish ?
Mr. Corcoran. No; after the first loan was finished, it was signed
about the middle of May, I loft the picture.
Senator Ball. Did you have anybody working with you on it?
Mr. Corcoran. No; I worked, as I testified earlier, in combination with these other law ofliccs. I worked in combination with that
office in New York, and there were four or five other lawyers in the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3901

company. There were also

lawyers representing the patent interests.
Senator Ball. But I mean for your personal fee of $65,000, did
that represent payment for your personal services or did you have a
staff working or partner?
Mr. CoRCX)RAN. No; I used the staff of the other people in New
York.
That is from January to May, approxiSenator Ball. I see.
mately, you say.
Mr. Corcoran. January to May; that is about right.
Senator Ball. You were never retained by Kaiser directly?
Mr. Corcoran. No.
Senator Ball. There was a story in News Week, I think, about
your having presented a bill to Kaiser for $34,000.
Mr. Corcoran. I shouldn't interrupt.
Senator Ball. That is all right. That is all I had to say.
Mr. Corcoran. I saw that story in News Week. I have never had
any direct financial relations with Mr. Kaiser.
Senator Ball. Did you represent any of the patent holders on
picture, too, lawyers representing the

this

magnesium process?

Mr. Corcoran. No; I represented the people who were trying to

buy the patents.
Senator Ball. Do you own any stock in this syndicate in Todd
Shipbuilding?
Mr. Corcoran. Not yet.
The Chairman. Do you expect to?
Mr. Corcoran. I hope to.
Senator Ball. Your fee is completely paid now ?
Mr. Corcoran. No; I don't think my fee is completely paid. I
have left the determination of my fee, as I always do in these cases,
to the lawyer who hires me.
So far I have been paid $65,000. I
don't know what his negotiations with the syndicate are.
Senator Ball, But you expect more fee?
Mr. Corcoran. I don't know. I know I had an understanding that
there was some stock coming to me. What his understandings are
upstairs, I don't know.
Senator Ball. Do you have any approximate amount, or anything?
Mr. Corcoran. No that was up to his adjustment.
Senator Ball. Well, your fee is sort of a side fee on this negotiation
arrangement for three and a half million in setting up this company.
The firm of lawyers which retained you as an associate presumably
charged the main fee and then paid you out of their fee, so that your
;

fee is only part of

what

it

cost them.

Mr. Corcoran. I assume so.

Senator Ball. You don't know what the total fee
Mr. Corcoran. No I don't.
Senator Hatch. Are you through, Senator Ball ?

is

Senator Ball. Yes.

QUESTION OF PROPRIETY OF FORMER GOVERNMENT EMPLOYEES PRACTICING

BEFORE GOVERNMENT DEPARTMENTS
Senator Hatch. Mr. Corcoran, I notice you were employed by the
lawyers for the Todd Shipbuilding Co.
Mr. Corcoran. That is right.


3902

INVESTIGATION OF THE NATIONAL DEFENSE* PROGRAM

Senator Hatch. And you had said that you had never represented
the shipbuildino- company in connection with any shipbuilding contracts that they had.

Mr. Corcoran. That

is

light.

Senator Hatch. I judge from that I am not familiar with it^

tliey had had shipbuilding contracts down there, had they?
Mr. Corcoran. I think that has been testified to before this cojnmittee.

Mr. Fulton. Several hundreds of millions.

Senator Hatch. Several hundreds of millions of dollars?
Mr. Fulton. Not connected with this transaction.
Senator Hatch. Not connected with this transaction, so it is perfectly evident that that concern and their lawyers knew their way
around Washington pretty well, didn't they?
Mr. Corcoran. I don't know about their lawyers knowing their way
around Washington. I would say the Todd Shipbuilding Corporation
had had plenty of contracts.
Senator Hatch. And plenty of experience down here in matters
before the Government agencies.

Mr. Corcoran. That

Senator Hatch.

is right.

You have

also said there were several other firms

of lawyers, I think, patent lawyers, and all those.
Mr. CoRC<)RAN. Patent lawyers.
Senator Hatch. And all those. That is a special field in itself,
patent law.
Mr. Corcoran. Yes.
Senator Hatch. You are not a specialist in that field?
Mr. Corcoran. No; I don't pretend to be a specialist in that field.
I pretend to know something about it, but I don't pretend to be a
specialist in

it.

Senator Hatch. What I am getting at, Mr. Corcoran, is just what

you were employed for and why you were paid $65,000?
Mr. Corcoran. I was paid. Senator, to work in the way you normally work in the organization of an enterprise in New York, to help
])ut the whole picture together and to be the lawyer who handled the
difficult problems arising in putting the thing together.
For instance, Ave had negotiations on patents; we had very difficult
negotiations on clearing the services of the inventor where there were
claims of other employment of him.
We had very difficult ])roblems in getting the engineering staff together and working on the contiacts whereby the engineering staff
was put together.

We

had veiy great difficulties trying to get the collateral cleared

such a way that it could be pledged. These fee contracts that were
pledged as collateral had to be reworked in such a way that the British
Purchasing Commission would consent to the assignment of the collateral.
When the problem of assigning the patents arose, we found
vei'V difficult pi()])l('nis of icstiicted use of the patents which had been
wi'ittcn into earlier patent licenses.
All of tiiosc problems had to be Avorked on by somebody who not
only could work on them but w ho could get them organized in time^
and I was practically the geiieial assistant to the men who were organin

izing the enterprise.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3903

The problem was not only legal, the proble,m was corporate. There
were very difficult problems of the interrelations between the syndicate
itself.
I remember I presented the plan of organization of the whole
thing to the Todd Shipyard board of directors.
Senator Hatch. I haven't any question about your ability, Mr.
Corcoran, in the services that you rendered. I am sure that you
worked hard on the job, as I think you do on all jobs, but I am tremendously interested in the whole problem of former Government officials appearing before departments of Government, and that is the
bigger thing. I am not asking about your personal relations, but
I want to know the answer to that problem, and may I ask this:
Was it because of your connegtion, your former connections with
the Government, that you were receiving these fees ?
Mr. Corcoran. No; it wasn't. I had known this particular law
firm, and I had known the people in charge of this shipyard corporaThey had known me when I was back in
tion for a very long while.
New York previously in an office whose business was the organization
of enterprises from the bottom up. In complicated problems of this
kind, the job is always much bigger than anybody dreams, and it is
also a job in which time is vital, because you have to hold a deal
together, and you have a great many people in the situation who will
stay together only if you can get something organized within a period
of time.
The deal will fall apart if you don't get it organized within
that period.
It is the kind of business that I had done for the Cotton & Franklin
office in New York as a bankers' lawyer for many years.
My employers
didn't need me for this Government business. As I say, all the principals in this syndicate were very well known to the Government.
Senator Hatch. That is the reason I asked the first question.
Mr. Corcoran. In this case they dealt personally with Mr. Jones'

on this loan.
Senator Hatch. But you were present with them ?
Mr. Corcoran. I was present, but they were present, too. I was
present to hear the conversation and to reorganize the deal in accordance with what I heard at the conversation.
Senator Hatch. And you tell us that it is your considered judgment that if you had never had any connection with the Government
you would still have been retained in this particular manner?
Mr. Corcoran. When you are saying "if I hadn't had any connection with the Government," what you are saying is "if I hadn't lived
for the last 10 years" that is a very, very difficult question to answer.
Senator Hatch. It is a difficult question.
Mr. Corcoran. Senator, how can you answer that question?
Senator Hatch. I thouglit you might have the answer, that you
might know tlie relationship so with these different people that you
would know whether or not they were employing you because of your
experience and perhaps your influence here with the Government in
Washington.
Mr. Corcoran. No; they may have employed me for experience,
but I hardly think they employed me for influence, because, as I say.
Senator Hatch, these people w^ho employed me knew the principals in
the Government better than I knew them. Each of these principals
had done business with the R. F. C. before.

3904

INVESTIGATION OF THE NATIONAL DEFENSE PROORAM

Senator Hatch. They had done business when you were with the
R. F. C?
Mr. Corcoran. But not with me. In no cases had I been involved
in any of the business they had previously done with them.
Senator Hatch. You liad had no contact with them ?
Mr. Corcoran. No.
The Chairman. Senator Brewster?
Senator Brewster. What were your duties at R. F. C. ?
Mr. Corcoran. Well, Senator, that is a long
Senator Brewster (interposing). I don't want you to take a great
deal of time.

Mr. Corcoran. That

is

a long problem.

I started in R. F. C. as a

counsel.

Senator Brewster. I want you to put it succinctly.

Mr. Corcoran. I started in R. F. C. as counsel away back in 1932
under the Republican administration. As time went on I was used
by the R. F. C. for special jobs the San Francisco bridge was my job;
the Chicago school teachers loan was my job; particular jobs, not administrative jobs, in which enormous sums were involved and somebody had to be sent out as a specialist to organize the job, just as in this
particular case I was sent out to organize the job. In the last few
years of the R. F. C, when it began to have power to work on utility
ref undings, I became in a certain sense the expert in that sort of thing.
Every one of them was a big job, and every one of them was in substance the kind of an organizing job that I went through in my training in a Wall Street office. That is the kind of job that you would
do in private practice. They were organizing jobs. You put a deal

together.

Senator Brewster. The thing to which I am addressing myself

that there has been a good deal of concern downtown in various departments about the energy with which you pressed the matters with which you were concerned, to the embarrassment of the
employees who in many instances had had close relations with you
is

before.

Mr. Corcoran. In the R. F. C. ?

Senator Brewster. No; I am speaking of all departments, that
you had a capacity which you very well phrased for "driving
through," but that your ability in that line was very much accelerated by reason of your previous association and that many of the
boys in the departments were very much embarrassed when Mr.
Thomas Corcoran called up with tlie same voice of authority with
which they had been familiar for the previous 7 years and said, "I
know that you can put this through, you always did it and you can
do it now." That is the criticism which I have heard very definitely, so that to the extent that the organizing of which you speak
concerned the approval by various Government departments and
officials, the approval of your proposals, it seemed to me you occupied
a very different position then, let us say, someone who had not had
your precise experience.
Mr. Corcoran. Well, Senator, may I answer that this way. We

now specifically about this magnesium situation?

Senator Brewster. Well, this applies to all.

are talking

INVESTIGATION OF THE NATIONAL DEFENSE PR0<3RAM

3905

Mr. Corcoran. Let's use it as an instance. There are two Governsituations here. There are two contacts with Government departments in which, along with other people, I participated in this
One of them was the problem of obtaining this very simple
loan.
amortization certificate. That took 10 days. The handling of the
R. F. C. loan to which you refer, where again I was only one of many
people involved, took 6 weeks. I don't think that is driving anything
through, particularly when you consider that we were dealing with
something that concerns the war.
Senator Brewster. I think that in things of the magnitude of which
you speak, 6 weeks is very short. We have had an aluminum contract
"that was still kicking around at the end of 4 months that lacked your

ment

precise drive.

Mr. Corcoran. Do you blame me or do you blame the people who

kicked it around for 4 months?
Senator Brewster. I am paying a tribute to the wisdom of retaining
you.

Mr. Corcoran. Thank you.

Senator Brewster. I shall come to other phases of that subsequently, so I wouldn't go too far.
Mr. Corcoran. I think, as I said this morning, the problem isn't
whether I work faster than other people; the problem is what the end
result is, whether this loan is a good loan or a bad loan if it is a bad
loan, whether it is a bad loan because of the speed, the comparative
speed with which you say it was put through. It was 6 weeks putting
the loan through, and the R. F. C. has quadrupled the loan since. I
think, unless something happens to change the prima facie assumption
from those facts, that it was a good loan, and therefore, if, to use
your own phrase, my presence accelerated things, it was all to the
;

good.
of the interesting things about this magnesium plant is that
first plant under the whole new development of this new
light-metal program to get into operation. It was the only new plant
with a new process which may cut the price in half to get into operation.
If I have sinned by getting a plant into operation under the defense
progi'am earlier than other people could get it into operation, it is a

One

it

was the

am very proud of.

Senator Ball. You got pretty well paid for it, too.
Mr. Corcoran. That goes with it.
Senator Brewster. As I understaiid it, your feeling is that you have
been continuing to render a patriotic service for the Government as
you did when you were employed by the Government.
Mr. Corcoran. I would have to leave that judgment to other people.
No man can judge himself on that.
Senator Brewster. I understood you Mere rather justifying your
activities on the ground that they had been profitable and advantageous to the Government rather than to your clients.
Mr. Corcoran. I think I can truly say that no operation I have
been engaged in has been disadvantageous to the Government. I don't
want to talk about achievement, but I should think from what you have
said that if I accelerated the putting of this plant into operation, that
possibly I was patriotic in this particular relationship with the
sin I

Government.

3906

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

yes.
The problem of retaining former
as expediters is an aspect of the situation which
does not seem to concern you.
Mr. Corcoran. Again, I say, if I may, that I think the problem is
whether the expedition was a good thing or a bad thing if I were employed as an expediter. You know, as members of this committee,
what the magnesium situation was like back in last January. You

Senator Brewster. Yes,

Government employees

know

it was one of the most critical shortages you had, and that by
action largely taken as* the result of the exposure of the situation by
this committee, there has been an attempt to increase enormously the
production of magnesium. I think this particular operation has been
proved to be one of the best to satisfy this need, and, as I say, I have
and of Mr. Jones,
confidence in the commercial wisdom of the R. F.
and when this loan with which you say you think I might not have
been connected or ought not have been connected is quadrupled within
the course of only a few months, then I can't feel ashamed of myself.
Senator Hatch. May I interrupt right there ? I started to a while
ago.

Mr. Corcoran. Yes, sir.

Senator Hatch. The fact of the loan doesn't mean that the original
investment is good by any means. I have seen bankers make a poor
loan and get so much money involved that they have to keep putting

money

in to save their first investment.

I don't

mean

to insinuate

that.

Mr. Corcoran. You mean Mr. Jones has made a poor investment
is throwing good money after bad ?

and

Senator Hatch. I say it very frequently is done. Just because the

loan was quadrupled doesn't mean the investment in the first place
was a good one.
Mr. Corcoran. In this case. Senator Hatch, there were two looks at
the investment. It was first doubled and later quadrupled, so at least
the purchaser had two chances to look at throwing his good money
after his bad money. Further, I understand, Senator, and because
I am not sure of my facts on this I am quoting them to you tentatively, that in the short period of 10 months from this first loan of
three and a half million to date, nearly two jniHion out of the original
four million eight has already been realized from the collateral and
applied against the loan. I may be wrong.
Senator Hatch. I hope that is correct.
Mr. Corcoran. In that case it was a very good loan.
Senator Bridges. Mr. Corcoran, you are sort of judged by your
own testimony here today, a sort of lawyer's lawyer. Is that right?
Mr. Corcoran. I would leave that characterization to you. Senator.
Senator Bridges. I mean by that, in the cases I have heard you
describe you haven't appeared for the client directly what you have
appeared for is the lawyer in each instance. What I am getting at
is, is that just a coincidence, or is that a plan of operation on your
part ?
Mr. Corcoran. I don't think inductively the assumption of facts
In some cases I have appeared for the client; in other
will hold up.
It has been a mixed situacases I haven't appeared for the client.
tion, and, therefore, I can't fall in either category.
:


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3907

Senator Bridges, Let me ask you, do you believe that if you hadn't
occupied the position close to the throne that you have occupied in
the last few years, that you would have been retained by these various firms and received $65,000 fees and a promise of stock?
Mr. Corcoran. First of all, may I enter a denial of any assumptions that I was ever close to any throne.
Taking that out of the question, I think that it may have occurred to
those who employed me that they were employing me for experience.
I have been very lucky in life. After I left the law school I was
Justice Holmes' secretary. For 5 years after that I was junior to
the man who I am sure was the ablest corporation lawyer ever
produced in New York; he was Mr. Cotton, who died down here
he was the Under Secretary of State trying to prevent the invaThen I was Eugene Meyer's junior; I was Mr.
sion of Manchukuo.
Harvey Couch's junior; I was Mr. Jesse Jones' junior; Mr. Stanley
It has been really a very lucky experience that I have
Reed's' junior.
had in the last 15 years, and it is entirely possible that the accumulation of that experience in which I have had purely educational opportunities not oiieied to other men may have been the inducement to

hire

me

for

my

experience.

Senator Bridges. If that conclusion of yours is correct, may I ask

you what percentage of your business has been either directly or
indirectly connected with the Government?
Mr. Corcoran. That is a very hard question to answer. Wlien you
say indirectlj^ connected with the Government, it is almost iinpossible
that any business of any magnitude today isn't somehow connected
with the Government.
Senator Bridges. Well, the particular case for which you were
employed had direct or indirect connection with some Government
agencies ?

Mr. Corcoran. I don't know, because I don't know of any way to

apportion what has direct relation to the Government and what hasn't
direct relation to the Government, for instance. If I should say to
you that I worked on the reorganization of a corporation which, as an
incident of that organization, had some antitrust operations to get
rid of certain contracts, I don't know Avhat proportion of that sort of
thing I allocate to Government and allocate to out of Gvernment.
Senator Bridges. You have certain Government connections. May
I ask you this question, Mr. Corcoran? Can you think of a single
instance since you have taken up the practice of law early in January
where you have had a case where you collected a fee from a client or
from lawyers representing a client that wasn't directly or indirectly
connected with the Goveinment ?
Mr. Corcoran. Yes, Senator. I don't choose to disclose my clients

Senator Bridges. I don't want you to.

Mr. Corcoran. But I have had, even, Senator, the tender problems
of domestic relations.
Senator Bridges. Your fees are slightly smaller on that, I presume?
Mr. Corcoran. Senator, don't ask me that question.
Senator Hatch. Seriously, Mr. Corcoran, I think what the Senator
Are your fees in connecis getting at is a perfectly proper question.

3908

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

tion with matters where you appear before agencies of the Government
materially larger than those in the private practice of law ?

Mr. Corcoran. No.

Senator Hatch. Is that what you were getting at ?
Senator Bridges. Yes.
Mr. Corcoran. Yon see, Senator, I am in the same position that you
are in as a lawyer. There are some cases completely unrelated to the
Government. There are other situations which do have connections
with the Government in which I simply charge nothing there has been
a great deal of that; you have done that as a lawyer many times.
There are other cases where the net result is that other people perfectly
;

legitimately make large sums of money as a result of their own risk

and their own daring and their own commercial judgment, with some
contribution from the experience which I am tible to contribute out
of that history that I have related to you. There I feel perfectly
justified, after agreement with them in which they feel that I am
I can say I have never charged
justified, in charging substantial fees.
a fee to a client that he didn't think was a fair amount to pay.
Now, don't ask me whojn I married and divorced, please.
Senator Connally. Mr. Corcoran, as I understand your testimony,
you say in this particular case you organized this corporation, this
private corporation ?
Mr. Corcoran. I worked in the organization of this private
corporation.
Senator Connally. Private corporation.

Mr. Corcoran. Yes, sir.

Senator Connally. Did the Government furnish any money to build
the plant or did they simply get a contract later on ?
Mr. Corcoran. No the company put up collateral, four million ei^ht
collateral, and the Government, the R. F. C, lent them three million
and a half on a construction fund loan drawn down as the construction
proceeded to build the plant. Then the Government, the R. F. C,
was so satisfied with what had happened, as I testified probably when
you were out of the room, that the loan was doubled and later quadrupled, long after I had left the situation.
Senator Connally. I am only concerned with what you did.
Mr. Corcoran. Yes, sir.
Senator Connally. You had nothing to do with getting the contract by the Government to buy the magnesium ?
Mr. Corcoran. No; I didn't. Senator, When I left the situation,
there was no contract to buy magnesium.
Senator Connally. So far as you are concerned, then, you had
nothing^to do with selling the pi-oduct to the Government?
Mr. Corcoran. That is right yon are correct. Senator.
Senator Connally. Now, a good deal has been said about Government employees, former Government employees, practicing before the
departments. According to my view, it is not so much as to what they
have been in the past it is the character of the service or the character
of what they do. I don't see ariy more harm in a former Government
employee if he acts properly and ethically appearing before Government departments than in a national committeeman from some State,
may])e not a lawyer at all, telling them where to head in.
;

The Chairman. Didn't the President make a ruling that the national
committeemen shouldn't practice before the departments?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator

Conn ally.

I don't

know whether he

3909'

did or not, but I don't

what authority the President would have to make any such ruling.
The Chairman. I think he did.
Senator Connally. Influence is improper anywhere, whether it is a
former employee or one who wants to be a Government employee or
see

official.

Mr. Corcoran. I completely agree with you. I think, as I have said

in other conversations with Senator Hatch before, and the Senator
and I had a great many discussions about the Hatch bill, the first

Hatch

bill

Senator Hatch. Yes.

Mr. Corcoran. And you will admit that I respected that act to the
pin point in leaving the service of the Government that I might not in
Senator Hatch has said to me
the slightest cross that legislation.
you can't legislate integrity and honor and judgment into a situation.
I think that on the subject we are talking about it depends completely
on what the former Government servant does. If he is cognizant of
what may honorably be expected of him he won't do anything that is
wrong, and, as a matter of fact, he will enormously help the problem
of Government by making it clear to his private client what the
Government likes and what the Government doesn't like.
Senator Connally. Let me ask you this question. Wouldn't a
high-class, ethical lawyer, instead of presuming to have influence \yith
former associates, if he had a proper standing, professional standing,
rather shun it? He would hesitate to approach somebody with whom
he had been associated with the assumption that he could influence
his actions.

Mr. Corcoran. Senator, I think you are right, and I think you will
I didn't want to talk about this because it might seem to be

find

Senator Connally (interposing). I am not making this personal

to you, but I am talking generally.
Mr. Corcoran. That is true. Senator.
Senator Connally. When I used to practice law we had certain
standards of ethics that made us lean back rather than run after
somebody.
Mr. Corcoran. That is why. Senator, if the subject
Senator Connally (interposing). The point I am making is, after
all, that it is the individual, it is up to him as to whether he is going
to be a crook or a high-class, straight lawyer. Isn't that true?
Mr. Corcoran. That is right. Senator. For instance, there are certain departments of this Government with the organization of which
I had something to do in the course of the legislation of the last few
years, in which many people would expect to find me if I didn't have
a sense of responsibility about those things.
The things I have worked
on have been hard things; they haven't been easy things, and they
have been hard things because I have felt, as you have felt, that I
should be very careful in my relationships with people whom I had

known.
Senator Connally. May I illustrate what I had in mind by an
incident that happened to me about 3 months ago. In a certain Federal district of Texas a man was under indictment.
lawyer breezed
up here, you know, to see me about this case. He said, "Senator, this
boy oughtn't to be prosecuted. He's a good fellow. He has a wife

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3910

and three children.

he did

What

he did was, he was maybe drunk

when

it."

I said,

"You ought to

beat the case."

They have the goods on us." He

case.
you recommended the appointment of the district attorney down there, and all you have got to do is call him up and tell
him you want this case dismissed and it will be dismissed." But did
I do that? I told him to get out of my office. The very fact that I
recommended the district attorney for appointment means he would
be the last man I would ever speak to. I wouldn't any more take up
a case with him and ask him to dismiss it or do anything about it than
I would fly. That ought to be. in a measure, the attitude of a Government official, at least with subordinates that he has had, if he had any,
in approaching them later to use his influence to try to get business
or to try to get a ruling. Is that your view ?
Mr. Corcoran. I completely agree with your view. Senator.
Senator Connally. Has your conduct been along those lines ?
Mr. Corcoran, I believe so, Senator,
Senator Hatch, May I make an observation? Mr. Corcoran, you
did correctly state our previous conversations, and I know you did,
just to a pin point, so far as my information goes, comply with the law
with which I had something to do. I have said in this committee
just recently that you can't legislate integrity and honor into people;
you can't do that. But we clon't make laws for the high-minded,
The laws against murder are not made to conethical, and the pure.
They have to be
vict or try the man who does not commit murder.
passed because of the minority, the few who do take advantage of situations, and do not act in that high-class, ethical manner in which
Senator Connally acted, and so far as I know you have acted, Mr.

He

said,

"We can't beat the

said, "Senator,

Corcoran. Again, I say this isn't personal at all. This is the broader
question that I am talking about. And I know this now I may get
personal I am quite sure, we will say, that you were using that extra
degree of care and caution in all your dealings with former associates
and being just as ethical as it is possible for a man to be. but you have
occupied a very high and responsible position in government, an unusual position, and I know a lot of these contractors, a lot of people
Avho are seeking to take advantage of the present situation to make
money for themselves, are dishonest I don't say they have done it,
but the danger is that a man of that type would say. "Here is this
former high Government official in private practice. I will go hire
him and get his influence," and see whether he gets it or not. That
thing goes out to the country, whether there is anything wrong or not,
and people are always prone to believe the worst of all of us who have
had anything to do with public life. That is the thing I am getting
I don't think there has been so much
at more than anything else.
wrongdoing. I rather think you would agree with me. If we went
out here somewhere and sat down we might work out all our sorrows.
Mr. Corcoran. It is because I comi)letely agree with you that I
have been so careful in this statement to list every single thing where
it might even be suspected that some contractor had aj^proached me.
I have turned away hundreds and hundreds of them.
One of the devices for a<!comp]ishing that was not having an easily ascertainable
office, because they always come well recommended.
I have carefully


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3911

details of everything that might be within a hundred

miles of that sort of thing in this statement, and laid it inductively
before yon.
As to the passage of a law, it isn't a matter which I feel affects me
personally because I have so many fields in which I can find an outlet
for energy that I don't feel locked up by any law. But I do hope
that in considering legislation you will remember one thing, and this
are going into a very curious
doesn't, as I say, apply to me.
period in which everything sooner or later will circulate around the
Government. Some of the forms of a restrictive statute which you
have heard suggested would mean that today any man who for patriotic
reasons went into the Government service would find himself, if he
ever tried to leave the service later on, practically unable to make
a livelihood. You take even the situation of your own counsel who
is connected with this committee and who has no relationship to Government departments, and yet he has been employed by the Government. I certainly shouldn't think you would want the kind of a
restrictive statute that would make it impossible for him, your counsel, who has been one of the most outstanding district attorneys in
the country (and a man only learns how to be a district attorney in
the Government service) for an indefinite period or even a long, fixed
period after that service never to be able to appear before the Department of Justice to defend anybody. I mean it is a matter. Senator,
in which you have got to be very careful or you will throw out the
baby with the bath.
Senator Hatch. I realize that full well. It could be carried to this
extreme, more than any you have given. In one particular form of
bill, which I haven't seen, but it has been suggested, if it were adopted
might even prevent a draftee in the service, who is an employee of
the Government in a sense, from securing a position after his period
of service in the Army is over. Of course, that would be ridiculous.
We do want whatever legislation we enact to be sane legislation and
not unreasonable. But it does seem to me the fact is proved by all
the regulations and rules and laws which have heretofore been passed.
Senator Brewster has a compilation of them here in the various
departments where these regulations are in force right now, many of
them very stringent ones.
Mr. CoRCOKAN. There is a very intelligent regulation in the Treas-

gone into the

We

ury Department.
Senator Hatch. There is one in the Treasury Department right
before me here now. There is one in the Labor Department, which
has recently been enacted, I think, or was that the National Labor
Relations Board. In fact, I guess there are a dozen of the departments that already have these rules in effect. But they don't relate
to all.
That is the trouble. A man in the Treasury Department
might be very influential in connection with other departments. He
could drop out of the Treasury Department and immediately pick
up his practice before some other department, using that influence he
had gained in the Treasury Department. I don't know whether that
is good or not.
I think there ought to be some general provision.
Mr. CoRcx)RAN. I think and it is only a very curbstone opinion
that you will find great difficulty if you go beyond limiting the relationship simply to a department with which people have been pre-

3912

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

viously connected. It is going to create a situation in which you may

go so far that you will make it very, very diflEicult for people either
to stay in Government or to come into Government, Senator.
Senator Hatch. I realize the difficulties in that legislation. I suppose we are getting beside the point of your testimony now that you
were covering, but it is involved, and that is a subject that I am interested in, and I think it is one that ought to concern us all.
Senator Brewster. As I understand from your colloquy with the
Senator from Texas you do recognize the impropriety, and you have
been scrupulously careful not to approach, in connection with your
dealings with the Government, either departments or officials with
whom you had previously been concerned. Is that correct?
Mr. Corcoran. Senator, there is always a very difficult balance
between relationships with people with whom you were previously

concerned
Senator Brewster (interposing). Can't you address yourself to

my

question ?

Mr. Corcoran. And, Senator, as a lawyer you will realize there come
times when, in fairness to your client, you can't help talking to such
people.

Senator Brewster. You intimated to Senator Hatch just now that

might be well to restrict the rule to departments with which you
had been previously associated.
Mr. Corcoran. That is right.
Senator Brewster. The particular case with which we are concerned, of course, involved an R. F. C. loan by whom you have been
employed for 7 years so that in that instance you were clearly going
against what you might recognize as a wise rule.
Mr. Corcoran. I think, as I answered Senator Hatch that I told
him I thought the wise* rule was really the Treasury rule; and the
Treasury rule, which has been in force for a great many years, particularly relating to all this business about taxation and the securing
of tax refunds, very carefully provides that no one can participate
in a situation in which he was involved while he was in the Treasury.
Senator Brewster. Could you name any department of the Government with which you had not had rather intimate connection iji the
past 8 years ?
Mr. Corcoran. I don't know what you mean by "intimate" dealings,
and this is a very big Government.
Senator Brewster. Well, weren't you rather the arm of the President?
Mr. Corcoran. Thank you for the compliment. I can't answer that.
Senator Brewster. I think it is a perfectly fair statement. Your
duties, I think, for 7 years have gone far outside the bounds of the
R. F. C. I think you don't need to be so modest as to Intimate that
they have not been widely recognized. You touched all the departments. Your young men were in practically every one of the departments of the Government your })rotcgvs, let us say, and they are still
there.
So that you have the nerve centers of the Goveinment inYou took them with j^ou when you left
stantly at your finger tips.
the Government employ, and I think it contributes very greatly to
your value in private practice. I am oure any yoiuig man would
be happy to approach the Government with your knowledge and background and jDrestige. You recognize that, do you not?
it

INVESTIGATION OF THE NATIONAL DEFENSE PROGKAM

3913

Mr. Corcoran. I have been very, very careful insofar as I possibly

could, consistent with the relationships to my clients and what I owed
them, that is, in fairness to them and thei/ relations to the Government, to stay as far away as possible from people with whom I might
be here felt to have intimate relations.
Senator Brewster. You are familiar with the various rules and
the statutes in the case of certain departments, evidently, applicable
in several departments I think six or seven departments a 2-year
rule, during which time you shouldn't be associated after you have

left that service.

may

be put in, I think it is quite carefully

really of extreme value in showing what is
the practice in the Government at this time. I don't think there is
any such rule in the K. F. C, is there ?
Mr. Corcoran. I don't think so. Senator.
The Chairman. This document will be placed in the record at this
point, and these four letters will be placed in the record at the place

Mr. Chairman,

if this

compiled, and I think

it is

where they were asked to be introduced.

(The document referred to was marked "Exhibit No. 345" and is
included in the appendix on p. 4236.)
Senator Connally. I would like to ask a question if Senator BrewSenator Brewster made some very wide statements
ster is tlirough.
about the propriety of a former Government employee practicing
before departments. Mr. Justice Hughes was rather highly regarded
in the United States as a lawyer.
Mr. Corcoran. There was no higher regard paid any lawyer in
the United States than Mr. Justice Hughes.
Senator Connally. You recall, though, that in 1920 when the Republicans were hard put to get a candidate, they induced Mr. Hughes
to resign from the Supreme Court and run for President of the United
States.

Mr. Corcoran. I remember, Senator.

The Chairman. 1916.
Senator Connally. 1916; yes. And do you remember that after he
got off the Supreme Court, he was before that Court in practically
every big, momentous case ?

Mr. Corcoran. I remember, when I was secretary to Justice Holmes,

It was one of
I used to go down to hear Hughes and Davis ^ argue.
the great shows of the time.
Senator Connally. John Davis had been Solicitor General, intimately associated with the Supieme Court. He quit. And then
when Judge Hughes quit, as you say, they conducted a feud over there
every time they had a case before the Supreme Court. Do you suppose that anybody could have employed Judge Hughes with the idea
that he had some influence with his associates ?
Mr. Corcoran. No. They may have employed him with the idea
that his associates had respect for his judgment.
Senator Connally. Anyway, he appeared in a great many cases.
I heard it stated over there that even in one case where he had
associate counsel (they always, or pretty often at least, let him do
the arguing), this counsel had to sit there with the brief in his hand
1 John W. Davis, of Davis, Polk, Wardwell, Gardiner & Reed,
nominee for the I'residency in 1924.

New York

City,

Democratic

3914

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

him what to argue, because he had so many cases he didn't

understand the case.
I have high regard for Judge Hughes, but in casting about, I would
suggest to the Senator from Maine that he think about Judge Hughes
awhile, take a large snuff of Judge Hughes' tobacco and put it in his
to tell

pipe and smoke

it.

That happened with regard to Judge Hughes. I think he made

a great judge, he was afterward appointed Chief Justice of the
Supreme Court, but those are facts. I have heard him make a good
many of those arguments, and they were good ones, too. I remember
he represented Mr. Newberry, of Michigan, and got him out from
prosecution before the Supreme Court of the United States while
he was off the bench, of course.
Senator Brewster. I attempted, I might say, to confine myself
rather precisely to what are the existing laws and regulations governing the practice before Government departments. Those had
been in effect for from 5 to 10 years under the present regime, in
whose wisdom I am sure the Senator from Texas will fully concur,
and the fact that those regulations and laws prevail and that their

is seriously considered to other departments seems to me

extremely pertinent in. the current case; and I gathered that your
colloquy with Mr. Corcoran addressed itself to the same considerations.
Whether or not Justice Hughes is an analogy, I think even
Mr. Corcoran modestly would hesitate to claim.
Senator Connally. I don't think Mr. Corcoran has any monopoly
on modesty.
You didn't represent the Passamaquoddy loan on the R. F. C,
did you?
Mr. Corcoran. I was just remotely connected with those negotiations, but they never eventuated. Senator.
Senator Connally. They never eventuated.
Senator Brewster. We got seven and a half million, Mr. Senator.
Senator Connally. Well, they didn't get as much as they wanted.
Mr. Corcoran. That was after I was out, Senator.
Senator Brewster. By request.
The Chairman. Senator Ball, did you have a question?
Senator Connally. I am not through.
The Chairman. I beg your pardon. Senator.
Senator Connally. Now, the Senator from Maine, Mr. Brewster,
said he supposed he had my agi'eement. He does have my agreement that any lawyer, whether we have a law or whether we haven't,
ought not, of course, to go to the department in connection with
any matter that he has had any contact with while a Government
officer any more than a judge should resign off the bench and take
the case of a litigant pending before him. So far, though, as just
saying a Government employee, because he has been a (iovernment
employee, shall not practice before any court or any Government
activities, I don't see why you shouldn't just chloroform the fonner
employees or devitalize them or do something to them, because a
lawyer without a case or without a client, isn't going to do very
much work very profitably.
I think whatever legislation you have, you ought to keep it within
the proper bounds, and a crooked lawyer is going to be crooked

extension

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3915

whether you have any law or not, and he is usually smart enough that
nobody is going to catch him. An honest and straight lawyer is
going to be straight, law or no law. Isn't that true ?
Mr. Corcoran. Senator, do you remember that in our Northern
States all law partnerships are normally constituted of a Republican
and a Democrat?
Senator Connally. I don't know that I understand that
theory
Senator

Hatch (interposing). I want a little explanation of that.

The Chairman. Let's have order.
Senator Connally. You startled me this morning by the size of
some of these fees. During the depression down in my State, two
of ny Texas lawyers met on the street one day. One of them said,

"How

is your firm getting along?"

"Oh," the other said, "we are doing pretty
$5 fees this week and several small ones."

I believe that

well.

We collected three

is all.

Senator Hatch. I don't want to let this pass without making the
observation that I think the practice of law in the courts of the land,
where everything is right out in the open and your adversary is present
and the judge is sitting up on the bench, is altogether different from
appearing before these departments down here, most of the time, in
an ex parte manner, sitting down across the desk and talking to the
administrator, who may have been your employee. I don't think
the analogy to Justice Hughes' practice fits these departments at all.
Senator Connally.
Senator Connally. That is perfectly all right with me.
The Chairman. Senator Ball, do you have a question ?
Senator Ball. Mr. Corcoran, I noted in your statement that this
original loan of three and a half million was committed at least on
February 21, that it was doubled then or increased by five and threequarter millions on June 30. You told me you worked until about
May on that case.
Mr. Corcoran. That is right.
Senator Ball. Were the negotiations for the increase under way
while you were there?
Mr. Corcoran. The necessary negotiations for the original loan
carried what Senator Brewster and I were taught to call an illusory
promise, that if the R. F. C. thought the venture was a good venture
in its own judgment, the people could plan for the second loan, but
there was no commitment of the R. F. C. The idea was there, but
they waited to see how the first loan came out before they applied
the procedure for the second one.
Senator Ball. You didn't participate, then, in any of the negotiations for the second one except that the idea was included in the
original

Mr. Corcoran. That

is

right.

Senator Ball. I notice you make quite a point of your statement

that this fee of yours is not paid out of this loan or otherwise out
of Government funds. Of course, technically, they wouldn't take
money out of the loan, but, as a matter of fact, won't all the magnesium they produce at this plant wind up eventually in defense
goods ?
811932 42pt. 10
13


3916

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Corcoran. I was very carefully paid not out of this plant at
The borrower in this case was a completely separate corporation,
with assets of its own. It was a California shipbuilding company.
It wasn't the Todd Shipyard Corporation at all.
Senator Ball. I don't get that. You mean the Todd Shipyards
paid your fee, but had nothing to do with the
Mr. Corcoran (interposing). The Todd Shipyards was a stockholder, along with many other syndicate members, in a subsidiary
corporation whose assets, of course, and whose liabilities were completely separated from Todd Pacific coast shipbuilding corporation
and it was the assets of that corporation and the obligations to that
corporation that were pledged to the loan.
Senator Ball. Yes; but in the long run, Todd is going to pay your
all.

what it gets out of this venture.

Mr. Corcoran. No; it pays my fee out of

fee out of

its

general assets, Sen-

ator.

Senator Ball. That is just a technical

Mr. Corcoran (interposing). Let me make

Each one of
it clear.
these shipyard corporations is separately organized. Each one of
them has its own separate corporation, its own separate contracts, its
own separate capital, and its own separate obligations. The only
relation of Todd Shipyards to it is that if there are dividends some
day, after all obligations have been met and all loans to the Government repaid, what equity there is over such obligations in the operati]ig funds is available for the declarations of dividends to the parent
corporations. This Todd California corporation is owned by seven
other corporations a syndicate.
Senator Ball. Yes; but no corporation ever pays out $65,000 without expecting to get something back.
Mr. Corcoran. AVhat Todd Shipyards hopes and what the syndicate hopes. Senator, is that this magnesium operation will be a very
pi'ofitable enterprise, not because of any contracts it has with the
Government, but because it has been smart enough to get the right
I^rocess and to get a commanding position in the market.
Senator Ball. Yon menticmed Todd Shipyards before. Is this
particular case your only connection with them?

Mr. Corcoran. That is right.

Senator Ball. Have you repi-esented them on any others ?
Mr. Corcoran. No; this is my only relationship with Todd.
Senator Ball. This is the one you referred to in your statement?
Mr. Corcoran. That is right.
The Chairman. Any other questions, gentlemen ?
Proceed to the next item, Mr. Corcoran.
Mr. Corcoran. The next item. Senator, is one which is a long
while in telling, but in which I acted merely in a friendly capacity to
Do you want to go through it?
a friend and took no fee at all.
The Chairman. I would rather 3'ou would proceed in order and
just take this brief as it is, so these gentlemen can ask any questions
they desire.
Senator Connally. Are you going on (omoiTOW, or are you going
to conclude today?
Tlie Chairman. We are going on tomorrow, hut we are trying to
get through with this witness this evening, and Mr. West will be the

tomorrow.
Senator Connally.

Avitness

He

got no fee.

don't

know about

this,

but

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

why

not

to this.

let hi.m

There

jump over

is

to

3917

China Defense Supplies and come back

a small fee in connection with that.

The Chairman. That

CONNECTION OF THOMAS

is all

G.

right.

We

will

come back

to that later.

CORCORAN WITH CHINA DEFENSE SUPPLIES, INC.

Mr. Corcoran. Early this year I was asked to do certain work for
the Chinese Government. Since then I have spent considerable time
and energy in assisting the representatives of China in this country
to forward China's heroic struggle to defeat Japan.
In spite of its
great shortage of defense materials, China has been fighting the fareastern partner of the Axis dictators for 41/2 years.
When the United States passed the Lend-Lease Act, it decided to
assist China's battle for the democracies by sending supplies to the
Chinese Army. These lend-lease supplies are all purchased directly
by the various procuring agencies of the United States Government
such as the Army and the Treasury and not by the Chinese.
My work for China consisted in the adjustment of relations between certain American corporations in the Far East, of advice as to
the selection of American personnel, and the appropriate organization
of Chiiui's business under the Lend-Lease Act. In this connection I
assisted in the corporate organization of the corporation knoAvn as the
China Defense Supplies, Inc., which supervises all lend-lease arrangements for China.
total compensation for this work Avas $5,000, which I received
early last spring. This did not come directly or indirectly from any
funds of the United States.

My

The Chairjian. Questions?

Senator Connally. No; I haven't any
Senator
Senator
Senator
Senator

Herring. No.
Ball. No.
Hatch. None.
Brewsteb. With

whom

questions.

does the China Defense Supplies,

Inc., deal?

Mr. Corcoran. They deal with the various procuring agencies of

the United States Government, such as the Army and the Treasurv^
All their supplies are bought by the Ti-easury and by the Army.
The only i-eason I have included this is that there has'^been a good
deal of \yhispering that somelioAv I must be getting a $5,000,000 cut
on supplies going to China. I have ncA'er received a cent. There is
no way to profit on the purchase of these supplies. They are bought
directly by the Army and Navy and then shipped direct.
Senator Brewster. And where did China Defense Supplies, Inc.,
get their capital ?
Mr. Corcoran. It was supplied, as I understand it, from Chinese
sources.
It is a very small capital, Senator.
It is a Delaware corporation.
Now shall we go to the Havenstrite matter ?
The Chairman. Yes. Proceed.

connection of THOMAS

G.

CORCORAN WITH HA\^NSTRITE OIL WELL IN

ALASKA

Mr. Corcoran. The so-called Havenstrite case is a case in which it

has been alleged that I "influenced" Secretary Ickes to make an unsuccessful attempt to "influence" Secretary Knox to take some undefined action against the public interest in relation to an oil well in
Many variations of the original story have been circulated,

Alaska.

INVESTIGATION OF THE NATIONAL DEFENSE PROGR.iM

3918
but

all

fee of

agree that

it

was a matter

in

which I asked and received no

any kind.

I should like to submit to the committee for incorporation in the

record, first, this examination of Secretary Ickes before the Subcommittee on the Interior Department of the Committee on Appropriations of the House on April 23 second, a public letter from Secretary
Ickes to the editor of the newspaper originating this Havenstrite
story, dated May 6, 1941 ; and an editorial from the same paper, dated
May 2, 1941, hereinafter quoted in full.
The Chairman. Was that the St. Louis Post-Dispatch ?
Mr. Corcoran. That was the Post-Dispatch in which the story
originally appeared and which retracted the story in this editorial,
copy of which I should like to put in the record.
In his letter Secretary Ickes states that the responsible chief of
the paper originating the story admitted to the Secretary that "he
was trying to get a story on Tom Corcoran."
The Chairman. They will be inserted in the record at this point.
(The documents referred to were marked "Exhibits Nos. 346 to
348." Exhibit No. 348 appears in full in the text on p. 3920.
Exhibits
Nos. 346 and 347 are included in the appendix on pp. 4238, 4243.)
Mr. CoRCX)RAN. This situation is understandable only in relation to
the magnesium enterprise which I have just discussed.
Havenstrite was the brother-in-law of the chief Washington engineering representative of the magnesium syndicate. For some
months I worked with this engineer in very close personal and
friendly relations. As we were working together, the engineer occasionally criticized Washington for what he termed a "run-around"
which the Government was giving his brother-in-law. And I still
felt a certain loyalty to the Government, and that sort of thing hurt
;

me.
Havenstrite, a Californian, a successful independent oilman in the
United States proper, had for some years been experimenting on the
side with a well in Alaska on which he was planning to suspend drilling during 1941. He had come to Washington early in the year to
attend to some legal details in connection with oil leases granted him
during the Hoover administration. He had thereupon been urged
both by the Alaskan Director of the Geological Survey and by the
admiral in charge of oil reserves in the Navy not to discontinue his

own drilling because the production of oil in Alaska, saving long

tanker hauls from California under war conditions, would be important to national defense. The reasons given were that (a) all
other competent organizations had already suspended drilling; (6)
only an organization already on the ground could complete drilling
within what was left of the short Alaska season (c) the Havenstrite
location, although completely upon private Interior leases and hundreds of miles from the Navy's oil reserves, was close to the Navy's
operating bases in Alaska; and (d) the Havenstrite operation was
the only practical prospect of getting petroleum production in Alaska
;

in 1941.

May

I put in the record a

map

of the location in close proximity

Kodiak base?
The Chairman. That will be made an exhibit.
(The map referred to was marked "Exhibit No. 349" and

to the

with the committee.)

is

on

file

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3919

feel that he wanted to invest

capital for the entire costs of continuing his venture, but it was
suggested that the Government might be able to assist him as a part
of the defense program. Havenstrite's complaint was that the Government had kept him waiting in Washington for weeks on end
without giving him a decisive answer as to whether it would help him
or would not help him, whether it wanted him to drill or not to drill.
He preferred to live in California.
With this story, which checked up later, Havenstrite came to me
late in April through my friend, his brother-in-law, not as a client,
but as a friend. Such talk as we had about fees was only my friendly
warning to him that he could not expect me (as many did expect me)
to follow up a gesture of friendship with free legal work.
I first saw Secretary Ickes alone to tell him of Havenstrite's problem and that I thought it was only fair that Havenstrite have a
decision one way or the other.
In that conversation, I pointed out
(a) If all the vague talk about Government help to Havenstrite
were brought down to earth, the only legally feasible chance to help
him was the very small chance that he could get an emergencyfacilities contract or a defense-plant contract with the approval of
the National Defense Council.
{b) If a problem so apparently local and specialized as oil in
Alaska came without preparation to the National Defense Council, it
would certainly be referred back to the Interior and the Navy for
advice, all of which routing around would take a great deal of redtape time in fairness to Havenstrite who had been waiting for weeks,
and in recognition of the short Alaska summer which waited for no
one, that delay should be avoided if possible by preconsideration by
the Interior.
(c) In fairness to the Secretaiy, I pointed out that his Department
would certainly be faced with two responsibilities: (1)
judgment
by the Geological Survey on the chances that the drilling would be
successful; (2) a retrading upward of the Interior's royalties if,
with Government financial help, Havenstrite made money in the
operation.
The Secretary agreed with my analysis and that Havenstrite ought
to have a decision; saw Havenstrite and myself together, heard
Havenstrite's story directly, and called Secretary Knox to say that
Secretary Ickes thought Secretary Knox should talk to Havenstrite.
Pursuant to this introduction, Havenstrite and I went to see Secretary Knox, who, during our conference, consulted the admiral with
whom Havenstrite had been holding conversations. Secretary Knox
then told Havenstrite that he was quite sure that the Navy wanted
and would contract for the petroleum products that might be developed by Havenstrite's drilling, but that he would like a letter from
the Secretarj' of the Interior assuming responsibility for the administrative and contractual problems because Interior leased lands
not
naval reserves were involved.
Havenstrite and I attended a large meeting with Secretary Ickes,
the Geological Survey chiefs, and Interior coimsel, relating to the
letter requested to be sent to Secretary Knox.
letter drafted by
the Department's lawyers was sent to Secretary Knox as Secretary

Mr. Corcoran. Havenstrite did not

new

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3920

Ickes wont away on a trip. The letter is set forth in the hearings
before the House Appropriations Committee, Subcommittee on the
Interior Department, April 2o, 1941, and is as follows [reading from
Exhibit No. 346]
:

to the problems raised by Mr. R. E.

Havenstrite's proposal for a Government loan to finance the drilling of a new
test well in the Iniskiu Peninsula area in Alaska held by him and his associates
under oil and jjas leases issued by this Department.
Insofar as these problems relate to the advisability of granting a loan, they
are not within the .iurisdiction of this Department, and it would be inappropriate
I would like to point out,
for me to express any opinion concerning them.
however, that the royalties to the United States in the present leases were fixed
at a specially low rate because the lessees were undertaking to explore the
Should it
oil and gas possibilities of this area at their own risk and expense.
be decided to advance Federal funds to finance the operations of these lessees,
I believe that the granting of a loan should be conditioned, among things, on an
upward revision of the royalty rates fixed in the leases. For this reason I
should be kept advised of further developments in this matter and be given an
opportunity to suggest what revision ought to be required in order to protect the
interest of the United States entrusted to this Department.

Sir

have given careful consideration

The next I knew there was public criticism of the relations between
Secretary Knox, Secretary Ickes, and myself in the House Appropriations Committee hearings above referred to and Havenstrite decided
that the matter was not worth waiting any longer for, and went back
to California.
I neither asked, received, nor expected an}^ compensation of any
kind from Havenstrite.
There was much talk at the time that Government drilling by the
Navy should be substituted for Haven.strite's private enterprise proNothing happened about this.
posal.
On December 10 the Office of the Petroleum Coordinator for National Defense issued the following statement
War conditions on the Pacific coast, the Coordinator has been advised, affect
tanker movements to the Pacific Northwest.
Washington, Oregon, and Alaska ordinarily are supplied with petroleum
products by Pacific coast tanker movement. Oil and gasoline are shipped to the
area from California by tank ship.
War conditions have created a problem of petroleum supply for the Pacific
Northwest imtil remedial measures can be put into effect.
It is of utmost importance that we take every possible a<'tion to use existing
supplies to best advantage.
We must obtain additional supplies by other
methods and involve whatever measures may be necessary.

The Havenstrite

story originated in the St. Louis Post-Dispatch.

in an editorial on May 2, 1941, which
The editorial read [readI have always considered closed the matter.
ing Exhibit No. 348]
It

was followed by a retraction

:

TEAPOT TEMPEST, Nar TEAPOT DOME

story of Secretary Ickes, "Tommy" Corcoran, and that Alaskan
deal has not yet been told, but, so far as the record goes, it seems
a tempest in a teapot instead of a new Teapot Dome.
The one reprehensible
thing sooms to be that the record was not at once made as complete as it
might have been.
The Post -Dispatch yesterday told how the Democratic majority of a House
appropriations subcommitteo, in the absenc(> of the Ke])ublican minority, struck
from the record Mr. Ickes' testimony about an effort of the Iniskin Refining
Co. to obtain a Government loan to develo]^ oil wells on a Federal reservation
in Alaska, and a contract for sale and storage of the oil, from the Navy

The whole

fiil-well

Department.

INVESTIGATION OF THE NATIONAL DEFENSE PROGBAM

3921

Thomas G. Corcoran, once the President's right-hand man, was counsel for
the company. According to Washington reports, he obtained the consideration
of Mr. Ickes for the plan, and the Secretary discussed it with Secretary of the
Navy Knox.
Now, whatever Mr.
he made it clear that

Ickes may have told Colonel Knox by word of mouth,

the only interest of his department in the proposal was
"I believe,"
in connection with the royalty rates paid to the Government.
Secretary Ickes wrote to Colonel Knox, "that the granting of a loan should be
conditioned, among other things, on an upward revision of the royalty rates
fixed in the leases."
This, apparently, was the fruition of Corcoran's effort on behalf of his client.
No doubt, Mr. Corcoran was readily able to get to Mr. Ickes and to other people
But there is nothing wrong in such a natural advantage so
in Washington.
long as it is not used to the public detriment.
Mr. Ickes himself has been one of the most outspoken critics of those who,
His zeal for the
in his belief, take unfair advantage of previous connections.
good name of his department is also well known. His efforts to keep the
Department clear of taint have led him to the very verge of espionage.
Whatever else may be said of the Secretary, his integrity as a public servant,
his interest in clean government, have never, during a long career, been called in
In this Alaskan oil matter, he may have shown bad judgment.
question.
However, there is so far, no apparent reason for suspecting disregard for his
liublic trust.

The Chairman. Senator Connally, any questions?

Senator Connally. You got no money, no fee?
Senator Herring. And got no oil ?
Mr. Corcoran. No.
The Chairman. Any further questions, Senator Connally?
Senator Connally. No; I am through.
The Chairman. Senator Ball?
Senator Ball. I would like to go into one or two other matters,
Mr. Corcoran. One is this Sterling Products, Inc., that we have read
You represented Sterling Proda lot about in this consent decree.
ucts, also, during the last year.
Mr. Corcoran. Senator, that isn't a defense matter. I have certain
confidential relations with my clients.
Very frankly, if this isn't a
matter of the kind that the committee generally is looking into, I
woidd prefer not to go into that matter. I have always made it very
clear that I was willing to talk about this with the Judiciary Committee or anyone else, but my own relationships with my clients are
such that I would rather not discuss them in connection with Empire
Ordnance, Savannah Shipyards, and a lot of other things, because the
public might get the impression that there was defense brokerage in
Sterling products.

Senator Ball. I think it ties up somewhat because the consent

decree dissolved contracts between these drug iSrms and I. G. Farben,
which is the German drug firm, giving certain groups of companies
the monopoly in this market and other companies the monopoly
on that market.
Mr. Corcoran. This committee is investigating getting contracts,
Senator. Sterling was a case of getting ricl of contracts. I am not
fudging on you any, but I really would rather not go into business that
is not within the defense contract margin, such as these things that I
have been talking about. I don't want Sterling mixed with this other
kind of transaction.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3922

Senator Ball. It seems to

me

it ties

in with this all-out

war we

are in, and also it certainly ties in with this question we have been
discussing quite a bit here, of practicing before Government departments. If we are to believe the newspaper stories, you had quite
a bit to to do with the appointment of Mr. Biddle originally, and
then had quite a bit to do with him in developing this consent
decree.

Mr. Corcoran. I am being very frank with you, Senator. I have

always been perfectly willing to discuss the Sterling case, because,
if you don't mind my saying so, I think it was a very far-sighted
And as I told you before, when I last talked to the chairman
job.
of the committee, I had just come back from the completion of the
Sterling reorganization, which I think is one of the most brilliant
things not from my point, but from the point of view of the action
of the board of directors themselves that has been done in the
defense effort. If you w^ere in Mexico today, Senator, you would
find that long before anybody else got on the ground, there was
a young American organization, headed by a young fellow named
Churchill, that was starting yesterday today to carry on a trade
war against I. G. Farben, with real prospects of success, in which
no one else has ever succeeded.

The only objection I am making is I don't want the Sterling

business bracketed with an inquiry about defense brokerage. If
there is a complete understanding, I am concerned that the name
of Sterling shall not be bracketed in press reports and the rest of
Charles West and Empire ordnance and all the rest
it with
of it. If there is a complete understanding that these are completely separate subjects, I don't mind talking to you about the
Sterling case. You understand what my concern is.
The Chairman. I think the committee will proceed with the
program as outlined, and when that is finished, we will ask you to
come back and discuss this under another heading.
Mr. Corcoran. All right. Now, Senators and Senator Hatch,
you are on the Judiciary Committee
The Chairman (interposing). That is subject to the approval of
the committee.
Mr. Corcoran. I have never had any hesitation about talking about
the Sterling case. Please, Senator Ball, I just simply don't want to mix
Sterling with the subject matter of this other discussion. I think I
should give to my client the protection that these two things aren't
reported together.
The Chairman. I think this will be a satisfactory arrangement
with the committee.
Are there any other questions that any Senator wants to ask?
Mr. Corcoran. Senator, I will come to you and talk to you about
the Sterling case any time, if you want me to.
Senator Ball. That is O. K.
Mr. Corcoran. Or, Senator Hatch, if you want to talk in the Judiciary Committee about the Sterling case, it is perfectly all right

with me.
Senator Ball. Are these four that you have gone over with us the
total of your business in relation to defense?

IN^^ESTIGATION OF

THE NATIONAL DEFENSE PROGRAM 3923

That is everything that comes within the

Senator. I think you will agree with me that
most of it all of it, I think is completely out of the penumbra of
the kind of thing that you are looking for, but I realize the importance
of my putting down everything that is even within the area of what
you have been considering.
Senator Ball. That totals $100,000 in fees, and I take it that
doesn't represent your total business for the year, by any means.
Mr. Corcoran. Yes.

shadowy edge of

it,

Mr. Corcoran. No, Senator it doesn't.

Senator Ball. And you drew what salary from the R. F. C. ?
Mr. Corcoran. In the R. F. C. over the last 10 years $10,000.
Senator Ball. Where you were doing very much this same type of
legal work, setting up companies, checking over organizations.
Mr. Corcoran. Yes, sir. As I said to you this morning, if you take
my contemporaries who stayed in the offices in Wall Street when I
came down here to work for $10,000, and add up the income that they
have over 11 years and the income that I have over 11 years, Senator,
I am behind the eight ball
Senator Baix. I doubt whether you would suffer.
Mr. Corcoran. You see, I made another mistake. I made mine in
the eleventh year, and the income tax just on this $100,000 is $55,000.
I should have made it 4 years ago or 8 years ago, when they made it.
Senator Ball. Seriously, Mr. Corcoran, I would like to ask you
one question going to the ethics of this picture. You have made quite
a point of the fact that your efforts on behalf of your clients expedited the defense program. It seems to me rather a reflection
on our set-up down here that any corporation or business that is
organized to contribute to the defense program had to obtain the
services of one as skillful as I think we all recognize you to be, in
order to get action to help the defense program. Obviously, you
can't handle all the concerns that come down here looking for defense contracts or defense business, directly or indirectly, and doesn't
it put the other concerns who may have just as much to offer to the
defense program, if they can't possibly obtain the services of Tommy
;

Corcoran,
in the

-at

little

disadvantage?

Shouldn't this expediting be

Government and not outside ?

Mr. Corcoran. Well, Senator, I am willing.

Senator Brewster. Just a moment. It has been very generally reported that you were ready to be Assistant or Under Secretary of the
Navy. Do I understand you would return to a position anything
comparable with the one you occupied for 8 years ?
Senator Connally. Mr. Chairman, I don't see what that has to do
%vith

it.

Senator Brewster. He has repeatedly stated here and in his formal

statement that he was quite ready to go to work for the Government.
I think we would like to know what we could hire him for. I think
he is a pretty good man.
Senator Connally. He can't appoint himself and I don't think
Senator Brewster (interposing). But we have gotten what he is
ready to do.
Senator Connally. I know, but you are not going to control any
appointments, and neither am I, and I don't see why you should
undertake to embarrass him by dragging in something like that.

3924

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. I haven't dragged it in. He, himself, has

brought it in repeatedly today that he was ready to come into the
Government.
Senator Connallt, You dragged in the Assistant Secretary of the
Navy.
Senator Brewster. That is the only thing I mentioned.
Senator Connally. I object to that sort of interrogation of the
gentleman, because that is a relationship between him and the Secretary of the Navy and the President of the United States, and your
questions are an enort to embarrass this witness.
Senator Brewster. I am sure no one could embarrass this witness.
Senator Connally. I don't object on any vital matter that is before us here, but I don't propose to agree to this line of questioning.
The Chairman. If Mr. Corcoran chooses to answer the question,
I don't think there is any harm. If he doesn't want to answer and
it will embarrass him, that is all right.
Senator Connally. If he wants to answer it, of course he can, but
I don't propose to sit here as a member of this committee and ask him,
"Why don't you get appointed to this, or why don't you get appointed
to something else?" It is not our concern. We don't make the appointments. The President of the United States and the Secretaiy
of the Navy make these appointments. I don't think it is fair to the
witness, and I don't think it is fair to the Secretary of the Navy or
the President of the United States.
Senator Brewster. I would like to know what Mr. Corcoran thinks

about it.
Senator Connally. I think you might as well if you don't mind,
Suppose you go ahead and tell some of the
this is off the record.
details of the divorce cases that you have had. for the Senator's
amusement.
The Chairman. Proceed if you want to answer the question. We
will be glad to have you answer it.
Mr. Corcoran. I would rather not answer that question. May I
answer Senator Ball's question?

The Chairman. Surely.

Mr. Corcoran. Senator, what impresses me about the relationships
of corporations to the Government in the defense effort is not that
they need anybody in relation to the Government but that they do
need somebody to help them determine their own policy inside themare going through a period of enonnous transition. The
selves.
average corporation board of directors, because it doesn't live in this
atmosphere and know the enormous changes that are taking place and
how everything is centralizing mider the ccmtrol of Government administrative agencies, is normally unconvinced, in time, of the way in
which it has to move so that its plans will mesh with plans down here.
For instance, when you talk with a corporation board of directors and
you try to made them understand that it is going to take so many
weeks and so many months for something to happen, which in the
much smaller scope of their relations to piivate enterprise could
happen the next day, they can't believe you.
When you are dealing with the enormities that Washington is dealing with there are reasons why things can't happen the next day.
But the average corporation doesn't realize that Washington can't
deal with its situation in particular; that Washington has to work

We

INVESTIGATION OF THE NATIONAL DEFENSE PROCSAM 3925

and with, regulations, generalization, and categories. Because the people down here have to deal with such enormous responsibilities, they can't move as quickly as a corporation official with whom
my corporation would do business tomorrow morning. There are,
therefore, miscalculations on the part of private managers. Unless
some adviser not only knows what will happen, but has the ability
to convince those managers of what will happen, of things that are
otherwise incredible to them, the3^ just simply can't gear themselves
to the direction of things.
Senator Brewster has remarked that I have been suspected of
driving things down here. I have likewise been suspected in many a
corporation board meeting of driving things unnecessarily because I
knew things had to be done at a certain time or that things could not
be expected from Washington for another time. And so far as unfair competition is concerned, I think. Senator, the point is to get
the stuff out and not to preserve competition at the speed of the
slowest train like the train schedules to the Northwest.
Senator Ball. I wasn't talking about unfair competition. I am
talking about the over-all defense program, and you come down here
and represent four clients and you cut through the red tape for
them, but there is only one Tommy Corcoran. AVho is going to do it
for all the others?
Mr. Corcoran. Do you want me to do a loaves and fishes miracle?
Senator Ball. It seems to me that that kind of work shouldn't be
necessary in order to get into this defense program.
Mr. Corcoran. Your problem is much bigger than me, Senator.
throug^h,

Senator Ball. It probably

is.

The Chairman. Senator Hatch.

Senator Hatch. Where is the problem ?
Mr. Corcoran. What is that. Senator?
Senator Hatch. Wliat is the problem?
Mr. Corcoran. I don't know. Senator.
Senator Hatch. Yes but I did want to ask some questions, but it is
late, Mr, Chairman; and a moment ago I was afraid maybe certain
members of the committee were getting a little tired and perhaps
tending toward being irritable. I haven't read the testimony, but
did I understand you to say, Mr, Corcoran, that you have here in this
prepared statement given a full statement concerning every contract
that you have been connected with, involved in the defense in any
;

way whatsoever?
Mr, Corcoran, That is right, insofar as I know, Senator,
Senator Hatch, In limiting it to defense, are you only limiting to
those matters directly affecting the Army or Navy?
Mr. Corcoran, I have everything in here.
Senator Hatch, Everything that might be connected with

any way whatever?

Mr. Corcoran. That is right.
Senator Brewster. That doesn't mean with the Government.

it

in

He

distinguishes that.

Senator Hatch. You do distinguish. You appear before the Government in some other capacities?
Mr, Corcoran. I am talking about everything that is within the
purview of the defense program.

3926

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Hatch. But you do distinguish that from other connections or appearances before the Government?
^
Mr. Corcoran. As I say, I am perfectly willing to talk about
Sterling; but I don't want it bracketed in the headlines tonight with
other things.
Senator Hatch. Has your practice been extensive, aside from the
defense contracts?

Mr. Corcoran. Fairly so. Senator.

Senator Hatch. As profitable as these have been ?
Mr. Corcoran. I think you are getting to my divorce cases.
Senator Hatch. I am speaking of matters connected with Govern.

ment.

No not that I know of yet. Senator.

Senator Hatch. I said, had they been as extensive that is, your
appearances in other Government matters as defense contracts?
Have they been as profitable ?
Mr. Corcoran. Outside of the Sterling case, I don't think I have
been involved in anything else touching the Government.
Senator Hatch. Now, on the Sterlmg case, Mr. Chairman, the
witness evinced a desire to relate that story to a proper committee
or at a proper place where it would not be associated with these
defense contracts. I think he should have that privilege. I don't
think he ought to go before the Judiciary Conniiittee, though, because there is nothing pending before the Judiciary Committee. The
story has been told to this committee, and I think your suggestion that
he come back at a later time when it would not be associated with
these other matters and let him tell that story would be all right.
The Chairman. It is perfectly agreeable to me. I just made the
suggestion to Senator Hatch that he let you tell that story to the
Judiciary Committee.
Mr. Corcoran. I thought, Senator Hatch., since fundamentally it
Mr. Corcoran.

is

problem of Department of Justice

Senator Hatch (interposing). I Ivnow.

Mr. Corcoran. That probably the Judiciary Committee was the
best place to tell

it.

Senator Hatch. I think it would be, but Senator Ball and Senator
Herring and Senator Mead and Senator Brewster are none of them
members of the Jtidiciary Committee; only Senator Connally and I
are.
They have heard part of the story, and I think they ought to
liear the rest of

it.

We

can arrange that. You are perfectly willing

to tell it at the proper time; that is the main thing. If you are willing to tell it, we will arrange that some other way.
Are there any other questions. Senator Brewster ?
Senator Brewster. I want to go for a moment into this broader

The CHAHtMAN.

question of policy that is involved, and propriety.

Yoti were the
chairman or the executive head of the committee, the political committee, in the last campaign, of Independent Voters?
Mr. Corcoran. I was one of the executive committee.
Senator Brewster. Well, I think you said in this statement that
you put in most of your time on that.
Mr. CoRCoiLVN. I did put in all of my time on that for a long time.
Senator Brewster. And that was entirely analogous to the position
of a member of a national committee, would you say?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3927

This was a temporary political

Mr. Corcoran. No, Senator.
committee.
Senator Brewster. Well, during the duration of the campaign you
were most active for the election. Would that be a fair statement ?
Mr. Corcoran. Certainly. I was very active.
Senator Brewster. I simply wanted, as it seemed to me, using the
analogy of persons in that position using their influence, to address
myself' to that to see whether you would distinguish it.
Mr. Corcoran. Senator, some day you will be as convinced, I am
sure, as I am that those working on an independent political committee have no political influence.
Senator Brewster. Well, I wouldn't presume to say as to who had
the influence in the administration, the regulars or the independents,
because that is outside my province, but I think each of you have quite
That is why I wanted to read to you the statea lot of influence.
ment regarding activities of this character. I quote
along that it is not quite in accord with the spirit of the adminany individual who holds a high party position, such as national
committeeman, should earn a livelihood by practicing law, because, in a sense, he
holds himself out as having access to the back door of the administration. It just
I

have

felt all

istration that

"is not done."

Do you find yourself in accord with that statement?

Mr. Corcoran. As I remember it, isn't that the letter that was written
about Mr. Arthur Mullen ?
Senator Brewster. That is quoted from the public paj^ers and
addresses of Franklin D. Roosevelt.
Mr. Corcoran. Well, I agree with anything that Franklin D.
Roosevelt says.
Senator Brewster. Do you have to see his signature before you conclude your ideas ?
Senator Connally. I think it ought to be noted that the Senator
from Maine has at least approved of something by President Roosevelt.
Senator Brewster. I find that Mr. Corcoran wouldn't approve it
I go on and read a further quotation.
until he knew who said it.
Referring to Mr. Mullen's retirement as you recall, Mr. Robert
Jackson, Mr. Arthur Mullen, Mr. Bruce Kremer were all retired from
political position because of their activity in law practice in Washington, and I quote again from the letter of the President of the United
States acknowledging Mr. Mullen's letter to him

I can appreciate your feeling as indicated in your letter to me, that the time
has come when you feel you should resign as national committeeman.

That is the end of the quotation. The President did not disagree
with that conclusion. But he goes on to say I quote

welcome a continuation of your counsel and advice where the welfare

of your State and the country is concerned.
I shall

It is phrased with a felicity that we find characteristic of his utterI take it you would agree with that

ances during your association.

statement also.

Mr. Corcoran. As I understand it, the idea was that Mr. Mullen
shouldn't continue as the national committeeman while he was in private practice. This committee of mine was disbanded and its affairs
cleared up before I went into private practice, so I am exactly, if the
analogy holds at all, in the position of Mr. Mullen after he resigned.

3928

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster.

You have

divested yourself of your political

inhibition.

Mr. Corcoran. I divested myself of my political activity.

Senator Brewster. Yes. Now, I go on quoting again. This is from
Mr. Mullen's book on the Western Democrat, which may be of interest
to our Texas Senator.
Senator James F. Byrnes, of South Carolina, went on the radio with a speech
of protest against allowing any members of the national committee to maintain
law offices in Washington. He also introduced in the Senate a bill to that
effect.
Jim Farley came to me with the statement that he thought I ought
to resign from the committee.
"Did the President send you?", I asked him.
"No; not exactl.v," he said, "but I think he wants you to resign."
I said, "I won't stir a step unless he himself asks me."

I continue the quotation

He said that nothing had happened to change his mind, but, as he went on, I
realized (this is the President of the United States talking to Mr. Mullen)
that the men who wanted to get me out of Washington law practice had put
him on a hot spot and that he was appealing to my friendship for him. If
the situation was bad for me it was also bad for him and he was the chief
of my party and the President of the United States.

Now, whether or not the distinction which you draw between active
association with a political party or political activity or previous
association with the Government and the action which you took in
resigning your position and association with the Government completely bridges the gulf or whether the 2 years of quarantine enforced by most of the departments of long standing, that is, if they
have a rule, I take it is the question here. What is your view, Mr.
Corcoran ?
Mr. Corcoran. I think, again, that the problem is what the end
result is, whether anything that has been done has sold the Government down the river, whether anything that has been done has hurt
the Government or helped the Government.
Senator Connally. Wliat was this committee that Senator Brewster asked you about, some committee ?
Mr. Corcoran. It was an independent committee during the last
campaign.
And you were in
Senator Connally. During the last campaign?

Government serv^ice at that time ?

Mr. Corcoran. Oh, no I had resigned from the Government serv-

the

order to be a member of it.

Senator Connally. Do you think it is any harm when the opposite
party, to which Senator Brewster belongs, has a capable corps of
high-powered senators out on the stump speaking for that party,
and that paHy comes along and kidnaps one of our Democrats and
makes him candidate for President of the United States, for the
Democrats to do a little to try to maintain their side of it? Do you
think there is anything wrong with that?
Mr. Corcoran. Senator, I am sure everybody knows what I think.
Senator Connally. That is all.
The Chairman. Are there any other questions, gentlemen?
Tliank you, Mr. Corcoran. 'J'he committee will recess until 10:30
tomorrow morning, when Mr. AVcst will be the witness, and at a
future date we will (expect you to appear, Mr. Corcoran.
(Wliereupon, at 4:30 p. in. the committee recessed until 10:30
ice in

a.

m. Wednesday, December

17, 1941.)

INVESTIGATION OF NATIONAL DEFENSE PROGEAM

WEDNESDAY, DECEMBER

17,

1941

United States Senate,

Committee to Investigate
the National Defense Program,
'W a^^hington^ D.

Special/

C.

The committee met at 10:41 a. m., pursuant to adjournment on

Tuesday, December 16, 1941, in room 318, Senate Office Building,
Senator Harry S. Truman, presiding.
Present: Senators Harry S. Truman (chairman), Tom Connally,
Harley M. Kilgore, Kalph O. Brewster, James M. Mead, and Clyde
L. Herring.
Also present Mr. Hugh A. Fulton, chief counsel Mr. Charles P.
Clark, associate chief counsel.
The Chairman. The committee will come to order. Mr. West, will
you take that seat, please, and be sworn?
Do you solemnly swear that you will tell the truth, the whole truth,
and nothing but the truth, in the testimony you are about to give
before this committee, so help you God?
:

TESTIMONY OF CHARLES WEST, CHEVY CHASE, MD.

The Chairman. Mr. West, are you a lawyer?
Mr. West. No; I am not, sir.
The Chairman. You were a Congressman from Ohio?
Mr. West. Yes;

I was, for

two terms.

The Chairman. And Under Secretary of

Mr. West. Yes,

the Interior?

sir.

connections or charles west with empire ordnance

CO.

and

FRANK COHEN

The Chairman. Are you connected with the Empire Ordnance?

Mr. West. At this time, no.
The Chairman. You have been ?
Mr. West. Yes.
The Chairman. Well, what was the nature of that connection, Mr.
West?
Mr. West. The Empire Ordnance Co., through Mr. Frank Cohen,
that time with a group of people from New
to me some time during the latter part of
October or November of last year, during the campaign, and asked
me if I would be interested in helping them in connection with
various matters that they had then and felt that they would have

who was associated at

York and Ohio, came

3929

3930

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

that would require the advice aud counsel of someone that knew
Washington and knew the Government, and after several conversations an arrangement was worked out whereby I was to be associated
with them, not as an official of the company nor as a holder of stock,
but to be associated with them on a basis of compensation represent-

ing a percentage of their business.

The Chairman. You were not on a salary ?
Mr. West. No; I was not; but it was understood that I was
employed by them on the basis of this compensation.
The Chairman, What was the purpose of that employment; just
the nature of the employment? Wliat were you supposed to do?
Mr. West. The purpose of that was to aid them in their work.
None of them was familiar with Washington nor with the various
procedures of the Government, and I was engaged as an adviser and
a consultant to help them in matters pertaining to their work and
matters that they expected to have that woiild involve work in
Washington. It was supposed to cover the whole range of their
activities.
It wasn't for any purpose of securing contracts for them,
because at that time, when I first became associated with Mr. Cohen
and the Emi^ire Ordnance, there were commitments from the British
Purchasing Commission with respect to British business. At no time
was there any question of a contract with the United States Government involved. It was British business to be carried out by the
Empire Ordnance for the British Government and to be paid for out
of British funds several months prior to the arrangements made

under the lend-lease program.

The Chairman. Well,

carried out,

it

had

would be
approved by the United States Ordnance

in order that the British contract

to be

Department, did it not?

Mr. West. Yes; there had to be approval or clearance from the
War Department, from the Ordnance Division of the War Department, before the British Government would negotiate a contract.
The Chairman. And Mr. Cohen was having some difficulty getting
that clearance, wasn't he?
Mr. West. Yes. During the campaign, during October
The Chairman (interposing). This is in 1940?
Mr. West. In 1940, I was told by a mutual friend that Mr. Cohen
was having difficulty in a matter in Washington. At that time I knew
nothing at all about his company or his program. Of course, over tlie
last 10 years as a Member of Congress and as a member of the administration I have done a good many favors for people of all sorts, as you
gentlemen no doubt have.
Senator Connally. And some disfavors to some of them.
Mr. West. I presume so, Senator. In fact, some have been interpreted that way in my case, and a political friend of mine from Ohio
came to me and represented this problem as being a matter involving
a friend or client of his and wanted this favor done. Of course, I was
very busy during the campaign, I was out speaking practically
Senator Brewster (interposing). Wlio was this gentleman friend?
Mr. West. A gentleman by the name of Duffy, Mr. Dan Duffy, of
Cleveland, Ohio, whom I had known for a number of years ])olitically
in Ohio, and T was im])()rtunod to come to Washington and to see if anything could be done to help Empire Ordnance, and I did that.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3931

The Chairman. And the object of your connection was to get the
Ordnance Department to approve the release of the funds for the British contract, was that it?
Mr. West. No, Senator; it was not that. In the beginning it was
merely to find out what the trouble was and to advise the Empire
Ordnance what they should do. Of course, the problem confronting
a good many business people when they come to Washington is to know
where to go and what to do.
The Chairman. That is true.
Mr. West. And I wasn't asked to do anything with respect to getting
a contract, because they already had the commitment for the business,
nor was I asked to get any specific approval for any project. I was

my friend in Cleveland, to find out

to advise them as to what they could do to
expedite their matter before the War Department so that they could
negotiate a contract with the British.
asked in the beginning, as a favor to

what the trouble was and

The Chairman. And what was your compensation

to be

Mr, West. There was no specific compensation for that particular

work. The matter of compensation and the matter of a permanent
connection with the company came later in subsequent discussions. I
was not hired at that time to do anytliing in particular for the

company.
Mr. Fui^roN. As I understood it, Mr. West, you filed a complaint
against tlie Empire Ordnance Corporation in wliich you said that "on
or about" and I am quoting from their complaint
Mr. West. Yes, sir.
Mr. Fulton. "The 1st day of November 1940, plaintiff and defendant." plaintiff being yourself and the defendant being the Empire
Ordnance Corporation, "entered into an agreement by the terms of
which the defendant hired the plaintiff as a business consultant and
adviser, and that in consideration of such services the defendant agreed
to pay the plaintiff 1 percent of the gross amount of all sales of its
products accepted as orders during the ensuing year by the defendant
or any of its subsidiary companies," and you also alleged that there
were undertaken $70,000,000 of orders by which you became entitled
to 1 percent, or $700,000, against which you credit the receipt by you
or for your account bv others of $13,000,'leaving a balance due yoii of
$G87.000. Is that true, Mr. West?
Mr. West. That is correct,
Mr. Fulton. In that connection, when this first contact came with
your friend, Mr. Duffy, Daniel Duffy, of Cleveland, Ohio, asked you to
meet Mr. Cohen, of the Empire Ordnance Corporation?
Mr. West. Yes, sir.
Mr. Fulton. You hadn't previously known Mr. Cohen, had you?
Mr. West. No.
Mr. Fulton. Did you know Mr. Cohen's reputation or record at

that time?

Mr. West. No I did not.

Mr. Fulton. Did you subsequently check into it, I mean, so that you
know it today?
Mr. West. Well, subsequently I heard a good many things. I
always felt this, that when a matter was pending before the Government of this country or the Government of Great Britain and if con311932 42 pt. 10
14
;

3932

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

which represented a good deal of money, that

there were facilities, both in our Government and in the British
Government, for determining the jfinancial soundness of a concern.
I never felt that it was either possible for me, that I had the facilities or the ability to determine the financial soundness of a corporatracts were involved

tion.

Mr. Fulton.

meant you yourself didn't know those things

at that

time ?

Mr. West. Certainly not.

Mr. Fulton. In fairness to you.
Mr. West. Mr. Cohen was vouched for by my friend, Mr. Duffy.
Mr. Fulton. And as I understand it, Mr. Cohen informed you that
he had been negotiating for a contract, not with the United States
Government, but with the British Purchasing Agency, that is, a contract to be obtained by the Empire Ordnance Corporation, and that
he had been informed before you came into this at all that that contract was one which the British Purchasing Agency at least wanted
to make, and that his difficulty was that the funds had been blocked
and that in order to obtain their release the approval of the Ordnance
Division of the War Department had to be obtained,
Mr. West. That is substantially correct. My understanding was
that he had a commitment for an order from the British and would
get a contract provided he got the nominal approval or clearance from
the War Department, but that no contract was involved with the War
Department nor any matter of funds being cleared that I know about.
This was prior to the lend-lease arrangement whereby they got
approval.

Mr. Fulton. The approval of these British funds were subject to

and had to be cleared.
Mr. West. That is right.
Mr. Fui.TON. And did he tell you that his problem was that he
had to find someone who should advise him and work with him and
tell him what to do in Washington in order to secure clearance from
the United States Government for that proposed contract with the
British, that is for the funds needed to make that contract workable?
Mr. West. Yes.
Mr. Fulton. And what did he tell you as to the amount of your
compensation in that first conference that you had with him?
Mr. West. Well, the amount I saw Mr. Cohen several times before
there was any discussion of a formal or permanent arrangement. Understand, this was during the campaign, and I was traveling a good
deal of the time and making speeches practically every night, and I
was in and out of New York and in and out of Washington, and I
had no intention at that time, no thought, of a permanent business
connection. These people came to me in the first instance through a
mutual friend. I was asked to do a favor, to look into a matter, and
it was subsequently that a permanent relationship was discussed and
an offer made for compensation along the lines that are indicate'.l
these block orders

in

tlie suit.

Mr. Fulton. Did he ever tell you in so many words that you could
name whatever figui'c you wanted as your compensation?
M)-. West. Oh, yes; certainly.
Mr. Fulton. That was in the early stage?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3933

Mr. West. Yes; and right along during November and December
that he expected to get a hirge vohmie of business, both with the
British and subsequently with the American Government, because he
expected to go into the matter of shipbuilding and he talked at one
time about manganese. He had various enterprises that he was considering from time to time.
Mr. Fulton. Well, did you name a set sum that you wanted, or did
you propose that instead it be a contingent sum based on sales?
Mr. West. No his proposal was made to me. I made no proposal
to him. I never sought the connection nor the opportunity to serve
him. I fully understood the need of a proper kind of representation
in Washington for a business concern, and I feel that there is a very
wholesome result that can come from this committee investigation to
determine the type of representation that a business firm can have
It is not so much tlie need of securing influence to get
in Washington.
specific contracts that a business firm needs, but the advice and counsel
of someone who. for one reason or another, knows the procedures in
Washington and can advise a business concern, and it was that type of
representation or association that Mr. Cohen was seeking. I was
never asked at any time to use influence, so-called, to get a contract,
nor was I offered a fee or a commission for a specific contract, and if
I may, Mr. Chairman, at this time, I would like to say for the benefi.t
of the committee in answer to rumors and allegations that have been
made in the press and elsewhere, that there is absolutely no truth to
any of those statements that I at any time have sought to get a contract from the United States Government, or the British Government,
for that mutter, nor have I been paid a fee or a commission for such
a defense contract, nor have I worked for anyone to whom I represented that for compensation I would use influence to get him defense
business.
Senator Brewster. Did you have, Mr. West, any discussion about
the political aspects of this situation?
Mr. West. The use of political influence to help him ?
Senator Brewster. Well, any discussion of the political situation
in Washington and ways in which it might be of value for him to move.
Mr. West. And it would be an advantage to him politically for me
to be associated with him ?
Senator Brewster. Well, did you participate in any way in any
negotiations having a political flavor? Let me put it that way.
Mr. West. No I think not at any time at least, not so far as I was
concerned or
Senator Brewster (interposing). Did you have any discussion with
any members of the Democratic National Committee about the
situation ?
Mr. West. With reference to his business?
;

Senator Brewster. Mr. Cohen yes.

Mr. West. No not at any time.
Senator Brewster. Did you have any discussion about campaign
;

contributions ?

Mr. West. Oh,

quite willing to

yes.

make

Mr. Cohen at different times said that he was

a campaign contribution.

Senator Brewster. In any amount?

Mr. West. Yes; he mentioned at one time he would like
$50,000, he and his associates, to the Democratic Committee.

to give

3934

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJ-I

Senator Brewstek. And that, was during the last campaign ?

Mr. West. Yes.
Senator Brewster. About October, was it?
Mr. West. Some time prior to the election yes.
Senator Brewstfr. And did you take that up with any members of
the Democratic National Committee?
Mr. West. No I did not.
Senator Brewster. You didn't mention it to anyone?
Mr. West. No it was not my purpose at that time nor at any time
during the campaign to secure campaign contributions.
Senator Brewster. You are very positive that you didn't mention
that to anyone else?
Mr. West. I am very positive that I did not mention it.
Senator Brewster. Then I am a little puzzled by this affidavit which
I have here covering your recent testimony in connection with this
;

hearing, in w^hich, after reciting this proposal of a $50,000 contribution to the Democratic National Committee, you go on to testify this
is from the deposition which you have filed with the court in your case
in New York

What did you say about a $50,000 contribution

Committee when he mentioned that?

Your reply was

to the National

Democratic

as follows, according to the stenographic report

Well, of course, I was not at all disposed to discourage him from doing that,
to proceed to do it at once, and, in fact, advised certain parties
In the Democratic National Committee that at last we had found someone suflSciently interested in our program that they were willing to back it financially.

and urged him

In view of that, would j'ou now wish to revise your answer that
you didn't communicate with any member just a moment, just a
moment that you didn't communicate with any members of the
Democratic National Committee? This evidence was under oath, I

understand.

Mr. West. I understand you, Senator, to ask me if I liad discussed

the matter with the officials of the Democratic National Committee.
What was your question ? I may have misunderstood it.
Senator Brewster. I asked you whether you communicated this
matter to any members of the Democratic National Committee.
Mr. West. I may be at error in answering your question.
Senator Brewster. I should say you very seriously were, Mr. West.
Mr. West. As a matter of fact, I might have misunderstood speThe testimony that I gave in concifically what you had in mind.
nection with that deposition to the best of my knowledge is true and
accurate.

Senator Brewster. Then you did connnunicate Avith certain parties

in the Democratic National Committee.
Now, who were those
parties ?
Mr. West. If I may say this in answer to your question, I do not
recall specifically to whom I made statements during the campaign
last year.
I was associate director of the speakers' connnittee of tne
National Committee. Congressman McCormack, of
Massachusetts, was the chairman, and we were in and out of the
committee. I will say this very positively, that at no time did I
undertake to secure contributions to the committee, nor did I handle

Democratic


INVESTIGATION OF THE NATIONAL DEFENSE PROORAM

3935

What

I said there about talking about possibilities of getting

correct.
Senator Brewster. You communicated to someone in the committee
the fact that he was ready to contribute?
Mr. West. To be strictly correct, I no doubt mentioned I will say
that I did mention it to those who were in headquarters, but so far as

them.

contributions

is

taking
Senator Brewster (interposing). Who were some of the ones with
whom you were in contact besides Mr. McCormack?
Mr. West. I was in contact with Mr. McCormack. I was in contact with Mr. Flynn and his assistant, with Mr. Aiken, who was in
the speakers' bureau at the time, and with any number of others that

came

in.

Senator Brewster. Who were looking after the funds?

Mr. West. At that time, I think Mr. Quayle and Mr. Wayne Johnson were looking after the funds.
Senator Brewster. Did you talk with either of them ?

Mr. West. I don't recall that I did.

Senator Brewster. You mean you didn't talk with them about any
matter ?

Mr. West. There are two things here, if I may say this. I never
regarded that as a matter of such consequence, and I think there is a
tendency that it might be exaggerated out of proportion to its real
significance.
Mr. Cohen said to me that he would be perfectly willing to give a campaign contribution.
Senator Brewster. Of $50,000?
Mr. West. Of $50,000; and naturally I said I wouldn't discourage
any effort on his part to do that, and naturally I would say something
to those who were associated with me who were out speaking with me
and those at headquarters, but if you mean did I take this up officially
with the Democratic National Committee and make arrangements for
them to receive a campaign contribution from Mr. Cohen, my answer
is "No," and I say also that the testimony I gave in the deposition is
correct.

Senator Brewster. Well, I think that

Mr. West. Does that clarify it?
Senator Brewster. I think that your position is quite clear except
for your earlier denial that you had communicated it to any members
of the national committee. I think that was in error.
Mr. West. I am sorry. Senator, if I misunderstood your question
to mean did I engage in negotiations to get the contribution to them.
That is what I understood the question to mean.
Senator Brewster. I don't quite understand your suggestion that it
wasn't a matter of much importance. I should suppose that $50,000
would be of importance even to as well supplied a campaign fund
as the Democratic National Committee, but that is a matter of opinion,
I suppose.
The Chairman. Senator, you remember they had to give a lot of
dinners* to cover the deficit.
Mr. West. I think they needed the money at the time. He would
have been very glad to secure a campaign contribution of that size.
The point I am making is that so far as my arrangements with Mr.
Cohen were concerned, this matter of the campaign contribution

3936

INVESTIGATION OF THE NATIONAL DEFENSE PROCtRAM

could be exaggerated out of proportion to its significance. That had

no bearing on my association with him nor my employment with him.
That was an incident in my recollection during the campaign and
I
merel}^ an incident because I wasn't engaged in that at the time.
was concerned with the speaking end of the campaign and nothing
else.

Senator Brewster. And you didn't contemplate that such an action

by Mr. Cohen would at all assist in your labors on his behalf in
Washington ?
Mr. West. No I wasn't induced to be associated with him for any
reason of political influence of that kind. Senator, if I had to have
brought up matters of favor that I have done for people throughout
Ohio and other parts of the Nation who have in one way or another
contributed to the Democratic National Committee and have my
conduct questioned from time to time because of those contributions,
I think we would run into a good many instances not only in my case
but in the case of any Member of Congress or any member of a legisAnd it had no
lative body that has been in public life for a while.
bearing at all on this business.
Senator Brewster. And what we are addressing ourselves to is
to possible relations between things of that character and the results
here in Washington, and we want to establish whether or not there
was any relation, and it certainly is a matter of great interest that
at the time you were being engaged to help Mr. Cohen in Washington
3^ou were also suggesting to the Democratic National Committee that
you might get a $50,000 campaign contribution. That would be certainly a matter of interest, and I would think of possibly some sig;

nificance.

Mr. West. Oh, I think that is very true.

Senator Brewster. Now, what I want to ask you, Mr. West, is what
Government officials in Washington did you take matters up with in
behalf of Mr. Cohen.
Mr. West. I have never taken up specific matters pertaining to
specific contracts or matters affecting his company with any Grovern-

ment

officials.

Senator Brewster. Well, then,

how have you rendered him any

service?

Mr. West. My service was the kind that was to extend over a
period of time and it was to be advice and counsel on what to do in
Washington, and never at any time was T supposed to get contracts
for him, because, as a matter of fact, he had his business arrangements
with the British, it was a matter of commitments with him at the
time I was associated, and there was never a time, until later on
when a matter of a shipbuilding program was involved, that there
were any contracts with the Government of the United States.
Senator Brewster. Well, now, are jhju prepared to testify, Mr.
West, and I want you to very careful and understand me very clearly,
that at no time have you discussed with any Government official any
of Mr. Cohen's various affairs?
Mr. West. Oh, no. Senator, I didn't say that.
Senator Brewster. That is what I want you to answer.
Mr. West. Certainly not. I have discussed
Senator Brewster (interposing). Now, I want

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3937

Senator Connally. Let him answer the question before you ask him
another one.
Senator Brewster. All right, all right, Mr. West.
Senator Connally, Go ahead.
Mr. West. Yes, Senator.
Senator Connally. I say, finish your answer before he pops another one at you.
Mr. West. I have talked with Government officials about Mr,
Cohen's situation, but not to ask for any contracts.
Senator Brewster. That is not my question Now, with what Government officials have you discussed this matter ?
Mr. West. At the beginning of his effort to negotiate a contract
with the British, he needed clearance from the War Department, from
the Ordnance Division of the War Department, for the purpose merely
of giving him standing with the British so that he could go ahead and
do business with them, and my original service with him was to find
out what the difficulty was and why he was not getting such clearance.
It was not for the purpose of going to the War Department
and getting anything from them, but to find out what his problem
was and report back to him as to what he should do to clarify his
matter. That was my purpose in serving him.
Senator Brewster. I understand. Now, with whom
Mr. West (interposing). I never went with him to the War

Department.
Senator Brewster. Now, just answer, with whom did you discuss
I understand your position.
it?
Mr. West. I discussed with several officials.
Senator Brewster. All right, who were they ?
Mr. West. I do not recall the names of the people.
Senator Brewster. Now, Mr. West, you refresh your memory.
You can certainly recall some official of the War Department with
whom you discussed this. Really, you strain our credulity.
Mr. West. I recall the name of one official.
Senator Brewster. All right, who is he ?
Mr. West. The name of one official is a friend of mine, and may
I make this clear at the beginning. I don't want to bring in names
of jDeople in this Government and have reflection made upon them as
a matter of publicity when they had nothing to do with the matter
of the Cohen

Senator Brewster. I insist that the witness answer.

The Chairman. Give the name.
Mr. West. I want to predicate this, because I didn't ask this man
to do anything, I merely asked his advice with respect to information^
and under those circumstances I will give the name of Gen. Benedict
Crowell in the War Department.
Senator Brewster. Now, with what other officials did you have anycon versation ? We understand your predication.
Mr. West. I made inquiries of subordinate officials at the War Department whose names I do not recall, to get information as to what
was the difficulty with the Empire Ordnance Co.
Senator Brewster. Were they persons to whom you were referred?
Mr. West. I simply went in to find out as any citizen ought to
have the right, to make inquiries in any department of this Govern-

3938

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

merit.
I Avasn't going there to ask them to do anything; I was going
there for information.
Senator Brewster. I understand that. But you don't recall the
names of any of these other officials ?

Mr. West. I do not, sir.

Senator Brewster. Now, coming on from General Crowell, what
other members of the Government have you at various times taken up
the Cohen affairs with?
Mr. West. There were a number of things. Mr. Cohen at one time
was interested in finding a location this was
Senator Connally (interposing). What Cohen is this? There are
a flock of Cohens arouiid here.
Mr. West. This is Frank Cohen.
Senator Brewster. This isn't Ben Cohen.
Mr. West. No, sir; this is Mr. Frank Cohen, of New York.
Mr. Fulton. Who is no relation to Mr. Ben Cohen, as I understand it.
Senator Connally, It is not the shipbuilder ?
Senator Brewster. This is the same one yes.
Mr. West. The same Cohen that is involved in the Savannah Shipyards. Subsequently Mr. Cohen wanted to get a location for his steamship company. I was in New York at the time. I do not recall the
exact date, but it was subsequent to this time. He wanted to know
where he could locate this shipyard, and someone had told him that
Houston, Tex., would be a good site. He asked me if I knew anyone
in Houston.
I said that I did, and would be very glad to find out if
there was a site available, so that I took up the telephone and called
the mayor of Houston, who is a personal friend of mine, to find out
whether or not there was an available shipbuilding site in Houston,
Tex. That was one service. I contacted him for that information.
Another thing
Senator Brewster (interposing). What was his name?
Mr. West. Neal Pickett, the mayor of Houston.
Senator Brewster. Pickett?
Mr. West. Pickett yes, sir.
Senator Brewster. Did that have any connection with this Joe Hill ?
Mr. West. No; that is another matter.
Senator Brewster. Who is Joe Hill ?
Mr. West. Joe Hill is a State senator in Texas.
Senator Brewster. What was your business with him ?
Mr. West. I never had any business relations with Joe Hill.
Senator Brewster. How is he getting money on your account, then ?
Mr. West. Joe Hill loaned Frank Cohen money to advance to me
for expenses in the early days of this association.
Senator Brewster. How did that happen ?
Mr. West. Joe Hill knew Frank Cohen. Frauk Cohen at the time
did not have money as he represented it to me, but he borrowed it from
Joe Hill and Joe Hill gave it to him and I gave Joe Hill a note for
that amount, which was subsequently paid by Mr. Cohen.
Senator Brewster. Then how did vou liappen to give the note to

Hill?

Mr. West. To protect Joe Hill.

Senator Brewster. Although the advance was to Cohen.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3939

Mr. West. The advance was from Cohen, but Cohen secured it from
Joe Hill. Joe Hill gave the money and I protected Joe Hill with my
personal note. At that time, understand, my relations with Mr, Cohen
were rather nebulous, and I didn't want Joe Hill to undertake a
financial responsibility witliout being protected by myself.
The Chairman. Is that the same Joe Hill who wanted to be counsel
of this committee? I say, is that the same Senator Joe Hill, from
Texas, who wanted to be counsel of this committee ?
Mr. West. Since you mention it, I have a recollection that I heard
something about it. All I know is what I heard in the way of rumor,
that he was seeking a position in the
The Chaieman (interposing). Mr. Hill came to see the chairman
of this committee and wanted to be its counsel. At the time I had
already talked to the Attorney General and engaged Mr. Fulton, and
Mr. Hill didn't make the connection.
Mr. West. Since you mention it, my recollection is that it is the
same man.
At another time, I know that Mr. Hill was interested in a position
either with the Petroleum Administration or several other places in
Senator Hill, of Texas Joe Hill, State senator
the Government.
was associated with the Southport Refinery. The Southport Refinery
was associated with Mr. Cohen in some way I have never known the

financial relationship.

The Chairman. Where is the Southport Refinery? Is that at

Houston ?
Mr. West. No it is somewhere in Texas. I don't know just where
Mr, Hill came to Washington to see if he could get an
3t is located.
order for high octane gasoline for that refinery, and he was having
difiiculties.
He was told that the Government didn't need any high
octane gasoline, and certain officials down there said to him that if
they did have any additional requirements the company represented
by this man in the Government could get the business, so that there
was no need for Joe Hill to become interested in getting Governme'nt
;

business.

Senator Brewster. What I am interested in

of Joe Hill to this particular deal.

is

what was the

relation

Mr. West. That I had with Cohen ?

Senator Brewster. Yes.
Mr. West. None whatever, so far as I know.
Senator Brewster. How did he happen to put the money up for
this?

Mr. West. As a personal friend to Mr. Cohen. This was during the
campaign, and I was spending a good deal of money in the latter days
of October and November, traveling about and making speeches and
paying my own way, and this was expense money that was advanced.
Mr. Cohen w^as supposed to do it, but did not have the money, so he
said, and so asked Joe Hill to give it to me, and I simply gave Joe
Hill a note in order to protect him.
Senator Brewster. Until Mr. Cohen could pay you?
Mr. West. That is right.
Senator Brewster, For the services which you were rendering?
Mr, West, That is right.
Senator Brewster. And did Mr. Cohen subsequently pay you, or

Mr. Hill?

INVESTIGATION OF THE NATIONAL DEFENSE PROORAVI

3940

Mr. West. Subsequently paid Mr. Hill.

Senator Brewster. Direct?
Mr. West. Direct.
Senator Brewster. And that was charged to your account ?
Mr. West. Charged to my account yes, sir.
Senator Brewster. For your expenses and services in this atlair^
Mr. West. Yes. At that time, merely expenses. For instance, I
was out in St. Louis. I was making speeches at Mount Vernon and
Murphysboi'o. I got a call that Mr. Cohen wanted me to come back
to Washington.
I came back here on the midnight plane, spent the
morning here, and took a ph\ne for Louisville for a meeting the next
night. That sort of thing during that early period.
Senator Brewster. Well, the money that Senator Hill advanced was
for your political activity or for your Cohen activity which was it i
Mr. West. Oh, it was for the Cohen activity yes. It was money for
;

Cohen not

for Joe Hill nor for politics.

Senator Brewster. To help out Mr. Cohen. Did you subsequently
have any further contacts with Mr. Hill about the Cohen matter?
Mr. West. Oh, yes; I have talked with Mr. Hill many times from
that time until the present about this.
Senator Coxnaley. May I interrupt, Mr. Chairman? The Senator
from Maine said something about Senator Hill. I want to make clear
this wasn't Senator Hill, of Alabama.
Senator Brewster. I think you hnd that it is State Senator Joe Hill,
of Texas.
Senator Connallt. State senator?
Senator Brewster. That has been made very clear.
Mr. West. I referred to him that way, Senator Connally.
Senator Connally. Not Senator Hill, of Alabama.
Mr. West. State Senator Joe Hill, of Texas.
Senator Brewster. It was brought out before you came. Also the
fact that he was applicant for counsel for this conmiittee. That was
;

the Hill.

You mentioned General Crowell. We would like to identify these,

because it would be extremely helpful to know the way in which these
matters proceed. What other officials of the (lovernment ?
Mr. West. Senator, I am very reluctant to mention
Senator Brewster. We understand you are reluctant.
Mr. A^'^EST. Men in Government who have nothing to do with the
Cohen matter, and I will be very glad to mention any names
Senator Brewster (interposing). I am confining myself to people
in the Government with whom you discussed any phas( of the Cohen
affairs. That is very si)ecjfic.
Mr. West. That is very specific and very clear; if it is understood
that I am giving it in just that way, I am glad to mention names.
Senator Brewster. That is right.
Mr. West. For instance, I was called here by Mr. Cohen, asked to
come and look into a manganese matter. That was late in the campaign. I don't recall the exact time, but it must have been late in
October or early November. It seems as though a Mr. Charles MacDaniel, of New York, who at that time was associated with Mr. Cohen,
had some sort of o[)tion on a bed of manganese in Brazil, and the
arrangement that he had discussed with Mr. Cohen was to esUxblish a

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3941

shipping- line to bring that manganese up and to take coal back down
to Brazil, one of those exchange arrangements of commodities carrying
out the good-neighbor policy, aiding our own coal industry and having
an exchange arrangement with Brazil that would permit the exchange
of commodities. I was asked to look into that and find out if it was
practicable, and during the course of my investigation into that I did
meet and talk with several members of the Government.
Senator Conxally. They don't charge commissions on all the good-

neighbor policy.

Mr. West. There was no commission involved. Senator. I mean

there was no commission involved in this matter. I was to be associated
with Mr. Cohen to look after all of his matters, and it was a compensation in lieu of salary, in lieu of stock interests, in lieu of commissions,
a compensation equivalent to 1 percent of the business that he got
during the year.
Senator Brewster. Of the gross business?
Mr. West. Of the gross business. There was no commission or fee
on anything I ever did for Mr. Cohen, and in this manganese matter I
talked with different members
vSenator Brewster (interposing). Now with whom? Just be specific.

Mr. West. I talked with the Secretary of State.

Senator Brewster. Secretary Hull ?
Mr. West, Secretary Hull. I talked with the Secretary of Commerce.

Senator Brewster. Mr. Jones?

Mr. AVest. Mr. Jesse Jones. I talked with Mr. Emil Schram, the
head of the R. F. C, and I talked with Senator Henderson, of the
Reserve Metals Corporation, a subsidiary of Reconstruction Finance
Corporation I talked with Warren Pierson, head of the ImportExport Bank, for the purpose, Senator, of asking if an appropriation
of that kind was practicable, if it could be worked out, not for the purpose of asking those officials of the United States Government to do
anything. I discovered after discussion with them that it was not a
practicable proposition, that it was highly inadvisable for Mr. Cohen
from his points of view as a business proposition to undertake anything
involving manganese, and I reported that back to him and advised him
not to have anything to do with it. I had a second conference with
Mr. Jones, Secretary of Conmierce. at which time Mr. Dan Duffy, of
Cleveland, was with me.
Senator Brewster. Duffy?
Mr. West. Dan Duffy, and we asked the Secretary of Commerce
about this matter. He advised against it, said that it wasn't a practicable matter, and that was the extent of my conversations with these
gentlemen and you can see why I would be disposed to be reluctant to
mention their names because I wouldn't want any unwarranted
interpretation put upon the significance of my seeing them.
Senator Brewster. Now, in connection with certain matters in
which you were more successful, with what Government officials did
you talk? In this affair it came to nothing. Now, in what cases were
;

you able to deliver ?

Mr. West. Well, I would hardly designate any of the matters as
being "delivered."

3942

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. Well, I will put it more practically, then. In

cases concerned with Mr. Cohen did you discuss with Government
officials a matter where contracts did finally result ?
Mr. West. In the very beginning, when I discussed witli people at
the Ordnance, when I tried to find out, get information, Mr. Cohen's
problem was how to get clearance. He didn't know where to go nor

what

whom to see.
Senator Brewster. Let's say, then, he did get some verv substantial
orders in the amount of $70,000,000.
Mr. West. I never really knew. He told me different amounts at
different times, and at one time in a letter to the Maritime Commission
he said that he had $25,000,000 worth of British business and was negoI
tiating contracts aggi-egating a total in excess of 100 millions.
asked Mr. Cohen from time to time, and he was vague. At one time
he said about 70 millions had been completed. I never had an accounting. I didn't know. I was basing my claim against him. 1 percent, on
70 millions because that is what he represented to me he had in round
figures at that time.
Senator Brewster. Was that both British and American ?

Mr. West. Oh, no just British.

Senator Brewster. Just British?
Mr. West. There was no American involved, no American business
at that time involved. And may I say this. Senator, in answer to your
question, that when I first sought information about this problem I
discovered that intermediaries of one kind and another had been sent
to the War Department, different people speaking for him and never
getting anywhere, and the advice that I gave to Mr. Cohen in those
early days was to take the president of his company, the Empire
Ordnance, and go directly to the Ordnance officials of the United
States Government and put his cards on the table to show them what
the facts were about his proposition, who the people were involved,
the financial interests back of him, and be perfectly frank and straightforward, and rest his case on its merits, and that manner of procedure
was effective and prevailed, and the advice that I gave him to deal with
the United States Government in that manner, in a frank and open
and straightforward manner, produced results.
Senator Brewster. Now, with what other officials did you personally discuss this matter besides General Crowell that you have
;

testified

about?

I never discussed Mr. Cohen's matter or specific phases

for the particular purpose of asking governmental action with
any officials of the Government.
Senator Brewster. Now, Mr. West, that isn't what I have asked
you. I repeat, I ask you. With whom did you discuss any of Mr.
Cohen's collateral affairs, with what Government officials? I don't
ask you for wliat purpose and what the results. With whom did
you discuss it?
Mr. West. You mean with reference to this early British business ?
Senator Brewster. I have been trying to cover blanket, but you
seem to be rather evasive, let's say that. Confine it to that.

Mr. West.

of

it

Mr. West. No others.

vSenator Brewster. No others?
Well, let's move on to the next
phase of it. With what Government officials did you have conversations about Mr. Cohen's affairs?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3943

Mr. West. I have told you about manganese.

Senator Brewster. Yes; you have given us that. I am asking
you
Mr. West. In regard to shipbuilding?
Senator Brewster. Yes let's take that.
Mr. West. Mr. Cohen became interested in shipbuilding, and his
purpose was to have the Empire Ordnance Corporation, which at this
time had developed to the extent where it had acquired other additional or subsidiary companies making parts in connection with the
original contract he wanted to have an additional company that
would make ships, and sought information about the possibilities
;

of shipbuilding.
to employ Tommy Corcoran?
Mr. West. I did not, sir.
The Chairman. Proceed, Senator.
Senator Brewster. Retention followed your employment, however,

The Chairman. Did you advise him

didn't it?

Mr. West. It did.

Senator Brewster. Did you ever discuss Mr. Corcoran with him?
Mr. West. Beg pardon?
Senator Brewster. Did you ever discuss Mr. Corcoran with him?
Mr. West. Oh, yes. I was asked by Mr. Cohen if I knew Mr.
Corcoran.
Senator Brewster. Yes.

Mr. West. I said, I did.

Senator Brewster. And did you recommend him?
Mr. West. Well, I wouldn't say that my recommendation was a
part of his hiring Mr. Corcoran, but I certainly recommended Tommy
Corcoran as a man of ability and character at that time, and I would
say that.
Senator Brewster. Now
Mr. West (interposing). May I say this, Senator, please, that I
have had no business associations of any kind whatsoever at any time
with Mr. Corcoran, none whatever, and even in connection with
Empire Ordnance. My understanding gained from what Mr. Cohen
told me was that Mr. Corcoran was hired for other purposes, and
in no way conflicted with what I was doing.
Senator Brewster. That is all right; we are not questioning that.
Now, you were leading up to the shipbuilding. He decided to get
into shipbuilding. What did that result in, as far as your conversation with Government officials is concerned ?
Mr. West. As I have already told you, I made inquiries of the
mayor of Houston to find out about a site. I made inquiries at the
Maritime Commission to determine
Senator Brewster (interposing). When you say "Maritime Commission," whom did you talk with ?
Mr. West. I talked with Commissioner Woodward at the Maritime
Commission, and I might say at the same time for the same purpose
of gaining information to advise Mr. Cohen, not to ask for a contract.
And I took part in a conference at the Maritime Commission subsequently where representatives of Mr. Cohen's company were, and in
the office of one of the officials of the Maritime Commission, Mr.
still

Scoll.

3944

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. How do you spell that?

Mr. West. I don't know the correct spelling;

S-c-h-o-1-1, I

would

suppose.

Mr. Fulton. He is assistant to one of the Commissioners.

Is it "S-c-o-1-1" or
Mr. West. Is that the correct spelling?
"S-c-h-o-1-1"?

Mr. Fulton. I believe

the Commissioners.

it is ''S-c-o-1-1,"

but he

is assi^^tant to

one of

Mr. West. I think lie is assistant to Commissioner Vickery.

Mr. Fulton. And that was referred to, Senator Brewster, in Commissioner Vickery 's letter, Avhich sets forth exactly what took place at
that conference.

Senator Brewster. You were present at that conference ?

Mr. West. I was present at a meeting there where Mr. Cohen's shipbuilding program Avas discussed. I mean there was no matter of asking Commissionery Vickery I mean Mr. Scholl in this instance, and
that Commissioner Vickery have
later when Mr. Vickery came in
the Maritime Commission in individual effort of asking for a conIt was a general discussion of his proposition, which he had
tract.
offered in writing to the Maritime Commission.
Senator Brewster. What other Government officials did you have
contact with in connection with this shipbuilding affair ?
Mr. West. No others that I recall.
Senator Brewster. Woodward and ScoU?
Mr. West. Yes and Commissioner Vickery.
Senator Brewster. Yes.
Mr. West. But, as I say again, for purposes of securing information
I conceived my purpose all the time to do that
to advise Mr. Cohen.
to advise him and counsel with him on matters pertaining to the
Government.
Senator Brewster. Now, let's go on to what other of Mr. Cohen's
affairs you took up with Government officials.
Mr. West. I don't recall any others.
Senator Brewster. You think that is the extent of j'our activities?
Mr. West. There were many, many things at one time or another
getting information or calling places for information but I have no

recollection at all of the specific identity of all of those.

Senator Brewster. Now, in your experience, Mr. West, I think you
have already testified to your association as a Member of Congress
and with the Secretary of the Interior. Did you refer to your intermediate connection when you were in some phase of activity on the
Hill in your testimony as to your experience?

Mr. West. To whom?

Senator Brewster. To this committee today. There was a period
when you were supposed to have been some sort of liaison officer on
the Hill. I never was quite clear what that was. What was that
connection

Mr. West. I was Under Secretary of the Interior at the time.

Senator Brewster. During all that period?
Mr. West. And on various occasions was asked, as you perhaps
lecall, to present the views of the administration with respect to particular matters to the Members of the House and the Senate.

IXVESTIGATIOX OF THE XATIONAL DEFENSE PROGRAM

Senator Brewster, Not concerned with Interior

aifairs, in

3945

many

instances?

Mr. West. In many instances that is correct.

Senator Brewster. You were sort of a free lancer in that period,
and you acquired a considerable acquaintance witli the general machinery of the Government and the Congress in that period, did you
not?

Mr. West. That is right.

Senator Brewster. That accLuaintanceship was undoubtedly of value
in your later contacts that you now have been carrying on.
Mr. West. It was very valuable to me in enabling me to understand
the processes of govermnent and what should be done" and to advise Mr.
Cohen in this particular instance as to what to do and where to go and
how to handle governmental matters.
I have a notion. Senator, that there is a range of activity that is
perfectly ethical and proper in the matter of giving that sort of advice
and representation to business people who do not know where to go and

what

to do.

it that is one of the matters which we

are exploring, and we obviously, I take it, are concerned about the
precise relation of former Government officials to such activities. Are
3'ou familiar with the 8 or 10 departments which forbid activities for a
quarantine period of 2 years of any former officials?
Mr. West. Oh, yes. I have never represented anyone before those
departments.
Senator Brewster. I didn't intimate that, but I meant you are
familiar with that.

Senator Brewster. I take

Mr. West. Oh, yes.

Senator Brewster. You are familiai- with those regulations?
Mr. West. Certainly.
Senator Brewster. And also with the attitude of the President discouraging the activity of those who have been concerned with the party
affair in Washington in the lobbying ])ractice?
Mr. West. Oh, certainly; and I am in com])lete accord with the
views of those who hold that these imethical practices of loblwing and
improper representation and the alleged selling of influence are very
reprehensible. I hope that out of this sort of exploration and investigation will come an enactment that will regubirize that activity, prohibit that which is impro])er, and recognize tliose forms of activity
that former members of the administration and of Congress can participate in with perfect propriety.
Senator Brewster. Now, isn't it a f;ict that the departments are
very generally condenming these percentage fee contracts?
Mr. West. I don't know what the departments are doing, Senator.
Mr. Fulton. The Treasury regulation is an old regulation.
Senator Brewster. This is about percentage-fee contracts. Have
tliere been any?
Mr. FuLTc^N. You are talking about the War Department, I think.
Senator Brewster. Yes.
Mr. Fulton. Which has a regulation to the effect that there has been
no fee paid to obtain the contract. That is, of course, in ever^^ one of
them.
Senator Kilgore. I would like to ask a question before you go on
and develop something else.

3946

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

From your

testimony I gained the idea that, in your opinion, it

to deal with the departments,
with the procurement agencies, shall we say, rather to have an adviser
and a guide to take him through the labyrinth and, in a legitimate
manner, show him whom he could talk to in order to procure contracts.
really

was necessary for a businessman

Is that right?

Mr. West. Yes,

sir I think that is helpful to him.

Senator Kjllgore. In other words, the labyrinth or maze of the procurement agencies of Government here are such that the common,
ordinary garden variety of businessman can't, find his way around.

Is that right

Mr. West. That

is very true.
Senator Kilgore. Don't you think a simplification so that a man
could get to the right official without wading through some labyrinth
some way might facilitate national defense ? In other words, a central
clearinghouse where lie could make his possibilities of manufacture
known and the people who need those materials could find out what he
could make. Don't you think that would be a help ?
Mr. West. I think that the present organization of the defense program could be improved, and it is, as I understand it, being improved
with experience, but when the emergency came upon us, it was neces-

sary

Senator IOlgore (interposing). I will grant you

Mr. West. To create agencies immediately.

that.

Senator Kilgore. But the point I am making is that it is very nearly

impossible for a man not familiar with official Washington just to
come in here and get a contract, even though he has all the facilities
to manufacture something that is needed, unless he is content to stay
around here for a long time and feel his way from clerk to clerk.
Isn't that right?
Mr. West. I agree with you. It is very difficult for such a man, but
I also agree that business can be done in Washington by businessmen
dealing directly with Government officials. It is a matter of knowing

where to go and what to do.

Senator Kjxgore. That is the point I

am making. I am not accusnot trying to infer any wrong in showing a man

where to go. The point I am making is that somebodv must know
where to go if they are going to get any business. Isn t that right?
Mr. West. I think that is true in many instances.
Senator Kilgore. And it is practically impossible to contact the
man who actually buys stuff unless you really, in the vernacular, know
your way around.
Mr. West. I don't think it is any different, Senator, from what it
has always been.
Senator Kilgore. I am not talking about the use of political pressure.
I am talking about knowledge.
ing anyone.

am

Mr. West. That

is

right.

Senator Kilgore. In other words, you must know your way through
the maze if you expect to get any place with any rapidity.
Mr. West. As a Member of Congress, I discovered that a great
many people in my district, even 10 years ago, did not know where
to go and what to do to get proper consideration of matters that
they had pending before the Government, and as a Member of Con-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3947

have advised many, many people in the past what to do in

Washington and what to do about matters pending before the
Government.
Senator Kilgore. Not so much what to do as to find out the proper
person to do it. Isn't that it ?
Mr. West. Exactly so.
Senator Kilgore. And that proper person is usually very hard to
see unless you know what his name is.
Mr. West. That is right.
gress, I

Senator Kilgore. All right.

Senator Mead. Mr. Chairman.
The Chairman. Senator Connally wanted to ask a question, Senator Mead, and then I will recognize you.
Senator Mead. Go right ahead.
Senator Connally. Mr. West, are you a lawyer?

Mr. West, No I am not. Senator.

Senator Connally. Your contract with Mr. Cohen was based upon
a percentage of all the business he was expecting to get. Is that
;

right

'{

Mr. West. That is right.

Senator Connally. Well, you said awhile ago

it was not a comcalled?

Mr. West. I would call that compensation in lieu of commission,
or in lieu of salary, or in lieu of stock interest. There was to be some

mission.

What was

it

compensation.
Senator Connally. You can't have something in lieu of something
unless the other is mentioned. Stock wasn't mentioned; salary wasn't

mentioned
Mr. West (interposing). Oh, yes. Mr. Cohen at different times
suggested a salary arrangement or suggested the matter of giving me
stock interest in the company. I Irad no interest
Senator Connally (interposing). As a matter of fact, the War
and Navy Departments provide in their contracts that they won't
recognize any contract where there is a contingent commission involved, but they do recognize contracts obtained by a paid salary
representative here in Washington. Did you know about that when
you had this talk with Cohen ?
Mr. West. Yes I know about that arrangement.
Senator Connally. Did that have any influence with you as to
whether you would take a salary or commission?
Mr. West. My only thought there was that I would take a gaml)le
with him. I didn't know how much business he was getting. He
might not have gotten any. And I wasn't disposed to have him pay
me any compensation that he might not get anything out of.
Senator Connally. Did you get for him any of these contracts that
he is supposed to have to make a volume of $700,000,000? Did you
get any of those contracts for him?
Mr. West. No, Senator. He had commitments with the British
before I ever knew him, and he negotiated the contracts himself.
Senator Connally. Well, what was he going to pay you $700,000
for if you didn't get any contracts for him and are not a lawyer?
What was it you were selling him ?
311932 42 pt. 10^15
;

3948

INVESTIGATION OF THE NATIONAL DEFENSE PROORAM

Mr. West. I was merely being associated with him and sharing
if we would look at it that way, in the profits of his business.
If I had had a stock interest, I would share in the total of
with him,

his business.

Senator Connallt. Of course, but

Mr. West (interposing) But this was in lieu of that.
Senator Connally. In lieu? All right, let's see about in lieu.
You say you weren't selling any influence for $700,000?
Mr. West. Certainly not.
Senator Connally. You weren't selling any legal knowledge?
Mr. West. Certainly not.
Senator Connally. You were selling your association. I have
known you and I like your association, but $700,000 for 2 or 3
.

months' social contact is pretty high.

Mr. West. Well, it would seem high. It would also seem high to
me that a man could get $100,000,000 worth of business or at least
whatever it was.
Senator Connally. You said you didn't get it. If you had got it,
that would be another matter. You said you didn't get a single
contract for him and that you are not a lawyer and you couldn't
advise him legally. Now, what were you selling?
Mr. West. I was not selling anything.
Senator Connally. Why should he pay you $700,000, then?
Mr. West. To be associated with him in his business. Now, if I
had had a stock interest of a certain percentage
Senator Connally (interposing). What would he give you a stock
interest for unless you were goin^ to give value received ?
I want to
get at the facts. I am kindly disposed toward you, but I can't exclude from my mind the fact that you have been the Assistant Secretary of the Interior, you have been Congressman, and you have been
a big troubleshooter here, supposedly, for the administration. If you
weren't selling legal knowledge, I can't resist the conclusion that you
thought you were selling some " 'fluence" with a big F.
Mr. West. I didn't understand you.
Senator Connally. " 'Fluence."
Mr. West. No; I was not at any time selling influence or service
that I could render by virtue of the people
Senator Connally (interposing). What were you selling? You
are not a lawyer, you say. But in a contract that calls for me to do
something and for the other man to do something, there is consideration.
You have to do something. What were you giving him for
this $700,000

Mr. West. Advice and counsel and constant service with respect
to his problems in Washington.
Senator Connally. Well, you say when you went with him, he
already had his commitments from the British.
Mr. "West. Yes.
Senator Connally. Did you know he was going to get $70,000,000
worth of business?
Mr. West. I had no idea what he would get.
Senator Connally. Did he tell you that?
Mr. West. How much he would iret?

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

3949

Senator Connallt. How much commitments he had. You asked

him about the commitments. You said he had commitments from the
British.
Did he tell you how much commitments he had?
Mr. West. No he didn't know at that time. Originally he thought
;

he would get an order for about $5,000,000.

Senator Connally. He thought. You said he had commitments
when you went with him, that he already had commitments, and that
you didn't get him any contracts or commitments. Didn't you know
what the extent of his commitments were when you went with him ?
Mr. West. Senator, I did not.
Senator Connally. You were advising him all the time ?
Mr. West. I merely had his word as to what he represented to me
that he might get.
Senator Connally. Oil, might get. You said he had the commitments.

Mr. West. He told me he had the commitments, but whether he

had them or not, I don't know.
Senator Connally. AVouldn't you ask him? When a man is making a contract based on a percentage, expecting to get a percentage
of what he is going to get, it looks to me as if I know if you were
a lawyer you would be thinking of how much that was going to
amount to. You would have asked him how much commitments he
had.
Mr. West. Yes; I did ask him that.
Senator Connally. So that you would know whether you were
going to make $5 or $500,000.
Mr. West. He expected to get an original order of $5,000,000 from
the British, so he told me.
Senator Connally. Expected to? He didn't have any commitments
if he just expected, did he ?
I am trying to get at the facts.
I never
heard of this thing until the other day.
Mr. West. As a matter of fact, I don't know. I merely took his
word for it. He told me he had no money with which to pay me and
wanted to know if I were willing to take a chance with him on the
amount of business that he would get, and that was the arrangement.
Senator Connally. What did he say? You had this contract with
him he was employing you. What did he tell you that he was employing you for?
Mr. West. To be associated with him, to advise him, and to counsel
with him and help him in all matters pertaining to his business as it was
affected by tlie regulations and procedures in Washington.
I was to
advise him to be his adviser and consultant on problems growing out
of the business that he had with the British and that he later hoped to
have with the United States Government; but he made it very clear.
Senator, that he did not have to have any help in getting his original
contract with the British, that he had, as he believed, so he told me, a
commitment for business with the British.
Senator Connally. If you weren't basing your services on the expectation of your helping him get contracts, why should you base your
compensation on a percentage? Why didn't you just tell him to put
it on a salary basis, and he would have said, "We will pay you $1,000 a
month or $15,000 a month." I can't understand why, unless a man
were wanting to get some commissions on contracts, he would want to
base his compensation on a percentage basis of what he is going to get.

3950

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. West. Well, that was his proposal to me, sir, and I accepted it.
Senator Connally. Of course, when you say the British, you try to
Of course, there is a differendifferentiate that from our Government.
tiation legally, but in this joint war effort, with the lend-lease, they are
money from us largely.
Mr. West. Oh, this contract that he negotiated with the British was
negotiated prior to the enactment of the lend-lease program last

getting

November;

yes.

Senator Connally. When was the lend-lease passed ?

Mr. West. I think it was in February. I am not sure of the exact
date.

Senator Connally. Well, irrespective of that lend-lease, it is a joint

Don't you think we ought to be just about as careful in dealing
with the British as we would be with our own Government, under the
circumstances ?

effort.

Mr. West. I do, sir.

Senator Connally. They are over here, more or less, and have to
avail themselves of our markets and our processes, and don't you think
we ought to be just about as careful shaking the British down as we
would be shaking our own Government down? I am talking about
Cohen now.
Mr. West. Well, very frankly, I don't think anyone should be
shaken down any time for anything.
Senator Connally. That is a beautiful generality.
Mr. West. I never regarded my relations with Cohen as a shakedown. I never sought out Cohen he came to me.
Senator Connally. I want to ask you this very frankly. I have
sympathy with an ex-Congressman or for any ex-Senator I will
probably be one myself some day. But I can't help but believe that,
not being a lawyer, what you were selling to Cohen was supposed
influence and drag. I can't exclude it. I have been trying to find a
hole to crawl out. And I want to know, if you weren't selling that,
what you were selling?
Mr. West. Suppose he wanted to

Senator Connally (interposing). I am not talking about supposing I am talking about the facts. What were you selling to Cohen
whether he
if you weren't supposedly selling him with the idea
believed it or not, I don't know that you were close to the big shots
here in the Government and that you could get him a lot of contracts.
Mr. West. What he had in his mind I don't know. I know

what
Senator Connally (interposing). If you were going to take money
from him and advise him, it was your business to find out what was
in his mind. Are you going to make a contract with a man that might
involve you in unethical practice without knowing what he had in his
mind?
Mr. West. I know exactly what I had in my mind.
Senator Connally. Why didn't you tell him what was in your
mind?
Mr. West. I did tell him.
Senator Connally. What did he tell you was in his mind?
Mr. West. He told me that what he wanted me to do was to be
associated with him, to help him and advise him, and that is all I
was supposed to do. That was my understanding.


INVESTIGATTOX OF THE XATIOXAL DEFENSE PROGRAM
Senator Connallt. Help him or advise him
get contracts, wasn't he

He was

3951

trying to

He said he already had

Senator Connally (interposing). Now, Mr. West, there isn't any
use.
Yon said awhile ago that he "expected," that he told you when
you first made this trade with him that he "expected" to get $5,000,000
from the British. Had he made his commitments with the British
when you made your agreement with him or hadn't he ?
Mr. West. He told me he had.
Senator Connally. That he had how much ?
Mr. West. He said he expected to get
Senator Connally (interposing). Expected? Do you call an exMr. West. No.

pectation a contract?
Mr. West. Senator, I know only what he told me, and he said he
expected to get-^
Senator Connally (interposing). It was your contract and it was
your business to find out. Here you are with all this background of
power and influence and campaigning around in connection with these
departments. It looks to me as if you ought to be very cautious.
You say you are not a lawyer, but you have some conception of the
ethics, I am sure, whether you are a lawyer or whether you aren't.
I just can't fathom what you were selling unless you were selling

your supposed influence.

Mr. West. I consider my conduct with him quite ethical. I never
considered I was improperly selling anything that I couldn't sell him
for proper compensation. Now, if he had given me a 10 percent
stock interest in his company and wanted me to be associated with
him as adviser, I would share in the profits of that to the same extent
or to a greater extent, and this is comparable to that. I didn't want
stock in the company.
Senator Connally, In the one case you get common stock in this
case you get preferred stock cash.
Mr. West, That may be so.
Senator Connally. You have a cash claim against the company
for which all of its assets are responsible. When you get the amount,
you don't figure increased dividends. If you took common stock,
maybe you would get something and maybe 5^ou would get nothing.
In all frankness. Mr, West, I have known you many years and like
you, I don't like some of your activities. I though you were supposed to go around here with your pockets full of "fluence," trying
But irrespective
to tell Congress how to run things and all that.
of that, I like you and I hate to see you involved in this. But I
can't resist the belief that you were selling your supposed influence
with the Government to this fellow Cohen. With the Government
sitting on one side of the table and Cohen on the other, if you looked
at them both, I don't think you ought to have any doubt about which
side you would like.
I just can't resist the belief and I am saying it
that I think this kind of
to your face rather than to your back
;

practice

is

reprehensible.

Mr. West. Senator, I appreciate your good will personally, as you

know, and I admire your frankness in just saj-ing bluntly, as you have,
that you think this is improper.

3952

INVESTIGATION' OF

THE NATIONAL DEFENSE PROGRAM

I deny and I say this to your face and to the members of the committee just as firmly as it is possible for me to do that at any time did
I seek to sell influence, or that I endeavored in any manner whatsoever
to induce any Government official to do anything for me as a result of
my prior acquaintance and association with him. I have a high regard
for ethics, as a former Member of Congress, and I want to say that at
no time have I ever appeared since my membership in the House of
Representatives to represent anyone in any manner in regard to any
matter that could be interpreted in any possible way as being lobbying
before the Congress of the United States. I have that high regard for
the membership in the legislative body of this country.
Senator Connally. Lobbying up here is one thing and lobbying
down in the departments is another. Up here we have stenographers
to take it all down in the departments they don't. I don't know what
happens down there. I assure you I am not trying.to take sides. I
think we ought to have this man Cohen up.
The Chairman. He is on the list.
Senator Connally. And we ought to search all of his pockets.
The Chairman. We are going to do just that.
Senator Mead, did you have a question ?

Senator Mead. Mr. Chairman

Senator Connally. Wait a minute; let me ask one other thing, if
you will permit me. I wasn't here and I know nothing on earth about
it.
Some comment was made about Senator Joe Hill being connected
with this thing. Would you mind telling me what connection he had
with it? I will say I saw him here several months ago, l)ut he never
mentioned tliis matter to me, and I know nothing on earth about it.
For my own information and for the record I would like to know. I
would like to know what Senator Joe Hill had to do with this case.
Mr. West. So far as I know, he never had anything to do with it.
Senator Connally. I thought you said that he paid you some
money.
Mr. West. Oh, no he advanced money to Mr. Cohen with which Mr.
Colien paid me and Mr. Cohen later paid Mr. Hill. In these early
days Mr. Cohen didn't have any money. That is why he entered into
this sort of arrangement.
Senator Connally. Then, you don't know what the relationship of
;

Hill

Mr. West (interposing). As I said a moment ago, my understanding

Senator Connally (interposing). Did you ever confer with Hill or
advise with Hill?

Mr. West. About this?

Senator Connally. Yes.
Mr. West. No; he had nothing to do with it.
Senator Connally. Why was he giving Cohen money ?
Mr. West. State Senator Joe Hill was associated in some way with
the Southport Refinery in the State of Texas.
Senator Connaixy. Oh, yes.
Mr. West. And Mr. Cohen was interested in tliat.
Senator Connally. I see
Mr. West. And State Senator Hill was here in Washington looking
after the interests of this refinery. I never had anything to do with

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3953

that matter at any time, nor did I know in any way that Senator Joe
Hill had anything to do with the Empire Ordnance.

Senator Connally. That is all right.

The Chairman. We will ask Cohen all about

that

when he

gets on

the stand.

Senator Mead. Mr. Chairman, I think the witness raised a very good
point when he suggested that he thought out of this investigation some
permanent legislation should follow that would govern matters that we
are now investigating, but to help me arrive at a proper conclusion,
and I believe that some uniform legislation ought to be enacted, would
yau say that your service was rendering legal service and I don't beto render service or was
lieve it is necessary for a man to be a lawyer
it rendering service as a result of your experience and your knowledge
of procedure and of, we will say, locale ? Would you say that ?
Mr. West. Oh, I think yes; unquestionably my ability to advise people in regard to Government procedure is the result of many years of
experience in Government and the expenditure on my part of a great
many thousands of dollars in being here and being a Member of Con-

gress.

Senator Mead. Then there is a little difference between influence

and what might be termed knowledge and experience.
Mr. West. Certainly, Senator. I think there is a very great difference between those two things.
Senator Mead. Now, breaking that down a little further, do you believe that a Democratic Representative in Congress with a number of
years of experience, with either a law degiee or no law degree, would be

we will say, before the Army or the Navy or the

O. P. M. or Ships, Inc., or any of those agencies that, just for the recwould a Democrat be
ord, we will say, are headed by Republicans
the natural employee of somebody that just wanted influence?
Mr. West. I think. you are absolutely right, that he would not be
the logical person. As a matter of fact, Senator, it is a detriment to
an individual who has been a Democratic Member of Congress to
attempt to use influence in the, departments.
Senator Mead. It is my understanding that these men who are at the
heads of these procurement agencies or contract distributing agencies
have instructed those under them to ignore influence in the matter of

influential appearing,

contract distribution.

Mr. West. I understand that

Senator Mead. I think, to the

to be the case.
benefit of the administration, it should
be said in the record, lest we get this word "influence" mixed up, that
the heads of these departments are not of the same political faith that
those who are being accused of using influence happen to be.

Mr. West. That is right. Senator.

Senator Mead. Well, now, in view of the fact that 56 firms have 75
percent of the defense business, and having no regard for the political
affiliation of those who represent the 56 firms, but it is true that they
maintain representation here in Washington in wartime and in peace-

time.

Mr. West. That is right.

Senator Mead. And it is true that they have dinners and luncheons
and various other methods of entertainment for their representatives

3954

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

and their salesmen and at times for representatives of the departments

of government. Now, has anybody ever criticized those 56 firms for the
method and the type of representation they liave here in Washington?
Mr. West. No. I have never seen any criticism of that, Senator.
Senator Mead. All right. Now, in any uniform law that ought to
be considered.
Mr. West. Exactly.
Senator Mead. All right. Now, then, there are 200,000 firms in the
United States employing 45 percent of the workers who are left out
of this defense program. How are they going to get into it unless
they employ somebody, not necessarily with influence I am against
that but how can they get into this picture unless they employ somebody, and if perchance, even though the department heads are of the
other political faith, wdiich probably is a very, very good thing, how
can they employ somebody with knowledge, with experience, if we set
up a uniform law that might work a hardship on them? Shouldn't
we take into consideration the 200,000 firms who are clamoring to get
into this defense program and who are not yet into it when we decide
on a uniform law governing representation of firms here in Washington ?
Mr. West. I think we should.
Senator Mead. All right. Well, now, we have congressional committees at work investigating and expending considerable money trying to find out why these firms cannot participate in the defense program, why they are being put out of business constantly. The chambers
of commerce are here, representatives of small business are here in
Washington, and the Congress itself is giving a great deal of attention
and time to it. Now I believe, with you, that we should have uniform
legislation, but we ought to go into the over-all picture and find out
how the big firms get the business, and find out why the little firms
do not get the business before we add to the dilemma in which we find
ourselves. I have only been here since the Harding administration,
and I have seen what is called "influence," or what might be called
experience or knowledge at work in the Harding administration, in
the Coolidge administration, in the Hoover administration, and now
in the Roosevelt administration, but I have never seen a set-up as far
above reproach and as much to the credit of the administration as this
administration. Long before there was any remote possibility of war,
these organizations. Ships, Inc., the War Department, the Navy Department, the Maritime Commission, the O. P. M. and all of its agencies, were practically placed under the authority and the direction of
those of opposition political faith; therefore, I think we want to be
very careful when we use the word "influence" as to whether or not it is
influence or knowledge and experience, as to whether or not the influence that you possess, for instance, would be helpful or harmful,
lest in the enactment of an over-all law we make another mistake and

add to our dilemma.

Mr. West. I agree with you absolutely on that.
Senator Connally. Senator Mead, will you permjt me to ask a question or make an observation?
Senator Mead. Sure.
Senator Connally. Talking about the O. P. M., the dollar-a-year
men, I think tlie dollar-a-year business is all wrong. Nobody in the
Government of the United States ought to ask anybody to work for

INVESTIGATION OF THE NATIONAL DEFENSE PROGJCAM

3955

riothing, and they oughtn't to ask the United States for the privilege
of working for nothing they ought to pay them if they are worth it,
and if they aren't don't take them. This business of rushing down
here and vohmteering for nothing is all wrong. We don't like to have
them under the temptation of picking up what is lying around. That
;

is all.

Senator Mead. I believe, Mr. Chairman, that we ought to have an

agency of Government that would do the work that is sometimes being
done by men who have experience and knowledge of procedure. I
believe that we ought to have an agency here that would guide and
direct small business so they could get into this defense program.
Thousands of them are being put out of business, and other thousands,
or hundreds are trying to employ men who know Washington, who
have experience and knowledge, in an attempt to bring them into the
defense program.
Mr. West. Something like that is the solution to the problem, and
that is the only solution that we can get.
Senator Mead. I believe that if all these representatives of industry were here and were called upon to register, were directed by legislative enactment, that would prevent such criticism as is occurring at
this time, that we might open up this contract distribution program
and at the same time prevent the necessity of men coming to Washington trying to find their way around in the dark and employing
somebody who has some experience and finding out that he hasn't any
influence.
I think that the defense set-up, so far as the major departments of the Government are concerned, is all right, but I do not believe that the avenue has been opened for the 200,000 small industries
and plants and manufacturers of the Nation to participate in it, and
they are clamoring to get in, and sometimes they are making a mistake

method that they adopt. Therefore, a set-up here, a set-up in

Washington, that would open up the avenue that would make it ethical
in the

for their representatives to participate in the distribution of contracts

really necessary right now.
Mr. West. I regard that as highly necessar3^ right now.
The Chairman. Do you have any more questions, Senator?
Senator ]Mead. No.

is

The Chairman. Senator Herring?

Senator Herring. No.

The Chairman. Mr. Fulton, do you have any

Mr. Fulton. As I understand my examination

mony and

questions?
of your sworn testi-

in the examination before trial, Mr. Cohen, when he first

talked to you, didn't have to ask you to find out what his difficulties
were in the War Department; he knew what they were, didn't he?
Mr. West. Yes; Mr. Cohen had told me what he thought was the
matter. He thought that it was the difficulty in his organization setup and mentioned different things about it.
Mr. Fulton. Particularly the people in the War Department who,
although they weren't giving the contract, had to give the clearance
for funds, thought that it was a stock-rigging or promotion scheme.
Did he mention that ?
Mr. West. Yes that was one of the things that he thought might be
the difficulty.
;


3956

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Fulton. Now, in that connection, did he name the persons or

had in mind who were suspected on the ground of stock
promotion by these persons in the War Department?
Mr. West. Did he name people in the War Department ?
the people in his own organization,
]\Ir. Fulton. No, no
Mr. West. That were
Mr. Fulton. That were the cause of the War Department having
this opinion that it was a stock-rigging or possibly a stock-rigging

figures that he

matter ?
Mr. West. Yes he mentioned several people in that connection and
mentioned the fact that possibly his use of stock that he possessed as a
part of his organization financing was at the bottom of his difficulty.
Mr. Fulton. What people did he mention?
Mr. West. I may say that all this is vague because I knew nothing
about his financial associates nor his financing program, that is, for
;

his

own

organization.

Mr. Fulton. But this was the problem that he had to get cleared, the
problem of his associates.
Mr. West. It subsequently developed that the thing that he had to
get cleared was the nature of his program, the financing of it, the backing that he had, and convincing the officials of the Government that he
had trained personnel and that he had financial backing, and of the
right kind, and that it was not merely a Wall Street proposition, as he
put it.
Mr. Fulton. That was what in your testimony he indicated he told
you was his principal problem.
Mr. West. That is right.
Mr. Fulton. Quoting you, you said that he told you that
The difficulty in Washington was that certain i)eople there felt that he was
merely a stock promoter and that he needed someone who could present his matter
in a right light to the people in Washington, and that I could name whatever figure
I wanted to name as mj' compensation for this.

Mr. West. That is right.

Mr. FuLoxjN. Now, at that point, you were not a lawyer, were you
an accountant?
Mr. West. No.
Mr. Fulton. Had you been a financier?
Mr. West. No.
Mr. P^uLTON. And prior to your Government connections what
business situations had you been in? What was your business?
Mr. West. I was not in any business.
Mr. Fulton. Now, you agreed, as I understand it, to go to Washington and present this problem. Before doing that, did you ask
him what his financial set-up was?
Mr. West. Yes. I asked him to prepare for me a memorandum
with reference to his propositicm that I could use for my own information for the purpose of determining what his difficulty was.
Mr, Fulton. And did he give you a memorandum showing his
financial set-up?

Mr, West. No I was never given that.

Mr. Fulton. Did you ever find out before going to Washington?
Mr. West. No; I came here and made inquiries, as I have indi;

cated before, to find out what the trouble was.

When

I discovered

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3957

that it involved the character of his organization, the nature of his

personnel, and the character of his financial backing, I recommended
to Mr, Cohen that he correct, in the proposition that he was submitting for clearance, any weak parts or correct the things that
were objectionable and go directly with Mr. Dowd, the president,
and sit down frankly with Government officials and work out his
problem in accordance with their wishes.
Senator Mead. If I may ask, Mr. West, who is this Mr. Cohen, I
don't seem to place him, and I wasn't here at the beginning of your
testimony.
Mr, West. He is Frank Cohen, of New York.
Senator Mead, And what business has he been in ?
Mr. West. He is now with the Empire Ordnance Corporation of

New York

City.

Senator Mead. Are you with him still?

Mr. AVest. No; I am not with him any more, have not been for
several months. That is the company that I am suing for compensation.

Senator Mead, Well, I for one, as a member of this committee,

and I know this is true of the whole committee, don't want to play
any favorites at all. We want to go to the bottom of every case that
comes before us, but in the over-all sizing up of the situation I think
we ought to try to make a contribution to the elimination we have
had half a dozen of these emergency periods, war crises, and in all
of them we have investigations; I understand we had 116 investigating committees created after the last World War. We want to go
along with this effort and stop the necessity of investigations after

the

war

is

over.

Mr. West. I agree with you absolutely. These things should be

scrutinized now. We could keej) our record clear as we go along.
Senator Mead. That is what this committee wants to do, but in
addition to that, I think that we ought to have a set-up here in
Washington that would require the registration of everybody who
comes here to represent any business whatever, I think we ought
to have in that set-up adequate facilities to give to little business
that representation which big business now enjoys; and then we would
spread out this defense program and we would get it honest from
top to bottom, and to keep it honest is the major function of this
committee, one that I want to take a leading part in,
Mr. West. It seems to me. Senator, there is a proper place for
representation of small companies in this defense program to aid
small companies in understanding how they should deal with the
Government and what they should do about Government procedures,
and if small business in this country is not afforded those facilities
that are available to a few big business concerns, in my judgment
the backbone of the industrial strength of this country will be broken,
because little business can never survive such an emergency without
such form of helpful assistance.
Senator Mead. Little business seems to be in a concentration camp
right now, and a good deal of that is due perhaps to priorities, and
some of it may be due to the fact that these industrial giants that are
directing the emergency defense agencies have never gotten over the
fact that they have been fighting little business as a nuisance com-

3958

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Now, in any consideration which this competitor all their lives.

mittee gives the problem of regulating or preventing representatives
of business from coming to Washington and approaching any of
these procurement heads, we ought to have in mind the problem of
small business, and that is the point that I made a while ago, and
that is the point I want to reiterate again, and that is the point I
hope that we will drive home successfully before long. The O. P. M.
set up under its own authority, an agency to look after small business. Well, it was merely theoretical.

The Chairman.

It

was window dressing.

Senator Mead. It was window dressing. Then the President, by

Executive order, created the Contract Distribution Division, and he
gave it the power and dignity of an Executive order, and it was a
step in the right direction, and they are doing a little better than they
were doing before when they were just an orphan of the O. P. M.
But we haven't gone far enough in that direction, and the question
of representation before the departments for little business, and intermediate business and the question of breaking up these contracts is,
in my judgment, the biggest problem now before those who are anxious
to expand defense that we are concerned with.
Mr. West. As a matter of fact, this concern in the beginning was
small business. It was not big business when it started, and it had
no financial resources, and the very fact that this arrangement for
compensation for me was made was because these people had no money
to pay for this kind of service at all, and I was willing to take a chance
of going along with them and sharing with them in this way because
I thought there was a genius there. I knew one of the men involved in
it, a Mr. Bert Quarrie, from Cleveland, who was their chief engineer.
I knew that their technical personnel were good, were the best that
they could secure, and I felt convinced that this group could step in
and do a job for the British Government that would react to the
benefit of our own defense program and because they had no money
to pay, they couldn't even pay salary, they couldn't even pay any
compensation of any kind, I felt convinced there was merit to their
proposal and I agreed that I would be associated with them and share
in their profits to this extent.
Now, it has resulted that instead of
getting a small amount of business they have gotten a great amount,
and the compensation runs to a large figure. That is the whole explanation of it. If they had gotten no business I would have gotten
no compensation, or if they had gotten only a small amount of business there would have been small compensation. But small business
this country has no way of finding out where to go and Avhat to do
and how to do business with the Government of the United States.
They can't afford, in the first place, to have highly ]3aid AVashinffton
representatives, and because of their lack of knowledge of Washington
conditions they become the victims of those who would ex]:)loit this
;

emergency for their own personal gain, and get into the clutches of
people who are totally devoid of ethical consideration in this matter.
Senator Mead. Well, to give them adequate representation and to
keep the defense program from justifiable criticism and condemnation
In other words, we want to keep it on
is the job of this committee.
the up-and-up, as it were.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3959

Mr. West. I am completelj^ in accord with that, and I hope, sir,

that this committee will find a means of accomplishing that objective.
Senator Mead. But we are not going to do it if we just go along in
this emergency as we have in other emergencies without doing anything over all about it, just letting every problem come up and take
care of itself.
Mr. West. It is too big a thing. You can't just handle each individual instance in this matter and give as much attention to each
individual instance.
Senator Mead. We need a big over-all agency of the Government to
see to it that very firm and every industry in the country that wants
to participate, should participate, has representation here, even if it
is representation furnished by the Government.
Mr. West. I agree with you absolutely.
Senator Mead. It must be on an ethical, honest representation, and
it must be complete with all of the experience and all of the knowledge
necessary so they can get in and participate in the picture and do it
honestly.
Mr. Fulton. Well, Mr. West, I have a few questions to ask you,
largely based on your own sworn testimony a week ago today. Before
asking those, I believe I will refresh your recollection by reading a
few of these answers which you gave, and then take the subject up
categorically by question. Quoting you
I saw certain people that I thought could present this matter to the oflieials
that had jurisdiction over Cohen's matter for the purpose of vouching for him
or clarifying his picture by convincing them that Cohen was able to do this that
he had a group of men about him, of technical experts and experienced engineers,
who could do this program, could do this work that he wanted done, to perform
this contract witli the British, and with a view of persuading them to give the
clearance that was necessary from our Government before the British would
enter into negotiations with him. I do not wish to mention particular names in
connection with that matter. The job was done. The clearance was secured.
Almost immediately Cohen was able to secure a very favorable conference at the
;

Ordnance Department.

You said you talked with "probably four people," and then you
advised Cohen "to go with Mr. Dowd to the Ordnance Division and
to see the officials," apparently that you were referring to earlier.
Now, the specific question was asked you "It is your opinion, I
presume, is it, that this change of heart in the War Department was
secured by your talk with the people in the Department?" To which
you answered, "Definitely."
Do you recall that line of questioning and those answers?
:

Mr. West. Yes; I do.

Mr. Fulton. And they were true?
Mr. West. That is right.
Mr. Fulton. And given under oath?
Mr. West. That is right.
Mr. Fulton. Now, you have told us that Mr. Cohen knew what
his problem was, namely, a matter of the unwillingness of the Ordnance Department to clear a contract that they thought might involve stock-rigging or promotion schemes. You have told us, I
believe, that you yourself had no financial accounting or legal experience, indeed any knowledge of this financial set-up.
Mr. West. That is right.


3960

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. FuXiTON, So that when you went down there you were not
down there for the purpose of doing a lawyer or an accountant

goin|>;

or other type of job of explaining the facts as to his actual financial

were you ?
Mr. West. No, sir.
Mr. Fulton. You say here

set-up,

I saw certain people that I thought could present this matter to the officials
that had jurisdiction * *.

Now, who were

those people?

Mr. West. I simply

what the problem was,
Mr. Fulton. First,
where ?
Mr. West. I said a

went in there, in the first instance, to find out

with this purpose in mind.
where's "there"? "1 saw certain people,"

Department

out

to

find

few moments ago that I went into the

what the problem was. When I

War
dis-

covered

Mr. Fulton (interposing). No, no. I wasn't referring to that,

Mr. West. I was referring to your sworn testimony that you saw
certain people that you thought could present this matter. Now,
who were they?
Mr. West. These would be the people in the Ordnance Division
who would receive applicants for this sort of thing and would
officers regarding the merit of the proposiI simply went in that thing speaks for itself.
Mr. Fulton. I still think you misunderstand me. I am quoting
your sworn testimony "I saw certain people that I thought could
present this matter to the officials that had jurisdiction." Now, I
am not talking about the officials; I was going into that next, but
who were the people that you saw that you thought could present
it to the officials ?
Mr. West. I have already made a statement with reference to that,
that I saw the parties in the Ordnance Division who would know
about the proposition of the Empire Ordnance Corporation for the
purpose of determining what their difficulty was and with the intention of explaining to them what I had been told by Mr. Cohen about
his proposition, in the expectation that they in turn would give that
information to the appropriate officials in the War Department who
would have jurisdiction over this matter. When I discovered, however, what the difficulty was, I reported back to Mr. Cohen, recom-

report to their superior

tion.

mended to him
Mr. Fulton

(interposing).

You

are skipping ahead to another

point.

Mr West. No; I am not skipping ahead. I recommended back to

Mr. Cohen
Mr. Fulton (interposing). Would you confine your answer to the
particular question?
Mr. West. I have already answered that in that record.

Mr. Fulton. Then if you have answered that, let's put yourself
back in the hotel with Mr. Cohen. You left the liotel, and you went
to the War Department, to the building of the War Department. Is
that it?

Mr. West,

l^^iy, I

would suppose

so

yes.

INVESTIGATION OF THE NATIONAL DEFENSE PROCrt.AM

Mr. Fulton. Just
ing the door.

to refresh

your recollection

Whom did you ask to see

You

are

now

3961
enter-

How did

you proceed ?
as to whom I saw specifically

Mr. West. I have no recollection at all

first instance or where I went.
Mr. Fulton. How did you get into the War Department ? To whom
did you apply for admission?
Mr. West. I have already said that I consulted with a friend of
mine in the War Department, a Gen. Benedict Crowell, and asked
him about information in connection with the handling of such a
matter for the mere matter of learning for myself what had to be done.
Mr. Fulton. Was it General Crowell that you meant when you
said, "I saw certain people who could present this matter to the
officials"? Did you have in mind that General Crowell should present
this matter to the officials?
Mr. West. Certainly not. I made it clear that I went to him to
seek information about the status of this matter, and to find out what
at that

should be done.

Mr. Fulton. Then, Mr. AVest. General Crowell had nothing to do

answer to tlie question I am asking, which is, who in the War
Department did you see for this purpose of having that man go to
the officials that had jurisdiction?
Mr. West. I went to the War Department for that purpose.
Mr. Fulton. No; whom did you see?
Mr. West. When I went to the War Department ?
INIr. Fulton. Pardon me, but the only answer to my question is
a name.
Mr. West. I don't recall the names of the people that I saw aside
from General Crowell, for the simple reason that I did not take up
the matter there myself in ])orson, but recommended to Mr. Cohen
that lie and Mr. Dowd go personally to the War Department and preAvith the

sent their

own

proposition.

Mr. Fulton. That comes later in your own sw6rn testimony. Now,
when you swore a week ago today that you saw certain people Tliat
could present the matter to the officials that had jurisdiction, that

was

a true statement, wasn't

it ?

Mr. West. Certainly.

Mr. Fulton. Who are those people?
Mr. West. I say I have no recollection of the names of the people
that I saw aside from this one gentleman whom I have mentioned.
Mr. Fulton. And you say that you didn't see him in connection with
this particular testimony because he isn't one that you asked to go to
the officials that had jurisdiction, is he?
Mr. West. I have made clear what I did,
Mr. Fulton. All right.
Mr. West. I went to the War Department to find out what this
problem was Avith the expectation of doing there what I said I was
going to do. I got information as to what should be done, reported it
back, and advised Mr. Cohen and Mr. Dowd to go to the War Department themselves and present their whole program, and at no time did
I go with Mr. (^ohen and ]\Ir. Dowd to seek the thing that they were
requesting the War Department to grant them.
Mr. FuT.TON. Although you now say you don't remember the names
of even so much as one of these people ?

3962

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAfii

Mr. West. They were subordinate officials whom I saw and asked
about the status of this matter. I was seeking information. I was not
going there to seek influence. I was not going there particularly to see
someone I knew whom I could induce by previous acquaintance to do
something. I went in as any ordinary citizen ought to be able to go in
and talk with officials of the Government and get information which
is a matter of public record, and that is all I did.
Mr. Fulton. Have you anything to add ?
Mr. West. No.
Mr. Fulton. Now, going back specifically to the question and I
wish you would, for purposes of conserving time, confine yourself to
answering the questions asked you said here that you saw certain people that could present this matter for the purpose of vouching for
Cohen. Now, you w^ere going to see a person, not according to this
testimony to ask for information, but for the purpose of having that
person approach the officials who had jurisdiction, using your own
words, "for the purpose of vouching for him." Now who ?
Mr. West. I went for that purpose.
Mr. Fulton. Whom did you ask to vouch for Mr. Cohen ?
Mr. West. I didn't ask anybody to vouch for him.
Mr. Fulton. Then this testimony you gave a week ago under oath

was false.
Mr. West.
about this

It is not, sir.

I went with that intention, to find out

case.

Mr. Fulton. Well, we will go on.

Mr. West. May I make this statement, Mr. Chairman, that this is
unverified testimony in a preliminary examination and is not yet a
matter of record in any court.
Mr. Fulton. With respect to that testimony, you entered into a
stipulation, did you not?
Do you consider that the testimony you
gave could be false because you say it was not under oath as yet?
Mr. West. No certainly not. I was examined by an attorney representing Mr. Cohen, and in that testimony that is referred to.
Mr, Fulton. You said in your testimony that you talked with
probably four people in the Ordnance Division you don't recall the
;

name of one?
Mr. West. I imagine I talked with that many in trying to find the
right person to talk to. I have sometimes talked with a dozen people
before I would get to the right person who would know information
about a matter.
Mr. Fulton. When you were asked whether it was your opinion
that the "change of heart," to use the exact quotation, "was secured
by your talk with the people in the Department," you answered, "Definitely," and you told me last night you didn't wish to change that.
Mr. West. I would stand on that to this extent, that my efforts
in finding out the status of Mr. Cohen's matter,
talking with these
officials, getting the information as to the nature of his j^roblem, and
advising liim what to do to handle his problem, how to correct objectioiuihle features of his ])ropoHitioii, and advising him and Mr. Dowd
to go back to tlie War Department and deal directly witli the officials
bi'ought al)Out a cliange of lieart on tlie attitude of the otlicials, and
]\Ir. Cohen got the clearance.
Now that is a simple explanation of what
liappened.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

396^

Mr. Fulton. But you told me last nigbt, did you not. that you didn't
know enough about Mr. Cohen's financial affairs to tell the War Department what they were and that you didn't discuss those ?
Mr. West. I certainly did not because I advised Mr. Cohen to go
down and discuss his own financial affairs with the people that had
jurisdiction over his matter. I don't know, I wasn't in a position to
know, either the technical features of Ordnance, the financial structure of his organization, nor any of the details that they wanted to
know, and I recommended to Mr. Cohen and Mr. Dowd that they go
directly and deal in person as the official representatives of their own
company with the officials of the War Department and get the clearance, and that, in my judgment, was the proper thing for them to do
and that was advice that I gave them; they acted upon it, and subsequently got the clearance that they sought.
Mr. Fulton. So that all that you did was, in effect, 'to introduce
them to the officials of the War Department. Is that correct?
Mr. West. My association with Cohen was not directed at the performance of one specific thing or another specific thing. I hope I
have made it clear in previous testimony that I was induced by an offer
of compensation to be associated with him for the purpose of advising
him throughout the whole course of his activities in connection with the
defense program.
Mr. Fulton. And your advice, according to your testimony this
morning, amounted simply to telling him to go do it himself. Isn't
that right?
Mr. West. In that instance I advised him to do just that.
Mr. Fulton. Now, you said, I believe, to Senator Brewster, that you
didn't know these men in the Ordnance Department before. Do you
wish to correct that statement ?
Mr. West. I don't recall who the people were that I talked with at
that particular time.
Mr. Fulton. But you did recall last night.
Mr. West. I talked with one gentleman.
Mr. Fulton. You recall talking with me last night.

Mr. West. Oh. certainly.

Mr. Fulton. And do you recall telling me that you did know the
men in the War Department before you went over there that you
had previously laiown them ?
Mr. West. I don't recall that I made such an assertion that I knew
them specifically. I knew where to go.
Mr. Fulton. You don't remember that I wrote down on this sheet of
paper in your presence and read to you that statement ?
Mr. West. You wrote down you asked me who all I had seen at all
times in connection with Mr. Cohen's matters, and I mentioned a number of people. I have already stated the names of some of them.
Mr. Fulton. Wait a moment, Mr. West. You told me you preferred not to mention them.
Mr. West. I said, yes, that I preferred not to mention names, and I
will say that again now.
Mr. Fulton. And after pressing you for those things you didn't
give them to me, at which point I wrote the word "refused" at the

side of this paper.

Mr. West. I did mention some names

31193242 pt. 10
16

to you.

3964

INVESTIGATION" OF

THE NATIONAL DEFENSE PROGRAM

Mr. Fulton. But not the names of the people that were referred to
have just been asking.
Mr. West. The four people.
Mr. Fulton. The people that you saw and asked to vouch for Cohen.
Those two questions.
Mr. West. No; I didn't mention any names to you.
Mr. Fulton. Didn't you agree with me last night that all that they
had done that this change of heart, as you termed it, was because you
knew them and they knew you, and they changed their minds and you
and I
Mr. West (interposing). If that conclusion is drawn from what I
said, it is an unwarranted conclusion.
Mr. Fulton. But you agreed with that last night, did you not, because I told you I thought it was a very serious thing for you to be
in this question that I

saying?

Mr. West. I made no statement that was designed to substantiate

that conclusion that one little thing I did resulted in such an accomplishment. No I didn't intend to say anything like that at all.
;

Mr. Fulton. That is all.

The Chairman. The committee will recess until 10:30 tomorrow
morning, when we will hear Mr. Cohen.
(Whereupon, at 12 40 p. m., the committee recessed, to reconvene at
10 30 a. m., Thursday, December 18, 1941.)
:

INVESTIGATION OF NATIONAL DEFENSE PROGKAM

THURSDAY, DECEMBER

18,

1941

United States Senate,

Special Committee to Investigate
the National Defense Program,
Washington^ D. G.
m., pursuant to adjournment on
Wedesnday, December 17, 1941, in Room 318, Senate Office Building,
Senator Harry S. Truman, presiding.

The committee met

at

10:35

a.

Present: Senators Harry S. Truman (chairman) Tom Connally,

James M. Mead, Clyde L. Herring, Joseph H. Ball, and Ralph O.
;

Brewster.
Present also: Mr. Hugh A. Fulton, Chief Counsel; Mr. Charles
P. Clark, Associate Chief Counsel.

The Chairman. The committee

Mr. Cohen,
will come to order.
you please be sworn?
Do you solemnly swear that you will tell the truth, the whole
truth, and nothing but the truth, in the testimony you are about to
give before this committee, so help you God?
Mr. Cohen. I do.
will

TESTIMONY OF FRANK COHEN,

NEW YORK

CITY

The Chairman. Mr. Cohen, will you please give the reporter
your full name and connections?
Mr. Cohen. Frank Cohen, 521 Fifth Avenue, New York. Mr.
Chairman, may I have Mr. Dowd, the president, and Mr. Voyes,
the secretary of our company, sit here with me ?
The Chairman. There is no objection to that.
Mr. Cohen. Mr. Dowd has a statement which he wanted to
present to you, Mr. Chainnan, and asks for permission to make
this statement.

The Chairman.

I didn't

hear you.

Mr. Cohen. Mr, Dowd has a statement here which he would like
to present to you and distribute to the members of the committee,
if you would allow.
The Chairman. Mr. Dowd wants to outline that statement and
put it in the record? It will be all right. Have you been sworn,
Mr. Dowd?
Do you solemnly swear that you will t^ll the truth, the whole
truth, and nothing but the truth, in the testimony you are about to
give before this committee, so help you God ?
Mr. Down. I do.
3965

3966

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

TESTIMONY OF BENJAMIN S. DOWD, PRESIDENT, EMPIRE

ORDNANCE CORPORATION
The Chairman. Mr. Dowd,

if

you

will give

your

full

name and

connections to the reporter.

Mr. DowD. Benjamin S. Dowd, president of the Empire Ordnance

Corporation. Mr. Chairman, I would like to submit this brief
statement to the committee.
The Chairman. You can state it for the benefit of the record, just
what the statement contains.
Mr. Down. May I read it, Mr. Chairman ?
The Chairman. How long is it ?
Mr. Dowd. Two pages.
The Chairman. All right.
organization and operations or empire ordnance corporation

Mr. Dow^D. Empire Ordnance has built and is operating the largest
independent group of companies exclusively manufacturing ordnance
Its business is the making of cannon for the
defense program not brokerage, and it never has employed any
broker, not even Charles West.
The company and its affiliates has never paid out one penny in
commissions or fees to obtain a single contract. We will place
conclusive evidence before this committee that Charles West never
had any agreement with Empire Ordnance or any of its associated
companies to secure orders, or attempt to secure orders, from any
source whatsoever.
Em|)ire Ordnance and its affiliated companies never had, nor has
now, one cent of United States defense money, either from the
United States Government or any of its financial agencies. Even for
its enormous expansion program, which was accomplished in record
time and involved several millions of dollars for plants and machinery. Empire did not make application to governmental agencies
established for that purpose.
In fact, when Empire purchased the stock of one of its affiliated
companies, the Vulcan Iron Works, it paid off an R. F. C. loan
balance of $150,000 which Vulcan previously had obtained, despite
tlie fact that it was not yet due.
When it first became apparent that there would be need for largescale production of ordnance in the United States, the officers and
stockholders of Empire Ordnance didn't wait for Government funds,
as many others did. While others marked time waiting for Federal
financial assistance, these pioneers raised their own capital, bought
machinery, built plants, and started manufacture. As a result, the
United States now has available and in operation the only organization not even excej)ting its arsenals which can, and does, turn out
a complete cannon from start to finish. Yet all this has not lost
the taxpayers of this Nation a single dollar.
Due to the foresight, unselfishness, and patriotism of these pioneers, this Nation is now better equipped to meet the challenge of
foreign madmen.
Not only did officers and stockholders of Em])ire Ordnance invest
their own fnnds, but at no time have thev taken out of their in-

in the United States.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3967

vested capital or earnings a single dividend. Every cent has gone

back into the business the business of creating materiel with which
to fight the enemies of democracy.
Officers draw only modest salaries, although their arduous duties
Empire Ordnance, to step up production
last far into the night.
for the "arsenal of democracy," has been on a 24-hour T-day week
for the past several months. Its several thousand employees receive

in excess of $150,000 in pay roll each week.

The only contract Empire Ordnance had with the United States
Government was for overhauling and repairing certain naval guns.
It amounted to less than $200,000, and was awarded on open bids. The
contract was completed to the satisfaction of the Navy Department,
and many of the guns are now in action against the enemy.
The Empire Ordnance Corporation has been, and is now, exclusively
engaged in the manufacture of tank guns and their component parts for
the British.
The corporation is a Delaware corporation and was organized in
May 1940. Raymond Voyes has been Secretary of the corporation,
Frank Cohen, treasurer, and myself president since its inception.
group associated with Willys-Overland Co. was among the original
organizers. Their connection with Empire Ordnance continued for
a short time after the company's incorporation.
Mr. Raymond Voyes served in the French Army during the World
War, where he distinguished himself as a pilot. After the World War
he was associated with Swedish gun manufacturers, Bofors, in the
manufacture of ordnance, and subsequently spent many years as a
technical expert in the aviation industry.
Mr. Frank Cohen has been engaged in finances for many years.
With these men, and their associates, we built the Empire Ordnance
Corporation and its affiliated corporations. These organizations are
now all producing ordnance, consisting of the 75-mm-tank gun, the
recoil mechanism for the 75-mm-tank gun, the mounts (carriage) for
the 75-mm-tank gun, and also machining heavy armor plates for the
M3 and
tanks.
(The allocation of this work is as follows :)

M4

Empire Ordnance Corporation is located in Pliiladelphia, Pa., where it is

actively engaged in the manufacture of gun tubes for the 75-mm. cannon, and
also in the manufacture of breech rings and breech blocks for the same gun.
The West Pittston Iron Works, located in West Pittston, Pa., is engaged in
machining and drilling armor plate for the M3 and M4 tanks.
Wissahickon Tool Works, Inc., located on the west side of the Schuylkill River,
Philadelphia, Pa., is engaged in the manufacture of recoil mechanisms for the
75-mm. cannon.
Wilkes-Barre Carriage Co., located at Wilkes-Barre, Pa., is engaged in the
manufacture of complete mounts for the 75-mm. tank cannon.
Schuylkill Manufacturing Co.. located on the west side of the Schuylkill River,
is engaged in the overhauling and repairing, and assembly of guns.
Vulcan Iron Works is located in Wilkes-Barre, Pa., wliere it is engaged in the
manufacture of locomotives, steam engines, steel castings, and general foundry
work. This company has been established for about 100 years.
Manayunk Forging Corporation is located in Philadelphia, Pa., where it manufactures forgings for gun tubes, breech blocks, breech rings, and other steel
material for ordnance.
Roxboro Steel Co., located in Philadelphia, Pa., makes electric melt steel and
ingots for ordnance. This steel is a special alloy steel, which must meet the
Very high physical requirements demanded in ordnance manufacture.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3968

Ordnance Instrument Corporation is located at ttie Bush Terminal in Brooklyn,

N. Y., where it is engaged in the manufacture of optics for telescopic sights and
other firing-control instruments.

Mr. Fulton. Mr. Dowel, I understand you are the president of

Empire Ordnance Corporation.
Mr. Down. That is right.
Mr. Fulton. And 10-percent stockholder thereof, together with

the

members of yotir family?

Mr. Down. That is correct.
Mr. Fulton. How nnich capital contribution have you made for
that 10 percent?
Mr. Down. I have made very little because I have a big family
and it takes all my earnings for them.
Mr. Fulton. Have you made any, and if so approximately how

much?
Mr. Down. I have made no money contribution to the corporation.
Mr. Fulton. And what is your estimate of the equity or present
equity value of the stock of the Empire Ordnance ?
Mr. Down. That is hard to tell because the contracts we have, we
don't know whether we are going to make a profit or not, until the
contracts are finished. At the present time I would say the profits
are

nil.

Mr. Fulton. What do you carry the assets on your balance sheet ?
Mr. Down. I prefer to refer that to Mr. Cohen, the treasurer, who
has charge of our financial

Mr.
Mr.
Mr.
Mr.
paid

affairs.

Fulton. Could you tell me, Mr. Cohen ?

Cohen. As of what date do you want ?
Fulton. Any reasonably recent date.
Cohen. The basic capital of these companies

is

about $225,000,

in.

Mr. Fulton. My question is how much do you have as assets?

Mr. Cohen. Today if they can help us lick that Hitler it is worth
millions if they can't it is worth nothing.
Mr. Fulton. At what do you carry it on your most recent balance
;

sheet?

Mr. Cohen. The assets run to about six or seven million dollars.
Mr. Fulton. And what are the liabilities carried on that balance
sheet?

Mr. Cohen. Probably iabout seven or eight hundred thousand

dollars

less.

Mr. Fulton. So that you carry now an asset over liabilities position of about $700,000 ?
Mr. Cohen. It is hard to get the exact dates. Ross Brothers &
Montgomery are just finishing the statement and that ought to be
ready in about a week, as of July 31. It takes us months before they
catch up. Our own run-off is of October 31, and I imagine would
show about eight or nine hundred thousand dolhtrs capital.
Mr. Fulton. That is eight or nine hundred thousand dollars which
you estimate now the assets of the c<)mi)any exceed the liabilities?
Mr. Cohen. I imagine so.
Mr. Fulton. And Mr. Voyes, you hokl an office in the company,
do you ?
Mr, Votes, I do yes, sir.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3969

Mr. Fulton. And what is that ?

Mr. VoYES. Vice president and secretary.
Mr. Fulton. And you also have a stock interest ?
Mr. Votes. I do.
Mr. Fulton. Of what percent?
Mr. Votes. Ten percent.
Mr. Fulton. And for that what capital contribution did you make?
Mr. Votes. In cash? None.
Mr. Fulton. Mr. Cohen, you hold a 15-percent stock interest in
the company, do you not ?
Mr. Cohen. Yes 15 percent common stock.
Mr. Fulton. And your wife a 10 percent ?
Mr. Cohen. Yes and my son 5 percent.
Mr. Fulton. And an organization known as the Esco Fund ?
Mr. Cohen. Fifteen percent.
Mr. Fulton. Which was organized by you, I believe, as a contribution to charitable societies of a part of your percentage, or how
would you characterize it?
Mr. Cohen. If you will let me explain that to you I will tell it
;

to you.

The Chairman. Proceed.

Mr. Cohen. I was not interested in ordnance. I was asked to
help some who were interested in ordnance to work together and
I
set up a corporation which would be of help in fighting Hitler.
have been doing it since 1933. In 1933 I paid for quarter-page ads
in the newspapers on my own behalf, requesting that, first, the
United States should not send any ambassador to Germany; second,
that the United States should not recognize Germany if you will

me read one

of these.
Mr. Fulton. I was not so much interested in your advertising in
1933 as I was in the question of what the Esco Fund was.
Mr. Cohen. That is what I am trying to explain,
Mr. Fulton. Which I was bringing out because it is one of the
things for which you, I think, probably deserve some credit.
Mr. Cohen. I think we deserve a lot of credit for all we have done
here and if you will allow me
Senator Ball (interposing). That is going back pretty far, isn't it,
Mr. Chairman ? Empire Ordnance was organized in May 1940.
are interested in the Empire Corporation.
The Chairman.
have cerare not interested in making a voluminous record.
would like to get those
tain facts in which we are interested.
facts as quickly and as expeditiously and with as few words as
possible, and get the meat of the thing.
Mr. Cohen. When I attempted with Mr. Voyes and Mr. Dowd
and some others to put the Empire Ordnance Corporation together I
interested the Willys-Overland group to come in and finance the
organization of an ordnance company for that purpose. I was entitled to receive 15 percent of the common stock.
I didn't want at
that time to have the earnings out of the ordnance business and so I
called together a number of educators who were interested in Jewish
education and we formed this Esco Fund committee to which I
assigned my interests right from its inception, and so they had the
15-percent interest of the Empire Ordnance Corporation at that time.
let

We

We

We

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3970

That is my total interest that I would have had in the Empire

Ordnance Corporation.
Mr. Fulton. Well, Mr. Cohen, I just thought that for your benefit
we ought to bring out what Esco Fund is. Just tell us very briefly.
Mr. Cohen. Yes, sir. Esco Fund has busied itself with a number
It helped start shelters for the children who were being
in Britain and they have established,
helped establish with the Interfaith Committee, seven of them. They
also began the distribution of vitamins to the children, which was a
result of our having had two refugee children in our home and we fed
them the vitamins and thought we could do the same thing on a larger
scale, and so they have been doing that.
They have also been helping in every way they can organizations
that could also help promote what they call the democratic way of
living, and it is surprising how if you have a small group that is vitally
interested in helping a little money goes a long distance to do that.
Mr. Fulton, In short, this 15 percent is to an organization in which
you have no personal interest and which does have these high motives

of things.

removed from the bombed areas

you have described ?

Mr. Cohen. I have no personal interest they run it themselves do
whatever they want, and I help them get their money.
Mr. Fulton. Now, as to the 25 percent which you retain for your
family, and as to the 15 ?
Mr. Cohen. That came later.
Mr. Fulton. And as to the 15 percent which you have given to the
Esco in other words, 40 percent of the present capital structure ?
Mr. Cohen. I didn't have 40 percent at that time; all I had was
;

15 percent.

talking about now what you have. What is the

which you made for that 40-percent interest ?
Mr. Cohen. This was the common stock you are talking about for
the common stock. There was no capital contribution in the sense
of money.
Mr. Fulton. Mr. Cohen, as I understand it from the discussions you
and I have had, there was a conference or a number of conferences at
which the question came up of the possibility of your working out a
corporation or series of corporations which would be able to manufacture ordnance supplies ?
Mr. Cohen. Yes.
Mr. Fulton. And it was decided that it would be desirable to purchase the Pencoyd ]:)lant of the Carnegie-Illinois Steel Co. for about
$300,000, was it not?
Mr. Cohen. Yes.
Mr. Fulton. And the Carnegie Co. was willing to sell that on a
partial-payment plan wliereby $30,000 would be paid down and ])ayments would be made from gross sales or at periodic times thereafter.

Mr. Fulton. I

am

capital contribution

Is that true?

Mr. Cohen. That is right.

Mr. Fulton. As to that $30,000, did you raise that partly from yourself and partly from bori'owing by youi-self from another individual?
Mr. Cohen. Yes; that was before the Empire Ordnance Corporation

was organized.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3971

Mr. Fulton, I am trying very briefly to outline the history. Five

thousand of that was your own money, was it not ?
Mr. Cohen. Yes.
Mr. Fulton. From your bank account and on your check?
Mr. Cohen. Yes.
Mr. Fulton. And was not obtained from anyone else or the result
of any borrowing you made from anyone else ?
Mr. Cohen. Not at that time.
Mr. Fulton. And the other $25,00 came from where?
Mr. Cohen. I borrowed that from Mr. Elisha Walker.
Mr. Fulton. Of Kuhn, Loeb & Co. ?
Mr. Cohen. Yes but I don't think you should bring their name in
here because Kuhn Loeb & Co. has nothing to do with this.
Mr. Fulton. And had Elisha Walker anything to do with it?
Mr. Cohen. Yes I was trying to interest him and he was interested
in this Willys-Overland group, and I was trying to interest them to
come in and support this group of men who were so vitally interested in
building up the ordnance business.
Mr. Fulton. And what did he get for the $25,000 that he gave you ?
Mr. Cohen. You mean interest in the company later?
Mr. Fulton. No; I mean at that time, what did you give him in
exchange for his $25,000 ?
Mr. Cohen. I borrowed that from him for 10 days or 2 w^eeks and
I gave him my checks, which he was to hold for that period.
Mr. Fulton. And no security ?
Mr, Cohen. No he just trusted me.
Mr. Fulton. And that enabled you to make the down payment
which the Carnegie-Illinois wanted on this Pencoyd plant ?
Mr. Cohen. Yes; it looked as if we might lose our position with
the Carnegie-Illinois Steel because there was some other outfit anxious
to buy it from them and pay them $200,000 more than we were paying,
and they felt it wasn't fair to hold it out indefinitely.
Mr. Fulton. Although you were able to buy that plant for $300,000.
Was it a plant which had been built at a greater expense than that?
Mr. Cohen. That plant was worth hundreds of thousands of dollars, particularly for this purpose. Particularly for this purpose due
to the fact it had so many cranes inside; each crane was worth thousands of dollars and there wasn't only the cost of the cranes but the
time that it would take to build it up, and here we were interested in
as quickly as we can to get the thing working.
Mr. Fulton. What had that plant been used for prior to that time ?
Mr. Cohen. That plant was a plant where the locks for the
Panama Canal had been built, where all their ingots or billets were
made, steel rolling mill.
Mr. Fulton. And had it lain dormant in the years immediately
preceding this?
Mr. Cohen. They had not been working it for about, I think, 8
;

or 9 years, or some period like that, and

we had to come in right

from scratch.
Mr. Fulton. Would it be fair to characterize it as a plant which
originally had cost a great deal of money but which had CarnegieIllinois Co. was not at the time desirous of operating as part of
its steel works because of their desire to use other plants which
might have been more efficient for their purposes ?

3972

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. New methods had come in for making steel billets
and these were old furnaces they had in the billet place. Then the
American Bridge, which was joint owners there, built up other plants
and this was lying dormant. To replace that plant as it was for
the purposes that we wanted it, 1 don't think you could do it for
under $10,000,000; worth a tremendous amount of money.
Senator Ball.

How much

floor space?

Mr. Cohen. Two and a half miles on one side of the river and a
mile and a half on the other side. Plants, one building following
another building, and the value this plant had to us, here you were
Since
in a period where time was very valuable, time was essential.
we took those plants, in the I'ehabilitation of them we have put in
over three and a half million dollars, and the time and effort that
it took.
We never could have ever gotten these plants set up at all.

Then

after tearing

down

those plants, the inside of them,

from scratch; we started some time

in

January

1941.

we

We

started

began to

tear out the insides, just leaving the structure and the crane structure.
had to take out all the old machinery that was in there.
Then we brought machinery in from the outside; went all over
the country hunting for the machinery until we ended up with
plants, today in that short period of time, where we are manufacturing, as Mr. Dowd said, 75 mm. cannons.
found it was difficult to get steel so we had to
we went all over the country for it.
Tlien we found it was difficult to get forgings, so we had to put up
our own forging plant. Then we couldn't get the high physical
steels to meet the forging requirements, so we had to put up our
own forging plant, our own steel-melt plant.
From there we went step by step, each time doing everything in
order to expedite the program. In addition to that it was a situation where we in our first contracts with the British, had agreed
that all these facilities that we would have could be available for
their needs. They gave us a down payment on the first contract.
After that an award of that contract was sometime in September.
It didn't go into actual effect until November 25 because we had to
as part of that contract show that we had accumulated a certain
amount of machinery, that we had the personnel, and that we had
the organization ready to function.
Then sometime about the middle of December, as I understand,
the British were stopped from making more i)ayments and more
commitments and they were in this position which is second-hand
knowledge as far as I am concerned; I don't know their inside affairs.
But they were in a position where they could not get other manufacturers, especially the bigger the manufacturers the less they were
able to get help from them, without giving them money for facilities,
without giving them money for down payments, and it was a custom
in this business when you ordered anything you had to give a large
down payment, so they came back to us on our facilities to expand it
and came back to our original arrangement of using our facilities,
and that is how we kept on going. AVe hadn't yet used up the first
clown payment so they asked would we use that same down payment
for the next step, and we kept on working that way.
Ml-. Fulton. I was going to develop that but I think you are ])robably proceeding a little faster than I had in mind.
were at this

We

We

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3973

point where you had borrowed $25,000 from Elisha Walker, giving him
checks which were dated as to a future date, which he was to hold for a
time. Is that correct ?

Mr. Cohen. That is right.

Mr. Fulton. Now how and from whom did you obtain the $25,000
to pay Mr. Walker back ?
]\Ir. Cohen. Borrowed from a friend of mine, John Roberts, $30,000.
Mr. Fulton. And who was John Roberts ?
Mr. Cohen. He is an accountant and treasurer of the Manhattan

Brewing Co. in Chicago.

Mr. Fulton. Have you had previous contacts with Mr. Roberts
business associations

in

Mr. Cohen. For about 8 or 9 years.

Mr. Fulton. And as to that $25,000. did he advance that to you
on security or was it unsecured advance like Mr. Walker's?
Mr. Cohen. Same thing; unsecured. Maybe I can make it short
for you in this* way. We were no millionaires; we didn't have large
capital. We had very little money but once I decided I was going
into this thing, and I was glad to go into it as I say, because I have
been since 1933 on this Hitler business, I then went to every friend I
knew, to every banker where I had any f riendshi]). I borrowed money
from my friends, borrowed money from the banks, went on endorsements, went on guaranties in order to get the money together to
start this ordnance plant going. Thank God we did.
Mr. Fulton. We were discussing, Mr. Cohen, the exact ways in
which it was obtained.
Mr. Cohen. I tell you I borrowed it from everybody I could,
Mr. Fulton. In effect you bailed Mr. Walker out by borrowing an
equivalent amount from Mr. John Roberts of Chicago?
Mr, Cohen. I don't bail anybody out. I don't like the word ''bail."
The man was good enough to loan me money for 10 or 14 days on my
say-so; that I would return it to him, I was very glad and happy to
return

it

to him,

Mr, Fulton, As to that $25,000. did Mr, Walker receive any stock
interest ? He has none today, has he?
Mr, Cohen, At that time he dichi't; there was no stock at that time;
there was no company at that time there wasn't an Empire Ordnance
;

at that time,

Mr, Fulton. To date he hasn't received any stock interest and there
no arrangement for him to, is there ?
Mr, Cohen, Today there is a realty company called Desirable
Realty Co, I gave them 5 percent of the common stock later on, but
at the time you are talking about there was no company,
Mr, Fulton, Does that mean that Mr, Walker is interested in the
is

Desirable Real Estate Corporation ?

Mr, Cohen. Yes I think he is,
Mr. Fulton, And have they made any capital contribution for
their 5 percent ?
Mr, Cohen, Well, time after time I would borrow money from him
or he would help me,
Mr, Fulton, But it would be repaid ?
Mr. Cohen. Yes I have repaid everybody I borrowed from.
;

3974

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Fulton. In other words the 5 percent is a repayment for the

to you from time to time which thereafter were

making of advances
repaid ?

Mr. Cohen. I would come to him for advice and help.

Mr, Fulton. And then did Mr. John Roberts does he have now
any stock interest in the company ?
Senator ConNxVlly. Mr. Chairman, wait a minute, please. What
did 3'OU say ? Who was this you came to for advice and help
Mr. Cohen. Elisha Walker. This is before there was an ordnance
company.
Senator Connally. Just getting ready to have one?
Mr. Cohen. Trying.
Mr. Fulton. Now, did Mr. John Roberts, of Chicago, obtain a stock
interest, and if so how much was that interest ?
Mr. Cohen. Later on.
Mr. Fulton. I mean now, 15 percent.

Mr. Cohen. He has 15 jjercent today.

Mr. Fulton. Has he a capital contribution in the company?
Mr. Cohen. Yes; he owns $40,000 worth of preferred stock in the
company.
Mr. Fulton. But has he made a capital contribution for common

stock ?

Mr. Cohen. No.

Mr. Fulton. And at that stage we have the situation where there is
$30,000 invested. Is this 10 percent down payment on the Pencoyd
plant? As I understand it you then interested the owners of a large
block of common stock of the Willys-Overland Co. in transferring
200,000 shares of that common stock to the Empire Ordnance Co. in
exchange for $300,000 par value of preferred stock and all of the

common

stock.

Is that true

Mr. Cohen. That is correct that is when it was organized.

Mr. Fulton. Yes. And of course the Empire Ordnance obtained
title to the Pencoyd plant, or rather to your contract to purchase the
Pencoyd plant ?
Mr. Cohen. Yes; and the ai'rangement with them was that is
why it is difficult to answer a question like you asked, "Was their capital
investment for common stock?" Empire Securities Corporation put
in $500,000 and had all the common stock and had all the preferred
stock of the company.
Mr. Fulton. They didn't put in $500,000 they put in 200,000 shares
;

of Willys-Overland.

Mr. Cohen. Which had a market value of two and a half dollars.
Senator Connally. They paid in $200,000 in money, did they?
Mr. Cohen. No; they paid in 200,000 shares of Willys-Overland
stock, wliich was selling on the stock exchange at two and a half dollars
a share, so it had a market value at that time of $500,000.
Senator Connally. That is what they put in?
Mr. Cohen. That is what they put in. Thov received for it the
$500,000 of par value of the preferred stock of the Empire Ordnance
Corporation and the thousand shares and the hundred shares, I think
it was, of the common stock of the Empire Ordnance Corporation, and
we who were working, building, putting it together, were entitled to
receive, when the preferred stock was paid off, two-thii-ds of the com-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3975

stock to be divided. That two-thirds of the common stock that

I had, the 15-percent interest in which I turned over to the Esco, and
it was from that two-thirds of the common stock Mr. Dowd would
have a 10 percent, Mr. Voyes a 10-percent interest, and so on down the

mon

line.

Senator Ball. How

got these 100 shares ?

much common

stock was outstanding

when they

Mr. Cohen. That was the whole hundred shares.

Senator Ball. You said you held two-thirds of it.
Mr. Cohen. No; when the preferred stock was being redeemed or
paid off, we would be entitled to receive two-thirds of the common
stock.

Senator Ball. Two-thirds of that hundred shares?

Mr. Cohen. Sure.
Senator Connally. Who would get the other third ?
Mr. Cohen. That would stay with the Empire Securities Corporation for their having put in the money while we did all the work.
Mr. Fulton. Now that gave you some stock of a company wliich
was listed on the stock exchange, the Willys-Overland, and I understand you proceeded to raise capital for Empire Ordnance by selling
on the stock exchange part of that Willys-Overland stock; is that true?
Mr. Cohen. And as we proceeded to buy machinery or repair the
plant we would sell some of the stock as we needed the money.
Mr. Fulton. And there were sold that way sufficient shares to bring
you in a net amount of somewhere in the neighborhood of one hundred
and twenty-five to one hundred and thirty thousand dollars?
Mr. CoiiEN. About $150,000 worth sold altogether and when the
stock-exchange houses on the commission or drafts and the interest
on borrowing against the stock, we had about $130,000 net.
Mr. Fulton. Now with that $130,000 you were enabled to buy certain
machine tools, some new and some second-hand, which you purchased
for use in the Pencoyd plant is that correct ?
Mr. Cohen. Yes; that is right. We had men scouting the country;
we were at auction sales, wherever macliinery could be gotten. We
also placed orders for new machinery to be delivered later on and we
began to repair and rebuild, build up the plant itself.
Mr. Fulton. Now the negotiation of the British contract ultimately
gave you a contract with the British for about how many million
dollars? That is the November 25 contract.
Mr. Cohen. November 25 contract, the basic one was for about $8,000,000 and then tlie additions to that totaled a little under $20,000,000.
Mr. Fui^TON. And on that j^ou obtained a down payment from the
British of approximately 25 percent?
Mr. Cohen. That is correct.
Mr. Fulton. Which would be about how many million dollars?
Mr. Cohen. About it was a little under $5,000,000.
Mr. Fulton. And with that $5,000,000 you were enabled to make
expansions of plant and facilities and purchase more tools and get
;

into production

Mr. Cohen. We began buying the material and the machinery and
the plant.
For instance, we ordered up from Midvale Steel $500,000
worth of forgings, and we had to pay them one-third down. We
ordered from Pennsylvania Forge Co. "a quarter of a million dollars

3976

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

of forgings, and we had to pay them one-third down. In that way,

that is how we built up.
Mr. Fulton. And then with those funds or funds which you obtained by making deliveries on produced articles, you were also able
to finance the Savannah Shipyard, were you not ?
Mr. Cohen. No; Savannah Shipyards doesn't enter at that time
at

all.

Mr. Fulton. But I mean that is the source of the funds which have
been expended to date in the Savannah Shipyard ?
Mr. Cohen. Savannah Shipyards was finally worked out from three
We borrowed money and we had a throw-off from deliveries,
sources.
that as we manufactured and delivered, some of our own basic
capital.

Mr. Fulton. And thus we have in effect a situation where you and
others contributed your skill and experience to develop this plant
arrangement for the interests that you have just testified to?
Mr. Cohen. No; you have that again later on; when we took out
the Willys-Overland and paid them off on their preferred stock we
put in the money in place of the Willys-Overland.
Mr. Fulton. You paid them back their $128,000 and took back
the stock from them ?

Mr. Cohen. We didn't take back as individuals; that is, when we

66% which we spread around, and it was at that time that
I had left for myself what I had paid in and borrowed, the 15 percent
that you referred to before.
Senator Herring. Mr. Cohen, as I understand, you borrowed some
money on your own credit to make this down payment ?
Mr. Cohen. That is right.
Senator Herring. And you paid it back?
Mr. Cohen. That is right.
Senator Heiujing. And through manipulations you took over a plant
that was out of operation, wasn't doing anything?
We had to go in and
Mr. Cohen. Just as dead as it could be.
sweep it, clean it, tear everything out.
Senator Herring. And didn't you go to the Government for money?
Mr. Cohen. We don't have a nickel from the Government we never
went to the Government for a nickel; we don't have a nickel from
any public; we never went to the public for any money, even when
we came in, as Mr. Dowd just said, when we came into the Vulcan
Iron Works in June 1941. I went in as treasurer; thev had a tail
end of a loan from the R. F. C, $149,000, which had another 3 years
I went to the Second National Bank. Wilkes-Barre, and
to run.
borrowed that money and paid off the R. F. C. so we don't have a
nickel of (iovernment money any place.
Senator Hp:rring. No Government money?
Mr. Cohen. No, sir.
Senator Herring. That is unusual; you should be juMializod for not
going to the Government for money. You have gone out yourself
and raised this money, paid back what you owed, put a plant in
operation, and you are now building material that we need for the
Government, and you got into competition with others and you are
now supplying what we need. I wish we had a thousand like you.
got the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3977

me just a couple of minutes because

really a disgrace the way we have been treated in these newshave been accused
paper charges and all these wild statements.
of being brokers or agents selling contracts and what not. All we
have been doing is working our heads off and we were doing it at a
time when we had no contracts. All this we are talking about here,
had
the borrowing of money and fixing up, was in anticipation.
no contracts; nobody promised us any contracts. It was a gamble
we took it was a gamble we took and we wanted to take because we
were fearful of what the situation in the country was.
had men in our lists who have had experience and knew what
was involved in it. For 5 months we carried a pay roll of a personnel
without any inkling where we would get a nickel to pay it back from
At the present time I am on guaranif we lost that was our gamble.
ties of about $300,000 we owed to the bank; some of the other stockholders are on guaranties of money we owed to the bank; wherever
we had a friend, wherever We had anyone we could get help from,
we went to get help we couldn't get it from the big banks we
couldn't get it from the big companies, and we didn't have millions
of dollars like everybody else had, but we were willing to work
hard and start and do it, and we did, and the only contract we had
with the United States Government which came from the Navy when
the Navy asked us to try to overhaul these guns which are now
mounted on cargo vessels, these 3-inch naval guns.
The Chairman. Let me make a request of the newspapermen to
please regard as confidential the last section of Mr. Dowd's statement
which places the location of these plants definitely, where they can
be reached. That should be regarded as a confidential document and
not for publication, on page 3, to the end of Mr. Dowd's statement.
were, Mr. Chairman, in a very difficult position.
Mr. Cohen.
were afraid to say anything, afraid to answer these charges; we
didn't know, because a lot of it is secret, part of it is for the Government.
were badly liandicapped. For instance, we were asked
on these 3-inch naval guns, Mr. Dowd wrote a letter to the commander. Kitchen, and this is what we wrote him
Mr. Cohen. Mr. Senator, allow

it is

We

We

We

We

We

We

Pursuant to our telephone c(nvers,ition today, would state that our engineers have made a very thorough study of the 3-inch 50-caliher naval giui
sent to our Pencoyd plant at Philadelphia. They have also examined a number
of the guns presently at the Philadelphia Navy Yard. There are many different
conditions confronted in each particular gun and it would be eminently luifair
to set an average price for the reconditioning of each gun, for the reasons
that one gun may only need cleaning and painting, while another gun may
need considerable repair to parts and replacements of other parts.
We submitted a price of $278 per gun and we would be very agreeable to
take our chances with this price, and if it was more than sufficient to do the
job to refund any excess amount to you. On the other hand this might be foo
small an amount and the work might greatly exceed this amount.
However,
with your cooperation we are willing to assume some risk in this work in order
to exi^edite it, so that the guns may be put to use.
Awaiting your early reply on this, we are * * *.

Then we asked Mr.

Senator Connally (interposing). AYliat is the name of the company ?
Mr. Cohen. Empire Ordnance Corporation.
Senator Connally. Did you go through the Securities Exchange
Commission and

its

organization?

3978

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. No because we didn't go to any public.

Senator Connally. Didn't do what?
Mr. Cohen. Didn't go to any public for money.
Senator Connally. You went to yourself, you said you took twothirds of this stock for organizing *it and financing it. Why don't
you have to go through them? I don't know. It looks to me like
they were asleep.
Mr. Fulton. No; Senator.
Senator Connally. You are selling them later on?
Mr. Cohen. We didn^t sell any stock.
Senator Connally. Didn't Mr. Fulton ask if you didn't sell from
time to time the common stock of this company on the New York
Exchange to get money?
Mr. Cohen. Not the Empire Ordnance stock.
Senator Connally. What corporation was it you sold the stock on
the New York Exchange?
Mr. Cohen. The Willys- Overland.
Senator Connally. That has been through the wringer and is all
;

right?

Mr. Cohen. That is listed on the stock exchange.

Senator Connally. All right. So you didn't have to go through
the scrutiny of the Securities Exchange Commission?
Mr. Cohen. We never went to any public for anything. Seven or
eight of us each time expand ourselves or stretch ourselves for what-

we can do.
Senator Connally. Tliis was too good to let the public in on?
Mr. Cohen, It is not a question of too good. It was a question
where nobody wanted to do it; everybody was asking what was going
What was going to happen to
to happen to them after the war.
them if they got no contracts?
Senator Connally. How much money did you personally put into
this thing ?
Mr. Cohen. About $50,000 plus being on $300,000 of guaranties.
Senator Connally. You haven't paid tlie guaranties yet, have you ?
Mr. Cohen. We paid back a good part of it, sure.
Senator Connally. You put in $50,000 oi your own money?
ever

Mr. Cohen. Yes.

Senator Connally, Cash?
Mr. Cohen. United States money.
Senator Connally. That is what I
money.
Mr. Cohen, Yes,
Senator Connally. That is good.
The Chairman. Senator Ball?

an; talking about,

United States

Senator Ball. As I understand it you sold only about $150,000

worth of this Willys-Overland stock?
Mr. Cohen. As we needed money in the company we would sell a
thousand dollars.
Senator Ball. That was the total ?
Mr, Cohen, That is right.
Senator Ball. Have you still got the rest of it?
Mr. Cohen. No.
Senator Ball,

What

hnj:)poiiO(l to it?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3979

Mr. Cohen. Well, this group of Willys came in and that is what
I was trying to explain to Senator Connally for a minute. They
came in on the proposal that they would put this money in but if no
contracts were to be forthcoming up to a certain period they would
have a right to disband the company. Well, we thought if we had
a plant and we had the facilities it would be very easy to put the
plant to work, but it didn't work that way and as time went by we
were spending the money keeping the personnel, keeping the pay roll
they got tired and they wanted to step out, so up to that point we
had spent about $150,000 of their stock, so I agreed with them to buy
their interest, return to them the balance of the stock that had been
unused and they should return the preferred stock of the Empire
Ordnance and they step out.
So some time in August or September I entered into an agreement
with them to do that, which I did.
Senator Ball. September of what?
Mr. Cohen. Of 1940, which I did, and we gave them back $350,000
worth of the Willys-Overland stock wliich we liad not used, and they
gave us back into the company $350,000 of the preferred stock, which
we had and we canceled tliat out. That is what left us with this
capital, as I explained to Mr. Fulton, of only $150,000 in the Empire
itself, and we had about $75,000 that we all contributed
for the capitalization of these other little companies in each locality
to do the special jobs.
Senator Ball. Let's follow through with- Willys-Overland first.
Did you ever pay tiiem back for the remaining $150,000? You did
that personally ?
Mr. Cohen. I did that with friends of mine and we bought their
stock so that we became the sole stockholders of the Empire Ordnance.

Ordnance

They had no more interest.

Senator Ball. Then when you paid off, returned the $350,000 of
Willys-Overland stock and paid them back for the $150,000 you had
you get back all of the 100 shares of common stock
Ordnance which you had also turned over?
Mr. Cohen. Yes.

sold, did

in

Em-

pire

Senator Ball. You didn't leave the one-third ?

Mr. Cohen. We paid them out, completely washed them out entirely.

Senator Ball.

Now who was

in

on that purchase with you of

$150,000?

Mr. Cohen. Mr.

Griffiths

paid in $10,000, Mr.

McHale put up

$25,000.

Senator Ball. Frank McHale of Indiana?

Mr. Cohen. He has been by attorney for about 5 or 6 years.
Senator Ball. Who is Mr. Griffiths ?
Mr. Cohen. Mr. Griffiths of New York. Charles Griffiths who is
our counsel. Roberts took $40,000; Orgill, $12,500, and I think the
rest was what I had.
Senator Ball. Orgill, $12,500 $77,500.
Mr. Cohen. Paid them $130,000.
Senator Ball. $77,500 this adds up. Then Roberts in return for
;

]:)utting

up $40,000 for the preferred

shares of

common

311932

42

pt.

stock ?
10

17

also got 15 percent of this 100

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3980

Mr. Cohen. Then I took that common stock which we took back
from the Willys-Overland and distributed it amongst everybody in
the place in accordance with the way we had agreed.
Senator Ball. But I mean Roberts put up $40,000; he got $40,000
worth of preferred stock, and in addition the 15 percent of the com-

mon

is

that

it

Mr, Cohen. That

is right.

And McHale got

Mr. Cohen. He had been entitled
Senator Ball.

had

to

some from before; McHale

5 percent.

Senator Ball.

He

got 5 percent in addition to $25,000 of preferred

stock?

Mr. Cohen. He paid in $25,000.

Senator Ball. And then Griffith, he still has $10,000 of preferred
stock plus 5 percent of common for which he paid nothing extra and
Orgill the same way?
Mr. Cohen. If you mean in dollars and cents, didn't pay it; that
would be correct, but for a year he had been working with us all the
time and we had been using money in and out, each one helping with
whatever he could.
Senator Ball. That seems to be the case. That leaves about
$42,500, if you paid them $130,000 which you put up, and you took
$42,500 of the preferred plus all this common stock that you got in
your family.
Mr. Cohen. Sixty-six and two-thirds was to be spread out originally without any
Senator Ball (interposing). Who were these people in WillysOverland? Is that the management of Willys-Overland that put up
this half-million dollars worth of their stock?
Mr. Cohen. The Empire Securities Corporation owned at that
time I don't know what it is now 52 percent of all the WillysOverland Co. They had in their possession about 1,000,000 or 1,i

200,000 shares of the common stock of the Willys-Overland. The

Empire Securities Corporation also owned all tlie Willys Realty Co.,
which is all the plants and real estate of the Willys-Overland. And
it is the Empire Securities Corporation that undertook to finance
the ordnance company. That is how we got this name Empire
Ordnance Co., from the Empire Securities Corporation.
Senator Ball. AVliich was you had no stock in Empire Securities?
Mr. Cohen. No; I wasn't in that.
Senator Ball. Who did you negotiate with; what individuals?
Mr. Cohen. With Mr. George Ritter, who was the attorney of the

Willys-Overland.
Senator Ball. George Ritter was their attorney,

who

is

the head of

Empire Securities ?
Mr. Cohen, (leorge Ritter and Ward Kennedy.
Senator Ball.

Who

Ward Kennedy.
B.vll. And you negotiated

Mr. Cohen.

Senator
Mr. Cohen. That

is

with Ritter and Kennedy, then?

right.

Senator Ball. Now, tliat adds up to $42,500 which you put in, and
you said about $50,000 cash ?
Mr. Cohen. I don't know the exact figures. For a whole year we
had been spending money.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 3981

Senator Ball, Yes; I can see that, but I was trying to figure out
what you put up in actual cash after that, when they stepped out.
Mr. Cohen. We began.
Senator Ball. You paid off Empire Securities for the $150,000 worth
of their common stock only paid them $130,000 cash ?
Mr. Cohen. We paid them whatever had come actually in the company they sfeood the expense of whatever it had cost for stock-exchange
brokerage fees or drafts or interest, and so on.
Senator Ball. They took a loss of $20,000 on financing your com;

2:>any

Mr. Cohen. That

is

right.

Why did they do that

Why does anybody go into business

Senator Ball.

Mr. Cohen.

Senator Ball. Did the}- figure you were going to bump about that
time, or something ?
Mr. Cohen. Well, there were no contracts forthcoming from anybody. We had been negotiating with various governments and the
governments were all collapsing. The French were collapsing, everyone, and they thought they were making a good deal.
Senator Ball. Now, so far all we know that you put up in cash is
$42,500, and for that you got $42,500 of the preferred stock which
eventually will be paid off ?
Mr. Cohen. Yes if we work hard enough, we will pay it off.
Senator Ball. Did any of the other officers of the company put up
any cash?
Mr. Cohen. Well, they didn't have any.
Senator Ball. Reece Ford ?
Mr. Cohen. He has been spending his money for 22 years until he
was nearly broke, trying to get together an ordnance company.
Senator Ball. How about the executive vice president
Mr. Cohen. I will come to them.
Senator Ball. He doesn't own any common stock?
Mr. Cohen. Quarrie represents is on our board of directors of the
Empire Ordnance Corporation, which consists of five people. One is
Mr. Dowd the other, Mr. Voyes the third one, myself the fourth, Mr.
Quarrie; and the fifth, Mr. Murray, of the British Purchasing Commission.
Mr. Quarrie is on there also representing the British, so with
the five men on the board of directors the British have two representatives and we are three.
Quarrie came in to be the general manager of
operations. He had been vice president of the Otis Steel Co. and president of the Oliver Steel Co., and he knew the steel business. Today he
is the president of the Manayunk Forging, of the Roxboro Steel, and is
directly in charge of the forging and the steel, and by the end of this
month we hope to be in a position where we will be delivering excess
forgings to the United States Ordnance and the arsenals, and that
is all we built up with our own hands from nothing.
Senator Ball. You seem to have built it up from nothing all right.
What is Quarrie's background ? What is his business experience ?
Mr. Cohen. Quarrie was president of the Oliver Steel Co. He has
been in the steel business since he was I don't know how young;
he is a trustee of Case Institute; graduate of Case Institute.
Senator Ball. Actually, then, all the cash vou had before you got
this $5,000,000 down payinent from the Britisli was $130,000?
Mr. Cohen. That is right, plus what we borrowed from the banks.
;

'i

INVESTIGATION OF THE NATIONAL DEFENSE PROORAM

3982

FRANK Cohen's business association with charles west

The Chairman. Mr. Cohen, what I am principally interested in

I think the financial background of this thing has been pretty well
aired and it is no disgrace to start a program on a shoestring and make
it work, if you can, but what I am interested in is your connections
here in Washington. How did you come to hire Mr. West?
Mr. Cohen.
had our letter of commitment from the British on
our contract and I called Mr. Orgill.
Senator Connally. Have you got that letter of commitment with

We

you?
Mr. Cohen. Your counsel has it, copy we showed it to him in the
office we gave it to him.
Mr. Fulton. The British didn't indicate an expectancy.

Senator Connally. It ought to be in the record so we could see what

;

it is

about.

Mr. Cohen.

May

I explain, Senator Connally, Senator

Truman

is

investigating

The Chairman

wanted

(interposing). I just

why you

to find out

employed Mr. West.

Mr. Cohen. Well, in the

first place, as far as the British contracts,

as far as our contracts are concerned, we never employed him. I called
Mr. Orgill to come down to help me put the contracts into shape for
him. He was sick; he sent Mr. Duffy down, his partner. OrgilFs
friend had been acting as counsel to us and on the tax matters and
other matters that we had in the Empire works. Duffy came to Washington and a few days later he introduced me to Mr. West brought
him to our hotel. That is liQw Mr. West came into the picture never
knew him; never called for him.
The Chairman. What was the purpose of the employment of Mr.
;

West?
Mr. Cohen. I didn't employ him; he came in with Mr. Duffy; he
Mr. Duffy said Mr. West was helping
him.
The Chairman. You paid Mr. West some money, didn't you ?
Mr. Cohen. I paid for the account of Duffy and for the account of
Orgill we paid Mr. West we paid some expenses he borrowed some
had to pay hotel bills his wife was sick he had to pay for an operation; in that way we paid; each time we charged it to ]Mr. Orgill.
The Chairman. '\Wiat did you expect Mr. West to do for these payments?
Mr. Cohen. What I wanted Mr. Duffy to do and ^Ir. AVest was helping Mr. Duffy it was necessary for us to get what we call a release
of facilities. The release of facilities from the United States Ordnance was if you are doing business for anybody but the United States
Ordnance, the United States Ordnance or the United States Government has to say that they don't need those facilities for their own purposes and give you what they call a release of facilities.
The Chairman. Weren't these British funds which you were going
to use blocked and you had to get them released from the Ordnance
Department before you could do any business?
Mr. Cohen. The Ordnance Department had nothing to do with it;
they sent you to the British to get the contract, sent us.
stayed around with Mr. Duffy.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

3983

The Chairman. But j^ou had to get a release from the Ordnance
Department before you could carry out the contract is that what you
employed Mr, West for, to get that release ?
Mr. Cohen, I called Mr. Duffy down here to work on it.
The Chairman. That is what Mr. West was called into the picture
for, to go down and "fix" the Ordnance Department ?
Mr. Cohen. Not to fix the Ordnance Department; nothing to fix
in the Ordnance Department.
The Chairman. You couldn't operate until the Ordnance Department gave you the go-ahead signal?
Mr. Cohen. It wasn't the Ordnance Department; there were 16 or
;

17 different departments.
The Chairman. Let's say the whole War Department.
Mr. Cohen. State Department, 16 or IT different departments.
The Chairman. They had to give you the go-ahead signal before
you could go ahead on the contract; British contract?
Mr. Cohen, They had given us the go-ahead signal but before we
could start operating we had to get also from different departments
something saying these facilities are not needed by the United States
Government and it is all right to use it for foreign governments.
That is all that was needed.
The Chairman, Then Mr. West didn't do anything for the money

you paid him ?

Mr, Cohex, For

us, nothing except cause us all this trouble.

The
next thing West did was tlien sometime in February I suggested
that he take a job and stop borrowing here and there and he came in.
We intended to build up a shipyard and for him to come in and take
the job as secretary of the shipyard. We also intended to open up an
office over here like we did in Detroit and other places, to expedite
the material over here. We wanted to expedite our business and have
a job for him so he would have an income. He agreed to do that
and about a month or so later he was named to some commission and
then he decided he wanted to stay in the Government service.
The Chairman. Mr. West testified here yesterday he made a trip
down to the Ordnance Department in your behalf and that you then
went down tliere after he had made the trip and things went through
like greased lightning.
He told you who to talk to. Who did you

Ordnance Department ?
Mr. Cohen. I never was in the Ordnance Department until sometime in the fall of this year; I never was in that place and he never
went anj'where for us.
The Chairman. Then you never had any never found it necessary
to fix things in the Ordnance Department so you could get this Job
done ?
Mr, Cohen. God Almighty, there was nothing to fix they are the
ones that gave us the order told us to go to the British and get the
order. What did we have to fix them for?
Senator Connalet, Why were you paying all those expenses?
The Chairman. He paid West $13,000.
Mr. Cohen. I am a good-natured damn fool. I introduced him
to a man.
Senator Connallt. I agree to half your statement, that you are
talk to in the

good-natured.

It is quite a serious thing, $13,000.

3984

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. I didn't give him any $13,000.

Senator Connallt. It may be a trifle to you.
Mr. Cohen. I didn't <jive it to him I never gave him $13,000.
Senator Connally. What did you give?
Mr. Cohen. $4,900, and the way he got that from us was I introduced him to a friend; he borrows money from him; I have to pay
;

the friend back.

Senator Bkewster. Who was this friend?

Mr. Cohen. Joe Hillman.
The Chairman. Take your time and just tell us what Mr. West
did for this money you paid him.
Mr. Cohen. You see, Mr. Senator, we worked very hard in this
whole situation.
The Chairman. It is perfectly apparent you did; I am not questioning that.

What

want

to laiow
is a perfect outrage for us to have
in the newspapers with this kind of state-

Mr. Cohen (interposing). It

been blackened that way
ments.
Senator Connally. We are
reports we want facts.

not here to

settle

the

newspaper

We want the facts in this case and are trying

you a chance to tell it.
Mr. Cohen. Here is an example of the thing. He comes to me and
says he might be caught on this confirmation in the Senate because
Mr. Julian took a judgment against him for $2,700 or $2,800 so I
said I will help him out. He comes to New York.
Senator Brewster. This is Mr. West, I take it^
Mr. Cohen. Mr. West he comes to New York well I didn't want to
give him the money from the company so I called up a friend of mine
who is the president of a bank, Mr. Leichtman, Modern Industrial
Bank, and I said, *'Here is a friend, Mr. West; would you give him a
loan of $3,000 ?" I sent him over there. He talks with Mr. Leichtman
Leichtman calls back and says, "Before I can give him the loan of the
$3,000 1 have to have in my record that the man is earning at least twice
as much." Well, I tell him I had offered Mr. West to come into the
Savannah shipyards and work for us and take charge of an office for
us here when we opened it up to expedite our papers we had to be here
all the time with drawings, all kinds of business; I will give him a
So I write a
letter embodying what I had agreed to do for Mr. West.
This is on April 24, attention
letter to the Modern Industrial Bank.
Mr. Jacob Leichtman.
The Chairman. 1941?
Mr. Cohen. 1941.
The Chairman.

to give

This is to verify to you that Charles West is emploj^ed by us os consultant at

an annual retainer of $7,500. We understand he has arranged to borrow from
you the sum of $2,800 which is to be paid bade in semimontlily paynionls. Mr.
West has authorized us to pay you, for his account, $llG.G(i semimonthly in payment of this loan which we are herewith undertaking to do.

He

takes this letter and goes down.

Senator Connally. Who signed the letter?
Mr. Cohen. I signed the letter.
Senator Connally. I thought you said you hadn't employed him?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3985

Mr. Cohen. I said in January or February I said to him he should

come in and take a job. When Senator Truman was asking me I
thought he was talking in 1940 about these British contracts.
The Chairman. I wasn't talking about any particular elate I just
wanted to know what he did for the money you paid him that is all.
Mr. Cohen. It still is the same thing; he did nothing but cause all
this trouble.
He was to take this job with us, as I say; he was nominated to this, some transportation commission he asked me to carry on
and pay him the salary until he would be confirmed by the Senate or by
the Government. Then came this judgment, announced in the newspapers by Mr. Julian. Then he comes to me with this, so I write the
letter embodying what I had said, that he would be employed by us at
;

$7,500 a year.
He went to the
loan.

He went

bank with the letter and made an application for a

to the bank, filled out his application for the loan.

Over here on the stand yesterday he said he was employed by us. In

the application it says "Who is your employer?" He says, "Empire
Ordnance Corporation."
Senator Connally. Wliat are you reading from ? You can tell me.
Mr. Cohen. This is the application that he made in that bank when
I sent him over.
Senator Connally. I just want to know what verification. Let's
see, Mr. Chairman, what verification this is supposed to be a photostat
;

of his application to the bank.

Mr. Cohen. That is right, sir.

Senator Connally. Where did you get it ?
Mr. Cohen. From the bank.
Senator Connally. If you want to accept it, it is all right with me.
The Chairman. This committee doesn't work exactly on the rules
of evidence: we are trying to find out what the facts are. I want to
know what Mr. West did and what you paid him.
Mr. Cohen. Didn't do a damn thing for us.
The Chairman. You hardly ever get the facts when you stick to
rules of evidence.

Mr. Cohen.

He

says here,

"Empire Ordnance" employed him.

"What is your salary ?" "$7,500 a year."

"Do you have any other income ?" He puts in "Savannah Shipyards,
$5,000 a year." Then he signs, "Charles West." They loaned him the
money. I thought he paid off Julian's judgment and meanwhile, when
the 15th came, we sent him the check; when the 30th came, we sent
him the check. We get called up by tlie bank saying he hadn't paid.
We had recognized an assignment that had been made of West's salary
and we are

liable to them for that salary. So I sent the next check over
Modern Industrial for the $500 for them to apply to West's loan
we made it out to Charles West. They called him to endorse it; he
wouldn't endorse it unless he got the difference; there was some difference of $30 or $40. They called me up. I said tliey shouldn't give
him any difference, apply it all to the loan or I would be stuck a second

to the

time.

So they endorsed

it

and applied

it.

The next month the same thing happened. After that we never
saw him any more until we were served with this.
The Chairman. Your answer, then, to my question is that Mr. West
didn't do anything for what you paid him ?

3986

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. Nothing except cause me this trouble.

The Chairman. Did you try to employ Mr. Corcoran as your attorney here in Washington ?
Mr. Cohen. I came to Mr. Corcoran at a time when there was a
question with us as to going into Savannah for the Savannah Shipyards, where we were to build the yard and the port authority was to
give us port-authority bonds in payment for building the yard, and
they would own the yard.
The Chairman. How did you come to go to Mr. Corcoran at that
time ?

Mr. Cohen. I read the newspapers he was going to open up his own
law office and his own practice.
The Chairman. Had you known him before ?
Mr. Cohen. I never knew him, never saw him.
The Chairman. How did you come to pick out Mr. Corcoran as your
attorney ?

Mr. Cohen. This was a question of municipal bonds which would

involve for us a lot of money, if we took it; my impression from what
I heard was he was a very smart fellow; that he was a good lawyer; he
would know this part of the law, so I called him and went to him he
told me he couldn't.
The Chairman. Did you employ him because he had been connected
with the Government before and you thought he was close to the President of the United States?
Mr. Cohen. I had nothing to do with the President of the United
States.
had nothing to do with the Government.
The Chairman. Is that one of the reasons you employed him?
Mr. Cohen. No. He has gotten a lot of experience out of the United
States; he said he couldn't.
Senator Connally. Do you know Judge Manton over in Philadelphia or New York? Manton?
Mr. Cohen. I did know Judge Manton yes.
Senator Connally. Were you associated with him in some financial
deals at one time ?
Mr. Cohen. What kind of deals ?
;

We

Senator Connally. Where is Judge Manton now ?

Mr. Cohen. I don't know.
Senator Connaixy. Where was he last seen ?
Mr. Cohen. Where I last saw him ? I don't know.
Senator Connally. You know who I am talking about ?
Mr. Cohen. I haven't seen him.
Senator Connally. Circuit court of appeals and sent to the
penitentiary.

Mr. Cohen. He was the senior of the circuit court of appeals.

Senator Connally. Did you have some business transactions with
him, associated with him in some deals?
Mr. C'ohen. One of our surety companies at one time; we issued
a bond for properties that he had.
Senator Connally. Then you did have some association with him?
Mr. Cohen. A long time l)ack, a long time ago.
Senator Connally. I didn't ask you when, but 3'ou did you were
associated with him? Was he a partner of yours?
Mr. Cohen. I wasn't associated with him; I was no partner.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator

Conn ally. That is what

3987

am trying to find out.

Mr. Cohen. I say in the surety company we wrote a bond for one
of his realty companies.

Senator Connally. Did you pay it ?

Mr. Cohen. We had to pay, yes he didn't pay.
The Chairman. I have no more questions.
Senator Connally. Do you know anything about the Missouri
;

State Life Insurance Co.

Mr. Cohen. Yes.

Senator Connally. Who was it associated with j^ou that borrowed

money from the Missouri State, enough to buy the stock of some
company over in Europe as a result of which the Missouri company
went on the rocks ? Do you know anything about that ?
Mr. Cohen. The question you are asking me, with the statement

you are putting in it, is not exactly right.

Senator Connally. You tell us right; I don't know anj'thing
about it; I am not a member of the Missouri State Insurance Co.,
but didn't you borrow you and Mr. Barnes, the former wheat
dictator $800,000 from the Missouri State Life to buy its own stock ?
Mr. Cohen. No.
Senator Connally. What did you do?
Mr. Cohen. We borrowed from the First National Bank in St.

Louis.

Senator Connally, You bought the stock. What did the Intersouthern Insurance Co. of Louisville have to do with it? Did they
have anything to do with this deal ?
Mr. Cohen. Kentucky Home Life, which has been organized by
Louisville interests, had taken over the Intersouthern Life and we

bought stock in the Kentucky Home Life.

Senator Connally. What did you do with this $800,000 you borrowed from there?
Mr. Cohen. We bought stock in Kentucky Home Life.
Senator Connally. Why did you do that? Still got it? What
did you do with it ?
Mr. Cohen. I was sold out by the banks. The banks have it.
Senator Connally. Why did you go in there to buy it? Did you
think it was a good buy or was it just a form of manipulation ?
Mr. Cohen. We thought it was a good buy at that time.
Senator Connally. But it didn't work?
Mr. Cohen. No; because in March 1933 the President came in and
closed all the banks we couldn't pay off our loans.
Senator Connally. What happened to the Missouri State Life?
Mr. Cohen. Still in business.
The Chairman. Missouri State Life has been taken over by the
new company in St. Louis and the Missouri State Life went bankrupt,
didn't it; and had to be taken over by another insurance company;
and one of the reasons it went bankrupt was because of this very
;

deal?

Mr. Cohen. I am willing to go into

all of that if you want to bring

are responsible for it so we can go into it.
Senator Connally. I am not concerned with anybody but you.
I am trying to find out the facts.

the people

who

3988

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. I wasn't in the management; I didn't control

didn't have anything to do with it.
Senator Connallt. You said you bought into it.
Mr. Cohen. I bought the stock of the Kentuckj^ Home Life.
Senator Connally. And it went "kaflewy," too, didn't it ?

it;

Mr. Cohen. No.

Senator Connally. You said you were sold out.
The Chairman. I think the American Life in St. Louis took them
all over, if I remember correctly.
Senator Connally. I don't loiow enough about it to pursue it
today. You will be back tomorrow, I suppose. That is all.
The Chairman. Senator Mead, did you have some questions?
Senator Mead. Mr. Cohen, what about this loan that Charles West
negotiated with your help at some bank in New York? What bank
was that?
Mr. Cohen. Modern Industrial Bank.
Senator Mead. And what is the present situation with reference
to the loan?

Mr. Cohen. The only money that was paid was the checks we

He

hasn't paid

it

sent.

back.

Senator Mead. What?

Mr. Cohen. The only money that has been paid are the checks we
sent over.
The rest he hasn't paid back yet.
Senator Mead. He hasn't paid the loan ?
Mr. Cohen. No. And he didn't pay Julian's note with that money
either.

Senator Mead. Has the bank taken any action?

Mr. Cohen. The last I knew from the bank was that they were
trying to find him so as to serve him with the proper papers.
The Chairman. Senator Ball, did you have a question ?

CONNECTION OF THOMAS

G.

CORCORAN WITH SAVANNAH SHIPYARDS

CORPORATION

Senator Ball. Mr. Cohen, when you came to Mr. Corcoran here
February what did he tell you? You wanted to retain him on
this Savannah Port Authority bond deal.
Mr. Cohen. He said he was too busy with other work and he couldn't
devote all his time, and he wasn't a s]Decialist on this thing, and he
recommended Bill Koplovitz, and Bill Koplovitz did a very good job.
Senator Ball. That is the firm of Dempsey & Koi)lovitz ?

in

Mr. Cohen. That

is

right.

Senator Ball. Did he mention that the Dempsey in that firm is

the son of Mr. Dempsey who was at that time on the Maritime Commission ?
Mr. Cohen. Yes; he told me about that; but that didn't affect us
one way or tlie other.
Senator Ball. What did he say about it?
Mr. Cohen. He told me that Bill Koplovitz was the best man he
knew for this type of work and that he would know these municipal
bonds better than anyone else I could get.
Senator Ball. What did he say about Dempsey's father being on
the Maritime Commission?

Mr. Cohen. lie told me he had been on the Maritime Commission,

but that had nothing to do with us.
Senator Ball. That is all he did, just mention it?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3989

Mr. Cohen. Yes.

Senator Ball. He didn't tell you it would be a good idea to retain
them for that reason ?
Mr. Cohen. No. On the Savannah Shipyards
Senator Ball (interposing). That is all he said? He just mentioned that Dempsey's father was on the Maritime Commission ?
Mr. Cohen. Yes.
Senator Ball. That is the extent of his statement?
Mr. Cohen. That is right.
Senator Ball. I see. And you went ahead and retained Dempsey &
Koplovitz on this bond transaction ?
Mr. Cohen. That is right.
Senator Ball. Is that all they did?
Mr. Cohen. From that time on they have been doing all the work
for us in Savannah.
Senator Ball. Thej' represent you as far as the Savannah Shipyards
are concerned

Mr. Cohen. That is right.

Senator Ball. They repiesented you in negotiating the contract, in
drawing it up, checking it, and all that sort of thing?
Mr. Cohen. That is right; and they also advised us not to take the
port authority notes in payment for our work.
Senator Ball. Yeg; but you say they are still representing you?
Mr. Cohen. Yes.
Senator Ball. I take it they continued as counsel for Savannah Shipyards and were counsel during the time the contract m ith the Maritime

Commission Avas negotiated.

Mr. Cohen. Yes.
Senator Ball. I
date

see.

How much

fees have

you paid them

to

Mr. Cohen. I think during the whole year they have received
about $18,000.
Senator Ball. That is all you have paid them?
Mr. Cohen. That is right. And they have done an awful lot of
work.
Senator Ball. They did help you on the contract with the Maritime Commission?
Mr. Cohen. Let me answer it for you this way. We had come to
the Maritime Commission away back in Januai-j^, Mr. Crowley and
myself.

Senator Ball. You were turned down then ?

Mr. Cohen. We didn't ask for anything so we couldn't be turned
down. We came to say what we were going to do. We came there
and said that we were going to build a yard, that through all our
plants we are able to manufacture practically everything that goes
into the ship except the steel plate itself. Admiral Land at the
time told me I was crazy, that this isn't the way a ship should be
built and he hadn't heard of anybody coming in with his own money
to build his own yard.
But we went ahead and did it anyhow.
He didn't promise us any ships, he didn't say he would give us
any ships; all he said was if we build a shipyard as we say, and we
have a yard, there is no question but that the facilities would be
They wouldn't let any facilities that are good lie idle. So
used.
we went ahead with our own money, with our own effort, and we
kept on building.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3990

We

Then

bid on those
bids were asked for coastal cargo vessels.
were the lowest bidder on one of the categories. Then
in conversation with the Maritime Commission, we were told that
our ways were too large, we ought not to use up thosei large ways
for small cargo vessels, so we stepped out of that bid. and we kept
on building. Then when we were pretty nearly ready with our
three ways and we were ready with the rest of the yard, we came
back and kept showing them the progress we were making, until
finally they called us and they said they were awarding to us 12
These conditions were very tough.
vessels, with certain conditions.
Senator Ball. What is the total of that contract.
Mr. Cohen. It is 12 vessels at $110,000 a vessel. That is what we
If we don't finish it on time,
receive as a fee, if we finish on time.
theai we are penalized $400 a day, with a bottom of $G0,000 per
vessel.
If we finish it faster, then we receive $400 a day for every
day faster, and with a maximum of $140,000. That is our contract.
Senator Ball. And what is the total cost of each vessel?
Mr. Cohen. I don't know; it depends upon the Maritime Commission.
Senator Ball. What is the estimate?
Mr. Cohen. The estimate?
Senator Ball. You are not setting out to build 12 ships without
knowing that they are going to cost approximately.
Mr. Cohen.
don't have anything to do with the cost.
Senator Ball. You pay the cost.
Mr. Cohen. The Maritime Commission pays the costs.
Senator Ball. You pay them first and they reimburse you. That
vessels.

We

We

is

their contract, isn't

it

Mr. Cohen. We advance it first on pay roll yes. It may run into
a million and a half dollars a ship.
Senator Ball. What is the estimate on the 12 ships ?
Mr. Cohen. Between a million and a half and a million seven hundred we don't know the exact figure.
Senator Ball. Your fee is based on the estimated cost ?
Mr. Cohen. It has nothing to do with it.
Senator Ball. That is what it is supposed to be based on. That
;

is in

the law.

Mr. Cohen. I don't know about the law, but we are paid so much
per vessel, not what the vessel cost. They may decide to change from
steam engines to turbines, then the cost would be five times as much.
Senator Ball. On the plans and specifications when the contract
was let, you had an estimated cost on which your fee was based, and
I am trying to find out what it was.
Mr. Cohen. The fee wasn't based on estimated cost.
Senator Ball. What was the estimated cost
Mr. Cohen. Between one million and a half and one million seven
hundred thousand dollars.
Senator Ball. Plus your fee?
Mr. Cohen. Plus the fee. The fee lias nothing to do with the cost.
Senator ]^all. And Dempsey & Koplovitz were your attorneys
while that contract was being negotiated?
Mr. Cohen. Oh, yes.

IXVESTIGATIOX OF THE NATIONAL DEFENSE PROGHAJSI

3991

Senator Ball. And they checked the contract for j^ou and helped
you in the negotiations with the Maritime Commission
Mr. Cohen. Yes.
Senator Ball. Did you know that Corcoran was employed by
?

Dempsey & Koplovitz as an

Mr, Cohen. I knew that

associate counsel
later yes.

Senator Connally. Mr. Cohen, you said something about Senator

Joe Hill having something to do with this thing Senator Joe Hill

of Texas.

Mr. Cohen. I said I introduced Charlie West to Joe Hill.

Senator Connally. What did he haA^e to do with the Savannah
Shipyard ?
Mr. Cohen. Nothing.
Senator Connally. Why did you introduce him? Did he ask you
to introduce

him

to

West ?

Mr. Cohen. No.

Senator Connally. Why did you bring Hill into this thing?
Mr. Cohen. I didn't bring him in.
Senator Connally. You mentioned something about Senator Joe
Hill.
What was he doing at your place? What did he have to do
with this deal ?
Mr. Cohen. He had nothing to do with it.
Mr. Connally. Did he just come by and pass the time of day with
you, say "Howdy," or what? How come you introduced him to
Charlie West? Why didn't you introduce him to Bob Jones?
Mr. Cohen. If Bob Jones had been there when I was talking to
him, I would have introduced him to Bob Jones.
Senator Connally. What happened was that West borrowed money
from him and you paid Hill.
Mr. Cohen. West borrowed money from Hill.
Senator Connally. Why did you feel called upon to pay Hill back
for the money West borrowed, because you had introduced him?
Mr. Cohen. I never yet had a friend of mine get stuck because I
introduced somebody to him.
Senator Connally. Well, hoAv long had you known Senator Hill?
Mr. Cohen. About 2 years.
Senator Connally. Had you been associated with him in any way
in these deals?

Mr. Cohen. No it had nothing to do with this.

Senator Connally. He had nothing to do with the Savannah Shipyard ?
Mr. Cohen. Nothing whatsoever.
Senator Connally. He had nothing to do with the order?
Mr. Cohen. Nothing whatsoever.
Senator Connally. I wanted to cret the facts. I didn't want implications cast on Senator Hill if nothing had been done.
Mr. Cohen. It is a shame his name should be brought in.
Senator Connally. The first time I heard his name mentioned was
in your testimony.
Mr. Cohen. Oh, no.
The Chairman. West testified to that.
Senator Connally. I said that was the first time I heard about it this
;

morninjr.

3992

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. I referred

to

here because

it

it

was referred to

yes-

terday.

Senator Connally. That

is

right.

That

is

satisfactory if

it

is

fact.

Senator Brewster. Wasn't Senator Joe Hill, of Texas, associated

with an oil enterprise in Houston with which you are also associated ?
Mr, Cohen. He wasn't associated he was representing the Southport Petroleum Corporation of Houston.
Senator Brewster. In which you liave an interest ?

Mr. Cohen. Yes.

Senator Brewster. And you were undertaking to sell aviation gas
to the Government ?
Mr. Cohen. No; we weren't trying to sell aviation gas to the Government. The O. P. M. had sent someone down there to go over the
refineries and the question of what facilities would be required for
stepping up the production of aviation gasoline; and Mr. Hill was
here, and Mr. Kroll, the president of the Southport Petroleum Corporation. They were meeting with these committees of the O. P. M.
Senator Brewster. Now, did you testify that on the board of the
Empire Ordnance Co. there were two members representing the
British Purchasing Commission?
Mr. Cohen. That is right.
Senator Brewster. And who were they?
Mr. Cohen. Mr. Murray and Mr. Quarrie.
Senator Brewster. Give their full names.
Mr. Cohen. George G. Murray and Bertrand Quarrie,
Senator Brewster. How do you spell the second name ?
Mr. Cohen. Q-u-a-r-r-i-e.
Senator Brewster. And what is their oflScial position?
Mr. Cohen. With the Empire Ordnance?
Senator Brewster. No. I 'understand they are directors there,
but I mean their other connection.

Mr. Cohen. Mr. Murray is directly in the British Commission, and

Mr. Quarrie was representing them on our board and in the management.
Senator Brewster. What are their positions in the British Purchasing Commission ? Mr. Murray is chairman or just a member ?
Mr. Cohen. I don't know what his official position is. Quarrie is
not in the Commission. Quarrie is an American.
Senator Brewster. An American lawyer?
Mr. Cohen. No he is a steel man.
Senator Brewster. Where does he live?
Mr. Cohen. In Cleveland, originally.
Senator Brewster, Cleveland, Ohio? And Mr. Murray is from
;

England?
Mr. Cohen. Yes.
Senator Brewster.

And

he

is

member

of the British Purchasing

Commission ?
Mr. Cohen. Yes.
Senator Brewster. And still continues as a member of your board?
Mr. Cohen. Yes; until their contracts are run out.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

FRANK Cohen's business association with thomas

g.

3993

coecoRxVN

Senator Brewster. Now, about the connection of Mr. Corcoran, you

say that you did not know about his employment by Dempsey &
Koplovitz until sometime after?
Mr. Cohen. Yes; we had a meeting. Koplovitz was arguing with
all these lawyers in Georgia that they had no right to issue these port
authority bonds, and the question that was involved was that if we
took these port authority bonds in payment for the work, we might end

up where we would have no yard and we would have no bonds on

which later to collect. The counsel for the city and the counsel for
the county, and for the port authority, all took the position that they
had a right to do it. Finally we decided to have a meeting here of all
the lawyers and it was at this meeting
Senator Brewster (interposing). About what time was that?
Mr. Cohen. The exact date I don't know.
Senator Brewster. Could you fix the month?
Mr. Cohen. It was sometime in March 1941. At this meeting of all
the lawyers Corcoran was present with Koplovitz, and after hours of
discussion we finally compromised on an arrangement whereby part
of the facilities might fall under the category of facilities of the port
authority and the other part not. Then we went back again to
Savannah, and when we got there
Senator Brewster (interposing). I want to stick to the Corcoran
connection.
Was that the only time you saw Mr. Corcoran ?
Mr. Cohen. That is the oiily time I saw him in connection with
these Savannah shipyards.
Senator Brewster. The $18,000 fees which you say you have paid
;

to date to Dempsey
of Mr, Corcoran?

&

Koplovitz

do these

inchide the compensation

Mr. Cohen. So I understand. AVe didn't compensate Corcoran.

had nothing to do with that. I understand fi-om his testimony
that he received $5,000 from them, which would be part of this

We

eighteen.

Senator Brewster. Did they have an expense account as well as

their fee?

Mr. Cohen.: They received a monthly retainer.

Senator Brewster. Of $1,500?
Mr. Cohen. It ran between $1,500 and $2,000, depending on how
much work was done.
Senator Brewster. Did they in addition have an expense account?
Mr. Cohen. So far they have paid their own expenses of traveling
up and back. I don't think we have repaid them for any expenses
yet.

Senator Brewster. So the Corcoran fee was never billed to you either
as a fee or expenses?

Mr. Cohen. No; we were never billed for anything like it; we
never paid anything like it. All our relationship is with the firm
of Dempsey & Koplovitz?
Senator Brewster. How did you make your initial contact with
Mr. Corcoran?
Mr. Cohen. As T have said
Senator Brewster. I asked you how.

3994

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. By telephone from New York to Washington.

Senator Brewster. Where was his office then ?
Mr. Cohen. I don't know. I telephoned first
Senator Brewster. He has testified here that at that time he had
an office with Dempsey & Koplovitz. Will that refresh your recollection

Mr. Cohen. At the time we telephoned I don't know which office

it was.
We telephoned to Republic 6363.
Senator Brewster. You say "we."
Mr. Cohen. I did.
Senator Brewster. Did anyone assist you in contacting Mr.
Corcoran ?
Mr. Cohen. No.
Senator Brewster. And when you made your call on him, where
was that call ? Where did you see him ?
Mr. Cohen. In the hotel.
Senator Brewster. At what hotel ?
Mr. Cohen. He arranged to meet me in our hotel, the Mayflower.
Senator Brewster. He met you there?
Mr. Cohen. Th.at is right.
Senator Brewster. Then he recommended you to Dempsey &
Koplovitz ?
Mr. Cohen. That is right.
Senator Brewster. When you got down there did you find Mr.
Corcoran had offices there?
Mr. Cohen. I didn't even go to their offices. I called up Koplovitz I was on my way to Savannah that day, and I called up Mr.
Koplovitz and he came over.
Senator Brewster, You told him Corcoran had recommended him ?
Mr. Cohen. Yes.
Senator Brewster. And he came over to the hotel ?
Mr. Cohen. I explained what we were trying to do and asked him
wliether he could come along with me right now, and he came.
Senator Brewster. And you saw nothing of Mr. Corcoran until 2
or 3 weeks later, when there was this conference of the terms, at which
they turned down the bond issue.

Mr. Cohen. That is right.

Senator Brewster. Did you have any talk with Mr. Koplovitz in
the meanwhile about Mr. Corcoran's association ?
Mr. Cohen. No.
Senator Brewster. Now, you started to say a little earlier that later
on you saw Mr. Corcoran again. Will you go on with that on af-

understand, other than shipbuilding.

Mr. Cohen. We became interested in a boat called the sea otter,
which we thought could solve the convoy problem, so we arranged
with Mr. Burgess, who was designing it, Ave advanced the money for
drawing the designs, and w^e wanted to go into the buildhig of that
boat.
Tliere was a question involved as to who was to bo res])()nsible
for tliat sea otter, and I talked to Bill, to Koplovitz, about it.
talked, and then one day by telephone
Sen a to Brewster. What do you mean by responsible for the sea
otter?
What do you mean by that?
fairs, I

We

I-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3995

Mr. Cohen. This as a new idea of a smaller vessel whirJi was to be

built in order to carry a cargo across to England.
were right in
the middle of all this transportation where we knew what the prob-

We

lems were, British transportation. Mr. Burgess had worked out

and he was testing out a model. We went out to see it with
him, and I agreed that we would spend the money for him to finish up
his designs and develop that boat.
The theory of the thing was and
why we were sold on it in the first place you didn't have to spend
millions of dollars for shipyards to build it in the second place, the
way it would be built was good for the kind of organization we had,
which w^as a mechanical organization, and we calculated we could
turn out those little boats one every 2 or 3 days. The total cost of it
would be about $225,000. It could carrj' 1,800 tons of cargo. It only
required about eight people. It was made out of the kind of steel
this idea

where there was no bottleneck.

Senator Brewster. I am still renewing my question. What did
you mean when you said, "We did not know who was to be responsible
for the sea otter"?
Can you address yourself to that?
Mr. Cohen. I thought you said "sponsoring."
Senator Brewster. No, "responsible" I thought j'ou said. What do
you mean?
Mr. Cohen. At that time the Navy was testing it out, the Maritime
Commission was testing it out, the Coast Guard everybody was
focused on that.
Senator Brewster. You didn't know which department might be

interested

Mr. Cohen. We didn't know if any of them would be interested.

Senator Brewster. Now, where does Mr. Corcoran enter the picture?
Mr. Cohen. Koplovitz had discussed that with Corcoran and Koplovitz called me and said, "From the information that Corcoran has
from the shipbuilding i)eople, we would be foolish to go into it because
wouldn't be practical."
Senator Brewster. In other words, Mr. Corcoran had expert knowledge available in the shipbuilding business.
Mr. Cohen. He was with the Todd Shipbuilding people and the
it

others.

Senator Brewster. Did you liave any talk with Mr. Corcoran at that
time ?
Mr. Cohen. No he called me on the telephone, or I called him, or I
talked to him through Bill Koplovitz's telephone board, where he
repeated what he told Koplovitz.
Senator Brewster, What other contacts did you have with him?
Mr! Cohen. Then, as we were finishing up our yard
Senator Brewster. Let me finish that. You didn't pay him anything
;

for that?

Mr. Cohen. No. As we were getting closer to finishing up the

Savannah shipyard, the question arose as to whom to put in charge as
an operating head. We had interviewed a number of people, various
captains, various commanders of the Navy, and other people. The
name of a Captain Easton came up, who was on the coast.
Senator Brewster. How do you spell that ?
Mr. Cohen. E-a-s-t-o-n, I think it is. And each time we interviewed
these people, of course, Koplovitz would know what we were doing,
311932

42

pt.

10

18

INVESTIGATION" OF

3996

THE NATIONAL DEFENSE PROGRAM

and we would go back and refer to the Maritime Commission, because

we always looked to them to approve any staff that we mi^ht employ.
Koplovitz told me that Corcoran knew this Commander Easton, had
met him in the Todd shipyards on the coast, and that he was going to
check up and see whether he w^ould be willing to come.
Senator Brewster. He w^as associated with Todd shipyards at that
time in San Francisco?
Mr. Cohen. Correct. So he called up and this Commander Easton
came he visited Savannah, and he had been in Savannah in the previous war, and he remembered that he had been very sick, and so on,
and he decided he and his wife would not live in Savannah, and he went
back then to the coast.
Senator Brewster. Mr. Corcoran took that matter up with the
Maritime Commission at that time for you, did he not?
Mr. Cohen. I think lie spoke to either Captain Vickery or someone
there to find out whether Easton could be availal)le. because they would
have to release him from the Todd Shipbuilding, which also had
;

Maritime contracts.
Senator Brewster. So you wanted

to be sure it

met with

their

approval.

Mr. Cohen. That

is

what Koplovitz

told me, that Corcoran

had

called up.

Senator Brewster.
behalf?

What was

the next activity of Corcoran in your

Mr. Cohen. That is all I know of.

Senator Brewster. Did you ever see Mr. Corcoran in his office?
Mr. Cohen. The only time I saw Corcoran w^ould be in Koplovitz's
office.

Senator Brewster. And what was the last time you saw him?
Mr. Cohen. It is about 2 months, either a month or 2 months ago.
Senator Brewster. And in what connection was that ?
Mr. Cohen. We were discussing this question.
Senator Brewster. That was the last time? He never made any
other contacts for you, then

Mr. Cohen. No.

Senator Breavster. Or took up any matter concerned with Empire

Ordnance ?
Mr. Cohen. No.
Senator Breavster. He never made any introduction for you?
Mr. Cohen. I think he one time called Mr. Amberg, of the War Department, assistant to the Under Secretary of War.
Senator Brewster. And when was that^
Mr. Cohen. It must be about 2 or 3 months ago.
Senator Brewster. And in what connection was that?

How

did

that happen?

Mr. Cohen. There was a question of the American inspection taking

over from the British inspection, and we had various ])roblems connected with that inspection exclinnge. For instance, we thought we
were very smart. We brouglit all our material in to be sure we would
have no pioblems later, and each time we bought our material the
British inspection would have to pass on it first before we used it.
Well, apparently, the British mode of inspection was Mhat they call
spot or 10-percent ins[)ection, and when the United States came in it

INVESTIGATION OF THE NATIONAL DEFENSE PROGKAM

3997

was a question that tlieir modes were 100 percent inspection, and here
we had all the material and we didn't know how this inspection idea
would work. So I spoke to Mr. Amberg.
Senator Brewster. Why did you want to see Mr. Ambero;?
Mr. Cohen. To get an idea how this inspection system would work.
Senator Brewster. Mr. Amberg doesn't handle inspection, does he ?
Mr. Cohen. No.
Senator Brewster. What is Mr. Amberg?
Mr. Cohen. He is Assistant to ITnder Secretary of War. I was
going to find out in the Ordnance Department who I would have to
talk with.

Senator Brewster. Do you mean to say after all your dealings you
didn't know the one in the Government who had charge of this
inspection ?
Mr. Cohen.
hadn't had any dealings with the Government on
this inspection at all. It was a take-over.
Senator Brewster. Was there a representative of the Ordnance Department at your plant at that time to conduct the inspection ?
Mr. Cohen. No just going to come in. And we had two inspections
at that time. In some of the plants we had British inspection and
American inspection. In some, only British inspection.
Senator Brewster. When did you first learn there would be American inspection ?
received a letter from the British saying they had
Mr. Cohen.
made arrangements with the United States Ordnance for them to take
over the inspection.
Senator Brewster. What was the date of that letter, approximately ?

We

We

Mr. Cohen. Sometime in September.

Senator Brewster. Sometime in September. And then you decided
you would find out as to who was going to handle the inspection for
the American Government?
Mr. Cohen. No; not who was going to handle the inspection.
Senator Brewster. You knew that.
Mr. Cohen. The Government has a regular inspection department.
It was a question of how that would affect us. That is what I wanted
to know.
Senator Brewster. Why didn't you go directly to the Ordnance
Department ?
Mr. Cohen. That is what I was trying to do, find out who would
know what effect that would have on our contracts between the American and the British.
Senator Brewster. Was it necessary for you to get an introduction
by Mr. Corcoran to IVIr. Amberg in order to accomplish that ?
Mr. Cohen. I don't think it would have been necessary. It so happened that was the way it was done.
Senator Brewster. Where were you when Mr. Corcoran called Mr.

Amberg ?
Mr. Cohen. In Mr. Koplovitz's office.
Senator Brewster. And Mr. Corcoran was there?
Mr. Cohen. Yes.
Senator Breavster. You were all three there together?
Mr. Cohen. Yes.
Senator Brewster. Are contacts with Government officials rather
difficult here, Mr. Cohen ?

3998

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. No; I wouldn't say that. It isn't a question of meeting

Government official. It is more a question of knowing which Government official to meet, once you know who you have to
Senator Brewster (interposing). You knew definitely you wanted
to see Mr. Amberg. How did you determine that ? You never heard
a

of Mr.

Amberg

before

'(

Mr. Cohen. No; I hadn't met him, didn't know he was the one I

was

to meet.

Senator Brewster.
seeing Mr.

Who

developed that idea?

Who

thought of

Amberg?

Mr. Cohen. Mr. Corcoran called Mr. Amberg.

Senator Brewster. Did Mr. Corcoran suggest Mr. Amberg would
be the one to see?
Mr. Cohen. Yes.
Senator Brewster.
right man to see ?

He was

the one

who thought

that would be the

Mr. Cohen. That is right.

Senator Brewster. Did he know Mr. Amberg ?
Mr. Cohen. I don't know.
Senator Brewster. There were no fees involved as far as these
contracts were concerned?
Mr. Cohen. No.
Senator Brewster. But Mr. Corcoran was simply acting in a
friendly capacity.

Mr. Cohen. That is right.

Senator Brewster. As he had in these various other matters.
Mr. Cohen. That is right. We were so busy, right up to our ears,
and every hour we could save of moving around, it was very essential to us to move around and tend to our business.
We had been
working in our plants
Senator Brewster (interposing). Now, is it necessary, Mr. Cohen,
in your experience here in Washington, to get as busy a man as
Mr. Corcoran to make an appointment with an official?
Mr. Cohen. No.
Senator Brewster. That just happened?
Mr. Cohen. I was up there talking about it, and the next thing
I knew he had suggested that I go see Mr. Amberg, he probably
could tell what the policy was going to be.
Senator Brewster. Have you seen Mr. Corcoran since this investigation developed

Mr. Cohen. No.

Senator Brewster. When did you see him last?
Mr. Cohen. It must be about a month.
Senator Brewster. About a month ago. And where was that?
Mr. Cohen. In Koplovitz's office.
Senator Brewster. How nearly can you fix that date?
Mr. Cohen. I don't know.

You

but it is about a month?

on me.
Senator ]?rewster. Did ]Mr. Corcoran tell you that there was an
investigation on of his relations with your concerns?
Mr. Cohen. No.
Senator Brewster. He didn't say anything about it?

Senator I^rewstfj?.

Mr. Cohen.

can't fix

it,

It just left that im])ression

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3999

Mr. Cohen. It was before we ever heard of this yes, sir.

Senator Brewster. You didn't know anything about any investiga;

tion?

Mr. Cohen. No, sir.

Senator Brewster. What were you discussing?
Mr. Cohen. Something in connection with the yards

there,

with

Koplovitz.

Senator Brewster. The Savannah Shipyards?

Mr. Cohen. Tlie Savannah Shipyards.
Senator Brewster. As late as a month ago ?
Mr. Cohen. Yes.
The Chairman. Mr. Cohen, do you know a gentleman in Washington by the name of C. B. McDaniel ?
Mr. Cohen. Yes I knew him.
The Chairman. Have you ever employed him ?
Mr. Cohen. No.
The Chairman. You have never paid him any fees?
Mr. Cohen. We haven't paid him any fees; no.
The Chairman. Did you ever pay him any salary?
Mr. Cohen. No.
The Chairman. The committee will take a recess until 2:30 this
;

afternoon.

(Whereupon,

at 12

25 p. m., the committee recessed until 2 30 p. m.

:

of the same day.)

AFTERNOON SESSION

The committee reconvened

Truman, presiding.

at

2 37 p. m., the chairman, Senator

:

FEES PAID CHARLES WEST BY

FRANK COHEN

The Chairman. The committee will come to order.

Mr. Cohen, this morning I was trying very diligently to find out
from you just what you paid ]\Ir. West for. and I never did succeed in
finding out. Will you try to tell me now after the recess just why you
paid Mr. West this money? What did he do to earn that money?
Mr. Cohen. The money we paid him sometime in February when I
suggested that he take a job with the Savannah Shipyards as a secretary and take charge of all the fonns that we would have to work

out
Senator

Hatch

hesitating and
tion directly.

(interposing). Mr. Cohen, you are doing a lot of

don't you answer the ques-

waving your hands.

Mr. Cohen. I

am

trying

to.

It

The Chairman. Senator Hatch,

Why

is hard to explain it.

I tried all morning to get

Mr. Cohen
answer that question and he never did answer it.
Senator Hatch. It just amused me because I have seen so many witnesses in my life, and when they begin to hesitate and hem and haw, I
have some very good ideas of what is in their minds. Why don't you
answer straight from the shoulder?
to

The Chairman. That is the best thing to do. You are not in a court
at all.
You are before a Senate committee and that committee is going
to find out the facts whether you tell them or not.

4000

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. I will tell yon whatever you want to find out.
The Chairman. I have the photostatic copies of checks which you
gave the committee, and we want to know what you gave all the checks
You told me this morning, for nothing. I can't believe that,
for.
and I am very frank to say that.
Mr. Cohen. You see, it is divided in two parts. You will find the
first checks that were given were what we charged to the account of
West had asked me to help him out and
Orgill, Maschke & Duffy.
pay for hotel bills, pay for expenses, and so on.
The Chairman. You didn't help Mr. West out just because he asked
you. You helped him out because you thought he would be of some
use to you. What use was he ?
Mr. Cohen. He wasn't any. I told you this morning he wasn't of
use to us.

The Chairman. But you paid him a lot of money.

Mr. Cohen. I paid these moneys for the account of Orgill's firm. I
charged it to them. Then in February when he suggested that he take
the job at a fixed salary, I started paying those salary checks. That
was when he was given this nomination to the transportation commission, when he thought he wanted to be in the Government service
again.
The Chairman. You didn't know West until he was introduced to

you by Mr. Duffy ?

Mr. Cohen. That is right.
The Chairman. And why should you have any interest in whether
Mr. West was confirmed or not by the Senate in his new job? If
he didn't do anything, you spent a lot of money because somebody
introduced you to West.
Mr. Cohen. It was on account of Duffy that we paid him, and each
time we gave a check I called him and asked him to help him out
because he had to pay hotel bills, he had to pay telephone bills as I
Then I would call Mr. Duffy
said, his wife was being operated on.
and ask him whether it was all right to pay him.
The Chairman. That is not the reason you paid Mr. West. I want
to know why you paid Mr. West.
Mr. Cohen. I didn't pay him. I am trying to tell you.
The Chairman. Here are the checks signed by you.
Mr. Cohen. Yes; and charged to Mr. Duffy and Mr. Orgill.
The Chairman. I don't know whom they are charged to; they are
signed by you.
Mr. Cohen. We charged them against the monthly retainer they
were to get from us.
The Chairman. You wouldn't pay out all this money. I wish
somebody would introduce me to you I need a lot of money if
you are that easy. I would like to know why you do it.
Mr. Cohen. As I say, I was paying it on the account of Mr. Orgill.
The Chairman. Mr. West must have been doing something for all
this money.
Mr. Cohen. He was working with Mi-. Duffy.
The Chairman. Mr. West testified yesterday before this committee
that he had made certain arrangements with the War Department
in your interest for this money.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. If he

did,

we

didn't

know

it,

4001

because he did nothing

for us.

The Chairman. You paid him.

Mr. Cohen. I am trying to tell you we didn't pay him. We paid

Mr. Duffy and Mr. Orgill.
The Chairman. Here is a check for $750 paid out to Charles West
and signed by you.
Mr. C'oHEN. That is right.
The Chairman. And here is a check for $250 signed by you and endorsed by Mr. West.
Mr. Cohen. That is right.
The Chairman. Here is a check for $2,000 signed by you.
Mr. Cohen. That is right.
Senator Hatch. What is right?
Mr. Cohen. The amount. We gave you the checks.
The Chairman. He gave the checks to the committee he knows what
Here is a check
I am talking about, and it is endorsed by Mr. West.
for $250 dated January 7. made out to Charles West and signed by
you. Here is a check for $250 signed by you and endorsed by Charles
West. They add up to a lot of money. You said $4,900 this morning..
Mr. West testified this morning, or rather yesterdav, that is was some
;

$13,000.

Mr. Cohen. This is the money we charged up to Mr. Orgill 's firm
and that I paid out on account of Mr. Orgill's fee and charged to their
fee.

The Chairman. You wouldn't have paid Mr. West this money if
he hadn't done sometliing for the money, would you ?
Mr. Cohen. He was working with Mr. Duffy, of Mr. Orgill's firm.
The Chairman. Mr. Duffy introduced INIr. West to you, didn't he?
Mr. Cohen. And Mr. Duffy was there working with Mr. West.
The Chairman. What did Mr. Duffy tell you when he introduced
Mr. West to you ?
Mr. Cohen. That Mr. West would help Mr. Duffy.
The Chairman. In what way?
Mr. Cohen. As I explained to you this morning, Mr. Duffy came
down in place of Mr. Orgill. I explained to him thatVe had the contracts. We were drawing up these contracts.
I needed legal advice
to be sitting alongside of me. We also needed to get the releases of
facilities, and we were all very busy with the plants, and I asked Mr.
Duffy Avhether he could take care of following through on the release
of the facilities. He brought Mr. West, and Mr. West was working
with Mr. Duffy.
The Chairman. What did Mr. Duffy tell you Mr. West would do
when he introduced you to Mr. West ?
Mr. Cohen. That he would help him that he would save him the
;

time.

The Chairman. In what way ?

Mr. Cohen. In going around to the different departments.
The Chairman. You still haven't answered the question, yet you
paid out all of this money for Mr. West's services, and as far as you
have told this committee, you just made a donation to Mr. West because
Mr. Duffy introduced him to you.

4002

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. I didn't make any donation to Mr. West.

The Chairman. That is what it looks like.
Mr. Cohen. No; we didn't. We charfjed that to Mr. Duffy and Mr.
Orgill's legal fee. If I had given Mr. West $250. at tlie end of the
month I sent $750 to Mr. Orgill's firm. We would take it off and they in
turn would charge it to him.
Tlie Chairman. I read these checks a while ago. They add up to a
good deal of money, and this is only a part of them, so I am told.
Mr. Cohen. The checks that we gave after February, as I have
told you, were $4,900, and that all together, according to the records, 'is $11,00.
Tlie Chairman.

You told us this morning $4,900 is all you paid.

Mr. Cohen. That is all we paid him for acting for us.
The Chairman. But he got $11,000, and you made him a donation

of $11,000.

Mr. Cohen. No; the $4,900 is in the $11,000.

The Chairman. I can't understand it.
Mr. Cohen. I don't know how to explain it to you.
The Chairman. Do you have a question. Mr. Fulton ?
Mr. Fulton. I thought I might clear up that Orgill-West -Duffy
set-up. Mr. Orgill was a partner and so was Mr. Duffy a partner
in a Cleveland firm called, Orgill, Maschke, Wickham, Duffy &
Loux.
Mr. Cohen. Correct.
Mr. Fulton. Mr. Orgill is also the same Orgill who put up some
cash, you said.
Mr. Cohen. That is right he is a stockholder.
Mr. Fulton. And received what, a 10 percent interest?
Mr. Cohen. Five percent.
Mr. Fitlton. You furnished me with an affidavit of Mr. Duffy's
in which Mr. Duffy admits having introduced Mr. West to you.
Mr. Cohen. That is right.
Mr. Fulton. And he says, "I didn't ask liim specifically to do anything for Empire. It was just a general help problem."
Mr. Cohen. That is right, to him, to Duffy.
Mr. Fulton. Do we correctly understand that that is all that you
think Mr. West did, was to help Mr. Duffy?
Mr. Cohen. That is right.
Mr. Fulton. Now. Mr. West testified when examined by your
;

attorney that he expected to receive 1 percent of the British contract,

told him that was about $5,000,000; do you recall reading that
as part of wliat he said?
Mr. Cohen. I read that.
Mr. Fulton. And that he, therefore, thought that $50,000 was
coming to him, and had a settlement conference with you in which
he says, whethei- i-iglitlv or wrongly, that vou told him that $36,000
should be paid instead "of $50,000^$6,000 down and $1,000 a month
until the balance of $30,000 Avas paid.
Do you recall that ?
Mr. Cohen. I don't recall what he said there.
Mr. Fin,T0N. You recall that he said something similar to that?
Mr. Cohen. I don't recall what he said, but that isn't the fact.
Mr. Fui.TON. What would be your comment about that? Did j'ou
hold such a conference with him?

and you

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4003

Mr. Cohen. Not with him. That is the reason we got the affidavit
from Mr. Duffy, because he said at a meeting with Mr. Duffy and
with me that I had agreed to pay him 1 percent commission on
everything we would selL That wasn't a fact. I had never liad any
meeting with him and Mr. Duffy where we discussed anything like
it, nor did we ever agree to pay him any commission; so we got an
affidavit from Mr. Duffy.
Did you read the affidavits ?
Mr. Fulton. That is what I was coming to. "What Mr. Duffy
says is that Orgill had been representing you, or his firm had been
representing you, for about one year previous to that.
Mr. Cohen. Orgill had been representing me for many years, but
in the Empire
Mr. FiivTON (interposing). He says 1 year and you agreed to retain them for an additional 2 years, or a total of 3 years. 1 for past
services and 2 for future, at $1,000 a month, which would be $36,000.

Mr. Cohen. That is right.

Mr. Fulton. You paying $6,000
Mr. Cohen. $6,000 at the time.
Mr. Fulton. So there Avould be $30,000 due; so to that extent
you would agree with Mr. AVest that there was a discussion of
$36,000.

Mr. Cohen. Not with Mr. West, with Orgill. West claimed from
Duffy later one-third of AA'hatever retainer fee they got from us.
Mr. Fulton. But West was present, was he not?
Mr. Cohen. He was present later on.
Mr. Fulton. Wlien you spoke of this $36,000 amount to be paid,
you thought it was to Orgill or Duffy?
Mr. Cohen. I was called to Mr. OrgilFs office sometime in December and Orgill told me that he was having trouble with West,
that West was claiming that he had an arrangement with Duffy to
get one-third of his retainer, the legal retainer he had with us. At
that time the understanding with Orgill was that he was being
retained for the years 1940 and 1941, at $1,000 per month.
Senator Hatch. I didn't understand the division of the retainer.
Mr. Cohen. I say Mr. Orgill called me to Cleveland. I met him
in Cleveland, in his

office,

their legal offices in Cleveland.

He

said

he was having difficulties with Mr. West, that Mr. West was claiming from Mr. Duffy and through Mr. Duffy a one-third interest
in any legal fee they Avere getting from us as legal retainer.
Our
arrangement with Mr. Orgill was $1,000 a month for the year 1940,
and also for the year 1941. When they got into this discussion
and Orgill told me his problems with him, instead of having any
fuss about it, I inci-eased the time of the retainer to one more year,
so they would be our legal representatives for the years 1940, 1941,
and 1942, at $1,000 a month.
Tlie Chairman. Mr. Cohen, isn't it true that you organized this
company of yours on a shoestring and I give you credit for having been able to do that and that you were despearately in need
of orders and releases from the Government, and that Vou were
willing to hire anybody or pay any sum of money to get that
thing through so you could make these plants work, in which you
invested money that you borrowed, and you wanted to hire Mr. West
or Mr. Corcoran or anybody else who had a little influence with
people down the street to g(!t the job done?

4004 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. No; Senator, that is not the case. When you say
started with a shoestring, if you mean we started with very little
money, correct; we didn't have very much money.
The Chairman. I am not going against you for that. I think
you are to be complimented on that, but I think you used methods
that are anything but ethical in getting the job done.
Mr. Cohen. At the time West came on the scene, we already had
our contract with the British. We weren't desperate for contracts.
The Chairman. I am not talking about the British. I don't
care what you did for the British because at that time they were
using their own money. I do care now because they are using our
money.
Mr. Cohen. I never had any other contracts.
The Chairman. You had to have releases from the American Government before you could do business with the British and you had to
have somebody get the releases for you, and you didn't care how much

we

it cost.

Mr. Cohen. It wasn't a question of how much it cost. It was a quesWe needed the release of facilities by the United States
Government; they had to say they didn't need the facilities for themselves before we could manufacture on behalf of a foreign government.
We didn't need anybody for the contract. We already had it.
The Chairman. I am not talking about getting contracts from the
American Government but you had to have certain releases from the
American Government before you could carry out the contract with
tion of time.

the British.

Mr. Cohen. Yes; we had to have the release of facilities.

The Chairman. And you had to have some machine tools from the
United States Government before you could operate. Didn't you get
tools from the Water vliet Arsenal ?
Mr. Cohen. We leased a number of tools from the arsenal.
The Chairman. Does the Government pass those out to anybody
who wants them ?
Mr. Cohen. Anybody that is helping in the defense program. That
In other
isn't what I am talking about in the release of facilities.
words, for a manufacturer to do any manufacturing in his plant for
anyone but the United States Government, the Government has to
certify that they don't need that plant for their service. That is what
we mean by the release of facilities. That is what we had to get. It
had nothing to do with moneys.
Senator Hatch. Mr, Cohen, how old are you ?

Mr. Cohen. Forty-eight.

Senator Hatch. Anyway, you are past 21 ?

Mr. Cohen. Yes.

Senator Hatch.

You have had

a considerable experience in life,

haven't you^

Mr. Cohen. Yes.

S(Miator Hatch. You don't go around giving men how much was
12
Tlie Chairman. $11,000.
Senator Hatch. $11,000 for doing nothing.
Mr, Cohen. I didn't give it for nolhing, I maintained an organization in the Empire Ordnance Corporation for 5 months and kept the
personnel going, and if we hadn't gotten any orders, then all you can

it, 10,

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4005

say is that we paid it out for nothing; but we didn't pay it out for
nothing we maintained the personnel.
Senator Hatch. You don't pay $11,000 for nothing?
Mr. Cohen. At the time I pay it I don't think it is for nothing. It
may turn out to be for nothing.
Senator Hatch. You don't intend to pay $11,000 and not get value
received

Mr. Cohen. Right.

Senator Hatch. Certainly. Why don't you answer truthfully?
Mr. Cohen. I am trying to.
Senator Hatch. Why don't you tell us. Isn't this the story ? You
knew Mr. West.
Mr. Cohen. I did not know him. I never knew the man.
Senator Hatch. You knew of him.
Mr. Cohen. I never knew of him, either.
The Chairman. You are the only man in the United States that
didn't

know

of him.

Mr. Cohen.

think you

may

find one

more

in these 130,000,000

people, I don't know.

A man who had been Congressman

Senator Hatch. Such is fame
from Ohio, Undersecretary of Interior, very close to the White House,
contact man between the White House and the Congress, and you
never heard of him?
Mr. Cohen. That is right.
Senator Hatch. But you did pay him $11,000.
Mr. Cohen. I did not. I am trying to say it all the time.
The Chairman. The checks here are signed by you, Mr. Cohen.
Senator Hatch. Mr. Cohen, really, wait a minute, I am very serious
about that. I know and you know whether it was through Mr. Duffy
or yourself now isn't this true, you tliought Charlie West could do you
some good down here in the departments of Washington, and you were
!

perfectly willing to pay ten, eleven, twelve thousand, or whatever sum

was necessary. Now don't deny that, please don't. Don't insult our
intelligence.

Mr. Cohen. When Mr. Duffy introduced him to us and told us that
he was going to help him, I assumed he could help him.
Senator Hatch. O. K. That is all.
He isn't a lawyer, and as for the splitting of fees, if Mr. Duffy did
what you said, if he divided fees with Charlie West, he ought to be disbarred.

Mr. Cohen. That

is

his affidavit.

I can't go over that.

PRIOR CONNECTIONS OF OFFICIALS OF EMPIRE ORDNANCE CORPORATION

Senator Bridges. Mr. Cohen, were you ever indicted?
Mr. Cohen. Look! That is another unfair statement to me, in
this way.
Senator Bridges. It is not unfair to ask whether or not you were
indicted.
You can answer yes or no.
Mr. Cohen. Yes; I was indicted foolishly and they nolle prossed
themselves. They never called me. They never brought me there.
And in fairness to you as Senators here, in fairness to me, if you
want to go into that, give me 1 day and I will bring in all the witnesses and bring in anybody you want.
Senator Bridges. Where were you indicted?
Mr. Cohen. Atlantic City.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4006

Senator Bridges. What month and what year?

Mr. Cohen. I don't remember.
Senator Bridges. Was it May 1939 ?
Mr. Cohen. I don't remember the year.
Senator Bridcjes. You have been indicted other times, so that didn't
stand out in your life, did it?
Mr. Cohen. I don't think jon should make that statement because
I never was indicted any other times. Personally, I don't think that
is fair.

Senator Bridges. It goes to establish your background and record.

Mr. Cohen. As

to

Senator Bridges.

what?
to whether or not you should do business as

As

a reputable concern.

Mr. Cohen. Isn't that up to the imputable concerns whether they

to do business with me?
Senator Bridges. Were you forced to make restitution?
Mr. Cohen. No I wasn't forced to do anything.

want

Senator Bridges.
Mr. Cohen. No.
Senator Bridges.

You

weren't?

You

weren't forced to

make

restitution?

Mr. Cohen. Mr. Chairman, I am willing to answer any of these

questions if you want to set aside 1 day; give me the day and let
me bring the people to you and I will go into it.
The Chairman. Mr. Cohen, the Chair rules that you must answer
the questions.
Senator Bridges.

You have said you were indicted in New Jersey,

and I have added May 1939, and you say you can't remember.
Mr. Cohen. That is right.
Senator Bridges. And I asked you whether you were forced to

make

restitution.

Mr. Cohen.

make

And

restitution,
restitution on.

I am telling you I wasn't forced and I didn't

and I didn't take anything for anybody to make

Senator Bridges. Did you make restitution even though you

weren't forced to?
Mr. Cohen. I told you I made no restitution because I took nothing from nobody, so there was nothing to make restitution on.
Senator Bridges. Suppose the evidence were produced to show vou
did?
Mr. Cohen. Suppose the evidence were produced that I didn't;
then wliat ? If you want to go into the evidence, set aside some time,
and I will bring- in anybody you want and go through the whole
business.

Senator Bridges. Were you ever denounced by the insurance commissioner of Massachusetts as a "luad dog of insurance"?
Mr. Cohen. Sure; that is the insurance commissioner that I impeached. Do you want to go into that? We asked for a legislative
hearing, and the man who put that in the newspa]ioi- took it out
of the context here. He didn't take the rest. He didn't say the
man was a cheat and liar and the senators and representatives in
joint legislative hearing so ruled and kicked him out.
Senator Bridges. Were you ever barred by the New York State
Insurance Commissioner from being an official of an insurance com-

pany

in

New York?

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4007

Mr. Cohen. That is another one of those statements. The very

time the statement was made, I was chairman of the board of another
insurance company in the State of New York.
Senator Bridges. You seem to be in trouble all the way around.
Mr. Cohen. I am only in trouble the way you ask it. I am not in
trouble.

Senator Bridges. I think I have permission to ask a question or two

here.

The Chairman. Proceed.

Senator Bridges. Have your insurance operations ever been

investi-

gated by the S. E. C. ?
Mr. Cohen. I have been investigated by the S. E. C, by the F. B. I.,
by everybody in existence, I think.
Senator Bridges. So you have been investigated?
Mr. Cohen. Everything that anybody could do to us has already
been done to us to stop us from trying to do any work. To show the

we had the F. B. I. come up to the office and

accuse us of sabotaging the defense program because someone anonymously wrote a letter, and here we had been working for 24 hours a
day for days and days and days.
Senator Bridges. Going back to your discussion of your employment
of Mr. Corcoran, or retaining Mr. Corcoran, I am informed that you
said this morning that you had not contacted or heard from him or
seen Mr. Corcoran regarding any inquiry being made about your
company before this committee. Is that correct ?
Mr. Cohen. I don't know how the question w^as asked me.
Senator Bridges. I understood it was brought out here this morning
that you weren't contacted by Mr. Corcoran or you weren't consultecl
by him or you didn't get in touch with him or have any connection
with him about this inquiry.
Mr. Cohen. That is correct I didn't talk with him.
The Chairman. Senator Brewster asked that question this morning.
Senator Bridges. Let me ask you this then. Did you contact Mr.
Corcoran or were you contacted b}' Mr. Corcoran either through a
third person or a counsel or in person or over the telephone })y indirection; I mean about this inquiry?
Mr. Cohen. Koplovitz talked to me about it and I talked to him
stui)idity of the thing,

about it.
Senator Bridges. So that Koplovitz was the go-between between
you and Corcoran.
I would sa}'
IMr. Cohen. I couldn't say he was the go-between.
I talked with him.
Senator Bridges. So actually what you said this morning was not
true, that you were not in contact with Corcoran about the inquiry.

Mr. Cohen. That

isn't so.

Senator Bridges. You said 3'ou talked with Koplovitz.

Mr. Cohen. That is right; I talked to him this morning; I talked
to

him

last night.

Senator Bridges. And your license with Corcoran was brought about
through your license with Koplovitz; is that true?
Mr. Cohen. No; the reverse. Corcoran is the one who introduced
me to Koplovitz.
Senator Hatch. Who introduced you to Koplovitz?
Mr. Cohen. Mr. Corcoran.

4008 INVESTIGATION OF THE NATIONAI. DEFENSE PROGRAM

Senator Hatch.

Thomas Corcoran ?

Mr. Cohen. That

is right.

Senator Bridges. And now talking about the present, when you
talked with Mr. Koplovitz lately, did you send any messages to Mr.
Corcoran or did he send any to you ?
Mr. Cohen. No.
Senator Bridges. Mr. Corcoran's name wasn't mentioned?
Mr. Cohen. I read Mr. Corcoran's statement before this committee,
but I didn't send any messages to him and he didn't send any messages
to me.
Senator Bridges. And that would be a normal, customary thing
for a man who was brought before a Senate committee, 'and he has an
attorney by the name of Corcoran, indirectly or directly, that he
wouldn't get in touch with him ?
Mr. Cohen. Corcoran is not our attorney Koplovitz is our attorney.
Senatoi' Bridges. Corcoran was by indirection, wasn't he?
;

Mr. Cohen. Sometime back.

Senator Bridges. What would you say if evidence were produced
here to show you were in touch with Mr. Corcoran within the last
48 hours ?

Mr. Cohen. If anybody could prove evidence that I was in touch

with Mr. Corcoran in the last 48 hours, he would just be a damned
liar.

Senator Bridges. All right. Will you say whether or not there was
any question of stock compensation to Mr. Corcoran ? Has that ever
been discussed by you or any members of your associates or officials?
Mr. Cohen. Never.
Senator Bridges. Never?
Mr. Cohen. No.
Senator Bridges. Was there ever any discussion tliat Mr. Corcoran
might be an official of the Empire Ordnance Co.?
Mr. Cohen. Never.
Senator Bridges. You never discussed that with anybody?
Mr. Cohen. I will tell you who called up about that if you want to
know. Some reporter.
The Chairman. Tell us who it was.
Mr. Cohen. Some reporter called up my house while I wasn't there,
and talked to Mrs. Cohen and asked three questions, because he said that
he had a great scoop and he wanted to find out first whether it was
true.

The Chairman. Who was tlie reporter?

Mr. Cohen. I don't know his name.
The Chairman. Was his name Tom Stokes?
Mr. Cohen. I don't know his name. He wanted the answer to three
questions. He wanted to know whether I was a brother of Benjamin
V. Cohen, and my wife said "No."
The Chairman. Let me ask you another question. Is Ben Cohen,
the attorney and partner of Tonnny Corcoran, a relative of yours?
Mr. Cohen. I was saying that is what this reporter called up to ask
me, if he was my brother or any relation.
The Chairman. Is he ?
Mr. Cohen. My wife said, "No, he is not," and he wanted to know
whether Mr. Dowd was the brother of Mrs. Corcoran, because her
maiden name was Peggy Dowd. She said "No." The next thing,

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4009

officer of our company on

and she said she didn't know who the officers were on salaries
and the next thing we knew, the newspapers carried a story that
Corcoran was an officer of the company. We have in the purchasing
department a fellow by the name of R. J. Corcoran, and if he walked

he wanted to know was Mr. Corcoran an

salary,

know who he was.

Senator Bridges. Did Mr. Quarrie, who was a member of the British Purchasing Commission, dine with you at various times when
negotiations were under way?
Mr. Cohen. Certainly. He is not with the British Purchasing
Commission.
Senator Bridges. Who is he?
Mr. Cohen. Quarrie is a steel man. Quarrie is a trustee of Case
Institute, he is a graduate of Case Institute, he was vice president of
the Allegheny Steel Co., he was vice president of the Otis Steel Co.,
and general manager; he was general manager and vice president of
the Cleveland Wire & Kope; he has been a steel man all his life.
Senator Bridges. Does he have any connection with the British
Purchasing Commission ?
Mr. Cohen. He was put in as manager with us at the request of
the British Purchasing Commission.
Senator Bridges. So he did represent the British Purchasing Commission ?
Mr. Cohen. I said that this morning; he represented the British
Purchasing Commission on our board, but he is not a member of the
Commission.
Senator Bridges. Wlio introduced you to Mr. Quarrie?
Mr. Cohen. I have known him for about 10 years.
Senator Ball. I would like to go a little into the experience of
your officers. Prior to tlie setting up of this Empire Ordnance you
had never had any experience in ordnance manufacture?
Mr. Cohen. I never was a manufacturer. I never had any experience in ordnance.
Senator Ball. Your background was financial and promoting.
Mr. Cohen. I have one ability, and that is not in manufacture,
and that is not as an ordnance man. I have an ability to organize
and I have an ability to see that things work, and that is what I did.
Senator Ball. Mr. Dowd, what is your business background ?
Mr. DowD.^ Well, Yale, the Army, banking, construction, and then
ordnance.
Senator Ball. Ordnance when vou came into this?
Mr. DowD. Yes; but in 1914, '15, '16, '17, '18, '19, '20, and '21, I was
very closely associated with ordnance because I was instructor in materiel.
From '14 to '16 I was one of the Regular Army officers at Yale,
headed by Captain Bard, Chief of Field Artillery, United States Army,
in here I wouldn't

and subsequently in service in the war. I resigned from the Army in

'21, and after further business experience, went with the Empire
Ordnance.
Senator Ball. In the war you were an

officer of artillery and instructor at Yale, as I take it, which doesn't include the manufacture
of ordnance, of course.
Mr. DowD. But we are very familiar with it and its parts.
^

B. S.

Dowd, president, Empire Ordnance Corporation.

4010

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Ball. And then your business experience since the war has
been in banking?
Mr. DowD. In banking.
Senator Ball. Banking and construction?

Mr. DowD. That

is

right.

How

about Mr. Voyes; what

ground ?
Mr. VoYES.^ Since the war?

Senator Ball.

is

your business back-

Senator Ball. Yes.

Mr. VoYES. I was a pilot in the French Army during the war. Immediately after that I was adviser to General Mannerheim in Finland
regarding the purchase of ordnance for Finland. I spent some time,
8 or 9 months, with Bofors of Sweden, manufacturers of ordnance, then
I was connected
I came back to the States and specialized in aircraft.
with the Curtiss-Wright Corporation; for a number of years I ran a
school and aircraft repair station of my own, and aircraft brokerage
concern, liquidating the British-Wright Aircraft of the Curtiss-Wright
Flying Service that Avent into bankruptcy, and all through those years
I was interested in ordnance and did know something about the manufacture of it.
I had been in Skoda in Czechoslovakia, I knew Vickers in England,
and kept my contacts with those people right along. Finally, in 1937,
found there was no such
we tried to form an ordnance concern.
thing in the United States and we decided to try and organize one
with Mr. Driggs who had been in business for I think 40 or 50 years, and
I think tliat time was the inception of the Empire Ordnance Corporation, because at that time we formed the corporation called the Driggs
designed mounts for the Government,
Engineering Corporation.
Ave designed some ordnance, we manufactured some.
Senator Ball. You came into this Empire Ordnance through the

We

We

Driggs?
Mr. Votes. Two or three years later when we Avent
and formed the Empire Ordnance.
Senator Ball. Are you the production executive ?
Mr. Votes. I am one of the production executiA^es.

Avith

Mr. Cohen

ORGANIZATION AND OPERATIONS OF EMPIRE ORDNANCE CORPORATION

Senator Ball. Who runs the production ?

Mr. Cohen. May I explain that? I Avill start from up at the further end, at the West Pittson Iron Works. At the West Pittson Iron
Works, of which you liaA'e some photostats here, Ave machine and drill

armor plate. We receive the armor plate from Iio])ublic Steel. Wo

machine and drill it and send it to Press Steel, Pullman, Lima Locomotives, and so on. We do this machining and drilling and manU'
The
factui-e 38 sets CA'ery 2 days, or enongh for 8 tanks every 2 days.
man in charge is Mr. Burleson, tlie manager. Each i)lace has its oavii
manager and its oAvn plant.
Then we move over to the Wilkes-Barre Carriage Co. Avhere we

make

the mounts.
Mr. DoAVD. Tlie

Army

has asked us not to disclose the amount of

pi'oduction.

Senator Ball. I

am

not asking for thai.

What

salaries

do you

pay your plant managers, rougldy?

1

Itayniond Voyes, vice

|)rcsi(Ieiit

ainl

scci'clMi'y,

l':inpir<>

Onlnniico Corpdi-al

ion.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. $15,000, $12,000, $20,000.

Nobody can

get

You mean from any one company ?

Mr. Cohen. From

Senator Ball.

the companies.

all

You draw more than

Mr. Cohen. I do

draw

more than

we have with

$25,000 salary in the whole outfit under arrangements

the British.

Senator Ball.

4011

not.

am

that, don't you ?

on the books for more, but I don't

it.

Senator Ball. It accumulates. It is coming to you.

Mr. Cohen. If it is going to be there.
Senator Ball. What book salaries do your other officers draw ?
Mr. Cohen. Nobody draws more than $25,000. They can't.
Senator Ball. They draw $25,000, but what are they on the books
You are on the books for $55,000 from the Empire and the
for?
various subsidiaries.

Mr. Cohen. They may be on the books for 30 or 40.

Senator Ball. Don't you know ?
Mr. Cohen. I don't know the exact amount. I can get it for you.
When you come to the Carriage Co., you have Fred Kern, the man
in charge there, and he is one of the best master mechanics in the country, and over there we have produced steadily on the mounts.
Then when we move down to the Roxboro Steel and the Manayunk
Forging where we make our own steel and forgings, that is where
Mr. Quarrie is in charge.
Then we move over to gun plant 1 where Mr. Stead is in charge.
He was formerly the general mauager of the Mergenthaler Linotype
Co.

Then we go across the river to the Wissahickon Tool Works where

we make the recoils. We had as the manager until Chicago Pneumatic Tool took him away from us, Mr. Dolan who is the president
of the Aeronautical Engineering Society of America, and he set up
the Curtiss plants in China; and since then Mr. Voyes is in charge
there, with Mr. Richards who was superintendent of the Cleveland

Pneumatic Co.
At the Ordnance Instrument Corporation, the sight company, the

man

in

charge has been in that business for 15 or 20 years.

is in the charge of a man who is of the highest experience

Each plant

My

in that special thing, and that is how we operated.

job was to
get these people together and get these plants together, and we think
we have done a very good job.
started in January and put all
these plants and this machinery and personnel to work, and it was no
cinch.

We

Senator Ball. These eight subsidiary companies are

all

owned

en-

tirely

Mr. Cohen (interposing). The same stockholders own each company.

Senator Ball. They are owned entirely by Empire Ordnance Corporation ?
Mr. Cohen. The same stockholders own them.
Senator Ball. The stock isn't owned by Empire Ordnance? It is
owned by you as individuals ?
Mr. Cohen. The same stockholders own the stock of each company.
Senator Ball. In the same proportion ?
Mr. Cohen. The same proportion.
311932 42 pt.

10

19


4012 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
Senator Ball. And your total assets you told us were something
around 7,000,000 now ?
Mr. Cohen. About that much.
Senator Ball. With a net worth of around eight or nine hundred
thousand dolars?
Mr. Cohen. I think so.
Senator Ball. And you, for promoting this venture, have taken
you and your family about 45 percent of the capital stock ?
Mr. Cohen. Thirty percent.
Senator Ball. This escrow fund has another 15.
Mr. Cohen. That is not mine. That is not my family's.
Senator Ball. Whose is it?
Mr. Cohen. I explained that this morning. That is a fund for educational activities which is not mine. That was my original 15 percent that I had and I turned it over to them.
Senator Hatch. I wasn't here this morning; I am very sorry.
Mr. Cohen. When we organized originally the Empire Ordnance
Corporation, I had a right to 15 percent of the common stock. I

turned that 15 percent of the

common

stock over to this education

fund directly from its inception, and it is a fund which is managed by

a group of Jewish educators.
The Chairman. It is also tax-free, isn't it?
Mr. Cohen. It is tax-free on what it would receive, I suppose. We
have to pay the taxes to start.
Senator Ball. What do your contracts with the British and this
one with the Maritime Commisison now total?
Mr. Cohen. The British today is somewhere around $14,000,000.
Senator Ball. That is all your contracts with the British.
Mr. Cohen. That is right that is all our contracts. I don't know
where they got the $70,000,000.
Senator Ball. That is according to Mr. West.
Mr. Cohen. That is all we have had. That is for the recoils, for
the mounts, and for the gun itself. It was somewhere around $20,000,000 when we started, and then when we changed from M-3 to
M-4, a different design, those that were not fit for the M-4 were canceled out and so, on the mounts and recoils there was a drop down
;

to three or four million dollars.

Senator Ball. Then you got $14j,O0O,0C)O of contracts with tlic

Savannah Shipyards has a contract of approximately

British, and
$20,000,000.

Mr. Cohen. No; Savannah Shipyards that is another misnomer.

contract we have with the Maritime Commission is only for
$110,000 of vessels times 12. That is our contract.
Senator Ball. Is that the same way you figure the $14,000,000 with

The

the British

Mr. Cohen. No.

Senator Bail. That is a lump-sum contract with the British.
Mr. Cohen. With the British we have to deliver so many mounts, so

many

recoils, at a price.
You total up the price. That is what it
amounts to. With the Maritime Connnission, they say to us, "If you
are going to have a shipyard, if you are going to have working capital,
if you are going to have a staff, if you are going to have the ability to

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM 4013

We

will send you the

are giving you IS vessels to build.
have nothing to do with it.
send you the material."
If it costs one million and a half for the ship, it is the United States
Steel Co. getting the million and a half, less the labor cost, not me.
Senator Ball. Are you required to make some of the parts of the
ships in the subsidiaries?
Mr. Cohen. Yes: but it is insignificant. We have to mold the steel
that comes there. They send us all the woodwork, they send us the
don't buy it; we don't manufacture it.
engines everything.
All we are getting is the fee for having built the yard, for using the
facilities, for having the staff, for managing the staff, and for constructing, and if we don't do it fast enough, then we are penalized,
and instead of the $110,000 a vessel, we go down to $60,000 a vessel.
If we do it faster and save the time and save the money, we may go
up to $140,000 a vessel. That is the contract. Why he should say
$20,000,000 or $50,000,000 I don't know. That's absolutely crazy.
Senator Ball. Twenty million dollars' worth of work; and your
gross profit on it. estimated at $110,000 a ship, would be $1,320,000.
Mr. Cohen. Less wiiat it costs us for our overhead, for our
administration.
Senator Ball. But thev a\ ill pav the cost of building the ships down
there ?
Mr. Cohen. Tliey only pay the cost of what actually goes into

caiT}^ on,

we

We

steel; Ave will

We

tlu' shi^).

Senator Ball. And they pay the crew and pay the superintendent ?
Mr, Cohen. Only what has to do with the ship itself. All we are
doing in the yard, all the construction of the yard, all the interest we
have to pay to the yard we don't get paid for that.
Mr. Fulton. You do get paid an allowance for rent for the facilities,

don't you, of 15 percent ?

Mr. Cohen. Yes they pay us the time.
Mr. Fulton. So Senator Ball is correct on that.
Mr. Cohen. But the Senator
Mr. Fulton. That is in the contract, isn't it?
Mr. Cohen. I mean that isn't what I was answering.
come to this. Here is the plain arithmetic of the thing.
;

The Chairman. Explain, in

so the Senators can understand
these ships.

words of one
it,

just

was going

and do

syllable

how much you

it

to

slowly

get for building

Mr. Cohen. The contract says you get a fee of $110,000 per vessel,
and you are supposed to deliver at a certain time. For every day it
takes you longer than that time to deliver it, you are penalized $400;
for every day you deliver it faster than that time you get a bonus of
$400. You are given a certain number of hours in which to finish the
vessel.
For every hour that you finish it faster than that time, you
are allowed, I think, 50 cents an hour: for every hour you finish it
later than that time, you are penalized the same number of cents per
hour. With a maximum no matter how fast you do it or how good
you do it, you can't get more than $140,000 per vessel; and with a
minimum, no matter how slow you do it, you can't get less than $60,000
per vessel. Before you put the staff on they have to approve I am

talking about our contract I don't know aboiit others the whole staff.
Before we can engage to build them on anything we have to show that
;

4014

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

the yard all set, ready to go. Meanwhile, we are paying everyare getting no money from anybody for it. Then, l3ecause
this is a yard which is not owned by the Maritime Commission, not
owned by the Navy, not owned by Defense Plant, or R. F. C, or any
Government agency, the Maritime Commission; the Maritime Commission says to us they will pay us li/j-percent interest rent on the
investment per month, on the investment that we have in the yard,
with the limitation that no more than $25,000 a month can be paid for
the rent.
Now, it is estimated that it will cost us about 2^2 million dollars.
Normal interest on 21/2 million dollare, if we pay 5 percent interest for
the 2 years that we have to pay, the same period, for our money, eats up
about one-half of that rent we are talking about. The depreciation on
it will eat up more than the other half of the rent of this one-fourth
percent.
The Chairman. You are figuring the interest plenty high. Do you
have to pay 5 percent on that money ?
Mr. Cohen.
have to pay even 6 percent.
Senator Wallgren. The witness has been talking about ship conWhat type of ship are you taking as an example?
struction.
Mr. Cohen. EC-2. That is the 10,000-ton cargo vessel.
Senator Wallgren. Did I understand that you are obtaining $114,000 for the construction of this ship? What is the fee paid you for
the construction of such a ship ?
Mr. Cohen. The fee is $110,000. That is fixed in the contract as a
basic fee.
Senator W^allgren. For that one ship ?

we have
thing.

We

We

Mr. Cohen. Per vessel.

Senator Wallgren. Do you know anything about the
the Government of that ship

Mr.

Cohen.

It

is

final cost to

roughly

calculated

between

million

and

$1,700,000.

a job for the committee. That is too

period of years. I know something about what it should cost to construct a cargo ship.
Mr. Cohen. Well, that is to be seen later on what the price will be.
Senator Wallgren. I think it is an outrageous price. It is too high.
Senator Ball. Is this $14,000,000 of British contracts the balance on

Senator Wallgren. There

much money

is

far too muchover a

the $20,000,000?

Mr. Cohen. I used $20,000,000 this morning as a round figure, because I didn't know whether it was good to give the exact figures and
information. Really, it is somewhere between eighteen antl eighteen
and a half million. That is, by February, we will run through one
of the contracts; by the end of January we will run through one of the
other contracts; but wlien you lake the total of the contracts, less the
cancelation ])art as a result of changing from JM-3 to M-4, it runs to

about $14,000,000 somewhere around there.

(Senator Hatch took the chair.)
Senator Ball. Then for setting up this company and an investment
of $42,500, which, as far as I can figure out, is the only cash anybody
put in
Mr. Cohen (interposing). Why do you say that? I told you this
morning we put in about $225,000.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4015

Senator Ball. Who put it in ?

Mr. Cohen, Different people.
Senator Ball. All I heard was $42,500.
Mr. Cohen. That is me. I told you.
Senator Ball. That is vou.
Mr. Cohen. You figured up there you had $87,000 or $78,000.
Senator Ball. Well, you and McHale and these other fellows put up
together $135,000?

Mr. Cohen. That is right.

Senator Ball. And for that you still hold preferred stock valued
at that, which
Mr. Cohen (interposing). That is right.
Senator Ball. Is preferred claim on any assets of the company
eventually.

Mr. Cohen. Not a preferred claim on the assets of the company.

creditors have the preferred claim on the assets.
Senator Ball. Next to that ?
Mr, Cohen. Yes.
Senator Ball, If there is anything, they get it before the common

The

stock gets

it.

Mr. Cohen. Oh. sure. They should. It is their money.

Senator Ball. Uh-huh. So that then for an investment of $42,500,
you have a 30-percent interest in contracts totaling about $34,000,000.
Mr. Cohen. That is right.
Senator Ball. And on one of them with the Maritime Commission, 3^our gross fee alone is $1,320,000.

Mr, Cohen, When you get through building your 12 ships, when
you get through building your yard, and when you get thiough
building your organization, and Avhen you get through doing all the
work.
Senator Ball. When did you first make your contract with the
British Purchasing Connnission and how was it made?
Mr, Cohen. We were bidding on United States contracts, and then
we were told that they had changed the program policy, and they
were not going to make the type of gun in the neighborhood where
we were, that they were going to change that to make a different
type of gun, and the Ordnance Department sent Mr. Dowd over to
the British, who were interested in that type of gun. We don't
know how much to tell you how much not to tell you.
Senator Ball. You organized this
Mr. Cohen (interposing). This is a part of their war program.
Senator Ball. Just a minute. You organized the Empire Ordnance on May 5, 1940, and 3'ou got your first contract with the British signed in November of that year.
Mr. Cohen. Contract was awarded in September, and finally, the
letters and so on were signed on the 8th of November, to go into
offect on the 25th of November.
Senator Ball. And who was representing you in Washington?
At the time you put in some bids with the War Department in that
interval before you went over to the British, who represented you
down here ? Who put the bids in ? Who did this work ?
Mr. Cohen. We didn't put any bids in down here. That was done
in the Watervliet Arsenal, the Watertown Arsenal wherever the
:

bids

came

in.

4016

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Ball. Who put that in for you ?

Mr. Cohen. Our own officers.
Senator Ball. Did you have any counsel ?
Mr. Cohen. No. You don't need counsels for that. You send in
your sealed bids, and on a certain day they open them.
Senator Ball. When did the Ordnance Department send Mr. Dowd
over to the British ?

Mr. Cohen. Some time in September.

Senator Ball. Not until September?
Mr. Cohen. That is right.
Senator Ball. Did you get a contract that same month ?
Mr. Cohen. Yes. They had worked it out. The British Ordnance
had worked out what should be done, and they had inspected all our
facilities and told us to go over to the British, who were going to make
the type of gun which we could make.
Senator Ball. When was that, Mr. Dowd ?
Mr. Down. Maybe I can bring you up to date by following the
sequence of the company. The first thing we did was to go to the
State Department on the 28th of May and got a clearance from the
State Department and also a license to manufacture munitions. That
was then the 29th of May. Beginning in June, we went to the War Department Mr. Voyes and myself to see what bids were available to
bid on. We made several bids on various types of guns, and they
checked and rechecked the persoannel to see if we had adequate personnel and facilities to build ordnance. I might mention here that
our chief engineer, Mr. Albert Howe, is the engineer who designed
our first field piece for the Army. That is the model 1898. He has
been an ordnance engineer for 42 years.
After we put in several bids on these guns, it was suggested to us
the latter part of September for me to go to the British mission hecause there was an acute need of tank guns, and we had been farther
advanced in our plans.
Acting Chairman Hatch. Did you get any contracts on these bids
that you were making ?
Mr. Down. No, sir.
Senator Wallgren. Who was competing against you ?
Mr. Dowd. I can recall one of the competitive bids that was we
have the list of bids here. Senator I mean the copies of them.
Senator Wallgren. Let's put those in the record.
Mr. Cohen. Do you have to go into the details of these bids as far
as the War Department is concerned, that is, their records? We

know

^*-

half the time

(interposing). The companies that bid against us would
be the leading large industrial companies in the country.
Senator Wallgren. Manufacturing the same type of ordnance.
Mr. Down. Not manufacturing ordnance, necessarily, because the
ordnance industi-y was more or less decadent or dead since the last
war.
(Senator Truman resumed the chair.)
The Chairman. Just moment, now. That information you are asking for appears in the committee brief, which I rather think is not a
matter to go in the record. It is available for your information any
time you want it. The connnittee has it all ready for you.
Senator Waixgren. All right.
don't

Mr.

Dowd

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4017

Mr. Cohen. That is just the point. Senator, We don't know how
answer a lot of these questions because of that.
Senator Ball. Mr. Dowd, when was it that somebody in the Ordnance Department sent you over to the British and told you about it?
Mr. Dowd. The latter part of September, after we put in these bids
and they had checked on our facilities and our personnel, and there
were two checks and inspection trips by the Ordnance officers through
to

the plants.

Senator Ball, Who in Ordnance sent you over there?

Mr, Dowd. Who in Ordnance?
Senator Ball, Yes,
Mr, Dowd, Well, it was a general in charge of industrial production.
Senator Ball, What is his name?
Mr, Dowd. It was General Lewis Colonel Lewis at the time, now
General Lewis.
Senator Ball. AVho was with you?
Mr. Dowd. At that time I did most of this by myself. Occasionally
Mr. Voyes or Mr. Howe or one or two of the engineers woidd be with
me, but during June, July, August, and September, it was mostly my

Senator Ball. You don't remember whether, on this particular visit,

you were alone or somebody was with you?
Mr. Dowd. I was alone?
Senator Ball. And you went right over to the British Commission ?
Mr, Dowd. I went right over and we discussed
Senator Ball (interposing). Did anybody go with you?
Mr. DowD. No; nobody went with me. I sat clown with them and
discussed it, and that afternoon or the following day they teletyped
their requii'ements to be made by us to the New York office of the British Commission, and from that time oh there was a lot of details and
data before the actual signing of the contract. But they had committed
themselves for the manufacture of guns at that time.
Senator Ball. That was within a matter of a couple of days after
you first contacted them that you had a commitment from them ?
Mr. DowD. That is right, because the British were very anxious
mean they were really critically in need of these weapons, and we were
picked up because we were most advanced in our ability to perform and
were ready to go to work.
Senator Ball. Did you have any counsel or other representatives
here in Washington at that time?
Mr. Down. None.
Senator Ball. Or anybody working on this with you? McHale?
Mr. Down. No, sir.
Senator Hatch. I want to ask these gentlemen a question or two.
I wasn't here this morning. I didn't realize who you gentlemen were.
When did you first hear of the employment of Mr. West?
Mr. Dowd. Sometime early this year. I believe it was around Feb-

ruary.

Senator Hatch. When was he actually employed? I haven't read

the testimony, and I haven't heard it. I wasn't there yesterday.
Mr. DoAVD. When was he actuallj^ employed?
Senator Hatch. Yes.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4018

Mr. DowD. That I don't know, becanse Mr. Colien was making the
arrangements for hiring personnel. AVe were bnsy, Senator, in the
plants, getting the material, machine tools, and we were woi-king
abont 20 hours a day.
Senator Hatch. Bnt yon knew he had been employed in Februar3^
Mr. DowD. Around February; yes. Around that time.
Senator Hatch. For what purpose was he employed ?
Mr. Down. Well, my understanding was that we were going to
open an office in Washington as a clearance for a lot of papers and

medium of saving time.

Senator Hatch. Had you ever heard of Mr. West before?
Mr. Down. No, sir.
Senator Hatch. Didn't know who he was?
Mr. Down. Yes; I take that back. I read an article once in the Saturday Evening Post, but that is the only occasion I had heard of him

revisions as a

at

all.

Senator Hatch. I wonder why you employed him. Do you have

any idea why he was employed ?
Mr. DowD. None. I never met the man. I met him a couple of
times later.
Senator Hatch. Just a stranger ]^icked u]) out of the thin air.
Mr. Down. That I know nothing about. We were l)usy working.
Mr. Cohen. Our intention in opening u]) the office was just as we
opened u]) an office in Detroit, to ])nt a man and secretaries in there,
to go ai-ound to all the plants and expedite all the little parts that we
needed. It was the same over here. We had to be here for revisions;
we had to be here for forms; we had to be here, coming and going.
Senator Hatch. It was perfectly natural that you ought to have
somebody, and it is perfectly natural that you ought to have somebody

who had some

contacts, wasn't it ?
contacts. What did

Mr. Cohen. Not

wanted somebody

we need

contacts for?

We

Senator Hatch (interposing). Now, listen. Why don't you be

frank ? You know why you hired Mr. West. Why don't you tell the
truth

Mr. Cohen. I am telling you

Mr. Down (interi)osing). Mr. Senator, may I say a word here?
Senator Hatch. Yes. All I want to know is just what is the
tiuth, and I think you men can tell, if you would.
Mr. Down. The situation with the War and Ordnance Departments
is that they award contracts to qualified people distinctly on the
merits, and
Senator Hatch (interposing). Oh, I know that. I think that is
true.

Mr. Down. And they had gone and checked our facilities before
they O.K.'d us to the British, even. They checked our facilities, had
the officers check the facilities, and they had checked the ])ersonnel.
had been given very close scrutiny our persoimel, })articularly
our engineering and production ]iersonnel and we just got our contracts on our al)ility to ])erform and the expedition with which we
could get stuff out.
Senator Hatch. I tell you, Mr. Dowd, that I tliink that is exactly
correct. I think that is what the AVai- Depaitment wants to do. That

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4019

my experience. I have liiid several conversations with Judge

Patterson, Assistant Secretary of War, and with General Somervell.
I think they are just as high-class and fine men as this country has
ever had.
has been

Mr. Cohen. That is correct.

Senator Hatch. They don't want to have any influence at all. But
I don't think, Mr. Cohen, that you employed Mr. West out of any
desire except to get some advantage.
Mr. Cohen. What was the advantage I would want to get? We
had our contracts. AVe were doing our work. Why would I need
him for contacts? Wliy? We needed somebody here to save our
time. If we had to write a letter, to get a form, to get something
else, we would know where to go and get it.
Senator Hatch. You wanted a man who was in tonch aiul knew
these people.

Mr. Cohen. Exactly.

Senator Hatch. Why di(hi't you say so? That is what I am trying
to get you to say.
Mr. Cohen. I have been trying to say that for li hours.
The Chairman. It has taken you a long time.
Senator Hatch. You have been denying it all day long, ever since I
have been here.
Mr. Cohen. I was denying the inference in your questions about
contacts.

It isn't

the contacts.

Senator Hatch. Of course it was contacts and of course it was influence. You wanted it if you could get it.
Mr. Cohen. No. Do I need influence for a man to carry a letter?
All I wanted was for him to know how to go there fast, and not to
influence, that he shouldn't go to six places instead of one place, that
he sliould know where to go.
Seiuitor H.\tch. Tliat is your story, and if you vant to believe it,
you just go ahead and hypnotize yourself, if you want to. Yoi don't
fool anybody, Mr. Cohen.
Mr. Cohen. I am not fooling any})ody.
Senator Hatch. By the way, there is one other question the chairman is very much concerned al)out. He wants to know if you have
ever been connected with a business before this one that did not fail
and go into banki-uptcy or receivership.
Mr. Cohen. Well, you come })ack yet to your
Senator Hatch (interposing). All right.
The Chairman. Can you name one?
Mr. Cohen. Oh, my gosh
I controlled probably more life insurance companies, individually, than any other individual, and
Senator H.vtch (interposing). And thev all failed, every one of
them, didn't they?
Mr. Cohen. No, sir; they did not fail. Jefferson Standard is the
finest insurance company you have down there.
The Occidental is a
fine insurance company.
The Peninsula Life Insurance
Senator Hatch (interposing). Were you connected with Occidental?
Mr. Cohen. What is that?
Senator Hatch. Were you conne(3ted with Occidental?
Mr. Cohen. Yes. We owned the controlling stock of it.
Senator Hatch. Now?
!

4020

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Cohen. No; I was sold out by the banks. That doesn't have
anything to do with the company.
Senator Hatch. I happen to know the Occidental myself.
Mr. Cohen. That is right. You would know
Senator Hatch (interposing). It was originated in New Mexico,
you know.
Mr. Cohen. That is right. You would know Lee. We bought the
stock in the banks in New Mexico that were closed to help them out,
and that company is in good shape and is going well and if we hadn't
bought it, the bank wouldn't have reopened.
Senator Hatch. I am going to tell Mr. Lawrence Lee how gracious
and kind you were to buy the stock.
Mr. Cohen. I think I was a very good friend of his. It is not his
fault if I was sold out by the bank on my stock.
Senator Ball. Mr. Dowd, you first contacted the Ordnance Department here after you set this company up around June ?
Mr. DowD. Yes, sir.
Senator Ball. And how did you go over there ? Did anyone introduce you?
Mr. DowD. No. I went into the Ordnance Department. We met a
number of oiEcers; and, oh, probably, I should say all together anywhere from 14 to 20 officers. I mean at various departments in the
Ordnance Department. We did a lot of leg work for 2 weeks, and it
was leg work most of- the time.
Senator Ball. Who do you mean, "we" ?
Mr. Down. Myself and Mr. Voyes, or myself and one of the engineers.
Senator Ball. You never had anybody outside of yourself and Mr.
Voyes and your own engineers make any contacts for you in the War
Department?
Mr. Dowd. No. In June, July, and August it was leg work, going
in and out, making bids, submitting them at Watervliet Arsenal, and
then the latter part of August or early September the British became
active down here in their tank mission down here. In September we
were sent to the British.
Mr. Votes. We walked in entirely alone.
The Chairman. Senator Wallgren, did you have any questions?
Senator Wallgren. Mr. Chairman, as I understand it, Mr. Cohen
has been in this business on what you might call a shoestring. Isn't
that right? Well, that is the custom. You had no plants; you hadn't
even engaged in the ordnance business or the sliipbuilding business up
;

until 2 or 3 years ago.

Mr. Cohen. No.

Senator Wallorex. And yet you have, in a short period of time,
obtained from this Government $34,000,000 in contracts.
Mr. Cohen. We didn't obtain anything from this Government.
Senator Wallgren. What is the total amount of your contracts,
then?
Mr. Cohen. We have no contracts with the Government outside

Maritime Commission one.

Senator Wallgren. Outside the Maritime Commission.
Mr. Cohen. That was November 25, 1941.
Senator Wallgren. Regardless of whether or not you have them
with the Government, what is the total amount of the contracts you
have obtained up to now?

this

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4021

Mr. Cohen. In ordnance about $18,500,000between 18 and 20
million dollars.

Senator Wallgren. How about shipbuilding?

Cohen. Shipbuilding I have told you.

Mr,

Twelve ships

at

$110,000.

Senator Wallgren.

How much?

Mr. Cohen. Twelve vessels at $110,000.

Senator Brewster. That is the fee, I might say.
Senator Wallgren. I mean the total amount of your contracts. I
want the total amount of the business that you have obtained over a
short period of time.
Mr. Cohen. I just told you in ordnance it is between $18,500,000
and $20,000,000, and for the maritime part, it is to build 12 vessels
at $110,000 fee.
Senator Wallgren. That $110,000 is your fee, but the 12 vessels
would cost the Government approximately, let's say, $1,200,000 each.
Is that right?
Mr. Cohen. About a million and a half, I think.
Senator Wallgren. All over this country there are a lot of smaller
plants that are unable to obtain any Government contracts, threatened with the possibility of having to close. You have been successful enough to obtain all these contracts, some from the Government
and some from other people. I merely wanted to bring out the fact
that apparently your outfit is being favored against others, whether
your deliveries are a little better than theirs or not.
Mr. Cohen. Senator, let me say this. Anybody in the United
States who wants to do what we did, go into a city like Savannah
and start building a yard and undertake to invest two and a half million dollars (we invested our money, our own credit, on our own responsibility, at any rate
it is our own, no public's and no Government's)
anybody who wants to do that can go to the Maritime Commission today, and they will kiss them on both cheeks and give them
contracts to build vessels.
Senator Wallgren. I am not criticizing you, Mr. Cohen. I am not
criticizing your company, but I may be criticizing the policy.
Mr. Cohen. Well, Senator, I think it is even not right to criticize
the policy, for this reason This was a peaceful country this wasn't
Nobody had any ordnance, nobody had any plants,
a war country.
nobody had any experience. Somebody had to go and get started.
wanted to get started.
started the hard way. Sure, we didn't
have a lot of money. If we had had a lot of money, it would have
been easy.
didn't have it.
went to all our friends, we went to
our banks, and we went any place we could get help to start this
ordnance businese.
came around and we bid, and we tried everything we could in order to promote it so that we could do the manufacturing.
Finally we got an order and started to manufacture.
From then on we worked day and night producing, producing, producing, and we are producing pretty well. I wish everybody else
were producing on the same basis, and, if the rest of the country had
gone in on the same basis we would be in fine shape today.
Now, on the yards, if anybody wants to come aloiig and give us
back our money and do the same kind of work in Savannah that
we have been doing, I will kiss him on two cheeks and he can have
the yard and we will go do something else.

We

We

We

We

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4022

Senator Hatch. Wait just a minute. You will take your original
investment and step down and out?
Mr. Cohen. Senator, if you are ready now to give me what we put
into the Savannah Shipyards.
Senator Hatch. I am talking about what you put in.
Mr. Cohen. That is what I am talking about.
Senator Hatch, What you put in yourself in Empire Ordnance Co.
Mr. Cohen. Let me come to one thing at a time, will you?
Senator Hatch. No; you just talk so, you make such extreme statements, Mr. Cohen
Mr. Cohen (interposing). I did not make an extreme statement. I
made a statement which I am going to repeat to you.
Senator Hatch. All right.
Mr. Cohen. If anybody wants to keep talking about Savannah Siilpyards and about the wonderful contract w^e had, if anybody wants to
pay back to us the money we have in there, he can have the contract
and he can go to w^ork, and we will go to work some place else.
Senator Hatch. I understand you are confining yourself to Savannah Shipyards.
Mr. Cohen. Yes; and if somebody will give us back all the labor
and effort that we put into Empire Ordnance
Senator Hatch (interposing). Wait a minute, wait a minute. You
are willing to take your original investment in Empire Ordnance?
Mr. Cohen. I didn't say that.
Senator Hatch. Why, of course, you wouldn't.
Mr. Cohen. I didn't say that.
Senator Hatch. But you talked about the labor and the time and
ever^^thing else high-sounding words.
Mr, Cohen. It is not high-sounding words just good hard labor
and just good hard effort, and the best proof of it is that nobody else
did it that w^e did it. Gosh, I don't think we should be criticized
because of what we have done here.
Senator Hatch. I am not criticizing you for anything you have
done, but the thing I criticize you about is your attitude before this
committee. I don't like it at all.

Mr. Cohen. I

am

sorry.

Senator Hatch. Because you don't speak frankly, plainly and, I

think, truthfully.

Mr. Cohen.

am

sorry you say that because that

isn't

what

am

doing.

While I was inquiring, Mr.

Senator Wallgren. Mr, Chairman.
Cohen, as to the amount of l)usiness that you had obtained from this
Government, it was i)ointed out that you had obtained contracts
amounting to some $J57,000,000. You mentioned the fact that that
was not all from the Government. It is my understanding now that
you have been manufacturing guns for the British Government and
that your checks are paid not out of the lend-lease program.
Mr. Cohen, That is correct.
Senator Wali^ghen. But they come right dii-ect from the British
Government,
Mr. Cohen. That is correct.
Senator Wallgren. I see. I merely wanted to get that in the
record.

INVESTIGATION OF THE NATIONAL DEFENSE PRGGRAIVI

4023

The Chairman. Are

there any other questions, gentlemen?

Senator Brewster. I wanted to ask Mr. Cohen about the present
state of 3'our relations Avith the British in connection with your ordnance plants. Are the contracts current or delayed, satisfactory or
unsatisfactory, as far as you know?
Mr. CoHEX. As far as I know, they are very satisfactory. And
AA'hen you say "current."' it is difficult to answer that question because
you start a contract with an estimated delivery date and then you
get some five-hundred-and-twenty-odd revisions and you have to keep
revising because, again, we were a peaceful country, we didn't have
these designs, and as these guns are made they find some error or
some mistake or some improvement, and so on, and we have to keep
on changing. On the basis of what we have done, on the basis of
what the British expected from us, on the basis of what we have been
delivering to them, we have done a very, very good job.
Senator Brewster. Is that the feeling of the British?
Mr. Cohen. They have said that in our presence time after time,
that they are grateful and thankful for the job that we have done.
Senator Brewster. Is that the attitude of our War Department?"

Mr. Cohen. We had no production with our Government, our War

Department.
Senator Breavster. Xoav. just a minute. You recall your testimony
this morning about contacting
w^ere to take over the insi)ecti()ii.
Mr. Cohen. The inspection.

tlie

War Department

because they

Senator Brewster. That is what I am asking you whether or not

they are satisfied with your handling and your progress.
Mr. Cohen. Today they are; and the deliveries are going out all
right.
We had difficulties for about 6 weeks when the inspection
changed over, because there were different methods of inspection

between the British and different methods between the United States.
Senator Brewster. You said that the British took a 10-percent
check, while the Americans took a 100-percent check.
Mr. Cohen. A good example of that is springs. We bought certain springs from American Locomotive. We bought the whole
amount that we would need for the whole order 5,600 springs. The
British gave us the inspection certificate on it. Their man w^as up
there and inspected, and they inspected on this 10-percent basis. Well^
when the U. S. inspection came in. there was a 100-percent inspection.
But it had already been manufactured, and then we had to begin to
rearrange these springs anil look for another place from which to get
springs and how to work it out. That is what I meant by the diffi-

culties in inspection.
Well, I can't tell the figures, though.

The Chairman. Mr. Cohen, there is one question that I don't think
was asked you today. Did you make a $50,000 contribution to the
Democrati'!; campaign fund in 1940?
Mr. ConiEN. That is another one of these crazy stories. I didn't
given any 'p50,000 to any campaign. I never contributed and I never
offered to contribute.

4024 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. Did you contribute any money at
the national committees, Kepublican or Democratic?

all to either

of

meet again

at

Mr. Cohen. No.

The Chairman. The committee

will take a recess, to

the call of the chairman.

(Whereupon,
call of the

at 3

55 p. m., the committee adjourned, subject to the

chairman.)

INVESTIGATION OF NATIONAL DEFENSE PKOGRAM

WEDNESDAY, JANUARY

28, 1942

United States Senate,

Special Committee to iNyESTiOATE

THE National Defense Program,

Washington^ D. C.

The committee met at 10 37 a. m., pursuant to adjournment on

Thursday, December 18, 1941, in room 318, Senate Office Building,
Senator Harry S. Truman presiding.
Present: Senators Harry S. Truman (chairman), James M. Mead,
Clyde L. Herring, Joseph H. Ball, Ralph O. Brewster, Mon C. Wallgren, and Harley M. Kilgore.
Present also Edward R. Burke, former Senator from Nebraska Mr.
:

Hugh A.

Fulton, Chief Counsel Mr. Charles P. Clark, Associate Chief

;

Counsel.

The Chairman. The committee will come to

Mr. Nelson, you made a request to be heard

order.

before the committee,

I think, verbally to me, and then by a written request.
Mr. Nelson. Yes, sir.
The Chairman. And you are here at your own request. If you have
a statement to make to the committee, you may proceed with it.

TESTIMONY OF DONALD M. NELSON, CHAIRMAN,

WAR PRODUCTION

BOARDRecalled
war production board

policy regarding dollar-a-year

men

Mr. Nelson. I have, sir. Thank you. I appreciate this opportunity to meet with you and discuss this very important problem of
the dollar-a-year men.
I asked for this opportunity to talk to you about a problem that I
know is of particular interest to this committee. I want you to underall
stand, and to be thoroughly informed, as to my attitude on it.
have the same goal complete victory.
The problem I want to discuss with you is one of personnel. It
relates to the dollar-a-year men.

We

As you know, Congress

by

successive statutes beginning in

June

1940 expressly adopted the policy of authorizing employment of

dollar-a-year men in times of national emergency.
The Chairman. May I say to you, Mr. Nelson, at this point that the
committee has some very definite ideas, which were expressed in our
report on the dollar-a-year situation.
Mr. Nelson. Yes, sir.
4025


4026

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. And ^Ye want you to understand, before you ^o any
further, that we want the war won as quickly as possible. If you
liave to have dollar-a-year men to win the war, this committee is not
going to interfere with that procedure on your part, because we want
the war won, but we still have some ideas on dollar-a-year men and the
But this
ethics and things that are brought to bear on that subject.
committee does not want to hamper you in carrying out your job.
That comes first.
Mr. Nelson. I appreciate

that,

Mr. Senator, and I

am

sure that you

don't

The Chairman (interposing). And we are not under any circumstances going to interfere with your carrying out that job. If it requires dollar-a-year men, go ahead and use the dollar-a-year men, but
that won't keep us from finding out what they are doing.
Mr. Nelson. That is right, sir; and I want you to keep on finding
out what they are doing. But, departing from my prepared statement, I should like right at that point, since you mention it, to show
you just how the committee is hampering with our employment of
dollar-a-year men.

The Chairman. Here is the situation.

wrong under the present circumstances,

Whether you

are right or

committee feels, I am
sure and I think I am speaking for the committee when I say this
that your idea ought to prevail, because we have to win the war. Now
proceed with your statement.
Mr. Nelson. All right, sir.
Senator Brewster. Did you say that the committee was hampering
you?
Mr. Nelson. Yes, sir; definitely.
Senator Brewster. Well, we certainly want to know that.
this

The Chairman. And we

don't

want

to.

Senator Brewster. Certainly the whole object of this committee has

been not to hamper, but to help.
Mr. Nelson. I am sure that is true. Senator. The reason I asked

come before you is that I knew that that was true, and I wanted
show you, not alone in a prepared statement but by answering any
of your questions, just how it was hampering us and why we had
this policy, what I intend to do about it, how I intend to control
May I say this before I read the
it from the administrative set-up.
statement. Whatever happens in this picture, I am responsible, and
I take the definite res])onsibilit_y, and in order that I can appear before
your committee without talking about anything except the war
emergency and the men that I feel are contributing to it, I just cut
every tie to the outside world. I am just working on a Government
salai'v like you and everybody else in this picture.
So, when I am
to
to

talking to you, I

am

talking as one of you.

The Chairman. Proceed.

We

May I add this ?

cannot, of course, review
of the considerations which led us to the o])inions we expi-essed in
our re])ort, and I anticipate you wouldn't want to go into the Avhole
liistory of O. P. M.
Ml'. Nelson. No, sir; that is behind us.
Senatoi- Brewster. On this side, we sui^poi't 100 ]iercent what the
chairman has said, that you are going to run this job, and certainly
Senator Brewster.

all

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4027

and we don't want anybody else, to hamper you. If

yon can use certain agencies, that is up to you. I was disturbed over your statement that we were hampering you. I assume
you mean by our expression of opinion ?
Mr. Nelson. Yes, sir; in this way, sir. You make men afraid to

we

are not going,

yon

feel

here. I mean honest, straightforward men who can help

this picture, and companies that are willing to sacrifice and make
sacrifices, to have men come down here are afraid for them to come for

come down

fear your committee expresses the attitude of the Government toward

men that have been called in at our request to help in this emergency.
That, sir, is the way.
The Chairman. Proceed with your statement, and then I will have
something further to say.
Mr. Nelson. All right, sir.
Shall I repeat that paragraph?
The Chairman. Surely.
Mr. Nelson. As you know. Congress but successive statutes beginning in June 1940 expressly adopted the policy of authorizing
employment of dollar-a-year men in times of national emergency.
This policy was extended by Congress to all governmental departments and agencies concerned with defense. And, as you know, an
identical policy was followed during the last war.
have heard much connnent on this policy recently on all sides.
It was criticized in the report of tliis committee on January 15
and
may I say here that I was gratified to note that after months of
scrutiny of O. P. M. by your lawyers and investigators, you did not
report a single specific case of impropriety? However, that does not
eliminate all the grounds for criticism, so I want to discuss with 3'ou
these questions:
Should the policy of Congress with respect to dollar-a-year men
be changed ?
If the policy is to be continued, how should it be administered?
I have one over-all standard for passng on these questions.
It is
quite simple, and it is as follows What will contribute most toward
winning the war in the shortest possible time? That is the test I
apply, and I am confident it is the test your committee and Congress
will also apply.
On this job we must get the maximum results from American industry. To do that we nnist have down here men who understand and
can deal with industry's intricate structure and operation. In other
words, we must have men with expert business and technical knowledge. For the most part we have to get them from industry itself.
But no matter where we get them or how we get them we simply must
have them in the places they are needed, when they are needed.
All things being equal, tliese men ought to be brought in to serve
on a regular Government salary. I wish that were possible. It isn't.
You can't get all the help you need of the kind you need on that basis.
The reason is simple most of these men, many of them specialists,
have been getting salaries much higher than those which can be paid
Government employees. Since they have been getting such salaries,
they naturally have incurred extensive financial obligations over the
years mortgages, life insurance, income taxes which they have to pay
this year, and so on
so that it is extremely hard for them to adjust
311932 42pt. 10
20

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4028

themselves abruptly to a much lower income. In many cases it is

literally true that the man in question simply can't make the change
to a Government pay roll without extreme hardship to his family.
Furthermore, when we bring these men in for this war effort, we
are not offering permanent careers to them. In the very nature of
things we are offering them temporary jobs. So if we did not have
any provision for dollar-a-year men, we should in every case be forced
to ask these men to sever their old connections entirely to take temporary jobs at salaries which might not enable them to meet their fixed
In practice, then, we would usually get from industry
obligations.
only older men who were independently wealthy and who could therefore afford to make the break, or those who have already retired. I do
not think the Congress could approve the principle of such an arrangement, and I do not think the Congress would like to limit the War Production Board to the ranks of the very wealthy in the selection of
personnel.
All these factors, I am sure, were in the minds of Congress which,
in two wars, has provided for the employment of dollar-a-year men.
Now the dollar-a-year policy can of course be abused. It must be
administered with great care and restraint. If it is so administered,
possibly even an
it is in my judgment an extremely useful adjunct
indispensable one to the war program.
Sound administration, of course, requires a carefully determined
administrative policy within the limits of congressional policy. With
this in mind, I have laid dowm the following rules and limitations for
the War Production Board to govern emplovment of dollar-a-year

men

^
:

No person shall be appointed on a dollar-a-year basis unless he

a man of outstanding business or technical ability, of unimpeachable

1.
is

and especially qualified for the work for Avliich he is chosen.

dollar-a-year man shall be appointed to any position if, with
reasonable effort, a man equally qualified can be found and induced to
come here to fill such position on a regular Government salary.
3. No person shall be employed in any position in wiiich he will
make decisions directly affecting the affairs of his own company.
4. No appointment shall be made except after a thorough investigation of the proposed appointee by one of the investigating agencies
of the Government.
These are the rules which will be followed with respect to all future
employment of dollar-a-year men by the War Production Board.
In addition, I have instructed the various directors of divisions
within the War Production Board to reexamine all past appointments
of dollar-a-year men to see whether they conform. If these requirements are not satisfied in the case of any dollar-a-^anir man now engaged by the War Production Board, he will be asked (o leave.
I would like to spend a moment on a more specific discussion of
the dollar-a-year men now with the AVar Production Board. There
are some 300 of them. Every one came here at the request of the
Government. Every one was carefully investigated by the Federal
Bureau of Investigation or one of the other Federal investigatory
services.
Of the 225 appointed up to August 30, every one received
integrity,
2.

'

No

fliis

eoiinootion seo copies of administrative ordprs issued by Mr. Nelson at a later

10," 1942, which appear in

and s;il)initt(d to the comiiiittee under date of February

appendix on p. 4252 et seq.

(Into

INVESTIGATION" OF

THE NATIONAL DEFENSE PROGRAM 4029

the personal, signed approval of the President. On August 30, 1941,

the President delegated this power of approval to the heads of the
various departments and agencies concerned, including the Director
General and the Associate Director General of the O. P. M. Since
August 30, 73 appointments have been thus approved. The power
of approval has now been delegated to me.
Of all of these men, substantially over 70 percent were operating
men, plant superintendents, technical engineers, research experts, division managers, and the like, rather than heads of companies. These
are the men who have actually run the production machinery within
their

own

industries.
15 percent were heads of companies, and their skill as overall executives and their experience in large affairs have been very
helpful to us. There are, in addition, a number of dollar-a-year men
drawn from university faculties, some from the professions, and some
from labor unions.
As a group, these men have worked hard and rendered A^aluable

About

service.

Those who have should be commended.

Those who have not

will be removed.
But any member of our organization failing to
deliver will be removed, whether he is here on a regular Government
salary, a dollar-a-year basis, or imder any other circumstances.
In
the last analysis, it is the integrity, capacity, and zeal of men which
should govern their selection, and not the accident of their financial

position and need.

In conclusion, I want to thank you for what I think this committee has done.
It has rendered a very valuable public service.
I am
having the committee's recent report analyzed by members of my
staff in order that any errors or abuses which have occurred in the
war effort may be corrected.
It is my hope, sir, that from time to time I may meet with this
committee so that I may have the advantage of such counsel and
advice as you gentlemen will be able to give us.
I thank you.
The Chairman. Mr. Nelson, this committee has been working for
7 months to get the responsibility for the war effort centered in one
man, with the power to act.
are informed that you have that

We

power.

Mr. NrxsoN. I am so informed, too, sir.

The Chairman. And this committee under no circumstances wants
any way to hamper your effort to win this war, for every day that
is saved on the end of this war means the saving of lives and of
millions of dollars. The lives, of course, are the important thing.
Whether you are right or wrong, this committee is going to back you
up in what you want to do.
Nevertheless, the committee, I think, has different views from those
expressed in your statement, but as I say, the committee is not going
to hamper you about the carrying out of your program.
I don't think that there should be any special class. I just received
a letter this morning from a young man who is getting $25,000 a year.
He is a Reserve officer. He is going to get $140 a month, and he can't
draw his $25,000 while he is gone. He is satisfied to do that because
he wants to win the war, just as you do and just as I do, by every
means possible, no matter what it costs him, because if he doesn't win
it, his $25,000 a year won't be worth a cent.

4030

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

am laborino;, and have been, under the delusion, maybe, that if

Government has the power to take these youii"; men away from
their jobs and their outlook on life for the purpose of this emergency,,
the dollar-a-year men could face the same situation and face it adequately and would be glad to do it. However, if that is not the case,
and their morale won't stand it and you say it won't we want to
win the war. Therefore, w^e are not going to hamper you in that
effort and in your manner of handling it.
We have fought to get you this job. We are going to fight to support you now in carrying it out. If you meet any obstacles in the
carrying out. of this job where this committee can turn the light of
I

the

publicity on the subject or call attention to legislation that should be

enacted to give you the necessary means to carry the job out, we want
to be informed, and we are at your service.
Now, I am sure that some of these gentlemen will want to ask you
some questions, and I hope that you will be willing to submit to that
ordeal.
Mr. Nelson. I shall be^glad to do that.
Before doing that, I want to tell you how much I appreciate that,
Mr. Senator. I knew^ that was the attitude that your committee
would take, and I want to assure you that anything we are doing at
any time is open to your scrutiny, sir.
appreciate that.
The Chairman.
are on this job, w^orking in a gold-fish bowl, just
Mr. Nelson.
for one objective, and, sir, anything we do that Ave can give you

We

We

at your disposal.
thank you for that thought.
Senator Wallgren, did you have anything?
Senator Wallgren. Mr. Nelson, I am going to ask a question that
I asked before the Military Affairs Committee, just to clear this matter
up with the committee.
Your position at the present time can be assumed to be assistant to
the Commander in Chief, in charge of production and procurement

information on,

it is

The Chairman.

that right?

is

Mr. Nelson. Well, sir. I so interpret it. I have been given the job
and the authority of the President to do this job with respect to
production and procurement.
Senator Wallgren. Then you are directly responsible to the Com-

mander

in Chief?

Mr. Nelson. Directly,

sir.

TRODUCTION OF LTGIIT METAI^S

Senator Wallgren. I am quite interested in })roduction of light
metals, and the chairman has seen fit to phice me as chairman of a
subcommittee in charge of liglit metals as far as this conmiitt^e is
concerned.^
I think our record in respect to magnesium and aluminum reads
a little bit queer.
About 8 montlis ago we were promised by the
O. P. M. considerable development as far as alumimim was con'

UcarinKR bofore the subcommittee on

will ajipfar in a future Part of Hearings.

linl't

iiictals

were bfld

duriiif;

March

H>4ii

and

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

terned.^

great

Today

many more

4031

the President has a program asking us to build a

planes than we had anticipated in 1941.

Mr. Nelson. That is right, sir.

Senator Wallgren. Where are we going to get the metal?
Germany and Japan have been using clays and alunite, such as
"\ve have in this country, in great quantities for the manufacture of
their aluminum. Apparently we are held to the production of aluminum through the use of bauxite only, which is hauled up from
Dutch Guiana and is then processed at Mobile. There may be a
time when those ships are not available to us, and yet we have these
clays which are found in the western hills that can be used.
The testimony before our committee at one time was to the effect
that Japan, in 1939, by using these same clays, had manufactured
more aluminum than we did in the United States. Yet, for some
reason or other, nothing is done to take advantage of this resource
that we find in this country, and they continue along the same old
program, going out of this country to obtain bauxite for the manufacture of aluminum.
Our record as far as magnesium looks to me to be quite bad. This
committee knows conspiracy has grown up between certain German
companies and American companies that would hamper the production of magnesium in this country.
You know something about that,
too.

Mr. Nelson. Yes, sir; I do, sir.

Senator Wallgren. We find now that the O. P. M. had let a contract for some I forget, but I think it is close to $50,000,000 for the
construction of a magnesium plant at Las Vegas, Nev. That plant,
I understand, is to be British-owned, operated by people from Great
Britain. They are here with their experts. They are supposed to
know all about the manufacture of magnesium, whereas, as far as we
can learn, they haven't had a great deal of experience with this particular metal themselves.
Yet we are turning over a plant and equipment to operate at Las Vegas.
I don't know how this plant is going to operate, but this committee is going to find out within a short space of time.
We know^ that we have the ores in this country. We know that
we have people ready and willing to start in with the manufacture
of magnesium. There were times when you brought this question
up that people would tell you it is rather a tricky metal and can't
be used very successfully. However, this committee has seen experiments in California where they have seen airplane wings constructed
out of magnesium without the use of a single rivet. We have heard
;

the testimony of engineers, telling us that because of such construction it might add up to 35 miles per hour to a plane. We have seen
a great many things in our trips through the West. We still see a
lack of appreciation of what might be done with the use of magnesium in the construction of planes in this country.
It is our understanding altliough I don't know exactly how we can
find out that Germany is making considerable use of this superior
metal, magnesium, in the construction of planes, in flares, and in incendiary bombs. I am just wondering what you are doing, as far as

>

Previous hearings on alumimiin api)ear

in

Hearings, Parts

3, 7,

and

8.

4032

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

your division is concerned, to handle magnesium and light metals,

whether or not you have a man at the top of that who is willing to get
right down to the bottom of this thing and see that we go as far in
such production as Germany has done in the past few years.
Mr. Nelson. Naturally, sir, I do not know all the answers at the
present time. I assure you I will know them.
Senator Wallgren. You do know that the problem exists there?
Mr. Nelson. I know that the problem exists, sir.
In the case of aluminum, I am told that we are experimenting with
alunite and have set up a test pilot plant to prove the process. I think
quite generally, sir, it should be our policy to take no chances with
important things like aluminum and magnesium in the production of
the amounts we need, but I do agree, sir, in that I think the Government's money would be well spent in making experiments into other
fields in order that it may protect itself in case one avenue were cut
I believe in that definitely.
I shall watch this alunite with a great deal of interest. The men
who are working on that are very successful and competent men. T
have great confidence in the Olins because of their past business record,
and they are not easily fooled. I shall watch that, sir.
I followed magnesium with greater interest because of its great importance and the fact that we were so slow in getting started in magnesium ver}^ slow. There is no doubt about our disadvantage at the
present time. However, I think if you would like to review the
things that have been done on magnesium at the present time, you
would see that we are rapidly catching up and will soon be. And I
think some considerable credit should reflect to the group that did take
a very desperate chance in the development of this Kaiser plant in
Los Angeles on an entirely new method of making magnesium which,
it was said, had failed in other places.
It had been tried in Great
Britain and had not been successful, and many people said it could not
be successful. I relied upon the man's past record of having put things
over.
considerable amount of money was given to him more or less
to experiment with in a relatively large way, and I believe that is a
commendable thing to do.
Senator Wallgren. Yes; but that plant was built at Permanente
down in California, and it used the Hansgrud process for the manufacture of magnesium.
Mr. Nelson. That was a new method in this country.
Senator Wallgren. It was necessary to employ a German to come
in here and run that plant.
off.

Senator Brewster. An enemy alien.

Senator Wallgren. I understand that particular German has been
picked up.
Mr. Nelson. All right, sir but the plant is running, and it looks as
;

if it will

be a valuable

magnesium

plant.
Senatoi- Wallgren. And engineers who were appointed and studied
it, have told us, as Senator Truman will
possibly remember, in
California, that the process used at Permanente was bound to bring
about explosions and considerable difficulty, and that they felt the
process that had been discovered at Pullman University in the State
of Wasliington, using what they called the electrothermic process,
using oil, Avas a far safer and a far better process. For some reason


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4033

or other, you can't get anyone in the O. P. M. set-np to go out and even
take a look at what they have done with the pilot plant at Pullman
great many of us feel that this particular process is
University.
something that ought to be studied very carefully.
Mr. Nelson. I assure you that it will be looked into; if you and
your committee feel that way about it, we shall certainly look into it.
Senator Wallgren. Thank you.

The Chairman. Senator Mead?

PLANS TO ASSIST SMALL BUSINESS
Senator Mead. Mr. Nelson, if I recall rightly, about 18 months
ago, sometime in 1939, in the set-up that was known as the National
Advisory Committee, you had charge, among other things, of the
little-business section.

Mr. Nelson. Yes, sir; I started the smaller business activity.

Mr. Senator.
Senator Mead. And then a little later that was absorbed when
O. P. M. was organized, and it became a service rather than a bureau
in O.

P.M.

Mr. Nelson. That is right, sir. It became an adjunct of the

Production Division.
Senator Mead. And then later on. they were raised to a bureau,
and they reported directly to Mr. Knudsen and Mr. Hillman.
Mr. Nelson. That is right, sir.
Senator Mead. Still a little later, there was created a small -business
section by Executive order, given more authority, and Mr. Odium
was then placed in charge of activities.
Mr. Nelson. That is right, sir.
Senator Mead. Now, what is to be the situation with reference
to little business under the new situation, the new set-up?
Mr. NEiiSON. I haven't \\orked that out entirely, sir. You see, in
Mr. Odium's Division, there were really two phases to his work.
One was contract distribution or conversion. The other was the
small-business activity. Now, the conversion end of it, the contract distribution, I have put directly under Mr. Harrison in the
Production Division, and I can assure j'ou that we are going at that
as energetically as can be, because I have always believed in it and
believe in it now more than ever. I think we need it more than
ever.
As you probably know, we are making some very radical
moves in the automobile industry to try to get conversion quickly
in that industry, and we are working it out with subcontracting
with their individual supplies, and so forth.
I have in mind a number of plans with relation to small business.
I think there are two or three phases of the problem, sir, one of which
I don't believe is directly connected with production and procurement.
Therefore, it is my recommendation it hasn't been fully worked out
that that be attached to some bureau or agency of the Government
that will look out for the financial problems of small industry.
The Chairman. That is what Senator Mead has been contending

for for the last 6 months.

Mr. Nelson. I liave an appointment, sir, on Thursday with Marriner Eccles to discuss that phase with the Federal Reserve group.

4034

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Wherever

it is, I think there should be a division that h)oks out for

the financial problems of small industry, but I do feel, sir, that they
are not directly connected with the production and procurement and
should have another fjroup that will look alter them wherever that
may be in Government.
Senator Mead. What will happen to this far-flung organization?
Mr. Nelsox. That will be there, sir that far-flung organization,
which I think is very essential, very important, to deal with subcontracting locally within the district to force more subcontracting.
I hope to work a closer arrangement between those men and the procurement men of the Army locally and with the ct)ntractors and
others locally who get more subcontracting in a local area, you see.
That division will he kept intact. I haven't decided yet, because
I have had a lot of problems of organization, just how to set it up,
whether as an independent agency which I think it should be or
as another division of the O. P. M. with field offices to look out for
those problems.
Senator Mead. It would be unfortunate, it occurs to me. if this organization, so well started under Mr. Odium for the dissemination
of contracts, set up in every region throughout the United States,
should be canceled out now.
Mr. Nelson. Mr. Senator, I assure you that I have no idea of doing
In fact, I want to strengthen its hand.
that.
Senator Mead. Well, you talk about an independent agency, and
I really believe that the experiences that we are having are leading us
more or less in that direction. Of course, we must have in mind
ahvays that whatever we do accelerates the war effort.
Mr. Nelson. It does; yes. It has a relation to it, of course.
Senator Mead. And almost everything else is secondary, of course
but anyway, one thing that would accelerate the war effort. I react
your comment and I imagine it was rather indefinite in this morning's paper about what little business would have to do to convert
hastily to production.
But little business cannot convert hastily to

war production
Mr. Nelson. No, sir.
Senator Mead. Unless little business, independent business, and intermediate business have access to funds as readily as big business
does.

Mr. Nelson. That

favor of that.

is

right, sir, definitely;

and I am 100 percent in

Senatoi' Mead. And without the funds, they cannot convert; but,
with the funds, they would quickly accelerate your war production
volume. So they need funds, and I hope tliat your agency will join
with the War Department and the Navy Department and O. P. M. in
recommending to the Congress a system whereby the funds will be
made available to them.
Mr. Nelson. I assure you, Mr. Senator, I regard that as important
and will be glad to so recommend, because I think it is important.
The place of snudl business is not alone in war production. You
see, we have to have two productions going along simultaneously.
Senator Mead. That is right.
Mr. Nelson. The essential civilian, the thing that keeps our
economy operating the repair parts to the economy and the repair

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4035

and all of the food industries

and all of those things must go on, or else you can't have a war eifort.
In other words, these two must move along together.
l^arts to transportation, agriculture,

I believe that the small-business activity can be hastened a great

deal by things that we can do in conversion, toward the separation
of an industry into its larger and smaller components, letting the
small&r components take the essential civilian, Avhere it is necessary
engineering orto have these things made, and tlie larger concerns
get more rapidly into the war production.
ganizations, and so forth
That isn't carefully thought out yet in my mind, but I do want to
give you that as my thinking in connection with this picture.
I can assure you, sir, that I have always felt and will continue to
feel that it would wreck this economy to have smaller business crowded
out during this desire on the part of all of us to build as many arms
On the other hand, sir. I do not want to see
as we possibly can.
us take a chance in putting component parts in with people who
cannot be reasonably expected to produce in the space of time in which
we must produce, and I would like to treat them on that basis and
Where they have the knowltreat them separately on that basis.
edge, the skill, the management, the machinery, and where we can
give them aid in converting and in subcontracting. I think, sir, we
should do everything we possibly can.
Senator Mead. Surely.
Mr. Nelson. Where they haven't, I think we ouglit to make provision of some kind to take care of them and not force them, through
the war effort, to do things that are illogical or unsound.
Senator Mead. Surely. The quicker we bring them into the war
effort, the less necessity there will be for expanding existing plants,
and we are already appropriating 13 billion dollars, only 3 billions
of which have been expended, I am told, in making big plants bigger.
Those plants, when they are completed, will never shoot at a Jap
They will be just big plants located in some congested industrial
ship.
Now, if we could accelerate small business and bring ])lants
center.
and machines and skilled workers into the picture, there would be less
and less of that necessit}^ for the expansion of big industry. There
is some, of course, that is necessary, but we must have in mind bringing
in every idle plant, idle worker, and idle machine, so that it won't be
necessary for us to a])propriate more billions for plant expansion,
but so that there will be more billions used for actual war output.
That is what we are all aiming for, and I think that that is where
this little business fits into the picture very well, where we utilize
existing facilities rather than build new facilities. Don't you think
that that is a reasonable statement that we use all existing facilities?
Mr. Nelson. Mr. Senator, I think it is the thing that we absolutely
have to do in order to do this job. There will be some new plants
which will have to be built, of course.

Senator Mead. Oh, yes.

Mr, Nelson. Explosive plants, TNT plants, smokeless-powder
plants, and more small-arms loading plants, demolition-bomb plants,
and things of that sort. Sir, we just cannot make the machine tools
that will be necessary at this time to build entirely
those facilities exist anywhere, they can be used.

new

plants.

Where

4036

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. AVe are vitally interested in something else, Mr.

Nelson, right at that point, if Senator Mead will pardon the interruption.

Senator jMead.

Go

ahead.

We

also want to be assured that there will not be

a policy to strip these little plants of their machine tools and move
them into the big shops, rather than put them to work on the ground,
because that would mean concentration of labor and everything else.
want to see
don't want to see these small shops stripped.
them put to work. There are two ways to approach that.
Mr. Nelson. I think there are, sir and I think it would be unfortunate to strip them if they themselves could do that job within the
plant and, as far as I am concerned, sir, we must see that if they can't
do it, that there is some reason that they absolutely can't do it, before
we strip them. However, we must face the fact that there are certain
essential machines which we vitally need in order to push this war

The Chairman.

We

We

effort.

We understand that.
Mr. Nelson. If we can take the work

The Chairman.

to the machine, I think we

should make every effort to take the work to the machine first. If that
can't be done, of course, this is a war effort and we must take the
machines.
The Chairman. You have to win the war. But we want these little
plants operated to the fullest extent possible to help win the war, and
J think that will help win it.
Mr. Nelson. I believe that to be an absolutely sound policy.
The Chairman. Senator Kilgore?
Senator Kilgore. I just M'anted to ask one question.
Mr. Nelson. All right, Mr. Senator.
Senator Kilgore. In determining the powers, as we discussed in the
Military Affairs Committee and as Senator Wallgren brought out
Mr. Nelson. Yes, sir?
Senator Kilgore. Is there any poAver inherent in your office to eliminate elaboration of design where the instrument sought could' be
made with less man-hours of work by eliminating elaboration of
design ?
Mr. Nelson. My powers, sir, extend to specification.
Senator Kilgore. They do?
Mr. Nelson. Yes, sir.
Senator Kilgore. That was one thing that was interesting to me in
the powers of your office.
Mr. Nelson. Now, I must say this, in all fairness to you, sir, that it
is my policy to interfere as little as possible with design.
I think the
technical men who have had the experience and the skill and the
training should determine design to the largest extent possible. However, whore that question of design can be proven I don't think we
should take a chance in changing design, because w^e mustn't lose a
battle because we have changed the design of a weapon and it doesn't
function. We have to go slowly in that. But it does extend to

specification.

Senator Kilgore. Whore it appears to your office tliat the design

could bo modified and get the same results, you conceive your office
as having power to approach that subject?
Mr. Nelson. Yes, sir.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Kilgore.

Mr. Nelson. Yes,

Senator Kilgoke.

Mr. Nelson,

And

4037

to seek a modification of that design?

sir; definitely.

To work?

Definitely,

sir.

Senator Kilgore. Thank you.

The Chairman. Senator Ball?
POSSIBLE obstructions IN rRODUCTlON

AND PROCUREMENT PROGRAM

Senator Ball. Mr. Nelson, in the committee's criticism of these

<iollar-a-year men, I don't think any of us wanted to question the integrity of these men, but it would seem to me and, I believe, to most
of us, that they kept an unconscious bias toward preserving as much
as possible the status quo and of avoiding disruption of the present
industrial set-up. I think you have been on the other side of that
picture and have argued from the beginning that we had to make
an all-out effort.
Mr. Nelson. That is right.
Senator Ball. And that business as usual was out the window, I
am wondering just how many of these 300 dollar-a-year men are in
key positions in your organization, where they would influence the
broad policy and where this unconscious bias and you can't blame

them for having

it

might play quite an important

effect.

Are most

of your division heads, for instance, dollar-a-year men?

Mr. Nelson. Yes, sir; they are. Among my division heads, as you
know, are Mr, William Batt, who I think has been on record for an
all-out effort for some little time and Mr. William Harrison, whom
you perhaps don't know as well, a man in whom I have a great deal
of confidence. He has been given the responsibility for and is literally going to town on this production job.
Mr, Knowlson Jim Knowlson came into our organization quite
recently from Stewart-Warner; a man with a great record of production in Chicago, a man of unusual ability, in my opinion, who,
I think, will certainly be interested in conversion 100 percent. He
was in charge of the industrial branches where most of this conversion will take place, because he sees that it can be done. He ran a
small factory himself, and a larger one. He was a small businessman before he was a large businessman, and I think he sees the problem
;

quite clearly.
I believe, sir, that the men whom I have picked in most of the key
jobs are men who believe, just as I do, that we must go out and do an
all-out job in this whole picture,
I should unqualifiedly say to you,
sir, that the men I have picked as my first assistants are men who have
exactly the same opinion about this job as you and I have.
Senator Ball. I take it you agree that that is the chief trouble with
dollar-a-year men, that their whole way of life is dependent upon the
economic system as it is now set up and that, consequently, unconsciously or otherwise, they kind of hate to
_Mr. Nelson (interposing), Mr. Senator, may I analyze that a little
bit?
There is a great deal of confusion in the mind of the public in
their attitude toward dollar-a-year men. Isn't that really an attitude you are expressing toward businessmen rather than dollar-a-year
men ? And whether they were on salary or not, that would not neces-

4038 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

change that particular bias of a lifelong experience. I think,
there is a difference in that picture. There are many businessmen,
of course, who believe in the status quo. There are many labor men,
many university professors; there are many from all walks of life.
There are probably many Senators and Congressmen, and many of all
types.
I think that that is true.
Our job now is to try to pick the man who knows how to do that
job and who will throw his whole heart and soul into it and, in a
Certainly it is my policy to see that
patriotic motive, do the job.
there are no others around there exce])t that type of m,an.
Senator Ball. Fine. One more question, Mr. Nelson.
Mr. Nelson. If, in the opinion of the committee, there are any
obstructionists anywhere in this picture at any time I should be glad
to have counsel or any member or Senator talk to me about it and
should be glad to have it carefully reviewed.
Senator Ball. I think w^e have all felt that the failure to expand
steel production and aluminum production as soon as it should have
been done was due partly to that subconscious holdback.
Mr. Nelson. That was partly true. Of course, partly it was due to
a lack of imagination on the part of all of us in seeing what the problem really was.
Senator Ball. And because they didn't have one man Avith authorsarily

sir,

ity to

do

it.

remember that

last siunmer you told us about 3'our ideas as to

speed up production and force m,ore subcontracting and,
as I recall, you suggested two things: One, to revise existing contracts
possibly to require, in certain cases where it was feasible, that a certain
percentage of the work be sublet; and the other, arbitrarily to move
up delivery schedules on them and force them to speed up, to work 24
hours a day, and to subcontract everything they could.^ Are you
moving in that direction ?
Mr. Nelson. I haven't changed my mind a particle on that, sir.
Of course, we haven't had much time yet to go into that thoroughly,
except that I know now that it is the attitude of the Army that thali
be done also, because we have got a tremendous j^rocurement program
to put through in this year and next.
Senator Ball. And what we Avill get chiefly in the next. 6 months
will be from existing contracts?
Mr. Nelson. That is right, sir.
Senator Ball. So, are you taking steps toward revising those
contracts?
Mr. Nelson. Yes, sir; toward speeding them up: getting them on a
24-hour basis. I want this field organization to go more energetically
than ever into subcontracting.
great deal has been done. I think
Mr. Odium and the field organization made a great contribution to
that subcontracting. I view it as largely a local proposition, working,
out the subcontracting Avithin that, and having regions communicate
Avith each other and Avork out rather than haA'ing everything come back
here and then go back out into the field.
Senator Ball. That is all, Mr. Chairman.
The CiiAiKMAN. Senator Brewster?

how

Ave could

Hearings, I'art

5,

p.

1343.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4039

Senator Brewster. I am very happy at your asking to appear. It ia

recognition that in some measure you represent the voice of America
that is concerned. I read in the paper yesterday that one Senator
said that he found the War Department with 350 of their men employed answering questions of comittees. I was happy to find that
was a year and a half ago, before our committee started.
I assume that your appearance recognizes that we do have a function

perform ?
Mr. Nelson. I do, sir; very definitely.
Senator Brewster. We can't take all your time, and I don't think we
ought to have more than one-tenth of 1 percent of it for the next
year or two while we are winning this war. But we have to have
This committee and I think I speak for it has had more
liaison.
difficulty with O. P. M. than with any of the others
War Department
or Navy Department or any of them in getting information and
cooperation, and I take it your coming here shows that perhaps we are
going to have a "new deal" in that regard.
Mr. Nelson. Sir, I want our organization to work closely with this
to

committee.
Senator Brewster. You contemplate the designation of a man of
considerable caliber as liaison ?
Mr. Nelson. Yes, sir; definitely.
Senator Brewster. I think that is very important. The Army and
Navy have both done that, aud it has been extremely helpful. We
can't constantly ask you, but if you have some man designated in your
organization who can go to any branch of your organization and get
the information we desire, rather than a mere clerical assistant, I think
And you do contemplate that step ?
it would be helpful.
Mr. Nelson. I do. sir.
Senator Brewster. Now, about the dollar-a-year men. You also
liave men without compensation?
Mr. Nelson. Yes, sir.
Senator Brewster. What is the distinction, aside from the dollar ?
Mr. Nelson. The distinction in my mind, sir, is this, and I don't
know that it has been fully carried out. But it is my policy and will
be fully carried out, that no man on the W. O. C. basis will be other
than a consultant. He will not be given administi-ative or executive
authority. He will be drawn in as a consultant. Many of these
W. O. C. men are men who have been brought in by the Labor Division
in panels in the various communities, as consultants on their training
programs.
Senator Brewster. In many cases, part time?
Mr. Nelson. Just an hour or two a day, or 1 or 2 days a week.
Mr. O'Brian.^ There are over 400 of the W. O. C.'s, as we call
them, in the Labor Division. They are engaged only a day or two a
week. They serve on these panels to aid in the training in industry.
The Labor Division has about 44 dollar-a-year men in addition. The
War Production Board, separating it from the Labor Division, has
about 214 W. O. C. men who are usually in the nature of technicians
or engineers or specialists.
Senator Ball. Do the dollar-a-year men work full time? Is that
the idea ?
'

Jobn Lord O'Brian, General Counsel,

War

Production Board.

4040

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

O'Brian. Yes; as I iindeistand it.

Mr. Nki.son. And a man in an aclministrative and

Ml'.

in tliis picture nnist

work

('xcontive capacity

full time.

Senatoi- Hrkwsteh. What is the relation on the approval of contracts noAv undei' this new doctrine of inKltration?
Mr, Nelson. Of course, contracts are made by tlie Army and by
the Navy by the military services and the Maritime Commission.
Tliev have had approval through contract clearance in the office of

O. P. M.
Senatoi' Brewster. On anything over $500,000?
Mr. Nklson. On anything over $500,000. Now. in order to speed
this up and not delay it, we are setting up methods by wdiich that
approval can go along concurrently, instead of consecutively. Consecutive approvals always slow up a thing, and my policy is to have
concurrent approvals where necessary, rather than consecutiA^e ones,
because the consecutive one is quite apt to be merely a veto power. It
is my experience that it always slows it up.
The contract approvals now are nuule by the War Department

own offices up to as nnich as $5,000,000, but those contracts come in and, after they are made, will be reviewed, and if wo
find that they are bad, they will be renegotiated.

out in tluMr

Senator Brewster. You do recognize that that presents a duality of

executive function with two men sitting in, one your representative
and the other the executive department, each of whom have coordinate
authority?
Mr. Nelson. I do recognize that, and I want to prevent coordinate
authority.
Senator Brewster. Hoav are you going to stop it?
Mr. Nelson. In this way, sir and the War Department and the
Navy are quite cooperative and see the necessity for taking in trained
civilians who will actually do the work as their employees. The main

thing
Senator Brewster (interposing). As whose employees?
Ml-. Nelson. As the War Department or Navy employees. I don't
intend to set up, sir, any connnissar system of dual authority or responsibility. I believe it to bo bad.
Senator BREwaiT:R. You have seen Pearl Harbor.
Mi-. Nelson. I have seen a lot of administration, too.
Senator Brewsti:r. Well, I don't want to pi-ess this thing at all to
an emban-assing pomt as I can understand it is a matter of some
delicacy, but you have said that you understand you possess practically unlimited authority, subject only to the President, to run this
production and procurement program. Is that right?

Mr. NicLSON. That is right, sir.

Senator Brkavster. That must nu>an that your men

nuist, let us

say, be responsible.

Mr. Nelson. No, sir not at all. I do not think that at all. I mean
Army and the Navy men still are res]ionsible. They can be lield
just as responsible for doing the job and for doing it under right poli'I'hey are res])onsible for doing a job.
1 am not
cies, and so forth.
considering, sir, that I have to have a grou]) of men, all of whom take
;

the

Responsibility can be deleresj)onsibility for everything that is done.

It is
It is delegated by the President.
sir, and it is delegated.

gated,

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4041

delegated properly so. That doesn't mean, sir, at all that I would
not consider it very bad administration if I felt that everything that
was done had to be done either by one of my men or approved by one
of my men.
Senator Brewster, Then do I understand that 6 months from today,
if this thing isn't working, you are going to tell us that you can't be

blamed ?
Mr. Nelson. I do not, sir no, sir.
Senator Brewster. I mean either you have got to be responsible or
you are not.
Mr. Nelson. Sii', I have no iililjis to make now or 6 mouths from
now under the authorities which have been granted me by the PresiIf they fail, it is my failure solely and not because of any alibi
dent.
;

1 can give you,

sir.

Senator Brewster. And you will be responsible for the elimination

of anything savoring of friction as between your representatives and
your department?
Mr. Nelson. Yes, sir; and there will not be friction, sir.
Senator Brp:wster. That is all we want to know.
Mr. Nelson. Because friction means delay. There will be differences of opinion
Senator Brewster. Of course.
Mr. Nelson. As there will be between members of your committee.
Senator Brewster. But there will be decisions?
Mr. Nelson. But there will be decisions, sir.
Senator Brewster. Now, on the matter of placing the contracts, all
tlie departments, as you know, now are under serious question on the
matter of i)rofits, the limitation of profits. Our various legislative
committees are considering the j)ossil)ility of legislation. To what
extent do you consider it is practical in your program to have restrictions as to the profits on your contracts, as distinct from tax legislation
which would reach whatever might be excess profits, if you would give
an opinion on that?
Mr. Nelson. Yes, sir. I haven't thought this through carefully yet,
of course, but I feel that no miinufacturer is en( itled to unconscionable
profits on a war contract.
I think a manufacturer, a workman
anybody connected .with it as long as we have the profit system in this

entitled to a fair profit for his labor or his management,

should be a fair profit. It is
opinion that where excessive profits occur in a contract, that contract ought to be renegoThat occurs at times, because we are dealing in new territories.
tiated.

country,
and that

is

it

my

Senator Brewsitr. And with vast volume.

Mr. Nelson. Vast vohime; vastly increased volume. And there is
no one wise enough today to know what the cost will be when a plant
gets working full on repeat business and when they learn how to make
that economy. I hope that we will get an interchange of ideas as
between manufacturers making an item, so that economies brought
about in one plant can be brought about in another, and that we can
get economy primarily of time, of course, but of cost, too. While I
think the cost is secondary in this effort, and that time is primary, I
think we should not waste money in getting the time element.
Senator Brewster. You said before our committee sometime ago
that you felt America was ready to make any necessary sacrifice to win

4042
this

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

war

as lono; as tliey

were each assured that the burden was equi-

tably distributed.

Mr. Nelson. That is right, sir. I said they would as long as, first,
they thought it was necessary and, second, if they thought it was being
shared alike by all.
Senator Brewster. And you do consider it is a part of your responsibility in the tremendous powers given you, to achieve as far as
possible those twin goals ?
Mr. Nelson. Yes, sir I think they are fundamental in having morale
in this country.
Senator Brewster. And it will be your endeavor to educate all
agencies of procurement, business, and labor and everyone else to that
philosophy ?
Mr. Nelson. Yes, sir because I believe that an absolute, fundamental conception of economy in a democratic system.
Senator Brewster. You do recognize, taking the two big fields in
connection wdth your dollar-a-year men, two groups of industries, the
monopoly groups and the competitive groups? When you have a
dollar-a-year man from a monopoly group like aluminum, for instance possibly automobiles, but aluminum there has, of course,
been the feeling, warranted or not, that their advice must be affected
by the tremendous concern with which they are associated. Senator
Ball raised the question about the matter of competitive solution of
that problem. How are you going to liberate yourself from any
possible bias of that character ?
Mr. Nelson. Well, of course, you are pointing out one of the most
That is a difficult job
difficult jobs of administration in my big job.
of administration, I will grant you. I think it can be eliminated, first,
in the man you select for the job and, secondly, of course, in the type
of supervision and policies that he works under and the care that
is exercised in seeing to it that everybody who has an idea in the
jncture gets a fair and considered hearing on that idea.
Senator Brewster, Perhaps you would say that the problem would
be solved if it is recognized?
Mr. Nelson. I think that is a very fair way of putting it, sir.
Senator Brewster. And you do recognize it?
Mr. Nelson. I recognize, sir, that in all of us there aie biases.
Senator Brewster. Yes. In the competitive industries, in the highly
competitive smaller industries, you have the peril of favoritism in allocation, and you recognize that also, that is, that a man who is carrying
(m a business and finds a dolhir-a-year man in charge here, being paid
a sahiry by a competitor, isn't going to be very happy about it. Is
there any way by which you can reassure those fellows that they are
going to get a fair break?
Mr. Nelson. You ask the mechanism by whicli they do it. I don't
know at the moment. I can assure you that
Senator Brewster (interposing). Again you recognize it?
Mr. Nelson. I recognize it, sir, but I would also like to point out that
that would be eciually true if that man sevei'ed his connection and
worked on a (lovernment salary. I don't believe that the difference
between the dollar you pay him and the $S.0()0 wliich you can pay him
iindei" the regulalions would change that bias if it is there, sir.
T
think tliat is the important dillerence that is in ni}^ mind about this.
;

INVESTIGATION" OF

THE NATIONAL DEFENSE PROGRAM 4043

Senator Brewhter. You mean his bias as between concerns?

Mr. Nelson. Well
The Chairman (interposing). Isn't it true, Mr. Nelson, that tne
probabilities are that the most biased ones will probably go home because they are more interested in the money than they are in the country? You recognize these problems and, when you go to solve them,
the chances are that those fellows who feel that they can't under any
circumstances sever their connections on account of the fact that they
have to have that much money to live, will in all probability go home,
and you won't be bothered with them. Then you can get somebody
who can agree with your policy and carry this thing out.
Mr. Nelson. Mr. Senator, of course, I don't feel that those criteria
necessarily apply. That is the difference, I think. I don't believe that
the amount of money you pay or whether a man has severed his connection

The Chairman (interposing). I was just remembering the statement that you made that these fellows had created for themselves a
standard of living which they couldn't forgo for $8,000 a year.
Mr. Nelson. Well, sir, it isn't quite the standard of living which they
don't forgo it is a question of their obligations, the debts and other
things they have, and their families could not live. True, you say they
would do it if they went into the Army. Well, in the Army you take
mostly younger men who haven't reached that stage where they have
big income taxes to pay. When I say "big income taxes," there is no
criticism of it. I believe that everybody should pay it and pay according to his ability, sir.
The Chairman. That is true, but you must also remember that
many of these Army boys are on the other end of the string and are
probably leaving a lot of debts which will be harassing them when
they get back from this emergenc3\ That is just the other point of

view.
I am not going to argue this question with you, because I have
certain views on it and you have certain views.
are behind you
to win this war, and I say, whether you are right or wrong, w^e are
going to get behind you and help you win it.
Mr. Nelson. I appreciate that attitude more than I can tell you.
Senator Brewster. There is one other thing I want to bring out.
You have made it clear that you now have, as you understand it,
unlimited authority.
Mr. Nelson. In the field of production and procurement, and I
limit it to those tw^o.
Senator Brewster. You are sufficiently realistic and you have been
around Washington long enough to know that there are influences
of various kinds that try to manifest themselves.
Mr. Nelson. Yes, sir.
Senator Brewster. From legislative sources, and executive sources,
and now even from judicial sources, as the judiciary seem to take
concern in executive matters, and from business sources.
have
that confidence in you that you are immune to as much of that as
possible.
But I think this committee wants to be assured that as
far as governmental functioning is concerned legislative, executive,
and judicial we want you to keep in that happy, position. And I
w^ould like your assurance that the first time any impairment of your

We

We

311932

42

pt.

10

21

4044

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

authority appears from legislative, executive, or judicial sources,

will advise this committee in order that we may know that the
responsibility then is more diffused. Is that fair ?
Mr. Nelson. Sir, if you say "impairment," of course that, again,
we have to define if we are to put down on paper just what we mean,
In the first place, I am not
I can assure you, sir, of one thing.
interested in politics in any particular. I have never been and I am
not interested in it. I recognize it as a business that you have to
learn from childhood, and it is a business and a profession, just as
the business of selling goods at retail is something that you must
learn, or manufacturing, or other busmess.
Now, sir, I am down here for one purpose, and that is to put
this program over if it is humanly possible and if I have the ability,
and if I see anything that will materially affect this war effort, the
production effort, I want to assure you, sir, that I am not going to
hesitate to appeal for help anywhere I can get it. I think, sir, from
what I have seen I have been down here a great deal and know
Washington fairly well; I don't believe anybody ever knows all
about it ^nearly everybody concerned is interested in one thing:
putting over this program.
Senator Brewster. And you are ready to be the goat?
Mr. Nelson. Yes, sir; I am ready to be the goat, because I think
the country expects it of me.
Senator Brewster. You will let us know if there is any way we
can help you ?
Mr. Nelson. I will be glad to do it. I recognize this, too, sir and
I would like to say this off the record that I have everything to lose
and nothing to gain during this job.
Senator Brewster. That is why we have confidence in you, Mr.
Nelson.
The Chairman. Mr. Nelson, I think that statement ought to be on
the record, because that is a strong statement.
Mr. Nelson. I will put it on the record, sir.
The Chairman. I don't want to put it on the record unless you want

you

to.

Mr. Nelson, I will put it on the record.

The Chairman. Are there any other questions, gentlemen ?

plan to establish independent agency to

assist

small business

Senator Mead. Mr. Chairman, if there are no questions down that

way, and we are at a loss for the moment, I want to go back to little
business.

Mr. Nelson. All right, Mr. Senator.

Senator Mead. I believe that your appointment was received with
universal acclaim because of past performances and because of the
confidence the people have in you. I think that is the sentiment expressed individually and collectively by our committee.
Now, I was wondering if, as a result of this concentration of authority and, I hope, the cooperation of the Army and Navy and other procurement agencies, you can give us any reassurance of the acceleration
of this program of procurement and production and how it is stepping
up, and if the jjrocess of stepping it up is going to be continued. What

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4045

the situation today ? Has it improved over what it was when you
took over this assignment? What is the situation? What can you
say for the country for the future ?
Mr. Nelson. Well, I would rather not make a statement at this
time on that, sir.
Senator Mead. We wouldn't want any details.
Mr. Xelson. I don't want to be put in the position of making any
promises. The record should show what we do. I can say and I
am very happy to say it that there is the finest kind of cooperative
spirit today in both the Army and the Navy and the Maritime Commission, and I for one, will do everything I can, without impeding the
progress of the program, to see that that cooperative spirit continues.
Senator Mead. Because of that cooperation and the concentration
of power, you look, and the country looks, for an acceleration of the
is

volume of tliat program. Isn't that true?

Mr. Nelson. Tliat is certainly true, sir, and I will consider that I
have been a great failure unless that is constantly accelerated.
Senator Mead. Surely. That is what I mean. And, from present
indications, that constant acceleration has set in to remain, to continue.
Mr. Nelson. Well, I sincerely hope so, sir, and I believe it is true.
Senator Mead. Just one other point, and then I am through.
I believe one of the best ways of making a contribution to the acceleration of that volume is for us to give some thought to the settinjj
up of an independent agency with authority and power to go out and
enlist all of these plants and factories that are not now in the program.
Now some of them are dead. Thej' have been made casualties as a
result of priorities or some other very necessary wartime provision or
order.
Some of them are dying. Others will go out as a result of
the auto and tire and other rationing within the next 2 or 3 months.
Not one of those casualties can in any way hope for relief through
any agency of Government unless something is done directly for them.
They can't qualify for a loan. There isn't any possibility of a grant.
So it occurs to me that an independent agency ought to be set up, at
least for the duration, which would revive and rehabilitate these
casualties and aid in the conversion of those industries that are slowly
disintegrating because of priorities and other orders.
This independent agenc}' could, by grants and loans, put all of
these plants in shape, and surely we have as much right putting those
plants in shape as we have making loans for the construction of plants

that do not exist.

So it occurs to me that one way in which we could make a great
contribution to the increased volume of production would be to set
up an agency whose job it would be to bring plants not now in the
defense program directly into the program, and an agency that would
have personnel engineering personnel, organization personnel in
order to advise them how to bring this about, an agency that would
have the power to make grants where the Government has already
ruined an industry, and loans where it is still a going industry buc
very likely to be going out soon.
I think that if we gave some thought to the setting up of an industry
agency, not to interfere with your agency or to interfere with the
Department of Commerce, but merely an agency to go out and to revive and rehabilitate and convert existing plants that could be within

4046

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

reason brought into the picture. Once they are brought into the picture, they could negotiate with Lend-Lease, War Department, Navy
Department, or the Maritime Commission, or with prime contractors
for some part in this program.
I hope you will give some thought to that, and I know you will, to
the setting up of an agency that will have some authority to bring
these small plants into the picture.
Mr. Nelson. I shall be glad to contribute whatever I can in thinking.
However, I consider that is outside the field of production and
procurement, and is not for me to set up.
Senator Mead. I am of the opinion it is very close to production,
if you bring in these 25 to 30 thousand plants.
Mr. Nelson. There are two things you have to separate out of
that.
If you are talking of conversion and bringing them into either
the war effort or essential civilian supply, yes; I consider that as
part of my job. The question of the financing of them and what is
done in that way to rehabilitate them, or other things, I do not consider tliat part of my direct responsibility, and would rather see it
set up independently.
Senator Mead. I think so. I think if it was set up independently
they would all be brought in line to participate in this ])rogram, and
when they were able to participate in the program and prepare for
it then they would become part of your productive effort.
Mr. Nelson. Then it would come over into our responsibility.
Senator Mead. But I know offhand of two airplane factories, both
capable of manufacturing trainer planes, and one with a contract for
the Dutch East Indies that, at the time we visited the plant, was
about completed and I understand that Mr. Odium has helped one
of these industries get into the defense picture, but the other small
airplane plant has been unable to get into the defense picture; and
so, if there are hundreds and thousands of such plants in the various
categories that are striving to get into the picture, we ought to bring
them in, and I know there are a great many located over the country; but we need, I believe, an independent agency with power to
furnish them with the funds and the advice they need to come into
the picture, and I hope it will have your cooperation at a very early
;

date.

Mr. Nelson. I will be glad to cooperate with anybody setting it

show what the problems are so far as we see them.
Senator Mead. I believe an endorsement from you in behalf of
small business would be most helpful right at this time.
Mr. Nelson. As I told you, sir, I am discussing that with Mr.
Eccles on Thursday.
Senator Mead. Fine.
The Chaikman. Mr. Nelson, there is a parting thought this committee wants to leave with you. If any of the agencies with whom
you have to deal, and who liave to come to the United States Senate
for the approval of appropriations, do not feel that they want to
up, to

wholeheartedly cooperate in this effort, bring that matter to the attention of this committee and we will i)ring it to the proper legislative committee so they will cooperate.
Mr. Nelson. Thank you.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAJM

4047

The Chairman. If there are no other questions, that is all.

Mr. Nelson. Thank you again.
The Chairman. I want to have this editorial, which was published
in the St. Louis Post-Dispatch and copied in the Richmond Times,
copied in the record as my views on dollar-a-year men.
(The editorial referred to was marked "Exhibit No. 350" and is
included in the appendix on p. 4248.)
The Chairman. The next meeting of the committee will be at the
call

of the chairman.

(Whereupon, at 12:50 p. m., the committee adjourned,

vene upon the call of the chairman.)

to recon-

INVESTIGATION OF NATIONAL DEFENSE PEOGRAM

THURSDAY, FEBRUARY

12,

1942

United States Senate,

Special Committee to In\t:stigate

THE National Defense Pi{Ogram,

Washington^ D. O.

The committee met at 10 47 a, m., pursuant to call of the chairman,

in room 318, Senate Office Building, Senator Harry S. Truman
:

presiding.

Present: Senators Harry S. Truman (chairman), Clyde L. HerJames M. Mead, Ralph O. Brewster, and Tom Connally.
Present also Mr. Hugh A. Fulton, chief counsel, Mr. Charles P.
Clark, associate chief counsel.
ring,

The Chairman. The committee will come to order.

Mr. MacKeachie, you haven't appeared before this committee before, have you?
Mr. MacKeachie. No; I haven't.
The Chairman. It is customary first to swear the witness. Do you
solemnly swear to tell the truth, the whole truth and nothing but
the truth, so help you God, in the testimony you are about to give
before this committee?
Mr. MacKeachie. I do.
The Chairman. Will you be seated, Mr. MacKeachie? Will you
tell us your full name and title, please, for the record?

TESTIMONY OF DOUGLAS
PURCHASES,

MacKEACHIE, DIRECTOR OF
PRODUCTION BOARD

C.

WAR

Mr. MacKeachie. Douglas MacKeachie, Director of Purchases,

Production Board.
The Chairman. I am somewhat interested, Mr. MacKeachie, in
your background before you came here. Tell us something about
your connections before coming to Washington.
Mr. MacKeachie. Before coming here I had been purchasing di-

War

rector for the

New England

Division of the Atlantic

&

Pacific

Tea

Co.

The Chairman. And what were your connections before that?

Mr. MacICe-achie. I had been with the Atlantic & Pacific Tea Co.
for about twenty-odd years.

The Chairman. Twenty

years.

for that organization? That

world, isn't it?
Mr. MacKeachie. Yes.

is

Were you the purchasing director

the biggest chain store outfit in the

4049

4050

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Chairman. Well, you ought

to

know something about

pur-

chases.

Do you

have a prepared statement you wanted to make ?

Mr. MacKeachie. Yes; I do, Mr. Senator. It is very brief.
The Chairman. Proceed.

FORMATION AND FUNCTIONS OF CONTRACT REVIEW BRANCH OF WAR

PRODUCTION BOARD
Mr. MacKeachie. I asked to appear before this committee because we have studied carefully the recommendations on reviewing
contracts contained in the committee report of January 15 and given
to me directly by members of the committee, together with those of
the Vinson committee, and I should like to tell you briefly what we
plan to do and to answer, so far as I can, any questions which may
be in your minds.
First, let me say that we have in mind recommending the following
They
policies, and these policies will be recommended immediately.
should be in eft'ect in a few days,
1. That war procurement contracts be placed by negotiation rather
than upon the basis of competitive bids. This method will enable
the Government to make the most effective utilization of available
productive capacity. It will eliminate the great volume of work
and considerable delay which are involved in the procedure of placing contracts on a bid basis. Of course, it will not preclude asking
for quotations from various sources where that procedure is desirable.
By that I mean informal quotations.
2. That contracts for standard commercial items be placed generally with the smaller manufacturers, leaving the facilities of larger
concerns available for the more difficult production tasks.
3. That contracts contain a standard clause for renegotiation under
stated conditions.

This last recommendation embodies one of the recommendations

of your committee. As I read your report, your committee recommends: (1) That contracts should be reviewed carefully after execution, in regard to protection of the Government's interest, prices,
delivery dates, and terms; (2) that contracts ordinarily should include
provisions permitting adequate review and renegotiation; and (3)
that such provisions should be actively used.
As you Know, title
of the second war-powers bill, now pending, specifically provides for the inspection and audit of the plant
and books of any contractor with whom a defense contract has been
placed since September 8, 1939. These powers, together with the
powers of renegotiation granted by the first War Powers Act, will
put us in a much better position to carry out these recommendations.
are, therefore, setting up in the Purchases Division of the War
Production Board a Contract Review Branch. The functions of
this branch will be as follows
(a) To clear, prior to execution, such contracts or ])roposals for
contracts by Government agencies as (he Chairman. W. P. B., shall
direct.
Arrangements necessary to avoid delay in tl\e execution of
contracts will be effected with each contracting agency.

XIV

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4051

(b) To maintain a record of all substantial contracts placed by

the War, Navy, and such other departments and agencies as the Chairman, W. P. B., shall direct,
(c) To analyze, from the standpoint of cost and otherwise, such
contracts as the Chief of the Contract Review Branch shall select, with
a view to recommendinfj to the Director of Purchases audits or such
other actions as may be deemed necessary and to perform such audits
as the Director may authorize.
(d) To recommend to the Procurement Policy Committee the
adoption of such policies and procedures as may be deemed necessary,
from the review of contracts.
Although we retain the right to clear contracts prior to execution
in clause (a), we anticipate that to expedite the program, clearance
will be delegated to the procurement agencies under our supervision
except under special conditions and the Contract Review Branch will
concentrate on the examination of contracts after they have been
executed. Every effort will be made to catch serious improprieties
in the original clearance, while those matters requiring extended examination will be the responsibility of the Contract Review Branch.
To do this, we shall ask the contracting agencies to supply us with
copies of all substantial letters of intent, contracts, and changes made
in original contracts.
This procedure will not delay the program
because our work can be done after production is under way. If our
review and analysis reveals that further information is needed, we
shall tie in closely with the auditing staffs of the various contracting
agencies and use them in inspecting and auditing wherever possible.
It would not be sound administration, in my judgment, for us to
undertake to duplicate existing auditing staffs. We shall, however,
build up an inspecting and auditing staff for use when, for any
reason, a contracting agency is unable to do the job itself.
The point of view with which we are approaching this job is quite
simple.
We recognize that quantity of production and speed of delivery of needed military goods are the first essentials, and that contracting agencies shoulcl put them first. On the other hand, we do
not believe for one moment that prices and more particularly costs
should be forgotten. Costs are important not only because of the
effect on the taxpayer, but also because high cost for a particular
item frequently means that materials, machinery, labor, and management are being used inefficiently. In other words, if we compare the
prices of several companies for the same item and find that they
differ widely, it may mean that some of the companies are realizing
large profits, or it may mean that the costs of some companies are
very much higher than those of others. If the costs are higher, we
must know it and know why they are higher. If we know why they
are higher, we can either see to it that suggestions for more efficient
operation are made by our production people, or we can consider
whether the high-cost companies should not manufacture something
else which they can handle more efficiently.
In some instances, of
course, we may conclude that our need for the particular item is so
great that we must have the output of all the companies, high cost
and low cost, and pay the prices necessary. In many other instances,
moreover, to carry out the policy of bringing large numbers of smaller
concerns into war production, particularly on standard and semi-

4052

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

standard commercial items, we shall have to pay prices higher than

otherwise would be necessary. But we shall know why it is necessary
and make our decisions accordingly.
There is one important function which cannot be performed effectively by reviewing contracts after they have been executed; that
is the examination of specifications to reduce the use of scarce materials
or to make production easier and faster. We shall need to make
certain that this job is done in other ways.
There, very briefly, are our plans. Before I undertake to answer
the questions which may be in your minds, there is one thing further
I should like to say. It is our hope that this Contract Review Branch
can work closely with this committee and other qualified congressional
committees so that we may have the benefit of your conclusions and
It is my understanding that a liaison man between
suggestions.
the War Production Board and your committee has been appointed.
You may wish to make your suggestions through him, but please
understand clearly that we want to do this job in a goldfish bowl and
that we shall welcome your suggestions.
I would like to add a few words on the statement that Mr. Nelson
made before a meeting of the National Association of Manufacturers,
in New York recently, which has been somewhat misquoted and
somewhat misinterpreted. In addressing a group of manufacturers,
he told them
Senator Brewster (interposing). Was that a public or private
meeting?
Mr. MacKeachie. It was quoted in the press; I assume it was
public.

Senator Brewster. There are various stories in the press about

First it was said it was a private meeting. Then the reports appeared. That doesn't always prove it was a public meeting because
it is in the press, as the gentlemen of the press will testify.
Mr. MacKeachie. I don't know whether it was an oft-the-record
meeting or otherwise.
The Chairman. It was a most astonishing statement and I will
be very much pleased if you will elaborate on it some. I am of
the opinion that neither you nor Mr. Nelson are entirely without view
of the cost, that is, that you are interested in the cost as well as you
are in the production, although there will be possibly a necessity sometimes, particularly if you make the right kind of distribution of these
contracts to the little contractors, the little manufacturers, probably
that you will have to pay more than you would on a mass production
basis, but it does seem to me, and I hope you will elaborate on that,
that the cost is of vital interest to the country. We are going to feel
that vital interest on the fifteenth of March.
Mr. MacKeachie. I am greatly in accord with what you say. I
believe the direct statement that Mr. Nelson Avas Avidelv quoted on
was one which went something like this. He said, "To hell with
the cost, let's get the production started."
The Chairman. That is a most astonishing statement.
Mr. MacKeachie. You must bear in mind that he was addressing
manufacturers, and what he \vas trying to bring forward to them was
that they should not quibble about prices or the contract terms, but
to get the job started and do the arguing afterward.
it.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJVI

4053

The Chairman. That, of course, puts another light on the situaHe wanted them to go to work and discuss costs afterward;
in other words, he didn't mean that it didn't make any difference
what it cost he meant the manufacturer should think about getting
tion.

the job done before he argued cost. Is that the idea ?

Mr. MacKeachie. That is exactly true.
The Chairman. All right. That gives it a much better, a much
better viewpoint.
Mr. MacKeachie.
are very definitely of that opinion.
don't want to wait and negotiate a contract while an argument goes
on between the attorneys of the manufacturer and the contracting
officers of the War Department over clauses and prices and terms.
want the job to be started and then do that arguing afterward.
The Chairman. Well, I hope you won't let the manufacturers
take the same attitude that the Bethlehem Steel Co. has taken, that
the contract and their pound of flesh is much more important than
They have held up this steel production
the production of steel.
trying to get the last "i" dotted and the last "t" crossed in the contract, and so did the Aluminum Co. of America, and so did the
copper people.
don't want that repeated from here on.
They
ought to be just as patriotic as the boys who don't negotiate the contract and work for $21 a month.
They are to be shot at.
Mr. MacKe^vchie.
feel our job is to assist these contracting
officers of the services in getting a deal made, no matter what kind of
deal it is, even if it is a vague letter, so that production may get
started, and then to supervise the placing of the actual contract in
the proper way after the job is going.
can't wait 2 months while
the contract is being negotiated.
The Chairman. That is absolutely correct.
Mr. Fulton. And it is in order to protect against that very inequity
of cost that you are setting up this method of contract review?

We

We

We

We

We

We

Mr. MacKeachie. That is right.

Mr. Fulton. So as to make sure that the cost is not exorbitant?
Mr. MacKeachie. We are interested in this contract review both
in price and in cost. They don't always go together. We want to
be sure that the cost is proper.
As Senator Truman says, it may be
necessary for us to pay some costs which may appear to be out of
line in order to get into production all of the small facilities of the
country.
But we also want to be sure that the relationship between
price and cost is proper.
The Chairman. Do you expect to decentralize this purchasing program so that we won't have Washington cluttered up with brokers
and front men and have these little fellows coming here stumbling
over one another, not knowing where to go? Are you going to them,
or have them come here ?
Mr. MacKeachie. We are going to assist the armed services in
getting trained procurement people out into the field to do as much
of the work as possible in the field.
It can't be done in Washington.
The Chairman. I was also interested very much in the statement
you made about the audit. In our investigation of the camp-construction program we found that the Construction Quartermaster
usually had the auditors on hand to do exactly what he told them and
tliey were not there for the purpose of making an audit in the in-

4054 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Government; they were there to obey his orders and
as he told them, and not for the protection of the Government. I hope you will set up an auditing program under this authority which is given by the last war bill, so tliat the auditors can
call a halt on the unconscionable waste of money that has been going
on in these expenditures.
Mr. MacKeachie. As soon as that bill is passed we will have the
program set up, unless it has been passed in the last day or two.
The Chairman. And you will have the auditors for the purpose of
auditing and giving you the facts so that you can act on them accordingly and not to obey the orders of somebody in the AVar Departterest of the

do things

ment ?
Mr. MacKeachie. The audit will be set up under Dr. Sanders,
who is professor of accounting at the Harvard Business School.
The Chairman. And it will be an independent organization?
Mr. MacKeachie. It will be an independent organization and we
will ask the auditing staffs of the War and Navy Departments to
carry on audits where we believe it is necessary, and they will be
carried on under the supervision of Dr. Sanders' group.

Senator Brewster. You will have a sufficient staff so that he could

supervise the audit, although he might not handle the detail work?
Mr. MacKeachie. That is true. He will have enough staff so that
he can direct the audit or direct the method under which the audit
is carried out.
Now, we have prepared and put in the hands of the
contracting agencies a rewriting of a cost formula which will be used
in making these audits, in determining the proper items of cost which
can enter into war production.
The Chairman. Now we are going to get somewhere if you will
<do that.

Mr. MacKeachie. You can't include, for example, credit expense

or sales expense or advertising under those things. We want all of
the auditors
Tlie Chairman (interposing). Or brokerage.
Mr. MacKeachie. To have the same formula.
The Chairman. I say "or brokerage."
Mr. MacKeachie. Or brokerage, I quite agree with you.
Senator Brewster. Have you analyzed the accounting methods of
the War and Navy Departments, for instance, to see to what extent
thev corresDond?
Mr. MacKeachie. They are not entirely alike, and we are meeting
this afternoon with the chief auditors of the War and Navy Departments, with Dr. Sanders, to set up a uniform reviewing and auditing
system.
The Chairman. Don't you think you ought to take the General
Accounting Office into consideration in that also?
Mr. MacKeachie. They have been consulted on this right along.
They have this formula under study now.
The Chairman. The whole thing, in the long run, has to go
through the General Accounting Office and it seems to me that they
ought to be taken into consideration when you set up this auditing
program.
Mr. MacKeachie. That

is riijht.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4055

tlie Congi'ess, and I am sure the counwould be interested, Mr. MacKeachie, in as frank a statement
as you feel now proper, as to change in the system under the new
organization. Under the old, O. P. M. was merely advisory; contracts over $500,000 were referred to O. P. M. for advice.
The
system proved cumbersome and unwieldy. We now have a new
system under Mr. Nelson and 3'ourself operating it. I think the
jnore clearly you can show us in the country how this is to correct the
defects, the better. Mr. Nelson apparently was not in a position to
speak too completely when he was here about how he proposed to
infiltrate and integrate, and we didn't press him in the matter, in

Senator Brewster. I think

try,

the questioning, because perhaps it involved certain delicacy of relationships with the various departments. How much is it now possible to say as to how we are going to have an integrated organization of procurement under the direction of Mr. Nelson?
Mr. MacKeachie. I think we can be pretty definite on that now. I
would like to take the Navy as an example, where the whole job is
completed. Admiral Robinson has been appointed a vice admiral in
charge of material, which, in the Navy, means procurement and

Admiral Robinson has under him Mr. Folsom who was

formerly deputy in the Division, who will be in charge of purchases
for the Navy and will, under Admiral Robinson and Mr. ForrestaFs
direction, see to it that adequate procurement personnel are installed
wherever it is necessary to add to those now in service.
Senator Brewster. He was transferred from your division to the
Navy so he is now a Navy employee ?
jDroduction.

Mr, MacKeachie. That is right, sir.

Senator Brewster. But was, shall we say, recommended or designated by Mr. Nelson ?
Mr. MacKeachie. That is right.
Senator Brewster. Does the power of removal continue ?
Mr, MacKeachie. The power I don't quite follow you.
Senator Brewster. If Mr. Folsom did not operate to the full satisfaction of Mr. Nelson, Avould it be possible for Mr. Nelson to have a
change ?
Mr. MacKeachie. Under Mr. Nelson's authority I think it is quite

clear that if the purchasing is not carried on satisfactorily he certainly would make a change.
Senator Brewster. I don't anticipate these difficulties, but, after
all, it is the only way Mr. Nelson can be accountable, if he not only
has the power of designation but of removal. I assume that is implicit in the situation.
Mr, MacKeachie. Our basic idea is not to set up a third organization to do procurement, but to attempt to build up the procurement
agencies of the War and Navy Departments so that they can keep
in step with the program as it grows.

Senator Brewster. Yes.

Mr, MacKeachie, Now the policies will be generally set up under

a so-called Purchases Policy Committee, which "vyill consist of Mr.
Folsom in the Navy, Mr. Browning in the War Department, Mr.
MacPherson in the Treasury Procurement, and myself; and we will
make such recommendations as are necessary to Mr. Nelson.

4056

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. Does that clear on priorities as between the

various departments ?

Mr. MacKeachie. No; the military priorities between the departments are determined by the Joint Board and the Army and Navy
Munitions Board.
Senator Brewster. And what is the relation of Mr. Nelson to those
groups ?
Mr. MacKeachie. Under the Presidential order, the Army and
Navy Munitions Board reports to the President through Mr. Nelson.
Senator Brewster, Under the audit and review, you are attempting to secure a preview of the contracts before tliey are executed?
Mr. MacKeachie. We have, in the case of the Navy where we have
proceeded pretty far, delegated a pre-clearance of contracts to Mr.
Folsom, and he has added to his staff one of the men from our Contract Review Branch who is accustomed to the method of clearing
and of reviewing contracts prior to execution, and that will be done
under a coordinated policy between our office and the Army and Navy.
Senator Brewster. And sufficient view will be kept of the operation of these contracts so that the possibility of renegotiation will be

always in view ?
Mr. MacKeachie. It will be always in view. Considering the vast
number of contracts that are placed, it may be sometime before we
get to a lot of them. We must't look for too quick an action on quantities of contracts, because some very careful checks must be made.
Dr. Sanders has in mind this basic formula, that he will review
series of contracts, also review the relation of price and cost between
manufacturers making the same item, that he will match those results with the earnings statements of the companies involved and
from that get a pretty good working basis as to whether a special
audit will become necessary.

Senator Brewster. What do you say in procurement as to the relative advantage of these two policies, (1) to place a specific limit on
the profits to be received from any contract, (2) to recapture through
the provisions of the excess-profits law the profits that may seem ex-

any corporation?
Mr. MacKeachie. We have a very definite opinion on that. First,
that it is impossible to develop any limitation policy on profits on
particular contracts which would be equitable because of the differences in type of work on different contracts. The application of the
same percentage profit limitation to a man turning out links for
machine-gun belts, where it is an automatic, rapid-fire operation,
naturally is quite different from the man turning out a battleship,
where he has a vast plant investment and a 3-year job, with varying
conditions throughout the operation of that work, would have very
different results. There are a number of other factors which would
make it difficult to set any formula which would be at all sound. For
instance, one man maj^ be operating a })lant which has been built by
Government funds, and another man may be operating a plant in
which he has all pi his own money. We feel rather strongly that
the soundest way to do it is to be sure, through this audit and
review operation, that the prices are kept on a reasonable level and
that any excess profits beyond what wje can determine here be
recaptured under taxation of surplus profits.
cessive of

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4057

Senator Brewster. You might have a corporation with the same

capital investment that would have contracts which might turn over
in three months, while some other corporation, building a battleship,
would be 3 years.
Mr. MacKeachie. That is right.
Senator Brewster. If you have the same profit limitation on the
contracts, one fellow would multiply that profit by 10, while the
other fellow would be getting only 3 percent in that period.

Mr. MacKeachie. That is right.

Senator Brewster. So the inequity between the contractors would
become very marked.
Mr. MacKeachie. I think that any formula legislated on that
basis which would cover all operations would really in a way legislate excessive profits to some manufacturers.
Senator Brewster. Yes. I think that is very clear.

The Chairman. Senator Mead ?

Senator Mead. Mr. MacKeachie, No. 2 on this list is very interesting in that it indicates that contracts for standard commercial items
may be placed with smaller manufacturers. Taking it, together with
item No. 1, "That war procurement contracts be placed by negotiation rather than upon the basis of competitive bids," it looks to me
like an opportunity to bring every idle plant and every dying plant,
large and small, into the defense production proo;ram. Heretofore,
with competitive bidding and large contracts, no funds and no loans,
the smaller and intermediate fellows couldn't get into the picture at
all, but by negotiation rather than competition, and by contracting
for standard commercial items with the smaller manufacturers, you
have the authority practically to put every plant in the country to
work.
I wonder if that particular task has the right and the adequate
personnel and if it is being pursued with all the force that it really

demands.
Mr. MacKeachie. It is being pursued. I wouldn't want to be so
optimistic as to say it would put every plant in the country to work,
but it would certainly result in putting a great many small plants
to work, giving them orders for somewhat easy items
standard or
semistandard commercial items where in the past they may not have
been the low bidder and may not have gotten that business. I think
you are aware of some cases of that kind.
Senator Mead. To illustrate, we have had before us a manufacturer of the jeep car, the man who pioneered it, the man who, our
committee was told, really developed it; and as a result of the War
Department's methods of negotiating contracts, as I understand it,
under the old O. P. M, system, he lost his contract, he ran out of
work, and a large former automobile manufacturer, with plant
built entirely by Federal funds, with a loan from the R. F. C, took
over the contract.^ We found that factory working, while the factory
up here at New Bedford, Pa. Butler, Pa., was closing down.
It occurs to me that under this formula we could be manufacturing
the jeep cars in both these places, using the plants, the skilled men,

and the added productivity.

1

See Hearings, Part

7,

pp. 1967-1992, 2067-2075.

4058

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. MacKeachie. That is generally true. There is one particular

factor that comes into that situation, and that is the necessity for
standardization of those cars among all of the factories making them,
because when they go out in the field, they must have one standard
Some of the armies in the field
set of parts that will fit all the cars.
have learned, to their sorrow, that that is a very necessary thing.
Senator Mead. Of course, in one instance they may manufacture
for the United States Army and in another instance they mi^ht
manufacture for lend-lease, for the Chinese Army or for Australian
service.

Mr. MacKeachie. In that case, they wouldn't have to be standard.

Senator Mead. That is right, and in either case, it seems to me
pitiful to have one plant operating on a 24-hour basis, built entirely
by Government funds and operating as a result of a Government
loan, and the other plant, a plant which pioneered in this work,
closing down and laying off the men, and presenting not only an idle
plant, but an idle industry, an idle town, a town that will be making
application for the unemployment insurance fund that has been set
up by the Government so that those skilled workers, instead of working for the defense program, will be drawing their $24 a week, I
believe

it is.

Well, anyway, I am rather encouraged by item No. 1 and item

No. 2, providing the Army and Navy will cooperate, and providing
you have an audit division that will see to it that placing the contracts by negotiation will not lead to corruption.
Mr. MacKeachie. That is very necessary.
Senator Mead. Eliminating competition, competitive bidding, and
substituting negotiation puts a heavy load on the auditing division,
and we ought to be very careful about that.
Mr. MacKeachie. And it requires very careful supervision of the
contracting ])ei"sonnel.
Senator Mead. That is correct.

Now, under Mr. Mehornay in the first place, and under Mr.
Odium's direction in the second instance, we established a fairly good,
efficient

organization throughout the country to disseminate informa-

and aid small and intermediate business in acquu'ing a knowledge of what is going on. I understand that some oj'ders have been
issued eliminating these coordinators, reducing the personnel in some
instances, setting up more or less inactive advisory committees. It
occurs to me that any move in that direction is a decided loss, and
we ought to maintain and augment these officers located throughout
the United States in all their efficiency in order to bring more of
these plants into the defense picture, in order to keep more of our
skilled workers working, and in order to do the job better and
quicker than W(^ would do it without them.
So T hope that the field orgjmizalion of coordinators and the
tion

coordinatois' aides will not be reduced, but will bo increased.

ISIr. MacKeachie. I know of no tendency to reduce that oi-ganizaAs a matter of fact, we expect a very much
tion, Mr. Senator.
closer woiking arrangement between those officers and the field
procurement officers in the services.
Senator Mead. I don't i-ecall the name, but a copy of a letter
reached n)y office just a few days ago, indicating that tliey were

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4059

set np advisory committees

some places.
Mr. MacKeachie. There may be some change in the method of
organization, but it is only to speed up the work, not to eliminate

going to eliminate the coordinators and

them.
Senator Brewster. Hasn't there been an order consolidating Priorities and Contract Distribution ?
Mr. MacKeachie. No; the Contract Distribution Division and
Production have been combined.
Senator Brewster. But not priorities?

Mr. MacKeachie. Oh, in the field ?

Senator Brewster. Yes.
Mr. MacKeachie. I see what you mean. They are going to combine the various field offices of the AVar Production Board so that a
manufacturer may go to one office and discuss his contract distribution problem and his priorities problem and whatever problems he
may have. In the past, the Priorities Division has had a separate
field organization.

Senator Mead. That

is

right.

And

the Contract Distribution Division had a

separate field organization, and one or two more, maybe. They are
all being combined so that they are operating in the same region in
the same city, being put together so that there will be one place to

Mr. MacKeachie.

go.

Senator Mead. It seems to me they all came under the coordinator,

and the order which I heard about was an order to abolish the
coordinator.
JNIr. MacKeachie. I can't tell you the details of how that will be
worked, but what change will be made I am sure will add to the

efficiency of the operation.

Senator Mead. Yes.

Mr. MacKeachie. That is what Mr. Nelson has in mind.

Senator Mead. It Avould be a decided loss if this organization,,
built up over a period of months by Mr. Mehornay and later by Mr.
Odium, was reduced and diminished. It really should be improved
and made more effective.
Under this authority which you may exercise, according to theseitems, I suppose that a given plant manufacturing fans, for instance we are both familiar with that illustration.
Senator Brewster. Fans are out, Mr. Senator.
Senator Mead. Yes. AVell, I am talking about fans that are very
vital to the cooling off of the workers in the hold of a ship, for
instance, but we have many industries and many plants in the country that are manufacturing electric fans air-cooling fans, air-conditioning fans, exhaust fans, and all sorts of fans that are very
necessary in our battleships and in our war industries. Some of these
plants are large enough to build tanks and just build fans as a side
line, whereas, if they built nothing but tanks they would build more
tanks. There are other plants that are so small that they couldn't
be utilized to construct tanks they could build more fans, with

the result that the little fellow who isn't getting a contract to build
fans and can't get a contract to build tanks, would actually be working and employing men, utilizing his plant, and the big fellow wha

311932 42 pt

10

22


4060

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

can build tanks and is building tanks would be building more tanks
and not some tanks and some fans.
So it occurs to me that if there were a reallocation of some of these
contracts, we could put the plants to work at a maximum of capacity.
I learned of a plant that was manufacturing a very large article
for the War Department, but it was also manufacturing gas masks,
and there were a hundred and one other plants, some of them small,
that were looking for jobs and could build gas masks, but this big
fellow, who could build other articles, had the big contract for
building gas masks. That is an improper sorting of the contract
or distribution of the contracts.
It reminds me of the difficulties that were encountered by this
manufacturer of jeeps at Butler. We understand that we are 3 or 4
months behind in our deliveries to Russia. I don't know whether
that is so or not. We understand that Lend-Lease could contract
with this Butler firm for jeeps for the various countries that we are
supplying. They wouldn't have to be standard according to Army
regulations, and yet according to the information brought to our
committee, that plant was allowed to shut down. The management
of the plant was here before us and said "When we finish this order
and it is about to be finished we won't have another order." That
is something we don't want to happen, and I think it can be corrected by item No. 1, which permits the negotiation of contracts, by
item No. 2, which will permit the distribution of small commercial
items to these smaller independent plants. But to do it, we must
maintain and increase this field organization that has been built up
and provide the information, provide the advice, and sometimes
provide the engineering and, through Jesse Jones or someone else,
the money.
Mr. MacKeachie. Those two policies are exactly for that purpose.
Senator Mead. I am very much encouraged by them.
Mr. MacKeachie. The size of the problem itself, with these new
appropriations coming through, will help a great deal, because that
program, cannot be placed with any speed of execution unless all of
the facilities of the country are used and used to the best advantage.
Going back to your fan case, it certainly isn't sound to try to
convert a small plant to making something else and allow fans to
be made in the large plants which can be converted and which have
the engineering skill and management to convert, whereas the small
plant hasn't in most cases.
Senator Mead. That is quite right.
You said a moment ago that the Ai-my and the Navy were cooDerating in the procurement of material and equipment and supplies,
and I was wondering if the same applies to the Maritime Commission.
Do you exercise the same authority over their procurement
that you do with regard to the Army and Navy ?
Mr. MacKeachie. I believe that the Presidential order covers all

war pi'ocurement.
Senator Mead. That would include defense housing, for instance?
Mr. MacKeachie. We have very close working arrangements at
the present with General Fleming, and he is clearing procurement
with our

men

constantly.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4061

Senator Mead. What about this corporation that was set up sometime ago, called Ships, Inc., \N'hich was to produce the sea otter type
of ship?

Is that in operation?

Mr. MacKeaciiie. 1 am not familiar with that. I don't know, 1

don't know whether it was ever operated or not.
Senator Mead. It has an office. It is located down here in Washington some place, and they were to build a ship that was probably
outside of the ships required and the specifications now permitted
by law as far as the ^Maritime Commission was concerned. This was
to be a smaller ship. It was to be a ship that was to be hastily constructed, and it was supposed to make its contribution to shipping
in this emergency period.
Mr. MacKeachie. I will investigate that and check up on the
status of that company and see what it is doing.^
Senator Mead. It seems to me that the head of the Dunlop Tire
Corporation was made head of this organization, and he has set up
some kind of organization under him, but whether he is functioning
and whether he comes under your direction, I do not know. It seems
to me that with the authority that Mr. Nelson has, consolidating
priorities and allocations, and so on, within his jurisdiction, he could
pretty well direct all of these procurement agencies, and he could
establish the type of house by exercising priorities and by determining the materials.

Mr. MacKeachie. The men from the Purchases Division are workall the time on their specifications for equipment to go into the house.
Senator Mead. That will be a very helpful contribution because
our committee saw all kinds of houses in the course of our investigation, some of which never should have been built. I think, by
exercising a little authority, by close cooperation between the two
agencies, and by exercising all the authority that is inherent in this
new Board, we may get a better brand of defense housing and also
do a much better job. But above all, we must have the cooperation
of the various agencies with your agency.
Mr. MacKeachie. We found that generally to be pretty complete
-in tliis new set-up.
Mr. Patterson and Mr. Forrestal have worked
very closely with us in the Army and Navy, and Treasury Procurement have been working extremely closely with us. Those are the
three big buying agencies. We are very well satisfied with the way
they have worked with us.
The Chairman. Senator Herring?
Senator Herkikg. Mr, MacKeachie. I assume you are not familiar
with the "jeep" deal that has been talked about, are you?
Mr, MacKeachie. Yes to a reasonable extent. It has been talked
about for a long time.
Senator Herring. If they had let a contract with one manufacturer
at that time, the War Department could have let it with the originators and didn't need this authority.
Mr, MacKeachie. As I followed the negotiations, I think their
judgment was pretty sound. I would be glad to get a complete reing with those people

Under date

War

of February 16, 1942. Stanley F. Teele, Consultant, Division of Purchases,

Production Board, submitted additional information on Ships, Inc., which appears in

the appciiuiX uu

p. -iiiji.

4062

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

port on that.
a while back.

I have one in the

office

on

it.

We

checked

it

again

Senator Herring. I think you will find that the originators didn't
have a man sitting here over in the War Department, and that is
probably the reason that they didn't get the order.
Mr. MacKeachie. I am afraid that isn't true, Mr. Senator. They
have had men down here. He certainly has been parked on my doorstep most of the time.
Senator Herring. Maybe it was the wrong doorstep.
Are these offices established by Mr. Odium being continued ?
Mr. MacKeachie. Yes.
Senator Herring. I hope they won't be as elaborate as the one they
established out in my State, where they wanted to take over two
floors and bought a lot of fancy rugs and high-priced furniture and
sat some people in there who had nothing to tell men who wanted to get
That was held up, you know, as a great relief to the
a contract.
little supplier, and if they had carried it out on the plan which they
started out there, I think they would have had more invested in the
office than the contractors got out of the contracts.
Mr. MacKeachie. I can't speak with authority on the reorganization of that Contract Distribution Division, as I told Senator Mead.
Senator Herring. I think Mr. Nelson should go into that.
Mr. MacKeachie. Mr. Nelson is working very closely on that.
Senator Herring. It certainly caused a lot of criticism out there.
Senator Brewster. Hasn't that been put under Mr. Scriven now?
Mr. MacKeachie. I can't tell you.
Senator Brewster. I think that is the case.
Mr. MacKeachie. It is under Mr. Harrison's division.
Senator Brewster. Mr. Odium isn't in charge of that work, is he ?
Mr. MacKeaqhie. No, sir.
Senator Brewster. Mr. MacKeachie, to what extent have you been
able to move in the direction of three shifts and 24-hour use of machine tools ? Our survey 6 months ago showed only about 50 percent
utilization of machine tools, while we were expending tremendous
energy in manufacturing more machine tools.
Mr. MacKeachie. The last report I saw on that showed a considerable progress. I can't remember and give you the figures.
Senator Brewster. But you do have that definitely in mind to get
the existing tools in as full use as possible. I tliink the}^ said 20-hour
use was feasible. They had to allow a little margin.
I have always felt the best measure of our success must be the
total disbursement month by month.
That is the barometer I have
always used.
We were around a billion a month. We have been
up to two billion, and I think this last month, two billion three hundred million. Our goal at present, I think, is four billion. Do you
ever deal in those over-all figures?
Mr. MacKeachie. Not in the actual disbursements; that is, my
particular Division does not. The contracts ])laced. however, are moving along very fast. January was quite satisfactory in the amount
of business that was actually placed aud started. However, there is
a lot of conversion involved, and sometimes your disbursement doesn't
come until a lonjr while afterward.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4063

Senator Brewster, Back sometime I think the country had a sense

of disillusionment through things "on order," which didn't worry Mr.
Hitler at all. The thing that really counts is the production. Through
all this last year or two 1 have insisted on that measure, feeling that
roughly what you paid out indicated what you produced. Is that a
fair measure ?

Mr. MacKeachie. It is.

Senator Brewster. And when you get to that, how rapidly would
you anticipate we could move toward a 4-billion-dollar-a-month production for defense?

Mr. MacKeachie. I would rather have Mr. Harrison go into that

whole production field. He is thoroughly familiar with it, and I
would be pretty thin on my accurate information.
Senator Brewster. That would be his field, then?
Mr. MacKeachie. After the business is placed, then that comes into
the Production Division.
Senator Brewster. As to how fast it is going to be turned out?
Mr. MacKeachie. That is right.
Senator Brewster. You agree that contracts placed is not as satisfactory a measure as disbursements?
Mr. MacKeachie. Well, of course, your final results depend on
disbursements, and yet the contracts placed have an important part in
the picture.

Senator Brewster. They are preliminary.

Mr. MacKeachie. You have the tooling up and starting the conversion before you get any production. It is highly desirable, of
course, to get those contracts placed.
Senator Brewster. I would say it is a little more desirable to get
the contracts executed. You must place the contracts, but if we rely
simply on that, we may be in a fool's paradise unless the stuff is
going to be turned out.
Mr. MacKeachie. There has to be a very close follow-up on the
contractor after he has taken the business to see that he does get to
work and meet his schedule.

Senator Brewster.

Would Mr.

Harrison, you understand, have an

how

the monthly production might rise?

Mr. MacKeachie. I think he has a very accurate picture of the

estimate of

whole production situation.

Senator Brewster. Perhaps we will hear him a little later.
A matter which has always interested me has been the use of alternative materials, to which one of your items refers. Undoubtedly,
On
steel is much more desirable in the construction of many boats.
the other hand, wood may be used and always has been used. There
has seemed to be a tendency in the departments of each one thinking,
"There is enough steel for me and I want the best thing I can get,"
without realizing in fact, I think an Admiral testified he didn't
realize that there was any steel shortage as far as he was concerned.
Perhaps there wasn't if he had a proper priority, but with the overall picture of Army, Navy, and merchant marine, there obviously
wasn't going to be enough to go around.
Who deals with that particular problem as to whether the twilight
zone of boats between 100 and 200 feet, for instance, shall be wood

4064

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

or steel, and the types, and so on

organization ?

Mr. MacKeachie. Well,

Who

wonld deal with that

in

your

think almost everyone would be involved

in that. You start with the Federal specifications and then you go
down to the raw material division to determine what materials are
available and are best adapted for those uses and what is the most
important use of each material, and also the speed of construction
and procurement of various materials.
Senator Brewster. You have all of those divisions in your organi-

zation?

Mr. MacKeachie. In the War Production Board.

Senator Brewster. And you are taking the responsibility for that ?
Tor instance, I found that in the Brooklyn Navy Yard j months ago
they couldn't get steel for battleships.
the matter, but they couldn't get it.

They

didn't

know what was

Mr. MacKeachie. They have had some slight delays, but generally speaking, they are in pretty good shape.
Senator Brewster. In their requirements.

You

think that

is

over-

come ?
Mr. MacKeachie. As far as the Navy is concerned, I think they
up to schedule on plate.
Senator Brewster. What about aluminum?
Mr. MacKeachie. Aluminum has been pretty well eliminated from
everything but planes or some uses in the Navy where you just can't
make a substitution without redesigning the whole ship.
Mr. Fulton. In that connection, I understand that you proposed
lecently to be eliminated a specification that had been set up to have
aluminum sheet unnecessarily used in connection with the preparation of trucks to haul gasoline to Army aviation bases. Do you know
are pretty well

of that?

Mr. MacKeachie. Yes.

Mr. Fulton. Why did the Army want to use a material that was
between five and six times as expensive and which was so scarce for

Wliy was it necessary ?

Mr. MacKeachie. When they designed that truck and wrote that
specification, there was no shortage of ahiniinum, and the reason

a use of that type ?

for using aluminum was that those trucks to service planes are sent
out in the field with the Air Force, out in the theaters of war and
their flying fields, and lightness is highly desirable.
Mr. Fulton. "V\nien did you make them make that change?
Mr. MacKeachie. They made the change when it became evident
that aluminum nmst be eliminated from every possible use except
planes. This was one of the later ones eliminated, and it did require
i-edesigning the truck. The truck was designed with its axle strength
and frame for a very light metal, and it had to be completely redesigned for the use of steel.
Mr. Fulton. When was it actually eliminated?
Mr. MacKeachie. I guess the last contract which was changed
was about a month ago, in my recollection several Aveeks ago.
Mr. Fulton. And the time that the aluminum shortage was discovered was certainly not later than May.
Mr. MacKeachie. It took considerable time to redesign that truck.
The redesigning, as a matter of fact, is not complete yet. There

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

were a

lot of semifabricated parts to the truck that

might

4065

better be

used up.

Mr. Fulton. But they were fabricated in May ?

Mr. MacKjeachie. Partially; j^es,
Mr. Fulton. My information was that very little had been done
as of that day.

On

the last contract, which is now being comthat, we either had to discard a lot of the
other parts which were designed for the use of the aluminum for
the body or complete the fabrication job of the whole job with
the aluminum sheet.
Mr. Fulton. But you are talking as of November, December, or

Mr. MacKeachie.

pleted,

when we checked

January.
Mr. MacKeachie. That

is

right.

Mr. Fulton. And I am saying that as of May, when the shortage

was discovered, when I think the Army knew of it, there weren't
very many parts that were made, and as far as changing specifications was concerned, all the oil companies were using steel sheet
in their own trucks and such specifications existed. Isn't that true?
My. MacKeachie. That is right.
Mr. Fulton. As a matter of fact, it took more new specifications
to make the new light truck than it would have taken to make the
old truck.

Mr. MacKeachie. That is true, yes; if you want to eliminate

entirely the desirability of a light truck for foreign use. For domestic use there is no problem; you can use any kind of truck.
Mr. Fulton. I took it only as an example, Mr. MacKeachie, along
Senator Brewster's line of using materials unnecessarily. I think
if you took the weight of that sheet steel and the weight of the
ahnninum sheet, and compared tliat to tlie total weight of the truck
with its load, you would find that the saving was a rather negligible
percentage, certainly not one that would warrant the use of so scarce
a material at so great expense.
Mr. ]\IacKeachie. That is wh}^ it was cut out.
Mr. Fulton. It was cut out later because you told them to and
not because the Aruiy realized it. Isn't that true ?
Mr. MacKeachie. That is true. The Army, of course, would like
to have the most efficient pieces of equipment that they could
possibly get. and they do resist, and properly, because it is their
function to design the best pieces of equipment, and it is our work
to convince them that they should be changed when materials are

more needed for other purposes.

Mr. Fulton. That is only one example of many

in

which you might

be interested, particularly in connection with this statement that you

intend to examine the specifications of the War and Navy Departments
in order to reduce the use of scarce materials and to accelerate
production.

Mr. MacKeachie. That is not an intent. Mr. Fulton. That has been
foing on for some months, and about 150 of the rather important specications have been revised that is, the Federal specifications. A great
many of the Army and Navy specifications have been revised, and
then, oh, another hundred or so, of the less important specifications
;

4066

INVESTIGATION OF THE NATIONAL DEFEiNSE PROGRAM

have been revised to meet civilian practices. In the metals, in the

metallurgical job, a lot of work has been clone on that in the changing of alloys. That information, of course, can't be made public.
Mr. Fulton. With respect to that particular subject, there is definitely a position, is there, which as far as I can understand would be
a proper position on the part of the War Production Board, that the
War Production Board in the last analysis has the right to determine
the specifications and to overrule either the Army or the Navy in the
interest of obtaining mass production ?
Mr. MacKeachie. The War Production Board certainly has the
right to allocate the material.
Mr. Fulton. And to determine the specifications that shall be used,
if it disagrees with the War and Navy Departments.

Mr. MacKeachie. That is right.

Mr. Fulton. And, in the case of this aluminum

Army, "You shall not use

Mr. MacKeachie. That was done.

say to the

Mr. Fulton. If that

it

truck,- the right to

for that purpose."

done, would it be possible to obtain this

goal with the specifications that exist in the

isn't

fifty- to sixty -billion-dollar

War

and Navy Departments today ?

Mr. MacKeachie. I think, taking aluminum as an example, the goal

can be reached. That is, the supplies of aluminum will be adequate foi*
the plane production, with, the eliminations that they have made for
aluminum for other military materials. Previously aluminum had
been eliminated from all nonmilitary uses. Now it has been eliminated from a number of military items in which it is highly desirable
but for which if we haven't got it, we can't use it.
Mr. Fulton. But taking the specifications as a whole, do you think
that with the existing specifications, we can make the quantities of
material that we are laying our plants for this year?
Mr. MacKeachie. There will have to be some further changes.
Some of the hardeners used in armor plate are becoming very scarce,
as you know, and there may have to be some changes from one hardener to another which msij be available in greater supply. There may
have to be greater changes as the situation changes.
Mr. Fulton. In other words, right now we have or you know of
cases such as the alloys and others where, unless you do take control of
determining specifications and make changes, rather than merely
following the specifications that are now prescribed by the War and
Navy Departments, you won't be able to make the number of tanks and
the number of other items that are s]:)ecified.
Mr. MacKeachie. That is the final result, but I think the War
Production Board will handle it as a matter of allocation of the
material for certain uses and will accomplish the same thing, and the
s])<H'ifications would have to be clianged to meet the available material.
Senator Brewstek. It won't do them any good to specify the use of
ahnninnni if you won't let tliem liave aluminum.
Ml-. Fulton. But if you do let them have so much aluminum, they
could use the aluminum in accordance with their existing specifications.

Mr. MacKeactiik. Tliey are using aluminum for a

lot of specific

pui-poses.

Mr. Fulton. But that goes further than the question of allotment.
Mr. MacKeachie. It does.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4067

Mr. Fulton. Take the example that was given to one of the Senators as being a British practice. The Ordnance Department might
devise a gun which they were very proud of as being the finest gun in
the world, but for some reason relatively small portions thereof would
It wouldn't be a
be very difficult to produce in mass production.
matter of materials it would be a matter of machining and tooling
to produce that particular gun. If a concern, such as the automobile
companies, who are experts in the use of tools, should in effect be
asked by your division to state how they could produce the most guns,
and they should state to you, "If we could make this change, and that
change, and the other change in the specifications, we could produce
a gun whicli the Army would say is 3 percent less efficient, but we
could make 50 percent more of them," under those circumstances, as
I understand it, you liave the power or assert the power of changing
that specification, do you not?
Mr. MacKeachie. I think the power is there, but I also think that
the efficiency of the nuiterial produced is of very great importance,
and I am sure that we would be loathe to demand a change in specification by which we developed inferior war material.
Mr. Fulton. Well, the British have been forced to do that in many
instances.
Mr. MacKeachie,
are being forced to do it in some cases now.
Mr. Fulton. And we are also forced to do it by the lack of the

We

more superior article.

Mr. MacKeachie. An example of what

I think you mean is the use

of sponge rubber as a liner for tanks. It is highly desirable as a
protection, as a padding for the men in the tanks when they are going
over rough terrain. Yet with the shortage of rubber, that has been
eliminated for more important uses.
Mr. FuLTON. But an even more trying situation would be where
the smaller article couldn't be produced, because it might mean the
difference between putting a plant in production 2 months from now

and putting it in production 6 months from now.

Mr. MacKeachie. I tliink that that has been met in this way, that
wliere a change has been developed which has added to the efficiency
of tlie military product, they have continued production with the old
product and started in on the new development. As the war goes on,
we are going to find a lot of our military items which will need revision, but we can't stop production and revise those to the new specifications.
However, tlie new specifications can be started along with
the other.

Mr. FuLTON. But the new specification I am talking about is not

one to increase the efficiency of, say, a gun, but one which will actually
decrease it, but which will get it into the hands of the soldier who
needs it.
Mr. MacKeachie. That is a matter that will have to be settled between tlie War Production Board and the experts.
Mr. FuLTON. The only question I was asking was, do you assert the
power to change that specification?
Mr. MacKeachie. I believe that that power is mentioned in the
Executive order.
Mr. Fulton. So that in the event Mr. Nelson is of the opinion that
in order to get mass production, it is necessary to do away with what

4068

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

might be termed a gadget, he will do away with it and will so order

the procurement agency?
Mr. MacKeachie. Yes.
Mr. Fui.TON. In connection with the use of scarce materials, the same
thing would apply, would it not, to such as sponge rubber?
Mr. MacIveachie. It has been applied; yes. It is being applied
right now.
Mr. Fulton. Complaint has been made to the committee about tires
on some Government vehicles, that a Government vehicle, in any expected life that it would have, within the experience that we have had
in the war to date, would be used only a few thousand miles and has
tires that are built of the finest quality and of the finest character so
as to last 100,000 miles.
Mr. MacKeachie. That is quite true, and new specifications on tires
have been issued and are in effect.
Mr. Fulton. And they are changing those on those Army vehicles ?
Mr. MacKeachie. They are very greatly changed.
Mr. Fulton. Is there any check being made as to why the change
could not have been made a little before ?
Mr. MacKeachie. I think we are more interested in what we can
do with the future rsither than spending time checking what might
have been done in the past.
Mr. FuL-TON. But in order to determine what you can do in the
future, you have got to determine what confidence you can place in
the men who composed the past. Isn't that equally important for
the future?

Mr. MacKeachie. I do not think the specifications on tires becomes

a matter of confidence. It would be sound to have those tires for
safety's sake, if we had the rubber to spare. There is more than the
Now, the new specifications are adequate, but
life of the tire involved.
they are pretty close to the line of adequacy, I feel.
Mr. Fulton. But you know probably the best way to build any
There is no sense in building one
article is like the one-horse sliay.
part of a thing that will outlast the usefulness of another. I do think
on many of these Government vehicles and other things that we have
seen it is quite apparent that some parts are built much more expensively than the average part in the car, and they would not be anything
but junk because of the defectiveness of the other parts of the car. Is
an over-all plan being made to go into those ?

Mr. MacKeachie. There is no plan being made. It has been made,

and, of course, there are thousands of specifications and we have a very
considerable staff of metallurgists and other experts who are working
with the Federal Specifications Committee. In fact, several of our
staff are members of that committee, working with the Army and
Navy constantly on revision of specifications. What you decide today may not be true tomorrow. For example, we eliminated in the
early stages the use of zinc, when there was a shortage of zinc, and
used tin. That had to be reversed. As the zinc production came into
being and the tin became scarcer, there had to be a reversal. That
woT'k goes on all the time.
Mr. Fulton. But you are going to undertake to force the change;
you are already doing it and you are going to fon-e an even greater
amount of it ?
Mr. MacKeachie. Yes.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4069

Mr. Fulton. I could cite you innumerable examples.

Mr. MacKeachie. So could I.
Mr. Fulton. I can cite innumerable examples that have been given
to me of what looked like ridiculous specifications.
Mr. MacKeachie. Some of them on investigation aren't as ridiculous
as they look, however.
Mr. Fulton. Take for example the long staple yarns, the finest types
of yarns being used for the underwear of the soldiers, the type that
those men would never buy, and which commercially you couldn't sell
to them in the market. There is no particular reason that the Government should pay a very large price for that particular type and thereby
denude the commercial mai-ket of it and at the same time have a surplus
of some other type of yarn that would serve equally well. And you

can go down the line.

Another specification I have heard of over in housing, which I think
you are in the process of changing, is that somebody decided that you
should use steel instead of cast iron, on the theory that there was a
shortage of scrap and use more weight in the steel than you do in the
cast iron. I cannot, for the life of me, understand how that could be
justified.
I think wo could all find hundreds of them.
What I meant by the questiim was, isn't it important for the future
to go into the past and get rid of some of the people who made some
;

of these rather ridiculous specifications ?

Mr. MacKeachie. That might be. But I don't say that a man is unsound or ineffective because he wrote tailor-made specifications when
They can
liiat particular time called for tailor-made specifications.
still be changed and he can be changed if he is directed properly as to
Avhat

we want.

Mr. Fulton. Is he being changed ?

Mr. MacKeachie. I say the man can be changed if need be, but it
may be that only his mind needs to be changed an<l that he will be fully
informed on what is available and what needs to be done.
Mr. Fulton. Are the minds being changed?
Mr. MacKeachie. Evidently, the man did a very good job in designing this truck for overseas' service. It isn't his fault that we do not
have aluminum and that truck has to be redesigned. If it was redesigned, you wouldn't change the man but you would change the design,
Mr. Fulton. I don't know. The man who i:)erhaps originally conreived the design would necessarily have it. There is a very big cost
a tremendous cost and you must bear in mind, as I
to this program
think you have already stated, that when you design things in an attempt to reach theoretical perfection without regard either to cost or
to the ability to mass-produce, you have not done a very good job,
even though you may have reached perfection.
Mr. MacKeachie. As a matter of fact, the whole matter of equipment of troops has changed since then. When we had a draft Army,

to give them quite a lot of attention in the

of the niceties of life. But since then sheets have been eliminated
and a lot of frills of equipment have been cut right down to the bone.
The Chairman. You are going to make real soldiers out of them, in
other words.
Mr. MacKeachie. Yes, sir.
Senator Brewster. How much encouragement can you give us this
morning about progress? I think the country is pretty sick at heart.
it

was apparently necessary

way


4070

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

we are spending two or three billions a month. That

doesn't seem to interest the Japs or anybodj^ else. Nothing seems to
It seems that

happen.
Mr. MacKeachie. The progress of production, I think,

is

encourag-

ing.

Senator Brewster.

You

feel

encouraged over what you liave been

able to do to date?

Mr. MacKeachie. I saw the January figures, and they are coming
along nicely.
Senator i3REWSTER. Without going into specific items let us speak
simply of the things which seem to be necessary to stop tlie Japs
without being more specific, do you think we are getting production
of those items, when MacArthur's men are asking for half a dozen

planes, for instance?

Mr. MacKeachie. Well, without going into military strategy, I

think the problem is to fly those planes over there getting them there
rather than having the planes.
Senator Breavster. Are we getting production of fighting and
bombing planes which sometime in the reasonable future is going to be
a match ? Is it fair to ask that question ?
Mr. MacKeachie. They are going to be a match.
Senator Brewster. A match for what the Japanese are doing?

Mr. MacKeachie. Yes we definitely are.

Senator Brewster. That is what, I think, the country' very earnestly
wants to know. It is a tragic picture when Amei'ica is seemingly im-'
potent in the face of this whole picture.
The Chairman. When a buck private can say to the country that
6 or 60 planes would be much more useful right now than 26,000 at the
end of the year, I think something really ought to be done about it.
Mr. MacKeachie. I think that is a matter of the military handling
;

war effort.
The Chairman. Sure.
Senator Brewster. But you are getting all tlie requests and requisitions necessary? The Army and the Navy are telling you what they

of the

want?
Mr. MacKeachie. Yes.
Senator Brewster. So it really is up to you to get the stuff ?
Mr. MacKeachie. Yes.
Senator Brewster. It isn't any lack of specifications or stipulations
as to what is needed ?
Mr. MacKeachie. Not now, it isn't. We have a very definite program, and a very definite goal; but that Avas lacking a good part of
last year.

Mr. Fulton. Senator Mead brought up a point to the connnittee

here a few days ago that interested a number of Senators, and that
was with respect to a comparison of the steam sliovel and crane industry with the automobile industry.
As he understood it, tlie conversion of tlie automobile industry is
something which we are trying very hard and with some success to
make now, but for which there had not been laid any extended prior
claims; and he was informed that in the steam sliovel and'crane induistry they had contracts which will carry them through a period to
about June of this year, and at that time you Avill have a heavy indus-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4071

try capable of about at least $500,000,000 a year production, and

particularly suited for certain types of heavy production, such as
tanks and parts of great weight. They really are more suited than
the auto plants because they have railway cranes and larger machine
tools and more of that kind of thing than would the auto plants.
Are there being made today concrete, specific, and practical plans
for the immediate shift-over of an industry of that character?
Mr. MacKeachie. Generally speaking, no, because our demands for
don't know
the things that they are now making are continuing.
when they will stop.
are building bases and plants and building
shipyards all over the world right now. You need cranes. That is a
particular item that we probably need more than anything else that

We

We

know

of.

Mr. Fulton.

And we

are not able to estimate

what our needs of

those will be?

Mr. MacKeachie. Yes; and they aj^pear now to be adequate to keep

that industry going substantially. Cranes are one thing they need
very badly. As we send troops out of the country and it is necessary
to arrange facilities for loading and unloading tanks and planes and
things like that, heavy eciuipment is very necessar3\
Mr. Fulton. Is the information correct that their contracts only
carry them through June? ^
Mr. MacKeachie. I cannot answer Ihat ofTliand. I will be glad to
check

that.^

Mr. Fulton. I know that some of the companies feel that they have
no certainty after June, and if they are going to be needed definitely
for a period of 6 months or 9 months more, the plans, even today,
ought to be laid to convert them.
Mr. MacKeachie. I can't on my own knowledge tell you that. I
have to limit my direct answers pretty much to what I know about it,
and that is the procurement of materials.
Mr. Fulton. Well, are there other similar industries of that character that are very apt by reason of shortages of materials and completion of their contracts to require conversion?

Mr. MacKeachie. Yes.

Mr. Fulton. In a ])eriod of, say, 3 to 6 months ?
Mr. MacKeachie. Yes. There is a meeting with the radio industry this morning, and there will be others coming along which will
need conversion.
Mr. Fulton. And plans are being made for the definite conversion
of industries to start, say, 6, 9, or 12 months in the future so that we
will not have a recurrence of the automobile situation?
Mr. MacKeachie. That is right.
Mr. Fulton. One other question. On this renegotiation, the committee also had a recommendation that in order to prevent profits
from the manufacture, after the war is over, of articles which had
been put on order before, that there be inserted in the contracts now
a clause which would permit the Government to cancel those contracts
and cancel them under terms such that they wouldn't be liable for
profits which they would have made if they had completed the contract.
Is such a provision being inserted?
of February 16, 1942, Stanley F. Teele. Consultant, Division of Purchases,
Production Board, submitted further information regarding crane manufacturers
Avhich appears in the appendix on p. 4251.
1

Under date

War

4072

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr, MacKeachie. Yes; there is a

has agreed to use and is using
that the Navy adopt about the same
mination clause, which, roughly, limits

termination clause which the

now. AVe have recommended
clause.
I will leave the terand allows for the termination
of the contract within a reasonable period after the end of the emergency, and limits the profits to that part of the work completed at that
time, or within a short period,
I will leave that for you.
Mr, Fulton. That type of thing would have saved a great deal in
the last war if it had been there ?
Mr. MacKeachie. I think it is quite necessary to have that in the

Army

contracts.

Mr. Fulton. And does your renegotiation clause, as you have proposed to insert it, apply to all contracts, including prior contracts
that there had been no clause used in?
Mr. MacKeachie. No; we felt generally that that would probably
not accomplish very much but a lot of argument and that we will
have to use our audit and cost checking authority to go over those old
contracts and, of coui'se, you know that it is pretty difficult to write a
good renegotiation clause for a contract without invalidating the
contract

itself.

Mr. Fulton. I think

it is

be a standard clause for

nearly impossible to write one that would

all contracts.

Mr. MacKeachie. And so, we have to do the best we can with

that clause, and then depend on the persuasive powers of the various
branches of the Government to see that that renegotiation is carried
out.

Mr. Fulton. Is the renegotiation to be only persuasive, or Avhen you

have held your audit and have discovered what you might regard as
a profit which by reason of unexpected contingencies would be very
large, you have the power?
Mr. MacKeachie. As near as we can write a clause to put in the
contract which won't invalidate the contract, we will get the best one
in that

we

can.

Mr. Fulton. But you haven't yet got that contract clause?
Mr. MacKeachie. We have several drafts of it. I think INlr. Hawes
would be willing to discuss that with you.
The Chairman. Senator Connally, did you have a question ?
Senator Connally. Yes. I would like to ask the witness a question
not right on that particular point.
I don't know whether you are familiar wnth this particular matter
or not. You're one of Mr. Nelson's asssistants ?
Mr. MacKeachie. Yes.
Senator Connally. Do you know anything about the regulation of
the O. P. M. respecting mohair ? You know what mohair is, don't you ?
Mr. MacKeachie. Yes.
Senator Connally. Well, I sent some ))ni)ers down there recently
about it. It seems that there is some regulation or ]irioi-ity that won't
let the civilians use mohair, cut them down or something
rationing
them; and then the Army and the Navy don't use the stuff, so the
result is that nobody is using it. My State is the biggest producer of
mohair in the country. We would like them to use some of the mohair.
Do you know anything about that?

Mr. MacKeachie. That doesn't come

Senator Connally. I know.

in

my

division.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4073

Mr. MacKeachie. But I can't imagine that a thing like that would
happen.
Senator Connally. It is happening and I wish j'ou would make a
note of that.

Mr. MacKeachie. I'll be very glad to.

Senator Connally. Contact whoever is responsible.
Mr. MacKeachie. I'll be glad to do that.
Senator Connally. Wlioever can do something about it.
I think Senator Brewster is on the other end of the proposition.
He has manufacturers in Xew England who Avant to buy mohair
and they cannot get any mohair because the GoA'ernment won't let
them have it.
Senator Breavster. We use about all the mohair in the country up
there and it comes under the wool order that you shall not use over,
50 percent wool. Moliair has alwaj^s been wool under the protective tariff, to Avhich Texas and Maine are alike devoted in this instance, and the result of the classification is that the use of mohair
forbidden.

is strictly

No

military use has ever been found.

Mr. MacKeachie. We are going to use some in place of shearlings

for garments for the Air Corps.
Senator Brewster. That would probably be pretty small as compared with the goats that Senator Connally has down in Texas.
Mr. MacKeachie. Yes. Apparently the job is to reclassify for
this purpose mohair as not wool is that right ?
Senator Connally. However you can do it.
Senator Breavster. That is the point.
Senator Connally. Experts can figure that out. You Avork that
;

We

out yourself. You are doing us a very grave injustice.

are producing this moliair Avhich is a useful article and these people in Ncav

England

Avant to manufacture clothes.

Senator Breavster. That's right.

Senator Connally. And palm beach suits and

all

that sort of busi-

They cA'en Avear it for these cA'ening clothes these white

summer eA-ening clothes made out of mohair of very fine quality.
ness.

Senator Breavster. Yes.

Senator Connally. I just use that as an example. They make
plush out of it for automobiles. Don't they make these plush covers
for automobiles?
Senator Breavster. Unfortunately, they are not going to let us have

any automobiles.
Senator Connally. I am shoAving Avhat

large avenue

They liaA^e cut all those things off.

The Chairman. They make pullman seats out of

it

has

normally.

it

too.

Senator Breavster. Yes. Well, whatcA'Cr is not needed for military

use, we feel should be made available for ciAalian use.
Senator Connally. Will you look into that and see that it gets
to the particular slot over there that it belongs in?
I don't know
Avho has it.
Mr. MacKeachie. I'll do it.
Senator Connally. Mr. What's-his-name that you write to.
Senator Breavster. I don't know. They have changed you mean
in the production?
Senator Connally. Yes; O. P. M.
Mr. MvcKeachie. Frank Walton.

4074

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Senator Brewster. Doesn't it come under you as a matter of

purchasing ?
Mr. MacKeachie. Only if it's being purchased for militaiy purposes.

Senator Connally. It would be the same

man

if it's a

question

of purchases.

Mr. MacKjeachie. It is a question of priorities.

Senator Brewster. I would like to be advised on it.
Senator Connally. Some time right away. I would

like to get it

as soon as possible.

Mr. MacKeachie. I don't know

why

I can't let you

know

this

afternoon.

Senator Connally. I don't want to press you because you probably

couldn't find

it

in that time.

Senator Brewster. The goats are putting in a 24-hour day growing

this wool.

Senator Connally. That's right. It is a serious matter. We produce more mohair than any other State in the Union, and get less for
it in New England than in any other State in the Union.
Senator Brewster. We may have to talk to Mr. Henderson before
we get through.
The Chairman. Did you have any further questions, Senator
Connally ?
Senator Connally. I believe not.
The Chairman. Senator Brewster?
Senator Brewster. No.
The Chairman. Senator Mead?
Senator Mead. No.
Mr. Fulton. No.
The Chairman. That is all, Mr. MacKeachie.
The committee will recess, subject to call of the chairman.
(Whereupon at 12 05 p. m., the committee adjourned subject to the
call of the chairman.)
:

APPENDIX
Exhibit No. 219
[Submitted by United Brotherhood of Welders]
[Copy]

Mr, Sidney: Hillman,

Office of Production Afandf/ement,

New

Social Security Buildiny,

Washington, D. C:
In reply to your request for negotiations we submit tlie following
1. Conference to begin as soon as ix)ssible that all interested parties can be
gotten together, including A. F. of L. executive board and C. I. O. executive board,
and general executive board of all independent weldor and burner organizations.
2. The purpose of the conference will be to obtain through negotiation an
equitable plan whereby future work cessation by weldors, burners, and helpers
can be avoided.
3. Pending completion of negotiations, the weldors. burners, and helpers agree
to return to work forthwith providing agrctment by the parties listed above is
obtained to the following conditions:
(a) That there shall be no intimidation or discrimination with respect to any
weldor, burner, helper, or their leaders, and no pressure of any kind, neither by
violence or by any otlier method, shall be used upon such weldors, burners, helpers,
or their leaders.
(b) All weldors, burners, and helix^-s are to return to work under conditions
and rates of pay effective when they left work.
(c) Pending completion of negotiations, no weldor, burner, or helper shall be
required to hold any card other than the card issued by bis independent organization for the purpose of continuing his employment during this temporary period.
(d) The A. F. of L. and C. I. O., each for thems(>lves, agrees that all portions
of contracts with employers dealing with welding or burning shall be susi)ended
during this temporary period.
After you have acted in accordance with your judgment we will be available
for immediate call from ytu.

Karl

Morri.s.

General President. United Weldors.

Dave

Ba.sob,

Represent nt ire, Independent Weldor and Burner Organizations.

Exhibit No. 220

[Submitted by United Brotherhood of Welders]

CONVKPxSATION "WiTH SIDNEY

HlLLMAX
10/30/11.

Hillman Reported he was sending a telegram and would read it over the phone
so Mv. Morris would hear it right away. Reported also that Bert Keenan was
supposed to have contacted Morris.
Morris Reported had not had a word from Keenan.
Hillman: Read telegram. (See attached.)
Hillman said he couldn't possibly negotiate with 20 different international
:

organizations over the telephone, that he thought there should be a convention

311932

42

pt.

10

23

4075

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4076

Tuesday for all the heads of the different labor organizations,

convention to be at Washington, D. C. The only thing for the solution of the
weldors is to go back to work.
Morris Have you contacted any of the A. F. of L. Heads at all?
Hillman Reported he didn't want to talk with any of them (A. F. of L. Heads)
over the telephone. Wanted to make a conference to discuss with the A. F. of L.
and all other organization heads.
Also stated that the longer the weldors stayed away from work, the longer
the delay would be for a conference.
Repeated again that the longer the strike is carried on, the longer it will take
to bring action by him.
Said for the weldor.s' sake as well as for national defense that the weldors
should return to work.
Morris: Asked whether the men could be assured that there would be no intimidation if they returned to work now. Morris stated that there probably would
be plenty of it between the time of returning to work and the gathering of the
conference next Tuesday.
Hillman Hillman said to notify him immediately of any cases of intimidation
that came up, no reassurance was given.
Morris Asked if the weldors would be required to reinstate and if there was
to be the same wages.
Hillman Said to let the owners and managers of the companies, if there is
discussion of wages, etc., get in touch with Hillman.
Wanted the representatives of all organizations in Wash., D. C, Tues. Said
he was ready to start planning such convention.
Morris: Will notify Hillman of the action of the General Executive Board and
of Dave Basor.
[Hillman phoned back 5 minutes later:]
Unable to hear part of this. End of conversation as follows:
Morris. Dave Basor is flying to Washington, D. C, tonight.
Hillman. Wanted to know how soon our organization would take action on
his telegram.
Morris. There is no reasonable assurance that there will be any agreement
reached. There is only one thing that we can do now and that is to take it direct
called for next

to the President.

Exhibit No. 221

[Submitted by United Brotherhood of Weldors;]

Oct. 30, 1041.

Over Phone 3 00
:

P.

M.

Dave Basor, Karl

V. Morris
United Weldors, V. F.

W. HaU, ^lauaou and Brondiray,

LoH

have given

AnffcJes, California:

cai-efnl consideration to the points dealt

with

in

your telegram

These matters necessarily are subject for discussion with the

Meanwhile I most strongly
representatives of the respective unions involved.
urge the weldors to return to work so that I may have a reasonable opportunity
of this date.

to convene a conference promptly of the representatives of the various interested

organizations as well as of youi'selves to explore basis for solution of this problem.
Obviously such confei-eiue is not feasible whilp the weldors remain on strike.
Therefoi'e, in the interests of national defense and of a speedy solution of this
problem, I urge again that the weldors return to work innnediaiely.
(Signed)
Sidnky Hillmax.

Exhibit No. 222

[Submitted by United Brotherliood of Welders]

NOVEMBKH
Hon.

SlDNETi'

14, 11I41.

Hiu.man.

A-ssoeiate Director

Ook rat,

Office of J'rodiiclioii M(nia(/<

iiiciit,

\Vaf<hi)i(/ton, J). V.

Dkar Mr. IIh.lman At the recpicst of

cullers jind (heir helpers of (his country,
following message to you.
:

lie

representatives of the welders and

instructed to convey the

we have been

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4077

Ten days ago there were thousands of welders and cutters and their helpers on
the West Coast and thousands in the Southern area and in gulf ports, mostly
engaged in defense industries, either out on strike or locked-out from their work,
and a general strike of welders on the East Coast and throughout the rest of the
country was threatened within twenty-four hours.
These strikes and lock-outs were due to the fact that for over twenty years
these highly skilled and trained craftsmen had been denied the right accorded
all other craftsmen to bargain collectively through representatives of their own
free choice a right long recognized by common law and judicial decision in the
United States, and for the past four years guaranteed by the National Labor Relations Act. This right, to bargain collectively through representatives freely chosen
by themselves, has been consistently and deliberately denied to welders, not alone
by some employers but by the two major national unions in this country, and
primarily and especially by the American Federation of Labor, which, year after
j-ear, has not only persistently refused to issue to welders a charter of their own
in the family of all the other large number of A. F. of L. craft organizations, but
has refused to permit its members to work alongside of and with welders who
have refused to join the A. F. of L. or who have attempted to organize their own
independent unions.
In addition, these highly skilled men have been required, as they proceed on
their jobs from one type of metal work to another, to actually purchase from each
of the various constituents of the American Federation of Labor the separate
right to work. For instance, on a construction job, a welder is forctni to join
first a Structural Iron Workers' Union, then a Steamfitters' Union, a Boilermakers"
Union, a Machinists' Union, a Pipefitters' Union, and a Blacksmiths' Union, and,
in some instances, even to join and belong to a Ilodcarriers' Union and a
Carpenters' Union.
Nor say a welder fail to pay regularly his monthly dues in any of these unions,
lest he be required, at any time, to pay a penalty fee for reinstatement of $100.00
or more and a delinquent penalty of six per cent of his weekly wage. While the
various A. F. of L. crafts union may move in and out of any particular job without difficulty or expen.se, if the welder stays on the job, he is required to join and
pay dues in every A. F. of L. union with which he works on the job.
As a result of all this, in order to practice his trade, a welder must pay initiation fees in and dues to a large number of A. F. of L. unions, at a substantial
yearlv cost to him, in many instances, of as much as anywhere from $500.00 to

$1,000.00.

While this requirement of belonging to a multiplicity of unions is the most

grievous discrimin;ition practiced against the welders of this country, it is far
fi'om being the onl.v one, and is merely illustrative.
The refusal to permit welders to form their own organization or to become a
constituent craft in the A. F. of L. craft organization, has for many .vears prevented the welders from inaugurating and consummating changes in procedure,
rotation of work programs, safet.v measures and efficiency devices which would
have proved helpful not only to the welders themselves but to the industries which
have employed them. For instance, the Federal Goverinnent, State Governments
and insurance companies have deemed it essential, for the protection of lives and
property, that welders prove, through highly technical examinations and tests,
that they are skilled, trained, and efficient before they are permitted to go to
work on jobs that are waiting for them.
However, there is no permanent central bureau empowered or authorized to
conduct such examinations and, therefore, each time a welder's services are no
longer needed on a particular job and he is required to find another employment,
and even though he is to do the identical work he has just finished, he is again
required to take the same lengthly examination and test before he can go to work.
Each such examination costs each employer a fee of approximately $50.00, and
each examination requires from several hours to several days, which means that
both the emplo.ver and the employee are forced to lose substantial time and money
when important work is at hand. With the recognition of a national welders
organization, this burden upon employer and employee would be eliminated, and
a saving of anywhere from fifteen to thirty percent in time and expense would
be effected.
In an effort to assist national defense and to avoid the spreading of the welder's
strike throughout the United States, the repre.sentatives of the welders, cutters,
and their helpers, met with you on November 5. You then persuaded them to
agree to send all striking and locked-out welders back to work, pending a conference to be called by you for Monday, November 17, to be between representa;

4078

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

major national unions, your department and ourselves, upon certain

representations and guarantees which you made. Those representations and
guarantees were (a) that all welders returning to work immediately would be
promptly reinstated in their former jobs or positions without discrimination or
interference; (b) that the Office of Production Management would protect them
in this right; (c) that all parties would be called upon by you to refrain from
any acts of intimidation or coercion against these welders pending the holding
of the conference and its outcome, and (d) that you would personally appeal to
all employers in non-defense industries to cooperate by reinstating to their former
jobs any workers who may have walked out in support of the welders.
When they questioned your ability to carry out your promises, and questioned
the willingness of the American Federation of Labor to abide by and carry
out your representations and guarantees, you assured them not only that you
were able to make the guarantees, but td fulfill them, and you told them that
you already had sufficient promises of cooperation from labor leaders and
employers to assure the fulfillment of all the obligations you were undertaking.
Upon the basis of these representations and guarantees, and of your assurances that they would be carried out, they immediately, from your very office,
sent word broadcast throughout the nation to all welders to return to their
work at once. They carried out their part of these obligations completely
both in letter and in spirit. The welders themselves not only immediately
returned to work, but in doing so removed the buttons from their lapels showing their membership in the different organizations in order to avoid antagonizing
their fellow workers and to show their good faith.
On the other hand, all the promises and guarantees which you made to these
men have been flagrantly and wantonly disregarded and violated. Since November 5, the day of their agreement with you, they have been giving you daily
reports of instances where welders who were retvirning to work were being
physically attacked, discriminated against, threatened, intimidated, and refused
an opportunity to return to their former employment. Not only are these gross
violations of the agreemetn still continuing, but as the hour for the proposed
<?onference approaches, instead of this persecution diminishing, it is in fact
increasing both in amount and in severity.
Without attempting to enumerate the hundreds of instances, the following
serve to illustrate what is today occurring to the welders of this country
At Childersburg, Alabama, approximately two hundred welders have been
and still are being refused reinstatement at the powder plant being erected for
the du Pont Company.
At the Lister Hill plant of the Reynolds Metal Company at Sheffield, Alabama,
a large number of men have been and still are being denied reinstatement to
tives of the

their former work.

At the T. V. A.

Dam project, also at Sheffield, Alabama, a number of men

have been and still are being denied reinstatement to their former work.
Throughout what is known as the Birmingham, Alabama, area hundreds of
welders who have applied for reinstatement have been and still are being refused
reinstatement at their former jobs, including work for the Ordnance Department
of the United States Army. In other cases in this area men have been discriminated against, threatened, intimidated, coerced, and bribed into giving up
their welders' affiliation.

In Seattle, Washington, over two hundred men have been and still are refused
reinstatement in the shipyards.
A similar situation exists both in the Los Angeles area and in the San Francisco
area.

They have just received word that at the Western Pipe & Steel Company, a
corporation engaged in defense shipbuilding, a number of welders have just
been locked out, in an (jbvious attempt to force the welders in that area to go out
on strike.
Likewise, they received notification today, that at the Salt Lake City arms
plant, the Boih^-makers' Union of the A. F. of L. has rofu.sed to iiermit welders
to work with them because those welders were affiliated with our organization.
At Morgantown, West Virginia, in the Pittsburgh area, Thursday night the
welders held an open meeting to di.scuss their problems, and as a result were
notified by tlie A. F. of L. representative that their membership in the various
A. F. of L. miioiis h;id been .su.si)en(l('d and their union cards revoked.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAAI

4079

Physical attacks have occurred in various parts of the country, and at the
California Shipbuilding Corporation, and other places, welders have been maltreated and beaten.
Representatives of the welders who attended the meeting with you and your
associates had a great responsibility to the people of this country, to the Government, and to these thousands of welders. They have carried out all of their
responsibilities in every respect to everyone. The welders whom they represent
have carried out their obligations in every respect. Up to the present time the
only people who have not carried out their guarantees and obligations have been
the A. F. of L. and your office.
Indeed, it has been the very jjolicy of forcing upon workers the requirement of
working under closed-shop agreements, established by your department, which
gave rise to the present difficulty, and now affords the screen behind which the
A. F. of L. is carrying on its discriminations and persecutions. And, this policy
is in direct conflict with the announced policy of the President that no Government agency will ever Impose a closed shop upon unwilling workers.
Under these circumstances, the representatives of the welders believe it wovild
be unconscionable and ridiculous for them to attend any such conference as you
had in mind, based upon a truce and an armistice, the terms of which they have
strictly carried out. but which the A. F. of L. has totally disregarded, and which
you have permitted it to disregard. If they attended such a conference, they
would be breaking faith with the thousands of men whom they represent and
to whom you promised complete return of their jobs without discrimination,
This is particularly so in the light of
interference, intimidation, or coercion.
your promise and your assurance that none of these abuses and persecutions
would occur, and your subsequent unwillingness or inability to carry out those
promises and assurances.
While these outrageous conditions still exist, the representatives of the welders
of this country will not take part in any conference. They will continue their
struggle, however, to be able to work without paying tribute, and to be able to
bargain collectively through representatives of their own free choice under the
guarantees of the National Labor Relations Act.
Since it is obvious that your office is either unable or unwilling to control
the present situation, as you guaranteed, the welders of this country hereby
notify you that they will find other ways and means of establishing their rights.
Very truly yours,

Leonard Weinberg,
(For Weinberg and Green.)
Heber James Brown,
Jack P. F. Gremiixion,
Of Counsel for
United Welders, Cutters and Helpers of America. National Brotherhood
of Welders and Burners of America, National Union of Welding Operators, Welders' International Association, A. F. of L. Councils of Welders
and Burners, and other independent welders.

Exhibit No. 223

Office of Production Management,
Social Security Building,
Washington, D. C, Novemher 5, 1941.
Sidney Hillman, Associate Director General of the Office of Production Management today announced that a committee representing a group of unions of welders
and cutters had agreed to call upon their members now on strike and sympathetic
strikers to return to work immediately. The committee was headed by Karl V.
Morris, president of the United Welders, Cutters and Helpers of America.
Mr. Hillman informed the committee that upon the return to work of these
men he would convene as promptly as possible a conference of representatives
of the welders' organizations, representatives of other interested labor organizations and representatives of the Office of Production Management.
This conference will hear such complaints as the welders and cutters may
bring before it, and will seek to arrive at a speedy solution of the disputes between the various interested parties for the purpose of preventing further work
stoppages.

4080 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Hillman informed the welders' representatives that all strikers returning
to work immediately would be promptly reinstated in their former jobs or positions without discrimination or interference
that the Office of Production
Management would protect the workers in this right; and that all parties would
be called upon to refrain from any intimidation or coercion aaginst these workers
pending the holding of the conference and its outcome.
Mr. Hillman announced that he would appeal to employers in nondefense
industries to cooperate by reinstating to their former jobs any workers who may
have walked out in support of other welders.
Representatives of the various independent unions of welders, helpers, and
cutters who met with Mr. Hillman were Karl V. Morris, Los Angeles, president
of the United Welders, Cutters, and Helpers of America Dave Basor, SeattleTacoma Council of Welders and Burners Charles A. Slnet, Baton Rouge, La.,
president, National Bi-otherhood of Welders and Burners of America
Lloyd
Payne, Norfolk, Va., and S. T. Gordon. New York, vice-presidents and East
Coast representatives Z. C. Whitlock, Norfolk, Va. and Leonard Weinberg of
the law firm of Weinberg and Green, Baltimore, of counsel.
;

Sidney Hh-lman.
Associate Director General.

We acknowledge receipt of your last telegram at 5 45

m. and agree that it correctly states the arrangement between us and we
hereby call upon all weldei's, cutters, and burners and helpers and others who
walked out in support of them to promptly report directly to their former jobs
in accordance with the agreement just reached.
Karl V. Morris,
Dave Basor,
Chas. A. Smet,
Lloyd Payne,
Leonard Weinberg.
Dear Mr. Hillman

a.

Exhibit No. 224

[Submitted by United Brotherhood of Welders]

To All Welders, Cutters, Burners

November 12, 1941.
this letter is a copy of the agreement reached
hetween your committee and the Office of Production Management to bring to a
head a conference, the outcome of which we hope will be an independent welders'

Dear Brothers Enclosed with

:

organization.

In accordance with the agreement and while the actual conference is go'ng on,
understood that the men are to return directly to their jobs without going
through any union hiring hall whatsoever. It is also understood that they do
not need to pay to any union any money, either form of dues, initiation fees, or
assessments unless they so desire.
Tlie letter of agreement also provides that there will be no organizing of welders
during this period of negotiation. While this may seem to you as a little unfair,
in view of your desire of an international of your own, at the same time we
must be fair with the opposition if we expect the opposition to be fair with us.
but you must be very explicit on tlie subject tliat the welders, cutters, burners,
fore, in putting your men back to work you will call them eitlier individual or
if you wish to have a meeting to tell them to go back to work, it is permissible
hut yon must be very explicit on the subject that the welders, cutters, burners,
and helpers and their sympathizers who walked out with them, are to return to
work at once by reporting directly to the job which they had prior to the
You, of course, liave the privilege of obtaining any and all
strike or lock out.
information of conditions wherein welders have been fleeced for initiation fees,
permits, dues or have been forced to carry more than one card.
In any event, where a controversy arises, tiike down the full detail and report
He has l>een given explicit
it to Paul Porter, of the O. P. M., Washington, D. C.
instructions by Hillman through the Office of Production Management, to see to
it that no action, otiier than the agreed action, included is used in connection
with the workers, burners, and helpers. Please do your level best to keep your
side as clean as vwssible, live up to these rules and we ask that you also ask
it is

THE NATIONAL DEFENSE PROGRAM 4081

II-JYESTIGATION OF

men to make up as much of the lost production as possible.

this will benefit our case.
Remember that you are at all times to

the

and

In doing so,
weld anything

things just get the welding done.

Respectfully yours,

all

Tour Negotiation Committee,

Washington, D. C.
This letter was submitted to
Paul R. Porter, O. P. M.

me November

5,

and approved by me.

Exhibit No. 225

Signed

[Submitted by United Brotherhood of Welders]

[Telegram]

Labor Division, Office of Herbert Harris.

November
Joseph

J.

13, 1941.

Green,

Stratford Hotel, Seattle, Washinffton

O. P. M. understands that welders who were working at time strike ended will
retain jobs inasmuch as laying them off would be discrimination against them.
O. P. M. further understands that striking welders not yet employed because
their job was completed or for other reasons have employment preference before
any new welders are hired.
Paui> R. Porter,
Special Labor Adviser.
I have read the above and am in full approval with its provisions.
John P. Frey,
I have read the above and am in full approval with its provisions.

Dave Basob.
Exhibit No. 226
[Submitted by United Brotherhood of Welders]
[Telegram]

From

Office of Production Management

Division Office of Production Management

November

17, 1941.

Mr. Leonard Weinbkuu

The underlying issue is that of national defense and
none other. Interruptions of production of essential defense commodities interfere with and impede national defense. The conferences are designed to deal
with these problems. Those who would counsel against participation in conferences which are designed to resolve disputes around the conference table carry the
responsibility of interfering with the defense program.
I am convinced that the welders are loyal Americans and have no desire to
impede the Nation's defense in this critical emergency. I am confident, therefore,
that they prefer the conference-table method for the adjtidication of their disputes.
All the presidents of the interested organizations have been meeting with me
during the day and they are now engaged in an effort to eliminate grievances
which the welders may have. They have expressed a desire and eagerness to
cooperate with the national defense program.
:

SiDNErr

HiLLMAN,

Associate Director General, Office of Production Management.

I

hereby certify that this

is official

business.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4082

Exhibit No. 227

[Submitted by United Brotherhood of Welders]

[Telegram]

From

Production Management.
Labor Division, Sidney Hillman.

OflSce of

Division

Copy

to

Dave Basor, Karl

Morris, Charles Smet, and Lloyd Payne.

Washington, D. C, November

17, 1941.

Mr. Leonakd Weinberg,

Weinberg and Green, Attorneys,

3300 Baltimore Trust Building, Baltimore, Maryland:
I am in receipt this morning of your letter of November 14, in which you and
others, as counsel for a group of welders' organizations, state that welders' representatives will refuse to participate in a conference called by the OflSce of Production Management for the purpose of exploring effective ways and means of
insuring uninterrupted work on national-defense projects on which welders are
employed.
I take note of the fact that you cite certain cases of discrimination allegedly
practiced against some welders as justification for the statement of a refusal to
participate in this conference. May I point out that one of these cases is called
to our attention for the first time in your letter. The other alleged discriminations were promptly acted upon by this ofiice. These complaints are specifically
denied and contradicted by the organizations charged with the alleged discrimination. The proper place of ascertaining the facts concerning these charges and
denials is at the conference which began today. May I remind you that the
conference was convened for the specific purpose of (a) hearing and inquiring
into any complaints that the welders might bring against any other labor organizations; and (b) seeking a speedy solution of the disputes between the various
interested parties for the purpose of preventing further work stoppages.

Exhibit No. 228

[Submitted by United Brotherhood of Welders]

NOVEMBEE

17, 1941,

Mr. David Basok In response to your inquiry concerning the agenda for the
conference called to consider complaints made by the organizations of welders
against other labor organizations, I wish to state the following:
(1) The purposes of this conference, as stated in a public statement issued by
Mr. Sidney Hillraan on November 5 are
(A) To hear and inquire into any complaints the welders may bring against
any other labor organizations.
(B) To seek a speedy solution of the disputes between the various interested
parties for the purpose of preventing further work stoppages.
(2) The obvious procedure is for the authorized representatives of the welders
to submit their complaints and recommendations in whatever way they desire to
present them.
(3) Confirming my statement to you Saturday, November 15th, the conference is
prepared to meet in sections if desired that is, representatives of the welders may
meet in one section to present the matters they wish to bring before the conference and the representatives of the A. F. of L. organizations, against which the
complaints are made, may likewise meet separately if they desire. It is natural
to assume that at some stnge in the conference, both parties may desire a joint
meeting or a meeting of a joint committee of the two groups. The Oflice of Production Management does not suggest either the number or the personnel comprising these committees but leaves that matter to be determined by the inter:

ested parties themselves.

Sincerely yours,

Paux R. PORTEai,
Special Labor Advisor.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4083

Exhibit No. 229

[Submitted by United Brotherhood of Welders]

1919

St. NE.,

Washington, D. C,
November 17, 1941-

Honorable Sidney Hillman,

Associate Director General, Office of Production Management,

Washington, D .C.
acknowledge receipt of your telegram of November
Leonard Weinberg, which was in response to our suggestion

Dear Mb. Hillman

We

17, 1941, addressed to

contained in our letter of November 14, 1941.
You will recall that our letter called upon you to investigate and rectify
discriminations which included violence and intimidations against weldors
throughout the nation, after your issuance against such actions as contained
in our agreement of August 5.
Our letter pointed out the uselessness of conferences until these past discriminations were corrected and steps taken to guarantee against future discrimi-

nations.

We

are gratified to observe that your telegram of November 17, together

letter of Paul R. Porter of November 17, places the matter of considering
and disposing of such discriminations before any other item, our conference.
We agree with you, as Americans and citizens, that national defense is of
paramount importance. Our attitude has been demonstrated by weldors everywhere returning to work upon the mere request of the Government, whom you
represent. National defense is retarded not by weldors but by those discriminating against weldors in refusing to allow them to work.
Accordingly, a delegation of representative weldors will be present at the
Office of Production Management on November 18 to offer evidences of discriminations z'eferred to in previous communications to you.
When this first stage of the conference is completed satisfactorily, we will
then be happy to proceed to the next agreements logically appearing on the
agenda.

with the

Leonard Weinberg,
Of counsel.

Karl

V. Morris.

Davtd Basor.
Lloyd Payne.
C. A. Smet.

Exhibit No. 230

ISubmitted by United Brotherhood of Welders]

November
Mr. SiDNirr Hillman,
Associate Director General,

Dear

Sir

We

19, 1941.

Production Management,
Washington, D. C.
have been asked by Commander Keller to present to you the
Office of

following
We refused to attend the conference scheduled by the Office of Production
Management on November 17, 1941, due to the failure of the American Federation of Labor and of the Office of Production Management to fulfill their obligations under the agreement signed by yourself on November 5. The reasons for
our refusal were outlined to you in our letter of November 14.
At your suggestion, contained in your telegram of November 17, and in tjlie
interest of national defense, the welders and their representatives have met
with representatives of your office in a separate meeting to present their cases
We submitted a large number
of discrimination, intimidation, and coercion.
of these cases of discrimination, and those which were reported back this morning
only proved again to us that the Office of Production Management is powerless
to act. and that the American Federation of Labor is screening behind technical
and flimsy excuses to continue its acts of intimidation and discrimination.
We are desirous of successfully concluding this conference, but it is utterly
impossible to attempt to do so while these men are still out of work and without
means of livelihood in direct violation of the agreement.

4084 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

We suggest, therefore, in justification to the welders of this country and the

good faith which they have shown, and that the public may be shown the good
faith and desire of the welders to continue in the national defense in keeping
their agreement with the Office of Production Management and the American
Federation of Laborwhich good faith on the part of the welders and their
representatives has been voluntarily stated by the Office of Production Management in the meeting this morning that you publicly, through the press, call
upon the alleged "responsible leaders" of the American Federation of Labor
to demonstrate their good faith, and willingness to abide by the spirit of the.
agreement, by allowing the welders to return to work.

Respectfully submitted.

Committee From Conference Requested by Chairman.

Exhibit No. 231

[Submitted by United Brotherhood of Welders]

For immediate release to the press.

United BROTHBHiHooDs, Weldors, Cutters, and Helpeks of America,
602 Fifth street NW., Washington, D. C., November 26, 19J,1.
Sidney Hiixman. Esq.,
Associate Director Oeneral, Office of Production Management,
Washington, D. C.
"We have received the proposal that we compose our
differences with the A. F. of L. and with your Department by having weldors
accept what is known as a "universal card" in the A. F. of L., which card would
be issued, as we understand it, to weldors working in shipyards, and which
Avould entitle those weldors to engage in any wielding work of any kind in the
shipyards, provided they had joined some one A. F. of L. union and held the
card of tliat union.
There is nothing new in this proposal, nor does it in any way obviate or overcome the discriminations and abuses to which the weldors have been and are now
being subjected, nor will it rectify and eliminate the many grievances which
have been brought to your attention.
In tile first place, the proposal refers to weldors working in shipyards only,
leaving entirely out of consideration all the thousands of weldors who are employed in structural work, in building trades, and in all the other industries and
businesses throughout this country.
Secondly, the issuance of such a card will still leave the weldors at the mercy
of all the various local unions, their business agents and employment offices.
What the weldors of this country are demanding, and what they are entitled
to have, and what your Office and the government itself ought to see that they
Ijromptly get, is the right to bargain collectively with their employers, through
representatives of their own free choice. They do not choose to be represented
by the American Federation of Labor or the Congress of Industrial Organizations.
They are at present organized in a number of weldors" unions which have been
amalgamated into or are affiliated with the United Brotherhoods, AVeldors, Cutters, and Helpers of America.
These are the representatives they have chosen.
This is the union to which they wish to belong, and this is the union which they
wish to have .speak and negotiate for them.
The immediate recognition of the fact that welding is a trade in it.self and the
holding of consent elections under the auspices of the National Labor Relations
Board is the only effective way in which the rights of these men can be guaranteed
and protected. Unless the Office of Production Management is prepared and willing and able to secure these rights to the wehlers of this country, that office is
incapable of assisting in any way in the solution of the problem that is now facing
American industry and the government itself.
At your request, and on your promise that all discriminations, abuses, intimidation and coercion of welders would innnediately cease, on November 5, we
requested the welders of this country who wero on strike to return to their work,
and they immediat(>]y did so. As we have repeatedly re])orted to you since then,
many of tho.<<e returning to work have been refused work or have been prevented
from returning to their work, and have been and stiU are being subjected to all
kinds of discrimination, abuse, and intimidation. In the meantime, representa-

Dear Mr. Hiixman

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4085

tives of these men have been gathered in Washington since Novembei- 5 at great
expense to themselves and to the men they represent, waiting for some action to
be taken by the Government tliat would secure their rights for them and insure
the maintenance of those rights. The proposal you submit does neither of these
Therefore, in the interests of National Defense and perfect harmony
things.
among the workers of this country and In justice' name, we, the representatives
of the Weldors, Cutters and Helpers of America, petition you and all the iiowers
and influence of your good offices to obtain agreements from the American Federation of Labor, Metal Trades and Building Trades departments and all other
American Federation of Labor agencies that might be involved and the Congress
of Industrial Organizations aiithorizing the National Labor Relations Board to
call a consent election for Weldors, Cutters, and their Helpers in all or at all
places where welders, cutters, and their helpers are employed for the purpose of
"choosing the union of their own choosing."

Very truly yours.

By

(s)

United Brotheehoods. Weldors,

CuTTKRs, & Helpers of America,
Lloyd Payne,

(s)

Karl

(s)

Chas. a. Smet,

(s)

Peter A. Tarnosky,

Secretary-Treasurer.
V. Morris,

Trustee.
Trustee.

Trustee.
(s)

C.

Cabdno, Temporary Chairman.

Exhibit No. 232

[Submitted by United Brotherhood of Welders]

(C)

CSF-Ry

Serial 21494

From: Commandant, Thirteenth N:ival District (Commandant, Puget Sound

Navy Yard).
To The Secretary of the Navy.
Subject Puget Sound Navy Yard Welders' Request for Navy Department's Good
:

Wilson Award.
Yard Welders' Resolution of October 5, 1941, contained in letter
addressed to Yard Manager, Puget Sound Navy Yard.
(b) Letter of October 6. 1941, addressed to Yard Manager, Puget
Sound Navy Yard, transmitting Inclosure (c).
(c) Letter of October 6, 1941, of Mr. Dave Basor to Mr. Pete Shea,
setting forth status of welding under Wilson Award and its adverse effect on National Defense Work.
1. Last week the press reported that the welders of Seattle and Tacoma intended quitting work on Monday, October sixth, upon the opening of the American Federation of Labor national convention in Seattle. The "strike" had for
its purpose the picketing of the convention with a view to forcing action on
what purports to be a nation-wide demand for a setting aside of the so-called
Wilson Award and the recognition by the A. F. of L. of the welders as craft
Oflices in Securing the setting aside of the

Inclosure

(a)

members, entitled to a union of their own.

2. Because many welders throughout the country belong to an organization
(not a union) known as "The United Welders, Cutters, and Helpers of America,"
and because a "local" of this organization is made up largely, if not entirely, of
Puget Sound Navy Yard welders, and finally because Mr. Dave Basor, a leading
of this organization, was the principal leader in the proposed "strike,"
the welders of the Puget Sound Navy Yard, under the leadership of Mr. Pete
Shea, a yard employee, decided on Friday, October third, to join the Seattle and
Tacoma welders in their demonstration before the A. F. of L. convention. The
yard was notified of this intention by letter the following forenoon Saturday.
3. The commandant thereupon sent for Messrs. G. L. Kaseburg and C. P. Ager.
the two Yard welders who bad signed the letter of notification to the yard, and
explained at length the serious consequences that would follow a mass quitting
of yard work on the part of civil service enjployees of the Government, pointing

member

4086

INVESTIGATION" OF

THE NATIONAL DEFENSE PROGRAM

out to them the distinction between the contemplated "strike" of the Seattle and
Tacoma welders and the stoppage of work Government workers. Mr. Kassburg
and Mr. Ager indicated their willingness to transmit the Commandant's comment
Later they returned with Mr.
to the welders, if a meeting could be arranged.
Pete Shea, the leader of their '"local," and, as a re&ult of the ensuing conference,
it was agreed that a further meeting of yard welders would be held the following
day Sunday, to which, at the request of Mr. Shea, the Commandant agreed to
send a representative to lay before the assembled welders the yard point of view.
Captain A. M. Charlton, U. S. Navy, the Yard Manager, was the representative
chosen, and he ably presented the Commandant's views.
4. Meanwhile the Commandant saw Mr. Hillman of the Ofiice of Production
Manageujient on Saturday evening and learned that he was sending a letter to the
persons concerned in the welders' difficulty in Seattle and Tacoma. The net result
of aU of these related efforts eventuated in a deferment of the proposed action of
the Seattle and Tacoma welders and an abandonment of the intent of the yard
welders to stop work. The yard welders, through their representative.'^, state they
have no complaint of work conditions in the yard. Their action is wholly one of

sympathy with the outside welders.

5. The Commandant reports the above incidents merely as a preface to the
submission herewith of the listed inclosures. The matter at issue is much moi'e
serious and far-reaching than is indicated by what superficially presents itself
as only another averted "strike." All who have been in a position to note the
growing importance of welding for the past quarter of a century are fully aware
that the so-called Wilson Award, made in the light of conditions of twenty and
more years ago, in no manner reflects or responds to conditions today. Nevertheless, it carries the full weight of a governmental decision in respect to labor relations and is being used by the American Federation of Labor, the Metal Trades
Council, and the strong unions generally to defeat the deirjands of the great body
of welders.
6. As pointed out above, the welders of the Naval Establishment have no
fundamental grievance as to their working status under the Navy Department.
It might therefore be held that the Navy Department is not officially concerned
with issue raised by the outside welders, which resolves itself essentially into a
demand that welding be recognized as a craft. However, the Navy Department
is deeply concerned in whether outside welders shall continue their work in
the country's shipyards. A general strike of welders would cripple the shipbuilding as long as it lasted.
7. While it is wholly true that welding of a sort can be relatively quickly
taught compared with the time it takes to produce a machinist or a shipfitter,
It takes months
it is likewise true that welding cannot be taught overnight.
to produce a competent welder, nor can men for trainig be obtained without
great difficulty.
8. Under present conditions, as is pointed out in the inclosures, a welder in a
shipyard is exposed to labor exploitation of a wholly indefensible character. His
time and money placed at the mercy of endless jurisdictional cleavages, a
"machinist" welder may not work on an "electrical" or a "shipfitter" welding job
without paying a permit fee, and so on throughout the amnzing number of trades
involving welding. There are welders in and oat of more than a hundred and
fifty unions, and yet there is no recognized labor organization of welders in the
A. F. of L. The Wilson Award, formulated when the widespread importance of
welding and its varied ramifications were not visualized, likened welding to
a tool of a trade. This analogy today is entirely inapplicable. Welding is a craft
that engages the .skill of a very numerous body of industrial workers. If these
workers are not to be had or if they stop work, the whole of industry suffers.
Their right to organize and to bargain as a united whole shoidd not be contravened by a stipulation that requires them to split into scores of unrelated groups.
9. In the interest of unimpeded work in behalf of national defense, it is
strongly recommended that the Navy Department take such steps as will
insure a full and exhaustive review of the Wilson Award, in the light of
current conditions relating to weldng, cuttng, and burnng, with the objectve
of satisfying the reasonable demands of the great body of welders now engaged
in shipbuilding and associated industries throughout the country. The inclosures
herewith' sufficiently set forth the matters at issue.
It is earnestly requested
that they be given most thorough and informed attention. The Commandant
is deeply concerned over the implications of this narrowly averted welders
"strike" here in the Northwest, and the unrest it provoked among the Navy

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4087

He feels that it was only averted because the outside welders,

long sensing their strength, are content to wait a little longer for the recognition they consider tli'eir due.
He feels strongly that they will not continue
to wait long
that their delay at present is. as they themselves assert, only
temjKtrary.
If they "strike," further luirest among the Navy Yard welders
is bound to follow, because of their full sympathy with the outside welders.
The whole situation calls for prompt, intelligent and independent action upon
the part of the Department, uninfluenced by the old line leaders of the American Federation of Labor, who have consistently invoked the Wilson Award,
which insures welders' dues and permit fees in some one hundred and fifty-seven
unions, as the final arbiter in all welders' disputes. There is nothing definite
about the Wilson Award. It met not too well the situation of twenty years
or more ago. It does not meet the realities of today.
Yard welders.

C. S.

Freeman.

Exhibit No. 233

[Submitted by United Brotherhood of Welders]

November

To

28, 1941.

all locals:

A copy of the following telegram has been sent to all industries. It was
signed by Sidney Hillman.
"A conference called by Office of Production Management to seek adjustment of Welders' complaints, A. F. of L. Metal Trades Unions agreed, in a
statement of general policy, to provide flexibility in welder work in all shipyards in the interests of improved production, to make it unnecessary for
any welder to carry more than one union card, to give full hearing to all
complaints from welders.
It was further agreed that the practical application of this policy would be worked out in conferences between employers and
A. F. of L. unions concerned. Upon advice of John P. Frey, President Metal
Trades Department A. F. of L. the Office of Production Management is
calling conferences for above stated purposes between employers and local
metal trades councils in Los Angeles. San Francisco, Portland, and SeattleTacoma. Los Angeles Area conference will convene Monday 2 P. M. at Los
Angeles office of 0PM. Other conferences to follow as rapidly as possible.
Until completion of these local conferences, which are a continuation of Washington conferences on welders, Office of Production Management advises maintenance of status quo to avoid any further work interruption. 0PM will be
represented at these local conferences by G. M. Keller and Paul R. Porter."
The Washington Committee, The

U. B.

W. & H.

of A.

Exhibit No. 234

[Submitted by United Brotherhood of Welders]

629 St. Helens A\'enue, Tacoma, Washington,

December
Mr.

30, 1940.

A. Franklin,
President, Intei'natUmal Brotherhood Boilermakers, Iron
J.

Shipbuilders

Helpers,

Brotherhood Block, Kansas City, Kansas.

Dear Sik A letter from you. addressed to me, arrived the day following
receipt of tlie copies sent to the Secretary of Lodge #568.
It was embarrassing
to be told that I had received the original because they had received their copies.
That may have been intended.
It is said there are two sides to every Question and fair judgment requires
that both sides be heard. I have never had the privilege to receive any other
than your communication bearing date Dec. 14, 1940, which states that I am
suspended as of that date. The immediate elTect of this action is that I am
thi-own out of my job, humiliated, and embarrassed without any kind of hearing
whatsoever prior to your action of said date.
:

4088 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

I have read a great deal of matter regarding the Weldors whom I had the
honor to represent for a number of years in California. I>etters written over
the signature of Officials of your Organization, the Metal Trades Department
of the American Federation of Labor and the American Federation of Labor's
own Secretary, Mr. Frank Morrison, now retired. All on the subject of Weldors.
I am
I am familiar with the Wilson Award and the signatories thereto.
familiar with the subject matter of the rehearing before that Board of 1918.
It has been my interest to read a great deal of Labor History both National
and International.
I am a citizen of the United States of America and a member of the Masonic
Fraternity. I mention this because I have been accused of being a communist
by those who hoped to gain by so accusing me. I am a firm believer in the
Trade Union Movement and too I believe it must remain definitely Democratic
in its Governmental ADMINISTRATION of Law and Policy.
You can understand from what I have said I am deeply disappointed to receive
your letter which deprived me of membership in your Organization and also
deprived me of my job in the most humiliating manner.
A trial of my case before a jury of my peers would certainly have been more
American than the action taken.
Your letter leaves me thoroughly condemned and punished but quite luiinformed
I am just a man depending
of any matter you feel justifies your attitude.
upon a job for a living and it is certainly giving me the works when you by

such action deprive me of my means of livelih(od then adding insult to injury

you say I can appeal to the same body that you say has already been consulted
It is more than likely I would be
with, and agreed to the sentence imposed.
wasting my time and money taking my case back to the same body that has
already done me the injustice of condemning me without a hearing yet state no
groimds for the condemnation.
I fought for the Weldors while I was employed by them just as you do fight
That the boilermakers felt our opix)for the Boilermakers for the same reason.
sition is no more true than other metal trades who have the same right under
the attitude of the A. F. of L. as does your Organization. The majority of these
men are now members of your Organization.
Do you believe your condemnation of a man that has a reputation of long
standing among them will assist you to bring about a better understanding and
cooperation on the part of the Weldors? I do not think it will. In fact, I have
already had a number of letters in the mail (and I have written none on the
subject yet) offering their personal support if I will announce my program.
I want to be allowed to work among my fellows as one of them, realizing as
I know the pre.sent does
I do the very controversial position the Weldor is in.
not hold out any very promising prosptM-t of the remedy he wants.
I therefore feel that you who made the decision of which I am complaining
is also the one who can recede from that position.
I will await your further correspondence with me in the hope that we may
bury the hatchet and find a harmonious platform for our future activities.
I am very sincerely yours,
C. Cardno.

Exhibit \o.

23.">

[Submitted by United Brothorhood of Welders]

[Letterhead of International Brotherhood of Boiler Makers. Iron Ship Builders,

and Helpers of America!
K.\NS.\8 City, K.\n8.\s. Jauuarij

(>th,

W'/t.

Mr. C. Cardno,
629 St. Helms Avenue, Taeomn, WaxhhKjton.
De.\r Sir: This will acknowledge receipt of your l<>tter of December 30th and
the contents have been noted.
I do not deem it necessary to deal at length with the statements contained in
your letter as you know full well that for many years you did everything within

IXVESTIGATIOK OF THE NATIONAL DEFENSE PROGRAM

4089

your power to destroy the metal trade crafts who had jurisdictiou over welders
and you carried ou these activities while carrying a withdrawal card from this
brotherhood, and in my judgment the exercising of the power vested in the
International President in Article
Yours very truly,

4,

Section 1
J.

A.

was

fully justified.

Frankon,

International President.

[Handwritten:] The charge "that for many years you did everything within
My
yr)ur power to destroy the Metal Trades Crafts" cannot be sustained.
activities so charged consisted of activities as a member and Business Agent of
the Weldors I'nion.
Names of our uni(Mi 192()-30 Associated Weldors, Burners and Helijers of
America; 1930-36 As.sociaticai of Certified Weldors; 1936-1941 Weldors International A.ssociation.
I

have been engaged in building a Weldors Union and this he construes as

my powers to destroy tlie Metal Trades.

tising

Exhibit No. 236

[Submitted by

I'liitpfl

Brotherhood of Welders]

TLetterhead of International As.sociation of Machinists, Hope Lodge No. 79]

Seattle, Washington, October 31, 19.'il
Mr. Dave P.asor.
c/o Mrs. Dave Ba.'<'>r.
J777 WoodUnrn Arrnnc. Scntfle. W<i.^hinf/ton.
Dear Sir and Bkothek This is to notify you that you have been charged
with conduct unbecoming a member of Machinists' Local No. 79. The charges
are as follows
1. For violating yoiu- oath of oilice in refusing to turn over the property of
Local No. 1351 when ordered to do so by Grand Lodge Representative Jas. A.
:

Duncan.
2. For promoting a dual organization.
3. For being a "finger man" for a "goon squad" that attacked the Business
Representative of Local No. 79. Stephen Ban-y, and Brother E. M. Weston, of
Boiler Maker.s' Local #104.
Charges were preferred against you by the Executive Board and signed by:
Robert Stephens, Ed. P. Beach, A. E. Baines, C. R. Hedges, C. O. Dale, Bill
Th(mipson. Walter Brown, and Henry Hutchin.son.
You are herebv notified to appear on Thursday, November 6th, 1941, at 7 30
:

P. M..

You

Room

109. Labor Temple.

are entitled, if you so desire,

to

select

any member

in

good standing

Should
of the International Association of Machinists to act as your attorney.
you fail to appear at the time designated above, the trial will proceed as though
you were present as set forth in the Constitution of the International Associati(m of Machinists.
We, therefore, trust that you will be present.
Fraternally yours,
R. E. Sqxher, Secretary.
[seal]

4090

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 237
[Submitted by United Brotherhood of Welders]

Qi^iT

DISCHAROED

[X]

laid off

California Shipbt'ilding Corporatiox

DISCHARGE QUIT

SLIP

(To the employee)

Louis LANyir,
35S6 E. Broadway, Long Beach.

No. 5953

Badge number
Paymaster: Please terminate services of bearer.
Name of employee: L. L. Lanyk.
Shift 1. Off 11. Has 3 hours worked today.
Occupation: Welder. Occup. code: 311. Rate: $1.12 per
O. K. for transfer: No.

44990.

hr.

California Siiipruildino Corporation', C. Hanson, Foremin

Date: 10-27-41.

Advances and deductions

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4091

When I requested the keys from the Chief, he informed me that neither me,
nor anyone else could have them.
I then contacted the Sheriff and he and Mr. Hudson, Highway Patrolman,
accompanied me to the Community House where the members were waiting for
the meeting to be held. We then went to the home of the Sheriff, where the
meeting was held.
Jack Searcy, Sr.,
Organizer, repr&senting
of Welders d Burners.
this 1st day of December A. D. 1941.

The National Brotherhood

Sworn

to

and subscribed

to before

me

[SEAT]

My

E. H. Bacot,
Notary Public.

Commission Expires October

25, 1942.

Exhibit No. 239

[Excerpt from The Boilermakers and Iron Ship Builders Journal reporting on
Convention of 1930, at which delegates reported no welders were heard.]

WELDING

We recommend that every possible means be taken to maintain weldtng as a

part of our craft and that our officers make every effort to prevent any organization
of welders becoming a part of the American Federation of Labor or any of its
affiliated departments.
Exhibit No. 240
[Submitted by United Brotherhood of Welders]
I

Letterhead of International Association of Machinists]

Washington, D. C, December
Subject

Mr.

19, 1932.

Organizing Welders, Seattle, Washington.

I. A. Sandvigen,
Busi7icss Representative, 107

Labor Temple,

Seattle,

Washington.

Sir and Bbothe^ei I liave before me your letter dated December 16, relative
to a group of Autogenous Welders who want to become members of Lodge No. 79.
I have read your letter very carefully as well as the clipping attached thereto,
and desire to give you the advice you asked for which we are always glad to do.
In order that I make myself as clear as possible and so that you will understand
more fully, I desire to make this explanation. When the autogenous welding
processes came into existence some eighteen or twenty years ago, the matter
p.ssumed i-ather serious proportions, particularly among the shop crafts in railroad service. Many jurisdictional controversies aro.e and the railroad shop craft
organizations finally decided to ask Secretary of Labor Wilson to select an Arbitration Board before whom the organizations would appear and present their
i*espective claims.
This Arbitration Board was created and consisted of John A.
Moffit, Charles Bendheim, and Ethelbert Stewart. This Board met in Washington
in June 1918, and it so happened that the undersigned was selected to present
to this Board the claims and the position of the International Association of
Machinists. This Board rendered a decision involving a number of specific points
that were presented to them. The following language taken from their report
is really the essence of the report
"With these general principles kept in mind, and with the specific understanding that where 'Oxy-acetylene or other processes are used, each craft shall perform the work which was generally recognized as work belonging to that craft
prior to the introduction of such process,' and that introduction of a new process does not give any craft the right to claim an exclusive use of a process or
a tool in order to secure for itself the work which it did not formerly perform."
Since the decision of the above mentioned Arbitration Board, the crafts in
the railroad industry have gotten along fairly well, although naturally some
jurisdictional disputes over this process have arisen.
These processes, how--

Dear

311932 42 pt.

10

24

4092

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

ever, have been extended to all classes of work and we have hH<l our Jurisdictional controversies with the organizations outside of the railroad industry.

The Boilermakers and the Blacksmiths Organizations have been two organizations that have continued to insist, wherever they thought it was proper, that

men belong exclusively to their respective organizations.

The Boilermakers' Organization, in their Convention held in Kansas City, in
September, 1930, amended their law to change the title of their Organization
by inserting therein the word "Welders." In February 1932, the Boilermakers'
these

Organization asked the American Federation of Labor to approve the change in

their title and stated that in changing the title they did not desire to take Welders into their Organization except those who were doing Boilermakers work.
Frankly, we had our doubts about what woiTld happen if this word was
included in their title and President Wharton protested to the A. F. of L. the
approving of the change in the wording of their title. The matter now is at a
standstill so far as any action on the part of the A. F. of L. although I believe
the Boilermakers' are using this word in their title on their stationary and in
other ways.
There has sprung up in various parts of the c<mntry independent organizaThe have
tions composed of men doing various kinds of autogenous welding.
not been able to affiliate themselves with the A. F. of L. and in most cases are
purely local in character. For instance, there is a group of possibly 100 of these
men employed in the B. & O. Railroad shops in Baltimore and the undersigned
at one time carried on negotiations with them to bring them into our association
which negotiations, however, did not bring any concrete results.
The above is purely explanatory and simply to give you an id^a of what
has transpired in this case.
My advice to you now is that if you can get these men, I mean the whole 125
or even a majority of them, to come into our Association, you should do that.
I suggest that you take them into Lodge No. 79, at least for the present and
not give them a Local of their own. If you are able to do this and if out of
it comes a controversy with the Boilermakers or any other organization, I believe we will be perfectly frank and willing to turn over to the Boilermakers
or any other Organization the men they should have.
[In writing:] This is what the welders does not want.
President Wharton and I came to the conclusion quite some time ago that we
were waging a losing fight when we permitted other organizations to take men
into their fold and then later try to get them to relinquish them and give to us
the men we should have. We are willing to take a chance on taking men into
our organization and then parceling out to some one else the men they should
have.
We think under these circumstances, we occupy a much more favorable
position and we do not think there is anything fundamentally wrong in our doing that, particularly when we state our position on being willing to turn over
later the men that belong to some other organization.
I, therefore, can say that
I think you should take these men if you can get them.
Trusting this gives you the information desired, I am, with kindest personal regards and the Season's Greetings.
Fraternally yours,
H. J. Cabr,
General Vice President.
H.TC H
ccThorpe
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4093

Exhibit No. 241

[Submitted by United Brotherhood of Welders]

11/27/41.

Discriminations After

Name:

Stoppage

Plant: Sandusky.
Location Ohio.
Local Baton Rouge, La.

R. E. Box.
Huron, O.

Address

Work
:

Aflaiiation

Boilermakers, Iron Workers, Steamfitters, 112 Mobile, 600 Mobile,

Ala.

Nature of Grievauce Labor organizor for welders in good standing with

dues and was fired by the Steamfitters in Cleveland, Ohio, Local 120.
:

Sworn

to

and subscribed before me

this 27tli

day of November

all

1941.

R. E. Box,
Notart/ Public, Eric County, Ohio.

[SEAL]

Com. expires 3/6/44.

Marguerite Greene.

Exhibit No. 242

L

Submitted by United Brotherhood of Wehlers]

[Letterhead of International Brotherhood of Boiler Makers, Iron Ship Builders,

and Helpers of America]

K.vNSAs City, Kansas,

November
Mr. Lloyd Rosenquist,
Reg. No. J,!)28.i5, R. R.

/,

Box 2303,
Redwood City,

15, 19.'ft.

dilifoniia.

Sir and BK(yiHPJ<: This is to advise .vou that under the authority vested
in the International President in Article 4, Section 1, lines ten to fifteen, inclusive, of the International C<nstitution and By-laws, reading as follows:

Dear

"He

shall have the direction and supervision (if all Subordinate and DisLodges, with power to susi^^nd their individual members or Lodges,
when in his judgment it is f(U' tiie best interest of our International Brotherhood."
trict

that effective this date your inerbeiship is suspended.

This is also to advise you that if you are dissatisfied with the foregoing action
you have the right of api>eal to the International Executive Council, and in the
event you should appeal and you are dissati.sfied with the action of the Executive
Council uix>n your appeal you will then have the right of appeal from the
Executive Council's decision to the International Convention.
Yours fraternally,
[seal]
J. A. Franklin. International President.

JAF W.
:

cc

Jack Kowalski, Secy. L-6Wm. E. Walter.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4094

Exhibit No. 243

[Submitted by United Brotherhood of Welders J

[Letterhead of International Brotherhood of Boiler Makers, Iron Ship Builders,

and Helpers of America]

Kansas

City, Kansas,

Noremher

15th, 1941.

Mr. H. H. Ramsell, Reg. No. 488021.

Dear Sir and Brother This is to advise you that under the authority vested
in the International President in Article 4, Section 1, lines ten to fifteen inclusive of the International Constitution and Bylaws, reading as follows:
:

"He shall have the direction and supervision of all Subordinate and District
Lodges, with power to suspend their individual members or Lodges, when in
his judgment it is for the best interest of our International Brotherhood."
that effective this date your membership is suspended.
This is also to advise that if you are dissatisfied with the foregoing action you
have the right of appeal to the International Executive Council and in the event
you should appeal and you are dissatisfied with the action of the Executive Council
upon your appeal you will then have the right of appeal from the Executive Council's decision to the International Convention.

Yours fraternally,
J. A.

[seal]

Franklin, International President.

JAF:W
cc

Wm.

E. Walter,

[Hand written

:]

Jack Kowalski, Secy.

No convention

till

Lr-6

1943.

Exhibit No. 244

[Submitted by United Brotherhood of Welders]

Nov. 12, 1941.

Concern:
Due to pressure brought to bear against the Vice-Principal, Mr. John Fuhrer,
of the John Dewet Vocational High School by Local #599 of the Marine Pipefitters, of the United Assoc, of Journeymen Plumbers and Steamfitters of the U. S.
& Canada, my job as instructor in the National Defense Training School has been

To

Whom

it

may

held up indefinitely.

511 So.

Mayo

D. G. RoKES,
Ave., Compton, Calif.

Exhibit No. 245

[Submitted by United Brotherhood of Welders]

[Letterhead of International Brotherhood of Boiler Makers, Iron Ship Builders,

and Helpers of America]

Kans.\s City, Kansas. Koremhcr 15th, 19Jfl.

Mr. James A. Fletcher,
Reg. No. 523153,
2566 34th Avenve, San Francisco, Calif.
Dear Sir and Brother This is to advise you that under the authority vested
:

in the International President in Article 4, Section

of the International Constitution

"He

shall

1,

lines ten tu fifteen inclusive

and By-laws, reading as follows

have the direction and supervision of all Subordinate and Diswith power to suspend their individual members or Lodges,
judgment it is for the best interest of our International

trict Lodges,
when in his

Brotherhood."
that effective this date your membership is suspended.
This is also (o advise yon that if you are dissatisfied with the foregoing action
you have the right of appeal to the International Executive Council, and in the

OF THE NATIONAL DEFENSE PROGRAM

IN\'ESTIGATIO]Sr

4095

event you should appeal and you are dissatisfied with the action of the Executive
Council upon your appeal you will then have the right of appeal from the Executive Council's decision to the International Convention.

Yours fraternally,
[seal]
cc

J.

Franklin, InternaPional President.

A.

JAF:

Jack Kowalski, Secy. L-6

Wm. E. Walter

Exhibit No. 246

[Submitted by United Brotherhood of Welders]

[Letterhead of International Brotherhood of Boiler Makers, Iron Ship Builders

and Helpers of America]

Maboh
Subordinate Lodge No. 92
Address of Writer 7315 S. San Pedro
:

St.,

17, 1941.

Los Angeles, California

Delbeet G. Rokes,
449 E. 118th Place, Los Angeles, Calif.

Deab Sib and Beothee You are hereby notified to appear before the Executive
Board at 7 30 P. M. .Tuesday, March 18, 1941. No excuses will be accepted.
:

Fraternally yours,
E. V. Blackweill,
B. A. and Secretary.

EVB APR
AFL 20798
:

Special Delivery Registered-Return receipt requested.

[Telegram]

Los Angeles,
Delbert G. Rokes.
Care Consolidated Bteel

You are

Co.,

Calif.,

Mar,

18, 19.^1.

I48I Water St.:

appear before the executive board 7315 South San Pedro,

Los Angeles, tonight 7 30 no excuse.
notified to

E. V.

Blackwell.

Exhibit No. 247

[Submitted by United Brotherhood of Welders]

Discriminations After

Work

Stoppage

complaint op

Name W. M.
:

Smith.

Plant

Ingalls Shipbuilding Corp.

Address 412 Holly St., Biloxi, Miss.

Location Pascagoula, Miss.
Welders AflSliatiou National Brotherhood of Welders & Burners. Local No. 6.
Affiliation Independent Union.
Date of Work Stoppage First time, on or about October 9, 1941 second time, on
:

November

8,

1941.

Nature of grievance On or about October 9, 1941, as I was entering the yard to

go to work, I was stopped by Walter Lowery, Jr., Business Agent of Boijer
Makers Union, A. F. of L., and his Secretary-Treasurer, who told me that I
would have to buy a card in the Boiler Makers' Union, or I could not go in the
yard. As I did not buy a card, I lost a day's work.
On ]S*oveniber 8, 1941, as I was entering the yard to go to work, I was again
stopped by Walter Lowery, Jr., and his Secretary-Treasurer and several others.
They told me that I would have to buy a Boiler Makers 'union card, or I couldn't
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4096

work, and also threatened me with physical violence against my National Brotherhood of Welders & Burners union card, telling me that I would have to tear it up.
They also told me this was the last warning.
On October 13, 1941, I lost four days' work on account of National Brotherhood of Welders & Burners Union activity.
W. M. Smith.

Sworn

to

and subscribed

to before me, this 24

My

day of November A. D.

1941.

E. H. Bocot, ,Notary Public.

[seal]

Commission Expires October

2-5,

1942.

Exhibit No. 248

[Submitted by United Brotherliood of Weldei-s]

Los Angexes,

Foreman

Calif., 11/8/41.

at Consolidated Ship Yard:

I have orders to lay off the men that did not work from 2Tth of Oct. to Nov. 5th,
as soon as they can be replaced or whenever I haven't enough work for them.
This order was issued by F. G. Donahoo at Consolidated Steel Shipyard
Dept. at the Craig yard Nov. 6th, 1941.
J.

W. McCuTCHEON, Leadernian.

Exhibit No. 249

[Submitted by United Brotherhood of Welders]

Discriminations fob Weldek Union Activity

Name: Dorsey

Affiliation: Independent Union.

Lyons.
Address: 373 Grant Street, Pascagoula, Miss. Plant: Ingalls Shipbuilding Corp.
Welders Affiliation: National Brotherhood
Location: Pascagoula, Mississippi,
of Welders & Burners.
Local 6.
:

Other data: On November 12th, at

30 P. M, Walter Lowery, Jr., Business
Agent for the Boiler Makers Union, A. F. L., and his Secretary and Treasurer
canje to my house. Walter Lowery. Jr., accused me of passing out literature and
applications and union cards of the National Brotherhood of Welders & Burners
union to men in the shipyard while they were at work. This accusation was
false, and I so informed Mr. Lowery.
Lo-'ery then informed me that I would
have to tear up my Welders' Union card or he would keep me from working, by
force if necessary. Lowery also forced me to sign a note to collect Boiler Makers'
Union dues through the company.
.'j

Jack Adams.

Sworn

to

and subscribed

to before me, this 24th

[SEAL]

My

commission Expires October

2.'i.

day of November, A. D. 1941.

E. II. BocoT, Notory Puhlic.

1942.

Exhibit No. 250

[Submitted by United Brotherhood of Welders]

Discriminations for Weldeh Union AcTnirv

Name: Dorsey
Addre.ss

87.'5

Lyons.

Grant

Street, I'ascagoula, Miss.

Welders Afliliation National Brotherliood

of Welders & Burners.
:

Independent Union.
Plant Ingalls Shipbuilding Corp.
Location Pascagoula, Miss.
Local No. 6.
Affiliation:
:

Other data On November 12, 1941, I went to the office of tlie Boiler Makers'
Business Agent, A. F. of L., to join the Boiler Makers' Union. Walter Lowery,
Jr., Business Agent of the Boiler Makers' Union, was in the office.
Lowery .ac:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4097

me of organizing an independent welderg' nnion, which I denied, this accusation being false. Lowery then attaclied me in the office, but the fight was sepaThe same day Lowery ordered a strilie because of Welders' Independent
rated.

cused

union

activities.

DoRSETT E. Lyons.

Sworn

to

day of November, A. D. 1941.

E. H. BocoT, 'Notary PuUic.

and subscribed

to before me, this 24th

[SEAL]

My

commission Expires October

25, 1942.

Exhibit No.

2r>l

[Submitted by United Brotherliood of Welders]

DiSCKIMINATIONS AFTER

COMPLAINT OF

Name:

J. L.

Address: 129

Meyer.
Washington,

WORK

J. L.

STOPPAGE

MEYES

Plant: Ingalls Shipbuilding Corp.

Location: Pascagoula, Miss.
Local No. 6.

Biloxi,

Miss.

Welders Affiliation: National Brotherhood of Welders & Burners.

Affiliation
Independent Union.
Nature of grievance On or about October 9. 1941, as I was entering the yard to
go to work, I was stopped by Walter Lowery, Jr., Business Agent of Boiler Makers
Union, A. F. of L.. and his Secretary-Treasurer, who told me that I would have to
buy a card in the Boiler Makers' Union, or I could not go in the yard. As I did
not buy a card, I lost a day's work.
On Sunday, October 12th, Walter Lowery, Jr., threatened all men connected
with the Welders' Union, and ordered a strike standing on the street, for the morn:

ing of October 13th, on account of the Welders' Union. I lost four days' work because of the strike, and I have been threatened with jjhysical violence several times
since those dates.
Lowery also forced

me

to sign a note to collect Boiler

Makers' Union dues

through the Company.

J. L.

Sworn

to

and subscribed

to before

me

this 24th

[seal]

My

Commission Expires October

2.5,

Meyer.

day of November, A. D. 1941.

K. H. Bocot, Notary Public.

1942.

Exhibit No. 252

[Submitted by United Brotherhood of Welders]

[Copy]

D. Vance,
Anti-Trust Division
United States Department of Justice
J.

Portland, Oregon, November

2,

1941.

Mr. Charles Bkinkeehoff,

Tacoma, Wash.

Dear Friend and Brother I received your welcome letter just before I went
to work yesterday. I gave the information and address to three fellows on the
job last night, who promised to spread it around among the fellows as much as
:

they dared.

You might be interested to know that I have been warned from all sides here
since I attended the welders' meeting here. This fellow Leonard Brock (who is
on the Board here) threatened me with a fine from the Boilennakers. So I went
delinquent the last of October to avoid any more trouble with them. I hated to
loose my Boilermakers card because if the welders don't get recognition it will
cost me considerable to reinstate sometime.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4098

Jack Gillard, Steamfitter's Bvisiness agent, called

me up and

told

me

was

behind the eight ball for going to the meeting. He told me to warn all the fellows
not to go to any welders' meetings.
He said, "You tell them if they do they will get a pink slip."
When I came down here from Seattle I had to work on a permit out of the
Steamfitters' Local 235 here. The fee or assessment was 50^ a shift and $1.00 for
double-time shift, besides the $50.00 to join, $6.00 quarterly dues, and then 15^ a
day members' assessment and $3.50 a month Boilermakers' dues.
When I first landed here April 8, 1941, I presented my clearance card to the
Boilermakers Local #72, but Tommy Ray refused to accept it because I was
going to work on a permit from the Steamfitters. I wrote back to Seattle Local
for a Withdrawal Card.
I'm sending you the letter I received from them, also
the money order I got back. In June Local #72 accepted my clearance card but
refused to give me a Withdrawal Card then, and on two other occasions later.
Most of the welders here are beginners and because of their one great ambition
to become a good welder they are scared stiff if anyone says Boo.
If there is any other way I can help you without openly exposing myself too
much, please let me know. I'm sending what proof I can to you. When this
this is settled one way or another if you still have it you can send it back.
I certainly admire you, Charlie, for the work you are doing and wish I could
help you more. You or any of your friends will always be welcome at my home.

Your friend and brother,

James H. Eabnbst.
[Copy of money order]

April

26, 1941, Seattle,

Wash.

Issued to Boilermakers Local #541.

Remitter: James H. Earnest.

Exhibit No. 253

[Submitted by United Brotherhood of Welders]

Local Union No. 760

[Letterhead of United Association of Journeymen Plumbers and Steam Fitters
of the United States and Canada]

NOVEMBER

JAMES

White,
South Pennsylvania

8,

1941.

E.

25Ji

Street,

Denver, Colorado.
Dear Sir and Brother: I received your thirteen dollars ($13.00) for September, October, and November dues and assessments and one dollar ($1.00) for

August assessments.

As Local 760 has charge preferred against all Welders that walked out on various jobs you will have to have your Business Agent write me a letter verifying
that you did not walk out with the Independent Welders.
In our last meeting a special assessment was placed on each member, the
amount of ten dollars ($10), to be paid within the 30th of November.
The purpose of this assessment is to purchase a Home for Local 760 and 760-B
and only covers repairs on the Building to be purchased. Hoping this information is clear.

Until I receive a letter from your Business Agent I cannot send you your
book.
Fraternally yours,
W. L. DuNMiRE, Sec. d Treas.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4099

Exhibit No. 254

[Submitted by United Brotherhood of Welders]
[In writing:] Tliese letters are evidence of the antagonistic attitude to men
to build a Weldors Union.
[In writing :] Defence work makes no difference, we are out so far as A. F. of L.

who want
is

concerned.

United Weldors-Cutters and Helpers of America, Local

November

37,
IS, 1941,

I was working for the San Francisco Bridge Co. who have a construction job
at the Navy Fleet base. Terminal Island, Cal. I was ordered off my job by
the Business Agent of International Union of Operating Engineers, Local 12-B.
He said that I must clear through this union in order for me to continue
working.
I am a member of the United Weldors, Cutters and Helpers of America, and do
not wish to work under any other union. I have a paid up card in the International Union of Operating Engineers, but they said that I must come into the
union and sign a clearance.

Yours

They

also
standing.

truly,

refused to

let

me

clear even thought I

am

R. L. Livingston.
a member in good

Exhibit No. 255

[Submitted by United Brotherhood of Welders]

Grand Lodge, United Weldoks-Cutters and Helpers of America,

5825 South Broadicay, Los Angeles, California, November 19, 1941.
I am working for the San Francisco Bridge Co., who have a construction job
I was ordered off my job
at the Navy Fleet base. Terminal Island, California.
by the Business Agent of International Union of OiK'ratiiig Engineer.?, Local 12-B.
He said that I must clear through this union in order for me to continue working.
I am a member of the United Weldors, Cutters and Helpers of America, and
do not wish to work under any other union. I have a paid up card in the International Union of Operating Engineers, but they said that I must come into the
union and sign a clearance.
Yours truly,
Joseph R. Nowak.
[In ink

:J

They

also refused to let

me

clear.

Exhibit No. 256

[Submitted by United Brotherhood of Welders]

National Brotherhood of Welders and Burners of America,

11-15-41.
E. Nesselquiest do swear and confirm that the following statement,
made by me this 15th day of November 1941, is true.
I was asked by the personnel ofhce of the Plumbers and Steamfitters Union
Local No. 91 if 'l belonged to the National Brotherhood of Welders, Burners
and Helpers after having said yes I was told that I would have to surrender
my book, which is in good standing, to the Union before I could go back to
work on the Alabama Ordnance Works at Childersburg, Ala. Other welders
which did not confess that they belonged to the National Brotherhood of
Welders were given a clearance card and did not have to surrender their book.
P. B. Nesselquiest.
I.

P.

:::

4100 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

[In pencil:] Please note clues in 2 union at

same month.

No. 6504

Temporary Weekly Working Card

issued by
plumbers and STEAMFirrERS LOCAL

NO.

106

Lake Charles and Vicinity

5-16, 1941.

Name

Robert N. Hodges.

Initiation

Working for: Carter Water Dept.

Good until 5-16.
:

Archie Anderson.
$5.38.

No. 6505

Temporary Weekly Working Card

issued by
PLUMBERS AND STEAMFITTERS LOCAL

NO.

10*5

Lake Charles and Vicinity

5-16, 1941.

Name

Robert N. Hodges.

Initiation

Working for: Carter Water Dept.

Good until: 5-24.
Archie Anderson.
$1.90.

No. 6507

Temporary Weekly AVorking Card

issued by

PLUMBERS AND STEAMFITTERS LOCAL

NO.

106

Lake Charles and Vicinity

5-23, 1941.

Name:

R. M. Hodges.
Iniation: 1206.
Working for: Carter.

Good

until

5-31.

AnoHiE Anderson.
$2.06.

No. 6508

Temporary Weekly Working Card

issued by

plumbers and STEAMFITTERS LOCAL

NO.

106

Lake Charles and Vicinity

6-3,

1941.

Name:

R. N. Hodges.
Initiation
Working for: Carter Water Dept.

Good

until: 6-7.

Archie Anderson.
$2.10.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

ORIGINAL

To

4101

be given to member.

Mechanic's Due and Insurance Receipt

Shbeveport, 6-5-1941.

Hegistered No. 494913

Received from Bro. R. N. Hodges C. C. from Lodge No.
Monthly dues
Insurance Premium
Total
Issued by Local No. 328.
Received Payment,

No. 643724

$1.

75
25

1.

3.00

-,

W.
[April punched out of

list

of

months

To

ORIGINAL

T.

Adams.

in margin.]

be given to member.

Mechanic's Initiation and Insurance Receipt

Tampa,

Fla., Feb.

8, 19.',1.

Registered No. 497913

Received from Bro. Robert Newton Hodges, C. C. from Lodge No.

Monthly

Dues

.$23.

Insurance Premium

1.

75
25

25.00

Total

Issued by Local No. 433.

Received Payment,
H. Hatfiuld per

[February punched out of

of

list

months

ORIGINAL^To

WEW/mws.

in margin.]

be given to member.

Mechanic's Due and Insurance Receipt

Shrevepobt, La., .lug.
Registered No. 436293

G,

1941-

No. 680243

Received from Bro. R. N. Hodges,

C.

from Lodge No.

Monthly Dues

$1. 75

Insurance Premium

1.

Total

25

3.00

Issued by Local No. 328.

Received Payment,

W.
[June punched out of

list

of

months

To

ORIGINAL

T.

Adams.

in margin.]

be given to member.

MEOHAinc's Due and Insurance Receipt

Shrev'Eport, 9-5-1941.

Registered No. 436293

Received from Bro. R. N. Hodges, C. C. from Lodge No.

No. 650695

$L 75

Monthly Dues
Insurance Premium
Total

1.

25

3.

00

Issued by Local No. 328.

Received Payment,

W.
[July punched out of

list

of

months

in margin.]

T.

Adams.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4102

To be

ORIGINAL

given to menil)er.

Mechanic's Due and Insurance Receipt

Shbeveport, 5-5-1941.
No. 640597 E.
Registered No. 494913

Received from Bro. R. N. Hodges, C.

C.

from Lodge No.

$L 75

Monthly Dues
Insurance Premium
Total

1.

25

3.

00

Issued by Local No. 328.

Received Payment,

W.
[March punched out

of list of

months

T.

Adams.

in margin.]

ORIGINAL To be given to member.

Mechanic's Due and Insurance Receipt
Shbeveport, 7-8-1941.
Registered No. 494913

Received from Bro. R. N. Hodges, C. C. from Lodge No.

Monthly Dues
Total

Issued by Local No.

Received Payment,

75
25

3.

00

"328.

W.
[May pimched out

1.

$1.

Insurance Premium

of list of

months

T.

Adams.

in margin.]

Tampa. Fla., 1-18-1941.

Received from R. N. Hodges, vFive and 00/100 dollars, on

init., bal.

due, $15.00.

$5.00.

H. Hatfield.

Tampa,

Fla., 1-27-1941.

Received from R. N. Hodges, Fifteen and 00/100 Dollars, on int pd in

full.

$15.00.

H. Hatfield.
No. 10044

Plumbers & Steamfitters, Local Union

91,
Oct. 9, 1941.

'

Received of Robert N. Hodges, Fifteen and no/100 Dollars.

Amt. Paid,

$15.00.

Balance, $75.00.

By F. Stuckey,
Shop Steward, Local
Tampa,

J^la.,

Received from R. N. Hodges, Five and 00/100 Dollars, on

91.

1-11-1941.

appli., bal.

due,

$20.00.
$5.00.

H. Hatfield.

INVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4103

Exhibit No. 257

[Submitted by United Brotherhood of Welders]

[Letterhead of Liternational Brotherhood of Koiler Makers, Iron Ship Builders

and Helpers of America]

Subordinate Lodge No. 92

Address of writer 731.j S. San Pedro, Los Angeles, California.
:

Apkil 15th, l&il.

Wm.

F. Schlater,
3909 Ma/yfield,

Deab

Sir

Long Beach, California.

and Brother: By motion made and carried by Local No. 92

at

its

regular meeting of April 10th, 1941, you are directed to appear before a Trial
Board on Saturday, April 19th, 1941, at 11:00 o'clock A. M., at 7315 South
San Pedro Street, Los Angeles, California, in connection with your activities
in a dual organization.
Fraternally yours,
E. V. Blackwell> Secretary.

BVB CCB
AFL 20798
:

Registered mail

Return receipt requested.

Exhibit No.

2-38

[Submitted by United Brotlierhood of Welders]

Nov. 19, 1941.

welder trainee at one of the National Defense training schools
here in Los Angeles. I have now completed my training and belong to the
United Welders, Cutters and Helpers of America. I cannot go to work at
I have a large
California Ship Corp. because I must pay $25.00 initiation fees.
family, and cannot afford to pay out that much money at one time, for as you
know I only get .$82.80 per month and this must be used for the supix)rt of
I

my

am

W.

P. A.

family.

Yours

truly,
.'{529

J. D. Martinez,
Michigan Ave., Los Angeles, Calif.

F]xhibit No.

2.59

[Submitted by United Brotherhood of Welders]

[

Copy

Telegram

Seattle. Wash., Nov. IS, 19^1.

Dave Basor,
1919 C St. XE.:

L. S. Graves
Isaacson Iron Works? Returned after strike was told there was
no work. Foreman told him if it wasn't for activity in Independent Union he
would have been able to work. After asking J. Creem of the O. P. M. for work
these men were told by him that there was no orders against the A. F. L. hiring
and sending men into shipyards. These names are: C. M. Jorgensen, Bart Di
Mattina. Robert Burlew, Everett Railsback. Thomas Hopkins, Melvin Coffee,
Vincent E. Millei-. Everett Railsback worked at Pacific Car and Foundry. Job
was refused on leturn to work. Creem claims he has no authority to put this
man to work. Lewis Callahan and A. L. Torerson worked at Pacific Car and
Foundry; layed off day bef<ne strike? AVere called back during strike; did not
go back and were refused their job after the strike. Herbert :Meyer worked at
Rainer Equipment Co. Came out on strike and was refused reemployment on
the excuse that work played out.
Melvin Coffee from Archer Blower went out
on strike. After strike w:is over company claimed work played out. A. M.
Welsh from Mud Mountain was reemployed for one shift, then fired. Was told
to tear up Independent cai'd by master mechanic and go back in the A. F. of L.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4104

after the strike claimed

Willard Pease from Isaacson Iron Works refused job
on the same excuse.
work was played out. Also Clyde Jones was refused job
after strike because of being
Albert Dossev from Fentron Steel was fired day
one year replaced by man from local
sick one dav -"had been employed more than
Truck Welding was refused
506 Ornamental Iron Workers. Al Howren from
Allan Johnson from Isaacson
iob'back after strike; claimed shortage of work.
the excuse that they were out of
Iron Works reported for work and they used
Motors went to work but
workin- materials. William Marcel from Kenworth
Ralph
filled by someone else during strike.
been
had
Position
out.
locked
was
that they could go to work
Tacoma
Seattle
at
told
were
Glad
Denny
and
Severs
haye at least 100 more men in the same
they went through 541. Daye Wethem
in person today; will have some more
of
all
contact
couldn't
but
cydition
tomorrow.
j^^ Cakkoll.
;

Exhibit No. 260

[Submitted by I'nited Brotherhood of Welders]
[Telegram]

Tacoma, Wash., December

2,

1941.

William Plested,
notice from Franklin that our membership in
Seye?'!? of^us S^'recehed
yiolation of truce agi-eement.
boilermakers has been suspended gross
;

Chas. Brinkerhoff,

Council.
Exec. Sec. Tacoma M'elders and Burners

Exhibit No. 261

[Submitted by United Brotherhood of Welders]
[Copy]

2327 N. CoMMEKCiAL, Portland, Ore.,

Nov. 7, \9Ifl.

Mr. Ca.\Ri.ES Brinkerhoff,

Tacoma, Wash.

we,ar
rGr:;ZttC
a uoN
Ki uiiiL

\.u;ss"Sa?nm.

-.t

T.K

& H.rco.

,-,^^,,.j,i,ig

^'Ca\r/rfv^v ^mliTJnuSucto... He

l,er.

jind said,

A f*d
\\ell,

of
lex,

has..,a 27 years welding e.peri-

-So,f.f;-,S^e,^r.S";f;^^:;^^^iS^r',S",Tr',iere. He .s .... ..,.er

answer any au.l all questions and do aoy
ibmit It 'u"! sam l,e w.ml.l Rla.lly

'"r\';,;r't"S;v:"S;:rJ"'2

n;

W. Flande,.

.t.,

(Landlady's), Beacon 0009.

He beh)iics to Iron Workers Local #510 here.

Portland, Ore., Phone

t,..^v

here by the name of Leonard Brock

Last Wednesday (Noy. 5. 1041) a fellow
tr,.uble here, and who, by the way i^
me
the
cuiscd
vho
V
Tel
(T^fe snnu
and is the fellow they all Ciilled
on tL 1 ilcTi arkers' Execuliye Hoard here,
were here), tried to throw Berry
you
Sunday
the
meeting'
ersel
V
l"
iont ie a
they both worked but got a
where
scIuh.1
welding
g..yernment
the
out '!f
trouble.
his
for
nose
irood poke in the
<>,. i.,>i,. T'ln
think he could be of any help Im
This is all I know about the rase but if yon
like.
you
information
any
you
sure he will giye

Sin.erely yours,
^^^^^^^^^

James H. Earnest.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4105

Exhibit No. 262
[Submitted by United Brotherhood of Welders]
[Telegram]

PlTTSBtTRGH, PA., Nov. 13.

Dave Bassor,
1919 C St., Northeast:
The Pittsburgh loc;il of National Brotherhood
meeting

to be held at the Roosevelt

of Welders ran a notice of a

Hotel for welders in

all Pittsburgh papers

meeting. The following craft agents, Johnson & Adherne, business
agents for Steamtitters Local 449, and Mat Gorman, president of the Iron
Workers Local No. 3, of Pittsburgh, walked in before meeting convened. It
was asked that all nonwelders to leave at this time. Then these representatives
started confusion and intimidation, threatening all welders at this meeting, and
on leaving Mv. Johnson said all welders at meeting on Riggs Distler pay rolls
at JVIorgantown ordnance works not to report for work in the morning, as their
permits would be lifted.
Marvin A. Brown.

at

this

Exhibit No. 263

[Siil)iiiitted

by United Brotherhood of Welders]

State of Louisiana,
Parish of East Baton Rouge:
Before me, the undersigned authority, personally came and appeared Bennie
E. Reynolds, who, after being by mo first duly sworn, deposed and said tliat
prior to November 6, 1941, he was employed by the Reynolds Metal Company,
working on a construction job at Sheffield. Alabama, engaged in the construction
of an aluminum plant; that affiant was at the time a duly qualitied member of
the Steam Fitters Union, and an affiliate of the American Federation of Labor,
and that affiant is a welder by trade and was performing welding duties at that
time; that he went on a sympathy strike as the result of the demands of the
welders for recognition, and that approximately one hundred welders in this
area went on a sympathy strike with the action of the West Coast Welders
strike; on November 6, 1941, they were advised of the agreement signed between
the welders' unions and Mi-. Sidn(\v Ilillman of the Office of Production Management, and that )U)der this agreement they returned to work on November 6,
1941; that after they, affiant and twenty-three other welders, were called into
the office of the persoiniel manager, and were advised that if they wished tf'
go back to work that it would be necessary for them to clear themselves w,ith
the Steam Fitters Local, and that six of theiu were blackballed, and that it
would be necessary for them to pay their fines the personnel manager of the
Reynolds Metal Company advised them that they had no differences with them
but that six of them, including affiant, were "blackballed" by the A. F. of L.
Steam Fitters Local, Sheffield, Alabama, Local No. 760, that they would have
to clear themselves through the business agent, a Mr. Roper, or Mr. Poag;
affiant does not remember the names of all six of the men, but two of t?Iie six
were L. J. Daniels and Dennis C. Dean affiant knows that .several of the welders
working on the T. V. A. constructions were "blackballed" also, because the
guards had their names down and would not let them get into the gates at the
time; that when this happened affiant was a duly qualified, and still is a duly
qualified, member of the National Brotherhood of Welders and Burners of
America affiant would still be working today if it had not been for the action
of the A. F. of L. in "blackballing" him, and this mea.sure was also exercised
against almost two hundred welders in this area.
;

Sworn to and subscribed before me

day of November, 1941.

at

Baton Rouge, Louisiana,

this

Notary Public.

4106

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 264
[Submitted by United Brotherhood of Welders]

Long Beach, Calif., 11-12-41.

Gentlemen I reported to work at Cragship Building Co. the morning of Nov.
6, 1941, apd was turned away by the shop steward of the machine shop, and the
production management and I was also told by the management to stay out
With the under.standing that there was no hard
until this was cleared up.
:

feeling

between

us.

I was again told to report back again

7, 1941
and was again turned down by the management.
that I was expecting to be paid from and including
I made a protest at the time
Nov. 6, 1941, as the Government had ordered us back to work on that day. I
was Informed by the management not to expect pay from them, that they had a
contract with the C. I. O. and must live up to it. They al.so stated that if we
wanted to drag our time we could do so, and also if we returned to work the
G. I. O. would pull the rest of the crafts, and they could not afford to shut the

The following morning, Nov.

by the United Welders

office,

entire shop down for the sake of the welders.

Sincerely,
E. C. Olsen,
55SS L. B. Blvd., Long Beach, Calif.

Exhibit No. 2G5

[Submitted by United Brotlierhood of Welders]

was requested to report for work Nov. 8, 1941, at 2 P. M. by the personnel

The following
I went to work at 12:30, graveyard shift. Nov. 8th.
men forced me to leave my work at 2 P. M. and was told not to come back till
I was cleared thru the C. I. O., Local 9. San Pedro.
I

director.

Daniel

J.

Donald
Curtis

Fraser, shipfitter, shop steward.

P. Oneil, welder, shop steward.

Wm.

Hoke,

Jr.,

welder, shop steward.

TFesley E. Stife,
L. A. Shipyard

<f-

Dry Dock, San Pedro,

Calif.

Exhibit No. 206

[Submitted by United Brotherhood of Welders]

Nov. 11, 1941.

In Regard to the Burbank Steam Plant

I

was one

of nine weldors

&

Heli)ers

who were

let

out due to strike condi-

tions.

When we were notified to return to work, we were forced to take Civil Service
examinations before we could return to woi-k. After going through this examination, three of us are still not at work.
I am one of the oldest men on the job, and am older than any working, except
the boss.

My work has proven satisfactory up until the time we all walked out. This
walkout included our weldor boss, Mr. Alexander. He assured us he was with
us 100% and that we all would go back together, but it seems that Mr. Alexander
has picked his own relation with the company and i)ersonal friends from the
examination files (regardless of seniority) and put them back to work.
The company made statements that there was no O. P. M. or government telling
them how to run the city, that there was no connection between the government
and them as far as the goveriuuent having anything to say about rehiring us.
They would rehire us according as the need arises.
Joseph U. Nowak,
37U West

108

St.,

Jnglewood.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4107

Exhibit No. 267

[Submitted by United Brotherhood of Welders]

Hawthorne,
J.

Calif.,

August

19, IdJfl.

W. Massey,
Pres, United Welders
Local #37, Los Angeles, Cal.

Dear Bro. I would like to have this letter entered in the investigation of
multiple-card racket, as proof of discrimination against me.
In April of 1941 I went to work for the Los Angeles Shipbuilding and Dry
Dock Corp. of San Pedro, Cal. I was excepted by the investigating committee of
the Shipyards Union of the C. I. O., Local #9. The union compelled me to pay
50 cents a day permit for the first 10 days in order to work. I paid the Union
the $5.00 permit money plus $3.00 to be applied to my membership fees, and
was told by the shop steward that I could pay the balance of $8.50 on my member
ship fees at my convenience. But on the 2nd of June my time card was pulled
out of the time card i-ack, and the shop steward said I was through. I wanted
to know why.
So they told me that it was because I belonged to the United
welders vmion, and would have to get a withdrawal from it if I wanted to work,
so I refused. And they terminated me.
I went to the company and asked for
a letter explaining why I had been terminated but they refused, saying it was
a matter between myself and the union, and was entirely out of their hands.
But I was given a letter of recommendation from the superintendent of welders,
as I was a certified Navy welder and had ijroveu my ability.
Fraternally yours,
Paui, C. Gregory,
:

727 York Ave., Hawthorne, Calif.

Exhibit No. 268

[Submitted by United Brotherhood of Welders]

Engineer to Start & Stop Welding Machine

Department of Justice
434 Federal Office Building
seattle,

Nick Bosko, 2625 South State

washington

Street,,

October 31, 1941.

Tacoma, Washington, Telephone: Main

1550.

Interviewed by Gai'eth M. Neville, October

30.

Bosko was working as a welder's foreman at the Seattle-Tacoma Ship Yards

at the time of the strike. He was also serving as a welding instructor in the
Lincoln High School, Tacoma. He is still continuing the latter activity.
Bosko has been following the trade of welding for the past 21 years. He
joined Local 691 of the Boilermakers Union in 1935, and was made a charter
member. In 1937, he went to Los Angeles and obtained a job with the Gay
Engineering Company. Inasmuch as this company had a contract with the
Boilermakers, it was not necessary for Bosko to join another union in order
However, while welding for the Gay Engineering Comto get on the pay roll.
pany in San Francisco during August and September of 1937, he was forced to pay
25^ a day permit money to a Refrigeration union. Bosko was unable to explain
why this was necessary. He said that he deemed it better to pay the permit
money than to have the entire job picketed.
Bosko's next job was on the Federal Building in Los Angeles. He worked
on this job during January, February, and March of 1938. While working, he
was forced to pay to the Iron Workers Union a total of 35^ for each day worked.
250 of this amount was permit money and 10^ was picket money. The shop
steward working on the Federal job collected the cash.

311932 42 pt. 10

25

4108

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

During July of 1938, Bosko went to Grand Coulee and obtained a welders
job at the Dam under his old Boilermakers card. During the latter part of
1938, a business agent for the Sheet Metal Workers in Seattle arrived at the
Dam and claimed jurisdiction over all Grout welding. As a result of this
claim, all of the Boilermaker welders doing such welding were forced to pay
additional initiation fees and join the Sheet Metal Workers Union, and then
pay dues to both unions. Bosko was working in the machine shop at the time
and so was not affected. However, he did attend all of the Union meetings
at which the situation was discussed and as a result is familiar with the entire
affair.

In October of 1939 Bosko moved to Seattle. Shortly after arriving, he was

offered a job at the Mud Mountain Dam. However, he discovered that in order
to work on this job, it would be necessary for him to join the Machinists Union
and give up his Boilermaker's card. Mr. Pat Obar, head engineer at the Mud
Mountain Dam, so informed Bosko. Because of the difficulty of changing unions,
Bosko refused the Mud Mountain job.
Shortly after the occurrence described above, Bosko obtained a welder's job
at Boeing's. However, before he could go to work on this job, he was forced
Bosko was not required to pay
to join the Aeronautical Machinists Union.
any initiation fee, but only to pay 3 months' dues in advance. Bosko does not
know why he was not forced to pay the regular initiation fee.
Bosko worked at Boeing's until February of 1940. During this month, he
was offered a welder foreman's job at the Seattle-Tacoma Ship Yards, and so
transferred from Boeing's to the Ship Yards. Inasmuch as Bosko was already
a member of the Boilermakers Union, he had no difficulty transferring. After

he left Boeing's he stopped paying dues to the Machinists Union. He now has a
chance to go back to Boeing's at a rate of pay higher than he was receiving
from the Ship Yards at the time of the strike. However, the Machinists Union
has refused to reinstate him and insists that before he takes the job at Boeing's
he must pay a new initiation fee of $25.00. Bosko exijlained that at present he
also has been asked to go to work for the Austin Company at Manchester, WashHowever, in order to work as a welder at
ington, at wages of $77.00 per week.
this place, it would be necessary for him to join the Machinists Union having
jurisdiction over the job.
Bosko said that a man's ability no longer counts. He said that if someone
in the Union "gets sore at you" it is impossible to obtain work under the jurisdicHe explained that he could obtain for the Departtion of the Union in question.
ment proof of numerous instances where Union officials had refused to send
competent welders on a job because of some personal grievance held against such
men, and thus forced the employers to hire all kinds of incompetents and drunks.
Furthermore, he said that "when times are not so good" it is absolutely necessary
for a man to "be thick" with the proper union official in order to obtain work.
He said that favoritism is constantly being shown to certain individuals at the
expense of other members of the Union. He explained that as a result of such
conditions, there is no incentive for a welder to try to become efficient and do
his work well.
The writer asked Bo.sko how various unions determine which one has jurisdiction over a particular job. He replied, "that union whose biisiness agent first
gets the iob usually obtains jurisdiction." He explained that no union would
ever stop its members from doing work theoretically under the jurisdiction of
another union, but that all unions constantly endeavored to prevent nonmembers
from doing work which might even be considered under their jurisdiction.
The writer asked Bosko whether he was aware of any instances where two
unions, both claiming jurisdiction over the same job, insisted on iilacing their
own members on the job witli the understanding that only one of the individuals
so hired would actually work. II(> rei)lie(l that sucli occurrences were contiimally
going on in the Seattle ship yards. When the writer asked him to furnish specific
instances, he said that such occurrences were so conunon that lie had failed to
make a mental note of them. He did explain, however, that a Mr. Pat Caster,
owner of the Northwest Welding Supply Company, while doing a job at Fort
Lewis, Washington, had l)een forced to hire a stationary engineer at a wage
of $l.r)0 per hour to turn on tlie welding machine used by a union welder. Bosko
said that all the stationary engineer had to do was push a button four times a
day.
Bosko also said that Morgan, formerly owner of the Service Electric
Company, had been forced to follow the same procedure at various times. Morgan
is now superintendent at the new Todd Yard.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
At the

4109

close of the interview, Boslfo explained that the situation had reached
am willing to stick my neck out for the Govern-

such a disgusting point that "I

ment, if it needs me."

Gareth M.

Ne\'ilxe, Special Attorney.

Exhibit No. 269

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Peter M. Peterson,
3, care of
General Delivery,
Kirkland, Washington.
Interviewed by "Vance on October 28, 1941.
I have been a member of four other locals aside from the Boilermakers.
In
about 1930 1 worked on ships in the Great Lakes member of International
Seamen's Union (A. F. of L). In order to be a welder and a maintenance
man aboard ship, I had to take a test as a seaman and join the Seamen's Union.
Then we got into New York Harbor, welding some deck brackets. I was forced
to join the Longshoreman's Union which was at that time A. F. of L.
I had
to pay $75.00 and $4.50 a month.
I got off that ship and went back to the
Lakes. I was a member in good standing of both unions above mentioned and
decided to change ships in Detroit. I went to work for Nicholson Transportation Company.
Immediately I had to join another union, the National Maritime
Union (C. I. O. affiliate). The constitutions of all three unions are almost
identical.
Each stated I could not take a withdrawal card while I was working
Then I decided to stay ashore and went in business for myself. I
at my trade.
did not keep up the cards and became delinquent. After a while I went to Wisconsin and landed in Manitowoc in 1936 or 1937. I paid permit money to Local
386 of Boilermakers but never got membership. They were asking me 25^ a
day in 60 days I could become a member if I got the right signatures on my
application, but that was practically impossible.
Until you were in a year you
had to start as a First Class man.
Then I went to Milwaukee, Wisconsin, August 23, 1939 went to work for
Milwaukee Railroad Company in the Car Department. We were there in the
shops about one-half hour when we were asked if we were going to join the
union. We asked what one that we were getting a little tired of joining
unions. I joined the Blacksmith's Union, Local 77, became very active in union
work and was an officer of that local. There were four unions in this shop
Blacksmith's, International Brotherhood of Carpenters and Helpers of America,
Boilei-makers, and Sheetmetal Workers^had jurisdiction over all welders. I
got work different places with my blacksmith's card. According to Hoyle I
was doing Carmen's work and had to pay permit money to Tinsmiths and Carmens. I was active in forming the Association of Certified Welders of Wisconsin.
We progressed to the point where we had about 3,500 welders lined up
getting along nicely. Then I was forced from my job and the Superintendent of
the Division said it was due to union pressure. He suggested I take a pass and
go to the West Coast. I found the Association had been crashed here.
I went to work in Seattle at Todd Dry Docks under the Boilermakers Local
541 on a permit card. At that time I was still a member in good standing of
the Blacksmiths. I had to pay 25(^ a day to the boilermakers. At that time
I was doing Blacksmith welding on the job.
It was the summer of 1940 that
I went to work at Todd's.
I lost my job and Doug Fowler wouldn't give me a
He said card men came first. I ran into one of the fellows I had worked
job.
with at Todd's and he told me all the card men were working and that there
were no card men on the list.
Around the 1st of September 1940 I got a job with Macco Case Construction
Company at Bremerton, Washington, through the Blacksmith's. The Boilermakers claimed jurisdiction on the job, and I knew I would have to join that

Route

4110

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

union when

I went back to Seattle to work.

One day J met William Williams,
International Vice President of the Boilermakers, and we were talking about my
working over at Macco's. I asked him if that was under the jurisdiction of 541,
and he said no and advised me to join the Boilermarkers at Bremerton, take my
clearance card in to Doug Fowler when I came to Seattle and that he couldn't
refuse it. My card was from 571 at Bremerton.
Later I went to Seattle and put the clearance card into the window. The
Business Agent, Fowler, said "That's no good, Bv;d.
You know, Pete, you
tried to pull a fast one on us.
You can't go over there and join a union and
come back here. You know tlie initiation here is $30. Before I put you
to work you will put that $30 through the window or else you won't go to
work." I took the thing to the floor and the membership said I could come into
the union if I paid the other $20. I was willing enough to do that because I
had to go to work. Since that time I have paid dues into the thing. I have
tried to be a good strong union man.
In February I went on record as asking that the permit system be lifted
entirely and a straight initiation fee be asked.
It is not in the Minute Book;
when I asked about why it wasn't recorded, the secretary said that it wasn't
favorable policy.
I was a job
I went to Lake Union, then to Todd's, now at Lake Washington.
steward at Lake Washington. I did the Business Agent's bidding and pulled
a man off the job. I then sent in my resignation.
He is in Kodiak, Alaska, now.
I actually know a man that carries 20 cards.
We have taken a vow to keep this strike clean.
One time I asked George Nelson how many permit men we had on He said
I would
I know that is a lie because we had 69 permit men at Todd's.
74.
estimate 450 or 500 permit men all together. He also made the statement that
there were 74, from the floor. I wanted to get the cards numbered and was
outvoted three to one.
We have bought a National Defense Bond and sewed up about $15,000.
When we wanted to buy this bond, there was a fight because they didn't want
They had turned it down in the Executive Board meeting.
to tie that money up.
At Todd's Dry Dock for over seven weeks I sat behind the Tin Shop and
drew $10 a day for reading magazines and doing absolutely nothing. They
tabled me because there were 9 sheet metal men working on boilermaker work.
They kept me there to keep away from a jurisdictional dispute. I had to sit
there in order to satisfy the Boilermaker's Union.
The ships at Todd's are being built on a cost plus system. I would estimate
that ships are being built at three times the cost they should be.
There are welders walking out in Louisiana, New Jersey, Chicago, etc.
Basor is key man. If he settles, they will all settle.

Exhibit No. 270

Department of Justice
434 Federal Office Building
seattle, washingtx)n

October 30. 1941.

Paul E. Davis, 505 East Denny Way, Apartment 506, Seattle, Washington.
Interview by Gareth M. Neville, October 29.
At the time of the strike, Paul E. Davis was working at the Associated Yards.
He obtained an International card from the Teamsters Union in Chicago on
December 29, 1938. He paid $400 for this card and at the time he obtained it
was informed that it would automatically admit him in any A. F. of L. Union
in the world, providing he could pass a journeyman's test for the type of work
done by the Union members. Davis arrived in Seattle in February of 1939. He
first tried to transfer to the Milk Wagon Drivers Local of the Teamsters Union.
RadcliiT, business agent for this Union, said that Davis' International card was
no good so far as the Teamsters were concerned. Furthermore, RadclifT did not
even let Davis join the Union and pay the regular initiation fee.
Davis passed a welder's test and obtained a pMmit card from Local 541 on
July 14, 1941. Nelson, business agent for Local 541, likewise refused to honor

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4111

Davis" International card and informed Davis that it vpould be necessary for
him to pay permit money at the rate of $1 a day until the full sum of $60 was
paid. Davis vv^as given no assurance that he would be admitted to the Union
However, he was informed that he would
at the expiration of the permit period.
be investigated and if found suitable would be passed on by the Union executives.
Davis paid $30 to Local 541 and then stopped his payments. He was immediately blacklisted by the Boilermakers and informed by Doug Fowler that if the
remaining $30 was not paid immediately he, Davis, would be pulled off the job.
However, Davis went on strike with the Welders and Burners Local before
Fowler had an opportunity to carry out the threat.
At the time Davis applied for his permit card from Local 541, he was informed
by Nelson that the Boilermakers Local 541 had full jurisdiction over all welding
work in all the shipyards in Seattle. Nelson further said that it would be
necessary for Davis to obtain a permit from Boilermakers Local 541 in order to
gain admission to any shipyard. According to Davis, Boilermakers Union, Local
541, does not have jurisdiction over all welding in all of the shipyards.
Davis said that tlie contract under which the IBoilermakei's claimed jurisdiction
was signed by all of the Metal Trades Union and that the welding work was
supposed to be divided among all such Unions according to predetermined jurisdiction.

While working at the Associated Yards, under a Boilermakers permit card,

Davis welded material under the jurisdiction of the Shipwrights, Plumbers and
Steamfitters, and the Boilermakers.
Gareth M. Nemlue, Special Attorney.

Exhibit No. 271

[Submitted by United Brotherhood of Welders]

Pipe Fitters and Welders, Locai, Union No. 465

3169

Los Angeles, Cauf.,

Received of Brother

Dues

Orill,

5/5, 1939.

Albert V.

$25. GO.

Initiation fee, pd. in full.

Received by

Lewis

S.

To be given

ORIGINAL

Berray.

to

member.

Mechanic's Due and Insltbance Receipt

Los Angeles,
Registered No. 462876
Received from Bro. Albert V. Orrill, C.

Monthly Dues

$3.
1.

E. v.
of

25
25

4.50

Total
Received payment,

[Month

from Lodge No.

Insurance Premium

Issued by Local No.

6-28, 1939.

No. 215113

92.

May punched from

list

of

months

in margin.]

Blackweix.

4112

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

To be given

ORIGINAL

to

member.

Mechanic's Due and Insurance Receipt

Los Angeles 8/30,

Registered No. 462876
Received from Bx'o. Albert V. Orrill, G.

1939.

from Lodge No.

Monthly Dues

$3.

Insurance Premium

1.

25
25

4.50

Total
Received Payment,
Issued by Local No. 92.
E. V.

[Month of July punched from

No. 226540

list of

months

Blackweix.

in margin.]

Exhibit No. 272

[Submitted by United Brotherhood of Welders]

To be given

ORIGINAL

to

member.

Mechanic's Out-of-Work and Insurance Receipt

Los Angeles, 2-28-1939.

Registered No. 462876
Received from Bro. Albert V. Orrill, C.

No. 26096

$0.

25
25

from Lodge No.

Monthly Dues
Insurance Premium

1.

1.50

Total

Received Payment,
Issued by Local No. 92.
E. V.

[Month of January punched from

list

of

months

in

Blackwell.

margin.]

To be given

ORIGINAL

to

member.

Mechanic's Due and Insurance Receipt

Los Angeles, S-Sl-1939.

Registered No. 462876
Received from Bro. Albert V.

No. 28996
Orrill, C. C.

Monthly Dues

$0.

Insurance Premium

1.

E. V.
of

February punched from

25
25

1.50

Total
Received Payment,
Issued by Local No. 92.

[Month

from Lodge No.

list

of

months

in

margin.]

Blackwell.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

To be given

ORIGINAL

to

4113
member.

Mechanic's Due and Instirance Receipt

Los Angeles, 4-25-1939.

Registered No. 462876.
Received from Bro. Albert V.

No. 29398

Orrill, C. C.

Monthly Dues

$0.

Insurance Premium

1-

E. V.
of

25
25

l-5<^

Total
Received Payment,
Issued by Local No. 92.

[Month

from Lodge No.

March punched from

list

of

months

Blackweix.

in margin.]

July

15, 1939.

Received of A. V. Orrill $1.00 Donation.

$1.00.

Bnx

Robinson.

By M. Warwick.

To be given

ORIGINAL

to

member.

Mechanic's Due and Insurance Receipt

Los Angeles, 7-17-1399.

Registered No. 462876
Received from Bro. Albert V.

No. 218136
Orrill, C. C.

from Lodge No.

Monthly Dues

$3.

Insurance Premium

1-

25
25

4.50

Total

Received Payment,
Issued by Local No. 92.
E. v.

[Month

of

June punched from

list

of

months

in

Blackwell.

margin.]

[official PB31MIT]

No. 324732

Inteknational Association of Bridge, Strt'ctubal and Ornamental Iron

Workers
Local Union No. 433

July

22, 1939.

This permit issued to A. V. Orrill entitles him to work until July 29, 1939, and
is void thereafter unless renewed by Examining Board of Business Agent.
Steward Collect $2.00 per day for June dues, $6.50.
M. E. Emerson.
Issued by

Exhibit No. 273

[Submitted by United Brotherhood of Welders]

International Union of Operating Engineers, Locals No.

137-B, 307 Walnut Street, Yonkers, N. Y.

137,

137-A, and

Feb. 9th, 1939.

Received from Arthur

J.

Cummings Five

Dollars.

Quit fee on acc't L-137B.

$5.00.

M.

J.

Parkinson.

4114

:
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

To be given

ORIGINAL

members.

to

Mechanic's Due and Insukance Receipt

Los Angeles, Calif.,

19
No. 460722 B.
Registered No. 475941.
Received from Bro. Arthur Joseph Cummings, C. C. from Lodge No.
Monthly Dues
$2. 7a
1. 25
Insurance Premium
,

'

3.95

Total
Received Payment,
Issued by Local No. 92.
E. V.

[Month

of

November punched from

list

of

months

Blackwell, per

WEW.

in margin.]

I had to join Laborers' Union to work as Welder's Helper at Parker Dam.

Joined Boilermakers Union to work as welder Same job.
Joined Operating Engineers' Union in New York to weld on tunnel job.
Initiation Fee was $150.00 and $5 a month dues.

Akthub
Exhibit No. 274

J.

Cummings.

[Submitted by United Brotherhood of Welders]

Industrial Union of Marine and Shipbuilding Wokkeks of Ameeioa

Affiliated

with the Congress of Industrial Organizations

membership book

Hawkey, Joseph, is a
to Certify that the Bearer hereof Name
Signature
City of San Pedro State Calif.
of Local No. 9
Comb. Welder Initiation Pee Pd.
Initiated 1-15-41 Book of No. 1729 Dept.
F. C. Suba, Jr., Seci'etwry.
This

is

member

International Brotherhood of Boilermakers, Iron Shipbuilders and

Helpers of America
This book belongs to Joseph Hawkey, welder. West Virginia.
Age at Date of Initiation 46 years Registered No. 515689
August 13, 1941 Local No. 92 of Los Angeles State California
Reinstated:
:

Initiated

Date

last

Social Security No.

Financial sercetaries are required to
.

fill

out the above items complete.

International Brotherhood of Boilermakers, Iron Shipbuilders and

Helpers of America
This book belongs to Joseph F. Hawkey, Comb. Welder, Proctor, W. Va.
Age at Date of Initiation 42 years Registered No. 471175 Initiated 8-9
1937; Local No.: 169 of Detroit; State: Michigan; Date last reinstated:
6276-28-39'
232-09-5554.
Social Security No.
Financial secretaries are required to fill out the above items complete.
:

Also attached to this exhibit was photostat of a membership book in the name of Joseph
for the Steel Workers Organizing Committee which was not legible enough tO'
Ed.

Hawkey,
copy.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4115

Mechanic's Out-of-Work Insurance Receipt

Phoenix, Oct.

30, 1939.

No. 40170 E.

Registered No. 471175.

Received from Bi-o. Joe F. Hawkey, C. C. from Lodge No.

Monthly Dues, .25
Insurance Premium, $1.25
Total, $1.50

Issued by Local No. 627.

Received Payment,

City Wilnoy.
[Month of October punched from

list of

months

in margin.]

This is to Certify that in consideration of Initiation fee of $5.00, duly paid or

transfer of Local Union No. 25, Joseph Hawkey, Welder, 162944, is hereby
granted membership in the International Association of Bridge, Structural, and
Ornamental Ironworkers by Local Union No. 25, Detroit, Mich., Nov. 8, 1<)37.
Jack Thorpe, President.
Jack O'Connor, Financial Secretary, 69 Erskine St.

Exhibit No. 275

[Submitted by United Brotherhood of Welders]

In March 1936 I was working on the construction of a bridge 25 miles from

I am a welder and was working at the welding trade at that time.
I drove truck to and from the job every day, carrying the crew to the job
and home every day. At that time I did not belong to any union. The Teamsters' Business Agent told me that I would have to join the Teamsters' Union
and that they had jurisdiction over my work and everything would be taken care
of whfen I joined their Union.
I joined and paid $25 initiation fees.
About
three months later I was approached by the Business Agents of the Machinists
was
told
and
that the Machinists had jurisdiction over all welding everywhere
and that I would have to join the Machinists, and that belonging to their
organization that would be the only one necessary to belong to.
I joined on
July 1, 1936, Local 364, International Association of Machinist. When that
job was over I transferred to Oakland, Local 1546, Auto Mechanics, because the
Machinist in that city had lost their charter because of an unauthorized
Stockton.

strike.

In January 1938 I went to work on the construction of a new all-steel, allwelded gold dredge being constructed by the Western Pipe and Steel Co. of
San Francisco. I had to join the Boilermakers Union. Initiation fee, $26. I
worked on the job ten days and a strike was called because of jurisdictional
disputes.

dropped the Boilermakers by not paying dues and continued the Machinists,
to San Diego to get away from strikes and went to work in the
boat yards, under Machinists' jurisdiction over welders. Everything was fine
until I left thte boat yards and went to work for a structural steel erection
Co. The National Iron Works of San Diego.
I was forced to pay $.12i^ per
hour or $1 per day permit to the Ironworkers' Union, Local 229, for the privilege
of working at my trade on steel erection.
I am inclosing one receipt as evidence.
In July 1940 I obtained a California State contractor's license because I had
started in business for myself, and was doing considerable contract work but
continued to carry my membership with the Machinists because most jobs
required a union card for everybody working on those particular jobs, regardless of whether they were being done by contract or not.
In January 1941 I went to work on the construction of the Consolidated Aircraft Building welding steel caps on steel piling. At the start of the job the
pile drivers were going to claim jurisdiction because of the work being connected with pile driving but the iron workers won out because the piling was
I

and moved

4116

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

steel.
I worked on the job for three and one half months and considerable
pressure was put on me to join the Iron Workers Union. On March 20, 1941,
Their dues at that
I paid $14.00 initiation fees in the Ii'on Workers Local 229.
time was $5.50 per month. The job was finished the 30th of March. My
application was sent to Kansas City for acceptance and in the meantime I
contracted on April 1st to weld some air and gas pipe in the new Rohr Aircraft
Building in Chula Vista after about one week I was approached by the Business Agent of the Steam Fitters Union Local 230 and was told I would have
to join the Steamfitters Union if I wanted to finish the job.
The Business
Agent threatened to pull off all plumbers and throw a picket line around the
place if I didn't join.
I gave the Business Agent $10 at that time and I told
him I would pay the $40 balance when I was initiated. He told me it would
After
cost me 25% of what I made until the $40 was paid.
I paid the $40.
I was initiated I had to pay $6 for a welding examination, $3 for examiners
and $3 for welding equipment rental although I have my own welding equipment I was not allowed to use my own equipment but had to pay for use of
equipment from a local welding shop which takes in as high as $75 a nite for
these examinations. My State welding certification papers were not recognized
by this local as proof of my ability but was forced to pay for and take their
examination. Incidentally the cost of a State certification costs $50.00 considering time, material and machine work necessary on welding samples, and
equipment necessary to complete test.
Due to the circumstances I never appeared for initiation in the Iron Workers
Union because a member must be a member in good standing with dues paid up
for at least 1 year before a withdrawal card will be issued, or in other words a
withdrawal card will cost $66. Therefore I never received a card from the Iron
My card No. in Machinists is 889231, my card No. in Steam Pipe
Workers.
;

Fitters is

My card

No. in our newly organized Welders Union is 6139.

These statements are true and any error if any is due to faulty memory.

Vernon McChesney.

Exhibit No. 276

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

Melvin H.

Tippie,

Route

4,

Box

272,

WASHINGTON

Tacoma, Wash.

Interviewed by Vance, October 30, 1941

Tippie was a member of the Machinists Union from August 1939 until March
Was a member of the Iron Workers Local 581 from March 1939 to
12, 1940.
August, 1939. Was a member of the Boilermakers Union in 1918, dropped in
1921, reinstated in 1940,

and member

until the present.

Mr. Tippie was employed at the Western Steel Casting Company when that
company was organized by the Machinists in August 1939. He believes he paid
The foreman at Western Steel then wanted to loan him to the Star Iron
$15.
& Steel Company to do some burning at that company. It was the same kind of
work he had been doing at Western Steel but inasmuch as the Iron Workers
union had organized the Star Iron and Steel Company he was told that he would
have to join the Iron Workers union. He refused to pay anything to the Iron
Workers as he was not very anxious to work over there anyway, so they made
him a member free of charge and he went over to Star Iron and Steel to work.
However, while ho was thevo he was forced to pay dues to both the iron
workers and machinist unions. He believes the amount was $1.00 per month
to the Iron Workers and $2.00 per month to the Machinists.
From there he went to woi-k at the Bremerton Navy Yard where he needed
no union card. However, during the time he was there he kept both cards in
force by paying dues to both unions.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4117

Upon leaving the Navy Yard he went to work at the Western Steel which, by
that time, had changed its name to the Johnson Engineering Company. He was
employed there 30 days. From there Mr. Tippie went to work at the SeattleTacoma shipyards through the Boilennakers, Local 568. There is a story in
connection with this
Inasmuch as the Boilermakers had, or were claiming, jurisdiction over all
welding in the Seattle Tacoma yards, Mr. Tippie went to the Boilermakers Local
and showed his machinists' card. The business agent told him to get the hell
out because they were not putting any machinists to work. He would not even
send Tippie out to take the welders test. Tippie then went back to the business
agent of the Machinists union who told him that there had been personal trouble
between himself and the business agent of the Boilermakers Union, but that he
did not believe that such diflBculty should stand in the way of Tipple's being
employed at the shipyards and he made^an effort to get the Boilermakers to accept Tippie, but was unsuccessful.
Tippie, however, was personally acquainted with George Morgan, who was
the superintendent at the shipyards. He called Morgan and told him what had
happened and that he wanted to take the welders test. Morgan told him to come
on out and he would see that he got the test, which was done. Tippie then
proceeded to wait for a call. Some time later (there is some confusion as to
exactly how much time) Tippie received a call from Morgan who said "Why in
the hell aren't you out here, you passed the test." Tippie told him that he had not
received a call from the union to go to work. Morgan stated then to Tippie that
he had several such cases and that he had to put in a call for 15 welders and only
got 5 and that he was going to look into it. Morgan later told Tippie that this
was what happened Morgan, calling the business agent of 568, said "How about
my 15 welders?" to which the business agent replied that he did not have any
welders. Morgan told the business agent that he knew this was untrue and that
he knew of several instances of men who had taken and passed the test and were
home waiting for a call. The business agent at this time was one Byers. Byers
thereupon called Tippie to rejyort to the Union office and sent him to work at the
shipyards. Tippie then paid $.31.25 for reinstatement in the Boilermakers Union.
At the shipyards he did practically all kinds of welding. He went to work at
the yards on March 5, 1940, and said that amongst other welding which he did was
machinist welding. He did not believe, however, that he did any iron work.
:

Exhibit No. 277

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
SEATTLE,

WASHINGTON

OCTOBEE 30, 1941.

Wedgeworth, Route 3. Box 1004B, Auburn. Washington.
Interviewed by Gareth M. Neville, October 30.
At the time of the strike Wedgeworth was a member in good standing of the
Boilermakers Local 568 of Tacoma. He has worked as a welder for the past
fifteen years, part of which time was spent as a welding foreman for the United
States Bureau of Engineers. This work made it necessary for Wedgeworth to
travel to different parts of the United States. The last such job was completed
on August 27, 1940, and Wedgeworth returned to Portland, Oregon, his former
home. He attempted to obtain work as a welder. He was informed by the business
agent of Local 72 of the Boilermakers, Tom Kay, that there was a good demand
for welders in Portland, but in order to obtain a job it would be necessary to pay
a permit fee of $1.00 a day for an indefinite period. Inasmuch as Wedgeworth
could obtain no satisfactory information as to when he would be allowed to join
the Union and thus stop paying the $1.00 a day permit fee, he refused to enter into
the agreement with Ray and as a result was forced to leave Portland in order to

James

F.

work at his trade.

Wedgeworth proceeded to Tacoma and obtained a job as a welder in the Seattle
Tacoma Ship Yards. He joined the Boilermaker Union in Tacoma, Local 568,
and paid an initiation fee of $30.00. He was not required to pay permit money.

4118

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

On September

30, 1940. he returned to Portland and attempted to obtain welding

work on a pipe line then being installed. The business agent of the Plumbers
and Steamfitters Union liaving jurisdiction over the pipe line work refused to
honor Wedgeworth's Boilermakers card and said it would be necessary for
Wedgeworth to pay a permit fee of 500 a day for an indefinite period, or until
accepted by the Union and then pay an initiation fee of $80.00. Wedgeworth
refused this deal and again returned to Tacoma where he worked until the strike.
Wedgeworth said that he has positive proof that Ray, the business agent for
Local 72 in Portland, made a practice of preventing members of his Union in
good standing from working, and putting in their place non-union men, or
members of other unions, and collecting from such individuals $1.00 permit
money. Wedgeworth contended that the following individuals would back him
up in the above statement Tom Stigm, Hillsborough, Oregon Ralph Beeler,
Portland, Oregon. Beeler is presently employed by the J. E. Hazelstine Company.
:

Gareth Neviixe,
Special Attorney.

Exhibit No. 278

[Submitted by United Brotherhood of Welders]

Rt.

Box

1,

127,

Westminster, Calif.,
August 11, 1941.

Mr. Bill Massey,

Pres. United Weldors, Cutters d Helpers of America,
Dear Sib: As requested in your communication dated August 12th, I am
offering you the following information to aid the government in its investigation
of the Weldors problems
I have belonged to the following unions A. F. L. Machinist, C. I. O. Shipyard
Workers, A. F. L. Boiler Makers, United Weldors, Cuttters & Helpers of
America.
At the present time I belong to the following unions United Weldors, Cutters & Helpers of America, A. F. L. Boiler Makers, C. I. O. Shipyard Workers.
I have been forced to pay dues on two cards at the same time.
I have been considerably inconvenienced, but not discrimianted against due
to the multiple card racket.
At the present time at the California Shipbuilding Corp. a man can't express
his opinion about, or for a Union for Weldors, Cutters, and Helpers.
Fraternally yours,
:

W.

E. Mills.

Exhibit No. 279

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEJATTLE,

WASHINGTON

Jack Black, 2803 Boylston Avenue, No., Tel. East 6112.

Interviewed by Neville, October 29, 1941.
I have been a member of the Machinist's Union in Spokane since May, 1938.
In Seattle I was unable to work under my Machinist's card. Edwards, the
local business agent, told me that he had a lot of local welders out of work.
So then I called on the Boilermaker's Union. Doug Fowler refused to recogI asked for work in the
nize my card from the Spokane Machinist's Union.
shipyards and Fowler said this came under the jurisdiction of the Boilermaker's
Union and that I would have to join that Union.
On January 2, 1941, I started to work at Todd's on permit. Fowler said
I would have to pay $1.2,5 per week until I was initiated, which would be in
two weeks. Then I would have to pay $30 for the initiation fee. I was
initiated February 22, 1941 after paying about $12. in permit money and $30.
initiation fee.

During the time I was working on permit the fee was raised from 25^ to
$1.00 a day. Nelson said I would have to pay the $1.00 a day and I objected
to paying that much. They didn't force me to pay more.

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4119

At the shipyard I did pipe and machinist welding. But I had to have a
Boilermaker's card to get on the job. You can't have two welding cards in
force at one time, which makes it necessary to join a different union practically
each time you change a job.
Exhibit No. 280
[Submitted by United Brotherhood of Welders]

This is to certify that in consideration of Initiation fee of $5.00 duly paid

Local Union No. 433, Vilus V. Davis, Welder, 199962, is hereby granted membership in the International Association of Bridge, Structural and Ornamental
Iron Workers By Local Union No. 433, of Los Angeles, Cal., Apr. 22, 1941.

W.

J.

Staer, President.

Jim Chehxy, Financial Secretary.

706 Valencia Street, Los Angeles, Calif.
[Back]

A. B. S.

&

O.

I.

W.

Identification Sheet

My

permanent address

illness,

please

notify

Social Security

is

_^

Date
19
In case of accident or serious
Whose address is
,

number

Official Permit,

No. 482927
Association of Bridge, Structural and
Ornamental Iron Workers
Local Union No. 433

I ntb2{ national

4-12, 1941.
is

This permit issued to V. V. Davis entitles him to work until 4-26, 1941, and
void thereafter unless renewed by Examining Board or Business Agent.
Steward Collect For Pending Obligation.
Issued by
J. R. Reusoneb.
No. 456867
Official Permit, International Association of Bridge, Structural and
Ornamb^^tal Iron Workers
Local Union No. 433
3-18, 1941.

This permit issued to V. V. Davis, entitles him to work until Mar. 25, 1941,
and is void thereafter unless renewed by Examining Board or Business Agent.

Steward Collect for

Issued by
M. E. Emerson.
No. 224220

Oil Workers International Union, Local No. 128, Date Mar.

Rec'd of V. V. Davis, $5.00
Local Secretary to issue Official Dues Card.

5,

1941

O. E. Forsyth, Steward.

This
[Month

of

is

not an

official receipt

March indicated by "X."]

A 215699
Official Permit, International Association of Bridge, Structural and
Ornamental Iron Workers
Local Union No. 433
3-25, 1941.

Received of V. V. Davis, Ten and Fifty-one hundredths Dollars, For Init

fee,

etc.

Received by
J.

R. Reasoner.

4120

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 281
[Submitted by United Brotherhood of Welders]

Depabtment of Justice
814 United States Court House
SEATTLE,

WASHINGTON

E. Vaughan, General Delivery, Kirkland, Washington.

Interviewed by Vance on October 28, 1941.
I am a member of the MachinI have a permit card with the Boilermakers.
Prior to that
ists Union, A. F. of L., which union I joined in August of 1941.
time I was with C. I. O. Woodworkers and got a withdrawal card.
I worked at Lamb's Machine Company, in Hoquiam, as a Machinist Welder,
I went down to the Boilermakers as when I
I have been up here seven weeks.
left Aberdeen they told me I could transfer my Machinists card into the Boilermakers. I found I couldn't, after I got up here. George Nelson told me I
would have to pay $C0 within 60 days could either pay it $20 at a time (no
less than $20) or $60 all at once.
I have worked at Lake Washington Shipyards ever since coming here. I have
I
really done Boilermaker welding at least, that is what it is classified as.
haven't paid anything on the permit money at all.
J.

Exhibit No. 282

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
SEATri,E,

WASHINGTON

October 30, 1941.

Vernon E. Lasater, 1006 South "I" Street, Tacoma, Washington.
Interview by Gareth M. Neville, October 30.
At the time of the strike Lasater was working under the jurisdiction of Local
Lasater, prior to
of the Boilermakers at the Seattlo-Tacoma Ship Yards.
of 1937, was employed as a welder at Fort Peck. He said that after the
welding job at Fort Peck ended he obtained a job with a road-construction gang
operating out of Cle Elul, Washington the firm of Woodworth & Cornell was in
charge. After being hired by this firm, he was assigned to operating a pump.
However, before he could actually opei'ate the pump, he was forced by his employer to join the Hod Carriers Union. This cost $11.00. After finishing the
construction job, he obtained work in a sawmill. He found that his Hod Carriers
card was of no u.se and as a result he was forced to join the Saw Mill Workers
union and pay an initiation fee of $10.00. This occurred in September of 1939.
Lasater arrived in Tacoma during April of 1940, and obtained work at tlie
.168

March

Seattle-Tacoma Ship Yards. However, before being permitted to go to work,

he was forced by the personnel director at the Yards to obtain a card from the
Boilermakers Union. This cai-d cost liim $30.00. He was not required to pay
permit money. He does not know why.
While working at the Seattle-Tacoma Yards as a welder, he has been doing
work which he would consider to be inider the jurisdiction of the Machinists,
Boilermakers, and Steamfltters. He said that the Boilermakers were able to
enforce jurisdiction over all of this work because of a deal "made by heads of
the Metal Trades Unions." He explained that the rank and file have never been
given a chance to vote on this arrangement.
At the clo.se of the interview, Lnsater volunteered the information that 80%
of the workmen at the Seattlo-Tacoma Yards are in sympatliy with the welders.
He said that "only certain gi-afting Union offici;ils are endeavoring to prevent
ns from forming our own union."
Gareth, M. Neville, Special Attorney.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4121

Exhibit No. 283

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Charles R. Vanderlinde, 332 Second Avenue N., Seattle, Washington (may be

reached through El 2938).
Interviewed by Gareth M. Neville on October 28, 1941.
Worked at Seattle-Tacoma Shipyards at time strike was called had been
there about two months and is in process of becoming a member of 541 also
took out membership in Machinists' Union in April 1941 at Yakima replied,
"Yes, that's right," to question that theoretically he should be able to do any
kind of machinist welding under Machinists' card; said he showed his Machinalso told that Boilerists' card to George Nelson and was told it was no good
makers had jurisdiction over entire Seattle-Tacoma Yard told it was necessary
to pay full amount of initiation and permit money said that for two nights they
tried to go according to A. F. of L. jurisdiction over the local union they had
hired out from and that the representatives said if they didn't do the work they
would be fired from 541 I refused to do machinists' welding for two nights and
they told me that my card was very likely to be pulled was told by the offi*
*
*
cial
but tiie A. F. of L. ruling says that the hall you hire out
from * * *
you're only supposed to do that kind of work the 541 wouldn't
recognize my machinists card I paid $40 theoretically, I will have to pay
another $20 when paid money, George Nelson and two different women were in
office believes payments cover initiation fee
$60 60 days. "Well, I waited for
three weeks and paid the first $20 he said I was delinquent and to never let
every 20 days I was supposed to pay $20 I brought up question
it happen again
of machinists' card to George Nelson the second time; he still said he didn't
have to recognize it he said this was under the jurisdiction of the Boilermaker's.
Vanderlinde said he knew for a fact that he was doing machinist work said
machinists with whom he worked didn't like idea of his using a Boilermakers'
card * * * but didn't do anything; said that George Nelson said that he
was supposed to weld anything that was propei'ly set up and properly ventilated.
Said Boilermakers claim jurisdiction because of Master's Agreement. Said
he had never made objection to practices in open meeting because not a member
yet * * * you can't go to a meeting until you carry a book. Said he had
never been threatened with violence. Promised to keep card for information
;

of this

office.

Exhibit No. 284

[Submitted by United Brotherhood of Welders]

[Copy]

Department of Justice
434 Federal Office Building
seattle,

washington

October 30, 1941.

Robert N. Buckholz, Route 6. Box 209X, Tacoma, Washington.
Interviewed by Gareth M. Neville, October 30.
Buckholz was working at the Seattle-Tacoma Ship Yards at the time the strike
was called. Buckholz's story was as follows: He started to work at the Coulee
Dam project in October of 1938. In order to obtain any work on the job he was
required to join Boilermakers Local 691. This cost him a total of $17.50. He
was not required to pay permit money. In January of 1939. a Mr. Murray, personnel director of the Dam, informed Buckholz that it would be necessary for
him to join a sheet metal workers union which was then being formed in order
The initiation fee charged by this
to continue to work on the Coulee project.

4122

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Union amounted

to $15.00.

However, Buckholz was aware of the fact that his

card in tlie Slieet Metal Union, whicli was purely a local affair, would be
worthless as soon as he left the Grand Coulee project, so he continued to pay
dues to the Boilermakers Union. The type of work done by Buckholz was the
same during the entire period. He said that as far as he could determine there
was no reason for forcing all of the men on the job to join this second union.
Buckholz arrived in Tacoma in October of 1940, and started work as a welder
at the Seattle-Tacoma Ship Yards. He took his Boilermakers card to Local 568
of the Boilermakers Union and was issued a new card without paying any additional fee whatsoever. Buckholz was unable to explain why he had been given
a new card without additional cost, when all of liis friends had been charged
varying sums by the Union.
Gabeth M. Neville,
Special Attorney.

Exhibit No. 285

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Craig E. Vining, 2803 Boylston N., Seattle, Washington, East 6112.

Interviewed by Daly on October 29, 1941.
I paid a
I was initiated into the Boilermakers Local 541 on April 22, 1941.
total of about $37 for my affiliation, part of which was paid while I was working
at Pasco, which is under 541 out of Seattle.
I had been a member of Machinists Local 86 in Spokane for 3 or 4 years, doing
only welding. When I went to Pasco to work for Owen Construction Co., I
was given 5 days to join 541 or not work I went to Pasco in July of 1940.
The procedure followed by 541 seems to be no different in my case than any
other local, as all welders know that it costs money to change jobs, and that it is
necessary to join the local at a particular job. Since I did not have to pay
permit money, it cost me about what I figured to change jobs.
After coming to Seattle from Pasco, the Boilermakers 541 sent me to the
Hydraulic Supply, where I did boiler and pipe welding for a week I was then
sent to Todd Dry Dock for 3 months, until July 1941, where I did all kinds of
welding. I am now at the Seattle-Tacoma Ship Yards, where I am "lead" man
in charge of an assembly.
;

Exhibit No. 286

ISubmitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SBIATTLE,

WASHINGTON

Charles J. Homiston, 3951 Graham Street, Seattle, Washington.

Interviewed by Vance on October 29, 1941.
From 1939 to the present time I have been a member in good standing of
International Association of Bridge, Structural & Ornamental Ironworkers,
Local No. 86 (Seattle). It cost $15.00 to join the Ironworkers; I did welding.
I was a member of International Brotherhood of Boilermakers, Local 104,
and paid some permit fees. I was initiated on August 10, 1987; it cost $32.50.
I was doing burner work In Seattle at the time.
In 1938 I went to work at Coulee. I tran.sf erred into the Welders at no cost.
Wlien I quit I went to work
I worked there a year doing sheet-metal welding.
for Bethlehem Steel Company doing Iron-workers welding, but the Boilermakers
and the Iron-Workers had an agreement that the Boilermakers would get all
the welding and the Iron-workers would get all riveting.
Before I went to

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4123

Bethlehem, the Sheetmetal workers tried to get me to join. I was paying dues
into the Boilermakers. An official of the Sheetmetal workers told me that if
welding copper strips
1 wanted to keep on grout welding I would have to join
I don't know what it would have cost to have
to keep water out of cement.
joined the Sheetmetal workers. The Boilermakers gave up jurisdiction over
grout welding to Sheetmetal workers.
After I left Bethlehem I came to Seattle and took clearance to Local 541.
There was no charge because the original came out of here. I went to work at
the Washington Iron Works, building pontoons probably actually boilermaker

welding.
In August of 1939 541 sent me to Ironworkers Local 86. I went to work at
Pontoon Bridge Builders, 16th Avenue, S. W. I worked there about a month on
free permit, welding or reinforcing steel, welding on shovels, welding on boilers
and clam shells. Dick Tracey came out and told me I would have to join 86,
so I paid $15.50 into Local 86.
Simmons-Drake sent me to Alaska the 1st of April 1940. I worked under
Local 86 and paid dues there in both unions. I paid $6.00 to Ironworkers and
$3.25 to Boilermakers.
/ have paid dues to both 5^1 and 86 since September or October 1940.
In Alaska I welded on tanks for gasoline and oil storage. It was not nece.ssary
to keep Boilermakers' card except that Fowler told me I would lose my insurance,
and also, if I took a withdrawal card I didn't know how the boys would feel about
taking me back when I returned to Seattle. There was Machinist, Ironworkers
and Boilermakers welding.
I returned to Seattle April 2, 1941, and 541 sent me out to Todd's where I
welded plates, bulkheads, and patched holes.
I went to California because I had sick relatives there and took 86 card with
me. I had to pay $2.00 doby fee at Oakland and worked there four days. The
$2.00 doby fee just lets them work.
I have been in Seattle two months.
I worked out at Seattle-Tacoma
welded
on longitudinals and vertical keels transverse braces. I would call it boilermakers welding.
About three months ago there was a dispute between Sheetmetal and Boilermakers out at Seattle-Tacoma. I can't tell you of any instance where work

was done twice.

Simmons-Drake sent two men from BoilerI was shop steward in Alaska.
makers who did work not properly under 86. The men got sore at me because I
wouldn't take the men's dough and send it to 86. That was one reason why I left.

Exhibit No. 287

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,
A.

W. Ellison,
214 Summit Avenue North,

WASHINGTON

Seattle,

Washington; Capital 4596.

Interviewed by Vance on October 28, 1941.

I was a member of the Machinists Union
became a member about a year ago.
I am not a member of any other union except Local 541 of the Boilermakers.
I
was a member of the local Machinists-Welders Union and worked here under
that.
When I first came from Wallace, Idaho, they wouldn't accept my transfer.
I went back to Wallace and worked approximately two months.
Then Markee
Machinery sent for me, and I came here about the 1st of February. I worked
for Markee about two months as a Jlachinist-Welder, and then I went into the
Boilermakers Union April 7. 1941. At the same time others were paying $120, I
paid $30 and was initiated, and that was all there was to it. They sent me to Todd
Ship Yard. I was in the Machinists Union and in good standing when I had to
join the Boilermakers.
I was welding pipe, some high-pressure steam welding,
brazed up a tail shaft, and that work was done in the shop in a lathe; I also did
pipe and armour plates no sheetmetal welding.

311932 42 pt.

10

26

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4124

joined the boilermakers, Nelson tried to put me under the permit system.
was to prove my ability as a mechanic. He wanted $90, but I said
I don't know how my friends got my application through for
I couldn't see it.
I have been a welder about 20 years.
$30.
I have heard oflBcials say they had jurisdiction over all the work in the ship
yards. There was a squabble one time about a sheet metal welder we had at
Todd's. At that time there was a lot of trouble because they wouldn't pull him
That was in July or August.
off tlie job.
I haven't the least doubt but that the permit money goes into the pockets of the
Otherwise, why should I only have to pay $30?
officials.

When
He said

it

Exhibit No. 288

I

Submitted by United Brotlierhood of Welders]

Department of

.Justice

814 United States Court House

SEATTLE,

WASHINGTON

Leo B. Marsh, Box

504, Puyallup, Washington.

Interviewed by Daly, October 29, 1941.
I joined the Boilermakers Local 691 at Grand Coulee

Dam in the fall of 1937

as a welder's helper this cost me $15. I worked at this job until December 7,
1939 I was doing copper braising, which is probably sheet metal working.
Sometime in 1938, I was forced to join Local 434 of the Sheet Metal Workers
Union as a welder's helper I was given a day to join or not come back to work.
This information came indirectly from a man by the name of Clise, an International Vice President of the Sheet Metal Workers. This cost $11, and I let my
Boilermakers card lapse.
I came to Seattle in December 1939, after the winter lay-off at Grand Coulee.
At that time I was carrying only my Sheet Metal card and tried to get work
through 383 (Sheet Metal Workers) here. I talked with the business agent, who
kept my card after three weeks of waiting for a call, I went again to see him
I was told that the card was no good and that this local (.383) didn't recognize
the classification of welder's helper. I was told the same thing in the Tacoma
;

local.

Then, I had to go back into the Boilermakers to go to work in the shipyards.

was told that the only way that the Grand Coulee card would be honored
would be for me to return to Grand Coulee and get my classification stepped-up
from helper to welder and pay the difference in the initiation fee.
As stated, I got into the Boilermakers I^ocal 568 in Tacoma as a helper by
reinstatement from Local 691 at a cost of $22.50. I began to work on February
Under this classification, I was
28, 1940, at the Seattle-Tacoma Ship Yards.
welding about two months later I was reclassified as a welder and assessed an
I

additional $10.

We

were doing

all

type of welding in the shops.

Exhibit No. 289

[Submitted by United Brotherhood of Welders]

814 United States Court House

SEATTLE,

WASHINGTON

Orville F. Walley, Route 2, Box 317, Tacoma, Wash.

Interviewed by Vance on October 30, 1941.
Walley was employed on the Grand Coulee Dam for 6 years. During the
time that he was working there he was doing gi-out welding. The welders were
Subsequently, Mersner, internaall organized by the Boilermakers Local 691.
tional vice president of the Boilermakers Union, told the men that they had had
a dispute and had made a settlement with the Sheetmetal Workers union whereby
all the gi-oiit welders would have to join tiie Sheetnietal Workers Union.
Upon
objection by the men, R. W. Clise, of tlie Sheetmetal Workers Union, .said that if

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4125

they did not join up they would bring in sheetmetal workers and run the
employees off their jobs. Inasmuch as all these welders were at times required
to do other welding, they found it necessary to join the Sheetmetal Workers
Union and at the same time to maintain their membership in the Boilermakers
Union. Walley paid dues to both unions for a period of two years, in the
amount of $8.50 per month.
Subsequent to the Coulee employment, Walley was employed at the Friant Dam
at Fresno, California. The Boilermakers Local 691 was moved from Coulee to
Friant.
The initiation fee into the Sheetmetal Workers Union at Friant was
$100 and inasmuch as only $3 of the $15 previously paid by these men to the
Sheetmetal workers Union at Coulee was charged as initiation fee, they were
all told that they would have to pay $97 additional to the Sheetmetal local at
Friant (it is customary when transfen-ing from one local to another for the
union member to pay the differential between the initiation fee between the two
locals).
However, Ralph Adams, who had been president of the Boilermakers
Union at Coulee, knew something about the union bylaws and rules and he
worked out some kind of a fast deal whereby it took the Kansas City office of
the Sheetmetal Workers Union ten months to find out that these men had not
paid the $97 and to get them off the job. Walley never did pay the $97 but left
the job. During the time that he was there, he was paying dues to both unions
and doing all kinds of welding.

Exhibit No. 290

ISubmitted by United Brotherhood of Weldersl

Depaetment of Justice
434 Federal Office Building
seattle,

washington
October

30, 1941.

Charles Scidmore, 5614 South Jeanette, South Taconia, Washington, Telephone:

Garland 6603.
Interviewed by Gareth M. Neville, October 29.
Scidmore has been a member of the Machinists Local 102 in Tacoma for the
past six years, during which time he was employed in the railroad shops. About
a month ago he quit the railroad and went to work as a welder under the
jurisdiction of the Plumbers and Steamfitters Local 82.
Scidmore has not as
yet applied for membership in this Local. As a result, he has been forced to
pay 2% of all his earnings to the Local for the privilege of hiring out of its
hall and doing welding work under its jurisdiction.
The 27c paid equals about
Scidmore explained that if he didn't have a Machinists welding
$1.10 a week.
card, it would be necessary for him to pay the Plumbers and Steamfitters Union
a total of $1.00 a day permit money for each day worked.
Scidmore has never been asked to join the Boilermakers Union. He is doing
welding that is clearly under the jurisdiction of the Plumbers and Steamfitters
Union and so feels that this Union has every right to charge him the 2% permit
fee.
He did say, however, that his own Union, the Machinists, recognized any
Union card and would grant transfers to any Union man in good standing and
capable of doing machinists' work.
Gaeeth M. Neville,
Special Attorney.

Exhibit No. 291

[Submitted by United Brotherhood of Welders]

November
List of Questions Submitted to Weldors, Cutters
No. 1

Name the unions

you now belong to

37.

C.

250-92. U. W. C. & H. of A.
No. 2 How many unions have you ever belonged to
of L. 2. U. W. C. & H. of A. : 1.
:

I.

& Helpers
O.

10, 1941.

of America
A.

of

3.

C.

I.

O.

A.

::

4126

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

No. 3 What unions have you been forced to join to be able to make a living:
250-92.
No. 4 To what unions have you paid overlapping dues 3.
No. 5 To what unions have you been forced to pay permit fees 250. C. I. O.
A. F. of L. X. U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local
C. I. O.
A. F.
No. 7 What is the union of your own choosing:
of L.
U. W. C. & H. of A. : X.
8
In what unions have you been forced to pay dues in advance to get a
No.
withdrawal card:
No. 9 In what unions have you been refused a transfer : 250.
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money 250. In what town South Gate, Calif. How much : $40
per mo.
No. 11 What union has threatened or discriminated against you
:

By whom:
No. 12 Have you
By what union

ev_er

been forced

on defense work by any union

off

Signed
Address

J.

Witness
Address
Witness:
Address
:

Paul

W.

Briscoe,

R. T.

Box

1,

918-J, Hawthorne, Calif.

C. Gregory,

727 York Ave., Hawthorne, Calif.

E. E. Leeper,
4609 S. Hoover St., L. A.

November

& Helpers

List of Questions Submitted to Weldoes, Gutters

10, 1941.

of America

A. F. of
C.
Name the unions you now belong to:
O.
A. F. of L.
U. W. C. & H. of A.
C.
O.
No. 2 How many unions have you ever belonged to
A. F. of L.
U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living:
A. F. L. Boilermakers & Steamfitters & Refrigerators.
No. 4To what unions have you paid overlapping dues Boilermakers & Fitters.
No. 5To what unions have you been forced to pay pei'mit fees:
C.
A. F. of L. A. F. of L. U. W. C. & k. of A.
O.
No. 6To what unions have you belonged and paid permit fees in other places
Louis, Mo.
to a corresponding local Boilermakers in
No. 7What
the union of your own choosing U. W. C. & H. of A. C.
O.
A. F. of L.
U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card A. F. of L. Refrigerators No.
No. 9 In what unions have you been refused a transfer A. F. of L. Refrigerators.
No. 10 In what unions have you been refused a clearance card and forced to

No. 1
L.

I.

I.

3.

I.

St.

is

I.

19.

pay permit money Boilermakers

Mo. How much $2 per day.
:

in St. Louis,

Mo.

In

what town

St.

Louis,

No. 11 What union has threatened or discriminated against you A. F. of L.

By vi^hom Local No. 19 Plumbers.
No. 12 Have you ever been forced off on defense work by any union :
:

By what union

Signed

O. D. Rust,

Address 314 W. 6th

:

Witness
Address:
Witness: Chester H. Wilson,
Address Boston Hotel, Local
:

6,

Salt

Lake

City.

St.,

Salt

Lake

City.

::
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

novembee
List of Questions Submitted to Weldors, Cutters

& Helpers

4127

10, 1941.

of America

withdrawal card
No. 9 In what unions have you been refused a transfer Steamfitters.
No. 10 In what unions have you been refused a clearance card and forced

No. 1 Name the unions you now belong to Steamfitters. C. I. O.

A. F. of L. A. F. of L. U. W. C. & H. of A.
No. 2 How manv unions have you ever belonged to
C. I. O.
A. F. of L. A. F. of L. U. W. C. & H. of A.
3
What unions have you been forced to join to be able to make a living:
No.
Steamfitters & Boilermakers.
4
To what unions have you paid overlapping dues Steamfitters.
No.
No. 5 To what unions have you been forced to pay permit fees
C. L
A. F. of L. A. F. of L. U. W. C. & H. of A.
O.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local
Steamfitters.
No. 7 What is the union of your own choosing U. W. C. & H. of A. C. I. O.
A. F. of L.
U. W. C. & H. of A.
No. S In what unions have you been forced to pay dues in advance to get a
:

pay permit money

In what town

Steamfitters.

St. Louis,

to

How much

Mo.

$0.50 per day.

What union has threatened

A. F. of L.
12Have you ever been forced

No. 11

whom
No.

or discriminated against you

By

off

By what union

on defense work by any union:

& Plumbers

No. 19.
Signed Winford N. Mitchell,
Address 1457 So. Main Ave., Salt Lake City, Utah.

Steamfitters

Witness
Address
Witness
Address

Orson D. Rust,

W. 6th St.
Chistie H. Wilsue,
Boston Hotel, Salt

314

Lake

City.

November
List of Questions Submitted to WYxdors, Cutters

& Helpers

10, 1941.

of America

Name the unions you now belong to

C.
O.
A. F. of
U. W. C. & H. of A. #37.
No.
How many unions have you ever belonged to? Four. C. O. One.
A. F. of L. Three. U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
A. F. of L. Boilermakers
Iron Workers 433, Pipe Fitters #92.
No. 4To what unions have you paid over-lapping dues?
No. 5To what unions have you been forced to pay permit fees?
C.
O.
A. F. of L. A. F. of L. U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other
places to a corresponding local?
No. 7 What
the union of your own choosing? U. W. C. & H. of A. SIO:
No. A. F. of L. No. U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get
a withdrawal card?
No. 9 In what unions have you been refused a transfer? Boilermarker Oakland,
#681.
No. 10 In what unions have you been refused a clearance card and forced to
permit
money?
pay
In what town?
How much?
No. 11 What union has threatened or discriminated against you? 92. By
whom Allen Bus. Agent.
No. 12 Have you ever been forced
defense work by any union? No,
No. 1

L.

I.

Loc. #92.

2.

I.

92,

I.

is
:

Cal.,

off

But was threatened.

By what union?

Witness Al Bocko.
Address 2715 Pepper Ave.
Witness:
Address:
Signed: John Remmerde, 4612 W. 17th
:

St.,

Los Angeles, California.

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4128

November
List of Questions Submitted to Weldoes, Cutters

& Helpers

10, 1941.

of America

No. 1 How many times have you beeu inconvenienced or discriminated

against due to multiple cards racket
Name the unions you now belong to
C. I. O.
A. F. of L.
U. W. C. & H. of A.
2
No.
How many unions have you ever belonged to? 2. C. I. O.
A. F.
of L.
U. W. C. & H. of A.
Have you been discriminated against
for talking about the multiple card racket? Yes.
No. 3 What unions have you been forced to join to be able to make a living?
No. 4 To what unions have you paid over-lapping dues? 1.
No. 5
To what unions have you been forced to pay permit fees?
A. F. ofL.
C. I. O.
U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local? None.
No. 7 What is the union of your own choosing?
CIO:
A. F. of
L.
U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get
a withdrawal card?
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance car and forced
to pay permit money?
In what town?
:

How much?
No. 11

What union has threatened or discriminated against you?

By whom?
Have you ever been forced of defense work by any union?

No. 12

off

By what union?
In what way have you been

discriminated against for talking about or for a

Lost job Illinois Central R. R. All

Union for Weldors, Cutters & Helpers [

can't be told on this card.
Lost job

Witness
Address
Witness
Address

Illinois

General R. R.

All can't be told on this card.

Signed

Harry R.

McComb,

Marsallis,

Miss., 317 No.

Cherry

November
List of Questions Submitted to Weldoks, Cutters

& Helpers

to

433.

I.

1941.

of America

Name the unions vou now belong

O.
C.
U. W. O. & H. of A. yes.
No. 2How many unions have you ever been belonged to?
warehouseman. A. F. of L. 433. U. W.
& H. of A.
No. 3 What unions have you been forced to join to be able
living? 433
O. Warehouseman's
No. 4 To what unions have you paid over-lapping dues? 433 &

No. 1

L.

10,

St.

A. F. of

C.

C.

C.

I.

O.

37.

to

make a

local.

I.

37.

No. 5

C.

I.

O.

what unions have you been forced

pav permit fees?

A. F. of L.
U. W. C. & H. of A.
To what unions have you belonged and paid permit fees

^To

to

C.

I.

O.

No. 6
in other
places to a corresponding local?
No. 7 What is the union of vour own choosing?
A. F.
CIO:
of L.
U. W. C. & H. of A. #37.
No. 8 In what unions have you been forced to pay union dues in advance to get
a withdrawal card?
No. 9 In what unions have you been refused a transfer? C. I. O. to
A. F. of L. and visa versa.
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money?
In what town?
How much?
No. 11 What union has threatened or discriminated against you? C. I. O.
By whom? Shop Stewart at Crane Co, L. A.
:

:
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

No. 12 Have you

By what union?

ever been forced off of defense

4129

work by any union?

Witness: R. D. Reid.
Address 615 Fir St., Inglewood, Cal.
Witness J. W. Massey,
Address 7207 Myrtle, Long Beach, Calif.
Signed: Carl M. Jacobi, 3070 Redwood, Lynwood, Cal.
:

NOVEMBKR
List of Questions Submitted To Welders, Cutters

10, 1941.

of America

& Helpers

A. F. of
O.
C.
Name the unions you now belong to
#92. U. W. C. & H. of A. Local #37.
O.
#270 &
C.
No. 2 How many unions have you ever belonged to?
A. F. of L. # 92 & 433. U. W. C. & H. of A. Local #37.
No. 3What unions have you been forced to join to be able to make a living? A.
F. of L. Local #92 and #433.
No. 4To what unions have you paid overlapping dues? A. F. of L. #92 & #433.
O.
C.
No. 5To what unions have you been forced to pay permit fees?
A. F. of L.
U. W. C. & H. of A.
No. 6To what unions have you belonged and paid permit fees in other places
to a corresponding local?
O.
the union of vour own choosing? U. W. C. & H. of A. C.
No. 7What
A. F. of L.
U. W. C. & H. of A. Yes.
No. 8 In what unions have you been foseed to pay dues in advance to get a withbefore you can get a withdrawal card.
drawal card? Must belong to #433 5
No. 9 In what unions have you been refused a transfer? No. 92 to #433.
No. 10 In what unions have you been refused a clearance card and forced to pay
How much?
In what town?
permit money?
No. 11What union has threatened or discriminated against you? #433 A. F. of

No. 1
L.

I.

I.

I.

I.

is

yrs.

L. Structural Iron Workers.

No.

12 Have you

By whom?

Jim Cheely.
work by any union?

By

ever been forced off of defense

what union?
Signed Charles S. Weeks,
Address 641.5 Haas Ave., Los Angeles, California.
:

Witness
Address
Witness
Address

M. Jacobi,
3070 Redwood.
C.

C. E. Tillman,
1124 3/4 W. 17th

St. L. A.

November
List of Questions Submitted To Welders, Cutters

Name the unions vou now belong to:

#92. U. W. C. & H. of A.
2 How many unions have vou ever belonged

No. 1
L.

No.

& Helpers
C.

I.

O.

10, 1941.

of America
A. F. of

37.

to?
C. I. O.
A. F. of L. #92. U. W. C. & H. of A. 37.
What unions have you been forced to join to be able to make a living? #92.
No.
No. 4 To what unions have you paid overlapping dues? None.
No. 5 To what unions have you been forced to pay permit fees?
C. I. O.
A. F. of L.
U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places to
:

a corresponding local?
A. F.
No. 7 What
the union of vour own choosing?
C.
O.
of L.
U. W. C. & H. of A. #37.
No. 8 In what unions have you been forced to pay dues in advance to get a withdrawal card?
No. 9 In what unions have you been refused a transfer?
:

is

I.

No. 10 In what unions have you been refused a clearance card and forced to pay
permit money?
In what town?
How much?
No. 11 What union has threatened or discriminated against you? Yes. By
whom? A. F. of L. #92.

: ::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4130

Have you ever been forced

what union?

No. 12

Signed

Witness:
Address
Witness
Address
:

W. Kobernick,
239 16th St., Seal Beach, California.

A.

Address

By

defense work by any union?

ofE of

Lloyd Taylor,
136 Mariposa Ave., Long Beach, Calif.
Geo. M. Lepp,
1239 W. 23rd, L. A.

Exhibit No. 292

[Submitted by United Brotherhood of Welders]

novembek
List of Questions Submitted to Wexdees, Cutters

No. 4To

& Hexpees

Name the unions you now belong to U. A. 250. C. I. O.

U. W. C. & H. of A.
of L.
No. 2 How many unions have you ever belonged to? 4. C. I. O.
of L.
U. W. C. of H. of A.
No. 3 What unions have you been forced to join to be able to
Boiler Makers, Pipe Line Welders.
No. 1

what unions have you paid overlapping dues?

1941.

10,

of America
:

A. F.

A. F.

make a

living?

4.

O.
To what unions have you been forced to pay permit fees?
of
& H. of A.
A.
U. W.
other places
No. 6To what unions have you belonged and paid permit fees
a corresponding local? 393 U. A.
the union of your own choosing? United Welders.
No. 7What
O.
A.
of
U. W.
& H. of A.
advance
No. 8 In what unions have you been forced
pay dues

No. 5

C.

F.

L.

C.

I.

in

460.

to

C.

is

L,

F.

C.

I.

to

to get a

in

withdrawal card? U. A. 393.

No. 9 In what unions have you been refused a transfer? U. A. 398.
No. 10 In what unions have you been x'efused a clearance card and forced to
pay permit money? 393 $4.00, 21/12% of Salary. In what town? San Jose.

How much?

What
whom?

No. 11

By

union has theatened or discriminated against you?

Have you
By what union?

No. 12

ever been forced off of defense

Boilermakers.

work by any union?

Signed N. L. Miller,
Address: 1524 Lincoln
:

St.,

Bakersfield, Calif.

Witness:
Address
Witness
Address:

November
List of Questions Submitted to Wb:ldess, Cu^rrERs

to a corresponding local?
No. 7What
the union of your own choosing?

& Helpers

10, 1941.

of America

Name the unions you now belong to A. F. L. & C. I. O. C. I. O.

A. F. of L.
U. W. C. & H. of A.
2
No.
How many unions have you ever belonged to?
Yes.
C. L O.
A. F. of L. Yes. U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
A. F. L.
No. 4 To what unions have you paid overlapping dues? A. F. L.
No. 5 To what unions have you been forced to pav permit fees?
C. I. O.
A. F. of L. Yes. U. W. C. & H. of A. _'
No. 6 To what unions have you belonged and i)aid permit fees in other places
No. 1

is

of L.

U.

W.

C.

&

H. of A.

Yes.

C.

I.

O.

A. F.

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4131

No. 8 In what unions have you been forced to pay dues in advance to get a
vpithdrawal card?
No. !> In wliat unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
How much?
In what town?
pay permit money?
By
No. 11 Wliat union has threatened or discriminated against you?

whom?
No. 12 Have you ever been forced
what union? No; but expect

off of

to be

By

defense worli by any union?

any time now.

I hope you can use this without my signature as I can't take any chances
having the A. F. L. know I feel this way as I would not want to be blackballed
from the A. F. of L.
I wish to state that I had to pay the A. F. L. $52.50 to be reinstated into the
A. F. L. I got the job myself, the Union had nothing to do with me getting the

All they did was to make me give them $52.50 so I could go to work and
job.
pay them $.3.95 per month. The A. F. L. is just a grafting bunch of gangsters.
Witness J. W. Massey.
72d St., Long Beach, Calif.
Address Box 901,

novembbh
List of Qijestions Sxjbmitted to Wbldeks, Cuttees

& Hexpeks

10, 1941.

of Ameeica

C.
Name the unions you now belong to
O. X. A. F. of L.
U. W. C. & H. of A.
A.
No. 2 How many unions have you ever belonged to?
C.
O.
of L.
U. W. C. & H. of A.
No. 3What unions have you been forced to join to be able to make a living?
A. F. of L, Canman's Workers &
Nyrsof Amer 190.
O. O.
No. 4To what unions have you paid overlapping dues?
No. 5 To what unions have you been forced to pay permit fees?
C.
O. X.
A. F. of L.
U. W. C. & H. of A.
No. 6To what unions have you belonged and paid permit fees in other places
to a corresponding local?
the union of your own choosing?
No. 7What
A. P.
C.
O.
of L.
U. W. C. & H. of A. X.
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card? A. F. of L.
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money?
In what town?
How much?
No. 11 What union has threatened or discriminated against you? A. F. of
Cannery Workers. By whom?
No. 12 Have you ever been forced
of defense work by any union?

No. 1

I.

2.

I.

F.

F.,

I.

2.

I.

is

I.

L.,

off

By what union?
Signed J. K. McMahon.
Address: 2238 Elm Ave., L.
:

B., Calif.

Witness: J. W. Massey.
Address 7207 N. Myrtle, Long Beach.
Witness C. E. Tillman.
Address 1124 3/4 W. 17th St., L. A.
:

NOVEMBEK
List of questions submitted to Weldors, Cutters

& Helpers

of

10, 1941.

America

No. 1 Name the unions you now belong to

A. F. of L.
C. I. O.
A. F. of L. U. W. C. & H. of A.
2
No.
How many unions have you ever belonged to?
C. I. O.
A. F. of L. A. F. of L. U. W. C. & H. of A.
3
No.
What unions have you been forced to join to be able to make a living?
A. F. of L.

:::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4132

To what unions have you paid overlapping dues? A. F. of L.

C.
O.
To what unions have you been forced to pay permit fees?
A. F. of L. A. F. of L. U. W. C. & H. of A.
No. 6To what unions have you belonged and paid permit fees in other places
to a corresponding local? A. F. of L.
the union of your own choosing? U. W. C. & H. of A. C.
O.
No. 7 What
A. F. ofL.:
U. W. C. &H. ofA
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card? A. F. of L.
No. 9 In what unions have you been refused a transfer? A. F. of L.
No. 10 In what unions have you been refused a clearance card and forced to
No. 4
No. 5

I.

is

I.

pay permit money? A. F. of L. In what town? San Diego. How much?

11^
What union has threatened or discriminated against you? A. F.

No.

By whom?

Have you
By what union?

No. 12

Local

of L.

19.

ever been forced off of defense

work by any union?

Signed Tommy Thompson.

Address Salt Lake Trailer Court, Salt Lake City, Utah.
:

Witness:
Address
Witness
Address

Orson D. Rust.

314 W. 6th St., Salt Lake.

Chester H. Wilson.

Boston Hotel, Salt Lake City.

November
List of questions submitted to Weldors, Cutters

&

1941.

10,

Helpers of America

A. F. of L,
C. I. O.
No. 1 Name the unions you now belong to
250 and 6. U. W. C. & H. of A.
C. I. O.
No. 2 How many unions have you ever belonged to?
A. F. of L. 250 and 6. U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
250 and 6, A. F. of L.
No. 4 To what unions have you paid overlapping dues? None.
C. I. O.
No. 5 To what unions have you been forced to pay permit fees?
Local 9. A. F. of L.
U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local? None.
No. 7 What is the union of your own choosing? United Weldors. C. I. O.
A. F. of L.
U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a withdrawal card? Local #92, Boilermakers.
No. 9 In what unions have you been refused a transfer? None.
No. 10 In what unions have you been refused a clearance card and forced to pay
permit money? None. In what town?
How much?
No. 11 What union has threatened or discriminated against you? C. I. O. Local
:

#9. By whom?
No. 12 Have you
By what union?

ever been forced off of defense work by any union?

I. O., Local 9.
Signed H. E. Nelson.
Address 3925 Prospect Ave., Apt. G., Culver City, Calif.

C.

Witness
Address
Witness:
Address
:

D. H. Downing.
1216 W. 91 St. L. A.
Paul Gregory.
727 York Ave.

November
List of questions submitted to Weldors, Cutters

& Helpers

of

1941.

10,

America

Name the unions you now belong to

A. F. of L.
C.
O.
U. W.
& H. of A.
No. 2 IIow many unions have vou ever belonged to?
C.
O.
A. F. of L.
U. W. C. & H. of A. #37.
No. 3 What unions have vou been forced to join
be able to make a living?

No. 1

I.

C.

I.

2.

to

A. F. of L.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4133

To what unions have you paid overlapping dues? All 3

paying 3
To what uniuns have you been forced to pay permit fees? C.

No. 4
I

At present

local.

am

No. 5

locals.

I.

O.

C.

I.

O.

A. F. of L.
U. W. C. & H. of A
No. 6To what unions have you belonged and paid permit fees in other places
to a corresponding local? None.
No. 7 What is the union of your own choosing? U. W. C. & H. of A. CIO
A. F. of L.
U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card? None.
^__.
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money? C. I. O. In what town? San Pedro. How much? $2.25 Per
:

Day.

No. 11 What union has threatened or discriminated against you? A. F. of L.

Local 92 for Union Activities. By whom?
No. 12 Have you ever been forced off of defense work by any union? No. By

what union?
Signed Louis Lanyk.
Address 3525 E. Broadway, Long Beach,
:

Calif.

Witness:
Address:
Witness:
Address:

NO\-EMBEB
List of Questions Submittej) to Weldors, Cutteks

& Helpers

10, 1941.

of America

withdrawal card?
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to pay
permit money?
In what town?
How much?
No. 11 What union has threatened or discriminated against you? Boilermakers
told me to draw my check and leave the country.
By whom? Crow.
No. 12 Have you ever been forced
of defense work by any union? No. By

Name the unions you now belong to

A. F. of L.
C. I. O.
Yes. U. W. C. & H. of A. Yes.
2
No.
How many unions have you ever belonged to?
Yes.
C. I. O.
A. F. of L.
U. W. C. & H. of A. Yes, machinist.
No. 3 What unions have you been forced to join to be able to make a living?
All of them except the U. W. C. & H. of A.
No. 4 To what unions have you paid overlapping dues? Machinist.
No. 5 To what unions have you been forced to pay permit fees? Pipe-fitters &
Plumbers. C. I. O.
A. F. of L.
U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places to
a corresponding local? None.
No. 7 What is the union of vour own choosing?
C. I. O.
A. F. of L.
U. W.'C. & H. of A. Yes.
No. 8 In what unions have you been forced to pay dues in advance to get a
No. 1

off

what union ?

But I know who

has.

Signed W. J. Faber,
Address 20O4 W. Canton, Long Beach,
:

Calif.

Witness W. L. Hill,
Address 2450 A. Hayes Ave., Long Beach, Cal,
Witness: J. W. Massey,
Address Box 901, 72nd St., Long Beach, Calif.
Answer to #9 One can transfer from boilermakers to pipe-fitters for $12.50 but
will have to drop boilermakers card, and join all over again in order to get back in
:

the boilermakers.
I belong to boilermakers and would like to go out for more money in the same
yard through pipe-fitters, but can't see how I could better my situation by going
through all that agony.
No. 4 By the way, I was forced to take a hod-carriers card to do welding in
Santa Maria.
Have had to join a manufactured pipe line union which originated through
Macco-Robertson. Branch of A. F. L.
:

4134

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

November

List of Questions Submitted to Weu>eks, Cutters

& Helpers

10, 1941.

of America

No. 1 Name the unions you now belong to U. A. & Boilermakers. C. I. O.

A. F. of L. Yes. U. W. C. & H. of A
How many unions have you ever belonged to? 2. C. I. O.
No.
A. F. of L. Yes. U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
United Associators & Boilermakers.
No. 4 To what uniQns have you paid over-lapping dues? U. A. & B. M.
No. 5 To what unions have you been forced to pay permit fees? None. C. I.
A. F. of L.
U. W. C. & H. of A.
O.
No. 6 To what unions have you belonged and paid permit fees in other places to
a corresponding local?
No. 7 What is the union of your own choosing? U. W. C. & H. of A. C. I. O.
A. F. of L.
U. W. C. & H. of A. Yes.
No. 8 In what unions have you been forced to pay dues in advance to get a withdrawal card? United A. & Boilermakers.
No. 9 In what unions have you been refused a transfer ? None.
No. 10 In what unions have you been refused a clearance card and forced to pay
permit money? None. In what town? None. How much? None.
No. 11 What union has threatened or discriminated against you? A. F. of L. By
19.
whom? U. A. L. U.
No. 12 Have you ever been forced off of defense work by any union? No. By
:

what union? None.

Signed

Address
Witness:
Address
Witness:
Address
:

Leo D. Veal,
:

383 4th Ave., Salt Lake City.

Orson D. Rust,
314 W. 6th St.
Chester H. Wilson,
Boston Hotel, Salt Lake City.

Date: Sept.

3,

1941.

To WJiom It May Concern:

Gentlemen In following my trade as a welder,

I have been unjustly treated

by other trade unionists, as follows
1. I am a member of Welder Local No. 35, Des Moines, and I am classified as a
Gas (X), Electric (X), Combination Welder (X) (Indicate which).
Locals of A. F. of L.-C. I. O. which is required
2. I am also a member of
for me to work as a welder under such other claimed jurisdictions.
per
for a permit to work
3. At times I have been required to pay $
at my trade as a welder under the claimed judisdiction of
4. At times I have been forced to leave a job of welding by the members or the
:

-.

business agent of Structural Iron Workers although I was a member of Blacksmith Local No. 104, Des Moines, Iowa.
5. While a welder member in good standing of Welder Local No. 35, Des
Moines, Iowa, I have been prevented from working at my trade on work which
was in progress by members or the business agent of the Plumbers and Pipe
Fitters, A. F. of L.
6. I have been threatened by members of the Boilermakers, A. F. of L., for
advocating a union of, by, and for welders, cutters, and their helpers.
7. During the years I have followed the welding trade, I have been a member
of two different trade unions, all of which demanded and received fees for my

and my monthly dues.

Although I am n member in good standing of United Welders. Cutters, and
Helpers of America, I have been prevented by imions affiliated with the A. F. of
L.-O. I. O. from getting work as a welder on the defense project located at Des
Moines Ordnance Plant while I remain such member.
Signed Arthur S. Miller,
Address 312 Second Ave., Des Moines, Iowa.
initiation
8.

who are members of the United Welders, Cutters &

America, and who are not also members of some A. F. of L. group

Interception of welders

Helpers of
accomplished

is

in

the following

manner

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4135

The Superintendent of personnel at the Ordnance plant requisitions his employee needs through the manager of Iowa State Employment Service.
In such
requisition, where Welders are concerned, it is stated whether Welders are
wanted on sheet metal work, pipe work, structural work, or maintenance repair
work, or such.
The Iowa State Employment Service then relays the need for Welders to the
A. F. of L. unions of Sheetmetal Workers, Plumbers & Steamfitters, Structural
Ironworkers, or International Association of Machinists, or such.
Despite the fact that employed Welders who are members of the Welders
Union have enrolled as such with the Iowa State Employment Service, where the
qualifications of each, whether skilled in Oxy-Acetylene or Electric or both
processes, is shown, no Welders are called for service on the Ordnance Plant
under the arrangement as set forth above.
Each of the A. F. L. metal trades has a kind of a "stable of Welders" who are
used by them in work tributary to their trade the Welder members of any such
trade may not work in welding with any other A. F. of L. trade without paying
what is called a "permit fee" to such other trade.
The whole set-up under the present A. F. of L. arrangement is extremely unfair
to Welders. The arrangement is really incompatible with the very structure of
the A. F. of L. itself, wliich is supposed to be a federation of workers trades with
no trade a slave under the jurisdiction of any other one. The Welders now
under A. F. of L. are in a form of slavery inasmuch as none of the trades which
hold Welders contribute any protection to Welders as such.
;

A. S.

novembeb
List of Questions Submitted to Welders, Cutters

Heilpejrs of

Name the unions you now belong to U. W. C. & H. of A. C.

A. F. of L. U. W. C. & H. of A.

many unions have you ever belonged to? U. W. C.

No. 1

I.

A. F. of L.
No. 2 How
C.

&

O.

C.

MnxER.

10,

1941.

America
O.

I.

A. F. of L. U. W. C. & H. of A.
unions have you been forced to join to be able to
O.

A. F. of L.

& H.

of A.

What
make a living?
A. F. of L.
No. 4 To what unions have you paid over-lapping dues? None.
No. 5 To what unions have you been forced to pay permit fees?
C. I. O.
A. F. of L. A. F. of L. U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local? Iron Workers
229 permit 267.
No. 7 What is the union of your own choosing? U. W. C. & H. of A. C. I. O.
A. F. ofL.
U. W. C. &H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a

No. 3

withdrawal card? None.

No. 9 In what unions have you been refused a transfer? None.
No. 10 In what unions have you been refused a clearance card
:

and forced to
pay permit money? None. In what town?
How much?
11
No.
What union has threatened or discriminated against you? Engineers
and Machinists. By whom? In San Diego.
12
Have you ever been forced off of defense work by any union?
No.

By what union? None.

Signed D. H. Downing.
Address: 4010 Monroe St., San Diego, Cal.
:

Witness
Address
Witness
Address

J. W. Massev,
Box 901, 72 St.,

L. B.

Paul F. Weeks,
7002 Vinevale Ave.

now belong

to International Association of Bridge, Structural, and Ornamental Iron Workers Local #229, and am working on a permit from local
#627. I was refused a job on the pier at the foot of E. St. In San Diego because
I didn't belong to the Machinist local, and was refused a job with the Standard
Dredge Co. because I didn't carry a card with the Engineers.
I was very politely informed by a fellow worker that if I didn't keep my mouth
shut about the United Welders Union, I would lose my job, as welder at the
I

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4136

Standard Iron Works, and the U. W. C & H. of A. was a dog's outfit. The party
that informed me is not a welder.
These statements are the absolute truth and I can take oath as to them.
D. H. Downing.

novembeb
List of Questions Sitbmitted to Welders, Gutters

&

1941.

10,

Helpeirs of America

A. F. of L.
Name the unions you now belong to One. C. O.
U. W. C. & H. of A. One.
O. Yes.
No. 2 How many unions have you ever belonged to? Three. C.
Yes. U. W. C. & H. of A. Yes.
A. F. of
be able to make a living?
No. 3 What unions have you been forced to join
C.
O. & A. F. of L.
O. a"nd A. F. of L.
No. 4 To what unions have you paid over-lapping dues?
C.
O.
No. 5 To what unions have you been forced to pay permit fees?
& H. of A.
Yes. A. F. of L. Yes. U. W.
No. 6To what vuiions have you belonged and paid permit fees in other places
O.
to a corresponding local? C.
the union of your own choosing?
C.
O.
No. 7What
U. W. C. & H. of A. Yes.
A. F. of L.
8
No. In what unions have you been forced to pay dues in advance to get a
withdrawal card?
O.
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money? G.
O. In what town? L. A. How much? 25^ per day.
No. 11 What union has threatened or discriminated against you?

No. 1

I.

I.

L.

to

I.

C.

I.

I.

C.

I.

is

I.

C.

I.

I.

A. F. of L. #92.

By whom? Blackwell &

Have you ever

Allen.

been forced off of defense work by any union? By what

union? Yes; A. F. of L. by Blackwell & Allen at Galiforuia shipyards. Termination July 31, 1941.
Signed B. E. Logan,
Address 1856 Gerritos St., Long Beach, Galif., Phone 678-582.
Witness J. W. Massey,
Address Box 901-72nd St., Long Beach.
Witness Paul 0. Gregory,
Address 727 York Ave., Hawthorne, Gal.

No. 12

Exhibit No. 293

[Submitted by United Brotherhood of Welders]

NOVEMBEK
List of Questions Submitted to Wbxders, Cun^Eus

Name the unions you now belong to

& Helpers

10, 1941.

of Am:e2{Ica

G. I. O. Oil Workers.
A. F.
H. of A.
G. I. O.
No. 2 How many unions have you ever belonged to?
A. F. of L.
U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
Boilermakers A. F. of L.
No. 4 To what unions have you paid over-lapping dues?
G. I. O.
No. 5 To what unions have you been forced to i)ay permit fees?
A. F. of L. Pipefitters.
U. W. G. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local?
No. 7 Wh;jt is the union of your own choosing? United Welders. G. I. O.
A. F. of L.
U. W. G. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card?
No. 9 In what unions have you been refused a transfer? G. I. O.
No. 10 In what unions have you been refused a clearance card and forced to
In what town?
How much?
pay permit money?

No. 1

of L.

U.

W.

C.

&

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4137

No. 11 What union has threatened or discriminated against you? Boilermakers

& Machinist A. F. of L. By whom?
No. 12 Have you ever been forced off of defense vpork by any union?

By what union?
Signed
Address

S. V.

419

Kinnoch,
Pine Ave., Compton Ave.

S.

Witness F. R. Hull,
Address 426 So. Pannes Ave., Compton, Cal.
Witness Mrs. F. R. Hull.
Address
I would like to state the reason I haven't joined more unions are that when
they started to ride me I just quit my job and went some place else some times
I traveled several hundred miles before I found another job.
Speaking as a real American I just couldn't see this thing of paying for something that never done me a dam bit of good.
Yours sincerely,
S. V. Kinnoch.
:

NjOVEMBEE

& Helpers

List of Questions Submitted to Wexders, Cutters

10, 1941.

of America

A. F.
C. I. O.
Name the unions vou now belong to
U. W. C. & H. of A. No. 37.
of L.
C. I. O.
#52.
#37.
No. 2 How manv unions have you belonged to?
Oilfield workers, Tulsa,
#22.5.
U. W. C. & H. of A.
A. F. of L.
Okla. & Shipyard Union #9, San Pedro; Pipefitters. Wichita. Kans.
No. 3 What unions have you been forced to join to be able to make a living?
C. I. O. #9, Wichita, Kan.
No. 4 To what unions have you paid overlapping dues? #225, Pipefitters.
C. I. O.
No. 5 To what unions have j-ou been forced to pay permit fees?
#9. Shipyards. A. F. of L. #225. U. W. C. & H. of A.
To what unions have you belonged and paid permit fees in other places
No.

No. 1

to a corresponding local?

C. I. O.
What is the union of your own choosing?
A. F. of L.
U. W. C. & H. of A. #37.
No. 8 In what unions have you been forced to pay dues in advance to get a

No.

No. 9 In what unions have you been refused a transfer?

No. 10 In what unions have you been refused a clearance card and forced to
How much?
In wliat town?
pay permit money?
No. il What union has threatencvl or discriminated against you? A. F. L. #92.
By whom? Business agent. C.
O. #9, Shipyard Workers.
defense work by any unions? Yes. By
No. 12 Have you ever been forced
withdrawal card?

I.

off

what union? #9

C.

O. Shipyard Workers.

I.

Signed

Address

Paul
:

C. Gi'egory,

727 York Ave., Hawthorne, Cal.

Witness: B. E. Logan,
Addi'ess

1956 Cerritos Ave., Long Beach, Cal.

Witness Dock Stancil.

Address:
:

NOVEMBEK
List of Questions StrBMiTTEo to Welders, Cuttei?s

& Helpers

10, 1941.

of America

Workers
C. I. O.
No. 1 Name the unions vou now belong to:
Organization. A. F. of L.
U. W. C. & H. of A.: Local 37.
No. 2 How manv unions have vou ever belonged to? Two. C. I. O. Steel
Workers. A. F. of L.
U. W. C. & H. of A. Local 37.
No. 3What unions have you been forced to join to be able to make a living?
:

C.

I.

O. Steel

Workers.

To what unions have you paid ovei-lapping dues? fees?

C.
O.
To what unions have vou been forced pay
& H. of A.
A. F. of L.
U. W.

6
what unions have you belonged and paid permit fees in other places

No. 4
No. 5

to

No.

Steel

--.

^To

to a corresponding local?

C.

pei'uiit
:

I.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4138

choosing? U. W. C. & H. of A. C.
O.
What the union of your own
U. W.
& H. of A.
A. F. ofL.
in advance to get a
No. 8 In what unions have you been forced to pay
withdrawal card?
No. 9 In what unions have you been refu.sed a transfer?
No. 10In what unions have you been refused a clearance card and forced to
How much?
In what town?
pay permit money?
By
No. ilWhat union has threatened or discriminated against you?
whom?
of defense work by any union?
No. 12 Have you ever been forced

No. 7

I.

is

O.

clues

off

By what union?
Leonard

Signed:

Address
Witness:
Address
Witness
Address
:

W.

Nadgwick,

1201 3/4 E. 61

St. L.

A.

Daniel L. Smith.
1203 E. 61 St. L. A.
Paul C. Gregory.
727 York Ave., Hawthorne, Cal.

November
List of Questions Submitted to Welders, Cutters

Name

& Helpers

10. 1941.

of AMBaticA

the unions you now belong to U. A. & International Opr. EngiA. F. of L. Yes.
U. W. C. & H. of A.
O.
No. 2 How many unions have yon ever belonged to? U. A.-I Op. Eng. & BoilerA. F. of L. Yes.
U. W. C. & H. of A.
makers. C. I. O.
No. 3 What unions have you been forced to join to be able to make a living?
U. A.-Int. Op. Engineers-Boilermakers.
No. 4 To what unions have you paid overlapping dues? U. A. & Int. Opr. Eng.
No. 5 To what unions have you been forced to pay permit fees? U. -A. & Int.
A. F. of L. Yes. U. W. C. & H. of A.
Opri.
C. I. O.
No. 6 To what unions have you belonged and paid permit fees in other places
Int. Opr. Eng.
to a corresponding local?
No. 7 ^What is the union of your own Choosing? United Welders Cutters & H.
A. F. of L.
of A.
of A.
C. I. O.
, U. W. C. &
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card? U. A. & Int. Opr. Eng. Boilermakers.
No. 9 In what unions have you been refused a transfer? None.
No. 10 In what unions have you been refused a clearance card and forced to
In what town?
How much?
pay permit money?
No. 11 What union has threatened or discriminated against you? Int. Opr. Eng.
& U. A. By whom? Business agent.
No. 12 Have you ever been forced off of defense work by any union?
By what union? International Operating Engineers.

No. 1

neers.

C.

I.

Signed Louis
Address 2778
:

Witness
Address
Witness
Address:
:

L. Eaton,
So. State St., Salt

Lake

City.

Orson D. Rust,
314 W. 6th St., Salt Lake City.
Chester H. Wilson,

Boston Hotel, Salt Lake City.

November
List of Questions Submitted to Welders, Cutters

& Hewers

C
X

Two.
4
No. To what unions have you paid overlapping dues?
No. To what unions have you been forced to p;iv permit fees?

10, 1941.

of AMEajicA

1
Name the unions you now belong to
Local 9. A. F.
C. I. O.
of L. Loc. #92. U. W.
& H. of A. ( )
No. 2 How many unions have you ever belonged to?
C. I. O.
A. F. of L
U. W. C. & II. of A
3
No.
What unions have you been forced to join (o be able to make a living?

No.

f)

C.

I.

O.

Local #9. A. F. of L. Local #92. U. W.

& H. of A.
No. 6 To what tuiions have you belonged and paid permit fees in other places
to a corresponding local?

:::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4139

What is the union of your own choosing?

C. I. O.
A. F. of L.
U. W. G. & H. of
No. 8 In what unions have you been forced to pay dues in advance to get a
No. 7

withdrawal card?
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
'-...
In what town?
How much?
pay permit money?
__.
No. 11 What union has threatened or discriminated against you?
By

Whom?
No. 12 Have you ever been forced

off of

defense

By

work by any union?

what union?
Signed: Frank 0. Mount,
1121 Labrre.

Address

Witness
Address
Witness:
Address

novembbk
List of Questions Submitted to Weldebs, Cutters
No. 1

Name the unions you now belong

to

1.

C.

I.

& Helpers
O.

W. C. & H. of A.
No. 2 How many unions have you ever belonged to? 4.
of L.
U. W. C. & H. of A. .J
No. 3 What unions have j'ou been forced to join to be
U.

10, 1941.

of America
A. F. of L.

C.

I.

O.

A. P.

able to make a living?

No. 4To what unions have you paid overlapping dues?

No. 5To what unions have you been forced to pay permit fees?
C.
O.
A. F. of L.
U. W. C. & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
2.

I.

to a corresponding local?
No. 7 What is the union of your own choosing?
C. I. O.
A. F. of L.
U. W. C. & H. of A.
No. 8 In what unions have you been forced to pay dues in advance to get a
withdrawal card?
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
pay permit money?
In what town?
How much?
No. 11 What union has threatened or discriminated against you? 4 times. By

whom?

Have you ever been forced off of defense work by any union? Lost
pusher job because of discrimination. By what union?
Signed M. A. Fosie,
Address Rt. 3, Box 650, Charleston, S. C.
Witness:
Address:
Witness:
Address

No. 12

NOVEMBEB

10, 1941,

LIST OF QUESTIONS SUBMITTED TO WELDORS, OUTTEKS & HELPEES OF AMERICA

Name the unions you now belong to U. W. C. & H. of A. #37. C. O.

A. F. of L.
U. W. C. & H. of A.
No. 2 How many unions have you ever belonged to?
C.
O.
A. F. of L.
U. W. C. & H. of A.
No. 3 What unions have you been forced to join to be able to make a living?
A. F. of L. #92.
No. 4 To what unions have you paid over-lapping dues?
No. 5 To what unions have you been forced to pay permit fees?
O,
C.
A. F. of L.
U. W. C & H. of A.
No. 6 To what unions have you belonged and paid permit fees in other places
to a corresponding local? None.
No. 7 What
the union of vour own choosing?
A. F.
O.
C.
of L.
U. W. C. & H. of A.
#37.
311932 42
10
27
No. 1

I.

37.

I.

37.

I.

is

I.

pt.

4140

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJVI

lu what unions have you been forced to pay dues in advance to get a
No. 9 In what unions have you been refused a transfer?
No. 10 In what unions have you been refused a clearance card and forced to
In what town?
How much?
pay permit money?
By
No. 11 What union has threatened or discriminated against you?
whom?
of defense work by any union?
No. 12 Have you ever been forced
No. 8

withdrawal card?

off

By what union?
Signed

Address
Witness
Address
Witness
Address

George M. Lepp,
1239 W. 23rd St., L. A.
:

Lloyd Taylor,
136 Mariposa Ave., Long Beach, California.
A. W. Kobernick,
239 16th St., Seal Beach, Calif.

Exhibit No. 294

[Submitted by United Brotherhood of Welders]

San Francisco,

Nov.

Cai..,

13, 1941.

the undersigned, a weldor of more than eighteen years' exi>erience, have been
forced to change my union card over three times in six years.
I do protest the following:
That, while a member of Machinists Local 1330 I was required to change my
card to Steamfitters Local 509, at a cost of Fifty-dollars, in order to weld on
pipe.
(Scott Co.)
That, while a member of above local, I was required to pay one dollar x)er week,
for permit to work at Mare Island, Cal., for Cory and Joslyn, said assessment
going to Vallejo, local of Steamfitters.
That, while employed by Young Bro. subcontractors of Meyer Bro. on housing
project at Army and Potrero Streets, San Francisco, I was asked to pay Thirty
cents per day to the Plumbers local, which I refused to do, thereby shortening
my job. Decidedly.
That, while employed by Cory and Joslyn on a job at Martinez, Cal. I was required to pay Oakland Steamfitters local 342, a sum ranging from eighty cents
to one dollar per week.
I,

P. J.

[SEAL]

Notary Public

in

me

Frank.

day of November 1941.

Neix O'Day,
and for the City and County of San Francisco,

Subscribed and sworn to before

this 13th

State of California.

My

commission expires March

26, 1944.

Exhibit No. 295

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal OfHce Building
SBIATTLE,

WASH.
OCTOBEB

Clem A.

29, 1941.

Ferris, 1209 Frink Place, Seattle, Washington.

Interviewed by Gareth M. Neville, October 28.

At tini(> of strike, worked at Associated Ship Building date of entrance into
Boilermakers ITriiou, January 2, 1941 previous membership in Local 440, International Hod Carriers, and 4 years in the Fislu-rmen's ITnion
declared that
membership in Ilod Carrieis T^nion did not entitle liini to work as welder: was a
welder in 1933; dropped out in 1934 because of scarcity of employment: fished 4
years in the Cohimi)ia River; tried to reinstate (apparently in a Boilermakers
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4141

or Welders Union) but could not obtain recognition of card then joined the Hod
Carriers Union, 440, and worked out of there until last Christmas, when laid
returned to Boilermakers Union, presented old card, and
off because of thaw
was sent right out to Ship Yards informed by Shop Committee that it would
be necessary to pay $1.00 a day for 90 days to work theu ,$30.00 additional for
initiation fee, total $120.00 questioned this because considered it a reinstatement went down to Union Hall to talk with George Nelson, who said it would
be necessary to pay, so paid $120.00 altogether in regard to receipts for money
paid to George Nelson, Perrin said he requested same and was told there weren't
any receipt of payment shown on reverse side of permit card only declared
that everyone else had to pay same amount, but they were all "squawking" three
weeks after making last payment, received notice to report for his Boilermakers
card did so, and received card showing notice of reinstatement, and dating
back to 1933 very angry and so "jumped" the secretary and told him it was a
"dirty graft" but was not able to get any money back thought at the time he
was really going to get a "kick-back" on the $120.00 paid complained to Washpersuaded about 13 or 14 other men to complain
ington (see letters attached)
to Washington; unable to recall names; stated that reinstatement fee amounted
to only $10.00 and that his reinstatement card made no reference to the additional
$110.00 which he had been forced to pay in the form of permit money and initiadeclared he had no idea what happened to permit money however,
tion fees
believes "I am paying somebody's rent" said at one union meeting he planned
to bring up such practices permit money, etc. ) but was ruled out of order by the
chair said "you get bounced out on your ear" if you try that sort of thing
gave names of Bill Bacon, Leo, Scotty, and Lou Morgan as persons stating that
Boilermakers Union had complete jurisdiction over all Seattle welding believes
it impossible to exactly differentiate between various kinds of welding and designate same as belonging to certain specific unions said "one outfit will claim
another will claim it is theirs."
it, and then
Stated lie had receipt for
$30.00 initiation fee only; does not have receiept for the $5.00 weekly permit payments when asked how an individual belonging to another Boilermakers local
could obtain work under Boilermakers 541, replied as follows "Well, he comes
He has to present his card ... It is pas.sed on by the membership. If
here.
he joined the first union longer than 6 months ago, he would not have to pay any
difference: if not, he would have to pay a difference between the cost of his
initiation and cost of being initiated into Local 541.
;

Exhibit No. 296

[Submitted by United Brotherhood of Welders]

Depabtmeitt of Justice
434 Federal Office Building

wash.

seattle,

October

30, 1941.

Anderson, 1101 17th Avenue Ca 0068.

Interviewed by Gareth M. Neville, October 29.
Has been member of Automobile Union in Ford Plant at St. Paul, Minn. "Last
two months had to join the following: Machinists and Boilermakers. I came
out here from St. Paul to get a job at Boeing's welding and I had to join the
Machinists (International A.ssociation of) as a welder.
I paid $15.00 there.
I failed to pass one part of the Government test out there so I was automatically
So I went to the shipyards. I had to go to the Boilermakers Union to
let out.
be hired there. So far I have only worked in the shipyards four days
when they went on strike. So far I haven't paid any money. But this Friday
I am supposed to pay $20.00 and then $20.00 every month until I have
."
paid.
Said he did electric welding at shipyards. Asked whether it could
be considered machinists welding, answered, "on mo.st work, I couldn't say."
When asked whether machinists card should entitle him to do machinists work,
replied, "I tried to get a job through this same union (the ^Machinists) but 1
couldn't.
The Boilermakers in some way liave jurisdiction over all that welding.
Nobody has ever explained why. I was never told the exact reasons 1
had to join another union the Boilermakers that was just understood and I

Alexander

J.

4142

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

had to do it. I did try to get money baclc from the Machinists.
failed to pass this test, would we get our initiation fee back
They said, 'Yes.' I went to the International Association of
they said it was too late."

We

asked

if

we

from the Union.

Machinists and

Exhibit No. 297

[Submitted by United Brotlierhood of Welders]

Depabtment of Justice
814 United States Court House
SEATTLE,

WASHINGTON

G. H. Clark,
2, Box 26, Kent, Washington.
Interviewed by Vance on October 30, 1941.
Clark was a member of the Sheetmetal Workers Union in 1940 and was
employed at the National Steel Construction Company. At that time they were
supposedly limited to work on 10-gauge or less material and the Boilermakers
were to do all above that. But the Boilermakers did part of the work on 10-gauge

Route

or

less.

Olark was one of very few men who could do combination welding and this was
the type of welding he was doing at National Steel.
When Clarke had gone to work at the National Steel Construction Company he
was not a member of any union but became a member when that plant was organized by the Sheetmetal Workers Union. It appeared that at that time none of the
unions wanted the combination welders and they were- turned down by several
unions before they were successful in becoming members of the Sheetmetal
Workers Union.
When the work ran out at the National Steel Construction Company, Clark
had an opportunity to go to work out of Boilermakers Union Local 541 at the
Puget Sound Machinery Depot where combination welders were needed. As
541 had no combination welders, he was permitted to work without membership
and without permit fees.
When the work ran out, Clark was sent to see the business agent of the Tacoma
Boilermakers local. He was sent to work at the Seattle-Tacoma shipyards on
November 1940. He paid $30 to become a member of the Boilermakers local.
The Boilermakers Local refused to accept a $10 credit which he had with the
Sheetmetal International.
While employed in the shipyards, Clark did pipe and boilermaker and sheetmetal welding.
Note. Collateral Issue. When Clark was employed at the National Steel
Company one Vic Ware was business agent of the Sheetmetal local and was
until December 1939.
At National Steel they were only getting $28 a week
or 70^ an hour and it was apparent to one and all that Ware had .sold out inasmuch as all other welders were getting more money elsewhere. In going to
Puget Sound Machinery Depot under Local 541, the pay became $1.15 an hour
or $46 per week.
Subsequent to these events Ware was accused of embezzling
from the union and was ousted therefrom. Clark said he thought AVare was
prosecuted for this but was not sure. He said that Ware kept terrible books
and that .sometimes they would have money in the bank, the source of which
they did not know, and that at subsequent meetings they would have a deficit,
the source of which they did not know. He also said that Ware had a bunch of
men on permit and would not let them join the union as he was pocketing the
permit money. Clark said that since the ouster of Ware, he believed the Union
had been run honestly.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4143

Exhibit No. 298

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

L. F. Gieseke, 1308 College Street, Seattle, Washington.

Interviewed by Vance on October 28, 1941
I was a member of the Machinists Welders Local 1531 in Yakima, Washington.
joined a little over four years ago it will be four years in June. I worked
for McDougal Construction, Arrowsmith Iron Works, and Valley Iron Works,
while in Yakima. I left there in Febiiiary of 1941 to come to Seattle. At that
time I was a paid-up member of the Machinists in Yakima.
I went to the Boilermaker Welders here and they sent me to Todd Dry Dock.
I was supposed to pay $90
I knew that they would not accept a transfer.
but I didn't think it right because I was a member of the Machinists. I went
a shop steward, took it up
to the Executive Board members and Ray
They decided they should accept me for $30. I paid
in Executive Meeting.
that and got a card. While working at Todd's, I welded pipe bulkheads
anything that came along. I have been with Todd's ever since coming to Seattle.

Exhibit No. 299

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
seattle,

washington

October 29, 1941.

Arnold Arthur Reuther, 1023 Jefferson Street, Seattle, Washington,
Interviewed by Gareth M. Neville, October 28, 1941.
At time of strike employed at Seattle Tacoma Ship Yards. "I was welding
on oil tanks clearly Boilermaker work.'' Worked for two months on a nonmember card, and was initiated about a month ago. About one year's experience.
In regard to permit money "First worked under permit given by Structural Steel
and Iron Workers Union not then a member of any other union. Paid about
$80 or $90. I stayed for a month on that job at $1 or $2 a week. I paid that
money to Fox. I have the receipt at home." (Offered to bring receipt to Mr.
Neville.)
Sent by instructor at Edison night school to George Nelson, who in
turn sent him to Pacific Car & Foundry. ... He (Nelson) wanted $60 at end
of 60 days and I did that ... I paid whole sum at end of 60 days. I paid $40
the 8th month, the Sth day, and $20 the 8th month, the 20th day, and then was
given a card and became a full-fledged member. In regard to type of welding.
"No. It was sheet-metal welding. I don't know much about their jurisdiction,
the Boilermakers
but you are not supposed to weld anything over 16 gauge
have contract with Pacific Car & Foundry to send all their welders out there.
We worked all over the place."
It didn't make any difference what we did.
In answer to question as to whether a sheet-metal worker, if employed, would
have been forced to join the Boilermakers' Union, said, "Yes although we were
doing sheet-metal work." Denied ever hearing any statement as to the use the
money was being put by the Union. Denied ever receiving any threats of violence.
Explained that change in ruling of Union now in effect whereby "if you
pay at end of 60 days, that's all right."

4144

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 300
[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building

washington

seattle,

Howard

F. Dupree, 809

Nob

Hill, Seattle,

Interviewed by Gareth M. Neville, October

Washington.

October 31, 1941.

Telephone Ga 2717.
:

28.

Dupree was working under the jurisdiction of Boilermakers Local 541 at the
time of the strike. Dupi-ee at present carries a Boilermaker's card and a Steamfitter's card
he pays dues to both unions. Until about January of 1941, Dupree
carried only a Boilermaker's card. Whenever he desired to work under the jurisHowever, in order to obtain
diction of another union, he paid permit money.
the particular kind of employment which he liked, he joined the Steamfitters in
January of 1941, and paid an initiation fee of $25.00. Dupree was asked why,
after having joined the Steamfitters, he continued to pay dues to the Boilermakers. He replied, "We don't dare drop a card, because it is too hard to get
back. They make it kind of tough on you." At the time Dupree started to
work at the shipyards, he was classified as a combination man because he carried
two cards. This enabled him to work under the jurisdiction of the Steamfitters
and the Boilermakers. He said that during this period he was working with a
man (he promised to obtain the name for the Department) who had a card only
in the Boilermakers.
He said that whenever this man "bumped" up against some
steamfitters welding, he would stop working and "monkey" around until the Yard
would obtain a welder with a steamfitter's card to do the work. This practice
;

resulted in

many

delays and

much

lost time.

Concerning the jurisdiction of the two unions, Dupree said, "We were more or
less battling.
They (Steamfitters and Boilermakers) were fighting all the
time over jurisdiction.
At one point, Dupree said that on several occasions he could have obtained work
if he had had a Machinist's card.
He was asked why he had not obtained such a
card.
He replied that the Machinists and the Boilermakers were always battling
and it was sometimes very embarrassing to have cards in both unions. He said
that people having cards in both unions were often discriminated against by each
one of the unions.
At the close of the interview, Dupree made the following statements "The last
Well, I was over ajt
10 years have been tough. We have all lost lots of time.
Grand Coulee Dam and I was over there 5 months and worked 2 weeks I guess
it was 7 weeks.
If I had carried a card
I was buUheaded
if I had been
carrying a steamfitting card, a sheet-metal card, and an iron-worker card, I could
have worked all the time. But due to the fact I was just carrying one card, I
got 7 weeks' work. I finally 'stabbed' a job and it was at the end of 5 months
and because I was not a steamfitter or a sheet-metal worker, I got laid off. They
put an incompetent nonunion man on the job
the sheet-metal workers claimed
jurisdiction over there and they offered me a card.
Well, I wouldn't join. Consequently, I lost from November until the following February. I lost all that
time because I wouldn't join their organization. I was perfectly capable we
maintain that welding should belong to the welders." Agreed to Mr. Neville's
statement that, "You were one of the fellows who joined one welding union on
the Dam and later they ruled that another union had jurisdiction." Dupree
continued: "Those boys that joined the Boilermakers' Union thought they could
do any of that work. They joined and then the Steamfitters and l'ii)efitters came
along and made them join up that was the start of this jurisdictional fight.
Up until that time the boilermakers did do practically all the welding. That's
when this big jurisdictionnl row broke loose we had !K)% of the welding on the
but in the last 2 or 3 years they enforced
Coast here (Boilermakers' Union)
this ruling made years ago that the welding will bo done by the union having
jurisdiction over the job.
When I joined the Steamfitters, they were very
short of welders. Worked for them
years on p(>rmi(. They knew my ability.
.

They took me in for $25.

all the topiiotch uhmi tliey could get.
or so later they sent a few bovs up to Alaska :ind their initiation fee was
$100.00.
There were 5 or 6 of them that paid $100.(M> and just a week after I
joined for $25.00. That is not so 'hot'^those boys have been ti-ying to get it

They wanted

A week

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4145

back. ... I do not know whether they made a special rate for me and I wouldn't
say for sure that the $100.00 was in effect when I joined. So, I found out during
the time they were in Alaska they charged $100.00
for welders
before
this time, they had taken in a dozen good boys.
This made them rather indeWell, I have always held
pendent and they started charging the high fee.
But the longer I belong to it, the more I think it's a
the Union in high regard.
bunch of racketeers. Now I wonder whether they would hesitate at anything.
The Union is supposed to have brought in a 'goon squad' from Portland
report is that there are 150 of course, they are all carrying union buttons.
Tommy Ray furnished the squad."
.

Exhibit No. 301

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SKATTLE,

WASHINGTON

Burton I. Duncan, 604 Colmubia, Seattle, Washington.

Interviewed by Daly on October 29, 1941.
I attended the National Defense School in Spokane and was sent by the Electrical Workers Union Local 73 to work on the Umatilla Ordnance Depot.
While
there I paid $10.11 per week to work. This was to be paid until $102 was paid.
In addition to this amount, there were dues and 1% wages to be paid to the
Union.
I belonged to no welders union but was doing welding under 73 (Electrical
Workers). I came to Seattle and was given a permit to work from Boilermakers
Local 541, and worked for 2 days and 3 hours at the Seattle-Tacoma Ship Yards
before the strike. I have paid no dues or permit money to 541 as yet.
I am under the impression that a lot of us were sent here by the Electrical
Workers Local 73, which is an A. F. of L. affiliate, to break up this strike.
A man by the name of Anderson with Electrical Workers Local 73 in Umatilla
said that we would be able to get back a part of the money paid on the Umatilla
job from 73 in Spokane.

Exhibit No. 302

[Submitted by United Brotherhood of Welders]

De:partment of Justice
814 United States Court House
SEIA.TTLE,

WASHINGTON

Loren A. Innes, 2129 N. W. Northrup Street, Portland, Oregon.

Interviewed by Vance on October 29, 1941.
I worked at Coulee in 1935 or 1936.
I was not a member of a union when I
went there, but we were or^^anized by Boilermakers Local 691. This cost $7.50 or
I missed the organization by the Sheetmetal Union because I stayed in the
$10.00.
shop after that. I was a combination welder.
Between June 5 and June 18, 1941, I stopped at Burlington, Iowa. At the
ammunition plant a man with the Boilermakers could not go to work. We would
have to pay permit money to iron workers or steamfitters, although welders were

needed badly.
Then I went

to Pittsburgh.
The Boilermakers had no job for me. The dues
there are $3.50 per month and 5%. I went over to 1807 Long Finance Building
and took a permit card in steamfitting union also went over to Ironworkers and
got a permit on June 18, 1941, but I never worked under this permit.
I went to work at the Morgantown Ordnance Works under the Steamfitting
permit. There was iron-worker and steamfitting welding there.
I did some of
same type of welding under my Boilermaker card at Coulee and Richmond, Call;

4146

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Coulee dues were $5.50, and

fornia, but had to pay the difference in dues.
the steamfitters $9.00, so I paid $3.50 and worked only 10 days. In July I paid
$5.50 for twelve days.
I was told not to mention the Boilermakers.
I then went to Denver, Colorado.
I went over to the Labor Temple and paid $1.50 for quarterly working card for
Building and Construction Trades Department, A. F. of L. I got a permit from
Steamfitters Union No. 208 at $1.00 per day up to August 7, 1941. I worked for
Broderick & Gordon (Remington Small Arms) the work was supiwsed to be on
pipe; was really ornamental iron work. I didn't do any boilermaker welding
there.
I then went to Richmond, California, and got a job at Todd-California Shipbuilding Corporation. I got a transfer and paid regular dues of $3.50. I did
some pipe and boiler maker welding and was a leaderman. I have no kick coming

on this score.
I couldn't go
to Portland, Oregon, on August 28 and deposited my card.
They told me to not even go out and
$1.50, $1.15 as other.
friends.
So on August 28 I went and got a permit card from the
talk to
Steamfitters Union No. 235. They sent me to Gasco Plant ( Bechtel-McCone-Parsons Coi"poration of 601 W. Fifth Street, Los Angeles, California). I have paid
in Seattle came up and they
50(f; per day permit money until all the trouble here
dropped the fee to 25^. There is no end to that unless I pay $52.50 and then
I
doing same work as the boilermakers there. The first day on the
dues.
I

went

out as leaderman

my

am

was working on 20". Business Agent from Boilermakers made them take
me off the job. I was afraid to show my Boilermaker's card because I would
then never have been able to get out of that ofllce. Boilermakers are now doing
the same thing I am doing. The Boilermakers there are doing the same work
(Structural beams building oven) which in Morgantown was under the

job I

Ironmakers.
(All this time Mr. Innes was paying dues into the Boilermakers Union.)

Exhibit No. 303

[Submitted by United Brotherhood of Welders]

Department of

Jttstice

434 Federal Office Building

seattle,

Lawrence Ohlschlager, Route

3,

Box

washington

1013,

Ootobek
Auburn, Washington.

30, 1941.

Interviewed by Gareth M. Neville, October 30.

Ohlschlager was employed at the Seattle-Tacoma Ship Yards at Tacoma, and
was a member in good standing of Boilermakers Local 568 at the time of the strike.
On July 18, 1939, he obtained a card from Local 395 of the Ornamental Iron
Workers of Hammond, Indiana. At this time he was employed by the Russ Furnace Company and worked out of its Pittsburgh office, installing equipment
throughout the Eastern United States. Ohschlager said that at all times he was
a member in good standing of his own local union and yet he was forced to pay a
permit fee of $1.00 per week on each job not under the immediate jurisdiction
of his own local. This sum was in addition to the $5.00 per month he paid as
dues to the Hammond, Indiana, organization. He said tliat while working on
a job in Camden, New Jersey, he discovered that the local welders' Tinion had
niled that any company using an electric welding mnchine had to hire a member
of the Engineers Union to turn the machine on and off. This made it necessary
to pay a skilled engineer $1.70 per hour all day long for turning a switch four
times a day, once in the morning, twice at noon, and once in the evening. Because
of this practice, the Russ Furnace people did all of their welding on the New Jersey
job with acetylene welding equipment. Ohlschlager said that a man by the name
of Byron Rice, superintendent of the Russ Furnace Company, would be in a position to furnish complete details concerning the above.
Ohlschlager started work at the Taconui yards on December 18, 1041. He first
obtained his job at the Sealtle-Tacoma Ship Yards and was then .-^ent by the company to Local 568 of the Boilermakers Union to obtain a card. The Boilermakers
Union refused to recognize his Structural and Ornamental Iron Workers card and

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4147

forced him to pay a new initiation fee of $30.00. However, he was not required
to pay permit money. Ohlschlager said that while working at the Seattle-Tacoma
Ship Yards under his Boilermaliers card he had been required to do work which
he would consider under the jurisdiction of the following unions Plumbers and
Steamfitters, Electricians, Machinists, Sheet Metal Workers, and Carpenters. He
said that the local Boilermakers Union claimed jurisdiction over all of this work
as a result of a deal made by the heads of the Metal Trades Unions in Washington.
He further explained that in all probability the various metal trades unions
would not object to the Boilermakers claiming jurisdiction over all work in the
ship yards, so long as there is plenty of welding work for everyone. However, he
said that as soon as the present demand for welders slows up, each union would
have a jurisdictional squabble with the Boilermakers concerning the distribution
of work in the ship yards.
Gaeeth M. Neville,
Special Attorney,
:

Exhibit No. 304

[Submitted by United Brotherhood of Welders]

Depaetment op Justice
814 United States Court House
SEATTLE,

WASHINGTON

Bay Hughes, 1511 South "I," Tacoma, Washington.

Interviewed by Vance on October 29, 1 941.
I was boilermaker (reinstated) in 1938
No. 5444, Local 691. I was working
at Coulee Dam doing Groute welding. Mercer, International Vice President of
Boilermakers, told us that it had been threshed out and that sheetmetal workers
were to have jurisdiction over grout welding. That was 90% of their work but
sometimes we had to make emergency repairs, etc., involving, pipe welding, etc.
We were told we had to joint Sheetmetals or quit grout welding. So I paid $15.50
to join and $3.50 per month dues.
I had to keep Boilermaker card ($5.50) per
month to do other work.
The same thing happened at Redding at Shasta Dam. They moved the local,
welders and all from Coulee, but I couldn't go for it.
There were also machinists, pipe men, and iron workers in the machine shop
where I worked.
J. O. Murray, now personnel manager of Oregon Shipbuilder Corporation, was
with the Consolidated Builder, Inc., at time of Grand Coulee and personnel manager of M. W. A. K. prior to that.

Exhibit No. 305

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
seiattle,

washington

October 29, 1941.

Robert R. Anderson, 1215 16th Avenue North, Seattle, Washington.
Interviewed by Gareth M. Neville, October 28, 1941.
At time of strike employed at Associated Ship Builders. Had been there 3
months. Has been a member of Boilermakers 541 since July 24, 1941, and has
worked as a welder since January 1, 1941. Belonged to Plywood & Veneer Union
sometime in past. In regard to payment of permit money, said: "January 10,
first time I paid any money.
That was 5.00, and I paid them up until June 20,
when I paid them the last payment of $.30.00 and the whole total in the meantime was $120.00." Paid money to George Nelson, representative, sometimes by

4148

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

check and sometimes by cash. Said, "They were surprised when I came down
with the first check, but they didn't refuse. The reason I paid by check was that
the receipt for the first $5.00 I paid them had been turned in to them for my next
week's permit." Said he had no receipt except the canceled checks. Declared he
was unable to secure any information from Union in regard to card designated as
"permit" and card showing "non-member" (the latter replaced the first). Said
he had no idea how permit money was spent by Union said members talk about
Said he fabricated pipe, but understood that it is considered
it among themselves.
as welder's work. Declared that in his opinion pipe-fitting, boilermaking, and
machine work are all welding "I don't see that there is any difference." Said
that Pipe Fitters Union had never attempted to collect money from him. Said he
couldn't furnish names of any of the officials of the Boilermakers' Union who had
told him or said that all of the work in the Yard was under their jurisdiction.
Denied any threats of violence had been made against him, and said that he had
never made any effort in open union meeting to object to practices. Furnished Mr.
Neville with cancelled checks, but said "I don't want them to get in the hands of a
boilermaker in a 'goon' squad." (Papers include cancelled checks, card, monthly
dues, $28.75.)
Said that only receipt given him was Identification card for first
$5.00 payment and that at end of week he was required to turn it in. Said he
was the shop steward out here at Associated and that one of the bosses, Carl
Buckenroth, "Told a welder to weld something on a piece. He said he understood
that it was machine welders' work. He asked whether he should weld it or not,
*
*
*
so the boss sent and got me and said he was going to fire him (Al
Corden, Sr.) unless he welded It because he had an agreement with 541 to weld
*
everything. No I didn't rcaake him pay more permit money to work * *
As
far as I can see it was machinists' welding because it was on a machine." "I

there are a lot of fellows up there that have two or three cards. * * *"
Denied any threats of physical violence, but i^aid, "It is more or less understood
that you are not allowed to work if you don't pay and that they reserve the right
to pull you off the job."

know

Exhibit No. 306

[Submitted by United Brotherhood of Welders]

Depaettment of Justice
814 United States Court House
SE1A.TTLE,

WASHINGTON

O. K. McKinley, 2021 Fourth North, Seattle, Washington.

Interviewed by Vance on October 28, 1941.

I was initiated into Local 541 of the Boilermaker Welders in April of 1941.
I
have had about ten years' experience as a welder. I never belonged to any union
prior to that time. The understanding when you go to work for the Boilermakers
is that you pay $1.00 for every day you work.
That has to be paid every week for
90 days. At the end of 90 days you then have to pay $30 in a lump sum for initiation fee.

I paid my money by cash

that is all they will take. I wanted to pay by
check but they refused to take my check. I showed them my bank account but
they still refused my check.
I offered the check to George Nelson and he said,
"We don't take checks." I asked for a receipt and he said, "Wo don't give receipts
for perirjits. The receipt is kept here in the office."
During the time I was paying permit money, I was working at Todd Dry

Dock

did steel plate,

pipe, sheetmetal, electricians (putting light fixtures

up

in

each stateroom and welding little button in) welding. T didn't have to pay permit
money to any other local during that time. Since then I have worked at SeattleTacoma Shipbuilding Corporation, Lake Washington Shipyards that's about all.
I was a member by that time and didn't have tc pay any permit money.
At
Seattle-Tacorna it was entirely ship welding; that i.s, steel plates, nothing any
lighter than I'r.s, nothing any heavier than y^ inch that's distinctly ship welding.
The Boilermakers Union claims jurisdiction over each of these three places. I
have heard Doug Flowler, Tom Crow (some International officer of Boilermakers
Union), William Williams (International Vice President), Tony Lakosky (Presi-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4149

dent of the Local) make remarks about this. So far as I know, the permit money
went into the local. You hear all sorts of stories about the officials pocketing the
money, but you can't prove anything.

Exhibit No. 307

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SBXATTLE.

WASHINGTON

Charles Culberson, 5210 Swift, Seattle, Washington.

Interviewed by Vance on October 28, 1941.
The first union I joined was the Boilermakers Union at Bremerton the last part
of November 1940.
I did not have to pay permit money there.
I paid $10 to join.

worked at Cloud's Welding Shop there, and did more or less general welding.
I came over to Seattle just before the fii-st of the year of 1941.
They wouldn't
accept my card here claimed that the Local at Bremerton liad jurisdiction only
over their workers. Had to pay $1.00 a day here when they let me work. I later
joined the Machinists Welders. While paying permit money. I worked at Associated Ship Builders on Harbor Island and at Todd Dry Dock. At Associated I
did general shipyard welding some machinists welding. At Todd's it would all
I

be classed as Boilermaker work, I think.

I joined the Machinists Welders around the 15th of June.
I did not have to
pay permit money in that union. I worked at Fenton Steel Works and since June
at the Carlisle Lumber Company.
I have been doing nothing but machinists welding since being with that union.
I never got a receipt for my permit money with the Ix)cal 541 of the Boilermakers I knew they wouldn't give anyone one and so didn't ask. In all, I paid
$23 in permit money that was from January until about the 15th of March
worked 22 or 23 days during that time.
;

Exhibit No. 308

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Hugh

Fancher, 240 Pelly Avenue, Renton, AVashington.

Interviewed by Vance on October 28, 1941.
I was initiated into Local 541 of the Boilermakers June 10, 1941.
At the time
I was initiated I was an experienced welder, having done that type of work since

1937.
I did welding at Peterson & Johnson Lumber Company,
Lakeview, Oregon,
having started there in May of 1940. That was when I joined the Carpenters
and Jtiners. I left that in August of the same year, and went to work in a
machine shop iu Lakeview. I did welding there, but that was a nonunion town
and I only kept my membership iu the Carpenters and Joiners about a month.
I wasn't paid up when I came to Senttle in January of 1941.
I
I went to work here as a welder in January, three days after I got here.
paid $1.00 a day for 90 days as permit mone|y.
Between January and June 1
worked at Pacific Car and Founders in the steel shop and foundry. In the
foundry I did electric welding, submarine net anchors. After I left there, I
worked at Todd Dry Dock for about three weeks. While there I did conversial
work on the President boats. Then I went back to Pacific Car and Founders in
the bus shop. I did sheet-metal work there. I then went to Todd's again. I
haven't paid any permit money since I was initiated.


4150
I

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

went up

to the

Labor Temple as a sheet-metal worker and they

told

me

thai

Carpenters and Joiners affiliation was no good. They told me I could do no

more welding here unless it was Carpenters' welding. They didn't ask me whethei
my card was lapsed or not. I don't know the man's name Sheet-metal Workers
Department at the Labor Temple. He sent me to Local 541.
They hesitated the first time or two in taking my checks for permit money.
No on ever explained why I had to pay the permit money. It cost me $120 in all
They gave no receipts.
to join the union.

my

Exhibit No. 309

[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
seattle, washington
October

29, 1941.

Lester Jared, 6359 Delridge Way, Telephone Avalon 1464, Seattle, Washington.
Interviewed by Gareth M. Neville, October 28, 1941.
At time of strike was employed at Seattle-Tacoma Shipyards. Had been there
Has not been initiated. Previously a
11/2 months and paid $60 to Local 541.
member of C. I. O. at Pasco and then of A. F. of L., also at Pasco. 5% years prior
experience. In regard to permit money "Only paid $00 paid by check I have
they said it
cancelled checks at home installments of $30 apiece." Also, ".
and wouldn't
was compulsory to pay within 60 days after starting to work
take less than $20 at a time. It absolutely had to be paid within 60 days." Said
didn't give receipt."
Said he had been weldhe paid money "to lady in office
ing on everything "pipe boiler all classifications." Said he had heard remarks
"to that extent" when questioned as to whether union ofl[icials had said that all
welding is under the jurisdiction of the Boilermakers. When asked to supply
names, said, "Well, that would be kind of hard to do. Before I came to 541,
Weston, a volunteer organizer, said that all welding was under their jurisdiction
Said "it was almost impossible" to deterimne whether a
of the Seattle district."
given piece of work actually belonged to the jurisdiction of a certain union. Declared that "they (Boilermakers) claim jurisdiction over all welding done by
men sent out from hall," but agreed with Mr. Neville that jurisdiction was supposed to be divided up. Never made any objections in open union meeting, and
never received any threats of violence. Said he didn't know of any instance
where a welder of good standing was prevented from doing
:

Exhibit No. 310

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEliTTI>E,

WASHINGTON

H. Butler, Route 5, Box 799, Seattle, Washington, no telephone.

Interviewed by Vance, October 28, 1941.
Around the first of the year I went over to Bremerton. I had fried to get
work in Seattle. I tried the Boilermakers and they said, "Sure, but it will cost
you $1.00 a day. That is the ruling here 90 days at a dollar a day and $30
initiation fee." I was talking with both Doug and Nelson. They said that was
L.

the only

way

could get a job hero.

was not a member of any A. F. of L. union at that time. I quit at Bremerton

and went to work at Alaska Steamship Company. In paying the permit money,
I tried to give them a check to have it over with, but they told me they wouldn't
accept checks. I paid $5.00 a week until I h:id $60,00 paid. I then went to Montana and came back the 1st of July. I went to the Boilermakers again and
they .sent me to Todd's. I worked a week there and didn't know there had been
I


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4151

a change in the permit money and gave them $5.00. Nelson didn't say anything.
Next Friday I said to the boys, "I have to go give Doug another $5.00." They
They
said, "How much are you paying?" and I told them I had paid $65.00.
So I went to see George
told me "$60.00 is all you are supposed to pay now."
and I said, "George, how much have I paid in here?" He said he would have
He looked up my payments but he didn't say anything. I said,
to look it up.
"Say, as I understand it, they have made a ruling that $60 is all you pay now
that that is the initiation fee and your working fee." He said, "That is right."
He said, "All right, you have paid $60.00." I raised cain with him and got my
$5.00 back. At first he said he couldn't do it.
During all that course of business with Nelson and Fowler they said that
that was the ruling they had and that I had to pay it and that if I didn't, I didn't
work. I hesitated a little on whether to pay it, but what are you going to do?

You

just didn't

work

if

you didn't pay.

Exhibit No. 311

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Roscoe Lohmeyer, 329 29th Ave. North, Seattle, Washington.

Interviewed by McFadden, October 29, 1941.
I did belong to Boilermaker's Local #541 until the present trouble.
I also belonged to CIO Mine, Mill, and Smelter Workers at Chelan, Washington.
I, too, paid $120 to the Boilermakers'.
$90 of this was for a permit, $30 for
initiation fee. I belonged to the same Union, Local 691 at Grand Coulee, Washington, in 1936, but I was charged $30 reinstatement. I have $51 in cancelled
checks and a receipt for the $30 reinstatement or initiation fee.
I worked at Todd's all the time.
We found out there that it slowed up the
job to have the appropriate welders doing the various odd jobs that is a sheetmetal welder, an electrical welder, a pipe or fitter's welder, and so on, so we did
We want to have our own Welder's union as most of us are qualified to
it all.
do any type of welding and it is nothing but a racket to make us pay $30 to $100
just to switch over a few feet on a job to weld a pipe instead of regular boilermaker's welding. We want to have our own school and train the welders that
will belong to our union.
I don't know what happened to my money.
Somebody told me they bought
$15,000 defense bonds, but I couldn't actually verify this. I suppose a lot of it
went in .somebody's pocket.

Exhibit No. 312

ISubmitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SE3ATTLE,

WASHINGTON

Ben Van Etten, Bellevue, Washington.

Interviewed by McFadden, October 29,

1941.

did belong to Boilermakers Local #541, at least I paid them $120 to belong.
$90 of this was for a permit to go to work as a welder at the Lake Washington
shipyards and $30 was for my initiation fee. I asked for receipts for this money,
but George Nelson wouldn't give me any, and said I was damn lucky to be working.
Nelson further told me that they intended to ask 18 months' permit money
in the future.
I asked him where my money was going, but he wouldn't tell me
that either. He just said to go on about my business and keep quiet. I may
have the stubs of the money orders I sent, I don't know for sure.
I

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4152

When I did go to work I was an electrical welder; that is, I did that sort of
work. Actually I wasn't to do anything but boilermaker's welding, but it turned
out that I had to do what I was told or lose my job. The Boilermakers want
us to break all the rules, so long as we do it for them.

Exhibit No. 313

[Submitted by United Brotherhood of Welders]

Dkpartment of Justice
434 Federal Office Building
SEATTLE,

WASHINGTON
OCTOBEK

30,

1941,

Howard

Russell Coad, 772.5 15th SW., Seattle, Washington.

Interviewed by Gareth M. Neville, October 29.

Member of Local 541 Boilermakers Union, Structural Steel, Ornamental Iron

Workers, and Aeronautical Union. Not affiliated with A. F. L. Has been doing
welding all the time." "I joined the Machinists Union and then got it cancelled
and joined the Boilermakers." Said he joined the Machinists "January 11,
1939-just plain welding." Said Machinists cai-d entitled him to do welding
at Boeings. "There are two Unions that have bawled this thing up 751 is
a sub-local of the Machinists it is an aeronautical * * * to work at
Boeing's you have to belong to the Machinists * * * the Boilermakers have
no jurisdiction over that yard * * * so when I went to work at Boeing's I
joined the Union to go to work * * * j wasn't very interested in the work

and wanted to get into ship yards, I just got a cancellation of the card. I was
out of work for sometime, so I joined 541 and have been working out of there
ever since in the ship yards but I have been doing machinists work the
Boilermakers have jurisdiction over all the machinists work in the yards in
*
*
so when I joined this Union I
Seattle it doesn't matter what type *
agreed to pay * * * i didn't even try to use Machinists card for machine
welding at Todds * * * .so went to work and paid my permit money (work at
Todds)$1.00 a day for 90 days and when I got my card, they only put $60.00
down. Probably someone ran off with the other $30.001 don't know." "It
says 'the insurance premiums' I got my insurance premiums without any date.
My lawyer said it wasn't worth the paper it was written on. Union promised
I paid $1.25 for three months for insurance
to get the matter fixed in the East.
premiums and I have as yet not received anything to show for it." When
questioned as to whether he had made any effort to have $30.00 refunded by the
Union, answered, "No, I didn't because I agreed to work for $1.00 a day for
90 days then initiation was $30.00 more." "This is a receipt signed by George
Nelson and here is another showing $60.00 * * * i forced them to give me
the receipt for $90.00 so I can use it in my income tax." Card shows date as
August 1941. "At the Yards we do all types of welding doing machinist
welding." "The pipe fitters had a little squabble * * * none actually came
out and asked me to join."

Exhibit No. 814

[Submitted by United Brotherhood of Welders]

DISCRIMINATIONS AFTER

Complaint of
Name John W. Foster.
:

Powder

Address

WORK STOPPAGE

Leary, Texas.

Plant. Location Childersburg, Ala.

Welders afliliation N. B. of W. and B. Local No. 9.
Local: No. 198.
A. F. L. Affiliation: Stoamfitters International:
Date of work stoppage October 27th, 1941.
Date of attempted return to work November 10, 1941.
Nature of grievance: Demanding all welders to return through the Steamfitters

Plant

and be

fined.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Required to clear through union hall

4153

Yes.

Fines or assessments:

Refused direct employment: Yes.

Physical violence: No.
other data I have worked on seven (7) different defense jobs in a period of
twelve (12) months. Assessments as following: Millington, Tenn., 7 weeks
$56, refused to give receipts Sheffield, Ala., 8 weeks, $6 Mobile, Ala., 3 weeks'
$9; Weldon Springs, Mo., 3 weeks, $7.50; Baytown, Tex., 4 weeks, $6; Texas
City, Tex., 3 weeks, $4.50 Childersburg, Ala., 10 weeks, $12.75 total, $101
75

Any

Exhibit No. 315

L

Submitted by United Brotherhood of Welders]

International Association of Machinists,

Los ANGE3LES LODGE NO. 311,
Los Angeles, Gal., January 23rd, 1939.
Mr. C. Cabdno,
Business Agent, Lodge 1330,

Room 402, 1119 Market St.. San Francisco. California.

Dear Sir and Brother The situation of the welder down here gets no better.
Open rebellion is taking place in the Boilermakers' Organization. The jurisdiction rows between the Pipe Fitters, daily gets more bitter.
I have been very outspoken on the matter, and there are a number of Welders,
who are anxiotis that I should head a movement here for the complete independence of the Welder within the A. F. L., that he may work at the only
trade he knows without having to carry a card in half a dozen unions.
:

I would appreciate it if you could send me as soon as possible by Air Mail

preferred, information about your set-up what jurisdiction previously claimed
by others you have broken down what progress has been made, and any other
pertinent facts.
Kindest i)ersonal regards.
Fraternally yours,

John Queen, Business Agent.

Exhibit No. 316
[Submitted by United Brotherhood of Welders]

INTEENATIONAL ASSOCIATION OP MACHINISTS,

Los Angeles Lodge No. 311,
Los Angeles, Gal., May 19th, 1938.
Mr. C. Cabdno,
S F. Welders Lodge #1330, 1. A. of M.,
1119 Market St., San Francisco, Calif.
Dear Sir and Brother: The welding situation in this city grows daily more
<'haotic. Many welders are in open rebellion against the present system of having
to carry cards in the Boilermakers, Ironworkers, Steam Fitters, Blacksmiths,
Plumbers, or whatever union under whose jurisdiction they may be working.
We are attempting to have an exchange of cards instituted, but obviously, with
men carrying insurance in a particular union, and with the impossibility of them
keeping it up owing to heavy dues, as, for instance, a man joins the Boilermakers
his dues are $4.50 per month, carrying a death benefit of $1,000.00. When the
Boilermaker's work finishes on a job, he may then transfer to the Steam Fitters,
for a fee of $3.00, but is obliged to pay a further $5.00 per month dues making a
total of $9.50 per month. Naturally men kick against this injustice.
Knowing that your lodge is composed of welders, would you please let us know
how things work out with your members. Is there any trouble on construction
jobs? If a welder's lodge can be successful in San Francisco we are seriously
considering the formation of such a lodge here.
With all good wishes, I am,
Fraternally yours,

John

Queein,

John Queen,
Ass't Business Agent.

4154 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 317
[Submitted by United Brotherhood of Welders]

Department of Justice
434 Federal Office Building
SEATTLE,

WASHINGTON

OCTOBEB 29, 1941.

William Morris EUer, 6743 14th Avenue NW., Seattle, Washington.
Interviewed by Gareth M. Neville, October 28, 1941.
Was working for a privte contractor by name of Anthony Del Gazzo, on permit
from Steamfitters Union acetylene welding at 95th NE. and Sand Point Way.
Joined the Boilermakers' Union on March 28, 1941. Has been welding since 1934.
Said he was a member in good standing in the Boilermakers, but that he was sent
on the job by the Steamfitters, and in order to work on this particular job it was
necessary to pay permit money to the Steamfitters Union. Had quit Lake Washington Ship Yards and put in application in the Steamfitters Local sent out by
Steamfitters on September 30, 1941. Declared, "I pay 250 a pay permit money to
the Steamfitters each and every day I work." Said he had thought of becoming
a member of the Steamfitters and had tried once before, but at that time they
weren't taking any more members. In answer to question as to whether steamfitters could be classified as being under the jurisdiction of the Boilermakers,
Eller said, "Absolutely no. Boilermakers don't claim any acetylene welding that
Said he had been given a receipt for permit money paid to SteamI know of."
;

Also, that $2.00 was total of money paid (8 days). Said "I could
for 10 years on permit * * *." Said he had no receipts from Boilermakers. "Was called November 26, 1940. * * * i worked 32 days, I believe,
and paid 250 a day permit money, and then they raised the permit fee from 250
a day for 45 days to $1.00 a day for 90 days before you could join. * * * Then
*
*
*
*
*
i was until March 28
I had the balance.
i paid a $1.00 a day. *
getting it paid." Has received no receipt other than one for initiation fee. Said
that he spoke to George Nelson in regard to receipts and was told that "my permit
card was the receipt." Declared he was not ever told how money was to be
used, and that he had never been threatened with physical violence. Said, "No
other than I was told that the Boilermakers claimed all jurisdiction in the ship
yards." Unable to tell whether a given job is under the jurisdiction of a certain
union. Said there was no strife between the Boilermakers and the Machinists
concerning ship yard work. Replied he had never objected to practices in open
union meeting. Said he "figured it was pay or no work. * * * he (Nelson)
said that 'you will have to pay it or Fowler will pull you off the job.'
I never
heard any disputes or heard anything in the ship yards. I welded pipe, sheet
metal, and machinists' work and everything out there, but I worked with the
understanding that the Boilermakers had jurisdiction in the ship yards. * * *
the Boilermakers claim it and they get it."
fitters

Union.

work there

Exhibit No. 318

I

Submitted by United Brotherhood of "Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON
Ootobeb

29, 1941.

Gerald John Hilbert, 13039 57th Avenue, South, Seattle, Washington.

Interviewed by Gareth M. Neville, October 28.
At time of strike was employed at Seattle Taconia Ship Yards. Went to work
under jurisdiction of Boilermakers, January 2, 1941, and card shows initiation date
as 6/10/41. With exception of a couple of years, lins been a welder since 1936.
Has also b(>loiiged to Teamsters at Eugene, Oregon. In answer to question concerning payment of permit money, Hilbert said "* * * was welding at Pacific
*
Car & Foundry * * * ^y gt^^g gj,,,^ (j.^^pg *
qq ^ g|^jf(. f^^ c^
:

=i=

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4155

(Jays

it

my

is

understanding with business agent, Doug Fowler, to

pay 250 a sliift for 45 days * * * j ^orlied two weeks * * * Fowler said
they had voted to change the shift * * * so instead of paying 250 a day for
10 days * * * then it was $10.00 * * * I had to pay it before I could
go back to work. From that time on I had to report once a week and pay my
$5.00.
I had to do that until $90.00 was paid.
Then I went out and made
application for niember.ship and paid them an additional $30.00 initiation fee."
Never given any receipts. Once requested receipt George Nelson, the dispatcher, said "they didn't give any." Paid in cash. Did electric welding, under
the jurisdiction of the Boilermakers, he believes, because woi-k being done
was for a mine net or "something." Was unable to tell how "jurisdiction" was
decided by unions. However, furnished the following information: "Most gen*
*
*
erally you can tell by the type of work it is going into.
welding on a
*
*
*
boat that would come under pipe fitters
engine work that is all
;

machinists' work." Declared that at the present time the Boilermakers claim
all the work (with reference to work he is doing) and believes that they can
properly claim jurisdiction.
Said he would have to get "clearance" if work
reached such a point that it would be necessary for him to change over to pipe
Denied that he knew of any instance in which an individual member
fitting.
of the Machinists' Union or Pii>e Fitters' Union had ever been forced to pay
permit money to the Boilermakers for the privilege of welding within his own
union's jurisdiction. In regard to payment of permit money, said that the first
day he went in, he was told that he owed $10.00 instead of $2.50. Said he was
told that "the men who had been working on the job for years had created
conditions and had lost a lot * * * ^nd that the fellows just coming in
would have to pay for it." Said he had no concrete evidence, when questioned
regarding any suspicions he might have about the Union's use of money received.
Said the Union had recently bought $15,0(10.00 worth of Defense Bonds. Said
that "the last financial report was, as near as I can figure it took close to $13,000.00
to run that union for three months." Said that apparently this permit money goes
Declared that he knew of no instance in which the
into a general treasury.
business agent of the union took money and put it in his own pocket, but also
said that so long as there are no receipts, no one had any proof. Said no one had
ever threatened him physical violence added, "no work if no pay." When asked
whether he considered that a type of coercion, he replied, "You have to work to
live in my business." Said he had never attempted to voice practices of i)ermit
money, etc., in oi3en union meeting because "it wouldn't do any good. They would
Said that he had seen other
call you out of order before you got on your feet."
people try it. Supplied IMr. Neville with slips from Company. * * *

Exhibit No. 319

[Submitted

b5'

United Brotherhood of Welders]

House
washington

814 United States Court

seattle,

Dan

McGillvray, 1715 18th Avenue, Seattle, Wash.

Interviewed by Vance on October 30, 1941.
McGillvrav was not a member of any A. F. of L. local prior to his initiation in
541 in July 1941.
He started to work on January 2, 1941, on the payment of a $1 per day permit.
He asked Nelson, the business agent, for receipts at various times and these
receipts

were refused.

the calendar on which he paid the permit money.

agreed he so told them and offered to pay the $30
initiation fee. They looked up his record and said that he owed them $3 more,
which he paid, plus the $30 and become a member of 541.
McG. has never paid any money to any other A. F. of L. union.
Under Local 541 he has been employed at the Lake Union shipyards Todd's Dry
Dock, and briefly at the Puget Sound Sheetmetal Works.
He welded pipe as well as other materials at both shipyards.

He checked the days on

When had paid the $90 as

31103242

pt.

10

28

4156

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 320
[Submitted by United Brotherhood of Welders]

Dei>abtme:nt of Justice

434 Federal Office Building

washington

seattle,

William H. Coats, Route

3,

Box

500, Kirkland,

October 31, 1941.

Washington; Telephone, Kirk-

land 3086.
Interviewed by Gareth M. Neville, October 28.
Coats was working at Lake Washington Ship Yards at time of strike had been
there about two months previously at Associated Ship Yards, Renton, and ia
business for himself. His story was as follows "About July 1939 we moved to
this State
I went down to Lake Washington and asked for a job, and the boss,
Paul Morgan, said I could go to work then we walked out from the shop and he
asked me whether I had a card told me to go to 541, where my machinists' card
was not accepted work was scarce at that time, and so they did not let me join
;

Then I got my own machine * * * got quite a bit of County

work worked for Dave McKinsey, King County shops bitter feeling between
Boilermakers' union and McKinsey because one Dick Lockett discharged because of being drunk so much of the time. When Lockett discovered that I was
using my own machine for work at the County shops, he tried to pull a strike
at the County unless I joined the Union and stopped using my own welding
machine. I was eventually forced to tie my machine in my back yard and apply
their union.
;

for admittance to the Boilermakers' Union. I started for the Boilermakers on

November 14 The arrangement was that I was to pay 250 a day for each day"
worked. Shortly after this tmderstanding, the fee was raised to $1.00 a daj' and
When this was paid in, I
I was forced to pay about $57.00 additional money.
was forced to pay $30'.0O initiation dues, making a total of $120.00 in all."
Coats was specifically questioned concerning the manner in which he was prevented by Dick Lockett from continuing in business. He declared that Dick
Lockett was some kind of executive member of the union and had forced him
to give up own machine; said threats he had received "were more to make me
scared." "Lockett said he wouldn't like to burn my machine up and that I
would save a lot of trouble if I joined the union. * * * First i tried to join
the union, and then they wouldn't let me when I made a success of my own
business they intimated they would burn my machine up." Suggested this oflSce
contact McKinsey for further information. Said he always paid his permit
money to Art Mace, Renton Car & Foundry, shop steward for 541, and never
Said he was
received any receipt.s was given new permit card each week.
making bulldozers and did not know whether it was under the jurisdiction of
the Boilermakers or not imagined it was, as they had their contract with
Renton Car & Foundry agreement says they will hire oidy boilermakers. Said
he had been a welder for 15 years and had never run into anything quite so
crazy as this; said it looked to him as though the welders are becoming the
backbone of the money the Boilermakers are taking in * * *. i have never
before seen fellows who have cards and are being forced to join other unions."
Would like to go back to working on his machine; mentioned strong-arm tactics
at Lake Washington this morning, outside men responsible; up until this morning there really has been no trouble. Declared he had solicited help from other
Government offices when put out of business, but did not receive any.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4157

Exhibit No. 321

[Submitted by United Brotherhood of Welders]

Department of Justice
814 United States Court House
SEATTLE,

WASHINGTON

Paul Harrington, 11722 Linden Avenue, Seattle, "Washington; Grant 3842.

Interviewed by Daly on October 29, 1941.
I have belonged to the Boilermakers Union since 1918
I came here from Montana on November 2, 1940. I was given a transfer card from the local there,
which was honored by 541. I have been a welder for about 20 years. Since I
wanted to do pipe welding here, I joined the Steamfitters Union here on June 10,
1941.
I pay dues to both 541 and the Steamfitters To the Steamfitters I pay $4.15
per month and to 541, $3.75.
If I were to completely jperform a job entailing various phases of welding, I
would have to join and pay dues to the following unions Blacksmiths, Machinists,
Sheet Metal Workers, and Iron Workers, before the job could be completed. These
are all afiiliated with the A. F. of L.
I have paid no permit money to 541, but did pay some permit charges to the
;

Steamfitters this amounted to 250 per day. From the time I came to Seattle
about three weeks ago, I have worked out of the Steamfitters Union, welding
pipe however, it is my understanding that I cannot get a withdrawal card
from 541, but must continue to pay them dues.
Three weeks ago I was sent by 541 to the Seattle-Tacoma Shipyards, which is
the first work I've done liere for the Boilermakers. In these shipyards I can only
do Boilermakers' welding, even though I hold a Steamfitter's card in good
standing.
I cannot even weld a pipe, but must get someone else to do so, if
this is part of a job.
This is because I was hired through the Boilermakers 541.
;

until

Exhibit No. 322

[Submitted by United Brotherhood of Welders]
J.

Wally Paul, 4058

D. Vance, Anti-Trust Div., U.

So. 36th,

S.

D.

J.

Tacoma.

Joined Bridge, Structural and Ornamental Iron Workers Jan. 4, 1938. Initiation $10 Ordinarily $100 but for one week they took in all who wanted to join

for $10.
For the next two or three months he didn't work but was forced to pay over and
above his dues a work permit fee of either $2.00 or $2.50 per week.
After joining the union he was told that he couldn't work unless he was
certified.
He could has passed a certification test but if he did it on his own
it would have cost him about $60.
Couldn't get a job unless he was certified and couldn't get certified unless
he had a job.

hook

Charles Brinkerhoff, Rte. 6, Bx. 146, Tacoma, Wn.

Was gas welding (grout stop) at Coulee Dam on Boilermaker card. In 1938
(I think) Charles Clice of the Sheetmetal Workers claimed the work as coming
under the jurisdiction of his union. Neither the Boilermakers Local #691 nor
the contractor (O. B. I.) would grant that jurisdiction so he took it up with his
International President. That gentleman took the matter up with J. A. Franklin,
International President of the Boilermakers and convinced Franklin that the
work belonged to the Sheetmetal Workers. Franklin signed a statement to that
effect which Clice brought to Coulee Dam.
The Boilermakers had no other
gas welding to offer and at that time I was not an arc welder so I had to join
the Sheetmetal Workers or I'd have been out of a job. I don't have my receipts
but as I remember it the initiation fee was $25.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4158

That was bad enough but the pay off came when I applied to Boilermakers
Local #691 for a withdrawal card. Was told that I was still working at the
trade so was not entitled to a withdrawal card. Had to either pay dues into
two unions or go delinquent in the Boilermakers I went delinquent. When I
came to Tacoma to work in the shipyard I had to reinstate in the Boilermakers
to the tune of about $33.

Exhibit Xo. 323

Washington, D. C, November-

IS, 1941.

Official Statement Issued by Inteenational Unions Repbesbnting Welders

The International Presidents and their associates, affiliated with the Metal
Trades Department, A. P. of L., and having members employed as welders,
have met in Washington upon the request of the Office of Production Management.

The

specific request

alleged complaints

was that they should give consideration

and grievances which had been made by some of

to certain
their welder

members who had

recently participated in a work stoppage in various parts

of the United States.
It was understood that at the conference called by O. P. M., the welders,
members of these International Unions, would be given every opportunity of
presenting such complaints and grievances as they might care to, so that the
actual facts could be ascertained and such understandings reached as would
prevent a repetition of the welder's interruption and obstruction of vital defense

work.

Upon arriving in Washington the International Representatives learned, through

correspondence addressed to O. P. M., that the representatives of the complaining welders refused to attend the conference called in their behalf. Evidently
their prime purpose was not to have O. P. M. listen to their complaints, but to
organize a national body to combine all existing independent groups of welders
and elect officers. It was only after this action that they were willing to begin
a presentation of their complaints to O. P. M.
The welders whom the International Unions had consented to meet under the
auspices of O. P. M. were those who, as members of these International Unions,
had recently violated the provisions

of their

own

constitution,

had violated the

agreements their International Unions had entered into with shipyards, buildingconstruction contractors, and other employers, and who, in addition, had unpatriotically stopped production for national defense.
Had there been a straightforward desire to have any grievance, imaginary or
otherwise, given consideration, the laws of their respective International Unions
provided one means, the agreements their International Unions had entered into
with employers provided another means, for these agreements, which prohibited
all stoppage of work, embodied specific provisions by which all complaints and

grievances should be taken up for adjustment.

The stoppage of work by these members placed every International Union in
the position where it must carry out the provisions of the agreements negotiated
with employers. These International Unions are convinced that if given the
opportunity they can maintain the necessary discipline and supply all workmen
required.
It is our deliberate judgment that the efforts of a few irresponsible leaders
which resulted in recent stoppages of work on national defense was a movement not designed to assist the welder so mucli as that certain individuals had
become the pliant tools of forces always at work in this nation to defeat the legitimate objectives of labor, and at the present time to interfere with production for

national defense.
It was the welders who were the ones who selfishly, uiniecessarily, and unpatriotically chose to tie up national defense.
It was those welders who quit work in
violation of the agreements with employers.
It was these welders who refused
to make use of the established methods for tlie proper consideration and adjustment of any grievance which might exist or may arise.
Under these circumstances the International Unions, regardless of the violalion of agreements with employers and violation of their own trade-union laws,
agreed that all of these welders, even though they had been responsible for

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4159

stopping work on national defense, would be permitted to return to their former

jobs without any discrimination.
The records clearly indicate that there was no discrimination practiced on the
part of the International OflBcers, their representatives and their membership.
The records also show that no complaints ever made by any welder members
have failed of examination and adjustment where they had merit.
These International Unions declare, without any reservation whatsoever, that
they are prepared to give full consideration to any complaint or grievance, in
the manner provided by their organizations' rules, which their welder members
desire to present. The same International Unions also declare their purpose to
actively cooperate with each other, so tliat all questions affecting their welder
members can be adjusted with justice to them, and to establish thorough-going
cooperation between the International Unions themselves over the entire field
covered by the welding process.
Apparently the principal demand made by this group of welders was the
granting of a national charter by the American Federation of Labor covering
all welders.
This the International Unions could not readily agree to, as it would
mean the dismemberment of the organizations they had mantained for fifty years
or more.
Apparently the dissatisfied welders, guided by their inexperienced, irresponsible
leaders, have endeavored, through the stoppage of work, and the formation of a
national organization, to take advantage of the urgent need for production in
shipyards and in building construction and other manufacturing for the purpose
of prepetrating a fraud upon those whom they claim to represent, and to force
International Unions to ignore or violate the provisions of the binding contracts
they have entered into with shipyards, with general contractors, and with individual manufacturers employing welders.
The purpose of the International Unions is to confer with all employers with
whom they have agreements, so that a full and free opportunity will be given to
examine into all grievances or problems arising from the process of welding
metals, and to work for their adjustment.
This same assurance is given for a full hearing of all complaints which may

come from any members of their respective organizations.

Should welders or any other members disregard these methods and those
which are incorporated as a part of the agreements with employers, then the
responsibility will be with them, and the responsibility of the International Unions
will be to replace them.
To maintain this necessary condition of industrial
the International Unions expect to receive the cooperation of
employers and of the Government.
There will be a flexibility in the performance of welder work in every shipyard
which will prevent any unjustified interference with the orderly and continuous
operations of production, this to be established through conferences with management and with the unions at interest.
The International Unions hold that it is not necessary for a workman performing welding to carry more than one union card, and furthermore, that there
should be no excessive fees.
Under the circumstances the International Unions must, first of all, maintain
the integrity of their own organizations and maintain compliance on the part of
their membership with all agreements with employers which have been legitimately entered into. They have no other recourse if agreements with employers
are to be of any practical value to the members of unions, and of outright service
to the nation in this period of national emergency.
International Brotherhood of Blacksmiths, Drop Forgers and Helpers, Roy
Horn, President; International Brotherhood of Boilermakers, Iron
Shipbuilders and Helpers of America, J. A. Franklin, President International Brotherhood of Electrical Workers Ed. J. Brown, President
International Union of Operating Engineers, Wm. E. Maloney, President International Association of Bridge, Structural, and Ornamental
Iron Workers, P. J. Morrin, President International Association of
Machinists, Harvey W. Brown, President; International Holders &
Foundry Workers Union, Harry Stevenson, President United Association of Plumbers & Steamfitters of the United States and Canada,
George Masterton, President Sheet Metal Workers International Association, Robert Byron, President Metal Trades Department, A. F. of L.,
John P. Frey, President, Joseph S. McDonagh, Secretary-Treasurer.
responsibility

4160

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Exhibit No. 324

Memorandum Re Receeation
The entire recreation program inside of the Army camps is in the hands of the
Morale Branch of the Army, and in cities adjacent to the camps and outside
of the camps it is in the hands of the U. S. O. under the advisory guidance of the
Federal Security Agency and the Joint Army and Navy Welfare and Recreational
Committee.
A hearing to determine the present status of the recreation program would,
therefore, involve detailed information about (1) the Morale Branch of the Army;
(2) the Federal Security Agency (3) the Federal Works Administration (4) the
United Services Organization; and (5) the Joint Army and Navy Recreational
Committee.
The Morale Branch of the Army is set up under the Chief of Staff, with a Chief
of its own, who is General F. H. O-sborn. General Osborn works jointly with the
Federal Security Administration and the Joint Army and Navy Recreational
Committee. Under General Osborn there is an executive officer, Colonel Davis,
who is the Assistant Chief of the Branch. Under the Executive Division the
Branch is divided into 5 sections. Budget and Estimates Section, Personnel and
Pay Roll Section, Coordination and Information Section, Supply Section, and Mail
and Files Section. There are then five separate divisions, each with several
sections under it. Welfare and Recreation Division, Planning and Research Division, Army Exchange Division, Morale Information Division, and Services
;

Division.

Under the Welfare and Recreation Division there is the Welfare Section, the
Recreation Section, and the Educational Section. Under the Planning & Research Division there is the Planning Section and the Research Section. Under
the Morale Information Division there is the Publication Section and the Radio
Section, and under the Services Division the Army Motion Picture Service Section,
the Facilities Section, and the Library Service Section. Each of these sections
is broken into several groups, as for instance the Recreation Section, in which we
are pi'imarily interested, which is divided into athletics, amateur dramatics, professional dramatics, song^s, music, dances, and miscellaneous recreation.
The Morale Branch was established in March 1941 and is charged in the
directive establishing it as a separate Branch, under such regulations as may be
prescribed by the Secretary of War, with the operation in the War Department of
those matters pertaining to recreation and welfare and all other morale matters
not specifically charged to other War Department agencies. The work of the
branch falls into three divisions (a) study of factors affecting morale and dissemination of information obtained; (b) planning, development and stimulation of
recreational activities appropriate to varying conditions of Army life; (c) operation of the Army Motion Picture Service and the Army Exchange Service.
Included in the duties of the Morale Branch is that of allotting funds to the
corps area and department commanders for the purchase of recreation and athletic equipment, which corps area and department connnanders suballot the
funds to the units within their jurisdiction. In the fiscal year 1941, $3,709,724
was allotted to the Morale Branch for purposes other than construction and for
:

1942, $2,344,000.
In its athletic program, the Army reports that prior to the present tremendous
expansion of the Arnjy, facilities were adequate foi the personnel accommodated,
but that expansion of the Army to some seven or eight times its usual size has
required an enormous amount of construction and that first priority was given to
essential buildings such as barracks, mess halls, etc. However, construction has
The
been started on service clubs, guest houses, recreational buildings, etc.
standard set-up now provides a day room for every company, a recreational
building and post exchange for every regiment, and a large service club, a guest
house, and two large theatres for every division. ;i7 field houses, each of which

gymnasium and munerous other facilities, are now under construction

throughout the country. The Moi-ale Branch rei)orts that plans have been suggested to it for enlarging facilities (U- providing new ones, but that they have
been rejected due to a lack of appropriated funds to carry them into effect. The
same statement is made with respect to the construction of the all-purpose recreation buildings, the design and construction details of which have been approved.
In explanation of the poor facilities in the camps in the South, the Army states
that the climatic conditons pernjit (tutdoor athletics for most of the year.
includes a

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4161

The program of athletics in each camp is the responsibility of each separate

commander, and it is the duty of the Morale Branch only to coordinate, stimulate,
and develop these I'ecreatiunal activities. A general program of sports is under
contemplation but has not yet had final approval. There is a subcommittee of
the Joint Army and Navy Committee on Welfare & Recreation which operates as a
The Morale Branch is at present preparing
civilian athletic advisory committee.
a Technical Manual of Sports <& Games and a complete program for 1942 is now
under consideration in the Staff. A guide for the use of regimental recreation
course of preparation.
In its educational program^ the Army has recently completed an agreement
with the International Correspondence Schools, of Scrauton, Pennsylvania, to
conduct correspondence courses for the enlisted men. In this connection, it would
be interesting to know why the Army ignored the Home Study Council, a group of
oflBcers is in the

representatives of all the prominent corresi^ondence schools after verbally promising to consult them before final arrangements were made.
The use of local
schools for class instruction for the men is left entirely to the discretion of the

commanding officers.
The U. S. Marine Corps offers

local

instruction to its men through the Marine Corps

which currently about one-fifth of the men of the Marine Corps are
enrolled as students and in which the enlisted men themselves who are qualified

institute, in

The Air Corps Institute offers

serve as correspondence-course instructors.
courses chiefly with vocational application in the Air Corps.
The iiresent athletic program of the Army is supposedly, according to the
Army's own statement, based fundamentally on the Fosdick Report, issued at
the end of the last War. Raymond Fosdick was in France during the War and
during the period after the War before the troops were sent back to the United
States and the greater part of his report deals with peacetime activity. He makes
three major recommendations: (1) concentration on mass games; (2) a minimum
of routine drill and (3) development of amateur dramatics and activities of that
nature, allowing the men self-expression.
Further, a Commis.sion on Training Camp Activities was establi.shed dtiring
the last War which drew up plans for games and specifications for equipment
necessary for these games.
An analysis of the chart showing the strength of the prospective posts and
the facilities of each one reveals the following ridiculous situations: Camp
Stewart with a .strength of 17,000 men has 2 basketball courts and no gymnasium,
no swimming pool, no football field, and no handball courts Camp Blanding,
with a strength of 50,000. has 8 tennis courts, no basketball courts, no football
fields, no handball courts, no gymnasium (but 25 chapels).
Fort Leonard Wood,
with a strength of 40,000. has 1 football field, no handball courts, no gymnasium.
The only camp in the list jjossessing a gymnasium is Fort Meade, which has one.
Only 4 camps out of 12 have swimming pools and Fort Meade alone has 3.
Indiantown Gap has listed as part of its equipment on hand 89 basketballs, and
has no basketball court; and Cam]) Stewart lists 50 footballs as part of its equipment and has no football field. For a strength of 17.000 men it purchased in
1941 1 handball. It possesses 2 basketball courts, and in 1941, 121 basketballs
were purchased. Camp Davis lists 18 basketballs and has no basketball court.
Pine Camp posses.ses 13 basketballs, 15 baseballs. 51 baseball bats, and has no
baseball fields or basketball courts. A comparison of Fort Meade with 27,000
men and Camp Blanding with 50,000 men is interesting. Meade has 3 swimming
pools; Blanding has a lake.
]\Iende has a football field; Blanding has none.
Meade has 11 tennis courts; Blanding has 3. Meade has 31 volleyball courts;
Blanding has 2. Meade has 10 bowling alleys; Blanding has none. Meade has
9 boxing arenas; Blanding has 3. Meade has 11 Softball fields; Blanding has 2.
Meade has a gymnasium; Blanding has none. Meade's allotment of funds for
Welfare of Enlisted Men in the Arniv for year 1941 was $28,029.03 Blanding's
allotment was $23,6f!3.24.
Early in the preliminary stages of our defense program the President, the
Secretaries of War and Navy, and the Federal Security Administrator called
on six of the national welfare agencies to cooperate in the establishment of a
program of recreation and welfare for the soldiers, sailors, and defense workers
in communities where such help is needed.
In response to this request the six
following organizations incorporated the United Service Organizations, Incorporatedthe Y. M. C. A., The National Catholic Community Service. The Salvation Army, The Y. W. C. A., The Jewish Welfare Board and the National
Travelers Aid Association.
;

: :

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4162

On February 8, 1941, a memorandum prepared in conference with the Secretaries of War and Navy, the Federal Security Administrator, and the Chairman
of the Joint Army & Navy Committee on Welfare & Recreation, General Osborn,
was submitted to the President and approved by him. This agreement provided
for the construction of the necessary recreational buildings by the Government
and the operation and staffing thereof by the U. S. O. This agreement endorsed
a public campaign for funds by the U. S. O. to pay for such operation and
provided that a public accountability of the funds would be made through the
Federal Security Agency.
On July 3, 1941, the Community Facilities Bill was passed appropriating
The actual construc$150,000, for the construction of the necessary buildings.
tion was placed in the hands of the Federal Works Administrator under the
immediate supervision of Colonel Maurice E. Gilmore, Director of the Defense
Public Works Division. Mr. Charles P. Taft was appointed Federal Security
Coordinator and after the passage of the bill a considerable period of negotiation
elapsed during which the work done by the Federal Security Agency in selecting
sites and developing building specifications in cooperation with the U. S. O. and
the communities concerned was worked out with the Federal Works Administration.

By September 24th no construction had begun. Mr. Thomas E. Dewey, who

had been in charge of the U. S. O. fund raising campaign, came to Washington
to investigate the causes of the delay and after conferences with General Osborn,
Mr. Stimson, Mr. Bard, Assistant Secretary of the Navy, and others, and after
a further lapse of four months, the construction work was placed in the hands
of General Somervell. As of December 5, 1941, the Army announced that contracts for the construction of 167 U. S. O. buildings had been awarded, and that
a total of 216 will be built, and that the completion date for the majority is
scheduled for December 15, 1941.
The U. S. O. is a corporate body, having a Board of Directors made up of
forty members, that is, five I'epresentatives from each of the participating agencies
and ten members at large. The National Headquarters Office is located in the
Empire State Building in New York City. The fund-raising campaign is now
completed, and there are at present 500 workers in the field, operating in tents
or portions of buildings. When construction is completed, the plans are that an
individual oi'aganization will take over each building and staff and operate it,
with perhaps one of the other organization using a room for an ofllce.

"Exhibit No. 325" introduced on

p. 3761, is

on

file

with the committee

Exhibit No. 326

Data for Congressional Hearing, Planning

Division,

November

8,

otttlinb

Subject
History of the Morale Branch
Initial Development.
General Munson's Study 1918.

Morale Branch 1918-1919.

"Management of Men."
Fosdick Report and Adaptations of Policy
Army Responsibility Within Camps.
Welfare Agencies in Civilian Communities.
Lapse of Morale Branch Following World War.
Regular Army Adopts Policy Recommended.
Planning of Policy: MR 1-10.
Activation of Morale Branch
Re.sponsibility of Commanders.
Army Motion Picture Service.
Post Exchange.
Functions of the Morale Branch
Control and Coordination.
Morale Work in the Field.
Personnelin the Field. (See Supplement, Letter 10-10-41.)

1941

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4163
Subject

Continued.

General
Decentralization of Records.

Chain of Command.
Consideration of Morale Branch Activities
Organization of Morale Branch.
Consideration of Morale Factors:
Leadership.
Personnel.
Conviction of Necessity for Preparation.
Pay Promotion, etc.
Discipline.

Recreation and Athletics.

Welfare.

Report of Visiting Officers.

Report from Arms and Services.
Unit Morale Reports.
Press Reactions.
Analysis and Utilization of Data.
Experimental Survey.
Special Study of Negro Troops.

Morale
Morale

Officer Personnel.
Officer Duties.

Hostesses.
Librarians.

Training of Morale Personnel

Preparation of Manuals.
Instruction Courses.

Uniforms and Insignia.

Liaison with Civilian Agencies.
Maneuver Studies.
Liaison with the Field
Conferences.
Distribution of "Notes on Morale Activities.'"
Factors Affecting Morale:
Pay.
Promotions.
Furloughs.
Transportation.

(See Exhibit)

Saluting.

Formations.
Bathing Facilities.
Hospital Benefits.
Discipline.

Other Factors Affecting Morale:

Legal Aid.
Demobilization Morale.
Leisure Time Education.
Special Movies.

Information on Current Affairs.

Lectures.

Camp

Newspapers.

Salacious Literature.
Personnel Replacement Foreign Bases.
Revision "Management of Men."
Study of World War Morale Activities.
Preparation of Bibliography.
Civilian Morale:
Service Flags.
Revision of Forms 202-203.
Recognition of Civilian Service.

History of the Morale Branch

of the
The first systematic effort in morale work, as such, in the military forces
Greenleaf
United States was undertaken bv General E. L. Munson at Camp
our
At thaf^ time the science of applied psychology was being developed m
1918

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4164

universities.
General Munson attempted to find out what psychological factors
produced the maximum of effort and esprit de corps on the part of soldiers, and
likewise to determine which of such factors were deterrents to good morale.
Consequently, the Morale Branch of the General Staff was created to study,
devise, and put into effect the psychological measures among the troops to produce
and maintain good morale. The IMorale Branch, in 1918 and 1919, made a series
of studies and produced suggestions for morale oflBcers, transmitted to the field.
Morale work at this time consisted of studying and applying the factors of leadership to the management of men. The results of this experience were embodied
in a work by General Munson, his "Management of Men," which is still a standard
It is to be noted that the Morale Branch at this
text concerning Army morale.
period was directly a General Staff agency. Furthermore, it is also to be noted
that it did not purport to maintain or oi^erate any facilities for welfare, entertainment, or diversion for soldiers. The organized work for recreation and welfare in the armed forces was conducted by private religious and welfare organizations whose work was coordinated to a considerable degree by the Commission
on Training Camp Activities, under the chairmanship of Raymond Fosdlck.
Major determinations made by this committee during the World War were, first,

that the Army shovild be responsible for recreation and welfare work within
second, that mass athletics, particularly boxing and bayonet drill, were
a definite part of the training program third, that such philanthropic agencies
should conduct welfare and entertainment activities for soldiers in communities
adjacent to camps fourth, that organized efforts of State and Federal agencies
to eliminate prostitution and to exterminate venereal disea.se were required.
Following the World War the Morale Branch pas.sed out of existence, as did
the Commission on Training Camp Activities. With the demobilization of the
Army, the functions which had pertained to both the Morale Branch and the
Commission remained operative, if at all, in the office of the Adjutant General,
which is the agency primarily concerned with personnel. Certain lasting xwlicies
were evolved from the World War experience. Recreation and athletics were
carried into the training program of the Regular Army, and still constitute a part
of that program. The War Department officially appoved the policy of handling
all recreation and welfare activities for soldiers within the military establishment, a policy which has been followed until the present.
In planning for emergencies which might demand the expansion of the Army,
the War Department adopted mobilization regulation 1-10. This provided that
the G-1 Section of the General Staff would be responsible for all matters of policy
relating to personnel that at the appropriate time there would be activated in
the War Department an agency to handle morale work. The Morale Branch is
that agency, activated by War Department letter
.Sf)3.8 (3-3-41) M, of March
This expanded the Morale Division heretofore in The Adjutant General's
8, 1941.
office, creating a "Branch" of the Army luider a Chief of the Morale Branch.
So far as the allocation of funds and personnel for its work are concerned, it has
still an indefinite relationship to The Adjutant General's office in respect to fiscal
matters and civilian personnel. This directive provided that the Morale Branch
would have no iiersonnel in the field. The full responsibility for the morale of
Army units rests upon the troop commanders. The Morale Branch is not a general
staff agency, although its purpose is to advise the Chief of Staff.
Policy determinations still are retained by the G-1 Section of the General Staff and recommendations of the Morale Bi'anch must proceed through that agency.
Restatement of
some morale directives has been made by official letters from time to time and

camps

WD

GO

#2.

During the years following the World War the Army Motion Picture Service
became a baby enterprise to provide entertainment for soldiers. It oi)erated
directly under the Army and was assigned to The Adjutant General for administration.
Likewise, the post exchanges, through the Army, developed and provided
the soldier with standard items of merchandise, as well as military equipment
and supplies, engaging from time to time in recreational activites as well. These
operative functions were transferred to the Morale Branch for administration,
but constitute a distinct analogous portion of

its

work.

FUNCTIONS OF THE MORALE BEANCH

As provided in the letter of the Secretai'y of War of

tions of the Morale Branch are:
(a) It shall develop means and facilities within the

when supplemented with information

to military

March

War

ix'rsoiuiel

8,

1941, the func-

Department which,
for directing and

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4165

executing morale measures, will assist commanders in maintaining a high state

of morale in the Army.
(6) It may make necessary research on specific morale problems, including
the problem of the individual, which should be developed for dissemination to the

Army.
(e) It shall study existing regulations and procedure pertaining to the morale
factors referred to in Mobilization Regulations 1-10 (Morale), and make appropriate recommendations for improving or regulating the administration of such

factors.
(<?) The Chief of the Morale Branch will study conditions which affect the
morale of personnel assigned to duty in the War Department and make appropriate recommendations for their improvement.

CONTROL AND COORDINATION

The

control and coordination of Morale Branch work as provided by the

War is as follows
(a) The Morale Branch shall function directly under the supervision aud
control of the Chief of Staff.
It is charged, under such regulations as may be
prescribed by the Secretary of War, with the operation in the War Department
of those matters pertaining to recreation and welfare and all other morale
matters not specifically charged to other War Department agencies. The Chief
of the Morale Branch will develop methods and procedures which will enable
him at all times to know the state of morale of the Army. In accomplishing
these missions he will conform to normal channels of command.
(ft) The Morale Branch will operate under policies developed through the
10-15.
Primary consideration of
procedure established in paragraph 5,
all such morale policies will rest with the Personnel Division of the War

letter of the Secretary of

AR

Department General Staff.

(c) The Chief of the Morale Branch is authorized to arrange directly with
chiefs of all other arms or services in the matter of obtaining routine and
special reports for the compilation of morale data pertaining to the Army.
(d) The Chief of the Morale Branch is authorized to communicate formally
with the various Federal agencies and departments, State and local governments aud individuals on morale matters in accordance with established War
Department policies.
MORALE WOUK IN THE FIELD

The complete control of morale work in the field, including recreation and
welfare in Army posts, is vested in the Army commanders concerned. The
Morale Branch has spent some months in studying the needs of these commanders for assistants in doing morale work and in providing for recreation
and welfare of the soldier. Certain of the larger commands were authorized
On October 10, 1941, additional
to appoint morale officers in March 1941.
assistance

was authorized, and

full-time officers for recreational

work were

authorized for regiments, replacement training units, separate battalions, and

analogous organizations. Authorization also was given to utilize enlisted men
for clerical assistants to morale officers where civilian assistance was inadequate or nonavailable. During the same period of time the Morale Branch
It became necessary to determine the scope of
itself was being organized.
its activities and its own need for qualified officers to study morale matters
and to assist the Chief of the Morale Branch in making recommendations.
These officers have been drawn both from the Regular Army and the Reserve
components. Their qualifications for this work are excellent, and as they have
become familiar with problems affecting morale and with the problems affecting
the administration of recreation and welfare activities, their productivity has
continually increased.
The Morale Branch, like all War Department agencies making studies of the
Armv. must rest its conclusions upon data derived from the Army Itself. The
entire trend of administration in the Army has been that of decentralization, in
order that the field commanders might have the greatest latitude and mobility
Bv the same token, the resulting decentralization of records
for operations.
leads to great delays in nrocuring data necessary for any scientific and accurate
survevs of matters relating to personnel. The directives governing the work of
the Morale Branch require that communications with the field be through the
chain of command. The Morale Branch therefore does not communicate directly

4166

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

with any morale officer in the field. It must transmit its suggestions from the
top down through the chain of command, and most of its information must be
derived in the same way. Until the present a great deal of study has been
required, and a great deal of time has been consumed, attempting to devise
suitable methods to procure needed information expeditiously. This has not
prevented the Morale Branch from conducting studies in fields from which data
was available. Some of these studies are indicated later on in this report. These
studies have been submitted to other War Department agencies for consideration
and appropriate action. The Army Motion Picture Service has continued its
function of supplying moving-picture entertainment to the troops. The entire
Post Exchange System within the Army has been reorganized, making that system comparable to chain-store operation. Previously, Post Exchanges were
cooperative ventures maintained by units in the several Army posts, camps, and
stations.
Profits were shared by the units engaged in the enterprise.
The rapid
expansion of the Army and the multiplication of new units, each without funds
with which to participate in post-exchange ventures, made it necessary to devise
a system in which all units might participate. This has now been accomplished.
The profits so derived are available to each organization in the Army for its own
welfare.
The internal

work of the Morale Branch has been organized into divisions.

The Planning Division has been set up to assist the Chief of the Morale Branch
It is a staff agency within
to devise plans for the work of the Morale Branch.
the branch. The Morale Research Division is now set up for special research
concerning the psychological factors in the morale of the troops, and is preparing
to accumulate data for this purpose.
The Editorial Division, embracing the
Publication Section, and the Radio and Pictorial Section, is designed to disseminate helpful information concerning morale activities to the field. The Welfare
and Recreation Division is set up to advise concerning welfare measures, recreation, leisure-time education, athletics, soldiers' insurance, legal aid, and kindred
matters. The Services Division has been active in matters concerning recreation,
leave, camps, service clubs, guest hou.ses, and other similar installations for the
troops.
The Executive Division is concerned with the administration of the
Morale Branch itself, and includes, at the moment, a special section devoted to
studying and planning for the needs of the soldiers at the Atlantic, Caribbean,
and other bases.
CONSIDEEATION OF MORALE FACTORS
1.

Morale Factors.

Factors which affect morale or esprit de corps in the military service include
the following
Ability, training, and experience of officers, both commissioned
(a) Leadership.
and noncommissioned.
Personnel. Number, background, and character of men in the armed forces,
( &)
and state of their training, including consideration of racial and linguistic affluence, and sectionalism or absence of it.
(c) Cmiviction in the soldier that the United States is in danger and that his
services are essential to preparedness, and that the country is behind him. In
other words, good morale in the soldier reflects good morale in the citizenry, and

vice versa.
{d) Military Factors Related to the Individual Inducing
(1) Pay.
(2) Promotion.
(3) Decorations and awards.
(4) Uniforms.
(5) Religious ministrations.
(6) Ceremonies.
(7) Leaves of ab.sence and furloughs.
(8) Individual development and education,
(e) Discipline.
if) Recreation and Athletics,
(g) Welfare.
(1) Religious ministrations.
(2) Insurance.
(3) Red Cross Welfare service.
(4) Education.
(5)
(6)
(7)

Library service.
Post exchange.
Legal services.

Oood Morale.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4167

STUDIES MADE AND RBXX>MMBNDATIONS

Securing and utilizing information or data on state of morale of the Army:

Branch visit large-scale maneuver areas, camps, posts,
and stations, observing morale factors and their application, and report as follows
(1) Formal Reports.
(2) Narrative Reports.
(3) Special Reports covering information required for various studies.
(4) Verbal Reports.
(&) Factual and statistical data is received from other Arms and Services as
1.

(a) Officers of the Morale

follows

Extracts from reports of Inspector General's department.

Special subjects for inspection at request of Chief of Morale Branch from
I. G. D.
(3) Extracts of Gr-1 officers' reports, if applicable.
(4) Monthly reports of general courts-martials from Judge Advocate General.
(5) Weekly sick and venereal reports received from Surgeon General.
(6) Other special information requested as appropriate.
(c) Monthly reports from tactical units and corps area installations covering
(Tentative report completed to be submitted to
a wide range of morale factors.
(1)
(2)

G-1

for approval.)
(d) Continuing study and compilation of press reactions covering certain
morale factors.
(e) Analysis, compilation, and utilization of data obtained regarding morale
factors.
(1) Reports abstracted and appropriate entries made on card file of individual
installations.
(2) Appropriate information forwarded to interested divisions.
(3) Files maintained of various morale factors, both negative and favorable.
(4) Corrective measures recommended as a result of study of information

compiled.
tentative planning survey to include study of all factors favorably or
unfavorably affecting morale, through application of techniques developed in the
social sciences and used by industry and by other government agencies.
Experimental testing of procedures and schedule has been completed on a small scale
at a Replacement Training Center.
(g) Special study and correlation of factors affecting morale of Negro troops.
(1) Location and composition of Negro units ascertained and classified as
follows
() Geographical location of Negro units,
(ft) Composition of Negro units relative to state from which inducted.
(2) Continuous study of proportion of White and Negro officers assigned to
if)

Negro
(3)

units.

Analysis and recommendations relative to recreational facilities available to Negro troops.

Continuous study and compilation of press reactions relative to racial

problems in its application to Negro troops.
(5) Continuous study of Military Intelligence and Inspector General reports
(4)

(6)

2.

as applicable to racial problems.

is made available and
and Services upon request.

Information as compiled

is

supplied to other

Arms

Morale Organizations and Administration.

(a) Study and recommendation of military personnel for morale activities

resulted in providing full-time morale officers in corps areas and appropriate
camps, posts, and stations. In tactical units morale officers are provided in all
headquarters of a division or higher echelon. Recreation officers, full time, are
provided in regiments.
(&) The functions and duties of morale officers and other military personnel

engaged

in

morale activities were studied and recommendations forwarded

to G-1.
(c)

Study

is

service clubs.
(d) Study
service.
(e) Studies

is

now

in progress considering the

now

in

need for additional hostesses in

progress relative to personnel for the

Army

library

were made relative to the training of morale personnel in the

Provisions were made authorizing Army, Corps, and Corps Area Commanders to hold conferences of Morale Officers in their respective commands.
field.

4168

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

meeting of Army, Corps, and Corps Area Morale OflBcers will be held in the
the Chief of the Morale Branch in December 1941 for the purpose of
instruction and dissemination of information relative to morale activities, one
such conference having been held February 25 to 28, inclusive.
(/) Studies have been made and material compiled relative to the preparation of manuals for use of oflBcers in the field as follows
(In progress.)
(1) Manual for morale officers.

office of

(2)

Manual

for recreation officers.

(In process of publication in tentative

form.
(In progress.)
(3) Manual for hostesses.
(g) Study is now in progress planning instruction courses for hostesses and
librarians.
(/() Study and affirmative recommendation was made relative to appropriate
uniforms and insignia for hostesses and librarians.
(0 Study relative to the introduction of a course in morale work for service
schools is in progress. This has been experimentally tried out at The Adjutant
General's School, Arlington Cantonment, Virginia.
ij) A study of the relationship between the military establishment and civilian
agencies in the Army morale program was carried forward, resulting in publication of pertinent information to the field.
(k) Study of morale activities during large-scale
lication of appropriate directives.
3.

Liaison with the

field

on matters relative

to

maneuvers resulted

morale

in pub-

activities.

(a) In addition to studies and recommendations concerning War Department

directives relating to morale activities and the conferences held with morale
officers, the following means are also used for liaison purposes
(1) Officers of the Morale Branch who are specialists in their respective
field, during the course of their routine visits and on special trips,
confer with commanders and morale officers in the field, giving them
:

(2)

advise and suggestions based upon experience.

Notes on Morale Activities is a six-page paper prepared by the Morale
Branch. Approximately 7,500' copies are forwarded monthly from
Washington to camps, posts, and stations for distribution to commanders, morale officers, and recreation officers. This publication is
utilized for the exchange of appropriate morale information between
various units of the Army. Only programs and activities of proven
value, based upon experience, are included as material is compiled
from suggestions forwarded from the field and upon information
obtained by Morale Branch traveling officers. "Notes on Morale
Activities" is designed to stimulate, through suggestion, all types of
morale activities. (Additional information on "Notes on Morale
Activities" and volumes 1 to 7 are presented as an exhibit.)

Factors involving military policies and facilities as they affect morale.

(a) Study, pay, and allowances for commissioned and noncommissioned officers.
(ft) Study of methods of promoting and removing officers.
(c) Study of the furlough system, with recommendations
(1) Furlough recommended for selectees at termination of 13-week training
period at Replacement Training Centers W. D. Circular #200, authorizing liberalized furlough policy followed).
(d) A study of the advisability of free transportation for enlisted men on
furlough is in progress.
(e) Study saluting off military reservations is in progress.
if) Study relative to optional elimination of roll-call formation at reveille,

4.

recommended continuation.
Study of bathing facilities on maneuvers.
Study of the status of enlisted men at recreation areas with reference to
hospital benefits; J. A. G. concurred in interpretation of Army Regulations grant(g)

(//)

ing such benefits.

(f) Studies relative to administration of militnry justice, including study of
Articles of War and manual of courts-martial.
(i) Study of policies regarding military prisoners.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM 4169

5.

Other Factors Affecting Morale Not Othericisc Classified.

(a) Study of legal aid organizatlous offering assistance to military personnel,

resulting in publication of list of such organizations to all echelons of the Army.
(6) Study is in progress relative to demolization morale activities in cooperation with the Selective Service Board.
(c) Study is in progress as to the relative merits of introducing a leisure-time
vocational education system.
(d) Study as to the advisability of the production of a motion-picture film of
Coyle's "America" was referred to G3.
(e) Studies have been conducted relative to the use of training films in Leadership and Americanism, and representatives of the Morale Branch are at present
in contact with G-2 and Signal Corps relative to the project.
At the suggestion
of G-3 that the Morale Branch prepare current affairs information items to be
imparted to the troops by commanding officers, it was recommended that this
project should be coordinated with G2.
(f) Study of the advisability of Citizenship lectures at replacement-training
centers resulted in Morale Branch concurrence with G-3 on this project.
((/) Study of the value and utilization of camp newspapers to enhance morale is
in progress.
(h) The study and the collection of data on the reactions of demobilized military personnel toward the Army is in progress.
(/) Study relative to the banning of salacious literature from military establishments is in progress.
(;) Study relative to replacement of personnel at foreign base camps was conducted, and concurrence for directives establishing such procedure was given.
(k) Revision of General Munson's book on "Management of Men" is in progress.
(l) A survey of World War material and the acquiring of files on World War
Material now compiled is being utilized for study as it
activities is in progress.
relates to current morale activities.
(m) The bibliography of publications relative to military morale is in the course
of compilation.
6.

Stimulation of Civilian Morale as Affecting the Army.

(a) Study was conducted as to advi.sability of the use of a service flag to show
relatives in military service.
No action was recommended.
(h) Study of the revisions of Forms 202 and 203 which was used to keep
soldier's relatives informed of his whereabouts as routine action was concurred in.
(c) A study was conducted as to the advisability of the awards to civilians
donating services for entertainment of the Army resulted in recommendation that
no award be made, but that appropriate letters be written these civilians thanking
them for their services.

War

De:partment

The Adjutant

General's Office

washington
October

10, 1941.

Subject Officers and enlisted men for morale activities.

To Chief of Staff. GHQ.
Commanding Generals, all Armies. Corps Areas, Departments, Air Force
Combat Command, all Air Forces, Alaska Defense Command, and all Base
:

Commands.
Chief of the Armored Force.
Chief of the Army Air Forces.
Chiefs of Arms and Services.

Commanding

officers of all

Exempted

Stations.

General considerations. The commander alone is responsible for the morale

of his unit. His responsibility in this regard cannot be delegated to subordinates.
Special staff officers to assist in all matters of morale, recreation, and welfare are
authorized as hereinafter indicated.
1.

4170 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

(a) Division and higher units

2. Special staff officers for morale activities.
{other than air units) and replacement training centers. A minimum of one
qualified ofiicer of suitable rank will be assigned to each of the following headquarters and designated as the morale officer
General Headquarters, Army, Army Corps, Corps Area, Department, Division,
Armored Force, Armored Corps, Armored Division, Alaska Defense Command,
Base Command, Replacement Training Center.
The assignment of additional officers as full-time assistants is authorized when
warranted. The assignment of two additional officers as full-time assistants to
the morale officer at corps area, department, and division headquarters is believed
desirable. Particular circumstances may require more than this number.
In regi6. Units smaller than division, including replacement training units.ments, separate battalions, or organizations analogous thereto, one full-time officer
other than a chaplain will be designated as a recreation officer, who will be
specifically charged with assisting the commanding officer in matters pertaining
1-10,
to recreation and welfare. Pending the revision of paragraph 6f7 (2),
the provisions thereof permitting this duty to be performed in addition to other
duties will be suspended in such cases. Where it is practical to gi-oup several nonregimental battalions, as in the case of the artillery battalions of the triangular
division, a full-time recreation officer will be assigned to the group rather than
one to each battalion.
Officers may be designated
(c) Battalions, companies, troops, and batteries.
in battalions, companies, troops, and batteries as recreation officers, but in such
cases the duties to be performed will be in addition to their other duties.
(d) Army Air Forces.
(1) Commanders of the following headquarters are
charged with providing a qualified officer for morale activities on their staffs, and
designated as the morale officer Chief of the Army Air Forces Air Force Combat
Command Chief of the Air Corps First, Second, Third, and Fourth Air Forces
Air Corps Training Center; Air Corps Technical Training Command.
(2) A qualified officer will be assigned as morale officer to the headquarters
of Army Air Force stations, including Air Force Combat Command stations, Air
Corps stations, and all other air installations, in which the prevailing conditions
or the strength of the personnel appear.? to warrant such assignment. Non-Air
Corps personnel of any such station will be taken into consideration. For each
station command it is normally considered appropriate to assign as morale officer
one qualified full-time officer, branch immaterial, fiom the base group. The
assignment of additional officers as assistants to the morale officer in air groups,
or in replacement or training centers, or other large installations is authorized

MR

when warranted.
(e) Posts, camps, and stations. A full-time morale officer will be assigned to
the headquarters of all posts, camps, or stations where the prevailing conditions
or the troop strength appears to warrant such assignment. The assignment of
additional officers as assistants is authorized wliere warranted. The assignment
of one additional full-time officer at posts having field forces approximating the
strength of a division, and two additional full-time officers where such strength
approximates that of two divisions, is considered appropriate. The importance
of assigning qualified officers for this type of duty at newly activated posts, camps,
and stations outside of continental United States will bo adequately recognized.
3. Enlisted men for morale activities.
Commanders of all echelons are authorized to detail enlisted personnel to assist staff officers assigned for morale activities, when civilian clerical assistance is inadequate or not available.
4. Prorurcnient of officers.
(a) The above provisions do not alter existing
tables of organization or allotments and it is contemplated that assignment
of additional officers for morale activities herein directed or authorized will be
made from officers availal)Ie to command(M-s concerned in both tactical units
and installations. The otlicer overstrength authoriZ(>d in most tactical units
should permit the replacement of ofiicers when necessary to fill the positions
vacated.
(6) In regiments, separate battalions, and similar separate iniits where no
overstrength is present, the reci-eation otlieer directed for assignment in paragraph 2h above will be initially withdrawn from some position now authorized in
the urnt and i-eplMC(>d by an officer from any overstrength provided sid)sequently.
(c) In exceptional cases where existing tables of organization or allotments,
together with officer ov(M-strenglh now authorized, an> insullicient to i>ermit the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4171

assignments herein directed or authorized, report with suitable recommendation

will be made, through channels, to the War Department.
By order of the Secretary of War

Adams,
Major General,

E. S.

The Adjutant General.

Exhibit No. 327

Services DI\^SI0N

OUTLINE

Recreational Facilities.
Army Library Service.
3 Hostesses and Librarians.
4 Recreational Camps.

Section 1
Section
Section
Section
Section

-United States

Army Motion

Section

I.

Picture Service.

Recreational Facilities
SER\1CE OI.UBS

Service Clubs are intended to provide the best features of club life for enlisted
personnel, members of their families, and civilians ix'rmanently employed within
a command. These clubs liave been recognized as the centers of the community
Whether the
interests of organizations serving at post, camps, and stations.
activities of such clubs shall center under one roof, or under several, is determined by the local commander; but they in no way supersede or interfere with
the conduct and operation of company day rooms provided individually for each
separate company, or similar unit.
Service Clubs are supplied with the necessary installation and equipment to
provide recreational and social activities in which women are included, such as
dances, musicals, parties, etc., a cafeteria and place of meeting of enlisted men,
their families and women friends. The original standard design of these clubs
included accommodation for taking care of women and children who, throvigh
emergency, might be detained in camp overnight.
Service Clubs existing at military posts and camps at the beginning of the
present emergency are continued in operation, unless the emergency demands
the use of their space for other purposes. As the process of mobilization continvied additional service clubs, as authorized by the War Department were
established in those posts and camps where required, on the basis of not to
exceed one club for each 5,000 enlisted men served.
Chiefs of Arms and Services ami corps area and department commanders submit recommendations to the War Department for the establishment of additional
Service Clubs. In the early part of September 1940, a study was made by the
newly created Morale Division, Adjutant General's Office of the construction
plans for the standard type service club known as the SC-2 type. This study
indicated that certain structural features made it unsuited to fulfill its full

mission on September 17, 1940, a memorandum was prepared and forwarded to

the G 4 Division, General Staff setting forth the deficiencies .of the SC-2 type
club and recommending the adoption of new plans. This resulted in the development of plans for a completely redesigned facility, known as the SC-3 type
Service Club as is now provided for larger garrisions where old Service Clubs
were non-existent or inadequate.
This plan provided a large kitchen and cafeteria, dining room seating 120
persons, a soda fountain and a main lounge room approximately GO' x 80' suitable
for conducting dances or other social activities, toilets, cloakroom, and offices
on the first floor and space for housing a 5,000^volume library, 2,C00 square feet
of floor space for reading, writing, and general library activities on the second
floor and balcony. This building was estimated to cost an average of $64,000.
Appropriated funds (WEMA) in the amount of $16,500 are made available to
the post commander for the purpose of completely equipping each SC-3 Service
Club authorized at that post. This equipment includes a 5,000-volume library
811932 42 pt. 10
29

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4172

with all the necessary library equipment and supplies required, Cafeteria furni;ture and equipment and lounge equipment.
Since these clubs were erected and furnished by the Government for the use
of enlisted personnel it was not considered desirable or necessary to assess charges
against enlisted men and their guests for admission to any of the social functions
held therein and all Commanding Officers were so informed. It was later realized,
however, that in conducting dances, certain conditions might occur requiring
funds for transportation of guests and other expenses which might prevent such
entertainment. Authority was given Commanding Officers concerned on September 29, 1941, to make a nominal admission charge to those attending dances,
This did not alter the "full-use policy"
sufficient to defray the costs involved.
as the basic principle of opeiation.
One of the features considered undesirable of the previously designed club was
the inclusion of guest rooms and Hostess quarters on the second floor. The new
plan provides these accommodations in a separate building known as a Guest
House to be constructed as an adjunct to the Service Club and located in close
proximity to it.
These Clubs and Guest Houses were e<instructed in accordance with the provisions of War Department construction policy, supplement #4. dated October
It will be noted however
9, 1940, established by the G-4 Division General Staff.
that the standard Guest House was not provided on the same basis as the standard Service Club. It was generally based on a minimum strength of 10,000, but
provision was made for its authorization for posts of more than 5,000 when the
isolation of the

camp made

its

construction essential.

This Guest House was designed to provide fovir suites of two rooms each, and
separate bath for each Hostess and Librarian permanently quartered at the
post, overnight accommodation for a maximum of 56 guests and a lounge or
foyer for use as a day room. The over-all dimensions of this building are 29' 6"
X 130', containing 28 bedrooms for overnight guests, each 10' x 12'. The estimated cost of construction including iitilities is approximately $32,000.
Since this building was designed for emergency use it was decided by the G-1
Division of the General Staff, and a directive issued stating that the initial
furnishings for these buildings should be kept to a minimum of essential items
necessary to provide sleeping accommodations and should be fin-nished either
from Quarterma.ster stock or from nonappropriated funds available locally.
Recommendation was made to the General Staff by the Morale Branch that the
table of allowances for Posts, Camps, and Stations be amended to include the
necessary items of bedding and furniture. It was felt that other desirable items
such as rugs, furniture, pictures, drapes, etc., would be provided from profits
derived from the operation of the Service Club Cafeteria.
It was decided that a nominal charge should be made to guests occupying this
facility to defray the cost of laurrdering linens and providing necessary chambermaid and housekeeping service. The usual charge is 50 cents per night per
person.

A growing demand for separate recreational facilities for use of colored personnel comprising a portion of the garrison at many posts and camps resulted iu
a directive from the G-4 Division, which was publislied on December 10. 1940, as
supplement #8 to the War Department construction policy. This supplement
provided construction of welfare and recreation facilities for colored troops which
were a part of a composite garrison on the same basis as if the colored contingent formed the garrison of a separate camp, and, in accordance with policies
established for camps in general, was ba.sed on the strength of the colored troops
present.

The operation

of this policy together with the obvious necessity of providing

below 5,000, resulted in a modification of jiolicy and of
construction designs, generally in accordairce witli the following:
facilities for garrisons

Strength
Strength
(c) Strength
(rf) Strength
(r) Strength
if) Strength
(g) Strength
(a)
(&)

between
between
between

(!.r,(l(l

betweiMi 4.S0() :ind OdOO, guest house, IS guests.

:{,()I10 and 4.S(;0, guest Iiouse. 14 guests.
between 2..500 and .'5.0(10, guest house. 10 guests.
between 1,.'")00 and 2,500, guest house, 7 guests.
l)etweeii

The SC-4 type Service

somewhat smaller scale.
approximately 37' x

and 5,000; small service clubs known as SC-4.

aod 15,(1(10, niciditied KH-1 for use as service club.
nnd 1(.(100 guest house, 21 guests.

rt.OOO
501)

80',

SC^3 except on a
This is a one-story structure containing a dance floor
7,(;00 square feet of floor space for a library and reading
Clnl) provides all the facilities of the

NATIONAL DEFENSE PROGRAM

INVESTIGATION OF THE
o r-ifpteria

,.ri

4173

diuing room 37' x 50' and

is

tbis club^
37' x 120' contains
purpose of equipping
^^^^.^t^.y structure
approximately
room
Modified RB-1 type ^^^'j^^^L'^^^-eading
recreation
and
leacim^
and dinmg alcove, a
^^.^^.^^ ^^^^^ ^^^ average of
kitchen
small
n

for The

*Ve

^^^S%^^;^r^
m

than the standard

t^s ^^ ^^ffi^^^^iXng with the space set aside the
modtications of several
use as a Uvmg room o.

't^S^^Si^Sl^

SnT^^rfor^Sn^and^mr^^^^^^

-qu^ed.

^^^^^S^^^^SS^^X

information -^^^ ^^
Librarian V^^^^^'^^^^^
hmited,
vided Hostess and
;4,l,,,d type, the space being

n^|L..-This

.een i20 Service Clubs au-

STa^l^nrl-^^n^S;:;:;^^^^^^^

RB-1 type, ^1^^

Of this number 109 are
f .^fj,|,^land
Provm| G^o^^n^^^
Aberdeen
at
Modified Club at Ab^situation
focal
^^^J^^^^^,
xo,
nis
irf
11 SC-48,
^^jp^, are of the
^
^^^
in oTieration (84 SC-38,
autho^^^^^^^^^
^,,,^,,,,, of these
i^eenr There has also been
oi
c54
jemaimng
modified type,
Standard type, and the
opeiation "" -^
Guest Houses are in
authorized on April 24

aM

?8 of the Modified

standard
^^Construction of mess and <lf,^/^*;^^,,f;\'taSSTv Is follows, for less than 50
allocated
RB-1
These facilities were
1941
f\^,f^^J""^^^ strength, one Modified
Room; for camps loss ^^^^^^'^^^^'^^
per regiment and
^oom
officers, one Day
o
10,0OU,
^nd
between 5,000
^^ .^^^^^j,
^^ ^^^^. ^
Building. For camps
ana
.^^ Club (designated
Building for tlie camp,
one Modified RB-1
these
but not to exceed two of

JTR^I^^VTerfofLS^SUtr^^^^^^^^^

SSiS^

indicated in
location and type are
Tt'^I
activities and
appendix "A" attached.)
permit indoor athletic
^^Hlitv to perim
facility
^^^ inclement
Recognizing a need for some
peno
duiin.
winter season
August
^^^^ ^^^^^^,^^,^ i,,
mass gimes during the proposed athletic *^eid ou
^_^^.^^ Section of
weather, a sketch of a
Division, AGO
I'^^lg^artermaster General. This
by the then Morale
27, 1940, together
Cmistructing

S^sr X^r

ad

^f

7S.
!^

Geneia on

Q^^^'-'^';}^-''T^:llf^^^^
ant
was submitted to The Adiu
ius^^^^
$90,100.(10^
with an estimate of cost of
4th, 1940, iecommenc
and under date of October

1^

sketch

Staff
sion of the General

'^^^,f

^^^^ ^^^^^^^^^^
^^ the

^^^^^ ^^^^^^

? .^^.^"^^^l^g.am

of
developed to provide one

?-VC'".?X=?'o7;^r.r?rStS .n<U.
10 000 strength.

plans were
Sed on this directive
and construction

on

May

27, 1941,

..^.^^

su^^^^^^^^

at posts , ov.-

t^ the Chief of the

Morale Branch

194I construe^
of
structures; construction
4,

^^f^^^;^,^
--> ^^
_

11, 1941, toi

^^^S^l''
G-4 Divi-

^.^^^ ^ ^^^^^ ^f

on
I ^^o more
was authorized on June
was included in
additional Field Houses was ^}^^^'2mtZal^^^^^^^
o
n
f
f or
Cantonments, makJuly 30. 1941. Authorization
i.
^fJ^^^^X
^^e iieNv Divisional
for foui ot
.^ expected
the construction authorization
now
structures
Ing a ?otal of 37 of these
J^^'/^^lty in obtaining delivto Ja""^^
buildings
to be completed prior
.^ed romSetTon of manv of their

tion

sS

^^^^

"'Tr/eS?Ho!.T>?a^'i^!;S|^^^^
r^:'r.tr;:fbe^i;lc.;rTCaV,;;^^Ste,. 33

,,ecU.oi.
feet 0, elea,.


4174

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

an interior free floor space of 100' x 180', provides lieating, sliowers, toilets, and
dressing rooms, is provided with portable seating and two portable boxing rings
whicli may be readily used as a temporary stage for theatricals, has a hardwood
floor susceptible to use for large dances, roller skating, soft ball, three basketball
courts, and all manner of athletic activities.
On April 25, 1941, the Quartermaster General was dii'eeted to design a temporary building for use as an all-purpose regimental gymnasium to be provided on
the basis of one per regiment or similar unit or stations of 3,000 enlisted men.
This structure to be so designed as to accommodate a basketball court, provide
seating for approximately 600 spectators during these games, be adaptable to
dancing, susceptible to use for boxing, gymnasium or indoor instruction, contain a motion-picture projection booth, dressing rooms, showers, toilets for men
and women, and contain a small stage. Plans have been developed and approved
for a building at an estimated cost of $44,000, providing all the foregoing requirements. However, no policy has as yet been developed by the G-4 Division of
the General Staff covering their construction.
Section

2.

Army

Library SEE^^CE

Upon the entrance of the United States into the World War a War Service
Committee was appointed by the president of the American Library Association
and The Commission on Training Camp Activities invited the American Library
Association to provide library facilities in Army camps. A sum of $1,700,000
was raised by private subscription, augmented in 1918 by $3,600,000. In addition, the Carnegie Corporation made a grant of $320,000 for 32 library buildings
40 X 120 feet in size, with chairs and tables for 200 men.
The Army Library Service began after the close of World War I when the
American Library Association turned over to the War Department all books,
equipment, and money amounting to about two million dollars remaining from
its operation of the War Service Libraries.
The Adjutant General assumed
responsibility for the administration and supervision of Army Libraries July 1,
1921, upon authority of the General Staff.
The 1921 report showed 228 libraries
with 163 branches or 391 book centers, 1,068,702 volumes, 42 separate library
buildings, and 23 professional librarians employed.
Expenditures were $94,654.70.
During the succeeding years the Army Library Service continued in operation
within the scope of Congressional appropriations, with one radical improvement
in library technique, which will be touched on later.
At the beginning of the expansion program (July 1940) there were 147 permanent libraries containing 569,648 books and 149 traveling libraries containing
The report for the fiscal year ending June 30, 1911. showed 245
8,046 books.
permanent libraries in operation with 886.003 books and 159 traveling libraries
with 9,.500 books. The total circulation for 1940 was 1,444,155 and for 1941,
2,483,948. It is estimated that there are 1,000,000 books in the Army libraries as
of

November 1, 1941.
If present plans work out,

it

is

from a national book campaign

expected that one million gift books obtained

added to Army libraries during the

will be

current fiscal year.

The types of libraries include post, service club, general and station ho.spital,
Atlantic base. Army Transport and Traveling libraries.
Post libraries are normally thought of as those which were in operation prior
to the expansion of the Army.
All were operate^l with enlisted personnel.
Fifteen of the larger posts have been recently authorized to employ professional
civilian librarians. Their collections vary from a fewer thnn 100 hooks to 30.000.
With the exception of the addition of 50 to 100 books from the traveling library
each year, Ihey have been dependent upon local resources as no appropriated
funds have been available to purchase books, magazines, or library supplies since
Tlieir collections are for the most part made up of old, obsolete and unat19.33.
tractive books which should he discarded. New posts having fewer than 5,000
men are not furiiLshed any funds siiecifically for libraries unless (he persoimel
he colored in which event a library is providtvl for units having 1,000 or more men.
Service Club libraries are authorized along with the building and are in
three sizes: 500 hooks for colored units 1,000 to 3,000 men, 1.500 books for colored
units 3,000 to 5,000 men and in special cases for white troops on the same basis
and 5,000 hooks for troop concentrations of 5,000 men are more iu some cases
(-xceeding 30,000 men. For tlie two larger sizes of these, the SCr-4 --1,500 volume
library and the SC~3 5,000 volume library and n civilian, professional librarian


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4175

The

library facilities in the present service clubs are admittedly

is under way upon which to possibly base recommendations for larger libraries and the separation of library authorizations from the
automatic system now in operation of establishing a standard library with each
service club regardless of actual neetls.
General hospitals maintain library service with professional civilian librarians
and the nine new general hospitals will have 5,000 books, magazines, and equipment as soon as Red Cross recreation buildings are completed.
Station Hospital libraries are operated either under the supervision of the post
or camp librarian or service is provided as requested from the post or service club
library. It is planned to put a small collection of books in each station hospital
having more than 100 beds which will have additional books added from the
national book campaign to be launched on Thanksgiving Day.
Atlantic bases are all furnished books, magazine and newspaper subscriptions
and library equipment when they are established. As the garrisons are expanded, additional reading materials are provided.
If funds can be made
available, it is planned to equip and furnish a bookmobile for the troops stations
in Iceland.
Army Transports were formerly furnished with libraries and a fresh stock
of current magazines for each sailing. This magazine service was discontinued
in 1933 at which time there were four transports in service.
The last purchase
of books for the four transports was made in 1936 when each was given 592
books. The number of transports in service has increased to 83 and to date no
reading materials have been furnished due to limited funds available.
Traveling libraries have been purchased since 1922 as a means of providing
new and popular books to supplement otlier library facilities at regular intervals.
They were instituted to insure maximmn usefulness of the limited funds availThey consist of 200 or more titles arranged in four sets, each set consists
able.
of 50 or more different titles.
Tlie Corps Areas are organized into traveling
library districts or circuits, and sets are routed in accordance with .schedules
prepare^l by corps area headquarters. Normally a set or traveling library was
sent to each post where it was kept tliree months then it was forwarded to
another post and a different set received in its place. At the end of each year
the traveling library was added to the permanent collection and new ones
purcliased.
With the curtailment in funds, magazines for transport sailings were discontinued in 1933 and in 1936 all magazine subscriptions were suspended.
Funds for the purchase of books, magazines, newspapers, library equipment
and supplies with the exception of those especially earmarked for such purposes
allotted to corps areas for the establishment and furnishing of service clubs are
included in the general allotment of funds to corps area commanders who in
turn make sub-allotments to posts, camps, and stations in accordance with the
number of new men at each station.
No funds were set aside for the purchase of traveling libraries for the fiscal
year 1941 but were allotted to corps areas on the same basis as other W. E. M. A.
funds. Whether or not reading materials or library supplies are purchased under
this plan is dependent entirely upon the discretion of local camp or post
is

authorized.

inadequate and a study

commanders.
Section

3.

Hostesses and Librarians

Hostesses and librarians were authorized by the Act of March 2, 1923 (10
U. S. C. 663) to be appointed by the Secretary of War without reference to Civil
Service Rules and Regulations.
They are unclassified civil service employees, take no examination, have no
civil service "status," although they are amenable to the rules and regulations
applicable to civil service employees on the classified list with reference to leave
of absence, compensation, disability, and death benefits. They have no retirement nor social security benefits. They are subject to discharge without notice
or hearing.
Hostesses and librarians must be of a high type, capable and energetic. They
play a large part in maintaining morale. They lend a feminine home touch to
the service club wherein is available an up-to-date cafeteria and soda fountain
under the skillful management of the cafeteria hostess and also a well chosen
library under the charge of a professional woman librarian.
Under the supervision of the Morale Officer the hostesses and librarians plan and make available

4176

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

to the soldiers in the service club a wholesome social and recreational program,
including dances, parties, musicals, and dramatics.
They are selected by the corps area or department commander. In their
application is contained data on family history, education, experience, salary
received, and references, and before an applicant is employed she is i)ersonally
interviewed.
It is very desirable that hostesses and librarians, whenever practicable, be obtained from local communities. Selection is confirmed by the Secretary of War.
All appointments are contingent upon availability of funds and the completion
of service clubs and guest houses.
They are paid from funds appropriated for the "Welfare of Enlisted Men,
Army." Corp.'? Area Librarians (SP-8) are paid $2,400; Principal Hostesses and
Camp Librarians (SP-7) are paid $2,120 and are entitled to certain quarters;
and Junior Hostesses (SP-5) are paid $1,620 and are entitled to certain quarters.
The following chart shows the number of hostesses and librarians reported to
the Morale Branch to have been on duty or authorized for appointment when
construction is completed in the following corps areas and departments on the
following dates

Hostesses and librarians reported to the morale 'brancTi to have been on duty or
authorized for appointment ivhen construction is completed in the following
corps areas or departments on the following dates

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

41'J

With the exception of the corps area librarians, all hostesses and librarians
iwe on duty at service clubs built from appropriated funds and located on militaryreservations. Their duties make it desirable that they be in close contact vpith
They are usually furnished quarters in a guest house near the
llie service club.
service club.
They work closely with the camp morale officer in planning the
])rograms conducted at the service clubs.
The coiiis area lihrarinn is in charge of and cooi'dinates the activities of the
<-orps ai"ea library and the libraries within the corps area, prepares book lists,
supervises the classification and cataloging of the books, organizes book collections
and coordinates instruction of enlisted personnel in library methods.
The catnp librarian operates the library of from 1,500 to 5,000 volumes which
is housed in the service club, recommends the selection of books, is responsible
for the cataloging and classifying of books, instructs such enlisted personnel as is
i'ssigned to the library and, when called upon, interprets the library to patrons
and assists in the selection of books.
The principal hostess supervises the service club, the guest house, and all service
club activities, provides and conducts social and recreational games, dances, features, and similar activities in which women participate, supervises the activities
of two junior hostesses, develops cordial relations with nearby communities to
better use the communities' resources for the benefit of the social club, and makes
provision for the care of women and children while visiting the camp.
The junior hostess (social and recreational) assists the principal hostess in
fandling the recreational and social activities of the service club and in managing

the guest house.

The junior hostess (cafeteria) has immediate supervision and direction of the
cafeteria and the buying of supplies, the preparation and serving of foods, the
collection of funds from tlie operation of the cafeteria, and the accounting therefor.
The corps area librarian may be a man or woman, must have passed the
thirtieth but not passed the fiftieth birthday upon appointment; must be a college graduate and a graduate from an accredited library school and must have
Iiad at least five years' experience in library work including one year as an
;jdministrator.
The principal hostess must he a woman who has passed the thirtieth birthday
but has not passed the fiftieth birthday upon appointment, must be a high-school
gr.Mduate with at least three years' experience as a hostess.
The junior hostess, social and recreational, must be a woman who has passed
luT tw(Mity-fifth but not her forty-fifth birthday upon appointment, must be a
high-school graduate with at least one year's experience as a hostess.
The junior hostess, cafeteria, nnist be a woman who has passed her twentyfifth but not her forty-fifth birthday upon appointment, must be a high-school
gi-adnate with one year's experience managing a cafeteria.
The camp librarian must be a woman wlio has passed her twenty-fifth birthday
but not her forty-fifth birthday upon appointment, must be a high-school graduate
and a graduate from an accredited library school willi one year's experience,
other than clerical. In libi'ary work.
The acceptance for employment of hostesses and librarians is based upon the
indivi(hial qualifications of each applicant without respect to race, color, or creed
except that white hostesses and librarians are employed in service clubs serving
white troops and Negro hostesses and librarians are employed in service clubs
serving Negro troops.
The following chart shows the number of white and colored hostesses and
librarians now on duty
:

Hostesses

White
Colored
Librarians

White
Colored

208
30
82
8

Since appointments depend on availability of funds and upon completion of

more hostesses and librarians will be available
only when
1. More service clubs and guest houses are authorized, and
2. Congress appi-opriates funds to pay the new personnel.
service clubs and guest houses,

4178

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Section IV

RECRELiiioNAL Camps

During the winter of 194041, while training camps were in the process of conweather conditions were such as to render it practically impossible to
provide satisfactory recreational facilities and programs for soldiers, particularly
those of organizations stationed in camps located near small communities.
To provide opportunities for week-end recreation and a change in environment,
the Chief of Staff, early in February 1041, directed Brigadier General James A.

struction,

Ulio to explore the possibilities of establishing recreational camps. General

Ulio immediately made a survey of sites for such camps in various cities along
the Gulf Coast, filed his report and was directed by the Chief of Staff to start
construction of several camps.
By Februai-y 25, 1941, five camps were authorized and arrangements made to
start construction.
Two additional camps were started early in March.
The first camp to be completed, Pascagoula, Mississipi, having a capacity of 500
men opened on March 21, 1941, followed soon after by the other Gulf Coast Camps.
At the time General Ulio was directed to start construction, no funds of any
type were available. It was, therefore, necessary to enlist the aid of other
governmental agencies for the actual work of construction.
As War Department representative of the Civilian Conservation Corps, General Ulio made arrangements with the Honorable J. J. McEntee, Director of the
Civilian Conservation Corps for the use of enrollees on construction work. The
major portion of the construction work on all recreational camps has been
performed by the Civilian Conservation Corps enrollees through the continued
cooperation of Mr. McEntee. In a few instances, however, due to local conditions and the scarcity of skilled workers, plumbers, electricians, and carpenters
in Civilian Conservation Corps companies, it was necessary to employ civilian
labor.

Through Mr. Conrad Wirth of the National Park Service, technical service
personnel of the National Park Service was made available and superintendents
of construction were assigned to build the camps.
The National Youth Administration also rendered valuable assistance, doing
considerable shop-work, electric wiring, plumbing, and similar tasks for a
number of the camps.
The assistance rendered by these agencies has made possible the construction
of recreational cami^s at an average cost of approximately $12,000.00 per complete winterized ^OO-man unit, as against estimates of $32,500.00 per unit submitted to the Chief of the Morale Branch while the program was under study.
In order to expedite the completion of the recreational camp program the
responsibility for the selection of sites for recreational camps was turned over
to corps area commanders on June 19, 1041.
Sites are selected after a complete survey is made covering population of the
city under consideration, availability of land, location with regard to recreational and entertainment facilities, transportation and troop centers to be
served.

Recommendations with construction estimates are forwarded to the office of

the Chief of the Morale Branch where they are thoroughly reviewed and
changes made where deemed necessary.
When a site is approved authority is granted the corps area commander to
construct the camp, funds being allotted him from moneys allocated for this
purpose.
Letters allocating funds contain such instructions as may be necesary to
insure economical construction of a type suitable for the locality in which thecamp is to be placed.
Information obtained from time to time on prices of material, supplies, and
equipment are transmitted to corps area comniamlers as also any new developments in plnns and specifications.
Two factors govern the decision as to the capacity of a camp to be authorizedthe strength of camps, posts and stations to be served, the size of the
community in which the recreational camjis is to be established and the recreational and entertainment facilities available therein for both daytime and
evening. Camps are constructed with a capacity of 2,000 men, 1.000 men, and

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4179

500 men for year 'round use. Certain camps are operated on a seasonal basis,
these being located in beach communities in northeastern states and interior
nonurban centers where no recreational or entertainment facilities are available
during the winter months. There are but four canjps of this type.
Certain beach areas, known as Day Use Areas located near training camps
have been developed for use during week-end days by troops stationed at such
camps. This development consists of permanent type latrine-bath houses, swimming floats, safety lines, and buoys. No living accommodations are provided.
There are six such areas included in the program.
Provisions have been made, at such of the camps as are located in centers of
population where ample recreational and entertainment facilities are available,
to expand them on a temporary basis to accommodate from 500 to 1,000 additional soldiers on furlough after maneuvers or during Christmas or other holidays.
Funds indicated as allotted to corps-area commanders for construction
include those allotted for temporary-type expansion.
No funds have been provided for the purchase of land. All sites for recreational camps are acquired by lease at a rental of $1.00 per year.
Recreational camps are of permanent-type tent construction with floors of
wood or concrete and framed side walls. Wooden structure for combination
latrine-shower buildings are provided, flushing toilets, hot water, and water-borne
sewerage-disposal systems being installed. All tents and buildings are winterized
and heated.
When the first Gulf Coast camps were authorized, no appropriated funds were
Shortly thereafter, $32,100.00 were obavailable for construction purposes.
tained from the American Red Cross Fund and later appropriated monies were
made available for this purpose.
On October 28, 1941, $206,046.81 were made available from the Chief of
Staff's contingent fund to cover operating expenses such as fuel, electricity,
water, laundry, gas and oil for camp motor vehicles, telephone and telegraph
during the fiscal year 1942.
The status of all funds for recreational camp purposes as of November 1,
1941, is as follows
construction:
(a) Appropriated funds

Funds made available for construction

March 1941 Special fimd (W'EMA)
May 21, 1941 Borrowed from QM funds
May 21, 1941 Borrowed from QM funds
July 15. 1941 $1,030,000.00 appropriated,
:

$40,000.00
17, 500. 00
200, 000. 00

QM

deducted the

$217,500.00 previously borrowed

812, 500.

Total available

1,

Allotted corps areas for permanent camps

Allotted corps areas for site expansion

Total allotments
Reserve retained by
Balance on hand

070, 000. 00
725, 258. 95
140, 440. 00

871, 698. 95

QMG

10,250.00
182, 051. 05
1,

(6)

00

070, 000. 00

Operating funds

Allotted to the Chief of the Morale Branch October 28, 1941

Allotted to corps-area and department commanders for operating
expenses first and second quarters, fiscal year 1942

Balance on hand

206, 046.

31

64, 881.

05

141, 165. 26

(c) WI{;MA funds allotted for purchase of recreational and

ment, magazines and periodicals, $20,.500.00.
(d) Red Cross funds allocated for the purchase of items not covered by
appropriated or WEiMA funds and allotted various corps areas, $32,100.00.

athletic equip-

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4180

(e) It is anticipated tliat approximately eight additional famps will be

Construction funds on hand are
authorized by the end of the fiscal year.
considered sufficient to cover anticipated new construction and luiforeseen

contingencies.
(f) Operating expenses for the second half, fiscal year 1042, will be considerably higher than that for the first half as all camps authorized and uow under
construction will be completed and in operation.
By November 1, 1941, the status of the recreational camp program was as
All listed will be
Approximately 30 of the camps are completed.
follows
:

completed by January

1,

1942.

Permanent camp capacity

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Recreational areas, Nov.
Corps

New

500

Beach,

New

500

Ritchie,

Mary-

500
1,000
2,000
500
500
500
500
1,000
500
500

Portsmouth,

Hampshire.
Island

II

1941
Capacity

Seasonal

All-year use

area

1,

4181

Day-use areas

Poponesset Beach, Massachusetts.

Jersey.
III

Anacostia Park, D. C. (colored),

Washington, D. C.

IV

Camp
land,

Atlanta, Georgia (colored)

Carolina Beach, North Carolina.
Charleston, South Carolina

Chattanooga, Tennessee

Gulf port
ississippi
Huntsville, Alabama
Jacksonville Beach, Florida
Lake Charles, Louisiana
Lincoln Beach, Louisiana
,

Yorktown

Beach,

Vir-

ginia.

.500

500

(col-

ored).

Manhattan Beach, Florida

500

(col-

ored).

Mobile, Alabama
Nashville, Tennessee
Natchez, Mississippi
New Orleans, Louisiana
Panama City, Florida
Pascagoula,
ississippi
Pensacola, Florida
Raleigh, North Carolina (colored).
Savannah, Georgia
St. Augustine Florida

1,000
500
500
2,000
500
500
500
500
500
1,000

Chicago,
Decatur,

500
500
500
1,000
500
500
1,000
500
500
500
1,000
500
500
500
1,000
1,000

M
,

v
VI

Detroit,

Illinois
Illinois

Michigan

Kansas City, Mi.ssouri

Kansas City, Missouri (colored)...
Lake of the Ozarks, Missouri
St. Louis,
St. Louis,

Missouri
Missouri (colored)
Fort Worth, Texas...

Houston, Te.\as

Lake Brownwood,

Te.\as.

Galveston, Texas.
_.

Oklahoma City, Oklahoma

McKinley Park, Alaska
Pismo Beach, California
Santa Monica, California

Washington
Departments Toro Negro, Arecibo, Puerto Rico, Waimanalo,
Oahu, Territory of Hawaii.
Seattle,

'

No camps

500
500

Fort Bliss, Texas.

Lake Mcad-Boulder
Dam, Nevada.
Puerto Nuevo, Arecibo,
Puerto Rico, San Juan,
San Juan, Puerto Rico.

authorized or constructed in this corps area.

Recapitulation

All year recreational areas (40):

2, 2,000 capacity

capacity
capacity. Seasonal recreational areas
1, 1,000 capacity
3, 500 capacity
8, 1,000

'.

Day

Total areas (44)

use recreational areas

4-000
8,000

--

--

30, 500

---- 15,000

(4):

1.000
1.500

29,500

(6).

War

Department,

The Adjutant

General'.s Office,
Washingion, D. C, June 19, 19^1.

memorandum
Subject Recreational Areas.
Recreational areas will be designated
1. Designation of Recreational Areas.
by the name of tlie city in which they are located.
The boundaries of each recreational
2. Boundaries of Recreational Areas.
area will include the camp site, the city in which the camp is located, and all
beaches, amusement parks, recreational facilities, and places of entertainment
within a reasonably close distance to the camp site.
:

4182

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Experience gamed in tlie operation of

3. Location of Recreational Areas.
recreational areas along the Gulf Coast has shown the desirability of locating
camps in or near enough to metropolitan centers to enable the soldiers to take
advantage of the entertainment and recreational facilities offered by such centers.
As such localities offer both day-time and evening activities, soldiers have
the opportunity to enjoy the hospitality and companionship of the civil popula-

tion.
4.

Civic

Cooperation.

will be solicited
cers assigned to

and

The

close

cooperation of civic officials and organizations

and cordial relations established with them by offi-

duty as commanding ofheers of recreational camps. This corelationship should insure the provision of ample and varied
and recreational activities for soldiers visiting these areas.
and Approval of Camp Sites. Surveys of sites for recreational
On
will be made under the direction of corps area commanders.
these surveys, report will be submitted to the Morale Branch
with recommendations as to capacity of the proposed camps, itemized estimates
of construction and operation costs, and statement as to wliethcr proposed camp
Sites recommended should bo of sufficient
is to be for seasonal or all-year use.
size to permit of expansion as well as to provide parking space for truck convoys.
On approval by the Morale Branch of ;iny recommended site, War Department
funds for construction will be allocated to the corps area commander.
6. Lease of Camp Si7es.Arrangements will be made with the proper officials
for permission to use the camp site for a period of years, preferably three years.
The permit may be in the form of a letter addressed to the War Department
or the corps area commander (it should include the legal description of the
site) and state that the War Department mny occupy it uninterruptedly, but
that the War Department may at its option terminate the occupancy at any time

operation and
entertainment
5. Selection
camps desired
completion of

without notice.
A formal lease will be prepared at a later date. If rental of the site is in
excess of one dollar ($1.00) per year, approval will be obtained from the War
Department before formal negotiations are entered into.
Camps authorized will be constructed initially as tem7. Construction.
porary type tent camps with wood floors, cold water showers and open pit
latrines with box seats. Later, as fund^) become available, a sufficient amount

frame and screen tents and to install a more permanent

type of latrine and bath house, hot water facilities and septic tank or other
sewerage disposal system where the extra construction is deemed necessary by
the War Department.
Construction work on recreational camps will be ordinarily performed by the
Civilian Conservation Corps under the supervision of the National Park Service
technical personnel. Arrangements will be made ly cori^s area commanders
through the corps area National Park Service representative for the designation
of Civilian Conservation Corps companies for construction projects.
Officer personnel for recreational areas will be selected
8. Officer Personnel.
and ordered to duty by corps area commanders and charged to allotments of
This officer
officers made to them by the War Department for this purpose.
personnel will be
will be allocated to

For 1,000-man-capacity camps:

One lieutenant colonel or major as commanding

One
One

officer.

captain.
first lieutenant.

For 500-man-capacity camps

One lieutenant
One captain or

colonel or major as
first lieutenant.

commanding

officer.

Enlisted cadres will be detailed as follows, authority

9. Enlisted Cadres.
being granted to corps area connnanders to call on Army commanders within
their corps area to furnish the personnel

For 1,000-man-capacity camps:

One
One
One
One
One

sergeant to act as first sergeant.

sergeant to act as supply sergeant.
sergeant for permanent military police detail.
corporal for permanent military police detail.
corporal to act as company clerk.

Fourteen privates.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4183

For 500-maii capacity camps

One
One
One
One

sergeant
sergeant
sergeant
corporal

to act as first sergeant.

to act as supply sergeant.

for

permanent military

or private

first class to

police detail.
act as company clerk.

Eight privates.

men detailed to duty with recreational area cadres

commutations of rations and quarters. If funds available

Enlisted

will be placed
in

on

corps area are

should be made to War Department for

the additional amount necessary.
Corps area commanders will provide necessary medi10. Medifol Attention.
cal personnel for troops attending recreational camps for week-end periods only.
Arrangements will be made with nearby government hospitals for hospitalization
in emergencies.
Civilian hospitals may be used for such cases if no government
hospitals are available.
11. Duties of Commanding Officers.
In addition to his other duties, the commanding officer is charged specifically with the responsibility of providing the
entertainment programs for soldiers visiting his recreational area. He will work
with local officials and civic organizations to the end that adequate programs
are arranged each week. The commanding officer will publish arrangements
for entertainment to all soldiers visiting the recreational area. He will make
known to the soldier prior to his arrival in the camp the entertainment afforded
in his recreational area.
Entertainment must be diversified and appealing to
the soldier.
insufficient for this pui-pose request

The commanding officer will maintain close liaison with morale officers of
camps, posts, or stations and tactical organizations using his recreational area.
The commanding officer of a recreational area will be accounttible and responsible officer and maintain proper records of all supplies and equipment
except
where an officer of the Quartermaster Corps is assigned to the Headquarters of
a group of recreational camps within a corps area, in which case this assigned
Quartermaster officer will be the accountable officer.
Commanding officers of camps will provide themselves with a copy of Army
Regulations pertinent to their command.
12. Concessionaire.
The commanding officer will arrange with local officials
to have a concessionaire immediately' available to serve meals in or adjacent
Food and such other articles which may be sold by the conto the camp area.
cessionaire shall be reasonably priced. The commanding officer shall be responsi-

ble for the inspection

and sanitary condition of the concessionaire's

establishshall not be given a contract either orally or in writing

for his establishment or its operation, but shall occupy the camp site solely at
the discretion of the corps area commander.
40' X 80' assembly tent will be erected on the camp site and made available
to the concessionaire for a mess hall and exchange, provided the concessionaire
cannot erect his own structure. All other messing facilities such as kitchen,
dishes, utensils, etc., will be provided by the concessionaire.
13. Military Police.
The commanding officer shall be responsible for the
maintenance of order in his recreational area. He will coordinate the activities
of the military police with the local police ofl5cials. During the occupancy of
the camp over week-ends two (2) M. P.'s for each 100 enlisted men will accompany the men from their organizational camps or cantonments, and uiwn arrival
in the recreational camp will be given assignments and be under the direction
of the permanent M. P. Sergeant. One pyramidal tent in the camp will be set

ment.

The concessionaire

aside as a guard tent.

14. Purpose and Objective. The purpose and principal objective in establishing and maintaining recreational areas is to give .soldiers serving in training
camps or posts an opportunity to get away from the routine of training for a

week-end of complete change and relaxation.

When a recreational camp is ready for occupany quotas of soldiers, on a

voluntary basis, having conduct privileges should be allotted to the camp. For
this purpose only enlisted men will be placed on "detached service without expense to the Government" from Friday noon to Sunday evening. This does not
preclude, in proper cases, the incurring of expense within the scope of appropriate regulations or the payment of public funds for claims for civilian emergency treatment or hospitalization when government facilities are not available.

4184

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

It is desired that the enlisted men granted such privilege be returned to their
respective organizations in time to permit for suitable rest prior to scheduled
training on Monday morning.
Travel by motor convoys to recreational areas may be
15. Transportation.
authorized by corps area commanders when deemed advisable.
Rail transportation at the rate of one and one-quarter cent (li/40) per mile,
to be paid by the soldier, has been arranged for by the railroads.
Arrangements for equipment for rail movements to recreational camps will
be made by the corps commander with interested rail companies. The policy
of sending to any one recreational camp a complete tactical organization is not
favored, except organizations may use the facilities of the camp if they establish
a separate bivouac or camp adjacent to the recreational camp.
For each 100 enlisted men who
16. Details Accompanying Groups to Camp.
are to utilize the facilities of the recreational area there shall be detailed to
accompany them on active-duty status

1 oflicer, 2 enlisted men (for M. P. duty).

1 enlisted man (medical corps).

Necessary truck drivers

(if

movement

is

made by motor convoy).

Corps area commanders will authorize travel of accompanying pei'sounel and

are authorized to pay in advance to military police, medical personnel, and truck
drivers, monetary allowance for rations for period of absence from their station,
furnishing The Adjutant General's Office, Attention Fiscal Section, copies of
travel orders with estimated cost noted thereon.
No charge will be made to
17. Charge to Soldiers Using Recreational Camp.
soldiers for using the facilities provided at a recreational camp, except that soldiers will be required to pay for meals or other purchases made from conces:

sionaire.

The

establishment by recreation'al areas of any post or

prohibited.
Intoxicating liquors are prohibited in the camp
19. Intoxicating Liquors.
area, except that the concessionaire may be permitted to sell beer not to exceed
3.2 percent alcoliolic content to be consumed in the concessionaire's establishment.
Attached hereto as inclosures 1 to 5 are mime20. Miscellaneous Information.
ographed lists of equipment, supplies, motor vehicles, stationery, and forms
needed in the construction and operation of recreational camps of 500- and l.OCK)man capacity. Also attached is mimeographed camp layout. The camp layout

18. Post Excliange.branch post exchange

is

is

advisory only.
order of the Secretary of

By

War
J.

A. Ulio,

Brigadier General,
Assistant The Adjutant General.
6 Incls.

List of Equipment, Recreational Area Camps

tent camp, joo men capacity

Each

500-

Man Camp
Tents, Pyramidal 11' x 16' x 10' complete (with pins and poles)
Tents, Hospital ward 11' x 50' x 16' complete (with pins and poles) (For
recreation puiTioses)
Tents, Wall, Large 11' x 14'3" x 14'6" complete with fly, pins, and iwles

90

(For office tent)

Tents, storage, 13' x 20'5" x 17'10" complete (with fly, pins, and poles)
(For storage tent)
Tent, Assembly (40' x 80')
Tents, Wall, Small 8'6" x S'lO" complete (with flies, pins, and poles)

(for Officers)
Screens, Latrine, complete (with lines, pins, and poles) (9 screens for
latrines, 5 screens for showers)
Fly, Tent, Wall, Small (For use as awning ^on Recreation Tent)
Flies, Tent, Wall, Large (For use over latrines and showers)

Ciiairs, folding, metal

Flag, .storm, 5 x 9.5

1
1

4
14
2
10
50
2


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4185

Buckets, G. 1. (General purpose, 24-gauge, 14-qt.) (For fire protection)

Cans, corrugated, galvanized, with cover, 32-gal. (For fire protection)
Basins,

100
15
200
500
550

wash

Mosquito Bar with Frame

Cots (Iron)
Pillows
Pillowcases
Sheets
Blankets, wool, OD. SVa

lb.,

M-19a4 or wool, OD. 3

lb.

550
600
1,200
1, 200
550
550
25

or 4 lb

Mattresses
Mattress Covers
Extinguisher, fire (soda and acid)
Typewriters, nonpoi'table, elite type
Desk, Field, Larse. Regimental (complete)
^Mimeograph, Small, Hand oi^erated
Brassards, M. P
Station Wagon (or .5-Pass. Vehicle)
^/l>-ton pick-up truck

1
1
1
12
1
1

1,000 MEN CAPACITY

EQUIPMENT, TENT CAMP

For n Tent Camp with accommodations fnr

ment will be doubled with the exception that

1.000 men. the above list of equip-

Only one mimeograph, small, hand operated will be supplied.

Only one de.sk, field, large, regimental will be supplied.
Only two flags, storm, 5 x 9.5 will be supplied.

LIST OF BLANK FORMS (INITIAL SUPPLY). (.500-CAl'ACITY CAMP)

10.
6.
(5.

6.

50.

200.
100.
100.
200.
200.

200.
30.

Strength Return

Company Morning Report

Daily Sick Report
Duty Roster
Requisitions (For forms and Pub.)
Gov't Telegram Blanks
Stat, of Charges
Requisition for Supplies
Stock Record Card with binder for same
Receiving Report
Shipping Ticket
Rept.

OS & D

100. Tally Sheet Inc

100. Tally Sheet Outg
I & I Report
Mileage Vouchers
150. Mileage Vouchers
20. Off. Pay Vouchers
60. Off. Pay Vouchers
30. Report of Survey
15. Motor Vehicle Accident Report (Stan. Form #26).
15. Motor Vehicle Investigating Ofl3cer Report (Stan.

20.
50.

(WD-AGO-33)
(WD-AGO-1)
(WD-AGO-S)
(WD-AGO-6)
(WD-AGO-17)

(WD-AGO-36)

(WD-QMC^OO)
(WD-QMC-424)
(WD-QMO-431)
(WD-QMC-434)
(WD-QMC-445)
(WD-QMC-489)
(WD-QMC-490)
(WD-IGD-1)
(Stan Forms 1071)
(Stan Forms 1071A)

iWB Form 336)

(WD Form 336A)
(WD-AGO Form

Form #27)
20.
12.

Strength Return

Companv Morning Report

Daily Sick Report

12. Duty Roster
100. Requisitions ( For forms and Pub. )

100.
200.
400.
400.
200.
30.
200.
200.

A/^r^~^(

wS"tnn

6.

2.50.

Ar-n^QQ^

T^rTi^

rJ

wS'tpoiT^
vvjj-aijU-j.<)

Gov't Telegram Blanks

Stat, of

Charges

Requsition for Supplies

Stock Record Card with binder for same
Receiving Report
Shipping Ticket

Rept OS &

Tally Sheet Inc

Tallv Sheet Outg

1,^~^^L
SR'SJJnllSd
/^TT^'r^^rrTlQi

;^S~^,;Jwq1^

^S^SJSifr

^"SiSiS
^~S^
SIS
(WD-QMC-490)

#15)

4186

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

20.

I & I Report
Mileage Vouchers
Mileage Vouchers
Off. Pav Vouchers
Off. Pay Vouchers
Report of Survey
Motor Vehicle Accident Report

20.

Motor Vehicle Investigating

25.
100.
250.
40.

75.
50.

LIST OF

(WD-IGD-1)
Stan.
(Stan.
(

(WD Form 336)

(WD Form 336A)
(WD-AGO Form

Officer

Report

Unit

Required

CLASS 51

Box

Tacks

Books, blank, 150 P,

Clips, paper, wire,

8M x 13^-

gem

Fasteners, paper (Acco #22-2")Pens, writing, ball-point

Penholders
Pencils, mpchanical, pocket
Leads, pencil for above, (black)
Leads, pencil for above, (red)..
Pencils, wood-cased, w/rubber

Pads,

Each...

10.1

Box ...
Box
Box...

Folders, manilaQJ.^x ll^i

Bands, rubber #18
Bands, rubber #32
Bands, rubber #64

Tags, shipping, paper,

#3,

Stencils,

mimeo,

8H x

#6,

ZH

14Ji

5M

continued
white, rules, 8 x

memo,

plain, white, 8 x

10'^.

Box...
Box ...
Quart..

Pound.

10

Bottle..

Each...

50
20
12
10

Each...

1,000

Each...

1,000

Each...

150

xl'i
Tags, shipping, paper,

Unit

official

penaltv,

draft 9 X 12.

Each...

Box
Box...
Box

(500-MAN CAPACITY)

memo,

Envelopes,

Each...
Each...

n.
Ink, writing fluid
Ink, dup. machine, raimeo
Correction fluid, mimeo

Pads,

#15)

Form #26)
Form #27)

Articles

CLASS 53

Thumb

(Stan.
(Stan.

STATIONERY AND SUPPLIES (INITIAL SUPPLY)

Articles

Forms 1071)
Forms 1071A)

Envelopes,
official
penalty,
white 41^x91 2Paper, bond, white 8 x \Q)4
Paper, manifold, white 8 x lOH
Paper, manifold, green 8 x 10,'^.
Paper, mimeo 8 x IOJ2
Paper, mimeo 8 xl3
Paper, carbon, black, T. W. 8 x
Scotch Tape, large, %"
Cabinet, filing, 4 drawer
Lime, chlorinated
Oil, crude
Paper, toilet. _.
Brooms, corn

Brooms, rattan, push w/handle

Brushes, white wash w/handle.

Each...

Required

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19120-311932

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INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4187

War Depaktment
Office of the Chie' of the Mokale Branch

washington
factual data on army recreational areas

Designation of recreational areas. Recreational areas are designated by the

name of the city in which they are located.
Boundaries. The boundaries of each recreational area include the camp

the city in which the camp is located, and all beaches, amusement parks,
recreational facilities, and places of entertainment within a reasonably close
distance to the camp site.
Location. Experience gained in the operation of recreational areas along the
Gulf Coast has shown the desirability of locating camps in or near enough to
metropolitan centers to enable the soldiers to take advantage of the entertainment and recreational facilities dffered by such centers. As such localities
offer both day-time and evening activities, soldiers have the opportunity to
enjoy the hospitality and companionship of the civil population.
Citric cooperation.
The cooperation of civic officials and organizations is
solicited, and cIo.se and cordial relations are established with them by officers
assigned to duty as conunanding officers of recreational camps. This cooperation and relationship insures the provision of ample and varied entertainment
and recreational activities for soldiers visiting these areas.
Selection and approval of camp sites.
Surveys of sites for i-ecreational camps
desired are made under the direction of corps area commanders. On completion
of these surveys, reports are submitted to the INIorale Branch with recommendations as to capacity of the proposed camps, itemized estimates of construction and operation costs, and statement as to whether proposed camp is
to be for seasonal or all year use.
On approval by the Morale Branch of any recommended site, War Department funds for construction are allocated to the corps area commander.
Constrnction. Permanent tent-type construction is used, as a rule, in building the recreational areas. This includes wood on concrete floors, framing and
screening of the tents, latrine and bath houses, hot water facilities, and septic
tanks or water borne sewerage disposal systems. In cases where it is desired
to put the camp in operation as quickly as possible, a temporary type of construction is used, with the improved features being added as funds are available.
Construction work on recreational camps is ordinarily performed by the
Civilian Conservation Coi-ps under the supervision of the National Park
Service technical personnel. Arrangements are made by corps area commanders
through the corps area National I'ark Service representative for the designation
of Civilian Conservation Corps companies for construction projects.
Officer personnel for recreational areas are selected and
Officer personnel.
ordered to duty by corps area commanders. This officer personnel
For 1,000 man capacity camps
site,

One lieutenant colonel or major as commanding officer.

One captain.
One first lieutenant.
For 500 man capacity camps
One lieutenant colonel or major as commanding officer.
One captain or first lieutenant.
Enlisted cadres.

Enlisted cadres are detailed as follows

For 1,000 man capacity camps

One
One
One
One
One

sergeant to act as first sergeant.

sergeant to act as supply sergeant.
sergeant for permanent military police detail.
coi-poral for permanent military police detail.
corporal to act as company clerk.

Fourteen privates.

For 500 man capacity camps

One sergeant to act as first sergeant.
One sergeant to act as supply sergeant.
One sergeant for permanent military police detail.
One corporal or private first class to act as company
Eight privates.
311932

42

pt.

10

30

clerk.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4188

Corps area commanders provide necessary medical pertroops attending recreational camps for week-end periods only.
Arrangements are made with nearby government hospitals for hospitalization in
emergencies. Civilian hospitals may be used for such cases if no government
hospitals are available.
Duties of Commanding Officers. In addition to his other duties, the commanding officer is charged specifically with the responsibility of providing the entertainment programs for soldiers visiting his recreational area. He works with
local officials and civic organizations to the end that adequate programs are
arranged each week. The commanding officer publishes arrangements for entertainment to all soldiers visiting the recreational area. He makes known to
the soldier prior to his arrival in the camp that entertainment aiforded in his
recreational area. Entertainment must be diversified and appealing to the

Medical Attention.

sonnel

for

soldier.

The commanding

officer

maintains close liaison with morale

officers of

camps,

posts or stations and tactical organizations, using his recreational area.

Concessionaire. The commanding officer arranges with local officials to have a
concessionaire immediately available to serve meals in or adjacent to the camp
area.
Food and such other articles which may be sold by the concessionaire
shall be reasonably priced.
A 40' by 80' assembly tent is erected on the camp site and made available
to the concessionaire for a mess hall and exchange, provided the concessionaire
cannot erect his own structure. All other messing facilities such as kitchen,
dishes, utensils, etc., are provided by the concessionaire.
Military Police. The commanding officer is responsible for the maintenance of
order in his recreational area. He coordinates the activities of the military
police with the local police officials.
Purpose and Objective. The purpose and principal objective in establishing
and maintaining recreational areas is to give soldiers serving in training camps
or posts an opportunity to get away from the routine of training for a weekend of complete change and relaxation.
When a recreational camp is ready for occupancy quotas of soldiers, on a
voluntary basis, having conduct privileges, are allotted to the camp. For this
purpose only, enlisted men are placed on "detached service without expense to
the Government" from Friday noon to Sunday evening.
Enlisted men granted such privileges are returned to their respective organizations in time to permit suitable rest prior to scheduled training on Monday

morning.
Transportation.
ized by corps area

Travel by motor convoys to recreational areas may be authorcommanders when deemed

advisable.

Rail transportation at the rate of one and one quarter cent (IVi) per mile,
to be paid by the soldier, has been arranged for by the railroads.
Tactical organizations may use the facilities of the camp and take advantage
of the entertainment and other features, if they establish a separate bivouac or
camp adjacent to the recreational area.
Charge to Soldiers Using Recreational Camp. No charge is made to soldiers
for using the facilities provided at a recreational camp, except that soldiers are
required to pay for meals or other purchases made from concessionaire.

DKSCRIPTIVE AND BACKGROUND MATERIAL IN

ARMY

RECRICAIIONAL AREAS

The Army has built the recreation camps on sites accessible to the downtown
areas and the particular amusement facilities offered at each location. In each
camp, the soldier on week-end leave can select from an entertainment program
which is as ample as any tourist can find.
The soldier writes his own ticket of fun when he goes to a leave Jirea. As
one of a group on leave be tiavt^ls l)y rail or motor convoy in charge of an
officer, but once he readies canq) he's his own boss.
No formations, no roll
calls, no reveille, no sergeants to hustle him along to the field.
lie goes to bed
when he chooses, and he gets up when Ik^'s ready.
The expenses at these camps are small. Food is obtainable from a concessionaire on the camp grounds at low cost, and more than a dozen different kinds
of recreation are open to him at a price far smaller than his civilian friend
must pay.

The i)Ian of providing centers where sold'ers might break away from the
routine of training was conceived by General George C. IMarshall, Chief of St.iff.
He outlined early this year (1!)41) to Brigadier Gencr.il James A. ITlio, Chief

Investigation of the national defense program

4189

of the Morale Branch, his idea of organizing leave areas similar to those provided
for the American Expeditionary Force in France, but wider in their scope.
General Marshall wanted to build first an experimental type of camp on the Gulf
of Mexico between Tallahassee, Florida, and New Orleans to serve the large
number of troops in training north of that region. The object, he emphasized,
was to make it possible for a soldier to go on leave from Friday noon to Sunday
evening and have a variety of entertainment from which to select his own.
General Ulio surveyed the coastal region, and on his return recommended the
seven sites. These were approved by General Marshall. General Ulio then received
permission to use C. C. C. companies to erect the necessary buildings. Less than
two months later the first two of the seven were opened, and the others followed
quickly. The Recreational Area program is being expanded rapidly and plans
call for establishment of camps in all corps areas.
Tlie present-day leave camp is far different from that of World War Days. In
France hotels alone were provided in a designated town where a soldier might
find a relief from front line duty. No recreation facilities were provided and any
entertainment he found in addition to what the Salvation Army, and a few
similar organizations furnished, he was forced to find for himself.
The purpose of today's recreational areas is not merely to give the soldier a
good time. It has a definite morale building objective. OflBlcers who have been
placed in charge of these camps under General Ulio are aware fully of the part
they are playing in the building of the new Army and are tackling the problems
which arise with enthusiasm.
"These boys in camps are going through a hard training schedule," one of them
explained. "Under the pressure they are liable to go stale just like a football
team from overtraining. The establishment of these recreational areas makes
it possible for them to break away from their everyday surroundings, visit new
places, make new acquaintances, and mingle with the civilian population. Here
the soldier has an opportunity to experience the friendliness and hospitality of
citizens in nearby towns. He finds out liis efforts are appreciated.
He discovers
that the people aie aware that he's making a real sacrifice and are anxious to
show him that they appreciate what he is doing for his country.
"If the .soldier's energies are directed in the proper channels, while he is in
these weekend camps, he will return to his post with more enthusiasm for his
tasks, new zest for his military duties, and renewed faith in his country. He takes
a new shmt on his place in the national defense program and his belief in the
American way of life is strengthened."
This matter of letting the soldier know that his efforts have the backing of
the civilian population is an important morale factor. To be a good soldier,
the citizen in uniform must feel that he has the friendship not only of his fellow
citizens in uniform and the people back home, but also the goodwill of the civilians
in the area where he is quartered.
If the service man doesn't feel at home after a visit to one of these recreational
areas, it isn't the fault of civic organizations, city officials, and residents in the
towns where they are located. The civilian populations are extending full
hospitality. Only in the case of a breach of discipline or where it is necessary
in the interest of a community are the movements of an individual soldier
restricted. Reported one camp commander on a recent weekend "The cooperation of all concerned was splendid. City officials and citizens all combined to do
more than their share. The men were enthusiastic."
How do the men behave while on these weekend leaves? Much better than any
other cross section of American life, officers report. The Army knows that in any
group there will be some persons who step over the line of good conduct and these
cases must be looked after. That's one of the reasons why a small detachment
of two military police are sent along with 100 men. On entering a leave area,
llie weekend visitors are placed on their honor to act as gentlemen and most of
them demonstrate they are.
Officers in the leave areas put the question of conduct up to the men this way:
"The people have been most cooperative in the building of this camp and are
doing everything in their power to make this city a popular place for soldiers to.
spend their weekends. Therefore, in appreciation of their efforts it is requested
that you conduct yourself in a manner that will bring credit to you and the
U. S. Army and make the citizens feel that their efforts have not been in vain.""
This excerpt from one of the camp information bulletins given to the soldier
when he arrives is typical of the way the matter is presented. It works.
Another example of this might be cited
"The city has been gracious enough and thinks enough of you men serving our
country to give this beautiful camp site in the finest residential section of their
:

4190

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

make your vacation pleasant and enjoyable. The public respects and
admires the uniform you wear. An indiscreet action by one individual can cause
the public to lose this respect and admiration. It is believed that the conduct
of each and every one of you while guests at this camp will be such that the city
will be proud to have had you and that the commanding officer of this post can
point with pride to the fact that your behavior was so excellent.
"We want you to have the best time possible. Be guided by common sense
city to

and make

it clean fun."
All the information a soldier needs to plan his week-end program can be found
For the newat the headquarters and information tents as soon as he arrives.
comer there are city maps and guides for all there are lists of interesting places
Any questions a man has are answered cheerfully
to go and see, things to do.
by representatives of community service committees. He'll find here or on the
camp bulletin board a list of special events for the current week as well as the
features and attractions available every week end.
Nearby is a recreation tent with magazines and newspapers if he cares to read,
games if he wishes to play them. Funds for athletic equipment for use at each
recreational camp have been allotted.
Meals in the camp areas average from 15 to 30 cents, depending upon whether
it's breakfast or dinner.
Food for a man from the time he arrives Friday afternoon until he leaves on Sunday can be had for approximately $2.
Lists of churches, their location and hours of services are placed on camp
bulletin boards so the soldiers may attend services of their faith on the Sundays
when they are in the recreational areas. Motion-picture theaters also are listed.
Intoxicating liquors and gambling in any form are prohibited in the camp areas.
Although the men are free agents while staying in the recreational areas,
organized entertainment is planned for them if they wish to join. The features
are varied.
While the trip from their training camps to the recreational areas may be
just a ride for the enlisted men, they offer an opportunity for training staff officers in the movement of troops by motor convoy, bus, or rail.
Given the number
of men to be moved and the destination, the type of transportation available, the
rest of the details can be left up to the staff officers to work out.
The commanding officers of the respective areas must be notified of the number of men in a
convoy or party prior to their arrival, the method of travel, the route, and hour
af arrival so that they may be met and guided to the camp site.
With each passing week, the Recreational Area program is gaining in popularity among the enlisted men because the camps give them an opportunity to
break away completely from accustomed surroundings and find clean, wholesome
enjoyment at a price the soldier can pay.
;

(The following is an explanation of the Army's Recreational Area program by

Brigadier General James A. Ulio, Chief of the Morale Branch, as made at the
Mississippi Valley meeting of the National Conference on State Parks at Pere
Marquette State Park, 111.)
These (Recreational Areas) are camps for week-end vacation periods for soldier groups in rotation, where, under mininnim supervision, the men can enjoy
sports and diversions in locations selected because they combine the attractions
of beach resorts with those of city entertainments.
I want to take occasion at this moment to express the Army's appreciation
of the very helpful attitude of all of you people who are experts in the building
Jind operation of state and other parks.
We need your help and we feel that
we have it. The Niitional Park Service not only made its experience available,
as did the Civilian Conservation Corps, but the actual work done by them under
the pei-soual direction of Mr. Conrad L. Wirth and of Mr. James J. McEutee,
respecdvely, gave sp<ed and technical correctness to the plan, and they have the
th;iuks of all concerned.

The relaxation from pressure, the change from routine, is not provided for the
soflening of these men, but precisely for the opposite purpo-se, and is done for
exactly the same reason that causes an athletic coach to take care that his star
athletes do not go stale.
These young men are your young men. Perhaps you
iiave been thinking of them as your boys, but they are rapidly becoming the
strong men of this nation, and on their condition rests the hope of this nation
for its security.
We believe, in fact we know, that the week-end camps I have
outlined to you h;ive the same b(Mieticial effect on them that their civilian relatives
and friends find in their holiday travels at the parks and resort areas which
your planning and your administration have made available to citizens.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4191

The only

differences are those of location and degree of immediate need. Your

has his daily habit of work, and the typical family has its dinner hour,
its evening of bridge, its movie party, and once in a vphile a longer bit of play or
travel.
There is the change of scene, the vacation, the use of park areas.
Your soldier has his vigorous training program of drill and gunnery, marching,
night maneuvering, study. At the end of duty hours he has his company dayroom which corresponds to the living room and the party room at home. He
has his baseball diamond and horseshoe court, his camp motion-picture theater,
his regimental recreation building, his chapel, his post service club for dances
and social assemblies, his library, his guest house for visitors, his post exchange.
And in the recreational areas now in use and increasing, he has the occasional
longer respite, strictly on his own, with no duty calls whatsoever.
civilian

RECREATIONAL AREAS AS OF JULY

In operation

Location

19,

1941

Capacity

New

Orleans, La. (increase to 2,000 authorized)

Gulfport, Miss

1,000
500
500
500
500
500
500

Miss
Pascagoula, Miss
Biloxi,

Mobile, Ala. (increase to 1,000 authorized)

Pensacola, Fla

Panama

City, Fla

Under construction
Charleston,

S.

500
500
500
1, 000
1, 000
1,000
500
500-1,000
500
500
500
1,000
500
500
500

Savannah, Ga
Jacksonville Beach, Fla
St. Augustine, Fla
Galvestou, Texas
Washington, D. C. (Arlington, Va.)
Portsmouth, N.

Camp

Ritchie,

Chicago,

111

Havana,

111

Md

Detroit, Mich
St. Louis, Mo
Wilmington, N. C
Lake of the Ozark.s,

Mo

Washington, D. C. (Anacostia Park)

Authorized
Chattanooga, Tenn
Huntsville, Ala
Island Beach, Seaside Park, N. J

500
500
500
1,000
500
1, 000

Kansas City, Mo
Oklahoma City, Okla
Lake Brownwood, Tex
Fort Worth, Tex
Los Angeles, Calif

,500
1,

Recreational areas, day use only

Section

5.

U.

S.

Poponesset Beach, Mass.

Army Motion Picture

000

Yorktown Beach, Va.

Service

It may properly be said that the idea of providing motion picture entertainment
for soldiers had its inception in a statement attributed to General Pershing during World War I "Give me a thousand soldiers occasionally entertained to ten
thousand soldiers without entertainment."
The Army's sense of guardian.ship, especially over the young recruit or selectee
away from home for perhaps the first time, is such that much consideration is
given to the way in which he spends his idle hours. As a part of the effort made
to direct the enjployment of these hours in a manner beneficial to the moral and
physical health of the men, their attendance at motion picture shows is encouraged. Coming in the evening when the men are restless, this type of entertainment is particularly valuable, as it affords a hai'mless emotional outlet otherwise
difficult to find. As a general rule, the average soldier's life is lived apart from the
intimate relations of the young people of the neighboring community and the
absence of wholesome amusement within the post produces a tendency to seek
less wholesome amusement elsewhere.
:

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4192

also a very practical reason for the operation of a theater on an Army

of the Army is composed of enlisted men of the 7th grade who
are paid $21 or $30 a month. With this amount they must purchase many of the
necessities of life which are not provided by the Government, and there is consequently but a very small amount remaining for expenditure on recreation.
They are therefore financially unable to patroniz*^ civilian motion picture theaters
to the extent required to meet the situation.
In the study which led to the inauguration of the U. S. Army Motion Picture
Service in July of 1920, it was decided to operate on a self-sustaining basis
thru the receipts derived from the attendance of military personnel on a paidadmission basis. This course was pursued in the belief that more efficient service
could thus be provided and a closer approach to a maximum response thereto
secured than would be true in the case of a free service financed from appropriated funds. The necessity for the avoidance of an operational loss provides the
incentive for efficiency in the iijanagement of the enterprise which insures the
successful accomplishment of its mission.
The cash admission charge is 20 cents for adults and 10 cents for children.
However, theater coupon books containing ten and fifteen admissions may be
purchased by the men. on credit if desired, at prices which result in an effective
admission rate of 14 cents for adults and 7 cents for children.

There

post.

is

The bulk

STATISTICS

Yearly attendance for preemergency Army

Yearly attendance for current size Army
Eventual expected yearly attendance when
in

operation

11,682,234
44,823,130
all

planned theaters are

6.j, (168.

500

Prior to the present emergency, motion picture performances were held in available buildings which were suitable for the purpose or, where none such were
present, in buildings constructed from funds of the U. S. Army Motion Picture
Service. For the present Army these building.s are being provided as a part of
the general construction plan, and, in addition to providing an auditorium for the
showing of motion pictures, they are used for all general gatherings for irjilitary
purposes such as lectures, critiques, viewing of training film.s, amateur and professional live entertainment, etc.
STATISTICS

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4193

The administration of the Service is conducted by civilian personnel vpho likewise are paid from the receipts of the enterprise. The Home Office, District
Offices and Shop are housed in rented quarters.
The administration of the
Service consists of the booking of film, the installation, servicing and repair
of equipment, the procurement and distribution of equipment and supplies, and
the

management

of the fiscal affaii'S of the enterpri.se.

STATISTICS

Office

4194

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

STATISTICS

All posts with theaters that clear expenses are given a 40% share of the profits
realized. Currently these dividends amount to approximately $91,000 per month.
The product of all film producers is available to the U. S. Army Motion Picture
Service.
Price negotiations are conducted on the same basis followed by a
commercial chain, special consideration on the grounds of its Governmental
During normal times the Service
aspect being neither sought nor desired.
operated as what may be termed a "subsequent run" theater circuit, in that it
exhibited pictures only after they had had a prior run in the theaters in the
neighborhood of the post. At that time nonresidents were permitted to attend,
In addition they
but their patronage was neither solicited nor encouraged.
were required to pay the admission rate in effect at the neighboring civilian
Coincident with the recent increase in the size of the Army, demands
theater.

arose both from within and outside the Army for an arrangement whereby firstrun pictures would be made available for our citizen Army. An agreement was
therefore negotiated with the film distributors in September of this year whereby
pictures are made available to the U. S. Army Motion Picture Service upon
It was necessary in return for this concession for the War Department
release.
to agree to protect the interests of civilian exhibitors by restricting the attendance at Army theaters to military personnel, the members of their households,
and civilians residing within the limits of the post.
STATISTICS

Number

of

programs

shotcn per year

Preemergency Army

25,
9J.

Presently

114

Planned eventually

418
808
192

Programs consist of feature, comedy, musical, novelty and semi-educational

shorts, March of Time and newsreels, for a minimum running time of 1 hour
and 40 minutes.
Film rental is paid on a basis of a percentage of the gross receipts developed
by the showing of a given program. The percentage is based on the quality of
the pictures and ranges from 15 to 409o.
Product used

is

confined to that of the ten reputable national distributors.

No censorship is attempted other than over those pictures which portray U. S.

Army life and activities. However, on the basis of reviews by disinterested
agencies the "mature" or "family audience" designation for each scheduled
feature is published for the information of all prospective patrons.
The U. S. Army Motion Picture Service operates theaters on Army pc-sts in
the United States, Alaska, Newfoundland, Bermuda, St. Lucia, Trinidad, and
Service for posts in Puerto Rico, Panama, Hawaii, and the
British Guiana.
Philippines is provided by similar organizations under the direction and control
of the Department Commanders.

Exhibit No. 328

Testimony Suggested fob Presentation By Brigadier General Osbokn to ihe

Senate Committee Investigating the National-Defense Program
the army exchange

sp:rvice

Many small items of personal use are not furnished the soldier in his regulation issue. He has to buy them. Toothbrushes, soap, stamps, letter paper, cleaning materials and (itlior tilings are regarded by the soldier as (essentials.
In the training camps of 1!)17-1*J1S, and in France, these things were made
available to the men through canteens operated in many cases by volunteer
These agencies lacked a singleness of purpose. Their efforts were
agencies.
For these and other reasons, cant<'(>ns were not c(mipletely
not coordinated.
Oftentimes, a weary soldier had to hike miles behind the lines to buy
effective.
It was learned in the last war that this
a pack of cigarettes or a bar of soap.
method of making available these small, essential, personal items would not do
the job in the next emergency.

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4195

For a good many peacetime years there has been operated by the various
regiments and units at each Army station, a Post Exchange to bring to the
soldiers and to officers and their families merchandise they need.
Launched
on a cooperative basis, without capital, employing civilian labor, and operated
under the direction of the Past Commander, such stores have been, and today
are, a monopoly in a position to make a great deal of profit.
The profits are
used to provide the soldiers with magazines; athletic equipment; furnishings
for day rooms, and other types of recreational and amusement facilities.
The activities of Post Exchanges included barber shops, grocery stores, meat
markets, gas stations, newsstands, and many other kinds of stores 'where needed.
Under the present Army expansion program, it is conservatively estimated that
Exchanges will sell $250,000,000 worth of goods to military personnel in 1941.
The rapid expansion of the Army has given rise to a good many problems involving this instrumentality by which the small articles of personal use are
made available to the soldiers in training camps and elsewhere on duty throughout
the Army.
At the instance of the Chief of Staff, Mr. Donald Nelson of O. P. M., early
in 1041 established a Post Exchange Advisory Committee of businessmen to
study the matter and to report a suitable plan for the conduct of this tremendous
retail business.
With the assistance of Army officers, the Committee explored
the operation of Exchanges, and reported to General Marshall its findings, together with a recommended plan of action.
The Civilian Advisory Committee found
"That there is general agreement among officers of the Army, with which the
Committee concurs, that Exchanges are second only to the soldier's mess as a
factor in building his morale.
"That there is greater efficiency * * * where there is a central * * *
Exchange with branches rather than individual Exchanges operated by each
division

in Exchange operations, personnel policies, purchasing, accounting, fixtures, store layouts, varieties of merchandise, prices on
essentials, mark-ups, attractiveness and cleanliness.
"Thai the principal cause of the defects in the present Exchange system is
the lack of centralized control.

"That a wide variation exists

The Committe specifically recommended

"That the management of all Army Exchanges be

centralized in a separate
the War Department.
"That a civilian operating personnel be developed to conduct the affairs of
the Exchange orgjuiization with the executive direction performed by officers
of the Army; that this type of organization be established for central, regional,
and local operation.
"That personnel policies be adopted leading to standardization of wages,
hours, conditions of work, and that benefits for Exchange employees be at least
(The Committee
equal to those now used by similar civilian organizations."
recognized that personnel is the biggest single problem of Exchanges and made
special provision to ans^^'er this problem in a comprehensive personnel program
which detailed the ways and means by which the personnel situation could be

office of

improved.

"That to meet the emergency situation, present Exchange officers in large

Posts and Camps who are not suited to this duty be replaced immediately by
officers experienced in Exchange operation.
"That the aids normally furnished civilian executives in similar type of busiSuch aids to include capital-investment
ness be furnished Exchange ofiicers.
ratios, quality and types of merchandise, prices, personnel standards and policies, equipment and layout plans, bookkeeping and stockkeeping methods, gross
These should be standardprofit operating expense and net-profit percentages.
ized and reasonably uniform in all Exchanges.
"That the minimum and maximum range of gross profit, operating expense and
net profit percentages be controlled by the Director of Army Exchanges.
"That essentials such as cigarettes, chewing gum, candy bars, cleaning materials and certain toilet articles be sold at the lowest possible prices and at the
same price in all Posts and Camps, because the soldier reecives the same monthly
pay in whichever Post or Camp lie may be stationed.
"That the Director of Army Exchanges secure a loau from the Reconstruction
Finance Corporation, or STtme other leading agency, for the purpose of financing
the establishment of new Exchanges, the expansion of the old ones and to furnish
working capital where needed.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4196

"That each Camp, Post, or Station have one Exchange with a sufficient number
of branches conveniently located to accommodate the military personnel.
"That concessions be Vonftned to the sale of specialized services where labor
shop, automobile repair shop,
is the principal item such as barber shop, tailor
and shoe repair shop.
"That the articles of merchandise carried in Exchanges be limited to the general
needs of the military personnel.
"That a study be made to determine whether the sales Commissary is a duplicate
of the Exchange Service and the possibility for consolidation of these two
(iperations."

1941, there was established in the Morale Branch of the

the Army Exchange Service for the purpose of developing,
administering, and supervising a system of uniform and coordinated operations
for Army Exchanges in accordance with sound business principles, to be coordinated, from a purely business viewpoint, with Corps Area and local commanders.
In addition, the Army Exchange Service will provide business aids which will

Effective

June

6,

War Department

include
(a) Free auditing service.
(b) Purchase schedules for procurement of fixtures, supplies, and merchandise
at the lowest possible cost prices.
(c) Manuals of operating and accounting.
(d) Programs of training for Exchange personnel.
(e) Plans for suitable social benefits for civilian employees.
(f) Purchasing service, when requested, for exchanges outside of continental

United States.
(g) Sending of funds, as soon as feasible, for expanding present exchanges and
financing new exchanges.
This circular provided that "*

*
*
Corps Area and Department Commanders
and necessary assistants on their staff * * *."
On July 1, 1941, the War Department released AR 210-6.J (tentative) further
detailing Ihe basis upon which Exchanges were to be operated.
On July 17, 1941, the Officer in Charge of Army Exchange Service petitioned
for, and later received, authority providing for an allottment totaling 38 officers
In addition,
to staff the central organization of the Army Exchange Service.
the War Department granted an overstrength of 20 officers to carry out the
training plan, which has been prepared for this purpose, to provide skilled and
qualified Exchange officers for local operations.
About a month later Brigadier General Brice F. Disque was detailed as the
Officer in Charge of Army Exchange Service.
Since the establishment of the Army Exchange Service on June 6, 1941, the

will appoint

Exchange

officers

following activities are reported

a.

were

of the close of business October 31, 1941, approximately 341 Exchanges

Approximately 275 were in operation prior to June 6,
in operation.

As

1941.
b.

The amount

actually received by the Army Exchange Service from

l^ of 1% of gross sales) as of October 31, 1941,

Exchanges (on the basis of

is

$191,098.02.

On August 15, 1941, Exchanges were asked to submit to the Army Exchange Service census data on officer and civilian executive personnel. As
of October 31, 1941, approximately 70 percent of the Exchanges have reported
c.

this data.
d.

Loans

to

Exchanges at the

close of business October 31, 1941, totaled

$1G3,(;0U.38.
e. The Army Exchange Service has paid a total of $3,215.08
costs for civilian clerical and administrative personnel since its
f. The Purchasing Section of the Army Exchange Service has
179 purchasing agreements with manufacturers and suppliers and

in pay-roll

inception.*

negotiated
these price

agreements have been furnished to all Exchanges.

g. The former system of stock ownership of Exchanges is btung liquidated
according to information avaihible to the Army Exchange Service.
*As of October

31, 1941.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4197

Exhibit No. 329

W. AND
Section
Section
Section
Section

1.

Athletics.

2.

Education.
Entertainment.
Music.

3.
4.

Section

R. Division

1.

Athletics

GENERAL

During the last war, the athletic program was developed under the supervision of the Commission on Training Camp Activities under the chairmanship
of Mr. Raymond Fosdick, who in his final report, made the recommendation in
which Secretary of War Baker concurred, that in any future emergency the Army
itsef should accept the responsibility and supervision of the activities carried on
by the Commission. Mobilization plans weie prepared during the intervening
years based on this recommendation. When the seiiarate Morale Branch was
established, athletics was included as part of the Welfare and Recreation Division.

As recreation. Army sports or athletics are a part of the leisure-time program

and should be clearly differentiated from the Army physical education program.
Physical conditioning is a component of every military training program under
the direction of General Headquarters.
Leisure-time activities, including athletics, are the direct responsibility of
commanding officers of all echelons. TTnit commanders designate qualified officers as unit athletic officers to assist them in this activity which is not a part
of the military training program.
The Morale Branch is charged with the planning, development and stimulation
of athletic programs and to act as consultants and advisors in this field for unit
commanders. The Morale Branch contains a specific section devoted to athletic
activities.

AVAILABLE FUNDS

WEMA

funds, none were earmarked specifically for athletic

Of appropriated
equipment, the purchase of which was left to the discretion of local commanders
in the proportion desired.
Athletic equipment is also purchased from funds derived from profits of post
exchanges and other local recreational funds. The majority of the post exchanges are just now reaching the point of solvency which permits declaring and
distributing dividends.

FACILITIES

The rapid expansion of the Army in the past year has requii-ed both tremendous
additions to existing posts and the construction of many entirely new cantonments.
First prioritv obviously had to be given to the construction of barracks, messThese priority considerations slowed up
halls, and other essential buildings.
the construction of athletic fields, baseball diamonds, outdoor basketball courts,
etc.

During recent months, outdoor nthletic fields have been graded and placed
in playing condition by the use of funds and labor normally available to post
commanders.
Reports which would necessarily add to the heavy burden of paper work of
commanders have not been lequired on athletic facilities. Telegraphic reports
from twelve camps, posts, or stations selected at random reveal the following
averages per camp

Average strength

Swimming

Pools

Football fields
Baseball diamonds

Tennis Courts
Volleyball

courts

Bowling Alleys
Boxing Arenas
Softball

Fields
Cts

Basketball

500
59
2. 83
7. 42
5. 42
52. 42
83
7. 25
16. 75
7. 66

27,

4198

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Golf Courses
Handball Cts
Track Fields
*Sports Arenas

1-

33
17
IT
OO

*See Capt. Newman's Section.

Many communities
swimming

near

Army camps have made

pools, football fields, baseball diamonds,

available school gymnasiums,

and similar

facilities.

EXISTING PKOGRAMS

commander

Each unit
program in his

is

responsible for the development of an athletic or sports

unit.

insure a better coordinated recreation and athletic program, a full-time

recreation oflScer is authorized for each regiment, separate battalion, or similar

To

unit.

Battalion and company officers have been authorized to detail officers to superathletics in the unit in addition to their other duties.
The responsibility of the Morale Branch to coordinate, stimulate, and develop
athletic activities is carried out through the Athletic Section of its Welfare and
Recreation Division.
The recent expansion of the Army with its many problems of organization,
personnel, and equipment made a rapid expansion of athletic activities very diffiThe stress and emphasis necessarily placed on military training exercises
cult.
and the extensive maneuver periods also interrupted much of the organized athletic program, although observers returning from camps and from maneuver areas
report many games of all kinds being played.
At present many reports of official inspecting officers and newspaper articles
indicate participation by service teams in a widespread football schedule. Baseball, Softball, volleyball, boxing, tennis, and horseshoes are sports in which leagues
and tournaments have been generally held throughout the Army during the
summer months.
PROPOSED FUTUKE PROGRAM
A'ise

With the end of the maneuver training periods at hand, the emotional stress
incident to the extensive training progrtim would incur a psychological let-down.
For this reason the Morale Branch believes that an extensive program of athletics
universally adopted throughout the Army will materially assist in providing an
adequate substitute for this waning psychological stability. In addition to providing a check on mental and physical staleness, a well-rounded athletic program
for recreation will assist in developing leadership, teamwork, self-pride, and
organizational esprit.
With this in view, a program to cover athletic activities for the year January
t, 1942, to December 31, 1942, has been submitted to the General Staff for study.
The goal in Army athletics as outlined in the proposed program is to provide
a sufficiently varied program to insure both the maximum participation and
spectator interest of officers and enlisted men, and to contribute to the Army's
public I'elations. The program of Army athletics is thus pointed towards
1. Maximum Participation.
This depends upon stimulation of unit commanders, who must in turn stimulate interest in intercompany, interbattalion, and interregimental contests in a wide variety of athletic contests organized and super-

by commissioned and noncommissioned officers.

This must be developed by a supporting and convincing
attitude of all commissioned officers toward the athletic program, and by develop\'ise(l

2.

Spectator Interest.

ment

In addition to the
of pride in unit teams, and of the competitive spirit.
contests described in 1 above, spectator interest should be great in inter-Army
corps, interfield Army, and Army athletic contests.
This must be developed by arranging contests with
3. Public Relations.
civilian teams, by participation in special events, and may include the development of all-star, all-Army teams.
In this suggested general program for major sports, it is desirable that each
company have a team in a battalion league. Each battalion winner should compote in a regini<>ntal league. Regimental winners should then compete for division championships. This procedure should be followed throughout the various
echelons of the Army to determine champions in football, baseball, basketball,
boxing, and other major sports.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4199

Althougli not scheduled in the suggested yearly program, it is urged that other
six-man football, touch football, soccer, wrestling, track and

activities, including

badminton, etc., be encouraged to promote maximum participation.

to time Army athletes may be centralized to form all-star all-Army
teams for special occasions. Such teams and their schedules will be under the
direction of the Morale Branch.
fields,

From time

MORALE BRANCH ASSISTANCE

group of physical education, and athletic experts met during the past year
to study the question of athletic opportunities for men in the service. The
individual members of this group are available as consultants, not only to the
Morale Branch but also to Morale officers of the various military organizations.
This group operates as a civilian athletic advisory committee, which is a subcommittee of the Joint Army and Navy Committee on Welfare and Recreation.
suggested program for battalion field day has been prepared by the Morale
Branch and sent to field commanders.
A technical manual of sports and games dealing with field and court construction,
rules, and coaching or playing techniques has been prepared and is now being
edited and will be ready for distribution to the field at an early date.
A manual covering the field of athletic and recreational duties required of regimental recreation officers is now being prepared for distribution to all regimental
athletic and recreation officers.
Under the proposed athletic program, specific information on each sport will
be prepared and sent to the field wheu that sport is in season. Suggested basketball and boxing programs are in the process of preparation for early distribution
to the field.
A suggested plan for volleyball, playground baseball, tennis, baseball, and football will be pivpared and sent to the field in season.
The Morale Branch has prepared lists of basic athletic equipment purchased
for units going to foreign bases.
The Morale Branch has prepared specifications for all athletic equipment
purchased against Quartermaster contract bulletins and for all sports arena

equipment.
RED CROSS DONATION

The

lied Gross patriotically appropriated $1,000,000 for the purchase of recreation equipment for the Army and Navy, the Army's share being $709,000. This
money was all obligated by July 1, 1941.
In addition, the Red Cross has purchased considerable athletic equipment to be
sent to the Base Commands.

Section 2

Education

educational activities

The media of education which have been contemplated in the leisui'e-time educaprogram for military personnel are correspondence instruction, educational

tional

motion pictures, class instruction, lectures, discussion groups, exhibits, educational

tours, and hobby groups.
Of these, the first two correspondence instruction and
educational motion pictures by their nature, must have central planning and
organization. The remaining activities are developed on a regimental or other
unit basis, depending upon the particular circumstances found in any regiment
or other unit. It is not desirable that they should be limited to a standard
program within all military establishments.
During the past year many such unit educational programs were operated.
There were classes for illiterates in Replacement Training Centers and other posts
where the number warranted their organization. Camps in appropriate locations
had lectures or classes taught by instructors from nearby colleges or universities.
At other posts tours were conducted to nearby points of historical or other interest.
Cooperation with civilian groups brought about educational exhibits and the
development of hobby groups. All these activities were developed to meet local
conditions and to capitalize upon the local advantages.
A large part of the class instruction program was conducted through funds
appropriated to the United States Office of Education for allocation to state vocational authorities.
Under this program a number of classes were organized. In
some cases the men were transported to nearby public-school buildings, and in
others Instructors met the classes in mess halls or other buildings on the military

reservation.


4200 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
With respect to the central planning required for correspondence instruction
and educational motion pictures, two studies have been made. The cori'espondence course study resulted in recommendations that an Army Institute be
established to offer correspondence instruction to military personnel in noncredit courses, and that arrangements be made with colleges and universities
to teach correspondence courses to military personnel who desire to secure
academic credit. It has been recommended that those studying courses in the
Army Institute pay a registration fee of $2.00 for each enrollment and that
those studying miiversity extension courses pay one-half the cost of fee and
In the initial operation
text material, the Government to pay the other half.
of the Army Institute, it has been recommended that a branch be established
in the Second Corps Area to serve the corps areas and installations east of
the Mississippi River, and that one be established in the Ninth Corps Area to
serve the corps areas and installations west of the Mississippi River.
The educational motion picture study resulted in recommendations that a
program lasting from an hour to an hour and a half be shown in each regimental recreation building one night per week. The films to be used would be
selected from documentary films, films developed by various governmental
and any type of film which is educational in nature. In general an evening's
agencies, films developed by corporations to show manufacturing processes,
and any type of film which is educational in nature. In general, an evening's
program would consist of several types of pictures. It was decided that before
these recommendations should be appi'oved, it would be desirable to conduct
a trial to determine how well these pictures would be received by the men.
Consequently, arrangements were made to show foiir programs in the various
recreation buildings at Camp Lee and Fort Eustis, Virginia, each program to
be shown for one week in each camp. This trial began October 13 and will
end November 7th. Complete reports of attendance have not yet been received.
The early weekly reports indicate a minimum of 5% and a maximum of 11.7%
of the post personnel saw each program.
For the present, it is contemplated that these media of education will be
stimulated through the Guide for Regimental Recreation Officers, in which
discussions of each medium is given.

Section 3

Entertainment

The problem of entertainment divides itself into two factors, the first one
being that entertainment initiated, developed, and presented by the soldiers
themselves for the edification of their fellow men in the Service. The second
is entertainment brought in from civilian sources for the purpose of providing
It has been the aim
a divertissement for the soldier during his leisure hours.
and purpose of the Morale Branch to encourage, as far as is practicable, both
of these factors within Army camps.
It has been recognized by Army authorities that the development of soldier
theatricals is conducive to good morale among the men. It is conducted on a
vohmtary basis and pleasure is derived not alone by those who participate but
by audiences who attend performances of the shows given by the soldiers. The
purpose of the Morale Branch has been to aid and assist the officers and enlisted
men assigned to or participating in this work in every way possible. No
direct supervision is given since this would tend to destroy the initiative and
ingenuity of the men interested in presenting this form of entertainment. However, various helpful aids in the way of suggestions and material are being
provided in order to assist in the general program and encourage this type of
I'ecreafional activity.

In the early part of this year the Citizens Committee, at the suggestion of
the Moi'ale Branch, conducted an experiment in the encouragement of soldier
theatrical entertainment by engaging two civilian advisors on soldier theatricals
These men.
to work at Fort Bragg, North Carolina, and Fort Bliss, Texas.
during their stay at the two camps mentioned, aided tiie military personnel in
initiating various soldier productions and coaduMl cci-tMin of the men in i)rinciples
of theatrical staging, directing, and itroduction to enable them to carry on the
work after the services of the civili.an advisoi's had been withdrawn. This experiment i)roved so successful th:it nine civilian advisors have now been eng;iged, one
for each corjjs area, who go from camii to camp, for the pnri)ose of encouras:ing
While
so'dier theatricals and coaching military personnel engaged in this work.
none of these men started initil aft(n' Sei)teinber 1st, the results of their activities
are iipparent already, as evidenced by the number of i)l;iys, nmsical .^hows and

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4201

revues which are now being pi-esented in the camps. The dramatic organizations originated by these Civilian Advisors in the camps have been very successful
and have maintained a very ambitious schedule of soldier entertainment after
the Civilian Advisor's departure for another camp or post.
For the purpose of further aiding and encouraging soldier theatricals, an
"Amateur Theatrical Manual" is now being distributed to all the posts, camps,
and stations throughout the country as well as the foreign bases and possessions.
This was prepared at the suggestion of the Morale Branch and published by the
Citizens Committee. The "Amateur Theatrical Manual" is a textbooli for interested military personnel on the organization, development, staging, and direction
of plays, musical shows, operettas, and revues and is a complete guide for the
presentation of soldier entertainment.
For the purpose of providing material for the use of the soldiers in their own
productions, a "Skit Slietch, and Black-out Book" is now being published by the
Citizens Committee at the suggestion of the Morale Branch and comprises 111
different comedy acts gathered for the exclusive use of soldier actors.
It is
contemplated that further material will be published from time to time as a
further assistance in this type of entertainment.
Approximately 600 civilian Little Theatre Groups throughout the country are
being encouraged through the National Theatre Conference to select plays for
production that are suitable for presentation in Army camps close to their
The results of this are now becoming known in various sections of
location.
the country where these Little Theatre Gi'oups are taking series of plays into
Army camps and presenting them for the benefit of the soldiers. Those plays
which have been and will be found acceptable will supplement the professional
schedule of entertainment and, for the most part, will play in the smaller recreation buildings.

As an additional method of encouraging entertainment from outside sources

for performances in Army camps, the War Department recently adopted a policy
which permits the acceptance of commercially sponsored shows to appear in
camps and to provide amusement for the soldiers under supervision and regulations which insure high standards of good clean entertainment.
In March 1941 the Citizens Committee for tlie Army and Navy, Incorporated,
was designated as an agency to assist tlie Army and Navy in providing entertainment for the various posts, camps, and stations. Shortly after its organization, this agency, working in close cooperation with the Joint Army and Navy
Committee on Welfare and Recreation, and representatives of the Morale Branch,
initiated plans for providing theatrical entertainment for the summer season.
As a result of this planning, seven stage trucks were secured and furnished with
necessary lighting and sound equipment to provide for outdoor shows. Professionally paid performers were secured and in June 1941, these mobile entertainment units were made available to corps area commanders for performances in
the camps, posts, and stations where desired. Each unit consisted of five or
six acts, making a show of about an hour and a quarter.
Usually two shows
were given each evening, if necessary, to acconnnodate the personnel in the camp.
In several of the larger camps, the show would remain an additional day. As
a rule these perfoi-niances were staged out-of-doors, but in inclement weather
theatres were used.
These units have covered every camp of any size east of the Ilocky Mountains.
Up to October 1, 1941, 1.03.S performances have been staged to an estimated
audience of appi-oximately 3,300,000 soldiers. These shows were not requested for
the Ninth Corps Aren on account of the great distances involving travel and in
view of the fact that most camps in that area were already plentifidly supplied
with talent from radio, screen, and stage, secured mostly from Hollywood.
These mobile shows have proved very satisfactory as attested by hundreds of
letters received by the Citizens Committee for the Army and Navy, Incorporated,
from all grades of personnel in the armed forces.
Several shows from outside sources, many of them Broadway productions, have
been brought into camps for presentation.
About three months ago planning was initiated for a winter program of theatrical entertainment.
These plans included a survey of the type of entertainment desired, the availability of suitable facilities, and tlie amount required
to provide adequately for all camps, posts, and stations.
It was decided that
it would be desirable to provide a theatrical entertainment for every camp, post,
and station of any size on the average of twice each month. Recently, at the
invitation of the Chief of the Morale Branch, a meeting was held in Washington, at which outstanding representatives of radio, screen, and stage were present.
Also attending were representatives of the Citizens' Committee, including

4202

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Eddie Dowling, noted Broadway producer and actor, who is Chairman of
the Citizens' Entertainment Committee. At the meeting it was determined that
the theatrical-entertainment objective desired by the Army could be met and
discussions were held on suitable types of shows. It was decided that all shows
would comprise paid professional performers and each would bo a complete
entertainment unit. Stars of the radio, screen, or stage would be added on a
volunteer basis whenever possible. Two talent pools, one on the East Coast
and one on the West Coast, are being formed to facilitate booking arrangements
for those stars available for short periods of time to join entertainment units
already touring.
As a result of the meeting held in Washington at the Office of the Chief of the
Morale Branch, Camp Shows, Inc., a nonprofit agency, was organized under the
laws of the State of New York, with Mr. Eddie Dowling as Chairman. The purpose of Camp Shows, Inc., is to provide professional entertainment and shows
Many of these
to the various posts, camps, and stations throughout the Army.
plans have now reached the conclusive stage and a number of shows are being
made ready for the tentative starting date, December 1, 1941.
On October 31, 1941, Camp Shows, Incorporated, with the cooperation of the
Morale Branch, sent a "Flying Troupe" of entertainers in an Army transport
plane for a tour of the Caribbean bases with the purpose of providing entertainment for the troops stationed there. The cast was composed of stars from the
stage and screen world as follows John Garfield, Chlco Marx, Laurel and Hardy,
Ray Bolger, Jane Pickens, and Mitzi Mayfair. Other professional theatrical
troupes intended for entertainment In these and other bases will be organized
and sent out from time to time as conditions warrant.
:

Section 4

INIusic

In recognition of music as a factor of importance in relation to Army morale,

officer with a broad professional and military musical background was
assigned to duty from the field to the Welfare and Recreation Division of the

an

Morale Branch

in

June

1941.

Army and Navy

Committee, a music advisory subof the fourteen members is a musical representative of national prominence. Divided into subcommittees, the entire field
of music in relation to the Army is carefully considered by members of the committee. Their plans include providing phonographs wherever needed, the collection and distribution of phonograph records, assistance in the training of song
leaders, cooperation in the development of efficient Army bands, dance bands,
theatre pit orchestras, concert orchestras, and drum and bugle corps, group
singing, and all other musical activities throughout the Army.
The purpose of the Music Section is to encourage the participation of the individual soldier in some form of musical activity, to assist the autliorized musical
organizations of the Army in attaining a high degree of usefulness and efficiency,
and to cooperate with military and civilian agencies in the utilization of muse as
an integral part of practically every recreational activity.
A. To i)romote singing by Army personnel, a collection of the songs of the
different branches of the Military Service, the patriotic airs of our country, and
some of tlie melodies which may be considered American folk music, was compiled, and an Army Song Book was published and distributed to the Army in
June 1941. The first edition of the Army Song Book consisted of one million
The
five hundred thousand words books and twenty-five thousand music books.
second edition of one million five hundred thousand words l)ooks and seventyfive thousand music books has been printed and made available for distribution
as requirtul. The words edition of the Army Song Book, containing the words
only, was designed to fit into the shirt or blouse pocket of the soldier's uniform
and may be carried with him at all times. The music book is larger and contains
the words, piano music, and chord indications for guitar and ukulele. The larger
number of nuisic books in the second edition was considered necessnry in order
to increase the ratio of music to words books to one for each thirty iHi>n.
A band accompaniment book for the Army Song Book is considered advisable.
Plans for producing the book and the cost are being studied.
To serve as a guide to song leaders in selecting suitable music for quartets,
glee clid)S, and larj^e choral groups, a source list of music was compiled from
data furnished by the publish(>rs of vocal music and distributed throughout the
Army. This guide lists the title, composer, arriinger, publisher, type, and cost
per copy of the nuisic listed.

Upon

invitation of the Joint

committee has been formed.

Each

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4203

B. The value of stringed iustruiiieiits such as the guitar, ukelele, banjo, and
violin, the so-called pocket-size musical instruments, the harmonica, ocarina, and
touette as a means of entertainment in camp and in the field is clearly recog-

nized consequently the playing of these instruments has been encouraged. A

gross each of harmonicas, ocarinas, and tonettes furnished by the Citizens Committee of the Army and Navy with which to conduct an experiment with pocketsize musical instruments by a Division during the recent Second and Third Army
maneuvers is reported to have prompted a buying rush which practically depleted
the stocks of small nuisical instruments carried by retail stores in communities
W'ithin the maneuver area.
To meet the urgent need for nmsical facilities in stations and bases too small
for authorized bands, several sets of orchestra instruments and required acces^ories have been purchased by the Music Section wuth Red Crciss funds for
shipment to Alaska and certain of the Atlantic bases. Approximately eight
thousand seven hundred dollars were provided by the Red Cross for this purpose.
C. In collaboration with the Music Division of the Library of Congress, recordings of typical Army music were made at Camp George G. Meade, Maryland.
The cost of the experiment, api)roxiniately two hundred dollars, was assumed by
the Citizens Committee of the Army and Navy. The recordings provide excellent
data relative to the musiciil status of the bands, singing activities, dance bands,
and misct'llaneous groups at Camp Meade. Distribution of selected recordings of
soldier musical talent to the Army is being considered.
D. With equipment loaned by the Carnegie Corporation, an experiment with
recordings of tlie world's best music is being conducted In camps adjacent to
Washington. The equipment consists of specially constructed phonographs and
a collection of phonograph records, similar to tho.se furnished colleges and universities by the Carnegie Corporation for use in music appreciation courses. The
reception accorded this type of music will determine whether the Carnegie sets
will be made available for distribution to the Army.
E. The official function of the Regimental Band is to provide the music and
marching cadence for militai-y ceremonies. The Band takes an important part
at (Juard Mount, liattnlion and Regimental Parades and Reviews, the Retreat
Ceremony, at funerals and cliapel.
In addition to participating in strictly military ceremonies, the Band is the
entertaining unit of the Regiment. Concerts and serenades are a regular part
of band routine. The Regimental Band furnishes the Dance Band, usually, the
chapel organist, stringed ensembles, as well as vocal and instrumental soloists.
The music of the Regimental Band provides color and arouses team spirit
during football, baseball, and other field sports and games.
F. The Selective Service Act is drawing into the Army large numbers of young,
high school, college, and professional nuisicians. Artists from the opera, from
symphony orchestras, the concert stage, radio, and the motion-picture studios are
willingly giving of their talent on camp radio programs and for the entertainment
of their fellow soldiers. By use of the Army classification system every effort
]s made to utilize the talents of accomplished musicians who come into the
Army, consistent with the military training program.
;

3779, is on file with the

"Exhibit No. 380" introduced on

p.

"Exhibit No. 331" introduced on

p. 3779, is

on

file

committee

with the committee

Exhibit No. 332

International Union of Mine, Mill

& Smelter Wobkeks

303 Railway Exchange Building

Denveb, Colorado

Research

Office

1407 L.

St.,

N. W., Washington, D. C.

Increased Proouction of Vital Non-Fekrous Metfals fob the Victory Program

Every American must rise

for discussion and argument is over.
meet the dark emergency that confronts our nation, our liberties, our lives.
311932 42 pt. 10
31

The time
to

4204 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Our country invaded, our cities bombed, our ships sunk, our
the American people must answer. We must join with

dered

citizens

mur-

in
Britain, the Soviet Union, China all other anti-fascists throughout the world,
to guarantee the absolute destruction of the Fascist axis.
In this fight, the battle for production assumes new significance. In the
effort to out-produce the Axis powers, to turn out the huge (juantities of materials of war which will guarantee our victory, labor's role is fundamental.
The International Union of Mine, Mil! and Smelter Workers recognizes itsEven before the outrageous attack
responsibility to our nation in this crisis.
by the Japanese partner of the Axis upon our peaceful nation, it had become
evident that the democracies of the world were faced with serious shortages of
The measures taken to date
vital base metals, the raw materials for war.
fall far short of the needs even of "all-out aid" to our allies
today obviouslyall past concepts of our needs, all past concepts of the sacrifices we must
make, fade in the face of reality we know we must exert every energy, use
every bit of knowledge, every production trick to produce in quantities never

oiir

allies

before dreamed possible.

Towards this end, our Union, together with the entire Congress of Industrial
Organizations, stands ready to partii-ipate in the truest sense of national miity
with management and government to guarantee our final victory. In the words
of President Philip Murray, of the CIO, we are "ready and eager to do our
utmost to defend our country against the outrageous aggression of Japanese
imperialism and to secure the final defeat of the forces of Hitler which have
plunged the whole world into a bloody war in their drive to enslave the human
race."

We

therefore offer this memorandum by way of constructive criticism ;i!id

suggestion, not as a complete panacea for the problems involved, but more as
a new approach to the entire question.
It is well to note here that the International Union of Mine, INI ill and Smelter
Workers is the only nationwide organization of labor in the entire non-ferrous
metals industry, starting at the mines and following through the primary fabricating processes, so that it will be understood why we feel that the problem
of production for national defense cannot be approached piece-meal, but must
be taken on a comprehensive basis involving the entire industry.

RE\^EW OF MEASURES TAKEN

Generally speaking, the measures adopted thus far by defense officials to
obtain greater supplies of raw materials are
1. Importations of available supplies, as from South America
2. Sympathetic assistance to the industry's pressure upon labor to work a
6-day week
of existing fabricating plant capacity handling consumer
3. Curtailment
goods, so as to save raw materials for defense needs
4. Large-scale expansion of fabricating capacity for defense production:
5. The use of price increases as an alleged incentive to greater output; and
6. Loans to mine operators for expansion of existing properties.
These Measures Are Not The Ansiver.
Of these six steps, only the first and the last importation of available supreally serve to increase supplies
plies from abroad and loans for expansion
of needed metals. All the other measures clearly demonstrate a failure on the
part of the individuals and agencies involved to get at the root of the problem
to increase production of the necessary metals.
We find to date curtailment of existing fabricating capacity side by side
with large-scale expansion of new fabricating capacity nn obvious and absurd
paradox; and, moreover, a complete evasion of the essential task of expansion
of capacity at the very beginning of the industry mine output.
"Put First Things First" has become a well-worn phrase in the defense
agencies; but first things have not been put first in the consideration of this
ma.ior problem confronting our nation.
P.riefly, our organization contends that prices do not mine ore and will not
bring more rock to the surface; that expansion of fabricating capacity in our
industry will not bring more rock to the surface; that curtailment of existing
ciipjicity will not bring more rock to the surface: and that, since no other
major approsich has been made to this problem by the federal agencies and by
industry itself, no more rock is going to be brought to the surface until and
;

'

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4205

\iniess drastic and immediate changes are made in the entire program for
production.
More rock will be brought to the surface and more metal recovered only
if the miners and smeltermen and other workers in the industry become an
integral part of the whole production picture.
Basic to this entire discussion is the understanding that there can be increased production starting at the mines, only if conditions of labor are
improved by the various means to be suggested to make it possible for men

to

produce more rock.

OUR SECOMMENDATIONS

Make

an Industry-Wide Inventory.
Under present conditions, statistics as to our needs for non-ferrous metals
are meaningless. In this crisis it is obvious that our needs are infinite, that
every single pound of copper, of lead, of zinc, and of the other vital metals
that can be mined must be brougiit to the surface as quickly as possible. We
must drastically alter all previous concepts of productivity of mines. So long
as any mine has metal which can be brought to the surface, that mine must
be worked.
Great as our needs are, they are intensified by the fact that the attack upon
us by Japan jeopardizes one major source of supply of copper upon which
defense officials leaned heavily namely, the 500,000 to 600,000 tons of copper
from South American mines.
With the need for using every available ship to transport materials and
men to the fighting fronts, the possibility of having the necessary bottoms
for the transport of copper from South America becomes dimmer.
Moreover,
it is obvious that even those ships which may be retained in the transportation
American
counted
cannot
upon
for
ore
be
regular deliveries.
of South
We must therefore realize the hard fact that we shall have to count on our
vast resources, our own abilities and efforts to produce the vital base metals.
Every mine, every level, every workface must be utilized for victory.
Immediately, we must undertake a detailed and complete inventory of the
industry to ascertain the number of mines in operation, the present real
capacity of those mines at full time operation, the number of miners at work,
the potential capacity of the mines if new equipment were installed, the availability of new mines.
Such information has never been assembled. It must
be done without delay.
To get a coordinated picture of the facilities of the industry, there must
al.so be an immediate plant-by -plant inventory of every existing production
unit in the industry to ascertain the number of plants, the amount and type
of equipment, the available trained labor supply and supervisory staff, the
nature of that unit's current business, and the possibilities of adapting that
unit to defense production.
The results of preceding without such basic information are best illustrated
by showing what actually has happened in the fabricating end of this industry.
Defense ofl^cials a year ago faced an industry situation in which fabricating
capacity was greater than mine output from both domestic and foreign sources
under existing production practices.
But without tli'e slightest explanation
of their action, they suddenly announced the granting of $35,000,000 to the
brass industry to expand brass production by another 79% adding to its
present 95,000,000 pounds of cartridge brass monthly capacity another 75,000,000

pounds
There was not the slightest indication of concern in this step as to how
the necessary copper and zinc supplies would be found to produce 170,000.000
pounds of cartridge brass if we cannot even meet the present capacity of
95,000,000 pounds.
The results were inevitable by early October, defense officials were forced
to issue an industry-wide order curtailing the use of copper for consumer
goods in more than 100 different items, and by October 23, the War Department itself ordered major curtailment of shell cases because of overproduction
:

of this vital defense article in comparison with loading facilities.

It is fair to assume that during November 1941 no more than 60% of our
brass mill capacity was utilized. Yet in the immediate future we are to have
new brass capacity of another 70% above the present capacity ready for

operations!

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4206

Such a state of affairs is scaudalous and iuexcusable.

parties should be brought to account for this misdirection

Tlie

auswerable

and sabotage of

our national interests.

Make

Full Use of Industry's Resources.

The resources of our metal mining industry are not being fully utilized.
There are two sources of additional production which must immediately be
brought into operation. These are: (1) mines which were shut down during
the depression; and (2) workplaces in operating mines which are not being
exploited.

According to the Bureau of the Census, there were ISO operating copper mines
in 1929 by 1939, there were only 49 producing copper mines, and the total output
of recoverable copper had dropped 28% below the 1929 figure.
;

As for lead and zinc, the number of producing lead and zinc mines dropped
during the samelO-year period from 375 to 254.
Of the 208 iron-ore mines producing in 1929, only 174 were producing in 1939.
Certainly it would be worth while to survey this field to determine how many
of the 131 copper mines that have been shut down since 1929, how many of the
121 lead and zinc mines, how many of the 34 iron-ore mines, ceased operations
because of depletion how many stopped operating because of the general economic
collapse of the thirties, but are still ijotentially productive.
A certain amount of capital expenditure may be necessary to bring such mines
back into operation but it would not be correct to assume, merely because many
of these mines were forced to close down because of the depression low prices
and disappearing demand that these mines are necessarily high cost, or marginal
operations. Certainly, any metal remaining in them is needed now, and must be
brought to the surface.
In addition, there may be found throughout the industry specific instances of
tailure to operate at capacity, or anywhere near capacity.
A few such examples, taken from reports of our locals and organizers in various
;

parts of the country, will illustrate the point

The Bunker Hill & Sullivan Mining and Concentrating Co., an important lead
and zinc producer in Idaho, owns the Bunker Hill Mine and operates on one
This mine has 23 levels, of which levels 10, 11, 12, 14, 15, and 16 are not
shift.
being worked. Developmental work is being carried on in levels 13, 17, and 18.
Ore reserves, according to a public statement by the president of this corporation about two years ago, will last indefinitely.
The levels mentioned have slopes, drifts, and numerous workfaces that carry
rich ore bodies.
This company has two mills, the South mill and the "West mill. The South
The West mill, with a
mill, with a capacity of 600 tons per day. is now idle.
capacity of 1,200 tons a day, has added a new department which is supposed to
increase the mill's capacity by some 600 tons per day. This mill is not working
at capacity.

The same company has one smelter with a capacity

now turning out about 195 tons of lead per day.
The company operates at capacity when all three of

of 350 tons of lead per day.

It is

its blast furnaces are working full time. Its No. 3 blast furnace has about the same capacity as No. 1 and
No. 2 combined but the No. 3 furnace is not operating at this time.
The Douglas Mine, owned by the Douglas Mining Company, whose president is
al.so president of Bunker Hill & Sullivan, has four levels reputed to contain the
best zinc ore bodies in the district it has all the necessary equipment and a camp
for operations. Today only a watchman takes care of this idle camp.
We slumld
know if the Douglas Mine is being kept as a future reserve for the company, inst'ad
of operating for national victory.
The Morning Mine, owned and operated by the Federal INIining Company, works
two shifts, with four levels currently operating and producing lead and zinc.
The miners assert that in levels such as the 2,400 and 3,000, the company is
employing only enough men to keep the places open producing almost no ore,
even though these places carry good commercial grades of ore and ])ro(luction
could easily be increased substantially.
The Morning mill currently averages 18 trains a day with about 20 tons of ore
per train. A year ago, the men report, the mill averaged 22 trains a day or
SO tons a day more than it now handles.
In the rich Butte. Montana, mines of the Anaconda Copper Mining Company,
monthly copier production has declined about 2,000 tons a month as compared
with the average monthly output during the first half of this year, the local union

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4207

leaders report. There have heen no stoppages or slowdowns but layoffs are
reported despite available workfaces.
A different example, but equally valid as an instance of failure to produce in the
face of our war needs, is the shutting down of the Walker Mine in California by
the Walker Mining Company directors, because the company couldn't show profit
at 12<^ copper.
While our Union does not dispute the losses incurred by this company, it wishes
to call attention to the following facts
This company lost money in 1935, 1936, 1938, 1939, 1940 but it operated all but
six months in all these years.
The average price of copper in 1935 was 8.649^ a pound in 1936, 9.470 in 1939,
11.296('; but in 1941, with copper constantly about 11.775(' (120 Connecticut
Valley), the company shut down.
In its review of the industry for 1940, the Engineering & Mining Journal said
"Copper output (in California) in 1940 came from the Walker mine, operated at
capacity by the Walker Mining Company. California output was 60% higher in
(luantity and 74v'c higher in value than in 1939, due principally to the activity of
;

company."
But the price of copper in 1940 when Walker was willing to operate at capacity
and lose money was lower than the price of copper today, when Walker is shut

this

down.
While we are not questioning the company's

losses, it is interesting to note that

Poor's Industrial Manual for 1937 stated that Walker's cost of production of
copper per pound sold, after credit for silver and gold in the ore and with the
This
cost of smelting, freighting and refining added, was 9.399('- a pound in 1936.
is mentioned because we have been advised that Walker's cost of production is
estimated at 20(* a pound.
In 1940. Walker produced more than 10,500.000 ix)unds of copper. Now that
mine is shut down. Our nation must have that 10,000,000 pounds of copi)er now.
That mine should be put back into production.
The company has indicated that the principal problem at Walker is the exhaustion of ore reserves.
We would like to call attention to the following excerpt
from Poor's Industrial Manual for 1941, regarding the Walker mine:
For economic reasons it is impracticable to develop and block
''Ore Reserrefi.
out ore bodies far in advance of current operations. Because of the width and
continuity of the Walker fissure zone both on strike and dip as disclosed by past
operations, and because of the nature and mineralogieal character of the vein,
it is- believed that the mine can be operated at full capacity for many years to
come."

EiHl Blackouts.

Inseparably bound to the question of capacity production is the need for unbroken operations and putting an end to conditions which result in the astonishing
rate of turnover in the working staff.
The Union holds that our national crisis requires drastic overhauling of views
and techniques and that industry, government, and labor should work together to
bring about that continuity of employment and production which will eliminate
not only "week-end blackouts", but day after day blackouts.
Mining operators and defense officials have repeatedly brought pressure on labor
to work a 6-day week.
Our Union cannot understand why employers should want to pay for 12 hours'
work for only 8 hours' production on the overtime day nor why government
officials should support that position.
Payment of 12 hours' pay for 8 hours' production will not mean bringing 12
work hours' more copper, lead or zinc to the surface. This will not produce for
our nation, therefore, the metals which w'e must have. It merely means that the
operators will be able to use this increased labor cost as (a) an excuse to win
exemptions from the penalties of the Wage-Hour Act by getting permission to
work 48 hours without overtime payment; or (b) an excuse to get OPA to agree
to higher prices for the metals for 6-day, overtime production.
Why should the United States Government be forced to pay more for metals
without getting more metal for national defen.se? Why should the government
be party to paying higher prices without increased production a price based on
12 hours' woi'k for only 8 hours' output?
Countering this illogical and unproductive measure is the Union's proposal that
the basic 8-hour day and 5-day week be maintained, with over-all oi>eration.s
expanded not to a mere 6 days, but to 7 days a week, 24 hours a day. We
;

4208

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

advance

this as the goal

with full realization that it cannot be immediately
achieved. This objective can be realized only through adoption of the measures
to be discussed.
Under present conditions in most mines, our nation's miners could not work
on a 3-shift basis. In some cases, the 3-shift technique may be used in modified
form, as in three 6-hour shifts to permit the air to clear or in two 8-hour
production shifts and three service shifts so that the production men may work
at top speed on their shifts.
In making continuous operations possible, two problems are interlocked and
inseparable the essential technical, engineering needs and the improvement of
working conditions.
In one of the world's largest mining camps, a recent siirvey revealed the
amazing fact that more than half the employees (of some 5,000 workers) worked
less than half the month.
Yet in this camp, the management's major campaign has been to put its
workers o-n the 6-day week apparently indifferent to the fact that even under a
6-day week, if the same turnover continued, the company would actually be
getting an average of three days' work per man.
Tlie same solutions which would bring about a greater continuity of employment in the regular and present work shift would make possible the complete
operation of the camp on a full time 24-hour a day, 7-day a week basis. Under
no other conditions is an unbroken production schedule possible. Under no
other conditions is efficient production ixjssible even on a single shift or 2-shift
;

basis.

MULTIPLE SHIFTS
Various mine operators continue to nssert that mines cannot be operated on a
multiple-shift basis.
But multiple-shift operations may be found in every type
of metal mining, and idle mine capacity undoubtedly is just as wasteful even
more wasteful than idle plant capacity generally.
The Bureau of Census" report on Mineral Industries Copper Ore, for 1939,
showed this situation in the copper mines and mills
"Of the 49 mines, 22 operated on a 3-shift basis, 15 on a 2-shift, and 12 on a
single shift. Virtually all copper concentrating mills operated three shifts.
"However, most of the employment in mining and milling was during the first
shift.
Of the total number of man-shifts worked at mines by wage earners, 66%
were worked during the first shift, 29% during the second, and 5% during
the third.
'The corresponding percentages for the first, second, and third shifts at copper
mills were 67%, 17%, and 16%, respectively."
A similar study of the lead and zinc industry showed that 28% of the mines
and 67% of the mills operated on a 2- or 3-shift basis during 1939. Of the 254
mines, 27 operated on a 3-shift basis and 43 on a 2-shift basis of the 118 mills,
64 operated on a 3-shift and 15 on a 2-sliift basis.
Significantly, 77% of the mine work-shifts were worked during the first shift
and only 2% during the third while in the mills, 54% of the ys^ork-shifts were
worked during the first shift and 19% during the third.
This shows conclusively
1 that multiple shifts yes, even 3-shift opei-ation" are not only possible, but
are common in the industry;
2 that full utilization of multiple-shift operations is not being made by the

industry
that,

3'
therefore, obvious and great increase in production
existing operating mines alone.

OLEIAN

is

possible in

THE AIR

To guarantee that a minor will remain at work, intolerable conditions of employment must be rectified and agnin this is posed by the Union not solely from the
viewpoint of improving working conditions for the men, but, rather, on the basis
that only through such improved working conditions can increased production
take place. A major factor in this respect is Ihnt of ventilation.
On November 15, four miners employed at Biitte, Montana, in the St. Lawrence
mine of the Anaconda Copper Mining Co., Nick Butko, Fred Bugni, Charles Makela,
and Charles Thomas, were suffocated to death :it their workplace underground.
This tragic development is but the latest and most striking proof of the Union's
contention that adequate ventilation is essential. The four dead workers remain

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Srim reminders that the men

still alive,

the mines, cannot be expected to

work

the half-suffocated

efficiently

and

to

men

still

4209

working

in

produce as much as they

could under normal conditions.

The Engineering & Mining Journal for September 1941 reports a particularly
good illustration of how this problem can be met.
Magma Copper Company, in Arizona, has just installed three new 140-ton
centrifugal machines to provide air conditioning down to the 4,600-foot level of
its mine in Superior, Arizona.
This is the third extension of the original airconditioning system installed in 1937. As a result, temperatures in the deepest
working place will be cut from 150 degrees to 90 degrees, and permit increased
copper output.

Although it may still be argued that the company should have installed more
equipment to cut the temperature even further, this, nevertheless, illustrates that
the problem of adequate ventilation can be solved.
The ventilation problem does not always require expensive air-conditioning
units.
In some cases, cutting more airshafts more holes to the surface so that
fresh air can come into the mines and spent air can go out would be adequate.
"More holes punched through to the surface, with the proper arrangement of air
doors on the various levels" was characterized as one of the most practical
solutions to the ventilation problem in the deep Butte mines, for example, by an
official committee of the men themselves.
Adequate ventilation and efficient fans in the mines become an immediate aid
to increased productivity in two ways
and temperature make possible more
1. Fresh air and lowered humidity
vigorou.s work by the individual miner in workplaces that are now difficult to
work. This would also do away with a great reason for "quits" and make possible mining in such levels where work has not been possible at all- as in the
case of the Magma Copper mine just cited.
2. Fresh air and efficient fan systems would clear the levels of the dust and gas
caused by blasting at the end of the shift and would thus permit the use of

multiple shifts in the mines.

At present the main talking point of the operators against the multiple-shift
system is that it is impossible for men to be sent to work after blasting on the
previous shift. And that is true under present conditions.
Obviously one argument against this proposal is the expense involved in the
installation of such new equipment where holes cannot be punched through to the
surface.
To this there are two answers:
1. If Magma Copper can do this, so can Anaconda and Phelps Dodge, for
example. In short, the important producers are in a financial position to do this.
2. If rhe operators themselves refuse to spend money to bring about increased
production for national defense, and if the Government desires to advance money
for such improvements, the money is far more wisely spent in this direction than
to these same companies' brass subsidiaries for expansion in brass fabricating,
when there is not enough copper and zinc to meet the needs of existing brass
capacity.
Our Local Union in Bessemer, Alabama, submitted to the Woodward Iron Company proposals to clear up its bad ventilation problem. The recommendations
were accepted by the company with fine results, and the company is operating
on three shifts.

RATIONALIZE THE CONTRACT SYSTEM

of the major mining operators impose a contract system in their wage
a system characterized by inequities which give rise to discontent
amons: the labor force, and which boomerangs as an incentive plan.
It Is not necessary here to go into great detail regarding the many grievances
arising irom .contract prices which result in "quits" repeated interruptions

Many

payments

of produciiou.

From

the management's and the government's viewpoint, the greatest weakness

it is the greatest single incentive to breaking down
thus of production. It is an incentive system which

in the contract system is that

continuity of employment and

works backwards.
The contract system theoretically encourages a miner to stay at work con!tantly, giving him a wage higher than the base rate in proportion to the feet of
rock brok'^n above the established norm. In practice, it makes it profitable for
the miner to work only in workplaces where (a) the temperature and humidity

4210

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

permit full steam ahead; (b) the nature of the rock allows comparatively easy
and good results; and (c) the methods of servicing and access to supplies are
conducive to efficient work.
Wlienever any of or all these prerequisites are missing, the miner's ability to
"break rock" and earn his contract rate is directly and immediately affected.
And whenever a miner realizes that he is not going to be able to earn his contract
rate, he "quits" his job, goes to the surface, and rustles for anotlier workplace
which will let him make his bonus.
And the record sliows as in the instance of the major camp already referred
to that among the regular employees there is a terrific fluctuation in the continuity of employment more than 50% of the men working less than 50% of
the month in the instance cited.
Let the operators explain to the government which needs more mine output and
to the public generally why this type of management is the best they are capable
For our part, in this one item alone lies one of tlie most
of demonstrating.
imiwrtant causes of the inefficient and unproductive nature of present mining

operations.
The contract system must be modified to stop the pressure which forces men
to quit their jobs rather tlian to continue working in a stope in which they cannot "make their rate." When these men quit, no one profits the company has
no production, the man loses his pay, the government loses its vitally necessary
metal.
Naturally, rationalization of the contract system alone would not be the full
solution to continuity of employment, but it is an essential step in acliieving

vmbroken

oijerations.

USE THE AVAILABLE LABOR SUPPLY

Basic to multiple sliift operations, of course, is the question of labor supply.
Inevitably, even in the face of unemployment figures in the hands of local,
state, or Federal agencies, the operators insist that they are unable to obtain a
sufficient number of skilled miners.
From 1929 to 1939, more than 20,000 miners in copper alone were thrown out
of jobs by the closing down of operations and because of Increased productivity
per man shift, according to the Bureau of Census.
Over the same period wage earners in the lead and zinc ore industries dropped

from 25,907 to 15.544.

Nor should we ignore the fact that employment among coal miners has dropped
(for anthracite mining) from 142,<S00 in 1929 to 71,400 as of September 1941; and
for bituminous mining from 458.700' to 432.100 in the same period, according to
Bureau of Labor Statistics.
Thus, about 130,000 skilled miners were thrown out of jobs in this short period
of time. Anyone acquainted with the mining industry knows there is a constant
interchange of miners from coal to metal fields, and that skilled coal miners may
be found working in almost every metal-mining camp in the nation.
Not even the most extreme will argue that all these I'AOMM experienced copper,
lead, zinc, and coal miners have died, have become too old to work, or no longer
desire to work. Indeed, the "rustling lines" at the mining camps give first-liand
proof of the availability of miners.
A serious factor which the government must face if it agrees that every available skilled miner should be employed producing vital base metals is the practice
of the operators in the important southwest copper-producing area in refusing
to hire experienced miners, known to be union members. The most striking recent
example of this on a mass scale was the action of Phelps Dodge, Miami Copper,
and Inspiration Copper, all in Arizona, during the shutdown of the miionized
Shattuck-Denn properties because of flood. In spite of the fact that 3(K> skilled
miners ware temporarily imemployed, the companies named shut down their
employment offic(>s to avoid hiring the experienced union minei's in the face of our
defense re(|uirements.
Where th(^ operators have accepted the Union's cooiKMation. experienced unemployed miners have been supplied, and iirodnction h.as been increas(>d. At the
properties of the Tennessee Coal, Iron, and Railroad Corporation, and at the
Bessemer and Irondale mines of the Sloss-Sbellield <'o.. th(> Union i)ro])o.sed the
hiring of ".swing" men on all shifts to permit G-day operations, while retaining
the 40-hour, 5 djiy week. The I'nion furnished experienced miners for this work
from its unemployed rolls. More than 5(0 men were so employed, iuid the resultant increased production has balanced tlie furnace capacity in that aiea. which
had been increased in recent months.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4211

Another iustauce of our Union's effort to encourage uninterrupted production

througli effective use of available labor is the work of local committees to get
our men not to lay off the day after pay day. In many camps this is a serious
problem, decreases of as much as 50% in the work shift having occurred. Our
committees' work has drastically cut into these voluntary lay-offs.
But even with miners available, there are considerations which explain why
some camps will not get men.
RAISE WAGES

The Tri-State lead and zinc fields of Kansas, Missouri, and Oklahoma, for
example, have constantly paid substandard wages from 950 to $2.50 a day below
the industry generally.
The Michigan copper range wage scale is between
$2 and $3 a daj below the industry rate.
And the industry average a little above 80-0 an hour is far out of line with
the average hourly wage rates in coal mining, steel, auto, rubber, and oil refining other basic industries of our economic structure having average hourly

rates of $1

and higher.

has been commonly assiuned that the hazardous and unattractive nature of
the mining industry brought with it a compensatory wage scale, one higher than
basic industry generally pays. The contrary is true, and if many skilled miners
and craftsmen who worked around the mines have forsaken the mines to work
at easier and higher-paying jobs, the operators will have to decide to meet the
wage scales to draw such workers back.
It

PROVIDE ADEQUATE HOU.SING

Again, there are numerous mining camps where housing is both inadequate and
to permit increasing the working staff, even though miners are
Even in such a camp as the Mountain City Copper property, the
company prefers to work its miners on a 0-day week rather than to build more
houses, employ more men, and use nndtiple shift operations.
Experienced miners are to be found tliroughout the nation, particularly in such
areas as the Michigan copper I'ange where unemployment has continued as a
result of mine depletion. Rut no long-range nor adequate guarantee has ever been
proposed to these hundreds of miners that might get them to risk leaving their
only known homes, their friends, to seek out new homes and new jobs in other
mining camps.
insufficient
available.

TRAIN NF.W WORKERS

In addition to the available expei'ienced miners, we nuist take into account the
crops of young men in the mining areas ready and eager to work, able after
a little experience to become the experienced miners of the coming decade.

new

DIVIDE

THE JOBS

There are some mines in the industry

blasts, shovels, timbers, hauls his tools,

where the miner d<jes every job drills,

and so on each service part of his as-

signment taking away from his basic prockietion job.

There are other mines in which there is a degree of job specialization where
miners primarily drill and blast, others "muck" the rock, still others do the

necessary timbering.
But in no mine has the whole question of work specialization been carried out
in the most efficient manner possible. The operators have always worked on the
assumption that if they can get one man to do more than one job at a time they
are saving money.
In terms of total output and highest productivity per man shift, the mining
operators are, of course, an anachronism in industrial engineering and labor
relations. The reason for this lies in the fact that mining operations have alway.s
been more profitable even under i)oor efficiency than factory operations, and that
profits per worker tend to be larger in mining than in manufacturing; so that the
pressure for this division of labor whicli manufacturers have always felt, has
for the most part been lacking in mining operators.
If special service crews were constantly available to see that the necessary
auxiliary work was done, the miners could produce without delay.

4212

INVESTIGATION OF THE NATIONAL DEFENSE PROGRATM

SERVICE

THE MINES

Aside from more efficient flivision of work and the other problems already
touched UDon is the simple question of servicing.
Necessary supplies and tools are too often either inadequate or diflScult of
access to the miner. In many mines a miner has to carry his tools and supplies
considerable distances on foot underground in others, long delays are incurred
waiting for the ore trains to take the men.
Increased efficiency in these matters is sorely needed in all parts of the metal
mining industry. Iron ore miners in Alabama, for example, report a situation
wherein some 80 hand-loading workers are forced to transfer the ore some 25 to 80
;

feet before being able to load the ore into cars.

If the company would lay tlie
tracks right up to the face, a job easily and quickly done, the men claim they could
load 6 ore cars in the same time they now load 3.

IMPEOVE THE HAULAGE SYSTEM

1, of oiir organization, makes this

a "poorly maintained haulage system" affects

committee from Butte Miners' Union No.

specific

comment

in explaining

how

production
"It should be explained that the first operation in opening up an ore body on a
mine level is drifting on the vein. Veins are often very crooked, with numerous
sharp turns and, naturally, the drift is sometimes also very crooked, with numerous sharp turns. This drift is often used long after the ore bodies are opened up
and stoping of ore has been in operation for a long time. The ground is heavy
along the vein, the timbers are crushed in, the tracks are heaved up and down,
rock continually falls on the sides so that the track becomes a narrow, tortuous,
up-and-down little channel in a miniature canyon, with rocks, large and small,
often scattered along the bed of this canyon.
"These conditions must be seen in order for one to form an accurate idea of
the difficulty of hauling rock under such obstacles. Locomotives and trains often
become derailed, causing considerable loss of time before they are straightened
out.
The contractor suffers through all this mismanagement. He loses time
through not getting his rock hauled away, through not getting empty cars, through
not being able to get in timber and other supplies, and so on. Often he quits in
disgust, because no adjustment is made in his contract price to compensate for
the delays.
"Certainly all this is not conducive to efficient production of copper. This
deplorable condition could be avoided by earlier attention to the driving of laterals
in the solid ground and cross-cutting into the vein at convenient intervals; by
putting a few days' pay men to work keeping the laterals in shape."
Our local union recently succeeded in having Republic Steel and Sloss- Sheffield
add 100 cars each at their Bessemer, Alabama, properties.

ELIMINATE THE HOISTING BOTTLENECK

Some operators toss the question of multiple shifts aside with the comment that
their lioisting capacity is too limited to handle all the rock that can be broken in
three shifts that they cannot get all the rock out through the small shafts in
their mines.
Even in the cases where it is not practical to enlarge the shafts, to add new
shafts, or to improve the hoisting equipment generally, this does not necessarily
waive the possibilities of continuous operations.
There are some mining opeiat ions -such as the Woodward Iron Co. proi)erties
in the liessemer, Alabama, area
which operate 24 hours a day, using, two production shifts, but three service and hauling shifts.
In ca.ses wher(> more rock can be broken per shift than can be hauled away
through the shaft, the shaft can be operated three shifts a day while drilling
and blasting goes on two-shift operations.

CUSHION PRIORITIES UNEMPIX>YMENT

The

creation of new brass fabricating capacity despite the present surplus

capacity, the failure to inventory existing fabricating capacity with a view to
transferrilig such capacity into defense production
snch mismanagement has
already created, and threatens to create slill further, a major ''priorities unemployment" situation, all the more tragic in that it is so unnecessary.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4213

Our nation still needs a detailed inventory of our fabricating capacity the
number of plants, the amount and the type of equipment, the size of the labor
staff and of supervisory personnel.
With such information, defense contracts can
be allocated properly either through prime or subcontracts to all existing production units prepared to handle such contracts.
If expansion were still necessary, plants not immediately equipped for victory production should be converted where possible, rather than spending millions of dollars and using vital materials to build new plants, as well as supplying new equipment.
It is necessary to set up an apparatus whereby a trained labor force can
be made available for newly created jobs in defense, retaining meanwhile their
seniority rights and other benefits, such as group insurance, at their original
plants.

The policy of severance or dismissal wages will have to be met by industry

for employees thrown into idleness through no fault of their own. Corporation
heads witli excess brass fabricating capacity should have resisted unnecessary
expansion in the industry their employees were not consulted and should not
;

made

be

to suffer.

And,

finally, the Federal government itself, aware of the need for caring for
people not only fi'om the humanitarian viewpoint but for the sake of national
morale as well, must take immediate steps to provide adequate relief, as
though expanded
programs, wherever such layoffs take place.

its

WPA

COLLECTI\-E BARGAINING

CAN HEXP

Every factor thus far mentioned, technical or otherwise, can be most effiand speedily adusted through honest and above-board collective bargaining between the workers through their Union and the companies.
The matter of wages, of adequate housing, of poor servicing, of poor working
conditions, and Intolerable temperatures, of inequitable contract arrangements,
of multiple shifts every issue thus far discussed can best be handled thoroughly
by use of the collective bargaining machinery since the record of experience
is clear that such matters have not been rectified by nianagament alone.
ciently

And since management is not likely to make such drastic changes without
great prodding, the best guarantee of a thorough-going readjustment of production techniques in the mining industry would be for such problems to be
handled on an industry-wide basis by a joint body consisting of industry, government, and Union representatives, all with equal authority to decide upon the
necessary measures to be adopted.
EXAMINE PRICE AND PRODUCTION POLICIES
It is impossible to discuss the question of increased output of copper, lead,
zinc, etc., without coming head on into the question of price.

In view of the history of wage and price relations in this industry, it is

necessary at this point to make very clear that our discussion of the price of
these metals is based solely on considerations involving production and the
government's purchase and price policies. Labor does not seek price increases
to raise its own wages.
In the past, the industry has been able to tie wage rates to the price of the
metals through a "sliding scale" system, whereby wages rose and fell with
increases or decreases in price, and wirhout regard to such considerations as
corporation profits or living costs.
As a result, especially in times of national emergency such as this, the industry has always been able to blame labor for increased prices by saying that
the workers were pushing for higher prices in order to get the automatic wage
increases under the sliding scale.
During the last year, in conformity with a formal position adopted at two
successive conventions of our Union, our organization has finally broken the
backbone of this system of wage payments and has abolished the sliding scale,
with almost no exception, in the contracts negotiated or renewed.
We stress this so that it will be clear that the false argument hitherto used
and eventually exploded by our efforts may not be used to confuse the issue
labor does not seek price increases to raise its own wages.
But, while we are not concerned with the price structure in the industry
insofar as wages are concerned, we have definite concepts of the relationship

between price and production.

::

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4214

Fundamentally, of course,, we maintain that prices do not dig rock; that

until such conditions as have been previously discussed are rectified, the working force that makes production possible will not be able to increase appreciably
the present output, regardless of price.
see three factors which enter into consideration of the problem of prices
and production in this industry: (1) The natiu'e of the industry; (2) the time
element; (3) the type of price increase.

We

THE NATURE OF THE INDUSTRY IN

RET.ATION TO PRICE

The question

of a rise in the price of copper, or of zinc, or of lead is complicated

in mining operations none of these metals is isolated from or
independent of the others. The issue is quite different, for example, from that
involved in the case of the price of coal.
Metalliferous ores are for the most part complex ores particularly in the
case of copper, lead, and zinc.
Anaconda, for example, although a large copper producer, is also one of the
largest zinc producers.
Lead and zinc, or copper and zinc, to ignore the other
metals in the ore, are customarily found together, and are mined in one operation.
The Bureau of Census preliminary report on Copi^er Ore, issued in March
1941, points out that
"About 10% of the mine value of the (copper) ore mined and milled during
the year was derived from its contents of recoverable metals other than copper."
And this statement applies to the 40 mines specifically designated as copiier

by the fact that

mines.

Much the same situation prevails in zinc

price increases are used as a means to expand
finds itself in a position of meeting demands
industry for price increases for each of the
same

and lead production. If over-all

output, the government inevitably
from the major operators in the
dilTerent metals taken from the

ore.

For example, OPA, on October

of zinc.

On October

10,

9, granted a !(- a pound increa.se in the price

reporting this zinc price increase, the Wall Street

Journal commented
"The zinc increase may foreshadow an increase in lead prices, however, OPA
ofRciiils admitted.
These two metals are often mined together and, in mines
where the lead content far outweighs the zinc, the increase in zinc prices will
not compensate producers for higher wages or overtime pay if they increase their
operations."
During that

week representatives of the lead industry conferred with OPA

and on October 18. even though no formal action had been taken on lead
prices as yet, the Wall Street Journal reported
"But members of the copper industry feel that they should receive the same
treatment as other noiifcrrous metals with a straif/ht-linc advance in price.
They claim this would eliminate any possible charge of discrimination. * * *"
The question of the "straifiht-line advance" versus the "subsidy price increase"
Here we merely wish to point out that mine operators
will be discussed later.
having zinc-lead mines or zinc-copper mines are pressing for a straight price
officials

increase on the lead or on the copper in their ores, having already received a
price increase on the zinc in the same or*^^ ore that is dug from the same
rock, by the .same work staff using the same machinery, in tlie same operations.
The operators, it must be noted, do not argue that since their particular ore
has more lead tlian zinc the.v should therefore be given a higher price for tlie
lead alone and not receive a higher price for the zinc no; they want higher
prices for hotJi metals; they want to get paid twice for the same I'ock.
It must be iniderstood that the producers who supply the great bulk of the
nonferrous metals in our nation, and exert the major iiifiucnces in the industry,
are tightly integrated concerns dominating the copper, zinc, and lead production
and disti'ibut ion as well as the fabrication of th(>se metals.
Thus, having won an ovev-;!'l price increase in zinc, the major operators return
to Washington again in their capacitif's as "lead" producers and ask for the same
treatment that the "zinc" producers got; aiul, going out of one door, they return
to OPA through anotli(>r door, this time in the guise of "copper" producers, and
demand the same treatment as the "zinc" and "lead" interests.
This, tlieti, is one consideration that should be weighed in any pi'ice change in
the iionf(>rrous mefals niimely, just how many times should tlie United States
governuH'nt pay any one company for the same piece of rock without in any way
guaranteeing increased output?

13%

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

THR TIME

P:I,EMENT IN RELATION

T()

4215

PRICE

Indicative of the ganilile involved in giving a price increase to win more production is tlie fact that in the important Tri-State lead and zinc producing areas
of Kansas, Missouri, and Oklahoma, the press statements dealing with tlie announc-ement of the increase in zinc prices significantly asserted that this increase
would permit the continuance of the present scale of operations but would not
permit expansion of output.
Spokesman for the operators was Mr. Evan Just, secretary of the Tri-State
Zinc and Lead Ore Producers Association.
"The price increase," said Just, will enable the operators "to maintain temporarily the present rate of concentrate output * * *
"It can hardly be expected that the new scale of prices will make an important
addition to the district rate of output * * * the most we dare exiiect is
that this increase will forestall a production decline for a short time * * *
"If the defense authorities decide, as we believe they eventually will do, that
the needs of national defense require a greater output from the Tri-State
district, it is our opinion that at least a $05 concentrate price (as compared
with the new $55.8) will be necessary to make any significant increase in production which can be sustained."
Tliis is all the more amazing since the 8Vt0 a pound rate, besides being 13%
higher than the previous price, is the highest price since January 1926the
highest for any month in ]5 years and higher than any average annual price

since 1917.

We have a right, in view of such a generous price policy by O. P. A., to suggest

that O. P. A. should demand to know of the industry just ivlien the government
will get increased zinc output as a condition of keeping the price increase.
We raise this question because the operators as.sert that a price increase per se
is not .sufficient to bring forth increased production, since they must also know
how long they can count on enjoying the higher price in order to be able to
decide how much they are willing to spend on expanding production.
Since no guarantee was given by O. P. A. of the duration of the price increase
in zinc, there is little ground for hojie that the operators will take any widespread
steps to enlarge productive capacity.
TYPES OF PRICE INCREASE

Even after due consideration is given to the duplication of price increases to

the same operators because of the complex nature of the ores and after the
(piestion of a guaranteed period for such price increase is disposed of, the type
of price increase still remains a problem.
Granting for the moment that the government must buy the cooperation of the
operators for increased production for our nation's victory through a price
increase, price olficials must decide whether to give the increase on the "straight
line" basis, or in the form of a subsidy for increased production only.
O. P. A. has already created two important precedents: first in the case of
the Michigan copper country, the high cost marginal producers were given an
overall price increase for their total production; and then again in the case of
the zinc producers, an industry-wide price increase for all production was granted.
From the production viewpoint^ which is the only viewpoint our organization
is interested in
an overall price increase is not the answer to increased production.
Let it be repeated that such increases as have been mentioned were given
by O. P. A. without any guarantee in return from the mine operators that
production would be increased. The mine operators were in no way requested
or cfimmitted to undertaking any changes in production technique, in quota, in
complete utilization of their properties and equipment.
Actually the mine operators were merely given more money for their identical
output.
It is important to note that this is an industry in which the operators are able
to take advantage of higher prices by mining lower-grade ores, leaving their rich
ore in the ground for the future when prices may be lower.
No price increase should be given except deliberately and directly as payment
for additional production to each individual producer for amounts above an
established quota. In the case of proved high-cost, marginal producers an outright:
subsidy may be permissible supplemented with a guarantee that it will be maintained long enough two of three years to enable the operators to make the

4216

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

improvements and investments necessary and possible only under long-term

But the operator should be made to guarantee that such steps
operations.
will be taken.
Thus used, the price increase becomes a direct payment for each and every producer for production above and beyond present levels. It vpould not increase
This is paying for
profits for copper already being profitably produced at 12^.
what you get, not for a promise.

THE INDUSTRY COMMriTEE

Basic to this entire memorandum is the understanding that there can be increased production starting at the mines, only if conditions of labor are improved
by the various means suggested to make it possible for men to produce more
rock.
It is our firm conviction that the best guarantee of capacity operations is the
complete cooperation of labor in the victory effort, a cooperation given whole-

heartedly by labor and accepted wholeheartedly by managenjput and government.

As we have already pointed out, this industry is complex and highly integrated. It is not possible to deal with the problems of this industry on the basis
of a single metal that is, taking copper per se as an industry.
In this situation, it is necessary to create a general industry-wide NonFerrous Metals Victory Production Committee, of labor, management, and government representatives, to blanket the basic metals from the mines through the

and primary fabricators.

Such an industry-wide committee could easily deal through subcommittees with
the specific problemis relating to copper as such, or zinc, or brass, or any particular

mills, smelters, refineries,

further subdivision.

But while such an industry-wide committee is essential in dealing with the

industry-wide problems generally, the specific problems right at the bases of production should be handled through Mine Production Committees or Plant Production Committees.
Such committees should be joint management-union committees, personnel selected on a mine or plant basis by the management and the union, to meet
regularly to develop ways of increasing production from that particular unit.
Governroent-approved engineers should be assigned immediately to cooperate
with Mine Production Committees in the key mining camps.
In cases where either party on the joint committee fails to agree or refuses to
cooperate in putting to trial ideas for increased production, the issue may be
carried to the industry-wide committee in Washington for consideration if
necessary.
The function of the industry-wide committee would obviously be to deal with
the broad problems of the entire industry the amount of idle capacity in the
mines and plants; the practicability of utilizing this capacity through introduction of new production techniques or oi more modern equipment the availability
of labor; conversion of nondefense plants (as in brass) to defense production to
protection of labor's
increase production and avert priorities unemployment
rights and economic security in these changes, and so on.
The function of the Mine Production Committee or Plant Proditction Committee
would be to deal with the specific local situations. Just as many corporations
encourage employees to submit ideas for new methods and devices, so such local
Production Committees could consider suggestions and criticisms. An exiimple is
the specific criticism made by our Local Union in Torrington, ronn'Cticut. The
union contends that the type of equipment in the American Brass plant's powerhouse is old, inefficient, and not properly serviced and that the last two breakdowns in the powei-house a turbine and a generatorneed not have occurred,
seriously blocking production for victory, had the company been willing to listen
to the Union's spokesnjen.
Such jealousy by management of its management problems is out of place in
our fight for national preservation and the defense of democracy. These breakdowns, for example, did not profit the company. They cnused hundreds of men
This could
loss of work and the government serious delay in vital production.
have been avoided. This must be avoided in the future. Management must
recognize labor's right to full participation in the defense effort, starting right at
the production line.
The creation of such n committee, the joint nnd cooporativo efforts of labor,
management, and government, anjicably, intelligently, and scientifically, is the

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4217

cornerstone of capacity production for our nation's victory. Its acceptance by

management would be clear-cut evidence that management's "business as usual"
outlook lias finally been replaced by "everythiag for victory."
The resultant
cooperation of the three groups labor, management, and government would put

an end to the guesswork and trial and error of the existing set-up in the industry.
To facilitate the development of this program and this relationship, the Executive Board of this organization at its recent meeting in Denver created a special
Victory Production Committee of the International Union of Mine, Mill & Smelter
Workers to work with the government through its various defense agencies.
The International Union of Mine, Mill & Smelter Workers Victory Production
Conjmittee is headed by International President Keid Robinson Executive Board
Members William Mason, Ralph H. Kasmusseu. and Jess Gonzalez, and International Representatives Allen McNeil and Don Harris are members and Research
Director Ben Riskin serves in Washington as its executive secretary.
Towards such a program for all-out production to guarantee victory to smash
Fascism towards complete unity between labor, management, and government,
;

the International Union of Mine, Mill

and ready.

&

Smelter Workers, C.

I.

O.,

stands pledged

Exhibit 333

United Electkical, Radio & ^Ivchine Wokkeks of America,

December 11, 1941Mr.

Hugh

FtrLTON,

Chief Counsel, Truman Committee, Investigating the

National Defense Program,
Senate Office Building, Washington, D. C.
Dear Me. Fttlton I regret that contrary to my expectations my doctor
believes that I am not sufficiently recovered from my attack of the grippe to
appear before the Truman Committee, Investigating the National Defense
:

Program, today.
Consequently, I am enclosing copies of the statement I intended to make.
These are in stifficient number to supply members of the Committee and the
press.
I would appreciate it if you will indicate my regrets for being unable
to appear personally before the Committee ten present this statement, and I
should like to have this statement of the United Electrical, Radio & Machine
Workers of America included in the record. If possible, I suggest it be inserted following the testimony of the representative of the Mine, Mill &
Smelter Workers.
I am expecting hourly, to receive a supplementary memorandum on unused
lead producing capacity, from our representatives in the Missouri area. When
this arrives I shall send you a copy in the hope that it may be included in
the record of these hearings as relevant to the entire question of the subject
of nonferrous metals.

Yours

sincerely,

Russ NiXON.

Stateiment by the United Electrical, Radio

& Machine Woekeks

of

Ameeica Inteknational Union

(Submitted by Russ Nixon, Washington Representative of the Union)
I.

summaby

Defeat of the enemies of the United States depends in large measure on the
quality and quantity of our arms.
Metals are thus of crucial importance to victory. One of these metals is
copper.
In respect to copper, there are two main kinds of difficulty which function
as obstacles to victory: (1) insufficient supplies due in part to artificial and
unnecessary restrictions of output; (2) irrational distribution of such supplies
as we have.

4218

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Office of Production Management has issued public statements, press

releases, announcements, etc., in unparalleled quantity, but the net result insofar
as copper is concerned has been to increase the output of copper by substantially less than 10 percent, a dangerously small amount in view of the present
requirements.
These shortcomings can be overcome, as they must be overcome, by (1) insistence on maximum production of copper, vpith government operating of mines
for the duration as the alternative; (2) bonus prices where necessary for
extra production, not all production; (3) institution of such labor conditions
as will makei full-shift operation of all mines a practical possibility; (4) the
development of substitutes for copper on a broad scale.
As a long step toward attaining maxinunn production of copper, the Union
fully endorses the plan for nonferrous metals of the Congress of Industrial
Organiaitions as drawn up by the International Union of Mine, Mill and
Smelter Workers.
This Union, the U. E., in view of the national crisis, has laid great stress
in its own activities on the transformation of nondefense plants into defen.se
plants.

These remedies are matters not only of policy but of execution of that policy.
The means at the disposal of the Senate and the House of Representatives
are necessarily limited, inasmuch as neither body is primarily an executive
Nevertheless there is much in the way of declaration of public policy
The greatest single thing that
in legislation which the Congress can do.
can be done is to make public the shortcomings, explain to the people the
danger that lies in these shortcomings, and insist that the Executive Branch
of the Government take speedy and effective steps to administer a correct
policy in a correct and efficient way.
Eventually it will be found that maximum efficiency will not be achieved in
these important fields until labor is admitted into full working partnership
for the purpose of defending the nation, and for that purpose only. Labor
does not make its cooperation in defense conditional upon such representation
Labor does, however, point out that
or, indeed, conditional upon anything.
to cooperate effecthere is no such thing as "cooperation" in the abstract
tively and fully, there must be concrete, practical machinery for such cobody.

and

operation.
I.

THE PBOBLEM

The very occasion of this hearing

of copper is widely understood.
The quality and quantity of our

shows that the urgency

armaments are

of

maximum

decisive in this

supply

war against

These armaments are made, in the main, of labor and of metals.

This Union the United Electrical, Radio & Machine "Workers of America
(an affiliate of the Congress of Industrial Organizations) inasmuch as at
least 75 percent of the more than SoO.OOO men and women working under its
collective bargaining agreements are engaged in defense work, is intimately
the enemy.

concerned with the labor factor in this production of arms.

In addition, we have had to concern ourselves with the metal factor in this
production. It is clear that shortages in metals function as material aids to the
enemy.
One such metal is copper, the importance of which in defense material and
machinery is obvious. For cartridge and shell cases alone, the 1942 need for
copper even prior to the attack on us by Japan was estimated at nearly one-third
of the estimated total annual supply.^ Prior to the Declaration of War, the
military and lend-lease requirements of copper were estimated, by the O. P. INI.,
The plans as of that time relied on Latin America for OOOOOO
at 1,050,000 tons.
Essential civilian needs were put at 250,000 tons, leaving 350,000 tons to
tons.
meet an estimated demand for 1,100,000 tons for nonessential civilian needs."
These estimates were made prior to the Declaration of War. It goes without
saying that now the military and lend-lea.se requirements will be much greater,
and that by reason of shiiipiiig dislurbances thei-e is a cliauce tluit the imiiorted
supplies will be, at least temporarily, reduced.
It nuist be noted further that in
^ Ttie Office of rrocluction Manasemont recently estimated the total annual supply at
l.G.'SO.OOO tons of copiior
the annual consumption of copper for cartridge and shell cases
;

.'').50.000 tons per year.

iiThc Wall Sticci .lournal, Doceniher

alone at

8, p. 2.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4219

public by the Office of Production Management

in the spectacular instances of aluminum and
steel within the past year and a half.
What it comes to is one simple, hard fact the Nation must have vastly more

past instances

have tended

all

estimates

made

to be too small

as

copper.
II.

IBRATIONAI, DISTRIBUTION OF AVAILABLE SUPPLIES

This over-all shortage in copper has spotlighted the secondary problem of hovr
such supplies as we have are distributed. Unreasonable methods of distribution
would not be so damaging were the total supply larger.
The Committee will be well aware that a labor oiganization like the Committee itself must necessarily judge the merits of the distributive practices of the
past by the results, and not by a detailed criticism of this or that isolated order.
Labor Is not represented in the executive agencies of defense. Labor does not
know what factors induced the responsible persons to Issue this or that order,
take this or that step. Labor does not know the detailed, day-to-day history of
this important governmental function
and, indeed, there is room to doubt that
the Office of Production Management itself is as well informed as national necessity

would require.
But the kind of

results

which the Nation has been getting can be dramatically

illustrated by this

On the day that the United States declared war against the Far Eastern partner
of the Fascist Axis, the manufacturers of copper products in the United States
were at that very moment waiting for long-overdue December allocation certificates, according to our information.
Under efficient operation, these certificates should have been completed at the
very latest by two or three days prior to December 1. But on December 8 they
had not been completed. In other words, when this Nation went into a war for
its very existence, the outcome of which war depends very umch on the metal,
copper, the Office of Production Management had not yet gotten around to issuing
allocation certificates for the month.''
The copper industry quite rightly under the circumstances, but also quite
illegally
then went ahead and allocated the copper without waiting any more
for the required presentation of O. P. M. certificates.
But even if the certificates had been on time, as they were not either in December
or in November,* there remained the still more important question of how the
supplies were distributed.
The system of distributing copper went through three main periods.
First, there was the so-called "priorities" system of the O. P. M.
Under this method, as the Conunittee knows, ratings determined simply the
order in which copper requirements were met.
A manufacturer holding a certificate of rating would have no sure way of
knowing when he would get the metal. He knew how far down his requisition
stood, but he did not know wlien it would be reached, if ever.
As a result, planning of production at best not an easy process, but one that
is essential to defense
became virtually impossible.
The second, transition, period began when the Supplies. Priorities and Allocations Board (the "SPAB") was set up under the Chairmanship of Vice-President
Wallace in an attempt to remedy the shortcomings of the "old" O. P. M. system.
It had become clear that the priorities system was not working.
SPAB therefore instituted allocations instead of priorities. Under allocations, the O. P. M. simply says who can have how much copper
and when, and
for what purposes.
So far as copper (and most other essentials), allocations now
have entirely replaced the priorities method.
Although SPAB definitely improved what was a most disturbing breakdown
in efficiency of O. P. M., SPAB was and remains a policy-making board.
The Committee understands, of cour.se. that the right policy is meaningless
until it is rightly and efficiently pnt into practice.
SPAB therefore encountered the difficulty of sound policies put into practice in
unsound ways. The policies as declared of SPAB have been in our opinion the
right policies.
SPAB began its work by calling for an all-embracing survey of the actual facts
of the problem.
SPAB tackled the problem of subcontracting and spreading

The Wall Street Journal. Decemher 9,

The Wall Street .Journal, December 2,

311932 42 pt.

10

32

p.

12.

p. 10.


4220 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
orders to firms other than the giant monopolies. SPAB announced the policy of
exploitation of sources of raw materials.
But the facts are, in face of these entirely correct policies, that no such survey
has been made, that the necessary facts are not known, that subcontracting
remains as a problem solved only to a small degree, and that we do not have
maximum exploitation of raw materials.
Indeed, when Donald M. Nelson, Executive Director of SPAB. appeared on
November 27 before a subcommittee of the House Appropriations Committee, and
when Mr. Nelson was asked what had become of SPAB's "leave no stone unturned" policy of boosting production of metals, he was unable to reply and
said he would have to turn the question over to SPAB to answer, if possible,
at their next meeting.^
There have been quasi-ofiicial charges of favoritism in the distrlbuton of
metals. The Rural Electrification Administration's government-owned power
projects have been denied copper, wliile private utilities have been able to get it
There have been widespread reports of bootlegging and viofor their lines.
lations of 0PM allocations.
Bootlegging is almost an inevitable by-product of the inefficient means of disInstead of driving and all but forcing the manufacturer to
tributing copper.
beg and even violate regulations in order to get enough copper to stay in business, the administrative agencies should rather work to put these manufacturers
in a position to get copper for use in defense, rather than nonessential consumer,
production.
III. SOME HARMFUL EFFECTS OF THESE SHOKTCOMINGS

maximum

The dislocations resulting from these and many otlier irrational actions in the
distribution of copper are, of course, one of the reasons for this hearing.
are able to cite, out of our experience, a few examples. Almost any
individual or agency which has had to tackle this problem, as have we, will be
able to expand the list.
It must be borne in mind that the apologists for these inefficiencies in
itself tend
quite understandably to represent each failure and each blunder
as an unfortunate exception to a generally satisfactory performance.
But many other labor organizations, as well as many employers and employer
organizations, will agree we believe with our view, based on some eight months
of almost daily contact with the 0PM, that the failures are the rule, and the
successes are the exception.
Indeed, we know of only one example in our experience in which a consumergoods industry was successfully transformed, with fair efiicieucy, into a munitions-producing industry.*
The Solar Manufacturing Company at Bayonne, N. J., required an amount of
fabricated copper by November 15 in order to produce essential communications
equipment. The Kenuecott Copper Company (one of the three dominant firms
the others being Anaconda and Phelps Dodge with their subsidiaries and atfiliOn December 1, however, there was
ates) promised delivery by December 1.
no delivery instead, a new promise of delivery by December l.j. As a result, the
production of this equipment has been delayed.
A firm under contract to this Union, the Foster Wheeler Co., at Carteret, N. J.,
bid successfully on an order of red brass copper tubing for a defense housing
are informed that an internecine dispute arose between the Housing
project.
Authority and the Office of Production Management, which resulted in a refu>;al
A.s a result, the comof the
to issue a priorities rating on this material.
pany lost the order, and the tube mill went from 5 days of work per week to
2 days.
Recently the Navy needed 4.000,000 pounds of red brass tubing, to be delivered
within three months' time. The only plant able to do this job within the time
limit was the Foster Wheeler plant at Carteret. N. .7.
Tliis firm was able to bid on approximately 15 percent of the order; that is, the
firm was ready to deliver 15 percent of the total within the three months.
Although the Foster Wheeler bid was just as low as that of the Bridgeport Brass
Company, the latter company bid on the entire order. And despite a policy.

We

0PM

We

0PM

= The Wall Street .Tournal, Novcmer 28. p. :5.

The example is that of the washinsr-mnchine imlustry, many plnnts of which are now
proflnpuiK machine-gun nioiints and other riefensi> jirtich-'s. th;\nl;s to a very intensive and
Although thi.s
detailed work on the i)rol)leni by tlie industry. tli(> (I^[. and this Tnion.
example is outstanding, there remain so many diflienlties as to make it merely an eneoiu'aglng example of what could be done were there more elflcient work on such problems.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4221

5, of .splitting up such large orders in order to speed up

delivery, the order was warded in toto to the Bridgeport company.
The result of this is an unnecessary delay in the Navy's getting its material,
and a lay-off of employees at Foster Wheeler.
In gist when allocations are made in an irrational manner, plants are entirely
disrupted. A manufacturer expecting to get a certain amount of copper suddenly
learns that he cannot get it, after all.
As a result, machines which might better have been producing and working
men and women who might better have been on the job are thrown into idleness.
There is thus a loss to the Nation, a loss to the employer, and a loss to the

announced September

employees.
This Union has had to handle scores of cases of dislocation and unemployment
due to insufficient supply of copper.
Our efforts have been directed toward converting non-defense plants into plants
producing defense goods, rather than seeking to maintain consumer goods production at existing levels. It is necessary to differentiate between what are commonly called consumer goods which do not serve a useful purpose in the defense
of the United States and those other kinds of products which, although technically classified as "consumer" goods, are necessary to total defense of the
country even though they are not munitions, as such.
IV.

ABTinCIAL EESTBICTIOXS OP SXJPPLY OF COPPEK

As we noted earlier, the harmful effects of irrational distribution arise fundamentally from the fact of not enough copper.
This union's membership is concerned not with the production of copper but
with the fabrication of copper and manufacture of machinery and articles of
copper.

The union whose members mine and process copper ores will be in a position
therefore, to present the Committee with a wider range of facts bearing on the
shortage of copper itself.
will call attention, however, to the fact that it is the arificial and unnecessary restriction of output which is of particular danger to the United States and
its security.
By refusing to mine so-called high-cost ores, by ceasing to mine rich ores when
the government -pegged price makes it profitable to mine iKior ores, by interminable
bargaining for special advantage before opening up new mines or reoijeniug up
new mines or reopening old ones, by deleterious labor conditions which make
full-shift, efficient mining a human impossibility, by long delays, the owners and
operators of the copper industry are throttling the supply of copper.
The public is continually misled by announcements of new plants, and new
This gives the nation a false sense of security, inasmuch as the
facilities.
average citizen is under the impression that much is being done to expand
copper production (and production of other metals). Rut the expansion is not,
in fact, taking place fast enough or on large enough a scale. The recently announced Ciistle Dome-Miami Copper $!,<)00,000 expansion, for example, will not
be in operation until late in 1!>42 perhaps too late.' Often, what are plants
merely for the more profitable processing of ores are mistaken for improvements
to produce more copper.
Also, when the Oflice of Price Administration permits a special "bonus" price
for copper, the public tends to believe this is a bonus for extra production. The
fact is too often that the higher "bonus" price permits the companies to mine
Thus the total production
their poor ores and to curtail mining of rich ores.
of copper is not materially increased.
effort
As of a recent date, the net practical result of the many months of
to increase copper production has been to raise production about 105,000 tons
annually.*
The point requires no belaboring the copper is there, the Nation must have
the copper, and no obstacle can be permitted to stand in the way of getting
that copper.
The Congres sof Industrial Organizations and its President, Mr. Philip Murray,
have prepared a plan for getting maximum production of nonferrous metals,

We

OPM

Wall Street Journal, November 22, p. 10.

Wall Street Journal, December 8, p. 2.

4222

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

based on the wide experience of the union in this field, the International Union
of Mine, Mill, and Smelter Workers.
Our Union fully indorses this plan as the way to boost copper production to
the utmost.
V. WHAT CONGRESS CAN DO
of the United States is, of course, not an administrative body and
thus at a disadvantage in seeking to remedy shortcomings that arise in the
main from administrative weaknesses.
The Senate can, of course, declare jointly with the House the policies of the
Government in this crisis. But it cannot minutely supervise the putting of these

The Senate

is

policies into effect.

it may seem at first, a great service can be rendered to the
the Senate and this Committee will bring to the nation all the facts

Undramatic as
nation

if

in this respect.

The Congress will find that 09 percent of the i)eople of the country will energetically support any campaign to put the Ofiice of Production Management and
the defense of the Nation on an efficient basis.
The Congress would also contribute much to the nation by doing everything
possible to bring about adequate and bona fide representation by labor in policymaking and policy-executive agencies and bodies of the Executive Branch.
Lahor docs not attach any conditions ichatsocrcr to its fullest coo/jeration in
war effort.
Labor d(jes not say, we will cooperate // we say we will cooperate, regardless
of conditions and regardless of whether a full partnership is accorded to us or

the

not.

We

do point out, however, thnt cooperation cannot take place in a vacuum.

Cooijeration lias to be concrete and specific. Labor can cooperate most effectively only in specific ways, on specific px'oblems, with specific agencies or bodies.
This is why labor urges that labor be accorded a place in the partnership of
government, employers, and employees for the single purpose of defending our
country.
In this partnership, labor does not seek to assume the functions of either
government or employers, nor does hibor expect government or employers to take
over our functions.
We desire a partner.ship in which each partner contributes everything he can
toward the single objective of destroying, once and for all, the Fascist Powers
which are the enemies of the United States.
Even the Conservative British Government soon had to accord representation
not as a concession, but as a means of greatly increasing the effectiveto labor
ness of the uxir effort.
Every week during which labor remains a willing, but excluded, participant in
this national task, is a week during which the nation is being defended less well
than it could be.
The great Unions of the United States want 100-percent effec-tiveness in niatioual defen.se. This degree of effectiveness cannot be achieved until labor is an
active part of policy making and policy effectuating.
The way to cure the past defects of the defense program and to guarantee
against any further break-downs, blunders, or .><candals. is to admit the organized
labor movement into full partnerslii]i in the national efifort.

Exhibit No. 334

[From the Congressional Record, September

4,

1941]

Mr. Johnson of Colorado. Mr. President. 1 thank the Senator from Georgia
and the Senator from Connecticut.
It must be aijparcnt to everyone who has liiven tlu> subject nnich thought that,
so far as taxation is concerned, the mining indnsti'y must be treateil on a different
basis than other industries.
In an effort to t>stal)lisli the principle of permitting
a credit based upon the normal profit jier unit of mine iiroilnction. it was suggested by me in committee tliat the (Irafting experts slumld be instructed to
l)repare an am(>ndmcnt to the bill which would prevent the excess-profits tax
from being unfairly apjilied to the normal profits of mines.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4223

It was suggested that the draft should be based upon the following principles
First. Where the normal profit i)er unit of production is determinable ou the
basis of past exijerience, the excess-profits credit should include such normal
profit per unit ou the production of the taxable year.

Second. In the case of new corporations or mines not operating on a commercially profitable basis during the base period, a normal profit should be determined as if the mine had been operated in a normal manner during the baseperiod years.
Third. The foregoing provisions .should be limited solely to mining proflt.s. No
increased allowance should be made with respect to profits from other than the
mining operations. The normal profit from mining operations should be added
only to such credit for base-period earnings or invested capital as is properly
allocable to operations or investments other than mining.
Such an amendment was offered by me in the committee and was referred to
the Treasury Department. The Treasury Department said the matter was very
technical, and would require considerable study; th'at they thought perhaps it
could be brought up later, at a time when technical matters pertaining to the
administration of the taxation problem would be before the Congress; and so
action was postponed by the Finance Committee on the amendment I olfered.
I ask unanimous consent to insert in the Record at this point a letter from
Mr. John L. Sullivan, A.ssistant Secretary of the Treasury, with respect to this
matter.
The PRESIDING OFFICER. Without objection, it is so ordered.
The letter is as follows
TRE.\sn{Y Department,
Washiiif/toi), September 2, 194iHon. Edwin C. Johnson,
United Stateft Siennte, Washiiif/ton, D. C.
My Dk.ar Senator In accordance with the action adopted by the Senate
Finance Committee, I have requested that a study be made in this Department
of the amendment that you submilt(>(l to H. R. 5417 with reference to a credit
If. as a result of the
based on the normal profit per unit of mining production.
study, any amendment of this character is deemed .-idvisable. a provision will
be drafted in time for insertion in the next revenue bill.
:

Sincerely,

John

L. Sttixiv.\n,

Assistant f^eeretnnj of the Treai^unj.

Mr. JOHNSON of Colorado. My amendment proposes to

by adding a new subsection reading as follows

amend

section 713

"(h) Corporations engaged in mining

"(1) A corporation engaged in the n)ining of natiiral d(>posits shall be entitled under this section (with i-espect to its mining operations) to an excessprofits credit equal to the normal profit per unit of production for its entire
production during the taxable year, in addition to such other excess-profits credit
as may be allowable mider tiiis subchapter which is propc^rly allocable to its
operations other than mining.
"(A) In the event that the taxpayer was actually in existence at the beginning
of its base period and was, during all or a part of such base period, engaged, on
a connnercially profitable basis, in mining operations similar, except as to the
volume of production, to those cnrried on during the taxable year, then the taxpayer's normal profit per unit of production during the base period (excluding
the year or years in which there was a deficit in excess-pi'ofits net income) shall
constitute the taxpayer's normal profit per unit of production for the purposes of
this subsection.
In computing such normal profit per unit, the adustments prorided by section 711 (b). so far as applicable, shall be made.
'(B) If the taxpayer was not in existence at the beginning of its base period,
or if it was not. during all or a part of such base period, engaged, on a commercially profitable basis, in mining operations similar, except as to volume of
production, to those carried on during the taxable year, then the normal profit
per unit of production shall consist of the base period profit per unit of production which the taxpayer would have realized if it had been so engaged during
Such normal profit per unit shall be computed by assuming
such base period.
that the taxpayer had sold in each year of the base period the number of units
which it could have produced and sold, with due regard to the average prices
and costs of operation prevailing in each base period year, except that the

4224

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAJM

number

of units assumed in such computation for any base period year shall
not exceed the number of units sold In the taxable year.
"(2) The term 'base period' means, for the purposes of this subsection, the
base period as elsewhere defined in this subchapter, but if the base period of a
taxpayer is not elsewhere so defined, in such case the term 'base period' means
the calendar years 1936 to 1939, inclusive.
"(3) This subsection shall not apply if the excess profits credit computed
under section 713, without the application of this section, or under section 714,
exceeds the amount of the credit computed xuider this subsection.'"
Tlie reasons back of this amendment are, briefly stated, as follows:
First. Mining companies as a rule did not have sufficient base-period income
to serve as a sufficient credit for excess-profits taxes.
Second. The prices of metals have been stabilized at a figure very little, if
The industry is
any, above the average prices over a ijeriod of 40 years.
cooperating willingly in keeping prices of metals down during the emergency.
There is no profiteering in the mining industry in the West.
Third. The defense authorities are urging increased production of metals in
order to meet requirements for weapons, plant expansions, and civilian demands.
The result of this combination is that if the mining companies increase production by taking out more units during the emergency than over the base period,
chey will receive but little above the base period price per imit. and yet the
The
profits, because of increased production, will be considerably greater.
mining industry must use up its capital in its production of units of metals
It
taken out under these conditions, and the capital can never be replaced.
At the end of
differs from the ordinai-y industrial enterprise in this respect.
The emergency the mine operator, because of his willingness to comply with the
request of the Government for increased production, may see his mine exhausted.
Accordingly, I have urged an amendment to H. R. 5417 which would permit
a credit based upon the normal profit per unit of mine production. That is,
increased profits would not be subject to excess-profits taxes unless there were
an increased price per unit of production. The following example will demonstrate what I am asking for
If the normal production of a mine was 10,000 tons of ore for a normal
profit of $2 per ton the mine would have a total normal profit of $20,000.
If because of the need for metals for defense purposes production were
stepped up to 15,000 tons at the same rate of profit namely, $2 per ton
Under the proiX)sed
the mining company would have a profit of $30,000.
amendment, it would be recognized that this represents only a normal profit
on the units produced and the $30,000 would not be subject to excess-profits
tax.
If on the other hand the profit realized on the 15,000 tons weie to be
$3 per ton or $45,000, the increased profit of $1 per ton, or $15,000, would
be taxed as excess profits.
The Treasury Department has promised that this very just demand upon the
part of the mining industry will receive study and that if deemed advisable,
the amendment will be drafted in time for insertion in the next revenue bill.
I wish it understood that I shall urge this amendment both as a matter of
justice to an industry which is essential to our national defense and as a
means of increasing the production which is so sorely needed during this
emergency.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4225

Exhibit No. 335

Appendix 1. Copper use for

all

purposes by the electric utility companies, year

19Jtl
[Short tons]

Item

4226

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

"ExHiriT No. 338" appears

in full in the text

on

p.

3876

Exhibit No. 339

Commissioner H.

L.

David B. Scoll

Vickebt

Mabch
MEMORANDUM OP CONFERENCE ON SAVANNAH SHIPYABDS,

28, 1941.

INC.

conference took place in Commissioner Vickery's office, March 27, 1941, at

Commissioner Vickery, Mr.
p. m., at v^'hich the following were present
J. E. Schmeltzer, Mr. Frank Cohen, Mr. James French, Mr. Crowley, Captain
Court, and Mr. David E. Scoll.
Mr. Slacks entered after the conference began.
Mr. Crowley handed me a letter addressed to Admiral L:\nd which he stated
had been prepared in response to my request over the telephone Wednesday
morning for more information concerning the people that they planned to hire
I gave the letter to the Commissioner, who,
for the shipbuilding operation.
after reading it, asked Mr. Cohen what he wanted us to do. From that point
on considerable discussion took place, the gist of which was that the Savannah
Port Authority people wanted some assurance from the Maritime Commission
that the pensonnel which Savannah Shipyards, Inc., planned to hire is satisfactory before the Port Authority will go ahead with the deal they have
with Mr. Cohen relative to the lease of land and issuance of bonds to pay for
the construction of facilities. The details of this transaction are set forth in
the memorandum accompanying Mr. French's letter to the Chairman dated March
4

00

20, 1941.

Mr. Cnhen stated that someone had told the Port Authority in Savannah that
are not satisfied with their proposed personnel and that the Savannah Port
Authority were, therefore, holding back. During the course of the conversation,
I asked Mr. Cohen point blank whether, if we had no objection to the personnel,
Savannah Shipyards, Inc., was prepared to go ahead and build their facilities
without any assurance of a contract from us. Commissioner Vickery added that
we might indicate that we ai-e not opposed to the construction of facilities by the
Savannah outfit. Mr. Cohen replied that he was certain that if they built a
shipyard they could get ships to build because more ships must be built by
somebody. Commissioner Vickery agreed that if the war continued, ships would
have to be built and that obviously if there was a .shipyard at Savannah, manned
by comiietent personnel, we would pass work to them. Commissioner Vickery
emphasized, however, that his policy up to now has been to expand existing

we

far as possible for the construction of additional ships and that

to construct additional yards, although he has considered
Savannah as a possible place for an additional yard if one is to be built. Commissioner Vickery also pointed out that our policy has been to distinguish between the Emergency Ship Program and the regular program; that we are not
putting any of the regular ships in the emergency yards, and do not intend to do
so.
During the course of the conver.sation Mr. Cohen indicated that he would
take contracts on a fixed-price basis and preferred not to work on a cost-plus-fee
basis. Captain Court, on the other hand, stated that in his opinion the cost-plus
basis was the safest, but that he was only the hired man and Mr. Cohen could
decide for himself what kind of contracts he wanted to make.
Cai)tain Court produced a sketch of a shipyard for ten ways, explaining that
he thought six ways would be suflicient. He also exi)lained that the people they
])roposod to u.se for .shipbuilding brains were men now woi-king in existing y;irds
who, because of seniority, could not rise any higher and were, therefore, good
prosi)ects for a new organization.
Mr. Cc.'hen produced illustrated circulars
.showing the products maniifactured by the Vidcan Iron Works, stating that unless it interfered with our iiurcbasint>- system. h(^ would, if he received a contract,
like to secure his machinery and other items from the Vulcan Iron Works and
other companies which he controls.
Finally the conversation boiled down to the point that Mr. Cohen wanted us
to indicate to the Savannah Port Authority that we iire not ojijio-sed to the
pi'oposed personnel for the new yard.
Mr. Butler, of the Savainiah Port Aufacilities

.so

he does not want

IXVESTIGATIOX OF THE NATIONAL DEFENSE PROGRAM

4227

was sent

for and entered the conference shortly thereafter in the

Mr. Butler stated that they were anxious to
of Mr. Charles West.
protect both themselves and Mr. Cohen in this Yeutnre, and that he wanted to
be able to tell the meeting of businessmen which would take place in Savannah
today (Friday, the 28th) that the Commission is satisfied with the general
character of the proposed set-up. Commissioner Vickery then stated to Mr.
IJutler that as far as he could tell the proposals made were feasible and that
we had no objection to the Savannah Shipyards going ahead with arrangements and construction of a shipyard, although we are in no position to offer
any assurance of a contract at this time. Mr. Butler stated that of course the
Savannah Port Authority did not want to authorize the construction of a ghost
town, whereupon it was generally agreed in discussion that in view of the present
national emergency it was unlikely tliat any shipyard available in the near
future would be a ghost town. Commissioner Vickery then mentioned the fact
that there was going to be a great deal of repair work for the Bfiitish, anfl
that this was just as profitable as shipbuilding.
The meeting closed with a general understanding that the Savannah Port
people and Mr. Cohen would go ahead with plans without any assurance of a
thority,

company

contract from us.

DA\aD E. SCOLL.

Exhibit 340
British Purchasing Commission

tank and transport

1333

Street

division

NW.
30 December. 1940.

The ViMALERT Company.

Limited),
807 Garfield Ai^enue, Jersey City,

(Attention of Mr. Bernard

J.

New

Jersey.

Flynn.)

Dear Sir Further to your letter of December 18th, we confirm that we have
received authority to place an order for 1,000 Liberty Engines subject to the
following:
(1) You agree to our accountants examining your costs, and that the price of
the engines shall be taken as your cost plus 107c for profit, with a maximum of
:

$8,000.
(2)

We

are to obtain sanction for the necessary P. N. R. In addition, it is

propo.sed to defer signing the formal contract for a little while.
understand that the new drawings which are being sent may allow you to
reduce the cost.
should be obliged if you would proceed with the order for 1,000 engines
on the above
with an option in our favour for a similar quantity.

We

We

Yours

truly,

G. S.

Murray.

Exhibit No. 341

The Vimalekt Company,

Ltd.

807 Garfield Avenue

jersey city,

n.

j.,

u.

s.

a.

May
Re

15,

British Purchasing Commission, Lend-Lease Requisitions #195, 881.

alert Company, Ltd.
:

IMl.
Vim-

Lieut. Colonel W. W. Warnek,

Chief of the Artillery Industrial Service,

Ordnance Department,

War

Department,
Washington, D. C.
De:ar Colonel Warner: Mr. Flynn has reported to me his attempts to reconcile
difficulties with you concerning the price at which Vimalert Company, Ltd., is
prepared to fill the requisitions numbered above.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4228

This letter is an attempt to find some ground on which Vimalert Company,

can both meet your very legitimate and commendable concern that the
United States should not be profiteered against, and at the same time be fair to
The proposal made in this letter has been discussed with ofiicers of the
itself.
British Purchasing Commission and is, I understand, to be acceptable to them.
These requisitions are for the purchase of certain existing machined component parts of Liberty Engines which we have now on hand. These parts are interchangeable with the parts of iSJuffield Engines now being used in British tanks.
All items of parts in the requisitions have been approved as interchangeable with
the parts of NuflSeld Engines by the engineering staff of the British Purchasing
Ltd.,

(Vmimission.
Substantial quantities of these parts have already been inspected and certified
by such engineers so that there is no question of either their quality or their
inmied'ate deliverability.
The British particularly desire these parts because they are immediately available, now, without any of the risks or delays of manufacture.
Substantially this
is the only supply of such parts so available iwiv; replacement will admittedly
take from 6 to 18 months for manufacture, varying with particular parts.
Disregarding previous negotiations, Vimalert makes you the following proposition

Vimalert and you will agree that the price of these parts shall be their
replacement value as determined by actual inquiry into the prices at which equal
quantities of identical parts can be contracted for in the present United States
market, for delivery within a reasonable time.
(2) That determination shall be made by any fair third party arbitrator either
you and Vimalei't can agree on, or the Undersecretary of War shall appoint.
(3) All prices, as so determined, shall be substituted in our present offer, in
(1)

lieu of the prices therein quoted.

This means replacement price for manufactiu'e and delivery within a reasonable period, as determined by a competent and impartial umpire.
shall not
ask for something to which in fairness I should think we would be entitled
premium for the advantage that the parts for which we ask such replacement
value are available not within a reasonable time, but noiv.
There is a very special reason why price of replacement is the only fair measure
of price for the component parts the British seek to purchase from us.
The British are ordering only particular items out of the reasonably complete
nets of engine parts we have on hand.
To give the British only the particular
parts they require i. e., only the parts which are interchangeable with the
|)articular Nuffield adaptation of the Liberty Motor
requires that we break up
much larger interrelated sets of parts which we have on hand. These larger sets
of parts have an important use, as sets, in a type of engine used by the Coast
Guard, among others. In that engine are used all the particular parts which the
British are requisitioning, plus a very large portion of the remainder of the sets
which would be left on hand as "orphans" after the British requisitions.
The net result of filling the British order will therefore be to "break sets,"
and to leave Vimalert with corresponding amounts of "orphan" parts. The
value of such "orphan" parts will be substantially reduced unless we are prepared and able to fill out the sets by replacement of the parts which have been
sold to the British.
Replacement price is the only fair measure of price for any inunediately
available commodity. But we think it is even less than a fair measure of
value when only a portion of a set is sold, leaving the rest of the bix)ken set
with only an "orphan" value pending replacement. We cannot feel that there
is even a shadow of profiteering when we offer to let the British take their
own choice out of our stock at present cost of replacement.
In our previous negotiations as to the price of such parts, you first proposed
a method of computation which in the state of our records is practically impossible, i. e., historical cost of these parts, plus carrying charges, plus a
percentage of profit.
That is, if we have understood you correctly, you have asked us to do a
cost accounting job to determine what is has cost Vimalert to acquire each
of these parts.
That acquisition has occurred over a long period of years.
We have frankly told you we do not know with any accuracy what the costs
have been. An attempt to compute them would be costly and of no value.
Price in all practical commercial relationships deptMids upon the intrinsic
value of the goods, not upon the personal hi^;tory of a particular seller.

We

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4229

Suppose, for instance, that we could determine costs. Suppose two months
ago we had sold half of these parts to another supply house at a price far in
excess of cost and then both ourselves and that purchaser offered you similar
parts for sale. Under your theory of historical cost-plus, the purchaser from
us would be entitled to a much higher price from you for his half of the parts
than we would be entitled for our half of exactly the same parts we had

kept on hand.
Because of our inability to supply historical costs, you have suggested that
prices on these requisitions might be determined by the unit inventory prices
at which these parts are carried in an Army Ordnance "Uniform Nomenclature
1928 was 12 years ago, in a different labor market,
(.f Tank Parts," dated 1928
fn a different materials market, in a completely different replacement market.
We understand (possibly erroneously) that the purpose of this catalog was
not to quote prices at which particular items of these parts could then actually
be purchased in the commercial market, but merely to establish inventory value
of supplies the Army had on hand without regard for the overhead or engineering costs of a going commercial business. But whatever the value of these
inventory catalog prices for other purposes, certainly even in 1928 they would
not fairly reflect the position in which a seller would be left with the parts
on hand remaining from the complete sets which we are being asked to break
;

from these sets to the British.

every ground, therefore, both of practicability and of fairness, we submit
that the fair price for these parts covered by the British requisitions is their
fair intrinsic market value which is in turn the cost of replacing the number
itnd the quality of these parts at the present time in the present conditions of
labor and materials markets.
If the principles set forth in this letter are acceptable to you, please send
us a letter to that effect and we will immediately get in touch with you about
a proi)er person to make the necessary inquiries and determinations.

up

to sell parts

On

Very truly yours.

Vim ALERT Company, Ltd.,

By Robert Cuse, President.
c. c.

The

British Purchasing Commission.

Exhibit No. 342

The Vimalebt Company,

Ltd.

807 Garfield Avenue

jersey city,

new jersey
July

Hon. Douglas

1,

1941.

Macke-^chie,
Deputy Director of Purchases, Office of Production Management,
Washington, D. G.
Dear Sik This will acknowledge your letter of June 19th, concerning the
purchase from this corporation under British Lease-Lend requisitions of certain items out of substantially complete sets of parts for Liberty engines
which this corporation has on hand.
We have taken considerable time before answering your letter because any
suggestion from an officer of the United States in the present emergency will
always have from us the utmost consideration no matter what difficulties it
C.

proposes.
Since your letter does not mention the proposal embodied in our letter of
May 15, 1941, to Lieutenant Colonel Warner, of the Ordnance Department,
we enclose a copy herewith.
To recapitulate the situation a little for the record:
This matter concerns not goods which are yet to be manufactured but goods
which we now have on hand. We are not speculators in these parts, who
bought them yesterday to turn over tomorrow. We have accumulated them
over a period of many years as the raw materials for a bread and butter
engineering and fabricating business in which we rebuild, remodel, and redesign those parts into engines of the general Liberty type.

4230

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Our stock consists of a large number of practically complete sets of parts

for the original Liberty engine. The British desire to acquire only such items
of our stocks as are interchangeable with the parts used in the "NuflBeld
Liberty" engines which they use in certain of their tanks. If we make the
sale, the remaining parts will remain on our hands.
Since they would be
entirely inadequate for building a complete engine of any kind, their value
would naturally be greatly depreciated.
The prices we originally quoted the British on the specific parts they deThe representatives of the British Pursired took this factor into account.
chasing Commission expressed themselves as satisfied with the prices then
quoted. However, after the passage of the Lend-Lease Act, this offer was
submitted to the appropriate ofiicers of the Ordnance Bureau of the War
Department for a]iproval. Those officers felt that the prices quoted should
be "lowered" to some undefined degree.
After very careful consideration, the ofiicers of our company decided that
they would forego any claim on account of the "orphaning" of the parts of
their sets which do not comply with the design used by the British, and
that they would accept present replacement cost for these items, such replacement cost to be determined by an impartial arbitrator. That, in effect, is
the offer contained in our letter to Lieutenant Colonel Warner, enclosed
herewith.

As we have said, the British expressed themselves as feeling that the original
prices proposed by us to them were fair. They thought more than fair the
concessions embodied in our May 15 compromise proposal to the War Department for an arbitrated replacement price. Mr. G. S. Murray, of the
British Purchasing Commission, with whom I checked over the telephone this
afternoon, stated that he still considers the proposal of May 1.5th more than
fair.
have understood, without having any official commitment, that the

We

Ordnance Department considered our May 15th

offer fair.

My own

For that
oldest son is a Pilot Officer in the Royal Air Force.
reason, if for no other, personally I want England to win and win quickly.
I know possibly better than even you how much the British need the Liberty

we have on hand.
corporation has not only owners. It has creditors, and heavy
costs of abortive expansion incurred in standing by and preparing for commitments with the British Purchasing Commission over a long period of now
nearly six months, which commitments the British have been unable to keep.
The officers of this corporation have decided to accept this shrunken transaction, if consummated, as an accord and satisfaction for the larger commitment of the British Purchasing Commission embodied in the letter of December
30th, a copy of which accompanies this letter.
We do not refer to this British contract because we think it is any part
of the duty of the United States to relieve the British Purchasing Commission from any liability. We refer to it simply because we feel that it is
to be taken into account in considering whether we should, as a matter of
good will toward the British, make price concessions below the commercial
value of the merchandise we have to sell.
For all these reasons, of losses of time and money and effort incurred to date,
our directors feel that they ought not be called upon, in iiddition. to take any
less for their goods than a price which is fair and reasonable and just according
to universal law and commercial practice.
For that reason we feel that the best we can do is to meet yon half way with
a further compromise.
As such compronnse we will adoj)t from your proposal of June 19th your suggestion that your cost accounting expert. Dr. Saunders, be accei>ted as the independent arbitrator referred to in our proposal of May 15th to the Ordnance
engine parts

But

this

I)('par(ment.
With that concession to you of otu- acceptance of your own Dr. Saunders as
the arbitrator, we offer to you and ask you to accept our proposal to the Ordnance
Department (f ]\Iny 15th as thus modified.
As restated, that proposal, so Tnodified, would be as follows:
1. The price of these parts shall be tluMr replacement value as determined by
actual inquiry into the prices at which equal quantities of identical parts can
])resei.itly be contracted for in the present United States market, for delivery
within a reasonable time.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAiM

4231

concession we shall not ask for something to which in fairness I should

we would be entitled a premium for the advantage that the parts for
which we ask such replacement value are available, not after a reasonable time

As

!i

think

for manufacture, but now.

2. That determination of such replacement value shall be

made by your

Dr.

we

shall ask merely to detail our Chief Engineer to aid him, without
interfering in any way with his judgment.
3. All prices, as so determined, shall be substituted in lieu of the prices quoted
in the original requisition, and shall be utilized for determining i3rice in respect
of future requisitions of the British for Liberty engne parts.

Saunders

I think there is no disagreement that so far as time is concerned, a determination of price of replacement could be arrived at so quickly that delivery could be
made against payment of a price so determined in a very few days. Present
market or replacement value is easy to find on these parts because both the British
Purcliasing Commission and the American Ordnance Department (as well as
ourselves) have been pricing contracts in the present market for parts like
Such data is all available.
this over at least six months.
Therefore, there is no real time to be saved by requiring us to deliver our parts
ahead of the determination of price.
feel sure that in the understandable pressure upon you to get things done
vou have not felt completely how h;irsh the literal terms of your proposal of June
19th sound to us. in the particular circumstances of this transaction as we know

We

them.

That pioposal

of June 19th asks us for delivery of material not only before

paid for, but before you will even let us know what we are to be paid for
it or on what basis is to be determined what we will be paid for it.
In the light of the delays in this transaction before a'ld after the Lease-lend
Act, we do not think that even the administrative pressure upon you of getting
things done makes it fair for you to press us with a proposal: "The terms on
which we will btiy are that you are first to deliver the goods we want and we
will arrange that other people will talk with you afterwards about what pay
you ought to get."
This time element becomes inqiortant in light of the second part of your propcsal to the effect that replacement jn-ice (easily determinable) shall not be
agreed upon as the basis of the arbitration as to price.
If, as your representatives have suggested orally, you were going to want
introduced in this arbitration not merely evidence of present day market price
or replaceuKMit price, but also evidence of the historical cost-accounting values of
each item in this transaction, you would put upon us if we are to do ourselves
justice an enormous burden of time-consuming and expensive work.
These parts, as we have said, liave been acquired over twent.y years by an
individuall.v owned and individually managed experimental business for the purpose of redesigning, remodeling, repaiiing. and rebuilding complete engines. They
have been acquired as raw materials for tliese complicated purposes. Some parts
have been acquired and paid for nien'Iy as a way of acquiring other parts; some
parts have been destroyed or depreciated in value in order to make other parts
accessible or to experiment with new designs; in this very transaction some parts
will remain at "orphaned" values aftei- sets are broken to furnish the British
only the particular items they want.
Carrying the burden of proof of the amounts of engineering and administrative
overhead of time, money, and risk properly chargeable to the "cost" of each of
these items under modern cost accounting methods would be a tremendous task
in the simple state of the records of this individually owned and managed busine.ss.
The cost of the accounting procedui'es and other proofs might be almost
as much as the value of the goods.
To go into an arbitration which will consider anything but easily determinable
present valuation will be the equivalent of going into a cost-accomiting history
since the last World War. We will get into the costs of time and money of a
lawsuit or an Interstate Commerce Commission rate hearing.
To ask us to go into such a time consuming method of detei-mining value, after
yon have taken our stock in trade away without paying for it, is to put us,
practicall.v, in a most unfair position.
Somehow, such an arbitration will inevitably work out in an unscientific "compromise" to the disadvantage of the nongovernment party who cannot, like the
government, afford to wait indefinitely. The unfairness of putting us in that
position is completely unnecessary because the easily available replacement price
it

is

4232

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

can be determined before the British are even ready to accept delivery against
payment.
A second reason why we thinli your proposal of June 19th is unintentionally
not fair, or reasonable, or just, is its attitude toward the determination of price.
Your proposal refuses to agree upon a principle for arbitrating price.
Frankly, yox; merely ask us to take pot luck in whatever price estimable
arbitrators known to you but not to us, decide is morally proper for the particular
its

human

beings who constitute Vimalert.

are asking for an agreement on an objectwe, not a suhjective price, determined by principles of law. No lawyer and no court in the world would say that
a "fair" or "reasonable" or "jiist" price for the present purchase of a present
article is anything other than its present value as determined in the present
market for present duplication (duplication within a reasonable time).
We have heard suggestions from time to time that we are not being patriotic
in not disclosing the prices at which we accumulated these parts over the course
of twenty years as part of a business as detailed above.
The first reason for such nondisclosure, as we stated in our letter to Colonel
Warner and have restated to you, is that we do not know such costs accurately
and it will cost us much time and money to determine them.
The second reason is that, as a matter of law, what these parts cost has nothing
to do with the case.
In a system of private commercial enterprise, which this war is supposedly being
fought to preserve, the worth of goods is determined by their own intrinsic value
and not by what A paid for them twenty years ago, or by what B paid for them
fifteen years ago, or by an arbitrary moral judgment that A gets a good price
because he is a good fellow and B gets a bad price because he is a bad fellow.
If you were buying crude oil for the British would you pay more than the
market price to a producer who had struck a lot of dry holes and insist on getting
it for less than market from the producer who had good luck with his drilling?
We see no reason why past history should make any difference in present price,
why you should pay A one price for the same article because of his past history
and B with a different history a different price for the same article.
Even if we were speculators in these commodities we would not feel that the
rule of law should be any different. But the fact is, as we have demonstrated
earlier, we are not speculators.
I have told you
I am very sorry to see delays continue in these negotiations.
of my personal interest in getting any kind of supplies to Britain that Britain

We

needs.

But I think that in faii'ness to everyone

its creditors, and its employees, all of them

connected with Vimalert, its owners,

taking losses on this order for nearly
six months, that we are going the limit of what can be expected of us when we
offer to deliver these parts of sets against the payment of what it would cost
us to i*eplace them in their sets, as determined by your own cost accounting
expert. Dr. Saunders.
We are confident that on the record, as it has been made to date in the letters

between you and us, the Ordnance Department, and the British Purchasing Commission, no one can say that our insistence on being paid what present goods are
presently worth, as determined by your own agent, constitutes an unfair or an
unpatriotic or a profiteering attitude. Nor on that record can anyone say that
it is "fair," "reasonable." or "just" on your part to ask us merely to turn parts
over to you and take pot luck later on anything we may get for thorn.
We have been perfectly willing to go into any ai'bitration provided some satisfactoiy principle were established on which the arbitrator would determine the
price.
We have not been able to conceive of any fair principle for such an arbitraIf your lawyers can show us that the law of New
tion but replacement cost.
Jersey fixes any more favorable standard for di'termining the value of these
If you or your counsel
articles, you will find ns ready to accept those principles.
wish to suggest any other ijrinciple on which the price can be fairly determined,
we shall listen to it witli an open mind.
In sunnnary, as detailed above, we will compromise between our letter of May
15th and your letter of June I'Jth.
We will accept replacement cost for the.se parts and we will let you, through
your Dr. Saunders, determine what that replacement cost is.
Very truly yours,
VIMATJCRT COMl'ANY. LtP.,
J. Flynn. Vice Picf^ideiit.

By Beunard

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4233

Exhibit No. 343

1016 Investment Buildinq,
WaHhington, D. C, July 8, 19^1.

Major Edwin Clabk,

Defense Aid Division,

Office of

Under Secretary

War
Dear Major

of War,
Department, Washington, D.

C.

In accordance with your telephonic request of today, I have

obtained from Mr. Flynn of the Vimalert Company and am forwarding to you
herewith the correspondence which constitutes the offers and counter-offers for
the Liberty engine parts now owned by the Vimalert Company.
As you will note, the last offer of the Vimalert Company to the O. P. M.
:

says in effect this

"We

will sell these parts to you and deliver them to you now against payment
of whatever it would cost you to let a contract with anybody else to manufacture these parts for delivery within a reasonable time and we will trust
you (the U. S.) to determine and fix for yourselves what that cost would be."
In my opinion that would be fair and just proposal even if the British were
purchasing complete sets of the parts. In view of the fact that they are only

taking selected items of Vimalert's sets, I think that it is somewhat more

than fair.
For personal reasons, I am very glad that the Vimalert Company finally
decided to make its offer in this form. I have no desire to participate in any
way in "war contracts" with our government. I am acutely aware of my position in Washington, and its relation to the position of my friends.
I have,
therefore, been careful never to solicit on behalf of any client any contract to
sell material of any kind to the \J. S. Government.
This Vimalert representation is an inheritance of the situation which resulted
from the taking over of British Purchasing Commission commitments by the
U.

Ijease-Lend agencies.

S.

first called into the Vimalert affair by a personal friend who had
interests in the t/ompany to draft the formal contract for 1,000 engines of
the Nuffield design after Vimalert had received from the B. P. C. a letter
of intent, a copy of which is enclosed herewith.
That was early in January,
long before the I^ease-Lend Bill and long before any difficulties about price
on completed engines arose between Vimalert and the British. Accordingly,
I felt entirely free to represent my friend vis a vis the British.
As the American Treasury shut off British funds pending the Lease-Lend
bills, and financing of the order had to be arranged elsewhere, I soon found
myself, at the solicitation of the British as well as my client, representing the
whole "situation," trying to hold it together.
This was the difficult, conflicting position in which I found myself when our
own government was brought into the situation by reason of the enactment of
the Lease-Lend statute.
Under all the circumstances, I have felt obligated to go ahead and see the
transaction through. Nevertheless, I have been careful to see that in all
quarters the record in the case is such that no one can ever make any justifiable
criticism or intimatitm that my conflicting loyalties and governmental acquaintance have resulted in a sale at price that is not completely and absolutely
I

was

sound and justifiable.

That is why, as I told you over the telephone, I have thought it essential
for the protection of everybody concerned that this price should be arrived at
not by trading and bargaining with figures unrelated to any principle, but by
the rigid application of some fair legal principle of value. I think it is embarrassing to all concerned to have the matter left where later on someone
will say that the price was "traded out" on a discretionary basis.
Therefore, the proposal has been made that the price to be paid for these
parts for present delivery should be the price which you, as a lawyer, admitted
this morning would be the measure of damages on breach of contract or on
commandeering a fair market value which in lieu of other goods on the market
is fair replacement cost
as determined by the O. P. M.'s expert. Dr. Saunders.
Nothing could be more fair, just or reasonable than that and I think that
no record shows a more just, fair, and reasonable attitude of a seller than
the record Vimalert Company makes on these letters which are enclosed here-

with.

4234

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

The Vimalert Company purchased these parts a long time ago fifteen or
twenty years ago when prices were lower and in many cases perhaps when
Liberty engines were more or less passe. The enclosed copy of the letter to
the O. P. M. sets forth the complications of that manner and time of acquisition.
As you and I agreed over the telephone, ther eis a statute of limitations on
"speculation" and yoii don't hold goods for speculation over twenty years. As
this letter to O. P. M. shows, it would be dithcult in the extreme to establish
and prove Vimalert's overall "costs" including interest on its investments, cost

of storage, deterioration,

etc., etc.

However, even if we should assume that those costs are substantially less than
the amounts for which the goods could be replaced, it would not follow at all that
Vimalert could properly be charged with in-ofiteering if it asks current n^arket
value at the time of sale.
If there had been no demand for Liberty engines and "\'imalert"s purchases of
parts had proved unfortunate, it is quite certain that neither the British nor
American governments nor anybody else would have absorbed that company's
losses. If, on the other hand, there is a demand for Liberty engines or their parts,
neither the government nor anybody else is fairly entitled to claim any share in
the Vimalert Company's good fortune in bavin jj made a wise twenty->ear iiurThis remark, of course, does not take account of the fact that if
chase.
Vimalert reaps a profit in this year of grace, our government, through excess
profits and income taxes, will take most of it right back into the U. S. Treasury.
However, the main point that I want to make is that it is highly desirable
that the price to be paid to Vimalert should n<it be "traded" but should be
determined by a fact-finder who acts in accordance with legal principles that are
generally accepted as sound and equitable. Fair market value is such an accepted
standard. In a case such as the present where tliere is no active trading in the
particular kind of goods involved, current replacement cost is an acceptable
substitute.

The determination of the appropriate principle upon which price is to be fixed

and having Dr. Saunders apply that principle to the facts, is satisfactory to the
Vimalert Company. It also meets my personal needs because it makes it impossible for anyone ever to make any just claim that I have ever participated in
an effort to get an unfair price for any products that are sold to the British or
American governments. It will furnish equal protection to any otHcers who act
on behalf of either of the governments concerned.
I think that a perusal of the enclosed records will assure you that the Vimalert
Conjpany has adopted a just, fair, and reasonable attitude in this entire matter.
In effect, it has waived its claims on account of the "orphaning" of the portions
of its sets that do not fit the Nuffield specifications. It is willing to take replacement cost of the items that are selected and it is willing that that replacement
cost shall be determined by an agent of the purchaser, the U. S. Government.
What more it could reasonably be asked to do, I fall to see.
Very truly yours,
Thomas G. Corcoran.

Enclosures.

Exhibit No. 344

1016 Investment Building.
Waiihington, D. C, July 28, 19.',1.

Re: Vimalert matter.

Mr. Jtjuus Amberg,
AN.nstant to Under Sccrctari/ of War,
War Department, Wa.shiu(/ton. D. C.
Dkar Mr. Ambero Since I have agreed with the Under Secretary to recommend
that (lie Vimalert Company accept whatever disposition you propose for this matter, I give you the following resume of the important events in the negotiations
as seen from the Vimalert point of view:
:

(1)

The

i)rincii)al

business of the Vimalert

Company

is

building, rebuilding

and dealing in Liberty engines iind the development of other engines of related
large stock of parts for thes(^ engines.
Over the years it has acquired
design.
ii

Many

of th<se iKirts are identical with those used by the British in the "Nntlield"
Liberty engine which they use in certain light tanks.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4235

(2) In November 1940, the Vimalert Company sold a substantial lot of Liberty
engine parts to the British for use in Nuffield engines. The parts proved satisNegotiations vpere then opened up to have Vimalert build 1,000 Nuffield
factory.
engines in which it would use such interchangeable parts as it then had on hand.
(3) On December 30, 1940 (almost seven months ago) the British Purchasing
Commission gave Vimalert a "letter of intention" with respect to those engines.
A copy of this letter is attached as Exhibit A. At this point in the proceedings
Mr. Flynn asked me to represent Vimalert in the preparation of a detailed

contract.
The
(4) Negotiations on details as to the form of contract moved slowly.
British were running short of fund^^. Vimalert finally proposed that, in lieu of
purchasing complete engines, the British purchase such component parts as
Vimalert had that were interchar -^able with NuflSeld parts.
(5) Before the order was closed the Lease-Lend Act was presented to Congress.
Upon its enactment nearly three months ago the British promptly filed two
requisitions for these parts at the prices quoted by Vimalert. Subsequently
three further requisitions were filed, making a total of five. The requisition
numbers are 195, 881, 2973, 2974 and 2975.
(6) The matter was handled by Lieutenant Colonel Warner of the Ordnance
Department. He objected to the prices quoted in the first two requisitions and
offered the prices set forth in the Standard Nomenclature List of tank parts.
Vimalert did not believe the S. N. L. prices to be fair or reasonable. That company is today sending you a letter setting out its reasons for such disbelief. Since
I had no positive knowledge either on that point or as to the fairness of the prices
quoted by my client, I recommended that Vimalert offer to accept present replacement cost for the quoted parts, such cost to be determined by an impartial
arbitrator. Thereupon, by letter of I\Iay 15, Vimalert made such an offer to
Colonel Warner. A copy of that letter is attached as Exhibit B.
(7) Apparently the matter was then turned over to Mr. Douglas C. Mackeachie,
Deputy Director of Purchases for O. P. M. On June 5 Mr. Mackeachie proposed
that the purchase price should be determined by arbitration. This, however, was
to be on an open basis, and "neither reproduction cost nor any other predetermined
basis should limit the discretion of the arbitrators." Meanwhile, Vimalert was
On June 19 Mr. Mackeachie confirmed
to make immediate delivery of the parts.
A copy of his letter is attached as Exhibit 6.
this proposal in writing.

the company wrote Mr. Mackeachie as per Exhibit D attached^,'

views of the unfairness of that proposal and renewing the offer
it had made to Colonel Warner, modified by offering to accept Dr. Saunders of
O. P. M. as the arbitrator.
(8) Vimalert was later advised that Major Edwin Clark in the Office of the
Under Secretary of War had been deputed by Colonel MacMorland of the Defense
Aid Division to "settle" the matter of prices for these parts. Major Clark asked
me to inform him as to the situation. I did so by letter of July 8, 1941, a copy of
which is attached as Exhibit E.
(9) Mnjor Clark then asked the representatives of Vimalert to meet with the
representatives of the British Purchasing Commission, the Ordnance Department
and O. P. M. Vimalert's representatives were called into this meeting at about
11 30 a. m. In addition to Major Clark of the Under Secretary's office, there were
present
() For O. P. M. Mr. Alexander Hawes, Assistant General Coimsel Mr. Fairfax Leary of the General Counsel's office Dr. Saunders, Chief of the Cost Accounting Division Mr. Bassey, probably from the Cost Accounting Division.
(h) For B. P. C. Mr. G. S. Murray; Mr. Murphy.
(c) For the Ordnance Department: Major Smith, Assistant to Lt. Col. Warner.
(d) For Vimalert: Mr. Flynn, Vice President; Mr. Clark, Chief Engineer;
Charles S. Guthrie and Thomas G. Corcoran, counsel.
(10) The conference had been proceeding for some time before the Vimalert
representatives were admitted.
After the entry of the Vimalert representatives. Major Clark stated that the
other parties had agreed among themselves and had authorized him to speak
for them.
Major Clark first inquired whether Vimalert would sell the parts at the prices
it had originally quoted prior to the proposal of replacement cost, with the
exception of the two different kinds of connecting rods.
After conference,
A''imalert's representatives said that they would be willing to take out the
connecting rods and sell the rest of the parts at the specific prices it had quoted.

On July
explaining

1,

its

81193242pt.

10

33

4236 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

so. however, they inquired wliether the Government agreed that
these quotations were less than present replacement cost of the parts it wanted
and expressed the desire that the Government representatives should certify
Mr. Bassey, of O. P. M., said that he was not satisfied that the
to that fact.
prices were less than replacement cost and stated that he had some offers at
lower prices. Vimalert's representatives were, therefore, unable to understand
why the Government wanted it to reinstate the former prices instead of accepting
In the end, however, they
the' apparently better offer of replacement cost.
expressed the View that the fact that the Government elected to take the original
quotations rather than to arbitrate replacement cost spoke for itself and withdrew' their request for an express statement to that effect.
(11) All present, including Major Smith of Colonel Warner's office, expressed
themselves as accepting as a contract the sale of Vimalert's parts, other than
connecting rods, at the prices quoted in the British requisitions.
Later in the day Mr. Bassey, in response to a further question, indicated that
the only quotation he had on hand for these parts at prices lower than those
(Vimalert thereupon
offered by Vimalert was from a certain Grant Company.
investigated and some days later discovered that the Grant offer was for a
limited number of parts and that tho><e parts had been aheadij inspected by the
B. P. G. and rejected as defective.
(12) After agreement had been made concerning the parts other than connecting rods, Major Clark brought before the meeting the question of what price
Vimalert would take for the connecting rods. Vimalert's rods are made according to the Liberty engine specifications which call for machining of a certain
web. The Nuffield specifications do not require that that web be machined.
Vimalert believes that this machining removes surface defects from the forgings
and lightens the rods without impairing their strength. The B. P. C. doubts
some of those claims. In any event, it claims that the much cheaper Nuffield
design is good enough for its purposes.
After the meeting had di.scussed these technicalities. Major Clark and Major
Smith announced' that they were going down to discuss the price of connecting
rods with Colonel Warner. On their return. Major Clark offered Vimalert the
After conference, this offer was
S. N. L. price plus 5% for the connecting rods.
accepted on behalf of Vimalert.
(13) Major Smith for Colonel Warner; Mr. Hawes, Mr. Leary for the O. P. M.,
and Mr. Guthrie for Vimalert, were then designated to express the agreement
of the meeting in legal form. They recommended that the transaction be consummated by having Vimalert make a new offer to Colonel Warner, incorporating
the proposals agreed upon at that meeting. The revised offer was prepared and
delivered that afternoon, July 15. A copy of it is attached as Exhibit F.
(14) Subsequently, Vimalert's representatives were given a copy of a letter
sent to Colonel Warner by the B. P. C. dated July 18. of which a copy is attached
marked "Exhibit G." This letter establishes for the record the .statement of
the B. P. C. that based on their actual purchases of comparable material from
other sources, Vimalert's prices to the B. P. C. are fair and reasonable.
Very truly yours,

Before doing

Thomas

G. Corooban.

Exhibit No. 345

Laws and Rules Govekning the Appearance

of Former Goveknment Officers

AND Employees Before Government Departments and Agencies

The

basic statutory provision governing this matter is as follows:

"It shall not be lawful for any person appointed as an oflicer. clerk, or employee in any of the departments, to act as counsel, attorney, or agent for prosecuting any claim against the United States wliich was pending in either of said
departments while he was such otlicer, clerk, or employee, nor in any manner,
nor by any means, to aid in the prosecution of any such claim, within \wo years
next after lie shall have ceased to I)e such ollicor, clerk, or employee."
(5
U. S. C. no, from Act of June 1, 1S72, 17 Stat. 202.)
The Attorney General has rnled that this provision applies to all such claims
whicli were pending in any of the Departments while the employ(H^ was in the
employ of the Government (20 Op. 095). What constitutes a "claim" and
whether or not the word "department" includes deiiartnients created since the
date of the statute, or independent commissions, are more or less open questions.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4237

is construed to apply chiefly, if not only, to claims involving demands for money from the United States. And it probably vpould not
be construed to prohibit the handling of claims before agencies other than the
ten departments.
It does not appear that there is any statutory provision which forbids a former
ofiicer or employee from carrying on business with the Government or Acting
as counsel in matters not involving such claims against the Government as
provided for in the statutory provision cited above. In a few instances, however,
there are statutory provisions governing the activities of officers after leaving
the government service. The Federal Reserve Act as amended provides as to
members of the lioard of Guvernurs of the Federal Reserve System
"The members of the Board shall be ineligible during the time they are in
office and for two years thereafter to hold any office, position, or employment
in any member bank, except that this restriction shall not apply to a member
who has served the full term for which he was appointed." (12 U. S. C. Supp. 244,
Act of August 2:i, 1935, 49 Stat. 704.
The statutes provide that any member of the Board of Tax Appeals removed
from oflice by the President for inelhciency, neglect of duty, or malfeasance
in office, shall not be permitted at any time to practice before the Board
(26 U. S. C. 620).
Several of the departments and independent agencies have, however, adopted
rules governing practice before them which forbid or restrict the appearance
or practice before them for a two-year period of attorneys, or other persons,
who were formerly employed by the department or agency.
The rules of the Department of Agriculture provide that "no former officer
or employee of the Department of Agriculture shall, within two years after the
termination of his employment, be permitted to practice or appear, or to act as
an attorney or agent, in any case, claim, contest, or other proceeding before the
Department of Agriculture or before any office, bureau, or agency thereof"
(7CRF 1, 1579).
The rules of the Department of the Interior provide
"No person who has been employed or has held any office or place of trust
or profit in the Department of tlio Interior shall be pei-niitted to practice, appear,
or act as an attorney or agent in any case, claim, contest or other proceeding
before the Department or before any bureau, board, division or other agency
thereof, until 2 years shall have elapsed after the separation of the said person
before the said service; and no attorney or agent admitted to practice before
the Department shall employ or retain any such pei.son for the purpose of making
any personal appearance in any such case, claim, contest or other proceeding,
before the expiration of the said 2-year period" (43 CFR 1.9).
Tlie Treasury Department also has similar rules.
No former officer, clerk,
or employee of the Treasury Department shall act as attorney or agent, or as
the employee of an attorney or agent within two years after the termination of
such Treasury employment, in any matter pending in such deiiartment during
the iieriod of his employment therein, unless he shall first obtain the written
permission of the Secretary of the Treasury or his duly Jiuthorized representative.
Such permission will not be granted if the employment as an attorney or
agent is prohibited by the statutes, 5 U. S. C. 99 or other law. Furthermore, no
enrolled attorney or agent shall assist a person who has been employed by a
client to represent him before the Treasury Department in connection loith. any
matter to which such person ()<tve personal consideration or as to the facts of
which such person gained personal knowledge while in the Oovernment service
(31 CRF 10.2).
The rules of the Federal Communications Commission provide that no person
serving as an attorney at law in the Federal Communications Commission on
or after July 1, 1935, shall be permitted to practice, api^eai". or act as an
attorney in any case, claim, contest, or other proceeding before the Commission or before any Division or agency thereof until 2 years shall have elapsed
after the .separation of the said per.son from said service (47 CFR 1.27).
Under a recently promulgated rule of the National Labor Relations Board.
no former employee of a regional office may engage in practice before the
Board "in any capacity in connection with any case proceeding which was
pending in the Regional Office to which he was attached during his employment with the Board." Former members of the Washington staff are subject
to the same disability in respect to cases pending before the Board or any
of its regional offices at the time of their employment.
A Tariff Commission regulation provides

apparently the provision

4238

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

"No former officer or employee of the Commission who has, as such officer
or employee, given personal consideration to an investigation (including preliminary inquiries prior to the institution of an investigation) shall be eligible
to appear as attorney or agent before the Commission in such investigation.
No former officer or employee of the Commission shall be eligible to appear
as attorney or agent before the Commission within 2 years after the termination of such employment unless he has first obtained written consent from the
Commission."

The Securities and Exchange Commission has stated in respect to its rule
governing the activities of former employees:
"Under the amended Rules of Practice any former member of the staff of
the Commission who shall appear in a representative capacity in any matter,
including an investigation conducted by the Commission, which was pending
before the Commission during the period of his employment and with which
matter he has, by virtue of his employment with the Commission, such familiarity as to be prejudical to the proper conduct of the case, or in which matter
h'e acted for the Commission in such a way as to make unethical his subsequent
connection therewith, and any person employing the services of any such
former member of the staff in such matters, without first obtaining the consent of the Commission, may be held to be lacking in proper profess-ion^al
conduct."
Somewhat similar rules are in force for other departments or agencies including the Post Office Department, Patent Office, Bituminous Coul Division of
the Department of the Interior, and the Federal Poioer Commission.
Furthermore, the Supreme Court of the United States has a rule which
provides that no person who has served as a law clerk or secretary to a
Justice of the Supreme Court can appear before the Supreme Court until two
years have elapsed after his leaving the service of the Justice or Court.

Exhibit No. 346

INTERIOR DEPARTMENT APPROPRIATION BILL,

PAET

III

EIXPLOBATION

FOR

1942

IN ALASKA

OIX,

Hearing conducted by the subcommittee, Messrs. Edward T. Taylor (chairman)

Jed Johnson, Oklahoma James G. Scrngham James M. Fitzpatrick Charles
H. Leavy Harry R. Sheppard Robert F. Rich Albert E. Carter and Robert
F. Jones, of the Committee on Appropriations, House of Representatives, in
charge of the Interior Department appropriation bill for the fiscal year 1942
;

Wednesday, Apkil
expix>bation for oil in

Statement of Hon. Harold

L. Ickes,

23, 1941.

alaska

Secretary of the Interior

Mr. Johnson of Oklahoma. Mr. Secretary, Mr. Jones has a few questions he
to ask you.
Mr. Jones. Mr. Secretary, you are familiar with the operations of the Iniskin
Oil Company in Alaska which is interested in drilling for oil that is, you granted
an exploration lease to this company in Alaska?
Secretary Ickes. Is that the Havenstrite group?
Mr. Jones. Yes.
Secretary Ickes. I know something about it. I know he drilled a well up there
and went down quite a distance. He says he spent about a million dollars for his
group. I do not know what the facts are. But he did not get any oil.
Then I think one of the Standard Companies went up there; at any rate,
someone else did, and they tried to drill. They did not go down nearly so far,

wants

and they abandoned

it.

were made.
Mr. Jones. Does his company have an exploration lease in Alaska with your

I think those are the only efforts that

Department?
Secretary Ickes. Yes. He and his associates have
Mr. Jones. Are they on the naval reserves?

oil

leases under the statutes.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4239

Secretai'y Ickes. No they are not ou uaval reserves they are on public lands.
Mr. Jones. Did Mr. Havenstrite or his counsel recently approach you with
respect to arranging for the oil which might be taken out of this Alaska well, or
one of the wells, so that the oil might be stored for the Navy ?
Se<?retary Ickes. Mr. Havenstrite did come to see me and he was very anxious
He believes there is oil there. I may say that I called
to drill another test well.
up and I had in, as a matter of fact, the Director of the Geological Survey and our
geologist for Alaska, Dr. Smith, who happened to be in Washington, and they both
say that this area, where Havenstrite did drill and wants to drill again, is regarded
by them as good oil-prospecting territory. And, frankly, they would like to know,
we would all like to know, whether we have any oil in Alaska.
Mr. Sheppakd. Was this first well a duster it was a dry well?
Secretary Ickes. That is right.
Mr. Jones. They are still drilling in that well, trying to get oil?
Secretary Ickes. I do not think so.
Mr. Jones. Is he drilling another well?
Secretary Ickes. No he wants to drill another well.
Mr. Jones. Did Mr. Havenstrite suggest to you that an agreement be entered
into with the Navy Department to store the oil from any well?
Secretary Ickes. No. I think he hoped the Navy Department might feel sufficiently interested to advance the money to put down an exploratory well but
we have no agreement with the Navy, and I do not think we could have.
Mr. Jones. Did Mr. Havenstrite or his counsel suggest to you or any of your
assistants that you approve such an arrangement and indicate that approval to
the Secretary of the Navy?
Secretary Ickes. No. It did not come up in quite that way. They wanted to
know what our Geological Survey felt about, first, the existence of oil in that
particular location and, second, whether the Geological Survey would like to have
a well put down in order to find out whether there was oil in Alaska. And that
;

was

all

that

was

said, so far as I

am

concerned.

Mr. Jones. Did you communicate with the Secretary of the Navy to persuade
him or give him the impression you were favorable that you would look upon it
with favor?
Secretary Ickes. No. I wrote the Secretary of the Navy a letter in which
I told him that the Geological Survey was sufficiently impressed
I am not
quoting it exactly with the possibility of there being oil in this particular
locality, so that it would like to see a well put down, but that I had no advice
or suggestions to make to the Navy Department in the matter; that is all.
Mr. Jones. Did you write to them or talk to the Navy Department, or phone?
Secretary Ickes. I talked to the Secretary of the Navy in the first instance and
then Havenstrite went over to see him. Then I wrote him this letter.
Mr. Jones. You wrote him one letter?
Secretary Ickes. Yes.
Mr. Jokes. Was Thomas Corcoran counsel for Havenstrite in this matter?
Secretary Ickes. I do not know whether he is " nsel or not; as a matter of
fact, as I understand, Mr. Corcoran was not inteicsted as his attorney at all,
was not being paid by Havenstrite was not being paid anything by him.
Mr. Jones. Was not Mr. Havenstrite advised by Mr. Wirtz down in your Department to retain Mr. Corcoran in this matter?
Secretary Ickes. I doubt it very much. In fact, I disbelieve that.
Mr. Jones. Would you check on that for the record?
Secretary Ickes. Yes. The only record I could make on it would be to ask
Mr. Wirtz, and I have talked with him about this thing generally and I am just
darned sure he did not.
Mr. Jones. My information is that Mr. Wirtz advised Mr. Havenstrite to hire
Mr. Corcoran and I was curious to know why.
Secretary Ickes. I just do not credit that. We do not advise anybody to retain
any particular counsel in any case, and I think Wirtz is too smart to do anything
;

"

of that sort.
Mr. Jones. Did Mr. Corcoran discuss this Havenstrite matter at all with the
Department, or any member of the Department, or with you?
Secretary Ickes. Yes he discussed it and I told him just what I told you.
Mr. Jones. You discussed it with Mr. Corcoran?
Secretary Ickes. Yes and he could tell the whole world.
Mr. Jones. Well, he did interest himself in this matter one way or another, in
Havenstrite or the Iniskin Oil Co.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4240

Secretary Ickes. Yes.

I think he has conferred with Mr. Havenstrlte about it.

relationship between the two I do not know, but my understanding was it was
merely friendly services. Naturally, everybody is interested in knowing whether
we have enough oil in case of an emergency here.
have, as a matter of

The

We

fact.

Mr. Jones. Was it I\Ir. Corcoran who first outlined to you a plan whereby
Havenstrite would talk, with your approval, to the Navy Department and see
whether or not he could obtain an agreement with the Navy so that they would be
able to obtain from the Navy Department, the O. P. M., the R. F. C, or the
Geological Survey, funds for the purpose of continuing drilling?
Secretary Ickes. The Geological Survey has no funds for any siich purpose,
and we could not advance money and could not put down an oil well of our
own. I do not know whether the 11. F. C. was approached on the subject, or the
O. P.

M.

Mr. Jones. Do you know, as a matter of fact, it was the plan of Havenstrite and
Corcoran to take an agreement which the Interior Department would make with
the Navy, to the Secretary of the Navy?
Secretary Ickes. I repeat we could not make an agreement with the Navy.
Mr. Jones. In regard to storing oil?
Secretary Ickes. No. The Navy has certain powers with respect to oil from the
naval reserve, but we have no power.
Mr. Jones. Well, you could make a recommendation, could you not, that the
Navy take some of the oil taken from public lands on which 3'Ou had granted an
exploration lease, and store it for the use of the Navy, could you not?
Secretary Ickes. Well, I would not volunteer any such suggestion.
Mr. BuKXEw. It could not be done. It is without any authority.
Mr. Jones. It is my understanding that the letter you wrote to the Secretary of
the Navy would leave them with the impression that this sort of an arrangement
I have described had your approval and was recommended by your Department.
Secretary Ickes. No I do not think anyone could get that impression from the
letter I wrote the Secretary of the Navy.
Mr. Jones. Would you put that letter in the record?
Secretary Ickes. I will be very glad to do so.
;

letter referred to is as follows:)

(The

1480
United States of America,
Department of the Interior,
Waslihigtori, D. C, April 2If, 1941.
Pursuant to title 28, paragraph 661, United States Code, I hereby certify that
the annexed is a true copy of the original as it appears in the records and files
of this Department.
In testimony whereof, I have hereunto subscribed my name, and caused the
seal of the Department of the Interior to be affixed, the day and year lirst above
written,

[SEA I,]

E. K. Bublew,
First Assistamt Secretary of the Interior.

[Copy]

The Secretary

of the Interior,

Washington, D. C, March 19,

19/fl.

The Honorable the Secretary of the Navy.

Sir: I have given careful consideration to the problems raised by Mr. R. B.
Havenstrite's pioposal for a Government loan to finance the drilling of a new
test well in the Iniskin Peninsula area in Ala.ska held by him and his associates
under oil and gas leases issued by this Department.
Insofar as these problems relate to the advisability of granting a loan, they
are not within the jurisdiction of this Department, and it would be inappropriate for me to express any opinion concerning them. I would like to point
out, however, that the royalties to the United States in the present leases were
fixed at a specially low rate because the lessees were undertaking to explore the
Should it
oil and gas possibilities of this area at their own risk and expense.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4241

be decided to advance Federal funds to finance the operations of tliese lessees,

I believe that the granting of a loan should be conditioned, among other things,
on an upward revision of the royalty rates fixed in the leases. For this reason
I should be kept advised of further developments in tiiis matter' and be given
an opportunity to suggest what revision ought to be required in order to protect
the interest of the United States entrusted to this Department.

Very truly youis,

(Sgd.

Harold

L. Ickes.

Secretary of the Interior.

Mr. Jones. When the matter was presented to you by Mr. Corcoran, or Mr.
Havenstrite, was there something said or was there any discussion in regard to it,
that it would be in effect putting the Government in the position of imderwriting
a wildcat oil operation?
Secretary Ickes. I do not recall anything of that sort.
Mr. Jones. Were you told by Secretary Knox at a luncheon that far rather
than to have the Government subsidize a wildcat operator that he, Secretary
Knox, would much prefer to have the Goverament itself drill for oil on the naval
reserve in Alaska or on public lands of Alaska?
Secretary Ickes. At what luncheon?
Mr. Jones. At the luncheon you had with him.
Secretary Ickes.
I being dictagraphed in my own Department?
Mr. Jones. I would not know, Mr. Secretary.
Secretary Ickes. I do not quite get the question. Will you repeat the question?
Mr. Jones. Were you told by Secretary Knox at some meeting that you had
with him, or luncheon, at which Secretary Knox said that rather than have the
Government subsidize a wildcat oil operator, he. Secretary Knox, would much
prefer to have the Government itself drill for oil on the naval oil reserve in
'

Am

Alaska?
Secretary Ickes. I do not recall I do not know whether he did or not.
Mr. Jones. Well, did you discuss this matter with him, outside of the letter
;

you wrote?
Secretary Ickes. There was a brief reference to it at one time, very brief.
a matter of fact, I do not hesitate to say I would rather see the Government
dig an oil well than to subsidize anyone else to do it. I do not think I have to
apologize for any such position as that.
Mr. Jones. Did Mr. Corcoran see the draft of your letter, or did you read the
letter to him that you wrote the Secretary of the Navy?
Secretary Ickes. No not that I know of. No I know he did not read the draft.
I signed that letter and left my office immediately to catch a train for Fort
Lauderdale, with the President.
Mr. Jones. Since you returned from your trip with the President, did you
write another letter to the Secretary of the Navy drawing a different conclusion
than from your first letter?
Secretary Ickes. No. That is the only letter I have written to the Secretary
of the Navy.
Mr. Jdnes. Just the one?
Secretary Ickes. Yes.
Mr. Sheppard. While my colleague is looking over his papers, may I inject
this question Does Mr. Corcoran enjoy any special privileges or special considerations in your Department, more than any other counsel practicing law would

As

enjoy?
Secretary Ickes. Not that I know of.
Mr. Sheppard. In other words, you did not figure you would be swayed by any
beseeching on the part of Mr. Corcoran more than anybody else?
Secretary Ickes. I would not think so.
Moreover, my action in this case
speaks for itself. And, of course, when you are questioned about your surmises
or what you might have done if you had done something else, you get off into
the realm of speculation, where it is pretty difficult to come to grips.
Mr. Jones. Mr. Havenstrite and Mr. Corcoran, I understand it, did try to
influence you to recommend to the Secretary of the Navy?
Secretary Ickes. What do you mean by "influence"? People come to my office
every day, including Members of Congress, asking for this, that, or the other.
I do not like the implication of the word "influence."

4242

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Mr. Jones. Well, you supply the word you want to use. That is the best word
know of to explain it to encourage you to recommend to the Secretary of the
Navy that they purchase the oil from a well Havenstrite's company would drill
in Alaska, to store for the Navy Department?
I do not remember
Secretary Ickes. I do not know anything about that.
anybody ever saying anything about storing oil for the Navy Department.
Mr. Jones. Well, does your letter to the Secretary of the Navy? If not, I

I thought you said you wrote a

to the question.
letter to the Secretary of the Navy in regard to this particular plan to store oil.
Secretary Ickes. I "said no such thing, Congressman.
Mr. Jones. Well, can you tell me the substance of the letter you wrote to the

misunderstood the answer

Secretary of the Navy?

Secretary Ickes. I have already told you, and I said I would furnish a copy
of the letter.
Mr. Jones. That was a letter written prior to your going on a trip with the
President?
Secretary Ickes. That is right.
Mr. Jones. That is all.
The Chairman. Mr. Secretary, do you want to make any statement concerning
this matter yourself?
Mr. Ickes. No.
Mr. Johnson of Oklahoma. Are there any further questions? If not, we
thank you. If there is any statement you want to make on or off the record,

you may do so.

Mr. Jones. No I have not. I was trying to find out myself whether the
Government, whether the Interior Department
Secretary Ickes. What if somebody did ask me to do this?
Mr. Jones. You misunderstand the implication of the question. I wanted to
and I had
find out whether it was the practice of the Interior Department
heard about this particular case to recommend agreements with the Navy Department whereby they would use, or an oil-company promoter could use that
agreement to finance the further drilling of wells in Alaska.
Secretary IcivES. I never made any such recommendation to the Secretary of
the Navy. Under the law, I have no authority to make any such recommendaIf I had ever done it, it would have been
tion to the Secretary of the Navy.
I have no authority to
purely gratuitous and could have been disregarded.
make any such agreements with the Secretary of the Navy. The only time there
was any collaboration between the Interior Department and the Secretary of the
Navy was under the Harding Administration.
Mr. Le.\vy. Let me ask this in order to clarify this matter in my own mind,
and I might have misunderstood you, Mr. Jones. In your questions, you seem to
quote the purport of a conversation had between the Secretary of the Navy and
;

the Secretary of the Interior about these oil drillings in Alaska.

Mr. Jones. Yes that is right.
Mr. Leavy. Well, did the Secretary of the Navy ever communicate with you or
write you or in any way give you such inforrritition, or upon what do you base
your statements? Otherwise, it would be the rankest kind of hearsay.
The Chairman. Where did you get this information?
Mr. LeuVvy. And it should not be given credence unless you have a basis for it.
I do not mean to pi'otect the Secretary he is able to protect himself.
Mr. Jones. I was only asking the questions.
The Chairman. Why did you ask the question whether he was influenced?
Mr. Jones. I told him to take out the word "influenced." that that was my word
and he could use any other word whether he was persuaded.
Mr. Johnson of Oklahoma. Just to ask a man out of a clear sky if he was
trying to influence or trying to persuade the Secetary to do something do not
you think it is only fair to take the committee into your confidence and tell us
if you have any information to indicate the Secretary has done that?
Mr. Jones. No.
Mr. Johnson of Oklahoma. Suppose I should say, "Mr. Secretary, have you quit
whipping your wife?"
Secretary Ickes. Precisely; these questions are of that nature.
Mr. Johnson of Oklahoma. "Have you quit whipping your wife?" and suppose
he answers either way suppose he says "Yes, T have quit whipping my wife," that
would loave the impression he had been whipping her.
The Chairman. Yes; and he ought to give his reasons for that.
;

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4243

Secretary Ickes. I have written a letter on a good many occasions, but I never
yet have been questioned on what I might have said or might not have said at a
luncheon with another nj3mber of the Cabinet.
Mr. Leavy. It was only my thought, Mr. Chairman, Mr. Jone?^, and Mr. Secretary, that in fairness to all parties, if you purport to quote anyone's statement,
either from a letter or orally, you ought to come as near as possible to giving the
time and place when it was said, the document, or how the statement was made,
and who was present.
The Ch.\ikman. It seems to me that none of this stuff should go on the record
at all.
Mr. Leavy. It does not seem to me it should, either.
Mr. Johnson of Oklahoma. No because, now, if you leave this on the record,
it leaves the impression he did.
Mr. Jones. The answers are there. I do not think it does.
Mr. Johnson of Oklahoma. It leaves the impression the Secretary has been
trying to do some underhanded work to get the Secretary of the Navy to do
something.
Mr. Leavy. It seems to me that you have reflected on the Secretary of the
Navy and the Secretary of the Interior.
Secretary Ickes. Anyway, is this within the jurisdiction of the committee?
The Chairman. It is a reflection on the Secretary of the Interior.
Mr. Leavy. And the Secretary of the Navy, also.
Mr. Jones. I cannot see where it is any reflection. The letter, when put in
the record I do not know what is in the letter, but I assume there was a
letter written in regard to this particular transaction, and when it is put in
the record it will speak for itself.
Secretary Ickes. Well, why do you assume that thei'e was a letter?
Mr. Jones. You said there was.
Secretary Ickes. I know, but you assumed it as a basis of your questions.
Mr. Jones. I assumed what?
Secretary Ickes. That I had written a letter.
Mr. Jones. I asked you.
Secretary Ickes. You asked me.
Mr. Jones. I said had you communicated or written a letter, or anything.
I do not think I even mentioned a letter.
Secretary Ickes. Well, it is an interesting experience to come before the
Appropriations Committee and be subjected to a fishing expedition on a
matter that is not within the jurisdiction of the committee.
I think it is
;

taking an unfair advantage.

Mr. Fitzpatbick. I did not know what it was all about.
Secretary Ickes. Well, the record is there. I have never had anything to
conceal yet; there has been no black satchel in my office.
You have to go
back to my Republican predecessor to find that.
Mr. Jones. I will say this to the Secretary, that I see no reason from my
questions why you would assume I would think so, or that anybody else
would think so.
(After discussion off the record:)
Mr. Sheppard. May I say this, Mr. Secretary If the inquiry I made relative
to the special privileges Mr. Cochran might enjoy was contrary to what you
think was ethical, you have my permission to strike it all out.
I have no
desire to do that, knowing such was not the case at all, but it was merely
in conjunction with the inquiry that had been made.
:

Exhibit No. 347

The Secretary

of the Interior,

Washington,

May

6,

1941.

Editor, St. Louis Post-Dispatch,

St. Louis, Missouri.

My

Dear Sir I have before me a cutting from your paper of May 1, 1941,
heading of which is: "House Committee Coverup of Ickes Deal on Alaskan
Oil Drilling Loan."
In view of your fair and discriminating editorial which
you printed the following day, I would not say anything about this article,
were it not for the fact that your editorial appeared in your paper alone and
even there it was probably read by a comparatively few of your readers. On
the other hand, the article with its misstatements and false insinuations,

thte

4244

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

appeared on the front page. Not only this, but it was picked np by many
newspapers throughout the United States, most of which in their news articles
carried the same false impression that your original article did. The fact that
your editorial page promptly did what it could to right an obvious wrong was
gratifying and very much to your credit.
What strilies me, liowever, is that
your desk should have passed such a story, especially with such headlines. It
seems to me that any fair-minded reader of the article could liave seen the
Inherent weaknesses and the apparent falsities in it.
The true facts involved in the incident about which your Washington correspondent, Mr. Brandt, wrote so erroneously, are as follows
Mr. R. E. Havenstrite, whom I had never met, but who had been doing
business with my department since before I became its head, came to my
office with Mr. Thomas G. Corcoran.
Mr. Havenstrite had spent, according
to him, one million dollars in trying to bring in oil on the public lands in
Alaska, the original right to do which had been granted by the Interior Department prior to 1933. He had been unsuccessful, but he was not discouraged.
He believed that there was an oil pool in Alaska and the Geological
Survey felt that if there was any oil in Alaska it was at this particular site.
It believed further that the indications of oil were sufficiently good to warrant
the drilling of another test well. Naturally, the Geological Survey would be
pleased if oil should be discovered in Alaska and so would I.
Mr. Havenstrite did not feel that he could finance, personally, the drilling
of another test well. He hoped that the Navy or the R. P. C. would advance
the money. I told Mr. Havenstrite that while we would like to see oil brought
in in Alaska, because we could use a lot of it there in connection with our
greatly enlarged military and naval operations, the Interior Department had
CO money with which to finance such an operation as he had in mind. Moreover, we had no authority under the law either to finance such an operation
cr to undertake a test well ourselves.
I called up Secretary Knox and asked him whether he would be vrilling to
talk to these two gentlemen. He said that he would and subsequently he did
see them. I made no suggestion to Secretary Knox as to what he ought to do.
I do not voluntarily advise my cabinet colleagues as to their duties, especially
in a case such as this, in which I did not have any facts upon which to base a
considered judgment.
I did not even have a guess as to what the requirements of the Navy for oil and gasoline might be in the waters contingent to
Alaska, or what means

Subsequently Secretary
it had to supply those needs.
called me up and asked me if I would write him a letter covering the
position of the Department of the Interior in this matter.
I got this letter
off to him just before I left my office to join the President on his fishing trip,
on March 19. That letter is set forth in full in your article.
No person with an honest mind can read that letter and find in it any
I not only said to Secretary Knox
suggestion of impropriety on my part.
that "it would be inappropriate for me to express any opinion * * *" on
"the advisability of granting a loan (to Havenstrite)," I went on to say that
if it should be decided to "advance Federal funds to finance the operation of
these leases, I believe that the granting of a loan should be conditioned, among
ether things, on an upward revision of the royalty I'ates fixed in the leases."
This letter is the only one that I have ever written to Secretary Knox on
this subject.
This constitutes the "Ickes Deal on Alaskan Oil Drilling Loan"

Knox

that your headline proclaims.

The last sub-head over this article has this language: "Interior Chief's
This is an insinuation that no newspaper should indulge
Letter Disclosed."
The word "disclosed" is one of those suggestive, smearing words that are
:n.
favored by newspapers when they want to create an erroneous impression
that the facts do not justify. I am glad to say that the St. Louis Post-Dispatch
does not belong in this classification. The "disclosure" consisted of this:
Congressman Jones, who at the hearing referred to, was reading to me
carefully prepared questions prepared, as I believe, although I cannot prove it,
by your very able correspondent, Mr. Brandt asked me if I had written a
Then he asked me if
I replied in the affirmative.
letter to Secretary Knox.
This I did from memory and to
I could tell him the contents of that letter.
the best of my ability.
Then he wanted to know if I would furnish the Subcommittee with a copy
of my letter. I readily agreed. This copy was in the hands of the Committee
Clerk that same afternoon. A copy was also gratuitously furnished to Congressman Jones at the same time and this was not covered by the executive

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4245

blanket prohibition pertaining to committee proceedings so that he was at

liberty to make such use of it as he might wish.
So much for the "disclosure" of the "Interior Chief's letter."
Now let us consider some other misstatements and innuendoes in this smear
by the St. Louis Post-Dispatch.
You refer to the action taken by the Democratic members of the subcommittee
as an "extraordinary incident." You go on to say: "It involves Ickes and his

Thomas G. Corcoran * * *."

The majority of the members of the subcommittee present at the time of this
interrogation by Congressman Jones did make it clear that it felt that the
subject matter was not within the jurisdiction of a subcommittee of the Appro-

close friend,

priations Committee.
not know. Certainly

Why

this majority voted not to print this colloquy I

do

not at my request, made either at the hearing or

of the committee. As a matter of fact I did not
subsequently to
know that ithe full Appropriations Committee had voted not to print this as a
part of the record umil your correspondent came to see me for the first time,
which, significantly, was after he had written and you had printed his article.
I do know, and so does Mr. Brandt, that the proceedings of all subcommittees,
as well as of the full committee on appropriations, are customarily executive.
This has been a standing rule which is more honored by its breach, however,
than by its observance. The committee, having voted not to include this part of
the record in its printed proceedings, every member of that committee, includHowever, it appears
ing Congressman Jones, was honor bound by that vote.
that Mr. Brandt had no difficulty at all in having access to the record.
I do not complain of this fact because there is nothing in the whole record
that, so far as I am concerned, may not be fully disclosed.
The "extraordinary incident" that the St. Louis Post-Dispatch thunders about
in its index consisted of the call upon me by Mr. Corcoran and Mr. Havenstrite.
I suppose that no man in high executive office in Washington does not partake
of some such "extraordinary incident" many times every day. There was no
attempt at secrecy; there was no action proposed or taken against the public
interest
the "exti-aordinary incident" consisted merely of a mutual acquaintance calling to introduce a man who wanted to transact some public business.
You say further: "Called before the Interior Department Appropriations Subcommittee in executive session, Ickes was questioned by Representative Robert F.
Jones * * *." More misstatement of fact. I was not called before this Subcommittee. At an earlier meeting of the Committee I had asked for the privIt was in response to that request
ilege of appearing again on another matter.
on my part that I was there on this occasion. In the meantime, Representative
Jones had asked First Assistant Secretary Burlew, through the clerk of the
committee, if he would come up and answer certain questions about oil leases,
the nature of which he did not make clear to Mr. Burlew. I told Mr. Burlew to
call Representative Jones back and tell him that when I appeared again, as
Representative Jones knew I was going to do, I would endeavor to answer
whatever questions he might care to ask. As to the weasel word "executive"
the answer is that all the meetings of this Subcommittee, and similar ones, are
executive just how "executive" you know as well as I, and they are "executive"
because the Congress itself makes them so.
You say: "The Government had already taken one of these (Havenstrite's)
wells down to a depth of 8,700 feet at a cost of nearly $1,000,000." This is
another misstatement of fact. The Government has never invested one red
cent in the drilling of any well in Alaska. As I have already said, Havenstrite,
according to himself, had spent $1,000,000 in drilling a well. That he had drilled
a well without finding oil there is no doubt.
In the next paragraph the article goes on "Then with this af/reement (underscoring mine) Havenstrite and Corcoran would go either to the Office of Produc*."
*
*
tion Management or to the R. F. C.
By using the words "this agreement" you evidently intend to insinuate that there either was an existing agreement or that one was intended between Interior and Havenstrite. This, too, is
a misstatement of fact. There was no agreement with Havenstrite or with
anyone else about attempting another test well. To be sure, Havenstrite and
his associates had a legal right to attempt another well if they wanted to, which
right had been obtained legally in the first instance during the administration of
President Hoover.
You say "Shortly before he was to leave with President Roosevelt on his
recent cruise in the Caribbean, Ickes invited Secretary of the Navy Knox to come
to luncheon with him in the private dining room of the Secretary's offices in the

was
any member
it

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4246

Interior Building. Over lunch they discussed Havenstrite's proposal." Another

misstatement of fact. My recollection is that Secretary Knox did lunch with
me prior to my leaving on this trip, but, according to my records, this M^as on
January 28. Certainly Havenstrite's proposal was not discussed on that occasion.
I had never even heard of him then and I do not believe that Secretary Knox

had

either.

You go on

to say "Knox left with the distinct impression that Ickes favored
the plan." Since the alleged fact upon which this conclusion is based is a misrepresentation, it is, necessarily also a misrepresentation thnt Knox left with
the distinct impression that Ickes favored the "plan." How Secretary Knox could
have left with a "distinct impression" that Ickes favored a nonexistent, or at
least, to him, unknown "plan" shows a clairvoyance on the part of Mr. Brandt
and, therefore, of the St. Louis Post-Dispatch that is little short of marvelous.
After writing all of these insinuations and outright misrepresentations, your
correspondent at last makes a statement that is true. In fact, it is the only
true one so far discovered. That is, it is true if you will permit me to amend
it by striking out the words "immediately afterwards" which refer to the luncheon that I had at which Secretary Knox was my guest prior to my leaving on
the fishing trip with the President. "With those words omitted, out of a scrupulous regard for the truth, it is true that I wrote a letter to Secretary Knox dated
March 19, the day on which I left with the President. It is also true that I
wrote to Secretary Knox the words that are quoted.
After he got through with this letter, of which your correspondent managed
to give a precisely contrary impression, Mr. Brandt proceeded again to build
his story with bricks and mortar of insinuation and innuendo.
The article goes on "Apparently one of Ickes' subordinates became concerned
over the phraseology of this letter. * * * According to reports, several of
Ickes' subordinates were deeply disturbed lest their chief give his approval
to the transaction."
If any of my subordinates was disturbed it was to his
credit and I honor him for it.
But why should any one be disturbed since I had
already said over my signature to Secretary Knox that "it would be inappropriate for me to express any opinion?" Your correspondent was hard put to it
to pick up again after quoting my letter.
But he had to make some effort to follow to the end the furrow that he had started. Again I quote
"On Ickes' return (from the fishing cruise) it was agreed between him and
Knox that the matter should be dropped."
Most extraordinary mind-reading. For the information of your Mr. Brandt,
may I say that after my return I again asked Secretary Knox to lunch with me?
This was on April 3. As a matter of fact, ever since my old friend. Secretary
Knox, came to Washington as Secretary of the Navy, we have lunched together
frequently. Not only do I find pleasure in his company, we have much to talk
:

about of mutual interest.

At this luncheon the Havenstrite matter did not come up until we had left the
table and were on our way to the door of the dining room. As nearly as I can
remember. Secretary Knox said to me "By the way, I won't do anything about
that Havenstrite matter until I hear from you further." My reply, as nearly
as I can remember, was "That's all right with me." However, the record was
closed, so far as I was concerned, with my letter to Secretary Knox of March 19.
So far as I know, it has also been closed with him.
Representative Jones also attempted to smear Under Secretary Wirtz. I was
asked by Representative Jones whether Under Socretai-y Wirtz had not sugIn assuming, as I did, that
gested to Havenstrite that he employ Corcoran.
Under Secretary Wirtz had never done any such thing and. in so replying to
this rotten insinuation I found that I was entirely correct. When subsequently
I talked to Under Secretary Wirtz about it, he told me that he had never met
Mr. Havenstrite, nor so far as he knew, had he ever seen him that he had had
no telephone conversation with him and that no correspondence has ever passed
between them. Under Secretary Wirtz has stated categorically to me that,
neither directly nor indirectly, did he ever make any suggestion with reference
to the employment of Mr. Corcoran by Mr. Havenstrite.
Mr. Brandt attempts to pick up some badly needed speed when he wrote into
:

his story
"It was Ickes

who some years ago started a campaign on political lawyers.

At that time Ickes said that the door to the Interior Department was
wide open and that no one needed any lawyer to gain entrance."
More insinuations that amount to deliberate misrepresentations. I did not
start a "campaign" on political lawyers and I never said that "no one needed
*

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4247

any lawyer to gain entrance to the Interior Department." I do not believe that
any lawyer has ever had any reason to boast that he secured from me anything
that any other lawyer might not have secured. I did issue a formal statement
as Administrator of PWA that no applicant for a loan or grant need retain any
lawyer or lobbyist or agent. And few applicants for PWA loans or grants did so.
But to have said or to have intimated that no one ever needed a lawyer in
transacting business in the Interior Department would have shown that I knew
Lawyers are very frequently needed by
very little about my Department.
citizens to transact business with my Department. I suppose that, next to the
Department of Justice, the Department of the Interior is the greatest law
Citizens seeking benefits to which they are entitled
office in the Government.
under the law, or asking for a redress of grievances, would find it difficult in
cases involving technical or legal questions to get along without a lawyer. Frequently, matters of tremendous importance, involving not only rights, but very
large sums of money, are argued before me personally and it would be strange
if those having cases to present were not represented by lawyers.
For example, the first important ca.se that I heard pei"sonally involved Section
finding resulted in a recovery by the Govern36 of the Elk Hills oil lands.
ment of some $6,500,000 from the Standard Oil Company of California and the
return of what is said to be the richest square mile of oil land anywhere in the
world. Pending before me now are such important matters as the violation by
the City and County of San Francisco of the Raker Act (known as the HetchHetchy case) and the making of a new contract following which there will
probably be a request for new legislation by the Congress from the allottees of
power generated at Boulder Dam. There are constant hearings on other im-

My

portant matters being held by the Assistant Secretaries and the Bureau Chiefs
of this Department were lawyers are not only expected, but welcomed.
To cite one of many examples, minimum prices for bituminous coal are fixed
after prolonged hearings before the Bituminous Coal Division of this Department. It would be silly even to suggest that the coal operators and miners, to
say nothing of consumers, should be denied legal representation at proceedings
that are so important to them.
When Mr. Brandt tardily came to my office to interview me about a story that
had already been published, I suggested that I was entitled to be interviewed
before the story was written. I also told him that, from what I understood of
the story, it was a deliberate smear. He disingenuously explained his failure
to interview me earlier by saying that he had not come to see me because some
of my answers to Representative Jones' questions had been vague. As a matter
of fact, this should have stimulated an interest on his part to interview me.
However, Mr. Brandt was simply following the technique that many newspaper
writers now employ. They do not seek interviews because they might then be in
no position to print the deliberately intended smear. Frequently they do not
even come around to interview the victim of the smear afterwards and, even
when they do, no good results from it because any denial of the misrepresentations
printed in the smear will either be distorted or suppressed. At best, all that a
man can expect in circumstances such as these is a garbled and twisted story
dishonorably interred in an inch or two on some inside page.
Again I want to tell you that I appreciate the printing by you voluntarily of
the editorial that I have already referred to. An official repudiation of a smearing story in the editorial columns of the paper responsible for it goes far to
sustain the belief that all of us want to have, that our press is not only free but
fair and responsible. Unfortunately, however, your fine editorial cannot begin
to counter the harm caused by Mr. Brandt's original article.
Mr. Brandt protested in our interview that he was not out to smear the Secretary of the Interior, but that he was trying to get a story on Tom Corcoran. A
member of my staff who was present at this point interjected "But what will be
the effect of your story?" Mr. Brandt did not answer this question; he merely
looked embarrassed.
I will leave it to any fair-minded reader of the St. Louis Post-Dispatch to say
whether or not Mr. Brandt was quite accurate when he earnestly denied that it
was not his intention to smear the Secretary of the Interior. Afer all, a man
must be held to intend the result that flows from a deliberate act on his part.
Moreover, if a public official is unfairly smeared, it is little solace to him to be
assured that it was unintentional.
:

Very truly yours,

'

Habold L. Jckes,
(Signed)
Secretary of the Interior.

4248

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

"Exhibit No. 348" appears

"Exhibit No. 340," introduced on

in full in the text

p.

3918, is on

on

p.

3920

file

with the committee

21,

1942]

Exhibit 350
[From

tlie

Richmond Times, January

The
[An

editorial

Doli.ar-a-Year

from the

St.

Man

Louis Post-Dispatch]

The Senate Defense Investigating Committee, headed by Senator Truman of

Missouri makes a sound recommendation in its call for abolition of the dollar-ayear man.
On its face, the dollar-a-year man idea looks good. Industry and business
lend some of their ablest executives to the Government to help out in the war
effort.
Since their salaries continue to be paid by their companies, the Government obtains the help of these men for the token payment of $1 for the year. This
system makes it possible for many outstanding men to perform a patriotic service
for their country without personal sacrifice.
So it appears on the surface, and so it actually is in some cases. But there is
another side, and it is to this that tlie Truman committee wisely directs its
attention.

The committee's inventory as of January 5 showed that there were no fewer

than 255 dollar-a-year men working for the Oflfice of Production Management
alone and 631 others associated with the same agency who were employed without
compensation. Indeed, there are so many such employees that they are designated
as "W. O. C."
Looking further into this situation, the committee found that these dollar-a
year men and "W. O. C." workers dealt "with matters involving the class of
clients by whom they were formerly employed and by whom they naturally expect
to be employed in the future." Under the circumstances, dollar-a-year men often
are "lobbyists" in "a very real sense."
Other findings announced by the committee go to support this conclusion on
dollar-a-year men. Take the case of the automobile industry. Notwithstanding
the national defense emergency that existed throughout the whole of 1941, automobile production for civilian uses was allowed to continue virtually without
Moreover, little if anything was done to prepare the industry for
restraint.
conversion to military production even after actual participation in the war
became a daily possibility.
When war did come, we were caught without civilian restrictions, and without
conversion plans, with the result that a sudden and complete prohibition of auto
sales was decreed.
The committee's inquiry into plane manufacture throws no more favorable
light on the O. P. M. and its dollar-a-year men. Here the Senators found that 19
"favored manufacturers" obtained the bulk of airplane orders and loans, while
some 60 other manufacturers were unable to get contracts of any consequence.
The committee also found an "ingrained distrust of small manufacturers," with
the result that small industry was not getting its share of war work.
The case against the dollar-a-year man is still further strengthened by the
committee's report on copper, zinc, and lead production. That the need for these
vital metals would greatly increase in the event of war was obvious even to rankand-file citizens. Yet the O. P. M., in the committee's words, "failed to realize
the necessity of increasing production until long after the probability of shortage
was apparent."
The man who goes to Washington to work for the duration shoidd be an employee of the American people. He should be paid by the American people. He
should look out for their interests. It is too much to expect him to be a disinterested public servant if his salary is being paid by his company. As the
Truman committee says, "No man can honestly serve two masters."
The committee performs a public service in focusing attention on the highly
questionable dollar-a-year arrangement.

'


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4249

SUPPLEMENTAL DATA
The following data appear herewith

mony of Brig. Gen.

in connection with the testiF. H. Osborn, supra, p. 3770.

[Copy]
Cir.

170

War

Department,
Washington, August 16, W^l.

Circular No. 170

Section

Rations
Prohibition of prostitution within reasonable distance of Military Establishments

Addenda

to

Ordnance Standard Nomenclature Lists

II
III

Pending the publication of a revision of Circular No. 28 War

Department, 1941, the field ration prescribed for a trial period of three months
by that circular as amended is continued in effect.
(A. G. 430.2 (8-8^1).)
/

Rational.

// Prohibition of prostitntion within reasonuhle distance of Military Establishments. The following procedure is prescribed in order to carry out effectively
the provisions of the act of Congress appi'oved July 11, 1941 (sec. I, Bull. No. 23,
W. D., 1941)
1. The commanding oflScer of each post, camp, or station is basically responsible
for determining if and when prostitution in areas adjacent to the military reservation adversely affects the efficiency, health, and welfare of the personnel of the
post, camp, or station.
Initially he will enlist the efforts of the local civil authoi'ities to remove such prostitution conditions.
2. If such local cooperative measures are not effective, the local commander
will make writt<n request to his appropriate corps area commander for a special
report of prostitution conditions in the specific area adjacent to the post, camp,
or station. Such requests will be referred to the Defense Regional Coordinator
of the Federal Security Agency who, under existing arrangements, will cause a
The Rt^gional Cospecial investigation and report of conditions to be made.
ordinator's report when received by the corps area commander will be referred
to the local military commander for his information.
3. If the Regional Coordinator's report transmitted through the corps area
commander to the local commander contains factual information of the existence
of prostitution, the local commander will again consult the local authorities, inform them of the general contents of the report, and advise them of the action
in paragraph 4 which he will be required to take if the unfavorable conditions are
not corrected.
4. If the local authorities fail to take corrective measures within a reasonable
period of time after they have been informed of the contents of the report, the
local commander will forwanl a letter to The Adjutant General, through military
channels, containing the following:
(a) A statement of' prostitution conditions which are inimical to the efficiency,
health, and welfare of his command, based upon the Regional Coordinator's

report.
narrative of the efforts
(&)
ties to correct conditions.

((,')

War

recommendation as

which have been made

to the specific

to cause the local authori-

areas or areas which the Secretary of

shall publicly announce.

If the report indicated in

5.
paragraph 4, together with other available information, indicates the existence of a condition harmful to the efficiency, health,
and welfare of military personnel at the specified post, camp, or station, the
Secretary of War shall designate and publish in War Department orders the
specific area or areas adjacent to or a limiting zone around the post, camp, or
station where it shall be unlawful to engage in prostitution or otherwise aid or
abet same as described in the act of Congress referred to above.
(A. G. 250.18 (3-12-41).)
Ill Addenda to Ordnance Standard Nomenclature Lists.
1. Addenda to Ordnance Standard Nomenclature Lists are being revised. These addenda indicate
the quantities of parts which are estimated as required to maintain the number
of major items, usually 100, indicated by the addenda for a period of 1 year
in the theater of operations.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4250

These addenda, until experience indicates otherwise, should be used

2.

reviewing

officers

by-

as the basis for checking requisitions as to quantities and

nomenclature of parts.
(A. G. 062.1 (8-7-41).)
order of the Secretary of

By

War
G. C. Marshall,
Chief of Staff.

Official:

Ulio,

J. A.

Brigadier General,
Acting The Adjutant General.

The following data appears herewitli in

mony of Henry B. Fernald, supra, p. 3824.

connection with the

testi-

The American Mining Congress,

Washington, D. C, December 13, 19Jfl.
Hon. Harry S. Truman,
Chairman, Special Committee Investigating National Defense,
United States Senate, Washington, D. C.
Dear Senator Truman When appearing before your Committee on December
I am
11, you extended to me the opportunity to supplement my testimony.
accordingly submitting a letter from Mr. Elmer Pehrson, Chief of the Economics
and Statistics Branch of the U. S. Bureau of Mines, addressed to the Secretary
of the American Mining Congress and giving official statistics of the domestic
mine production of copper, lead, and zinc for 1940 and 1941.
These represent the production from the mines, which was the subject of
the Committee's discussion. You will note that both copper and zinc show
substantial increases in 1941 over 1940, and that lead production for 1941 is
estimated as slightly in excess of that for 1&40. These present quite a different
picture from some of the statements made during the committee hearings on
December 11.
I ask that my letter and the letter from Mr. Pehrson be incorporated in the
record of the hearings immediately following my testimony.
:

Respectfully yours,

Henry B. Fernald,
Chairman, Tax Committee, The American Mining Congress.
United States Department of the Interior,

Bureau of Mines,
Washington, December 12, 1941.
Mr. Julian D. Conover,
Secretary, American Mining Congress,
Munsey Building, Washington, D. C.

Df^vr Mr. Conover: In reply to your request for data on the domestic mine
production of copper, lead, and zinc, I am pleased to submit the following
statistics prepared by the Bureau of Mines
Short tons

Copper

Lead

Zinc

1940:
457. 392

Total.-

Monthly Average

73,

174

38,116

77,

569
50y
569
113
683
314

664
664
37, 664
38, 234
39,116
38, 136
36, 867
36, 910
37, 806
38, 000
378,061
40, 000
40. 000
458, 061

665, 068
55,

422

1941:

Jan.

Feb. >Monthly Average

Mar.

77,
77,

Apr

80,
83,

May

82,

June..July

80, 043
81, 0.'i8
79, 655
81, 600
801, 173
82, 000
82, 000

Aug-Sept.-

Oct

for 10 months
Nov. (estimated)

Total

Dec. (estimated)
1941 total

-.-

965, 173

37,
37,

58, 101
58, 101
58, 101

61,43y
60, 703
62, 916
59, 800
62, 823
62, 339
63, 300
607, 623
63, 000
63, 000
733, 623

Cordially yours,
Chief,

E. W. Pehrson,
Economics and Statistics Branch.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4251

The following information appears

mony

in connection with the testiof Douglas C. MacKeachie, supra, pp. 4061, 4071

War Production Boaed,

Washington, D. C, February 16, 1942.
Mr.

Hugh A. Fulton,
Room .'f49, Senate

Office Building,

Washington, D.

C.

Duriug his appearance before the Truman committee an

Thursday, February 12, Mr. MacKeachie was asked two questions to which he
agreed to secure answers for the record. In his absence from the city he has
asked me to send you this information:

Dear Mr. Fulton

The first question in effect was

"What is the present status of the company
up

to build the so-called sea-otter type of

mission

called Sliips, Inc., which was set

merchant ships outside Maritime Com-

siMJcificatio-ns?"

The answer supplied by

Capt. J. O. Gawne, Assistant Chief, Shipbuilding

as follows:
"Ships, Inc., is a Government corporation, of which Mr. E. B. Germain is
president, organized under the Reconstruction Finance Corporation to build the
sea-otter tyi)e of cargo ship.
Preferred stock in the amount of $100,000 was purchased by the Reconstruction Finance Corporation, of which sum $14,000 has
been expended for engineering and development work. No expense has beeu
incurred for salary. One vessel had previously been built, but the Board ot
Directors of Ships, Inc., recommended, after thorough trials and tests had been
conducted, not to build any additional vessels of this type, due to the limitations
in usefulness of the type.
The Secretary of the Navy agreed with the report
of the trials board and the board of directors, and by direction of the President
the available balance of about $86,000 is to be returned to the Reconstruction
Finance Corporation, but the corporate structure is to be maintained as a facility
to be available for any similar purpose for which it might be required."
The second question was in effect
"We understand that crane manufacturers whose facilities could be well utilized
for heavy military construction will run out of contracts in June.
Is this correct?
If it is, what plans are being made for the conversion of the industry?"
The answer to this question provided by Mr. George C. Brainard, Chief, Tools
Branch, is as follows
"Replying to yours of February 13, please be advised that all builders of cranes
of the overhead factory type, also for steel mills, shipyards, and so forth, are
extremely busy; they have large backlogs of unfilled orders, and, in addition, this
Branch is instigating pool orders for the entire balance of their 1942 production.
In order to meet the requirements, the output of several companies is to be
expanded thi'ough the use of additional machine tools and other facilities."
If there is any additional information you would like in regard to these questions, please do not hesitate to ask for it.

Branch,

is

Sincerely,

Stanley F. Teele,
Consultant, Division of Purchases,

The following data are included in connection with the testimony

of Donald M. Nelson, supra, pp. 4025-4047
February

Donald M. Nelson,

16, 1942.

Esq.,

Chairman, War Production Board,

Neio Social Securitij Building, Washington, D. C.
Dear Mr. Nelson The orders which you have issued for an investigation of
the dollar-a-year men under your juri.sdiction are of great interest to the committee. I am hopeful that you will be able to make substantial progress in weeding out those who were responsible for the failures of the past and in substituting
capable men who will have the courage to meet the problems with which we are
faced.
Unless you can accompli.sh such a substitution, you are certain to encounter serious difficulties carrying out your program. I am glad that you are
:

311932

42

pt.

10

34

4252

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

not going to rely simply upon a reshuffle of the procurement agencies without a
substantial change in personnel.
The committee believed that the problem of substituting the right men for the
wrong men was so great that the practice of retaining dollar-a-year men should be
abandoned, so that those who were more interested in their remuneration than
in their public service would automatically be eliminated, and those public-spirited
individuals, like yourself, would be retained. You have informed the committee
that you desire to retain some dollar-a-year men who, by reason of the standard of
living to which they have accustomed themselves, cannot afford even temporarily
to work for the Government for $10,000 per year, or less. The committee does not
like to have important procurement matters entrusted to men who have given
such hostages to fortune. Those wlio cannot forego large incomes temporarily
cannot reasonably be expected to take a chance of foregoing them permanently
by taking positions on behalf of the Government with which the controlling
In the committee's opinion,
officials of their corporations are not in sympathy.
this was one of the principal reasons for the now generally admitted failures of
the Office of Production Management.
However, the committee believes that the best interests of the procurement
program require that it be administered by a single head who will be able to do
things his own way and who will be judged by his accomplishments as a whole
and not by his position on individual matters. The committee will, therefore,
support you even on matters on which it disagrees with you, and believes that
all other agencies of the Government should afford you a similar unquestioning
support until you have had a full opportunity to achieve the success which we all
hope that you will achieve.
The orders which you have issued, if rigorously and expeditiously carried out,
should go far to lessen the evils inherent in the practice of retaining dollar-ayear men. The committee will appreciate it if you will furnish it with copies
of the reports which you have instructed your division heads to furnish you within
30 days.
Very truly yours,

Harey

S.

Tkuman,

United States Senator.

War Production Board,

Washington, D. C, February 16, 19/(2.
Hon. Harry F. Truman,
United States Senate, Washington, D. G.

Dear Senator Truman: On January 28 your committee afforded me the

op-

portunity to appear before it and explain why in my opinion it is essential

to the prosecution of our maximum war effort that the War Production Board
continue to have the privilege of engaging properly qualified dollar-a-year
men. At that time I explained the rules and limitations laid down for the
War Production Board to govern all future employment of dollar-a-year men
and th[e review of all such personnel presently employed.
Since that date, I have formalized these rules in two general administrative
orders, one covering appointments on a dollar-a-year basis and the other personnel serving on a without-compensation basis.
Together with a memorandum sent to each Division head on February 10, 1942, these two orders outl'ue
the procedure to be followed with respect to future appointments and in the
review of all personnel presently serving in the War Production Board on
other than a regular salary basis
To administer these orders a special department has been set up in the
personnel branch and my assistant, Mr. Sidney J. Weinberg, has been designated the approving officer with responsibility for seeing that all dollai'-a-year
and without-eompensation personnel meet the qualifications I have laid down.
I am attaching copies of the orders and memorandum referred to above for
your information. I would welcome any comments or suggestions you may
have with respect to the steps taken and know you will call upon me should
you desire any further information.
Sincerely yours,
D. M. Net.son, Chairman.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

War Production

4253

Board,

February

10, 1942.

Subject: Appointmeuts on a dollar-a-year basis.

General Administrative Order No. 4

Section 1. Purpose of this order. .01 The purpose of this order is to prescribe
regulations governing appointments on a dollar-a-year basis in the administrative organization of the War Production Board.

.01 Any nominee for appointment

Sec. 2. Summary of govemwg principles.
on a dollar-a-year basis must be a citizen of the United States, of high integrity
and good moral character, of outstanding exi>erience and ability, qiialified for a

responsible administrative, technical, consulting, or advisory position, and in

receipt of earned income from his current nongovernmental employment at a
rate of at least $5,600 a year.
.02 The position to which the appointment is to be made must be one requiring
special business or technical knowledge and experience.
.03 No dollar-a-year appointment shall be made to any position if, by reasonable effort, an equally well-qualified person can be found who will serve on a
regular governmental salary basis.
.04 No person so engaged shall make determinations directly affecting the
affairs of the firm or company in which he is employed.
.05 No permanent appointment shall be made except after a thorough investigation of the proposed appointee by one of the investigatory agencies of the

Government.
appointment may he made on a dollar-a-year
for an appointment on a dollar-a-year
basis until the duties and responsibilities of the position he is to fill and its
place in the organization have been described in writing on Form GA-2 (attached)
and until the administrative officer, or such person as may be designated by him,
has reported to the Division head concerned whether the position is one which,
in accordance with the provisions of this order, may be filled by an appointment
on a dollar-a-year basis. The Division head may appeal from such determination
to the Chairman, or such person as may be designated by him, and his ruling
Sec. 3. Glass of position to uihieh

basis.

.01

No person may be nominated

shall be final.
Sec. 4. Nomination

.01 A nomfor appointment on a dolMr-a-year basis.

ination for the appointment of any person to any position on a dollar-a-year
basis may be made only by a division head, and only for a position within his
division, to the chairman or such person as may be designated by him.
.02 A nomination shall be made through the medium of Form GA-6 (attached)
signed on the front by the nominator and on the reverse by the nominee and the
nomination shall be approved by the chairman, or such person as may be designated by him.
Sec. 5. Appointment on a dollar-a-year basis subject to confirmation by the
chairman. .01 Upon approval of nominations as provided in section 4 of this
order, nominees for appointments on a dollar-a-year basis shall be given
temporary appointments and inducted into the Gfovernment service by the
Director of Personnel, subject to later confirmation of their appointments upon
completion of investigations and classification of the positions filled by them.
.02 The Chairman of the War Production Board, or such person as may be
designated by him, upon receipt of reports of investigations, will make the
appointments on a dollar-a-year basis or terminate the services of the temporary
appointees.
Sec. 6. No nominee to enter on duty prior to induction into Oovernment service.
.0:1 A nominee for appointment on a dollar-a-year basis shall not be permitted to enter on duty prior to his induction, under temporary appointment,
into the Government service by the Director of Personnel, nor shall he be
entitled to any reimbursement for travel or other expenses incurred by him prior
to induction. Upon induction he shall take the oath of office and shall agree that
in accepting this appointment as a Government official and while serving in that
capacity he ceases to represent his employer or his industry and that all of his
actions will be taken in the public interest.

4254

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

Sec. 7. Transfers or changes of duties or status, including releases and termina.01 Executives and employees
tions of personnel serving on a dollar-arycar basis.
on the doUar-a-year basis may not be transferred to a newly created position, or
fill a vacancy in an existing position, without the approval of the Division head
and the Director of Personnel.
.02 No substantial changes in the duties of an executive or employee on $l-ayear basis shall be effected without written advice of such changes by the director
of the division concerned to the Director of Personnel.
.03 No action to remove a dollar-a-year man for cause shall be initiated

without specific authorization by the Chairman, or an executive designated by

him. If the services of a dollar-u-year man are terminated for any reason,
the Director of Personnel shall immediately be advised by memoi'andum of
the effective date of such termination.
.04 Executives and employees on a dollar-a-year basis are subject to the
same supervision and direction as regular salaried ofiicers and are expected
to observe established policies and rules as to attendance on duty and absence
from duty, as required by their immediate superiors.
.01 Administrative Order
Sec. 8. Administrator Order No. 30, superseded,
No. 30, dated November 12, 1941, is superseded by this order.
.01 There shall be
Seo. 9. Exceptions under the provisions of this order.
no exceptions to the provisions of this order in making appointments on a
dollar-a-year basis except as specifically authorized by the Chairman- or such
person designated by him.
.01 This order shall be effective on and after FebSec. 10. Effective date.
ruary 10, 1942.
Donald M. Nexson, Chairman.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

FOKM GA-2
Prepare and sign three copies.
Transmit all three copies to divisional administrative officer vpho
will review, number, and approve the request and transmit
two copies to personnel branch

and

Date

of

request

4255

Request No-

(2-2)

United States of America

WAR PRODUCTION
BOARD

Division

_.

Branch

retain third copy.

Request for

Classifica-

Section and unit

tion OF Position (s)

kind of position

Temporary (how

long)

Permanent

--

DIVISION

recommendation

Title of position..

Grade and

Number

rate of pay..

of positions

Request prepared by
Date.

Approved..
Divisional Administrative Officer.

Date.

personnel PRANcn recommendation

Title-

4256 INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

CEETinCATE OF EMPLOTING OFIICEE
I certify that the position herein described is needed, that the description
thereof reflects the kind of the position as it is intended it should exist, and that
its place in the organization is correctly shown.
Signature of employing oflBcer

Title

Date

INSTEUCTIONS FOE DESCRIBING A POSITION

Each employing officer is responsible and held accountable for the accuracy
of the description, for the purpose of classification and grading, of each position
within the scope of his employing authority. Each position description shall be
such as will convey to any incumbent of the position a correct understanding
of his place in the organization and a proper basic concept of his responsibilities
and functions or duties.
In describing each position, employing officer shall include a statement with
respect to each of the following: (1) The character and degree of supervision
to be received by the incumbent; (2) the character and degree of supervision
the incumbent is to exercise over other employees in the organization unit; (3)
the specific duties and responsibilities to be exercised by incumbent; and (4)
the qualifications required of candidate to be selected to fill the position, including knowledge, ability, experience, and education. If the requested position is in
the custodial service, or the stenographic, typing, or clerical series in the CAF
service and is below grade CAF-5 or an equivalent grade, the statement of
qualifications may be omitted, unless the employing officer wishes to state any
special requirements.
FORM OA-e
(2-2)

United States of America

Title

and grade

WAR PRODUCTION BOARD

Nomination for Appointment
ON $1-A-Yeae Basis

Name
Division

Business address

Home
Date

Branch

address

of birth

OflBcial

Place of birth

headquarters

or office

Section

Unit

detailed statement of experience (include location of companies, period of employment, salaries,

directorships, memberships, and public services)
I nominate for the position described herein and I certify that to the best of my
knowledge and belief, (1) he is a citizen of tlie United States, of hij;h integrity
and good moral character, of outstanding experience and ability, and fully qualified ifor such position
(2) and that a reasonable effort has been made to find an
equally qualified person for this position who would serve on a regular governmental salary basis and that no such person has been found; (3) and the information given hereon is true and correct.
Signature of nominator
Director
Division.
Date
;

CERTIFICATION RESPECTING

EMPLOYMENT ON A

D0LL.\R-A-YEAB BASIS

I certify that I have been granted leave of absence and have been authorized by
niy employer to accept an appointment in the War Production Board on a doUara-year basis.

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

4257

hereby expressly agree that in accepting this appointment as a Government

and in the course of my official duties, I will not represent my employer or
my industry and that all my actions will be taken in the public interest.
Signed
Date
I

official

Wab
Subject

Pkoduotion Board, Febi'uary

10, 19)2.

Personnel Serving on a "without compensation" basis.

General Administrative Order No. 5

Purpose of this order. .01 The purpose of this order is to prescribe

regulations to govern the securing or accepting of the services of individuals on
a "without compensation" (W. O. C.) basis.
Sec. 2. Qualifications of persons rendering services on a "icithout compensa.01 Any person who is to serve the War Production Board on a
tion" basis.
"without compen-sation" basis must be a citizen of the United States, of high
integrity and good moral character, of outstanding experience and ability, and
well qualified to give authoritative advice on a specific problem or program of
the War Production Board.
Sec. 3. Class of service that may be rendered on a "without compensation"
basis.
.01 An individual may serve on a "without compensation" basis in an
advisory capacity to the War Production Board. Individuals shall serve in this
capacity as Government consultants working in the public interest and not ass
representatives of their private employer or industry. Any person serving on
such a basis may not be permitted to assume any administrative responsibility
nor to exerci.se any authority over, or direction of the work of, executives or
employees of the War Production Board. No person shall be permitted to serve
on a "without compensation" basis on one nomination for more than a total of
30 days nor over a period longer than 3 months. A subsequent period of service
may be authorized in accordance with the foregoing provisions of this section
by the division head concerned. Any such extension shall be effected by a written memorandum addressed to the Director of Personnel and signed by the
division head, without the preparation and submission of Form GA-7 (attached).
Sec. 4. Nominations of pei'sons to serve on a "loithotit compensation'" basis.
.01 Nominations of iiersons to serve on a "without compensation" basis may be
made by the division head for positions within his division to the administrative
Any such nomination will
officer or such person as may be designated by him.
be made through the medium of Form GA-7, in duplicate.
.02 If the administrative officer, or such person as may be designated by him,
agrees that the nomination is in accordance with the provisions of sections
2 and 3 above, he will secure the approval on both copies of Form GA-7 by the
Chairman, or such person as may be designated by him. Upon approval he will
return a copy of Form GA-7 to the nominator, who will arrange to have the
nominee report for duty.
.01 When a nominee reports for duty
Sec. 5. OatJi of office; entrance on duty.
the nominator or his representative will give him a copy of Form GA-7 and
request him to present it, in person, to the Personnel Branch.
.02 No official duties shall be assigned to any nominee until he has taken the
oath of office. No Government travel authority will be issued to any nominee,
nor can reimbursement be allowed by the Government for exi)enses of any kind
incurred by the nominee prior to the date his nomination is approved by the
Chairman, or by such person as may be designated by him.
Sec. 6. Transitional provisions.
.01 Within 30 days from the effective date of
this order each division head will arrange to have continued on one of the following bases all personnel now serving in his division on other than a regular
salary basis or on a doUar-a-year basis, approved and formalized prior to the
SExrnoN

1.

date of this order

1. On temporary appointments on a dollar-a-year basis as provided in General
Administrative Order No. 4.
2. On dollar-a-year appointments if they have qualified and if satisfactory
reports of investigations have been received.

4258

INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM

3. On a "without compensation" basis in accordance witli tlie foregoing provisions of this order4. On a regular-salary basis in accordance with the rules and regulations of the
Civil Service Commission.
.01 There shall be no excepSec. 7. Exceptions under provisions of tfiis order.
tions to the provisions of this order in making appointments on a "without-compensation" basis, except as specifically authorized by the Chairman, or such
person as may be designated by him.
.01 This order is effective February 10, 1942.
Sec. 8. Effective date.

Donald
FORM OA-7
(2-2)

United States op America

WAR PRODUCTION BOARD

Nomination for

on a Without Compensation Basis

Ser'^hce

IM.

Nelson, Chainno/n.


INVESTIGATION OF THE NATIONAL DEFENSE PROGRAM
February

4259

10, 1942.

To All division heads.

From Donald M. Nelson.
:

Subject: Analysis of presently employed dollar-a-year men.

Attached

is

General Administrative Order No. 4 outlining the

new procedure

to be followed hereafter in connection with the employment of personnel on a

doUar-a-yeai' basis.
I have designated Mr. Sidney J. Weinberg, assistant to
the Chairman, to act on my behalf in the administration of such activities
reserved under this order to the office of the Chairman.
The order applies not only to future and pending appointments but it is

important that all dollar-a-year men presently employed, and the positions
which they occupy, meet the qualifications outlined under section 2 of the
order.

In the light of the requirements of this section, will you please go over the
of all dollar-a-year men in your division whose appointments have
Please arrange to terminate all those men whose
already been formalized.
positions or personal qualifications do not qualify them as dollar-a-year men
or, in those cases where their records qualify such action, arrange to place them
on a salaried basis.
Men whose dollar-a-year appointments are pending and whose appointments
have not been formalized will be considered as new nominations subject to the
conditions of the new order and need not be included in the review of existing

names

personnel.

Thirty days from the date hereof, please send me a report on the subject
indicating
(a) The names of those men who as individuals continue to qualify as dollara-year men and whose positions warrant dollar-a-year status.
(&) The names of former dollar-a-year men whom you have transferred to
a salary basis.
(c) The names of former dollar-a-year men whose services have been terminated.

Febbuaby

10, 1942.

memorandum
To: Sidney J. Weinberg.
From Donald M. Nelson.
Subject: Appointments on a dollar-a-year
:

basis.

I have just signed General Administrative Orders No. 4 and No. 5 setting up
new procedures to be followed in appointments on a dollar-a-year basis and
for "without compensation" services.
I hereby designate you to act on my behalf in the administration of such
activities reserved under this order to the office of the Chairman.

INDEX
Page

Aberdeen Proving Grounds

Adams, Maj. Gen. E. S
Adams, John
Adams, Ralph
Adams, W. T
Advisory Commission to the Council of National Defense

4173
4171
4096
4125
4101-4102
38448845, 3865, 3919, 4033
Aeronautical Engineering Society of America
4011
Aeronautical Machinists Union
4108, 4152
Ager, C. P
4085-4086
Agriculture, Department of
4237
Air Corps Institute
4161
Alabama Ordnance Works
4099
Alaska
3767, 3772, 3870, 3917-3920, 4194, 4241-4242, 4247
Alaska Steamship Co
4150
Alexander
4106
Allegheny Ludlum Steel Corporation
4009
Aluminum Co. of America
3830,4053
Amberg, Julius
3996-3998, 4234
American Brass Co
4216
American Bridge Co
3972
American Expeditionary Force
4189
American Federation of Labor
3731-

American
American
American
American
American
American
American
American
American
American
American
Anaconda

3741, 3743-3744, 3747-3752, 4075-4079, 4082-4092, 4099, 4103, 4105,

4109-4110, 4118, 4121, 4125-4139, 4150-4155, 4158-4159.
Federation of Labor, Metal Trades Department
3749,
4085-4088, 4111, 4120, 4146-4147, 4158

League

Liberty engine
Library Association
Life, St. Louis

3767
3893, 3895

4174
3988
Locomotive Co
4023
Mining Congress
3815,3818,3822,4250
Public Hygiene Association
3768
Red Cross
3767, 4175, 4179, 4199, 4203
Welding Society
3739, 3744
Zinc Co
3851
Copper Mining Co
3787-3789, 3792-3793, 3825, 4206, 4208-4209, 4220
Anderson, Archie
4100
Anderson, Robert R
4147
Appropriations, United States House of Representatives Committee on__ 3862,
3918, 3920, 4220, 4238, 4243-4245
Appropriations, United States Senate Commiteee on
3858
Arbitration, 1918, Board of
3734
Archer Blower Co
4103
Army Institute Correspondence School
3774-3775
Army and Navy (Inc.) Citizens Committee for
4200-4203
Army and Navy Munitions Board
4056
Army Song Book
4202
Army, United States
3756-3764, 3766-3768, 3771-3772, 3774, 3776, 3837
Air Force
_ 4064, 4073, 4161
Chief of Field Artillery
4009
Chief of Stafe
4188, 4195
Post Exchange Service
3758, 3772-3773, 4166, 4194r-4196
Surgeon General
376&-3770, 4167

INDEX

II

Faev
4143
4140, 4147, 4149, 4156
Associated Shipbuilders
4110-4111
Associated Yards
4089
Association of Certified Welders
4109
Association of Certified Welders of Wisconsin
3939
Attorney General, United States
4108
Austin Co
4058
Australian Army
3782. 4204, 4219
Axis Powers
3836-3837,
3854
Ayer, Frank A
4141
Bacon, William
4091
Bacot, E.
4089
Baines, A. E
Baker, Newton D
3757, 3771, 4197
4092
Baltimore & Ohio Railroad Co
Bank, Maj. Theodore P
3758
4009
Bard, Capt. C. Robert
4162
Bard, Ralph A
Barnes, J
3987
Basor, David
3735, 3750, 4075-4076, 4080-4083, 4085, 4089, 4103-4106, 4110
4235-4236
Bassey, Louis V
3825-3826, 3836, 3840, 4037
Batt, William L
Battersby, Margot
4225
Beach, Ed. P
4089
4118
Beeler. Ralph
Bendheim, Charles
4091
Bermuda
4194
4111
Berray, Lewis S
Berry, Glen
4104
Bessemer mine
3795
Bethlehem Steel Co
4053, 4122-4123
Biddle. Francis
3922
Black, J
4118
Blackwell & Allen
4136
Blackwell, E. V
4095, 4103, 4111^114
Blanding, Camp
3756, 4161
Bliss, Fort
4200
Bocko, Albert
4127
Bocot, E.
4096-4097
Boeing Aircraft Co
4108, 4141, 4152
Bofors Aktiebolaget (Sweden)
3967,4010
Boilermakers & Iron Ship Builders Journal, the
4091
Bolger, Ray
4202
Bosko, Nick
3736, 4107-4100
Boulder Dam
4247
Box, R. E
4093
Bragg, Camp
3759, 3763, 3765, 4200
Brainard, George
4251
Brandt, Raymond P
4244-4247
Brazil
3940-3941
Bremerton Navy Yard
3742, 4116-4117
Bridgeport Brass Co
4220, 4221
Brinkerhoff, Charles
4097,4104, 4157
Briscoe, J.
4126
British; Government
3887, 3898, 3981-S933, 3937. 3942, 3948-3951.
3958-3959, 3972, 3975, 3982-3983, 4022^023, 4222
British Guiana
4194
British Purchasing Commission
3S92-:3897, 3902, 3930. 3932-3933. 3942. 3981,
3992, 4009, 4012, 4015, 4017, 4227-4233, 42^5-4236
British-Wright Aircraft Co
4010
Brock, Leonard
4097, 4104
Brodorick & Gordon (Remington Small Arms)
4146
Brooklyn Navy Yard
4064
Brown, Ed J
4159
Brown, H.
3748, 4159
Brown, Hober James
4079
Brown, Marvin A
4105
Brown. Walter
4089

Arrowsmith Iron Works

INDEX

III

Fase
4055
Broyles, Capt. N. B
3765
Buckenroth, Carl
4148
4121-4122
Buckholz, Robert N
Budget, Bureau of the
3767-3768
Bugni, Fred
3792, 4208
Bunker Hill mine
3786-3787, 4206
Bunker Hill & Sullivan Mining & Concentrating Co
3786-3787, 4206
Burbank steam plant
4106
Burgess, W. Starling
3878, 3994-3995
Burke, Hon. Edward R
4025
Burleson,
4010
Burlew, E. K
4240
Burlew, Robert
4103, 4245
Butko, Nick
3792, 4208
Butler,
3873, 3875-3876, 4226
Butler, L.
4150
Butte Miners' Union, No. 1
3796
Byers,
4117
Byrnes, James F
3928
Byron, Robert
4159
California Shipbuilding Corporation
4079, 4103, 4118
Callahan, Lewis
4103
Camp Shows, Inc
4202
Canada
3834,3860
Capone, Al
3882
Cardno, Cornelius
3785, 4085, 4088, 4153
Caribbean islands
3767
Carlisle Lumber Co
4149
Carnegie-Illinois Steel Co., Pencoyd plant
3970-3971, 3974-3975, 3977, 4203
Carr, H. J
4092
Carroll, Albert
4104
Carter, Hon. Albert E
4238
Case Institute
3381, 4009
Caster, Pat
4108
Castle Dome Co
3851-3852, 4221
Census, Bureau of the
3784,3786,3791,3794,4206,4208,4210,4214
Charlton, Capt. A.
4080
Cheely, James
4119, 4129
Cheney, Jenson & Marr
3810
Chicago Pneumatic Tool Co
4011
China
3782, 3917, 4011, 4204
China defense supplies
3870, 3917
Chinese Army
3917, 4058
Chinese Government
3917
Church. John A
383&-3837, 3839, 3843
Churchill
3922
Civil Aeronautics Authority
3861
Civilian Conservation Corps
4178, 4182, 4187, 4180-4190
Clark, Maj. Edwin
4233, 4235-4236
Clark, G. H
4142
Clayton, W. L
3839
Cleveland Pneumatic Co
4011
Cleveland Wire & Rope
4009
Clice, Charles
4157
Clise, R.
4124
Cloud's Welding Shop
4149
Coast Guard, United States
3861, 3935, 4228
Coats, William
4156
Coca-Cola Co., the
3773
Coffee, Melvin
4103
Cohen, Benjamin V
3871,3938.4008
Cohen, Frank
38723886, 3888-3891, 392.9-3933, 3n3;5-3945, 3947, 3950-3953, 3955, 3957,

Browning, A. J

3959-3987, 4018, 4226.

Cohen, (Mrs.) Frank

4008

INDEX

IV

Commander

in Chief

Commerce, United States Department of

Secretary of

Community

facilities bill

Congress of Industrial Organizations

Face
3871,4030
3865, 4045
3941
41132

3731-

3732, 3734, 3736-3739, 3747-3748, 3750, 3781, 4075, 4;JS4-i085, 4114,

4150-4151, 4204, 4217-4218, 4221.
3765.
Congress, United States
3767-3768, 3774-3775, 3820, 3824, 3930. 3936. 3944-3946, 3951-3^54,
4005, 4025, 4027-4028, 4034, 4106-4107, 4125-4139, 4193, 4204, 4218,
4222, 4235, 4249.
3777, 3S19, 4222
Congressional Record

Conover, Julian D
Consolidated Aircraft Co
Consolidated Copper Mines
Consolidated Shipyards Corporation
Coolidge, Calvin
Coordinator of Defense Housing

Copper Range Co
Corcoran, R. J
Corcoran,

Thomas G

4250
4115
3855
4096
3871,3954
3779
3855-3a5&
4009
3875-

3S76, 3920-3921. 3943, 3986-3988, 3991, 3993-3998, 4003, 4007-4009,

4225, 4234-4236, 4239-4241, 4244-4247.

Corcoran, (Mrs.)
Cory & Joslyn
Cotton,

J.

Thomas G

Cotton & Franklin

Couch, Harvey
Court, Capt. Alva B
Crag Shipbuilding Co

Crane Co
Creem, J
Crow, Thomas
Crowell, Gen. Benedict
Crowley, William
Culberson, Charles

Cummings, Arthur J
Curtiss-Wright Corporation
Curtiss-Wright Flying Service
Cuse, Robert
Czechoslovakia

4008
4140
3907
3903
3907
3876, 4226
4106
4128
4103
4133, 4148
3937-3938, 3940, 8942, 3961
3872-3875, 3876, 3881, 3989, 4226
4149

4113^114

4010-4011
4010
4229
4010
Dale, C. O
4089
Daly,
4122, 4124, 4157
Daniels, L. J
4105
Davis, Camp
3756, 4161
Davis, John
3913
4110-4111
Davis, Paul E
Davis, Polk, Wardwell, Gardiner & Reed
3913
Davis, Vilus V
4119
Dean, Dennis C
4105
Defense Plant Corporation
3839, 3841, 3850-3851, 38o6, 3S98, 4014
Defense Supplies Corporation
3839
Del Gazzo, Anthony
4154
3933-3936
Democratic National Committee
Dempsev, John
3880, 3988
Dempsey & Koplovitz _ 3873-3874, 3879-3880, 3882, 3884-3885, 3888, 3891, 3988-3994
Dempsey, William J
3873-3874, 3877, 3879-3880, 3988-3989
Desirable Real Estate Corporation
3973
Des Moines ordiuiiice plant
4134
Dewey (.John) Vocational High School
4094
Dewev, Thomas E
3762-3763, 4162
4103
Di Mattiua, B
Disque, Brig. Gen. Brice F
4196
Do.ssov, Albert
4104
Douglas Aircraft Co., Inc
3736

INDEX

V
Page
3787-3788, 420G

Douglas mine
Douglas Mining Co
Dowd, Benjamin S

3787,4206

3876, 3957, 3959,

3961-3963, 3965, 3969, 3972, 3975-3977, 3981, 4008, 4015-4016, 4225
Dowd, Peggy
4008
Dowling, Edward
4202
Downing, D.
4132, 4135, 4136

Engineering Corporation
Duffy, Daniel

Driggs

Duncan, Burton I
Duncan, James A
Dunlop Tire Corporation
Dunmire, W. L
du Pont (E. I.) de Nemours
Dupree, Howard F
Dutch East Indies
Dutch Guiana

4010
3930-3932, 3941, 3982-3983, 4000-4003
1.
4145

& Co

Dykstra, Dr. Clarence

Earnest, James H
Easton, Captain____
Eaton, Louis L
Eccles, Marrjner
Edison Electric Institute
Educati(m, United States Office of
EUer, W.

Camp

Elliott,

Ellison, A.

Emergency Plant Corporation

Emergency plant facilities
Emerson, M. E
Emerson, Ralph Waldo
Empire Ordance Corporation

Engineering and Mining Journal

England

4046
4031
3774
4104
3995-3996
4138
4033, 4046
3857-3859, 3862
4193
4154
3759
4123
3900
3898
4113, 4119
38S1

3872,

3792,4207,4209
3893, 3995, 4010, 4230

Enterprise
Ernest, James

Esco fund
Eustis, Fort

W. J
Hugh

Fanclier,

Farben
Farley,

414i4

3874-3876, 38S2, 3885, 3887, 3921-3922, 3929-3932, 3937, 3943, 3953,

3957, 3960, 3966-4024, 4225.
3974-3975,3380-3981
Securities Corporation

Empire

Faber,

4089
4061
4098
4078

(I.

G.)

Industrie

Federal Bureau of Investigation

Federal Power Commission
Federal Mining Co
Federal Power Commission
Federal Reserve Act
Federal Reserve Board
Federal Reserve System, Board of Governors
Federal Security Agency
Federal Security Coordinator
Federal Specifications Committee
Federal Works Administration
Federal Works Administrator
Fenton Steel Works
Fernald, Henry B
Finance, United States Senate Committee on
First National Bank, St. Louis
Fitzgerald, Stapleton &
Fitzpatrick, Hon. James

Fleming, General
Fletcher,

James

Mahon

3878
4098
3969-3970, 3975
4200
4133
4149
3921-3922
3928
3860, 4007, 4028
3841, 3860, 4238
3788,4206
3860,4238
42C7
4033
4237
3762,3769-3771,4160-4162,4249
4132
4038
3762,416)
4162
4149
3815,3817,4250
3819-3821, 4223
39S7
3899
4238, 4243
4030
4094

INDEX

VI

Flynn, Bernard J
Folsom, Frank

Ford Motor Co
Ford, Reese
Forrestal,

James

Forsyth, O. E
Fosdick, Raymond
Fosie, M. A
Foster, Joljn

Foster Wheeler Co
Fowler, Douglas

France
Frank, P. J
Franklin, J. A
Fraser, Daniel J

Freeman, C. S
French Army
French, James
Frey, John F
Friant Dam_
Fuhrer, John
Fulton, Hugh A

Page
4227,4232-4233,4235
4055-40oo
3796
8981
4055,4061
4119
3757- 3758, 3764, 3769-3770, 4161, 4164, 4197
4139
4152
4220-4221
4109-4111, 4118, 4123, 4148, 4151, 4154-4155
4161,4189
4140
3747, 4087, 4089, 4093-4097, 4157, 4159
410'i

4087
3967, 4010
3876, 4226

3733,4081,4087,4159
4125
4094
3876, 4217, 4251
4164, 4167
G-1 Division, Personnel and Administration, War Department
4169
G-2 Division, Intelligence, War Department
4169
G-3 Division, Operations and Ti-aining, War Department
G-4 Division, Supply Construction and Transportation, War Depart4171-4174
ment
4202
Garfield, John
4146
Gasco Plant (Bectel-McCone-Parsons Corporation)
4251
Gawne, Capt. J. O
4107
Gay Engineering Co
4054
General Accounting Office
3813
General Electric Co
3918-3919, 4239-4240, 4244
Geological Survey
3819
George, Hon. Walter
4251
Germain, E. B
Germany
3798, 3821, 3969, 4031-4032
4143
Gieseke, L. F
4098
Gillard, John
4162
Gilmore, Col. Maurice E
4104
Glad, Denny
3744
Gompers, Samuel
Gonzalez, Jess
4217
4080
Gordon, S. T
4105
Gorman,
Government ( Appears throughout.
4108, 4121-4122, 4124-4125, 4144-4147, 4151
Grand Coulee Dam
4103
Graves, L. S
4019
Great Atlantic & Pacific Tea Co. of America
3782, 3970, 4031-4032, 4201
Great Britain
4081
Green, Joseph J
3777
Green, Senator Theodore
Greene, Marguerite
4093.
4163
Greenleaf, Camp
4107,4120,4132,4133-4138
Gregory, Paul C
4079
Gremillion, Jack P. F
3979-3980
Griffiths, Charles
4235-^236
Guthrie, Charles
Guthrie, Stuart
3S93-3S94, 3800
4032
Hansgrud process
4090
Hanson, C
3954,4242
Harding, Warren G
HaiTington, Paul
4157
Harris, Donald
4217
Harris, H<'rbert
4081

INDEX

VII
Page
4033, 4037, 4062-4063

William
Harvanl Business School
Hurririon,

4054
3775
3909

Harrai'd University

Hatch

bill

Hatfield,

(political activities)

4101^102
3870

Havensti'ite oil well

Havenstrite, R. E

3917-3920, 4238-4242, 4244-1216

4194

Hawaii
Hawes, Alexander
Hawkey, Joseph

4072, 4235-1236

4114-4115
4118
4089
R
3941
Henderson, Senator Charles B
3840, 3852, 4074
Henderson, Leon
4247
Hetch-Hetchy case
4154
Hilbert, Gerald John
3938-3941, 3952-3953, 3984,3991-3992
Hill, Joseph
4133
Hill, W. L
3733, 3735, 3831, 4033, 4075-4076, 4079-4084, 4086-4087, 4105
Hillman, Sidney
3745, 3813, 3843, 3968, 3973, 4063, 4204
Hitler, Adolf
4100-4102
Hodges. Robert N
4106
Hoke, Curtis W., Jr
3871, 3907, 3913
Holmes, Oliver Wendall
4161
Home Study Council
4122
Homiston, Charles J
3871, 3918, 3954, 4245
Hoover, Herbert
4103
Hopkins, Thomas
4159
Horn, Roy
4220
Housing Authority, United States
4016-4017
Howe, Albert
3855-385G
Howe Sound
4091
Hudson
3913-3915
Hughes, Charles Evans
4147
Hughes, Ray
3941, 4137
Hull, F. R
4089
Hutchinson, Henry
Hydraulic Supply Co
4122
3841-3842, 3917-3921, 4238-4247
Ickes, Harold L
Illinois Central R. R. Co
4128
Import-Export Bank
3941
3871
Independent Voter's Committee
Independent "Welder & Burner Organizations
4075, 4089-4099
Indiantown Gap
3756, 3759, 4161
Industrial Union of Marine & Shipbuilding Workers of America
3736,
4109, 4114, 4118
Local No. 9
4107, 4137
lugalls Shipbuilding Corporation
4095-4097
Iniskin Oil & Refining Co
3920, 4239
Innes, Loren A
4145-4146
Inspiration Copper Co
3794, 4210
Interfaith Committee
3970
Interior, United States Department of
3918-3920, 4237-4247
Bituminous Coal Division
4238
Secretary of
3944-3945, 4238-4243
^
Under Secretary of
4005
International Association of Bridge, Structural & Ornamental Iron
Workers
4077, 4107, 4113, 4134-4135, 4157
Local No. 3
4105
Local No. 25
4115
Local No. 86
4122-4123
Local 229
4115-4116, 4135
Local 305
4146
Local No. 433
4113, 4119, 4127
Local 506
4104
Local 516
4104
Local 581
4116
Hazelstine
Hedges,

(J.

E.)

Co

311932

i2

pt.

10

35

INDEX

VIII

Page

International Association of Machinists

37493750, 3752, 4077, 4089, 4091, 4108, 4120-4123, 4135, 4147, 4155-4157
4125
Local No. 102
Local 364
4115
4140-4142
Local 1330
International Brotherhood of Blacksmiths, Drop Forgers and Helpers
3736,
'.

4077, 4092, 4157

4109
Local No. 77
International Brotherhood of Boilermakers, Iron Shipbuilders and Helpers
4077-4078,
4087-4090,
4092-4097,
4103, 4114, 4120-4127
of America
4089, 4122
Local 104
Local 386
4109
4098, 4109, 4111, 4141-4159
Local 541
4120, 4122, 4146-4148
Local 568
4110
Local 571
4127
Local 681
4107, 4121, 4124-4125, 4145, 4158
Local 691
3735International Brotherhood of Boilermakers Union
3738, 3746, 4104, 4108-4111, 4115-4118
4098, 4117-4118
No. 72
4127, 4132-4134
No. 92
International Brotherhood of Carpenters and Helpers of America
4109
International Brotherhood of Electrical Workers
3748, 4145, 4147
4161
International Correspondence Schools
International Federation of Labor
3747
International Hod Carriers, Building and Common Laborers' Union of
America
4077, 4114, 4120. 4140-4144
International Longshoremen's and Warehousemen's Union, Local 433
4128
4159
International Holders and Foundry Workers Union
3781-3782,
International Union of Mine, Mill, and Smelter Workers^
4151, 4203^204, 4217-4218, 4222
4217
Victory Production Committee
4135, 4138
International Union of Operating Engineers
4099
Local 12-B
4113-4114
Local No. 137, 137-A, and 137-B
4110, 4115, 4154
International Union of Teamsters
3987
Intersouthern Insurance Co
4231
Interstate Commerce Comnassion, United States
4135
Iowa State Employment Service
3795
Irondale mine
4103-4104
Isaacson Iron Works
3855-3856
Isle Royale Copper Co
3821
Italy
3927
Jackson, Robert
4129
Jacobi. C.
3782, 3798, 3821, 3917, 4031, 4205, 4218
J
Japan
4150
Jared, Lester
4019
Jefferson Standard Co
3810-3811
Jenson, John
4161
Jewish Welfare Board
3768
Johns Hopkins Hospital
4105
Johnson & Adherne
4104
Johnson, Allan
3768-3773
John.'Jon, Bascom
3781,3797-3798,3819-3821,3823,4222-1223
Johns.Mi, Hon. Edwin C
4117
Johnson Engineering Co
4238, 4242-4243
Johnson, Hon. Jed
3935
.Tohiison. Way no
Joint Arniv and Navy Welfare and Recreational Committee
,

4160-4162, 4199, 4201^202

4104

Jones. (MA^de
Jones. .Tesse
Jones, Hon. Robert
Joplin Globe

3837, 3839. 3841-3842,

3898-3899, 3903, 3906-3907, 3941, 4060. 4239-4243

4238,4244-4247
3830

INDEX

IX
Page

Jorgensen,

C M

4103
3984-3985, 3988
4215

Julian^
Just, Evan
3911,
Justice, Department of
3926, 4097, 4107-4110, 4116-4118, 4120-^125, 4140-4142, 4154, 41564157, 4247

Antitrust Division

Kaiser (Henry
Kaseburg, G. L
Keenan, B

J.)

Keller, G.
Kelley, Cornelius
Kellogg, Charles

Kennecott Copper Co
Kennedy, Ward

Kentucky Home Life

Kenworth Motors Co
Kern, Fred
Kinnoch,
Kitchen,

S.

Commander

Knights of Labor
Knowlson, James
Knox, Hon. Frank
Knudsen, William
Kobernick, A.
Kodiak base

Koplovitz, William

C.

L
C

4157
3899,3901,4032
4085-4086
4075
3733,4087
3789
3825
3854, 4220
3980
3987-3988
4104
4011
4137
3977
3744
4037
3757,3762,3917,3919-3921,4241,4244-4246
3752, 3831, 3840, 3845-3846, 4033
4130, 4140
3918
-,

Co

3873-3875,
3877-3880, 3888-3889, 3891, 3988, 3993-3998, 4()07-i008

4093-4095
3927
3992
Kuhn, Loeb & Co
3971
Labor Statistics, Bureau of
3794,4210
Labor, United States Department of
3849, 3911
Secretary of
3734
Lake Union shipyards
4155
Lake Washington shipyard
3732, 4120
Lakosky, Tony
4148
Lambs' Machine Co
4120
Land. Admiral Emory S
3989, 4226
Lanyk, Louis L
3735, 4090, 4133
La Salle Correspondence School
3774
Lasater, Vernon E
4120
Lauderdale, Fort
4241
Lead Industries Association
3830
Leary, Fairfax
4235
Leavy, Hon. Charles
4238, 4242-4243
Lee, Camp
4200
Lee, Lawrence
4020
Leeper, E. E
4126
Leichtman, Jacob
3984
Lend-Lease Act
3894-3895, 3917, 4046, 4060, 4229-4233, 4235
Lepp, George
4130, 4140
Levpis. Fort
4108
Lewis, Gen. R.
4017
Liberty engines
4227-4231, 4234-4236
Liberty ship
3878, 3885
Library of Congress
4203
Lima locomotives
4010
Lincoln High School. Tacoma
4107
Linde Air Products Co
3742
Livingston, R. L
4099
Lockett, Dick
4156
Logan, B. E
4136-4137
Lohmeyer, Roscoe
4151

Kowalski, J
Kramer, Bruce
KroU,

INDEX
Page

Longshoi'eman's Union
Los Angeles Shipbuilding & Dry Dock Corporation
Lowery, Walter, Jr
Lyons, Dorsey E
MacArthur, Gen. Douglas
Maeco Case Construction Co

Macco-Robertson Co
MacDaniel, Charles
Mace, Art
Machinists Welders Local 1531
MacKeachie, Douglas C
MacMorland, Col. E. E
MacPherson, O
Magma Copper Co
Makela, Charles
Maloney, Wm. E

Management of Men
Manayunk Forging Corporation
Manchukuo
Manhattan Brewing Co
Mannerheim, Gen.
Marcel, William
Marine Corp., United States
Maritime Commission, United States

3736, 4109

4106-4107
4090, 4095-4097

409G-4097
407^
4109-4110
4133
3940
4156
4143
4229, 4235, 4251
4235
4055
3792-3793, 4209
3792, 4208
41.59'

4164, 4169
3967, 3981, 4011

3907
3973
4010
4104
4161

3872-3880,
3885-3889, 3942-3944, 3954, 3988-3991, 3995-3996, 4012, 4014-4015,
4020-4021, 4040, 4045-4046, 4060-4061, 4226

Markee Machinery Co
Marsallis, Harry "r

4123
4128
Marsh, Leo B
4124
Marshall, General, G.
3757-3759, 3762, 3767, 3769, 3771, 4188-4189, 4195, 4250
Martinez, J. D
4103
Marx, Chico
4202
4217
Mason, William
4006
Massachusetts Insurance Co
Massey, J.
4107, 4129, 4131, 4133, 4135-4136
Massey,
4118
Masterton, George
4159
May Act
3765^3771, 4249-4250
Mayfair, Mitzi
4202
4116
McChesney, Vernon
3934-3935
McCormack, Hon. John
McCutcheon, J.
4096
McDaniel, C. B
3999
McDonagh, Joseph S
4159
4143
IVIcDougal Construction Co
4178,4190
McEntee, J. J
4151
McPadden
4155
McGillvray, Daniel
3882, 3979-^3980, 4015, 4017
McHale, Frank
4148
McKinley, O. K
4156
McKinsey, Dave
4131
McMahon, J. K
4217
McNeil, Allen
3762
McNutt, Paul
3756, 3775, 4161, 4203
Meade, Fort George
4059
Mehornay, Robert L
4147
Mercer,
4011
Mergenthaler Linotype Co
4124
Mersner
3741
Metal Trades Union
MetMls Rest'i-ve Company
3839, 3844-3845, 3848, 3941
3834,3922
Mexico
-II-IO
Meyer Brothers Co
3907
Meyer, Eugene
-1103
Meyer, Herbert

Wm

INDEX

XI
Page

Mejer, J. L
Mevers, Ralph
Miami Copper Co
Midvale Steel Co
Military Affairs, United States Senate Committee on
Miller, Arthur S
Miller, N. L
Miller, Vincent E

4097
4104
3794, 4210, 4221
3975
4030, 4036
4134-4135
4130
4103
4118
Mills, W. E
4109
Milwaukee Railroad Co
3784, 3833, 4250
Mines, Bureau of
4250
Mines, United States Bureau of, Economics and Statistics Branch
3987
Missouri State Life Insurance Co
4127
Mitchell, Winford N
3984-3985, 3988
Modern Industrial Bank
4091
Moffit, John A
3758
Montgomery, Col. H. G
3768
Moore. Dr. J. E
4117
Morgan, George
4141
Morgan, Lou
4108, 4156
Morgan, Paul
4145
Morgantown Ordnance Plant
3788, 4206
Morning Mine
4159
Morrin, P. J
3733, 4075-4076, 4079^080, 4082-4085
Morris, Karl V
4088
Morrison. Frank
4139
Mount, Frank C
379.5, 4211
Mountain City Copper Co
4103, 4108
Mud Mountain Dam
3928
Muellen, James A
3927
Mullen, Arthur
3757-3758, 4163-4164,
Munson, Gen. E. L
4J69
-,

Murdock, Hon. Abe

3781,

3787-3788, 3798-3799, 3806-3807, 3809-3814, 3816-3817, 3819, 3823

Murray, G. S
Murray, George G
Murray, J. O
Murray, Philip
Xadgwick, Leonard

4227, 4230, 4235

3992, 4121

4147
3981, 4204, 4221

4138
3748-3750
National Association of Machinists
4052
National Association of Manufacturers
4079-4080
National Brotherhood of Welders and Burners of America
4089-4099, 410.5-4106. 4111
4095-4097
Local No. 6
4134
Local No. 35
4161
National Catholic Community Service
4190
National Conference on State Parks
National Defense Program, United States Senate Committee Investigating. 3876,
4194, 4217, 4248, 4251
4115
National Iron Works
3736-3737, 4077, 4079
National Labor Relations Act
3734,
National Labor Relations Board
3736-3738, 3750, 3911, 4084-4085, 4237
3767
National League
3736, 4109
National Maritime Union
4178, 4182, 4187, 4190
National Park Service
4142
National Steel Construction Co
4201
National Theatre Conference
4161
National Travelers Aid Association
National Union of Welding Operators, Welders' International Association 4079
4178
National Youth Administration
4050
Naval Affairs, United States House of Representatives Committee on
3762, 3772. 3775, 3837
Navv, United States
Secretary of
3924, 4085, 4161^162, 4239-4243, 4246, 4251
3768-3769
Surgeon General
3733
Navy, United States Department
:

INDEX

XII

Page

Nelson, Donald
3860,
4052, 4055-4056, 4059, 4061-4062, 4067, 4195, 4220, 4251-5252, 4254, 4257, 4259
Nelson, George
4110,

Nelson, H. E
Nesselquiest, P.

Gareth

4120^121, 4124, 4141, 4143, 4147^148, 4151^152, 4154-4155

4132
4099

4107, 4109-4111, 4117-4118,

4120^4122, 4125, 4140-4141, 4148-4144, 4146-4148, 4150, 4154-4156
3914
Newberry,
3777
Newcombe, Maj.
Newell,
3889
Neville,

Newfoundland

Newman,

Capt.

3767, 3772, 4194

New York Board of Education

New York State Insurance Commissioner
New York Stock Exchange
News Week
Nicholson Transportation Co
Nimitz, Admiral Chester
Nixon, Russ
Norris-LaGuardia Committee
North American Aviation Co
Northwest Welding Supply Co
Nowak. Joseph R
Nuffield engines
Obar, P
O'Brian, John Lord
Occidental Life Insurance Co
O'Connor, Jack
O'Day, Nell
Odium, Floyd
Office of Price Administration

4198
3872
4006
3978
3901
4109
3762
3799, 3802, 4217
3871
3736
4108
4099,4106
3893, 4228, 4234-4236
4108
4039
4019-4020
4115
4140
4033-4034, 4038, 4046, 4058-4059, 4062
3800-3801,3815
3847, 3953-3954, 4207, 4214-4215, 4221

Production Management

3733, 3752-3753,
3790, 3793-3794, 3806, 3825-3843, 3859-3863, 3865-3866, 3868,
3992, 4026-4027, 4030-4031, 4033-4034, 4039-4040, 4057, 40754078-4087, 4103, 4105, 4195, 4218-4220, 4222, 4233-4236, 4240,
4248, 4252
Associate Director General
4029, 4076, 4079-4084
Bureau of Research and Statistics
3836

Office of

3785,
3896,
4076,
4245,

Conservation Branch
Contract Distribution Division
Copper and Zinc Branch
Director General
Labor Division
Materials Division
Production Division
Supply Priorities and Allocation Board
Ohlschlager, Lawrence
Oil Workers' International Union, Local No. 128
Olin Corporation
Oliver Steel Co
Olsen, E. C

O'Mahoney, Hon. Joseph C

O'Neil, Donald P
Ordnance Instrument Corporation
Oregon Shipbuilder Corp
Oregon Shipyard Co
Orgill,
Orgill,
Orgill,

AV

Maschke & Duffy

Maschke, Wickham, Duffy & Loux

Albert V
Osborn, Gen. F.
Orill,

Otis Steel

Owen

Co

Construction Co

3861
3958
3844-3857
4029
1
3849, 4082
3827-3843, 3858
4033
4219-4220
4146-4147
4119, 4137
4032
3981
4106
3789
4106
3968,4011
4147
4104
3979-3982, 4000-4004
4000
4002
4111-4113
4160, 4194, 4249
3981, 4009
4122

mDEX

XIII
Page

Pacific

Palmer,

& Foundry Co
Charles F

Car

4103, 4143, 4149. 4154

3779
4194
3971
4114
Parker Dam
4113
Parkinson, M. J
3771
Parran, Dr.
3914
Passamaqnoddy project
4238
Patent Office, United States
Patterson, Robert P
4019, 4061
Paul, Wally
4157
Payne. Lloyd
4080, 4082-4083, 4085
Pearl Harbor
4040
Pease, Willard
4104
Peck, Fort
4120
Pehrson, Elmer
4250
Peninsula Life Insurance
4019
Pennsylvania Forge Co
3975
Permanente Corporation j
4032
4141
Perrin,
Perrls, Clem A
4140
Pershing, Gen. John J
3759. 4191
Peterson, Eric
3748
Peterson & Johnson Lumber Co
4149
Peterson, Peter
3736. 4109
Petroleum Coordinator, Office of
3920. 3939
Phelps-Dodge Corporation
3787, 3793-3794, 3851, 4209-4210, 4220
Philadelphia Navy Yard
3977
Philiijpine Islands
4194
Pickens, Jane
4202
3938
Pickett, Neal
Pierson, Warren
3941
Pine Camp
3756, 3759. 4161
Pipefitters Union
4077, 4111, 4148. 4155-4157
Pipefitters Union, Local No. 92
4127, 4133-4137
Pipe Line Welders Union
4130
Plested. William
4104
Plywood and Veneer Union
4147
Poag
4105
Pontoon bridge builders
4123
Poor's Industrial Manual, 1937
37S9. 4207
Porter, Paul R
4080-4(183, 4087
Post Exchange Advisory Committee
4195
Post Office Department
4238
President, United States
3762-3763.
3782, 3802, 3842, 390S-3909, 3912-3913, 3924, 3928, 3945. 3958,
3986-3987, 4028, 4031, 4040-4041, 4056, 4076, 4161, 4237, 4244-4246
Pressed Steel Co
3888, 4010
Princetou University
:5775
Public Health Service
3770
Public No. 235. Seventy-seventh Congress
3821
Public No. 5417, Seventy-seventh Congress
4223-4221
Public Works Administration
3873,3880.4247
Puerto Rico
4194
Puget Sound Machinery Depot
4142
Puget Sound Navy Yard
4085, 4087
Puget Sound Sheetmetal Works
4155
Pullman Co
3888-4010
Pullman University
4032, 40?.3
Quarrie, Bertrand
3958, 3981, 3992, 4009^ 4011
Quayle
3935
Queen, .John
41.53

Panama
Panama Canal

.u

Quincy Mining Co

38.56

Radcliff

4110

INDEX

XIV

Page
Kail.sback, Everett
Raiiier Equipment

410-!

Co

4103
4247
4094
Ramsell, H. H
4217
Rasmussen, Ralph
4098, 4117-411S, 4145
Ray. Thomas
4119
Reasoner, J. R
3773, 3829, 3839, 3841, 3844-3845
Reconstruction Finance Corporation
3847, 3852, 3856, 3871, 3888, 3893, 3898-3899, 3903-3906, 3908. 39123915, 3923, 3941, 3966, 3976, 4014, 4057, 4195, 4240, 4244-4245, 4251
3757
Recreation and Welfare, Joint Army and Navy, committee on
3744
Reed, Joseph
3S45, 3847
Reed. Philip D
3907
Reed, Stanley
3761
Regimental Recreation Officers' Guide
4129
Reid. R. D
3874, 3889
Reilly. John
4127
Remmerde, John
4156
Renton Car & Foundry Co
Representatives, United States House of 3771. 3819-3821, 3944, 3952, 4218, 4222
4010,4212
Republic Steel Corp
4143
Reuther. Arthur
4105
Revnolds, B. E
4078, 4105
Reynolds Metal Co
4146
Rice, Byron
3797. 3799, 3818
Rice. Neil
4238
Rich. Hon. Robert F
4011
Richards.
Richmond Times
4047, 4248
4105
Riggs Distiller
Riskin, Ben
3806, 3811, 3817-3818, 3822-3823, 4217
3980
Ritter. George
Roberts. John
3882, 3973-3974, 3979-3980
Robinson, Reid
4217
Robinson, Admiral Samuel S
4055
Rodman. Fort
3777
Rohr Aircraft Co
4116
Rokes. D. G
4094^095
Roosevelt, Franklin D
3871, 3927. 3954
4105
Roper,
Ro.senquist, Lloyd
4093
Ross Bros. & Montgomery
3968
Roxboro Steel Co
3967, 3981. 4011
Royal Air Force
4230
Ruial Electrification Administration
3859-3861, 4220
Russ Furnace Co
4146
Russia
4060
Rust. O. D
4126-4127, 4132, 4134. 4138
Rustin Smelter Co
8742-3743
St. Joseph Lead Co
3831
St. Lawrence mine
3792, 4208
St. Louis Post-Dispatch
3918,3920,4047.4243-4248
St. Lucia
4194
Salvation Army
4161
Sanders,
4054, 4056
Sandvigen, L A
4091
San Francisco Bridge Co
4099
Saturday Evening Post
4018
Saunders, Dr. T.
4230-4235
Savannah, Port Authority
8872-3874. 3883, 3988. 4226-4227
Savannah Shipyards Corporation
3870, 3872-3879, .3882, 3884, 3886-3887. 3921,
3938, 3976, 3984-3986, 3989, 3991, 3993, 3999, 4012, 4022, 4226-4227
Saw Mill Workers Union
4120
Schlater, W. F
4108
Schmeltzer, J. E
3876.4226
Schram, Emil
3941

Raker Act

-.

INDEX
Schuylkill Manufactui-ing

Co

Scidmore, Charles
Scoll,

Scott

David E
Co

Scranton Correspondence School

Soriven, L. Fklward
Scrugham, Hon. James G
Searcy, J., Sr
Seattle Tacoma Shipbuilding Co

XV
Page
3967
4125
3876, 3943-3944^ 4226-4227
4140
3774
4062
4288
4091
4104,

4107-4108, 4117, 4120-4124, 4142-4143, 4145-4148, 4150, 4154, 4157

Second National Bank, Wilkes-Barre

Securities and Exchange Commission

3976

3893, 3977-3978, 4007, 4238

Selective Service Board
4169, 4203
Senate. United States 3820-3821, 3858, 3944, 3985, 4000, 4046, 4218, 4222-4223

Service Club
Service Electric Co

4171^172

Shasta Dam
Shattuck-Denti Mining Co

u.

Shea, Peter
Sheet Metal Workers International Association
I^)cal 383
Local 434
Sheppard. Hon. Harry
Ships. Inc

R
^

Skoda Works (Skodawerke, Czechoslovakia)

Slack.s.

Sloss-Sheffield

Co

Smet, Charles A
Smith, Daniel L
Smith, Dr
Smith. W.
Snow. Dr. William
:
Snyder. F
Solar Manufacturing Co
Somervell. Gen. Brehon
Southport Petroleum Corporation
Southixirt Refinery Co

Union

Soviet

Spanish

War
E

Squier,

R.

Standi,

Standard Dredge Co
Standard Oil Co. of California
Star Iron

&

Steel

State Department.
Secretary of
Stead,

United

States

Fentron

Steel,

Steel

Co

W. J

Starr,

Workers Organizing Committee-^.

Stephens, Robert
Sterling case
Sterling Engine Co
Sterling Products. Inc

Edward R.. Jr
Stevenson. Harry
Stewart. Camp
Stewart, Ethelburt
Stewart-Warner Corporation
Stettinius,

Stife,

Wesley

Stigm, Thomas
Stimson. Henry
Stokes,

Thomas

E
L

Strawbridge. F.
Structural Steel and Iron

Workers Union

4108
4147
3794, 3855, 4210
4085-4086
4108-4109,
4122-4125, 4135, 4142, 4147, 4157

4124
4124
4238-4239. 4241. 4243
39.53-3954, 4061, 4251
4010
3876
3795, 4210, 4212
4080, 4082-4083, 4085
4138
4239
4095-4096
3768
3787. 3798
4220
3763, 4019, 4162
3992
3939,3952
3782, 4204
3759
4089
4137
4135
4247
4116
4119
4016
3941, 3983
4011
4104
4114,4137,4152
4089
3870
3893
3921-3922, 3926
3845
4159
3755-3756,4161
4091
4037
4106
4118
3757,3762-3763,3768,3771,4162
4008
3776
4143

INDEX

XVI

Page
4102
4114
4223
3913-3914
3810, 4238

Stuckey, P
Suba, F. C, Jr
Sujlivan, John L
Supreme Court, United States
Supreme Court, Utah
Sweden
Tacoma Welders & Burners Council

^h

Taft, Charles P
Tarnosky, Peter A
Tax Appeals, Board of
Taylor, Hon. Edward T
Taylor, Lloyd
Teapot Dome
Technology Employment and Output Per Man
Teele, Stanley F
Temporary National Economic Committee
Tennessee Coal, Iron & Railroad Corporation
Tennessee Valley Authority
Thomas, Charles

4010
4104
8762-3763, 3769-3770, 4162
4085
4237
4238,

4242^243
4130, 4140

3920
3799
4061, 4071, 4251
3789
3795, 4210
4078, 4105
3792, 4208
Thompson, Thomas
4132
Thompson, William
4089
Thorpe, J
4115
Tillman, C. E
4129, 4131
4116-4117
Tippie, Melvin
TNT
^
4035
Todd California Corporation
3916, 4146, 4155
4148-4149
Todd Galveston Dry Docks, Inc
3873-3874
Todd Shipyards Corporation
3889, 3898, 3900-3903, 3916, 3995-3996, 4108-4110. 4118. 4123, 4143
Torerson, A. L
4103
Tracy, D
4123
Training Camp Activities, World War 1, Commission on__ 4161, 4164, 4174, 4197
Treasury Department, United States
3819,
3894, 3911-3912, 3917, 4223^224. 4233^234, 4237
Treasury Procurement Schedule
4055, 4061
Trinidad
4194
Tri-State Zinc and Lead Ore Producers Association
3801, 4215
Truman, Hon. Harry S
4248, 4250, 4252
3758,3761,4178,4184,4188-4190,4250
Ulio, Brig. Gen. James A
Umatilla Ordnance Depot
4145
Union I'acific Railroad Co
3744
United Aircraft Co
3736
4104
United Airline (Western Division)
United Association of Plumbers and Steamflttei-s of the United States
4077. 409S. 4111, 4118, 4152
and (Canada
4126-4127
Local No. 19
4105
Local No. 76
4125
Local No. 82
4102
Local No. 91
4100
Local No. 106
4144-4147
Local No. 208
4116
Local No. 230
4098,4146
Local No. 235
4140
Local No. 342
Local No. 449
4105
4140
Local No. 509
Marine Pipefitters' Local No. 599
4094
4134
United Associators
United Brotherhood of Cai'penters and Joiners of Amori<a__ 4077, 4147. 4149-4150
3731-3742
United HrothcMhnod of Welders, Cutters and Helpers of America

4075-4076, 4079-4080. 40S9-4>9, 41(13-4157

4099,4107,4116,4132
Local No. 37
Machinists' Local No. 79
4089
United Electrical Radio and Machine Workers of America International
4217-4218
Union

INDEX

XVII

Page
3761-3763,3767,3773,3776,3778,4160-4162
Service Office
3797, 3803
Smelting & Refining Co
3871
States Ambassador
4013
States Steel Co
4079^4085,
Welders, Cutters and Helpers of America
4089-4099, 4127-4129, 4135
3787
Utah Copper Mine
4143
Valley Iron Works
Vance, J. D
4097, 4116, 4120, 4123-4124, 4142-4143, 4147-^150, 4155, 4157
Vanderlinde, Charles
4121
4151
Van Etten, B

United
United
United
United
United

Vaughn, J. E
Veal, Leo D
Vickers, Ltd
Vickery,

4120
4134
4010
3874-3876, 3878-3879, 3944, 3996, 4226-4227

Howard L

Vimalert Ltd. Co. of

New

Jersey

3870,

3892-3894, 3896-3897, 4227-4229,

Vining, Craig E
Vinson, Hon. Carl
Vogelsang, Erwin
Voyes, Raymond
Vulcan Iron Works

4122
4050
3831, 3833, 3836-3837
3965, 3967, 3969, 3975, 3981, 4011, 4016-4017, 4020
3966-3967, 3976. 4226

Wages and Hours Act

Wage and Hour Division
Wagner Act

3790-

Walker, Elisha

Walker mine
Walker Mining Co
Wallace, Henry A
Walley. Orville F
Wall Street Journal
Walter, William E

-_

3810
3736-3738
3971, 3973-3974
3788-3789, 4207
3788-3789, 4207
3871, 4210
4124-4125
3800, 3828, 4214, 4218-4221

4093-4095
4073

Walton, Frank

War Department
Adjutant General's

4232^236

Office

Adjutant General School

Chief of Staff

3756, 3785, 3842, 3860, 3879, 3S97

3769,
4164, 4169, 4171, 4173-4174, 4181, 4184, 4249-4250

4168
4178
4053
4165
4167

Construction Division
General Staff, Personnel Division
Inspector General
Judge Advocate General
4167^168
Morale Branch
4164-4168, 4173, 4176, 4179, 4182, 4196, 4198-4202
Chief of
3757-3779, 4178, 4187, 4189^190
Executive Division
4160, 4106.
Budget and Estimates Section
3768, 4160
Coordination and Information Section
4160
Mail and Files Section
4160
Personnel and Pay Roll Section
4160
4160Supply Section
Morale Information Division
4160
Publication Section
4160, 4166
Radio Section
4160, 4166
Planning and Research Division
4160, 4166
Planning Section
4160, 4166
Research Section
4160
Services Division
Army Motion Picture Service Section
3758,
3764, 4160, 4164, 4166, 4192-4194
Facilities Section
4160.
Library Service Section
3758, 4160, 4166, 4174
Technical Manual of Sports and Games
4161
Welfare and Recreation Division
3768, 4160, 4160
Educational Section
4160:
Recreation Section
3758, 4160,4166
Welfare Section
4160, 4166

INDEX

XVin
War Department Continued.

^*se

3S9G, 4233-4235
3895. 3030-3932, 3937. 3942. 3959Ordnance
3963. 3981-3983, 3997, 4015-4018, 4020, 4067. 4078, 4231-4232, 4235
3896
Ordnance Department. Chief of
4173-4174, 4179
Quartermaster General. Office of
3765, 3778, 4160-4162, 4164-4165, 4171. 4175, 4250
Secretary of
3996-3997, 4019
Under Secretary, Assistant to
Office of Undersecretary,

Defense Aid Division

War Powers Act

War Production Board

4050
4064, 4251-4253. 4255-4258

4025-4074. 4251-4252

Chairman
Contract distribution service
General council
Labor Division
Priorities Division

Procurement Policy Committee

Production Division
Purchases Division
Contract Review Branch, Chief of
Director of
War Service Committee, World War I
Ware. Victor

Warner, Lt. Col. W.

Washington Daily News
Washington Iron Works
Watertown Arsenal
Watervliet Arsenal
Watrous. Col. L

4059, 4062

4039
4039
4059
4051, 4055
4059
4061, 4071
4050-4052. 4056
4049, 4051, 4229, 4285
4174
4142
4227, 4229-4232, 4235-4236
3876
4123
4015
4004, 4015, 4020
3758

Wedgeworth, James F
Weeks. Charles S
Weeks. Paul F
Weinberg & Green
Weinberg, Leonard
Weinberg, Sidney J

4117^118
4129
4135
4079-4082
4079-4083
4252, .4258-4259

Welders International Association

4089
4103

Welsh. A.
West, Charles

3872. 3873,
3875. 3887, 3916, 3922, 3966, 3982-3985, 3988, 3991, 3999-4005, 4012,
4017-4019, 4227.
Pittson Iron Works
3967, 4010

West
Western Democrat
Western Pipe & Steel Co

Weston, E.
Wharton,
White, James E
Whitlock, Z. C
Wilkes-Barre Carriage Co
William and Mary College
Williams, William
Willis, Hon. Ravmond E
Willys-Overland Co
Wilnoy, City
Wilson award
Wilson, Chester
Wilson. William B

Wilsue, Christie
WIrth, Conrad L
Wirtz, Alvin J
Wis.'^ahickon Tool Works, Inc
Wood. Fort Leonard
Woodward Iron Co____

Woodward, Thomas
Woodwoi'kers

Union

Woodworth & Cornell

Works Proiects Administration

3928

4078, 4115-4117
4089, 4150

4092
4098
4080
3967, 4010-4011
3775
4110. 4148
3869, 3885
3967, 3969, 3971. 3974-3976. 3978-3980
4115
3736-3737, 3739. 4085-4088
4126, 4132, 4134, 4138
3734,4091
4127
4178,4190
4239, 4246
3907,4011
3756, 4161
4209, 4212
3943-3944
4120
4120
3873,4103,4213

XIX

INDEX

Page

World AVar No.

3738, 3764-3765, 3771, 3893, 3957, 3967, 4161, 4164, 4169,

4174, 4189, 4191, 4231

Yale University
Young Bros
Young, Col. C
Young Men's Christian Association

Young Women's Christian Association

4009
4140
3758,3774
4161
4161

Pm

BOSTON PUBLIC LIBRARY

.immiiii
3 9999

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