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Mr. SCHIFF. As far as I am concerned, I am a volunteer. I don't get paid.

Mr. Nicholson. No, I mean social workers; who pays their salaries?

Mr. Schiff. In some instances they are paid by private agencies, in some instances by municipalities, in some instances by State governments, and in some instances by the Federal Government.

It is a cross section of the social workers of the country. As far as we are concerned, we are volunteer members of the committee.

Mr. McDONOUGH. Mr. Chairman.
The CHAIRMAN. Mr. McDonough.

Mr. McDonough. Before coming to Congress, I was a member of the Los Angeles County Board of Supervisors, and in that county I think we have perhaps one of the largest case loads of aid for aged, for medical aid, for relief, for unemployment, for many reasons, and we have administrative and executive and legislative duties, so I was very close to the problem of administering to social workers.

You recommend the adoption of this bill, which would affect all of the people of the United States-and in most countries of the United States, the people that you find as your clients usually represent a very small percentage of the total population; isn't that true?

Mr. Schiff. Well, I think it would vary according to the county.

Mr. McDonough. Well, it would be a much lesser percentage of the population, in many counties, than in Los Angeles County.

Mr. SCHIFF. Of course, we talk for our membership, too, which are not the recipients.

Mr. McDonough. But the aid you are talking about is for the clients to whom you render aid?

Mr. SCHIFF. To a largo extent; yes.

Mr. McDonough. And knowing the type of people that are in those unfortunate circumstances, there is almost need for rent control for that kind of people all of the time, while there isn't need for rent control for most of the population all of the time.

In other words, your appeal to this committee, as I gather it, and from your frequent references in your testimony, is to the people that you find it necessary to render aid to, who are clients of yours and who are dependent upon the city, county, or State in which they live, because of physical disability, age, poverty, and many other reasons.

Now, I doubt if that applies to 90 percent of the population of the United States.

Mr. Schiff. I should make this clear to the committee: That while we are particularly interested in that group, until such time as we can provide the kind of housing that America can well afford to give them, we believe our point of view cuts across the American population, with the exception of the highest income groups. We don't represent any unions or anything like that.

Mr. McDonough. No.

Mr. Schiff. But at the same time, the average American family, I think, can well benefit from the law that you folks are considering, aside from the clients we come in contact with.

Mr. McDONOUGH. That is all.

Mr. MULTER. Mr. McDonough, I happen to have before me a letter received from a gentleman in Los Angeles-Hollywood, Calif.on May 28, 1951, in which he says:

These fact-juggling fellows claim that rents in decontrolled districts have only risen 9 percent in California and 19 percent in New England. I would like to call your attention to one instance I know personally aboutand he gives me the name and addressOur rent has been increased 100 percent since the City Council of Los Angeles decontrolled rents.

She has been living in the same place 18 years and was informed that if she had not been such a desirable tenant, the increase would have been 167 percent.

Mr. McDonough. I got a copy of the same letter addressed to me.

Mr. MULTER. If there are no further questions, and there are no further witnesses, the committee will adjourn, to meet at 10 o'clock tomorrow morning.

(Whereupon, at 4:38 p. m., the committee adjourned, to reconvene at 10 a. m., Thursday, June 7, 1951.)

(The following statements were submitted for inclusion in the record:) MEMORANDUM SUBMITTED BY SANFORD H. Bolz, COUNSEL, FLINT LIGHTER

MANUFACTURERS GROUP, New York, N. Y. I desire to submit for the committee's consideration the following statement on behalf of my client, the Flint Lighter Manufacturers Group:

This group is a trade association whose members 'comprise the major portion of the cigarette lighter industry and allied businesses. We do not desire to protest in any sense the basic question of extension of the Defense Production Act of 1950. We believe that such extension is definitely in the national interest in these critical times and that American business as loyal citizens should support it as a vital element in making and keeping America strong in the emergency that confronts us, even though it entails certain difficulties and problems. In that spirit we support and endorse the continuation of the act which you are now considering. And we wish to take this opportunity to state for the record our applause for the splendid job that is being done in the allocation of scarce materials by the National Production Authority, and by its Administrator, Mr. Manly Fleischmann, in what is at best a thankless task-for nobody, least of all American businessmen, likes restrictions.

But while we are not concerned with extension of the act, we are very much concerned about one problem seriously affecting our industry—and others-for which we believe provision should be made in the extension act. It relates to the tariff concessions made by the United States on various items, including lighters, in the recent Torquay Tariff Agreement. The tariff on lighters under this agreement will be cut in half--from 110 percent to 55 percent, and our industry with reason fears that as a result a flood of lighters will inundate the American market, particularly from Austria and Japan, and will cause serious injury to our businesses. If that were all, it would be enough to cause us great concern. But it is not all. At the same time our industry is under severe restrictions in the amount of copper, nickel, steel, and other critical materials that it can use for its products, which as patriotic citizens we have accepted as our share of a necessary contribution to national defense. However, between domestic materials restrictions on the one hand and greatly increased foreign competition on the other, we have substantial fears of being able to keep our industry going at an economic level in order to stay in business and also to keep our plants and personnel intact and available for increased defense production as it begins to roll.

Moreover, although there is a so-called escape clause action whereby the tariff cut can be restored if serious injury to a domestic industry is threatened by increased imports, it will be almost impossible, in present circumstances, to sustain the burden of proof necessary to secure such action. As established by Congress in its recent extension of the Trade Agreements Act, that burden is to show that the serious injury to the domestic industry is the “result” of the tariff cut. The House amendment, knocked out in conference, did not require any connection between injury and concession, but the Senate version did, and this was adopted in conference. And while the previous law required proof that the injury resulted from the concession, today it will, as a practical matter, be virtually impossible to establish to the satisfaction of the Tariff Commission that the serious injury to the domestic industry is the result of the tariff concession rather than the result of restrictions on the use of materials, which obviously have a serious impact on the industry's production but which have nothing whatever to do with the tariff concession. Indeed, it is almost impossible for the industry itself to determine, as a matter of fact, that the decrease in its business is properly attributable to the increased imports resulting from the tariff concession, rather than from its inability successfully to compete with the increased imports because of restrictions on its use of materials. The two matters are almost inextricably interconnected and interrelated, and it would take a magician to be able to determine which is the proper proximate cause of the injury to the industry:

It would indeed be ironical if as a result of tariff concessions large quantities of articles which are under materials restrictions in the United States were to flood the United States market because (1) there are no similar restrictions on the use of these materials in the foreign-producing country, and (2) the tariff cut encourages the shipment of these items here. And this is very likely to happen; experience in the recent past has shown that at the same time that domestic industries are being hampered by materials restrictions, similar foreign articles utilizing those same critical materials have been coming into the country in increased quantities.

Accordingly, we desire to propose that in extending the Defense Production Act of 1950 the committee make provision to protect domestic manufacturing industries which are under materials restrictions, and which at the same time are threatened with increased importations of competitive articles as a result of the Torquay Agreement tariff concessions, to the end that such an industry will be given a lift by NPA in the form of larger allocations of necessary materials in order to enable it successfully to compete with the increased foreign competition and to avoid serious injury. We propose for the committee's consideration and adoption the following proviso to take care of the situation described:

Provided, however, That where a domestic manufacturing industry is under restrictions on the use of necessary materials for its production, and where substantial tariff reductions on imported competitive articles threaten increased importations of such competitive articles, the National Production Authority shall consider this a hardship case and shall grant to such domestic manufacturing industry sufficiently increased usage of necessary materials to enable it to avoid serious injury and remain in business and available for necessary defense production.

We have no particular pride of authorship in this language, and any similar language that would accomplish the same result would, of course, be satisfactory to our industry. We do believe, however, that the foregoing accurately reflects our legitimate concern and one with which we know the committee and the Congress will be in sympathy. While both necessary restrictions on the use of materials and legitimate tariff concessions to friendly countries to enable them to earn necessary dollars are important national considerations, neither alone nor both together, in the present national situation, must be allowed to present a threat of serious injury to domestic civilian production. We know that this is not NPA's intention, and we sincerely trust that the combination of materials restrictions and tariff concessions will not be allowed to achieve the same unintended result. Respectfully submitted.

SANFORD H. Bolz, Counsel.


Chicago 3, June 6, 1951. To All Members of the Eighty-Second Congress:

The attached represents the opinions and the recommendations of the Construction Industry Manufacturers Association on the price-control phase of the Defense Production Act.

We request your careful consideration of each of the points made and any assistance you can lend toward correcting a bad situation. Respectfully submitted.



Chicago, June 6, 1951. Mr. MICHAEL V. DISALLE, Director, Office of Price Stabilization,

Economic Stabilization Agency, Washington, D. C. DEAR MR. DISALLE: After careful consideration and deliberation by its Government relations committee, the board of directors of the Construction Industry Manufacturers Association, representing the majority of the country's manufacturers of construction equipment, supplies, and components, expresses deep concern over the unfair and possibly disastrous effects of CPR 30 upon our industry.

The CIMA board of directors, at its meeting in Chicago on May 24, 1951, went on record strongly recommending to the Office of Price Stabilization that:

"CPR 30 should not be made applicable to the products manufactured by the construction equipment industry. The industry should continue under the general ceiling price regulation, with frozen prices established at the level at which equipment was offered for sale during the base period, December 19, 1950, through January 25, 1951. This amended general ceiling price regulation should be placed into effect with the provision of a simple relief mechanism for those manufacturers for whom the ceiling prices thus established are too low. Any segment of the construction equipment industry should have the right to be heard in the event OPS should believe it has evidence that such segment established excessive prices prior to January 25, 1951.”

The basis of our reasoning, our conclusions, and our recommendations is attached hereto under two headings: "General comments on Ceiling Price Regulation No. 30," and "Specific comments on Ceiling Price Regulation No. 30.'

It is our honest belief that CPR 30 will cause undue hardship and hamper production in the over-all effort to achieve maximum production so important to the defense effort.

Your cooperation in correcting this situation is urgently requested.
Respectfully submitted.


In the statements of considerations of CPR 30 and CPR 22, the latter being equally applicable to CPR 30, there have been inserted a number of opinions and conclusions, as well as inferences, which do not appear to be entirely consistent with facts, at least as far as large segments of the American machinery-manufacturing industry are concerned. Furthermore, there appear to exist a number of inconsistencies in these statements of considerations, both with respect to assertions in different parts of these statements, as well as in relation to the Defense Production Act of 1950, which is quoted as the authority for the issuance of these ceiling price regulations.

THE DEFENSE PRODUCTION ACT OF 1950 The following exerpts from title IV (price and wage stabilization) of the Defense Production Act of 1950 are particularly appropriate to Ceiling Price Regulation No. 30. Title 1

Under section 401 of the act it is stated as the intent of Congress that the authority conferred shall be exercised in a manner giving “full consideration and emphasis, so far as practicable, on the maintenance and furtherance of the American system of competitive enterprise.”

It is quite doubtful that the mechanical method of computing prices required under CPR 30 will afford the maintenance of competitive enterprise inasmuch as final prices are usually determined in relation to the price of competitive equipment of the same type rather than as a result of detailed cost computations. Also, it can be expected that many of the prices determined pursuant to CPR 30 will be unprofitable and, therefore, will not permit production of the unit, thereby upsetting the competitive balance which originally created the prices in the industry. Title 2

Section 402 (c) provides in part that “The President shall also give due consideration to the national effort to achieve maximum production."

Making the sale of a product unprofitable is far from an inducement to produce, particularly to achieve maximum production." Title 3

Section 402 (d) provides in part that “the President shall make appropriate provision to prevent hardships and inequities to sellers who have bona fide contracts in effect on the date of issuance of any such regulation or order for future delivery of materials in which seasonal demands or normal business practices require contracts for future delivery."

There is provision in CPR 30 for appeals to prevent hardships but the method is so cumbersome as to make it impracticable and unfeasible for a manufacturer to avail himself of it. Consequently it does not, in fact, prevent the hardships and inequities which the law requires of it.


Title 4

The OPS attempts to justify CPR 22 and CPR 30 in the main by assuming that the majority of American manufacturers under the general ceiling price regulation either had their prices "far above any justifiable level" or "so low as to discourage continued production.”

Very little consideration appears to have been given to by far the greatest percentage of American manufacturers whose prices in January reflected an equitable position. Therefore, it is inconceivable why OPS should subject the overwhelming majority of American manufacturers to the fantastic task of adjusting prices in accordance with the ceiling price regulations for no other reason but to take care of a relatively small number of unbalances in either direction. Title 5

OPS in recognition of "complaints from manufacturers whose prices are frozen at levels at which they cannot continue to operate" concluded that it was “neither feasible nor sound policy to attempt to apply individual adjustments,” stating "because to do so would tax virtually the entire resources of the organization.'

OPS seems to have completely ignored the possibility that in issuing CPR 22 and CPR 30 the administrative resources of the organization would be taxed to a far greater degree than would have been the case if OPS had issued a simple regulation providing for relief to those relatively few manufacturers for whom the January freeze order meant a demonstrable injustice.

OPS attempts to explain its omission in that respect by saying that it is not sound policy to concentrate upon giving relief to hardship cases without a concurrent effort to roll back those prices which are clearly excessive."

Again it must be stated that in the relatively few cases where such excessive prices were established, a reguls tion much simpler and certainly more understandable and less burdensome than CPR 30 could have been issued. Even without such a regulation the public market place and competitive conditions under the free-enterprise system, in all probability, would bring about a downward adjustment of these excessive prices. The recent past is full of examples of such downward price adjustments, which in turn gave Government officials occasion to state that price stabilization by virtue of the January order had been effected, and that even with application of CPR 22 and 30 it could be expected that the over-all pricing structure in the country would deviate very little from the structure heretofore existing. Thus it again appears to be inconceivable why industry as a whole should be asked to go through the terrific job of making CPR 30 applicable to its operations, when the over-all result is expected to show little or no change from the existing and already stabilized price structure.

Title 6

OPS admits that it would be soundest to issue a series of individual regulations tailored to meet the needs and peculiarities of each industry, but at the same time concedes that "the mere compilation of the data needed to form the basis for such orders would take months.”

In this admission OPS appears completelv to ignore the fact that it will take an equally long period for industry to compile the data needed to make CPR 30 applicable to its operations,

Title 7

In numerous places in its statement of considerations to CPR 22, OPS indicates that appropriate tailored regulations no doubt will be necessary.

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