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FIFTH SUPPLEMENTAL NATIONAL DEFENSE

APPROPRIATION BILL, 1941

WEDNESDAY, MARCH 26, 1941

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C. The subcommittee met, pursuant to adjournment, at 2:30 p. m., in the committee room, Capitol, Hon. Alva B. Adams (chairman) presiding.

Present: Senators Adams (chairman of the subcommittee), McKellar, Hayden, Byrnes, Overton, Thomas of Oklahoma, Nye, and Brooks.

Senator ADAMS. The committee has received from the War Department certain suggested amendments recommended for inclusion in the bill under consideration. These amendments and a brief discussion covering each will be inserted in the record at this point.

REGULAR SUPPLIES OF THE ARMY

Page 5, line 14: Strike out "$9,000,000" and insert "$12,400,000." Discussion: To provide an addition of $3,400,000 under the 30,000 pilot program, in accordance with supplemental estimate of March 24, 1941.

CLOTHING AND EQUIPAGE, ARMY

Page 5, line 19: Strike out "$70,048,000" and insert "$79,418,000."

Discussion: To provide an addition of $9,370,000 under the 30,000-pilot program, in accordance with supplemental estimate of March 24, 1941.

CLOTHING AND EQUIPAGE, ARMY

At pages 5 and 6:

Strike out lines 23-25, page 5, and lines 1-7, page 6, reading as follows: "Provided, That no part of this or any other appropriation contained in this Act shall be available for the procurement of any article of food or clothing not grown or produced in the United States or its possessions, except articles of food or clothing not so grown or produced or which cannot be procured in sufficient quantities as and when needed, and except procurements by vessels in foreign waters and by establishments located outside the continental United States, except the Territories of Hawaii and Alaska, for the personnel attached thereto."

Discussion: This language will hamper the national-defense activities of the War Department.

ARMY TRANSPORTATION

Page 6, line 8: Strike out "$137,630,000" and insert "$150,852,000." Discussion: To provide an addition of $13,222,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

39

MILITARY POSTS

Page 6, line 17: Strike out "$9,500,000" and insert: "including the acquisition of land, rights pertaining thereto, leasehold, and other interests therein and temporary use thereof, without regard to the provisions of sections 355, 1136, and 3648, Revised Statutes, as amended (10 U. S. C. 1339; 40 U. S. C. 255; 31 U. S. C. 529), and the purchase, operation, maintenance, and repair of passenger-carrying vehicles, $193,821,000."

Discussion: To provide an addition of $184,321,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

BARRACKS AND QUARTERS, ARMY

Page 7, between lines 7 and 8: Insert "Barracks and quarters, Army: For barracks and quarters, $2,366,000, to remain available until June 30, 1942." Discussion: To provide an addition of $2,366,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

SIGNAL SERVICE OF THE ARMY

Page 7, line 10: Strike out "$46,714,000" and insert "$49,807,000."

Discussion: To provide an addition of $3,093,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

AIR CORPS, ARMY

Page 7, line 16: Strike out "$888,236,000" and insert the following: "$982,236,000."

Discussion: To provide an addition of $94,000,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

MEDICAL AND HOSPITAL DEPARTMENT, ARMY

Page 7, line 24: After "Department" insert the following: "Army, $2,876,000, to remain available until June 30, 1942, and, in addition."

Discussion: To provide an addition of $2,876,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

ENGINEER SERVICE, ARMY

Page 8, line 12: Strike out "$18,944.000" and insert the following: "$19,074,000." Discussion: To provide an addition of $130,000 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

MILITARY CONSTRUCTION, DEFENSE INSTALLATIONS

Page 9, line 4: After "therewith" in lines 3 and 4, insert the following: "and also including the acquisition of leasehold and other interests in land, and temporary use thereof".

Discussion: The insertion of the above language is essential to authorize the War Department to effectuate undertakings which have been made with the British Government.

ORDNANCE SERVICE AND SUPPLIES, ARMY

Page 10, line 11: Strike out "$82,039,000" and insert "$82,132,100, to remain available until June 30, 1942".

Discussion: To provide an addition of $93,100 under the 30,000-pilot program in accordance with supplemental estimate of March 24, 1941.

STATEMENT OF HON. SUMNER WELLES, UNDER SECRETARY OF

STATE

QUARTERMASTER CORPS-PURCHASE OF FOOD OR CLOTHING NOT GROWN OR PRODUCED IN THE UNITED STATES

Senator ADAMS. Mr. Secretary, you are interested in an item on page 5 of the bill in reference to the purchase of food or clothing not

grown or produced in the United States. We shall be glad to hear from you.

Mr. WELLES. Mr. Chairman, and gentlemen of the committee, I very much appreciate this opportunity to discuss with you the question of defense purchases of imported foodstuffs and other materials. The bill H. R. 4124 which you are now considering contains a provision which reads in part as follows:

Provided, That no part of this or any other appropriation contained in this Act shall be available for the procurement of any article of food or clothing not grown or produced in the United States or its possessions, except articles of food or clothing not so grown or produced or which cannot be procured in sufficient quantities as and when needed

* * *

Such purchases are, of course, already subject to the requirements of domestic law with regard to the procurement of Government supplies, particularly the so-called Buy American Act, which gives substantial preference to domestic products over imported products. As a guide in administering this act, there is a prescribed differential of 25 percent in favor of domestic producers on orders over $100. Provisions such as those contained in H. R. 4124 go far beyond this in the direction of a complete embargo against imported goods needed by our armed forces.

IMPORTANCE OF PURCHASES OF SOUTH AMERICAN CANNED BEEF DURING EMERGENCY

The need for immediate Government purchases of South American canned beef in the present emergency has been pointed out recently by Mr. Donald Nelson, Director of Purchases of the Office of Production Management. In a statement issued on February 22 he said that purchases of South American canned beef are necessary because of a material broadening in the field of purchasing domestic meat supplies for the armed forces.

In addition to satisfying the immediate need for Government purchases of canned beef from the other American republics-a need which has been recognized at least by some of the domestic beef producerssuch purchases would incidentally be of substantial assistance in carrying forward this Government's program for strengthening our relations with the other countries of this hemisphere in these critical times. Most, if not all, of these countries now depend in large degree upon the United States as a source for many of their essential imports. Their ability to obtain these imports depends primarily upon their ability to export and secure payment for at least a part of their surpluses. As a result of the war, many of the American republics have found their former markets and sources of supply either cut off or severely restricted. While most of the products which they need can be supplied by the United States, they can obtain them from us only to the extent that they are able to secure the dollar exchange to pay for them.

The purchase by this Government in the other American republics of complementary products such as canned beef would be of considerable assistance in this regard, while at the same time the requirements of our armed forces would be satisfied without any injury whatever to domestic beef producers.

I shall not take your time to discuss the general question of canned beef imports in relation to the prosperity of domestic beef producers, particularly since Senator Byrnes and others have very recently discussed on the floor of the Senate the more important factors bearing

on this question. Imports of canned beef are not competitive with domestically produced beef. Such imports amount in any case to an insignificant fraction of domestic beef production, and the price of beef is now and has been for some time past substantially above the so-called parity price.

I should now like to refer briefly to the most unfortunate impressions which recent discussion of this matter has created in the other American republics. It is quite clear, from information which the Department has received during the past few days from our representatives in those countries, that the reenactment and extension of unreasonable restrictions on necessary Government purchases of their products would seriously undermine the efforts our Government is making, in cooperation with the other American republics, to strengthen our hemisphere defenses. I am confident that the Congress, realizing the vital importance of these efforts, will not adopt any measure, such as the provision under discussion, which would be directly contrary to the purposes of our defense program.

During these past few years immense strides have been taken toward solidarity between the nations of the Western Hemisphere. I think it is not too much to say that in the grave international situation which now exists, all of the 21 American republics have achieved that full measure of understanding and of identity of purpose which is essential to insure the preservation of the integrity and independence of the New World. The agreements reached at the inter-American conferences at Montevideo, at Buenos Aires, at Lima, at Panama, and at Habana have thus given and are giving increasingly practical results.

Any measure, consequently, which is taken by this Government and which tends to destroy the fabric of inter-American comprehension and of solidarity is directed squarely against the best interests of the United States.

It would be difficult for me to exaggerate the importance which is attributed by public opinion in certain of the other American republics to the provision which I have quoted above and which is contained in the bill now before you for your consideration. If the bill, when enacted, contains an embargo measure of this character, it would be construed by our friends and neighbors in many parts of this hemisphere as proof positive that our publicly announced desire to further economic cooperation between the American republics in this time of stress amounts to nothing more than words and will not be carried out in fact.

It is my considered belief, for the reasons I have briefly expressed, that the elimination of this provision would in no sense be detrimental to our domestic producers, but that such elimination would on the contrary be of the greatest advantage to the cause of close and satisfactory relations between the United States and the other American republics and would, therefore, particularly at this moment, be of the highest benefit to the national interests of this country.

Senator THOMAS of Oklahoma. What do you have in mind besides beef, if anything?

Mr. WELLES. I think beef is perhaps the most critical item we have under consideration here, but I think any embargo provision of this kind would have the same very prejudicial effect.

Senator THOMAS of Oklahoma. As the bill is now drawn, would it not apply to wool as well as to beef?

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