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July 2016
Congressional Record, 77th Congress, Second
Session
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"Congressional Record, 77th Congress, Second Session" (2016). War Information Center Pamphlets. Book 750.
http://utdr.utoledo.edu/ur-87-68/750
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WA.R \NfOR J\1\0N
KEY CENTER
(Not printed at Government expense)
University of Toledo library
To\ec~o, · Ohio
Q:ongrcssional .ir-,~-Cb'rlf~ ,
4
United States
of America
PROCEEDINGS AND DEBATES OF THE
77th
duction on a wide and diversified scale
throughout the country, asserting they
insisted upon concentrating war production in the hands of a few large conREMARKS
cerns-56 corporations and subsidiaries
OF
received 76 percent .of the primary contracts in the whole war program as of
HON. JOHN M. COFFEE
November 15, 1941.
OF WASHINGTON
On January 1, 1942, the United Press
IN THE HOUSE OF REPRESENTATIVES
published an iri.terview with me, and gave
it to its member newspapers throughout
the country, in which I drew attention
Wednesday, February 4, 1942
to the negligence of dollar-a-year men
in general, pointing out that with some
ARTICLE FROM THE PEOPLE 'S LOBBY
few exceptions the dollar-a-year men
BULLETIN
ENTITLED-"EQUIPMENThad failed to convert the automobile inNOT BILLIONS OF COSTS WILL WIN
dustry to war production; had refused to
WAR"
support drastic limitation of nonwar
goods; had created chaos and confusion
Mr. COFFEE of Washington. Mr. in the war program. This precipitated
Speaker, early in August of 1941 I read widespread discussion, with editorial
into the CONGRESSIONAL RECORD an artiin few cases, and comcle from the August People's Lobby Bul- condemnation
mendation
in
few
cases, and culmiletin, dealing with the subject of dollar- nated in a flood oferlengthy
analyses of
a-year men and giving their corporate
war program and observations by
connections. This article revealed the the
radio commentators and nationally
amount of contracts received by or known
newspaper columnists.
awarded to the great industrial organiThe country was getting disgusted with
zations with which such dollar-a-year
men were affiliated. The . article at- delays and the lack of organization chartracted great attention throughout the acterizing O. P. M. operations. It was
country, provoking much discussion and becoming apparent that dollar-a-year
evoking editorials pro and con in the men were chosen in many cases from
metropolitan press of the United States. among financial and political dilettantes,
I was abused and wrathfully con- in the words of the Cleveland industrialdemned, in journalistic jeremiads di- ist, Cyrus Eaton. Had the dollar-a-year
rected at me, for having had the temer- men selected been chosen from actual
ity to invade the sacrosanct precincts of production experts such as master mebig business and point out the amazing chanics, general foremen, efficiency excoincidence of great corporations get- perts, and so forth, the picture might
ting the juiciest portions of war business ' very well have been different. But in
and their executives being dollar-a-year most cases the men selected were exmen working for the O. P . M. and sim- ecutive of great corporations who had
attain d that eminence by being proilar Federal agencies.
I introduced House ResoJtttion 338 in moted from the legal division, or by havNovember 1941, the purpose of which was ing been successful in stock promotion , or
to secure the creation of a special House in the floating of securities, or in the
committee of seven Members given the negotiation of mergers.
Mr. Walter Lippmann, Miss Dorothy
directive of making a full investigation
as to the identity, compe_n§ation, and Thompson, Mr. Ray Clapper, Messrs.
corporate affiliations of dollar-a-year Bob Allen and Drew Pearson were
men, and the duties and responsibilities among the distinguished newspaper
vouchsafed them .by our Government, columnists who condemned dollar-a-year
and providing funds for such investiga- men and insisted upon a change in the
tion. This resolution was referred to set-up.
the cqmn;t,ittee on Rules, which up to
The Tolan committee of the House of
the dafe tlereof has not seen fit to hold Representatives had discovered some
hearings~thereon.
startling facts, revealing the mistekes
The Associated Press carried to its made by dollar-a-year men. The House
member newspapers in the fall of 1941 Military Affairs Committee stumbled
an interview I had given as chairman of upon some other interesting data. The
the liberal bloc of the House of Repre- Truman committee of the Senate, in a
sentatives, calling attention to the in- voluminous report, condemned dollar-aeptitude of dollar-a-year men and the year men, urged that responsibility be
break-down of the war program due to fixed, and that the system be changed.
their unwillingness to distribute war pro- Finally the President acted, and Donald
Debts, lnllation, War Production, and
Plant Conversions
442819-21625
CONGRESS, SECOND SESSION
Nelson was made civilian czar of the war
production program. One of his first
announcements was the abolition of the
0 . P. M. I have great hopes of accomplishment at the hands of Donald Nelson, though I deplore his defense of
dollar-a-year men as a class.
The laborer is worthy of his hire. Any
F ederal official shouid be paid a reasonable compensation. He should divorce
himself from the pay rolls of any corporation. He should not have two
masters. His devotion to Uncle Sam
should be undiluted by any loyalty which
might be superinduced by salaries paid
him by the corporation while serving the
Government.
The People's Lobby, Inc., of Washington, D. C., of which the eminent Benjamin C. Marsh is executive secretary, and
of which the erudite Bishop Francis J.
McConnell is president, has fearlessly
fought in the interests of the plain people through the years. It calls a spade
a spade. It does not pull its punches
It is not overawed by, apprehensive
about, the persons upon whose toes its
disclosures may tread. It h as published
the unvarnished truth about controversial matters.
The following article discusses the
armament program and emphasizes the
importance of efficient mechanical
equipment and the dangers of inflationary, unlimited Federal expenditures:
[From the People's Lobby Bulletin of Ja:puary 1942]
EQUIPMENT,
NOT
BILLIONS OF
WIN WAR
COSTS,
Wn.L
The New York Times stated ed!tor!ally
January 1:
"f,. well.planned armament program of
$50,000 ,000 ,000, it should be clear , may be
far more effective than an ill-planned armament program of $100,000,000,000. Unneeded
defense equipment ls not merely superfluous,
It diverts vital labor and materials and time
from essential defense equipment,"
·
The editorial continues: ·
"We h ave been thinking ef defense too
much !n monetary terms, and !n terms of
such abstract statist ical concepts as what
percentage of the Nat ion's production ls going Into defense. The danger of this type
of thinking ls that it draws attention away
from such prior and primary questions as:
What definite strategic plan have we for the
defeat of Japan and Germany, how sound ls
that strategic plan , and what precise equipm ent do we n eed to carry out that plan?"
Some fact s need recurrent stressing:
1. Excessive war costs, whether m·et by
taxes or by bonds, upset our national economy.
2. Every additional b!llion dollars of war
debt will m ake a just peace more difficult of
atta inment.
3. Ap propriations do not insure production, and cannot, wh!le the Government per-
CONGRESSIONAL RECORD
2
mits private industry to produce war material In its own way and time .
4. A larger prop01·t1on of our population
will suffer from inflationary costs, and higher
prices, than of almost any other nation .
Mr Leon Hender son, Price Administrator ,
stated to the Senate Banking and Currency
Committee bearings on the price-control bill:
"As to the appropriations authorized by
this Congress, some $67 ,000,000,000, we figure
that by the time they are expended t h e
amount of munitions and armaments calculated to be bought would cost at least
$13,000 ,000 ,000 more."
He admitted the cost might be Increased
by $50,000,000,000 .
"If anything like a victory program Is authorized-and I think it must be authorized-the total amount of increase in cost
at t h e present rate prices are Increasing
would be more than. the total cost of the last
war. The last war cost upward of $31,000,000,000. Mr. Baruch in his testimony estimated that there was an excess of cost, du e to
Inflation, of about $13 ,000 ,000,000."
WAR'S AFTERCRASH
"All wars in this country have produced an
inflationary period, foll owed by a d eflation
which paralyzed recovery."
He pointed out that since World War No . 2
started in the fall of 1939, there bas been an
increase In prices of about 1 percent .a
montb-"but the basic foodstuffs have been
increasing at a rate of about 2 percent a
month."
WAR EVILS THREATEN
While admitting the current 1\1:. percent
monthly increase in prices ls manageable .
Mr. Henderson warned:
"But If many other items are not brought
within control, unless we are able to bold the
control we now have, and unless we are able
to get a substantial discipline in farm commodities, there ls not prospect of preventing
a repetition of the World War experience.
"You can go on with your metals and control the basic costs of the steel industry, the
basic costs of every large and heavy manufacturing industry, but If their costs of manufacture, due to wages, go up, then the Price
Administrator, both by the terms of this bill
and by the terms of our operations to date,
bas to permit an Increase.
"Once that Increase in industrial goods
passes, as farmers increase their dollar price,
that dollar goes over lnt9 the cost of living ,
and the wage earner again has the problem
which he will face beginning the first of the
year . He has bad his wage Increases eradicated in the basic industries, and in Industries where he bas not bad an Increase he
faces a r eduction in his standard of living ,
and, therefore, the whole vicious spiral tends
to go into action ."
Common sense, not lack of patriotism, dictates the n<0cessity for producing the maximum of war material and equipment, at the
minimum of cost, consistent with such wages
as will permit workers in all Industries to
maintain an efficient standard of living.
SWAPPING DOLLARS
It is the height of folly to pay wages in de-
fense Industries 15 percent to 20 p ercent
above what these workers will be permitted to
spend, and then to compel them to bu y bonds.
or even to pay taxes, so they will h ave a
"cushion" for a pos t -war collapse.
A government which can arra11ge full employment of employables in wartime, will,
under the Atlantic cha rter, have to do so
442819-21625
after the war--or make way for a government that will.
Mr. Henderson very shrewdly met this
problem when, after si:+owing that In June
1942 there would be some $6,000,000,000 more
available to buy goods than the supply
thereof, he was asked whether "some tax, or
withholding levy, or enforced saving" could
not recover that money for the Government.
He said such a device "would fall on the
just and the unjust, on those able to pay and
those not able to pay, alike.:•
WORLD WAR NO. 1 WAGES
In World War No. l, between 1914 and 1920,
the average Gcvernment worker In the District
of Columbia "lost 25 percent In his standard of
living," "wages in the eight Important man ufacturing Industries went up 140 percent, real
wages, however, were up only 20 percent," and
"teachers b a d a 20-percent loss , despite the
fact that, beginning in 1918, the average
salary of teachers was on a steady Increase,"
Mr. Henderson testlfl~d.
He summarized :
"Wage earners in industries that were at
strategic places were able to beat the cost of
living, but In beating it they had to have a
120-percent increase (in dollar wages) in
order to get something like a 16- to 18-percent
increase in their relative well-being ."
Partial control of prices is as little effective
as partial control of a cyclone-it must be
complete, starting with site r ent, and natural resources, including farm prices, and
wages, and going clear through to ultimate
consumers of a much -reduced volume of consumer goods.
Under present plans the total Government
and non-Government d zbt will, within 3
years, exceed tbe present national wealth, and
debt service, on -a practical basis, will take 8
percent to 10 p ercent or more of a shrunken
post-war national Income.
DEBTS AND REPARATIONS
The vindictive reparations and peace t erms
imposed upon Germany at the end of World
War No. 1 were in large measure due to the
huge domestic debts of the "victorious"
nations.
Clemenceau and Lloyd George, realist and
opportunist, achieved the acquiescence of Wilson, idealist, in trying to "m ake the punishment fit the crime," but the results do not
argue for our continuing a sky-the-limit
price policy of obtaining war material and
equipment.
A national debt of $100,000,000,000 to $125,000 ,000 ,000, 3 to 5 years hence , with a national
income easily shrunken to $70 ,000,000,000 to
$75,000 ,000,000, will make a just, because realistic peace, much more difficult.
'
Public imagination may be temporarily fired
by the magn ificence of countless billions, but
the temperature and endurance of that fire
can be determined only by paying those billions by current taxation-with parity of
sacrifice.
PRODUCTION VERSUS PROFITS
Walter Lippmann ls an enthusiastic supporter of the system of private enterprise and
private profits, but he recently asserted In his
syndicated column that the main cause of
our inadequate defense production to date,
"overshadowing all others combined. Is the
fact that Am£rican Industry did not abandon
'business as usual' in 1840, nor in 1941 , nor
has it yet really abandoned business as
u sual," also "for 18 months the industrialists
In the Office of Production Managei;iient, and
a very large proportion of the Industrialists of
the country, have b een unwilling or unable to
take up boldly the task of converting commercial Industry into war Industry."
Asslstan.t Attorney General Thurman Arnold
In bis annual report to Congress for the
Antitrust Division of the Dep artment of Justice said :
"Looking back over 10 months of defense
effort, we can now see bow much It h as been
hampered by the attitude of powerful private
groups dominating basic industries who h ave
feared to expand their production because
expansion would endanger their future control of industry."
R aymond Clapper In r ecent columns states :
"For 18 months Jesse Jones has fooled
around with a one-binged stockpile effort.
• • • For 18 months record-breaking automoblle production b as b een u sing up precious chrome" (December 30, 1941).
"In the United States are about 180,000
industrial plants, including all of the little
ones. We are u sing only a fraction of
them . • • •
"Mr. Roosevelt bas p ower under the new
legislation to revamp the shambles of the ·
defense agencies into an effective supply
agency or ministry. The dissatisfaction with
the present situ ation ls so widespread that he
m ay be compelled to act" (December 31,
1941).
The President has just acted.
The Tolan committee of the House of Representatives recently reported:
"Only a negligible part of the au tomobile
Industry's pl ant capacity Is presently employed in the war effort."
During 1940. $10,000.000,000 In appropriations and $5,000,000,009 in authorizations
were available for defense .
During 1941, $50,000,000,000, most of it early
in the year, were made available for defense;
but we haven't gotten what Congress appropriated for.
The day before the President addressed
Congress the motor Industry, which long ago
received four and five-tenths billion dollars of
war orders. were asked to take a further order
of $5,000,000.000.
Until we become a government over money
as well as over men we won't get what Is
needed to win a war.
Hitler , Mussolini, and the J apanese, as well
as Latin-American countries, know that all
too well .
VICTIMS OF I NFLATION
In 1938-39 the consumer incomes of persons
having incomes u 11der $500 was $2,363,000,000,
of those with incomes from $500 to $1,000 was
$10,038,000,000, and of those with incomes
fr:cm $1,000 to $1,500 was $12,280 ,000,000.
The total consumer income of persons with
incomes u n der $1,500 was $24,681,000,000about one-quarter of the probable national
income in 1942.
They !1~c!ude nearly all the aged, Including
the Indigent aged, supported by public p ensions and privat e help.
The Social Secu rity Board reports that
there are eight and one-half to nine and onebalf million aged, with Independent means or
support, and five to five and one-half million
aged dependent upon resourr.es other than
their own, of whom 3,000,000 are o public
assistance rolls, in Institutions, or in receipt
of private or public aid . Of tqii , emaining
two to two and one-half m!llib:p., ~pproxi­
mately 190,000 are· on public assi~ance waiting lists, and m a ny more need aid.
I. J . GOVERN MENT PRINT ING Of'FICl1 IHI