istration, and at the same time from a practical standpoint it creates the use of synthetic rubber that is necessary to continue the industry. Senator ROBERTSON. Are the tires being made now as good as prewar tires?

Mr. FIRESTONE. Senator Robertson, I think they are better. In fact, I am quite sure they are better.

Senator ROBERTSON. And what percentage of synthetic is going into the average tire now?

Mr. FIRESTONE. It varies with each size and type. It is all according to specification under what we call the R-1 order.

Senator ROBERTSON. I find the tubes will hold air better than the prewar tubes.

Mr. FIRESTON. Yes; the butyl tubes hold it many times better.

Senator BRICKER. Do you think the industry would be ready and willing to lease plants under the provisions of S. 2187?

Mr. FIRESTONE. I think it opens the way, which is important. It is a trend in the right direction to return it to private industry. I think that the development of this plan will bring out the problems and I hope we can find the solutions for them.

Senator CAIN. You found a solution for all of your problems prior to the war did you not?

Mr. FIRESTONE. We always tried to, Senator, yes.

Senator CAIN. It is not far from the time when we ought to try to find them again on that basis, is it?

Mr. FIRESTONE. I feel that way.

Senator BRICKER. You think if this date is moved up, then, as has been suggested by Mr. Viles, and supported by you, there is adequate time there, that the industry could work out this program, and the Government could work out the disposal of these plants?

Mr. FIRESTONE. Senator Bricker, it allows a 9-month period; I think if we were diligent at it, we would certainly be in a position to know what the problems were and to try to have the best solutions that could be obtained.

Senator BRICKER. And if it could not be worked out within that time, of course we can take another look at it.

Mr. FIRESTONE. That is correct, sir.

Senator CAIN. A lack of diligence has never been charged against the rubber industry of America, to my knowledge.

Mr. FIRESTONE. I think not.

Senator CAIN. You have been as progressive as any industry this Nation has ever known, so I think there would be no fear of your industry not being diligent in taking another look at this business. Mr. FIRESTONE. Thank you, Senator.

Senator BRICKER. I would like for you to discuss too any recommendation you have in regard to the Government ownership of patent rights. That is on page 13 of our bill, subsection (b) of section 11.

Mr. FIRESTONE. As I said in my formal statement, I feel that it is a fact that the synthetic rubber industry will be furthered faster through private research. Of course, the December 19 agreement, which is spoken of makes that impossible. I favor the bill as it provides for the immediate cessation of the further accumulation of technical information or rights to patents under the agreement dated December 19, so that private research may resume.

Senator BRICKER. That is all, Mr. Firestone. Thank you very much. Mr. FIRESTONE. Thank you.

Senator BRICKER. Mr. William O'Neil, of the General Tire & Rubber Co. We will hear from him as the next witness.

Have you a prepared statement?

STATEMENT OF WILLIAM O'NEIL, PRESIDENT, GENERAL TIRE & RUBBER CO., AKRON, OHIO

Mr. O'NEIL. No.

Senator BRICKER. We will be glad to hear any of your suggestions now as to Senate bill 2187 or any suggestions you might have with regard to the House bill, or the problem generally of proper disposal of the synthetic plants.

I think I can say that our attitude is to get them back into private industry at the earliest possible date with full protection to the national security and the public interest.

Mr. O'NEIL. I would like to make this statement.

Senate bill 2187 is America. It is the first time that I have ever found the rubber industry unanimously together. They are unanimously together against the Shafer bill and unanimously for S. 2187. That is something remarkable. I have been in this business for a great many years, and it is the first time I ever found them together on anything.

Senator BRICKER. You would include, of course, the amendments suggested here by Mr. Viles?

Mr. O'NEIL. That is all right; yes. We are still unanimous.
Senator BRICKER. You agreed upon those?

Mr. O'NEIL. We are still unanimous, and that is remarkable, in spite of Mr. Clark's opinion that we get together. He has not got a sense of humor or he would excuse us.

You know there is a grave danger of war. Money and labor are very necessary in a war, and I want to state that for the last war, at the time of Pearl Harbor, the rubber industry was more ready for that war than any other industry in America. There was never any time that there was a shortage of rubber for any military purposes all during the war. Not only was there not a shortage, but we furnished rubber to all of the rest of the world, including some of the rubber-producing countries.

Why with a shortage of money, with a shortage of labor, and everything else short in this country, why do we have to waste our money on some kind of a foolish dream of an impossible stock in this country. The price of rubber itself today indicates that there is no shortage of rubber. We have in this country 375,000 tons of rubber in the hands of manufacturers and in the hands of the Government. In 1933 when there were 385,000 tons in all world stocks-in Amsterdam, in the Far East, in London and Liverpool and here-rubber dropped to 212 cents a pound because there was a world overstock. We have 375,000 tons right in this country right now.

We have a producing capacity of 600,000 tons, which you say you are going to maintain, of synthetic rubber. It is absurd to think of the Government spending money now on an industry that was more ready than any other for war.

percent of the world's The American rubber

The American rubber industry controls 50 rubber business outside of the United States. industry did not grow on natural resources. We brought the rubber from the farthest point of the globe to this country and we are leading in technical advancement over any other country in rubber. Why should we be the one industry picked out by a bureaucratic group to try and horn in and say, "We want to do something in this."

In private industry we produced more rubber in tonnage again over the previous records than our whole Rubber Reserve Company was able to get out of Brazil. I am talking about total tonnage again, and the cost of that rubber under private industry came out at 28 cents a pound; the cost of the tonnage in Brazil, I understand, went somewhere between four and five dollars a pound.

They say they sent birds down there from Harvard to teach the natives how to climb trees. I never knew that was in the curriculum at Harvard.

If anybody ever saw how foolish our Government tried it was just lucky you had an industry quite as ready for this war.

Do you realize that at one time when they were trying to talk to me about cutting tire rationing because it was not any longer necessary, we were informed, well, there was a shortage of gasoline, and we can control it better through rationing tires.

There was no time that we were short of rubber in this war. There was no time that we did not ship rubber to Venezuela, which raises rubber. We shipped rubber to nearly every country in the world out of America. And they talk about our not being ready for war.

Senator BRICKER. I think that is right. My explanation here to Senator Cain, and he and I were just discussing it, was that your statement was to this effect, that there was never a shortage at any time for military purposes. When we needed a tractor tire or a rubber product for military use, it was ready when the need was there. Mr. O'NEIL. That is right. There is no shortage now.

Senator BRICKER. And that you soon caught up with the needs, so you could have supplied automobile tires, but you held that restriction because of the shortage of gasoline.

We went down

Mr. O'NEIL. That was what we were informed. there, the entire industry went down and asked them to throw out rationing. We were informed that there was a shortage of gasoline. Senator CAIN. For that reason they rationed tires.

Mr. O'NEIL. Yes.

Senator CAIN. I understood your rubber industry was short of tires for commercial and passenger use, but your testimony indicates that after a given date that was no longer so, although the average consumer could not buy a tire.

Mr. O'NEIL. Yes.

Senator BRICKER. Have you any further statement?

Mr. O'NEIL. Why, I am very much for this. I do not like the length of the control. I think it is a little bit longer than necessary, but still in order to be unanimous, I will go even for that.

Senator BRICKER. That is the shortened date suggested by Mr. Viles.

Mr. O'NEIL. The shortened date would be very much better.

72432-48- -3

Senator CAIN. May I ask your opinion as to what a shortened date would actually be? Do you want any date at all?

Mr. O'NEIL. Yesterday would be my idea.

Senator CAIN. The industry is in agreement?

Mr. O'NEIL. Yes. You realize that we could right now produce a better rubber than GR-S.

Senator BRICKER. You could produce it?

Mr. O'NEIL. Yes, right now.

Senator CAIN. That is important to the people of this country—to get the best product at the cheapest price.

Mr. O'NEIL. No question about it.

Senator CAIN. You are saying for as long a time as there is a date, if I understand you correctly, the product will not actually be as good as you want it.

Mr. O'NEIL. The reason for this is that the old American system of initiative, where a fellow thinks that he owns something, will work the minute you step the Government out of it.

Senator CAIN. From your point of view, you see no time in the future in which those virtues are not going to be even more in demand in the future than they have been in the past.

Mr. O'NEIL. Correct. If we are going to fight this war with atom bombs, the next war, do you think the rubber industry will be as out of date as to fight it with GR-S? It will not be. We have always led the world in that. That synthetic butadiene styrene was a German patent. We made it very much better than they. We have greater technical knowledge than they. We control, as I say, the rubber industry outside of the United States. This one industry is something like the automobile industry; the automobile industry is the same way, ahead of the rest of the world. All of our mechanical industries are ahead of the rest of the world.

Senator CAIN. You are very anxious to have incentive and competition take over whatever control of this field is necessary.

Mr. O'NEIL. That is right. In other words there is interference today. For instance, we went to them, and asked them to supply us with latex, synthetic latex, to work with ourselves. They charged us more for that, which takes it only one-third of the way through, onethird of the way through a copolymer plant, they charge more for that to us than if we finished it. It is just complete interference.

Senator CAIN. There is a tremendous difference of opinion within your industry as evidenced by your very friendly testimony, and that which has preceded, and some which will follow. You would like it fought out today on the basis of incentive and competition.

Mr. O'NEIL. I am still going along to be unanimous.

Senator CAIN. I respect that, but I think it is important if you feel that way, that as a spokesman within your own industry, you speak of the need for the reestablishment of the motive of incentive. Mr. O'NEIL. That is right.

Senator CAIN. In this country.

Mr. O'NEIL. That is exactly it.

Senator CAIN. Because if the leaders of industry will not do it, you will never decontrol this country in a century.

Mr. O'NEIL. That is right. You see, you have, when you operate a Government plant, you are completely stopped from any private initiative. It is socialistic. It is the thing that Hitler did, and that

is why he lost out. The German industry went back very much under Hitler's control. Previously Germany under the Kaiser was quite a competitor in the rubber business, but they got terrific government control, and they were no longer a competitor.

Senator CAIN. Yet Hitler's reputation as known to us for a long time in this country, was that he had improved the nature and the quality and character of everything, including rubber products.

Mr. O'NEIL. Mr. Hitler did not develop a single synthetic except a wood plastic, and practically every synthetic that was developed came from this country. That is nylon, rayon, and all of those synthetics came from this country. They did not come from Germany, which was the great chemical country up to the First World War, but after that they passed out.

Senator CAIN. Did it work this way; because I do not know; perhaps the Third Reich took the best brains in Germany and put them to work on a federal subsidy, and took away from them their incentive to be infinitely better than their competitor, and the net result was the falling off of the excellence of their work.

Mr. O'NEIL. They not only threw the Hebrews out of the chemical business, but they threw every non-Aryan-born German out. All of their Danish and French and those kinds were obliged to leave Germany. But the biggest thing they did, they turned over the production of synthetic rubber to the A. G. Farben Co., which was a chemical company. They turned out a synthetic rubber twice as hard and not usable by the manufacturer, but you just talk to any government official about improving a product, and our American fellows are not a heck of a lot ahead of the Germans on that kind of thing; they do not listen to you very well.

The German industry was obliged to use a synthetic that was very much harder than our synthetic. You had to electrically heat it, electronically heat it, in order to use it in the mill. We had softer rubber, and we were able to make a very much better product in spite of the fact that the original patent was a German patent.

Senator BRICKER. Thank you very much, Mr. O'Neil.

Mr. O'NEIL. Thank you.

Senator BRICKER. Mr. J. P. Seiberling, of the Seiberling Rubber Co., of Akron, Ohio.

Will you give your name and position to the stenographer? Have you a prepared statement?

STATEMENT OF J. P. SEIBERLING, PRESIDENT, SEIBERLING RUBBER CO., AKRON, OHIO

Mr. SEIBERLING. Yes, I have.

Senator BRICKER. You will proceed, then.

Mr. SEIBERLING. Mr. Chairman and members of the committee, my name is J. P. Seiberling, and I am president of the Seiberling Rubber Co., Akron, Ohio.

The problem of developing legislation to provide "for the maintenance of an adequate domestic-rubber-producing industry" so as to "strengthen national security and the common defense" may seem to the casual observer to be a relatively simple one. However, as you gentlemen must well know, to anyone who has explored and studied it