stood in the breech until the synthetic-rubber industry was created and functioning.

Our industry is old. It is much older than the tire industry. So far as I know, it has never had any Government help, and asks for

none.

We recognize the truth of what Mr. O'Neil pointed out, that the available supply of crude rubber today is greater than it was at the time that crude was selling below 3 cents a pound. We would regard that as a threat to our profits, a threat to our solvency, because in addition to the crude rubber, there is an available supply of synthetic rubber. We obviously would not like the required use of a competing rubber hydrocarbon in the presence of so much other competing rubber hydrocarbon, particularly so long as the use of reclaimed rubber is not required, and that, too, is an American-manufactured product. I would like to say at this point that there is nobody in the reclaiming industry who has suffered to my knowledge or suggests now required use for reclaimed rubber.

We believe we are faced with the difficulty of low-priced crude and required use of synthetic; yet we believe that the required use of synthetic as outlined in this bill is probably in the national interest, and I favor the bill. I particularly favor one provision of the bill which states that this synthetic rubber that must be purchased and must be used shall be sold at its full cost.

I am not an accountant, and I do not know what phraseology you could use better than you have in your present bill. If there is better phraseology, I do not object to it.

I do object to any phraseology which has as its purpose or result pricing synthetic rubber below its costs. These plants were built by the taxpayers, not by the tire users. There is no reason why the taxpayers should subsidize tire purchasers by producing synthetic rubber and selling it below cost.

I have no suggestion to make as to the phraseology. It suits me as it is in the bill now. But other phraseology suits me just as well, so long as it is clearly understood that synthetic rubber is to be sold under Government auspices at its full cost.

I am very anxious for the day to come when all three rubber hydrocarbons, crude, synthetic, and reclaimed, stand on their own feet and the chemists express their preference for one or two or three, in their compounding specifications.

That day will come under your Senate bill. I hope you will see fit to move the date up, not later than June 30, 1949. I think it would be helpful to do that.

I have no other suggestions for any change in the bill. The reclaiming industry is very happy to sell its product on the judgment of the market place.

If I understand the practical operation of the Congress, it is possible, I hope, and improbable that this House bill will pass. I sixcerely hope that it will not pass, not because I think it would ever be used as a substitute for the Senate bill, but because I think that the elections of 1946 clearly established the fact that the American pecs & decided they wanted less government in business, and not mor think it flies in the face of a mandate from the people, ani lä it is unfortunate, if through carelessness, through lack of time to mak

the provisions of the bill, it is allowed to pass the House. If it does pass the House, and this Senate bill passes the Senate, as I hope it will, and they go to conference, I hope the conferees for the Senate bill will insist that free enterprise be maintained in the country instead of Government bureaucracy.

Senator BRICKER. Thank you very much.

Mr. WELCH. Thank you.

Senator BRICKER. The next witness is Mr. Robert A. Winters, of the Association of Sole and Heel Manufacturers.

Give your name and your position to the reporter. Then you have a prepared statement, as I understand it. If you will present that, we will appreciate it.

STATEMENT OF ROBERT A. WINTERS, EXECUTIVE DIRECTOR, ASSOCIATION OF SOLE AND HEEL MANUFACTURERS, NEW YORK, N. Y.

Mr. WINTERS. I am Robert A. Winters, executive director of the Rubber Heel and Sole Manufacturers Association, 551 Fifth Avenue, New York.

This statement was written before I knew that Senate bill had been introduced, and therefore I shall not in this statement discuss the bill itself to any extent.

This association believes that the United States should continue the production of synthetic rubber, especially the GR-S type, for the following reasons.

1. GR-S and other synthetics are better materials than crude rubber in some uses already.

2. The fact that GR-S and other synthetic rubbers are being produced is an insurance against widely fluctuating prices for natural rubber. These price fluctuations, which have characterized the naturalrubber markets in the past, are damaging to our business.

3. The national defense of the United States requires the availability of synthetic rubber.

The association urges further experimentation and research of GR-S and other synthetic rubbers so that these rubbers will be continuously improved in quality.

Every rubber industry, and specifically the rubber heel and sole industry, should use some synthetic rubber in its production continuously. This is necessary so that present technical know-how in the use of synthetic rubber will remain in all rubber industries for any future political crises, and for the production of better products today. The best way to induce the use of GR-S by industry is through a price incentive. It is this association's recommendation that the price of GR-S should be 20 percent below that of No. 1-X ribbed smoked sheets, and no higher than 20 cents per pound. The price of GR-S should be changed quarterly and not follow the day-by-day variations in the price of natural rubber. This association also recommends that the Canadian plan of differential prices for GR-S be considered for adoption. The Canadians rebate 1 cent a pound when an industry uses in excess of 32 million pounds of GR-S during a month.

The members of this association are opposed to the sale of be synthetic-enter pants to large rubber companies. We are opposed

to the exclusive sale or the plants to large ucber companies or to apy, say, majority ales to the arve ridder companies. We want the tree source of Vithette miter for the benent of our members when ne plants go back to private industry.

They do not want to be put in the position of buying one of thei major raw materials the se of which may be required by law—-romA their biggest competitors.

It is the association's "onclusion that the Government should continue to own and rete the synthetic-rubber plants undi sales can be made to persons or companies outside of the rubber industry; and until arrangements an be made so that the price of GR Skype syns thetic rubber vill be competitive to that of natural rubber, with a maximum price above which the product cannot go.

If I may continue further, some of my members have told me that about 70 percent of the total ribber consumed is by the tire companies. Other products use about 30 percent. Therefore, as long as the nuustry is under Government controi, we should like to have available o us 30 percent of the total production of GR-S each month. If we do not use that amount. Then we suggest that it be reoffered to tires, but the reason for this suggestion is that then in some of our products, in the heel-and-oie industry, we have to use GR-S to make the product, Natural richer cannot be used in those products. They are the hardtype sole, or what we are calling in part of the industry the nuclear soie, Senator BRICKER. You do not mean the 30 percent is used by the svie and heel industry.

Mr. WINTERS. No.

Senator BRICKER. That is all of the nontransportation items.

Mr. WINTERS. That is right. We do not want to have to use the 30 percent. but we want it available.

Recently there has been a severe shortage of GR S, which has hurt the production of the items which have to use GR-S, because a great deal of this is going into uses where it is not necessary; because of `ower cost it is convenient to use.

In general, the association is for the operation of the synthetie rubber by private industry, under conditions that will safeguard the independent rubber companies and the military interests of the United States.

That concludes my statement.

Senator BRICKER. Any questions. Senator Cain?

Senator CAIN. What do you mean by your use of the phraseology "political crises"? Were you talking in terms of war or domestic politics, or what?

Mr. WINTERS. In terms of war.

Senator BRICKER. Any questions?

Senator ROBERTSON. NO.

Senator BRICKER. Thank you very much.

Mr. WINTERS. Thank you.

Senator BRICKER. The next witness is Mr. Everett Morss, president of the Simplex Wire & Cable Co.

STATEMENT OF EVERETT MORSS, PRESIDENT, SIMPLEX WIRE & CABLE CO.

Senator BRICKER. Mr. Morss, will you give your name and position to the reporter? Then you may proceed. Do you have a prepared statement that you wish to read?

Mr. MORSS. I am sorry, I do not have a prepared statement.

Senator BRICKER. You may proceed to discuss this problem in your

own way.

Mr. MORSS. My name is Everett Morss, and I am president of the Simplex Wire & Cable Co., of Cambridge. I have been a member of the Army-Navy Munitions Board advisory committee and also the advisory committee of the Department of Commerce, representing the wire and cable industry.

Our industry uses about 3 percent of the rubber used in the country. It therefore is not a large factor. But to the companies in the industry the question of a proper and available supply of rubber is a very important matter.

This Senate bill, which I heartily endorse, represents the first ray of light that our industry has seen since the termination of the war.

We never were satisfied with natural rubber. We used it almost exclusively before the war because it was all we had. In the establishment of this synthetic-rubber industry, from our point of view, a very substantial advance in the art has been made.

Of what we use as an industry, today about 80 percent of the rubber is synthetic on a voluntary basis. It is used because it makes for us a better product. But even so, we are not satisfied with the present day GR-S any more than anybody else is. We want to see it developed into a better polymer. We think we know how to start on that development.

We have found ourselves unable to make any substantial beginning since the war because of the patent pooling with the exchange of information and because of the Government operation of the plants.

In this bill you point the policy that you would like to see the termination of that patent pooling and the exchange of information. You also establish the policy of the beginning of the sale of plants into private hands and to make available at least a few plants for such sale. To us that represents a chance to begin almost immediately in this work of developing a new polymer, which is very important to us, and we welcome this very, very much.

As small users we were not too much aware of the over-all problems of the rubber industry taken as a whole. I think I have had a liberal education in my service on the advisory committees and because of that I have learned considerable and I heartily endorse the suggestions made here by Mr. Viles today.

Senator BRICKER. Thank you very much.

Mr. MORSS. Thank you, sir.

Senator BRICKER. The next witness is Mr. Robert S. Wilson, who is the executive vice president of Goodyear Tire & Rubber Co.

Will you give your name and position to the reporter? You have a prepared statement, I understand.

STATEMENT OF ROBERT S. WILSON, EXECUTIVE VICE PRESIDENT, GOODYEAR TIRE & RUBBER CO., AKRON, OHIO

Mr. WILSON. Yes, sir.

Senator BRICKER. You may present it.

Mr. WILSON. My name is Robert S. Wilson. I am vice president of the Goodyear Tire & Rubber Co., Akron, Ohio. I was an alternate member of the Rubber Industry Advisory Committee to the Munitions Board which prepared the statement read to you by Mr. Viles this morning.

I support S. 2187 with the modifications outlined in the statement read by Mr. Viles. I wish to comment briefly on S. 2187 as modified by the amendments just mentioned.

What are the basic elements of the rubber problem that the present legislation seeks to deal with?

1. National security. This is the first and most important consideration.

2. The preservation and promotion of the American system of free competitive enterprise.

3. The protection of the best interests of the American consumer of rubber products.

These basic elements must all be kept in mind and considered in the light of certain facts existing at the present time, which facts, however, are subject to change from time to time, with or without notice: A. There is a world shortage of natural rubber at present.

B. Synthetic rubber is not the equal of natural rubber as yet, except for limited uses.

C. The price of natural rubber has fluctuated quite violently, ranging from a high of $1.25 per pound to a low of 234 cents per pound, in the 15 years prior to World War II.

D. Artificial production restriction schemes entered into by the countries who produce most of the world's natural rubber have, in times past, resulted in higher prices for rubber-products to the Amer

ican consumer.

E. The areas that account for the production of 90 percent of the world's natural rubber are distant halfway around the world.

F. In two world wars this country's safety has been greatly endangered by the fact that we did not have adequate sources of rubber, natural or synthetic, within our own natural area of protection. In these circumstances we believe that

1. National security should be safeguarded (a) by maintaining at this time 600,000 tons of synthetic rubber producing capacity in being, owned by the Government and operated by the Government to the extent necessary to supply all the general-purpose synthetic rubber the manufacturers of this country need and can use; and (b) by requiring the use of certain varying amounts of general-purpose synthetic rubber in a limited group of rubber products while security pressures are being relieved and while satisfactory plans are being worked out, blueprinted, and documented for the disposal of the synthetic-rubber plants to private industry in such a manner as will be consistent with continued national security.