Colonel HEISS. May I clarify that? The amendment to the language in the 1942 estimates released funds that had been appropriated previously to 1942.

Mr. POWERS. Yes.

Colonel HEISS. The Air Corps has been operating with those funds to enter into Defense Plant Corporation contracts. There has been practically no expansion of Air Corps facilities with funds contained in the regular 1942 estimate, or the third supplemental, 1942, estimate. Prior funds have given out. The funds under discussion are needed for additional Air Corps expansion.

In a number of cases these funds will be used to further expand facilities originally financed under Defense Plant Corporation

contracts.

Mr. POWERS. How much more of an organization are you going to build up at this time?

Colonel HEISS. I do not think there is going to be any more required.

Mr. POWERS. You think if this language is changed, the defense plants can go along just as they are, without any additional help or the building up of another construction organization?

Colonel HEISS. Yes, sir; that is my opinion. We do not contemplate putting with defense plants any of the ordnance, quartermaster, or anything like that; just the Air Corps, and some small amount of Signal Corps items which are primarily radios, and so forth, for use in airplanes.

Mr. PATTERSON. Mr. Powers, you recall at the time of the discussion last June it was settled for the time being by adding $500,000,000 expediting production moneys which were to be used for ordnance, for the explosives plants and smokeless-powder plants. There was not any new money in that act for Air Corps construction.

Mr. POWERS. But would you be hindered or hampered should the committee decide not to change that language; could the engineers go ahead?

Colonel HEISS. In some cases, we might; in cases where we were expanding existing industrial facilities. Let us take Ford; we are going into Ford's factory and putting in new machinery, building additions through the Defense Plant Corporation, and Ford enters into a contract with the Defense Plant Corporation and the Defense Plant Corporation puts those facilities in. It then becomes part of the Ford plant, with Mr. Ford, as he gets through, in a position either to buy the installation from the Defense Plant Corporation or to pull the machinery out and let the Defense Plant Corporation sell it; and the War Department will reimburse the Defense Plant Corporation for the loss they might have to take.

If we change the system now in practice and have to increase Ford, we would place the Corps of Engineers in a position where they are going into part of Ford's plant and actually building facilities for producing munitions in Ford's plant and adding to what he has at the present time in the matter of a production unit.

Mr. POWERS. Then, will it be satisfactory at the present time to limit this to the Defense Plant and have the Defense Plant do all the financing?

Colonel HEISS. No, sir; because there is quite a lot of talk of using the "steam shovel" people.

Mr. POWERS. What do the engineers think of this?

Colonel HEISS. The engineers are perfectly agreeable to it.

Mr. WOODRUM. Judge, is this suggested change satisfactory to Mr. Jesse Jones and the Reconstruction Finance Corporation? Mr. PATTERSON. Yes, sir.

Mr. WOODRUM. And it has cleared through the Budget?

Colonel HEISS. Yes, sir; it was informally cleared through the Budget.

Mr. WOODRUM. You regard it as a very desirable and important change in the language?

Mr. PATTERSON. Yes, sir.

Mr. CASE. Is there any conflict between this and what was done by the House yesterday in repealing that section which provides permission to companies that are financed by the R. F. C. to charge off 20 percent a year of their capital costs?

Mr. PATTERSON. I do not think so. That provision in the taxamortization law has to do only with companies that do their own financing, without regard to any Defense Plant Corporation. The Defense Plant Corporation does not make any loans; it actually builds and owns the facilities.

Mr. CASE. I just wanted to be sure that we were not crossing ourselves up.

The CHAIRMAN. Are there any other questions of Secretary Patter

son before we recess?

Mr. STARNES. Mr. Secretary, is part of this money for the expediting of production to be used in converting automobile plants into wartime establishments?

Mr. PATTERSON. Yes. A good deal of this money will be used to expand the existing projects with the automobile companies. You take Ford. He is now making B-24's himself and is also making parts for assembly down in the Tulsa and Fort Worth plants of the B-24's. I take it a good deal of this will be devoted toward the expansion of existing facilities for the production of heavy bombers.

Mr. STARNES. You do not contemplate expanding existing facilities on the exposed coasts that we have now, which are subject to destruction by a sudden raid or foray, as mentioned by General Arnold? Mr. PATTERSON. No, sir.

Mr. STARNES. Do you have a sufficient amount of material available to carry this program on?

Mr. PATTERSON. We think so. The tightest spot will be aluminum, of course, and magnesium.

Now, Mr. Chairman, General Knudsen is here and would be glad to answer any questions.

Mr. O'NEAL. I would like to ask you about the unexpended balances as of June 30. Of course, in a program of this sort, there must be tremendous readjustments of what you forsee, and is there anything now in contemplation which would keep the unexpended balances from reverting to the Treasury?

Mr. PATTERSON. I do not know about that.

Colonel HEISS. Yes, sir. But they have not yet been extended beyond June 30, 1942. We expect to come before the committee and ask for an extension on that, sir.

Mr. O'NEAL. All we have appropriated would normally expire at the end of the fiscal year 1942, and unless there is further legislation that will revert to the Treasury; is that right?

Colonel HEISS. Yes, sir.

Mr. O'NEAL. Then there is in the 1942 act an extension of the unexpended balances from the year 1942 over into 1943?

Colonel HEISS. No, sir.

Mr. O'NEAL. Have you any guess as to the amount of money which would be the unexpended balance as of June 30, 1942; have you any estimate as to what that amount might be?

Colonel HEISS. Referring only to expediting production funds, sir, I believe all that have been previously appropriated, with the exception of certain funds that we have obligated through the Defense Plant Corporation and through these emergency plant facility contracts, will be gone by the end of this year. My estimate is there will be perhaps half a billion dollars that will not be spent by the end of this year. Of course, there is a relatively small proportion of this $933,000,000 that will actually be expended before the end of this year, and the language of this bill carries this for 1943.

Mr. O'NEAL. Do I understand that in all normal appropriations for the year 1942, both suplemental and additional appropriations, there is a provision which extends those to the fiscal year 1943?

Colonel HEISS. It is my understanding that such a provision will be requested.

Colonel MOORE. For expediting production, we have authority to obligate only to June 30, 1942.

Mr. O'NEAL. And those funds are either obligated or expended? Colonel MOORE. Available funds not yet obligated will be so obligated this fiscal year, but expenditures will not be completed for many

months thereafter.

TRUMAN COMMITTEE REPORT

Mr. PATTERSON. Mr. Chairman, may I say just one thing: I was here when General Arnold was being asked some questions relative to the recent report. I think, if he did not point it out-and I did not hear him point it out—it may be noted with regard to the charge of a lack of planning and the quality of the aircraft, and so on, that, insofar as I know, neither General Arnold nor General Echols, nor anyone else in charge of the aircraft program for the War Department, made any statement or was called on in any way to disclose or make any statement about the aircraft program.

Mr. STARNES. Mr. Secretary, do you know who the military expert was that advised the Truman committee on these alleged facts?

Mr. PATTERSON. I cannot say.

Mr. JOHNSON of West Virginia. Judge, we are in this war and we have to win it. What I want to know is, Will this money that you are asking for be sufficient to carry you through?

Mr. PATTERSON. No, sir.

Mr. JOHNSON of West Virginia. I mean for the present.

Mr. PATTERSON. Oh, it will carry the Air Corps for the present.

Mr. JOHNSON of West Virginia. That is what I mean.

Mr. PATTERSON. Yes, sir; for the present.

The CHAIRMAN. Thank you, Mr. Secretary.

TUESDAY, JANUARY 20, 1942.

WAR PRODUCTION PROGRAM

STATEMENT OF LT. GEN. WILLIAM S. KNUDSEN, UNITED STATES ARMY

The CHAIRMAN. General Knudsen, this is the first opportunity we have had to meet with you since your promotion. Allow us to felicitate you on that promotion.

General KNUDSEN. Thank you very much.

The CHAIRMAN. We would be glad if you would give us a statement on the new set-up in production machinery with which you are to be charged.

General KNUDSEN. Of course, I just moved into the War Department yesterday morning, and all I know about is what was there when I came there. I am going to a meeting of the new Munitions Board this afternoon at 2:30; in fact, the first meeting; and I expect to find out there how the O. P. M. and the War Department are going to function in the matter of procurement and production.

The CHAIRMAN. To what extent, General Knudsen, have you been over this program previously in the O. P. M.?

General KNUDSEN. We had this up here in December, and we and O. P. M. have been over the program in its entirety, on the planning of it, and the entire number of airplanes to be manufactured under this program has been distributed by companies and by types and models.

The CHAIRMAN. You were present this morning during General Arnold's testimony. Do you consider the plan as outlined by him entirely feasible; that is, as to conversion of automotive machinery into production of war materials?

General KNUDSEN. Yes, sir.

The CHAIRMAN. About how long do you think that process will require?

General KNUDSEN. It depends entirely on the different jobs. Some jobs take longer than others. But I imagine that the main part of the automobile factories will be entirely tooled up in 5 or maybe 6 months. The CHAIRMAN. Such an enormous program necessarily involves the production of correspondingly large quantities of material? General KNUDSEN. Yes, sir.

The CHAIRMAN. How do you think we are supplied with those essential materials that will be required to turn out this increased program; for example, aluminum?

General KNUDSEN. I feel that for 1942 we are protected. For 1943 we will have to build some more aluminum facilities and magnesium facilities. In fact, we will have to build a lot of facilities for a lot of things.

The CHAIRMAN. Are we in a position to do it in time to get it ready when it is needed?

General KNUDSEN. Yes, sir.

The CHAIRMAN. That involves additional power as well as additional military facilities?

General KNUDSEN. Yes, sir. Whenever we have to consider expansion of aluminum facilities, the first thing we hunt for is power. The CHAIRMAN. Power is essential, then, to the production of aluminum?

General KNUDSEN. Yes, sir; power and bauxite.

The CHAIRMAN. How are we supplied with power for that purpose? General KNUDSEN. At the moment we have the power for it.

The CHAIRMAN. Have we sufficient at the present time for the entire expanded program?

General KNUDSEN. Beyond this?

The CHAIRMAN. Beyond this.

General KNUDSEN. Beyond this, we are hunting for it now. We have a very large portion of it now.

The CHAIRMAN. You must have additional power?

General KNUDSEN. Yes, sir.

The CHAIRMAN. How is that to be secured?

General KNUDSEN. We try to get that by taking a power pool in different locations and finding out how much we can draw from the pool.

The CHAIRMAN. Does that mean increased facilities, or do you pool power produced by present facilities to meet the program? General KNUDSEN. It is a little of both, sir.

LABOR

The CHAIRMAN. Of course, the next essential after materials is labor. What progress is being made toward the 7-day week and the 24-hour day?

General KNUDSEN. There are negotiations going on now for the so-called swing shift, which means that seven men take five men's jobs, and shifts swing around on the 7-day basis.

The CHAIRMAN. Is it being employed at the present time in the production of airplanes?

General KNUDSEN. Yes; in certain shops it was employed even early last year.

The CHAIRMAN. Successfully?

General KNUDSEN. Successfully; yes, sir. Of course, you understand that in the steel mills we have had that for years.

The CHAIRMAN. You propose to expand that to all the plants producing war materials?

General KNUDSEN. Yes, sir; any plant that we can keep in op

eration.

The CHAIRMAN. Do you think that would be practicable to apply to automobile plants, for example?

General KNUDSEN. In such things as shells and machine guns, we feel we can do it. In other things, like airplanes, we might be able to assemble in 6 days what we can machine in 7 days.

The CHAIRMAN. What, in general, is your present monthly output of airplanes?

(Discussion off the record.)

Mr. STARNES. Will you have a request in later, General Knudsen, for additional facilities for expediting production?

General KNUDSEN. Yes, sir.