The CHAIRMAN. I want to state this to the committee, that H. R. 3 does not necessarily represent my final and complete views upon the subject, but that I drafted that for the purpose of getting the matter before the committee.

I want now to state to the new members of the committee that it has always been the policy of this committee in formulating important legislation to consider the bill or bills that deal with the subject, then to have the hearings, then to appoint a subcommittee to go over the whole situation very fully and to draft for the use of the full committee a proposed bill, which, if accepted by the full committee, is then introduced in the name of either the chairman or some other member of the committee whom he may designate to introduce it. In that way the bill, when it comes up before the House, will not have a lot of amendments that the committee has proposed, but will be a clean bill, representing the considered views of the majority of the committee; and we hope that in a matter of this kind it may be unanimous. I see no reason why it should not be unanimous. This is not a partisan question in the slightest. In fact, partisan matters do not come before this committee.

And it is a matter of history that in 1924 there was a plank in the platform of each of the major political parties, both Democratic and Republican, pledging that party, if charged with responsibility of government, to enact legislation to accomplish this result, to wit, to take the profits out of war, so that there cannot be anything partisan in it; and I do not see why we cannot all agree upon desirable legislation.

Now, I want to say that I concurred in the report of the War Policies Commission in 1931, expressing considerable misgivings as to the power of the Congress even in time of war to stabilize prices in order to prevent profiteering; and I thought I knew then what the Constitution meant. But I have found out since that I did not know, that the Constitution means a great many more things now than it did in 1931, and so I have no misgivings now as to what would be the view of the Supreme Court in passing upon such legislation as a war emergency measure.

I am sorry that we are disappointed in not having these important witnesses to appear before us this morning; but, as I have stated, it so happens that it was not convenient for them to come this morning.

Tomorrow morning we will have the national commander of the American Legion, their national legislative representatives, and we will have several department commanders and a representative of the national president of the women's auxiliary to the American Legion.

Mr. KVALE. She will be here in person.

The CHAIRMAN. She will be here in person. So that tomorrow morning we will have something to do.

Mr. McLEAN. I am somewhat confused in connection with this subject, on account of what is brought to my mind about the letter from General MacArthur. As I understand it, General MacArthur and the Assistant Secretary of War, Mr. Woodring, have been

appointed on a board by the President to investigate this whole subject and make a report to the President. Is not that correct? The CHAIRMAN. All I know of that is what I saw in the newspaper that General MacArthur, Mr. Baruch, and General Johnson were appointed by the President.

Mr. McLEAN. It was quite a large board.

The CHAIRMAN. The newspaper report that I saw mentioned those three only; and in the telephone conversation I had with Mr. Baruch he stated that those three were a special committee charged with that.

Mr. ANDREWS. I wonder if the fact that General MacArthur passes the buck might not be due to the fact that he was appointed by the President on that commission?

The CHAIRMAN. I wonder how they will ever get any legislation without coming before this committee.

Mr. HILL. No doubt General MacArthur thought, when he received the chairman's letter, that the chairman was inviting him here as the Chief of Staff of the United States Army; and, as he well says, as the Chief of Staff of the Army, he really has no responsibility in this matter. It all comes under the industrial mobilization section set out thereunder, under the law, and that section comes under and is a responsibility of the Assistant Secretary of War. So that I can easily see how General MacArthur would feel that, as Chief of Staff, he should not speak on this matter, that the proper person, so far as the War Department was concerned, would be the Assistant Secretary of War or someone designated by him or, of course, the Secretary of War, because the Secretary of War is responsible for everything in the War Department.

The CHAIRMAN. They are not standing back on that. They want to be helpful, I am sure. It just simply did not suit Mr. Baruch to be here today, because he had not sufficient notice. He is a very busy man.

I talked with General Johnson over the long-distance telephone. I did not know how to reach him and so I addressed him in care of the N. R. A. with a request that my letter be forwarded.

General Johnson says that he will be here Thursday.

Is there anything else that any member of the committee would like to bring up? If not, gentlemen, it is moved that we adjourn until tomorrow at 10 o'clock.

(Thereupon the committee adjourned until tomorrow, Wednesday, Jan. 23, 1935, at 10 a. m.)

TAKING THE PROFITS OUT OF WAR

WEDNESDAY, JANUARY 23, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON MILITARY AFFAIRS,

Washington, D. C.

The committee met at 10 a. m., Hon. Lister Hill presiding.
Mr. HILL. The committee will please come to order.

As the committee knows, we have before us the bill of the chairman of the committee, Mr. McSwain (H. R. No. 3), to prevent profiteering in time of war and to equalize the burdens of war and thus to promote the national defense. The bill really covers the whole subject matter of profiteering in time of war and equalizing the burdens of war.

Unfortunately, the chairman of the committee, Mr. McSwain, had to go to South Carolina today, on account of a very important matter pending before the legislature of that State, and he cannot be with us.

We have with us the representatives of the American Legion. It is not necessary for me to remind the members of the committee that the American Legion has been the great organization waging the battle throughout the years for legislation to take the profit out of war and to equalize the burdens of war. I think that one of the first declarations of the American Legion after that organization came into being was to declare for legislation to this end, and the Legion has consistently and persistently waged this battle.

I am going to ask the vice chairman of the National Legislative Committee of the Legion, the Washington representative of the Legion, and our good and old friend, Col. John Thomas Taylor, if he will not make a statement with reference to this bill and the general subject matter, and then present to the committee the other representatives of the Legion.

Mr. Taylor, we will be glad to hear from you.

STATEMENT OF JOHN THOMAS TAYLOR, VICE CHAIRMAN, LEGISLATIVE COMMITTEE, THE AMERICAN LEGION, WASHINGTON, D. C.

Mr. TAYLOR. Mr. Chairman and gentlemen of this committee, first let me express to you or sincere appreciation for this opportunity to appear before this committee and present our views on what has commonly come to be known as "Universal Service Legislation."

If I may, let me take a moment, please, to call the attention of this committee to the very noble efforts that your chairman, who

is absent for the moment, I understand, in South Carolina, the Hon. John J. McSwain, a Legionnaire, has made in this matter. Your present chairman, Mr. Hill, is correct in stating that this is a matter which the American Legion has been interested in and has been fighting for ever since 1921.

At our convention at that time, in Kansas City, a resolution was adopted, calling for the creation of a committee to study the matter; and that committee made their report in 1922 to our New Orleans convention.

I recall very well the introduction by Chairman McSwain in 1922 of a resolution touching upon this very matter. That resolution did not get very far. The following year the resolution was reintroduced, in 1923, and we appeared before this committee and, as I recall, very vividly, Mr. McKenzie was the chairman at that time and he turned the hearing over to Mr. McSwain.

Extensive hearings were conducted, oh, a volume of two or three hundred pages, containing the hearings, which is now a printed record. But nothing came of it as a result of those hearings.

However, year after year we have been presenting this matter to the Congress; and year after year Mr. McSwain has been presenting it in the form of a resolution to this Congress, until finally we have succeeded in having hearings over before the Senate, through the creation of a special commission, the War Policies Commission, of which Mr. McSwain was a member; and out of that commission came special recommendations.

In those early days we presented what we thought was a very simple and specific piece of legislation.

That in the event of war declared by Congress to exist, which in the judgment of the President demands the immediate increase of the Military Establishment, the President be, and he hereby is, authorized to draft into the service of the United States such members of the unorganized militia as he may deem necessary: Provided, That all persons drafted into service between the ages of 21 and 30, or such other limits as the President may fix, shall be drafted without exemption on account of industrial occupation.

SEC. 2. That in case of war, or when the President shall judge the same to be imminent, he is authorized and it shall be his duty when, in his opinion, such emergency requires it

(a) To determine and proclaim the material resources, industrial organizations, and services over which Government control is necessary to the successful termination of such emergency, and such control shall be exercised by him through agencies then existing or which he may create for such purposes; (b) To take such steps as may be necessary to stabilize prices of services and of all commodities declared to be essential, whether such services and commodities are required by the Government or by the civilian population.

We considered that a specific piece of legislation containing specific recommendations. The purpose, of course, was security, so far as the American Legion is concerned, to prevent in the event of another emergency slackers and war profiteers. It was very simple to express in words but apparently very difficult for the Congress to write into legislative language.

Now, 13 years after this matter was first taken up by the American Legion and by the Congress, and through the constant and everlasting effort, as I have said, of your chairman, Congressman John J. McSwain, it appears that we are now upon the verge of having some specific legislation written by the Congress and presented to the Congress and the people.

So for that reason we are particularly happy to be here today to present our views upon this subject.

We have here National Commander Frank N. Belgrano, Jr., and we have with us Mr. Vilas Whaley, the chairman of the national legislative committee. We have with us Mr. Raymond J. Kelly, the chairman last year of the national legislative committee, who will go into this matter at length. We have with us Mr. Jess W. Barrett, a member of the legislative committee from the State of Missouri. And we have with us Mrs. A. C. Carlson, the president of the American Legion Auxiliary.

With that brief statement, Mr. Chairman, and with your permission, I now present Commander Frank N. Belgrano, Jr.

STATEMENT OF FRANK N. BELGRANO, JR., NATIONAL COMMANDER OF THE AMERICAN LEGION

Mr. BELGRANO. Mr. Chairman and gentlemen of the committee, it is a privilege indeed, in representing the national organization of the American Legion, to state in no uncertain terms that today the men of our organization are more interested than ever before in the legislation now before you.

From the early inception of the American Legion the Legion has endeavored to teach and preach the gospel of universal service to the people of this country.

The men of the Legion, I think, are well qualified in bringing before the people of this country the many ills that were found to exist during the last great emergency. The Legion is interested in any sort of legislation which will take the profit out of war, because it is no longer ready to be led along by theories which will bring to this country the shame and disgrace that it experienced following the last great conflict.

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The Legion remembers that following the last Great War there were grown here on this side of the waters more so-called profiteering millionaires" to offset every white cross in Flanders' fields, representing the heroic dead who gave all that these shores of ours might be protected.

The Legion would like to make one other statement: That had this sort of legislation been on the books of our National Government in 1917, today the Legion or the people of this country would not be asking for immediate payment of adjusted-service certificates. A universal-service law, a law giving equal privilege to all to serve their country with honor and distinction, with special privileges and profits to none, would eliminate any cause for so-called "bonuses ", which are preferred to be called "adjustments" when it comes to industry and to business, but, for sensational headlines, are called "bonuses " when referring to the ex-service men. That would not be necessary or be up for discussion had this legislation been enacted prior to the last great conflict. The Legion will bend all of its efforts this year in supporting any bill that comes before the Congress which will eliminate profiteering during war and will give this country its greatest peace and national defense measure that has yet passed. We understand that a bill will be presented, and we want you to know that the Legion will be behind this sort of legislation a million strong, represented by 11,000 posts throughout this country.