the foundries, where the work is heavy and hard and dirty; especially in hot weather it is one of the most unpleasant jobs in the country, as you know.

Now, they gravitate out of that into other jobs which they regard as just as essential. They are war jobs; they are better pay. Now, some way has to be found so that our manpower requirements in those foundries can be fulfilled. Well, you would naturally say, "Isn't the Selective Service Act the right answer?"

I would rather not get into the full discussion of that at the present time, but I do not believe that that is the total answer to this problem. Senator RADCLIFFE. In spite of these special factors, it would occur to me that the aggregate of manpower needs might be certainly not increased and possibly a little bit lessened by exceptional standards of production.

Mr. NELSON. Yes, but there is one other factor, Mr. Senator; you must take into consideration when you look at this question of a war economy. We are in a war economy in every direction. Now, while the production may not require more workers in total, it will require more in spots, as we just developed.

Senator RADCLIFFE. Yes.

Mr. NELSON. But you also have to consider the number of men the fighting forces take out of the country. Now, they will take out 1,700,000 this year for the fighting forces and for the replacements, and of course they will release other men who find themselves not able to carry on, and they are released and go back into jobs; so that this manpower situation is a very complex affair. You cannot solve it on the basis of the generality that we are on a plateau and therefore that our demand for manpower will go down.

The CHAIRMAN. Are there any other questions of Mr. Nelson? We want to thank you.

Mr. NELSON. Thank you very much.

The CHAIRMAN. Your statement is very informative and very helpful to us. We have great confidence in you.

Mr. NELSON. Any time I can be of help to you, I would be delighted, sir.

The CHAIRMAN. Thank you very much.

(Whereupon, at 12:30 p. m., the committee recessed until next Monday, March 27, 1944, at 10:30 a. m.)

EXTENSION OF THE EMERGENCY PRICE CONTROL ACT OF 1942

MONDAY, MARCH 27, 1944

UNITED STATES SENATE,

COMMITTEE ON BANKING AND CURRENCY,
Washington, D. C.

The committee met at 10:30 a. m., pursuant to recess on Friday, March 24, 1944, in room 301, Senate Office Building, Senator Robert F. Wagner, chairman, presiding.

Present: Senators Wagner (chairman), Bankhead, Radcliffe, McClellan, Danaher, Taft, Butler, Capper, Hawkes, and Buck.

The CHAIRMAN. The committee will please come to order. Is Mr. Buckner here?

Mr. BUCKNER. Yes, sir.

The CHAIRMAN. You may come around and take a seat at the committee table.

STATEMENT OF FRANK BUCKNER, ASSISTANT TO THE PRESIDENT, UNITED STATES WHOLESALE GROCER'S ASSOCIATION, INC., WASHINGTON, D. C.

The CHAIRMAN. You represent the United States Wholesale Grocers' Association, do you not?

Mr. BUCKNER. Yes, sir.

The CHAIRMAN. I need not tell you what is before us now. The question is whether we should continue the emergency price-control legislation for another year; or, if you have any suggestions on the whole matter, we would be glad to have them.

Do you have a prepared statement?

Mr. BUCKNER. Yes, sir; I have a prepared statement.

The CHAIRMAN. You may sit and present it. I suppose you would

rather do it that way and then be open to questions.

Mr. BUCKNER. That is correct, sir. May I proceed?

The CHAIRMAN. Yes.

Mr. BUCKNER. Mr. Chairman and gentlemen of the Senate Committee on Banking and Currency:

This presentation is made in behalf of the members of the United States Wholesale Grocers' Association, Inc. on the matter of extending the Emergency Price Control Act. We are speaking for approximately 1,000 independent wholesale grocers in the various trade areas of the country.

1. It is our conviction that rationing and price control are vitally necessary in this war emergency and that with clarifying directives and amendments the act should be extended.

2. With all deference to the capacity, good will, and the good intentions of the Price Administrator and his staff, we submit that the time has now come for Congress, by directives in the statute, to require more prompt, more certain and more efficient administrative procedures.

(a) The statute should provide for creation of a Review Board in O. P. A. but independent of the administrative staff, to which appeals could be promptly taken. The decisions of the board when approved by the Director of Economic Stabilization would become binding upon the Administrator.

This kind of plan has worked well in the Bureau of Internal Revenue where a technical staff functions within the Bureau to settle many controversies without resort to litigation and its consequent delays and expenses. The functioning of such a board of review within O. P. A. should not be permitted to affect the right of appeal to the courts already provided in the statute. The purpose of the board within O. P. A. is to promote greater efficiency, to prevent delays, and to give interested industry a forum quickly available for quick decision. At the present time a member of industry or an industrial group, being convinced that a mistake has been made in an order or regulation, too often mills around endlessly without getting anywhere. This results in confusion, dissatisfaction, and a feeling of futility. The mere existence of such an independent board will compel increased efficiency, greater care, and more promptness on the part of the administrative organization. The mere fact that the administrative organization may have to justify their acts before an independent agency and as a matter of record, will have a healthy effect on their work, and exasperating, unnecessary delays will be ended. Then, too, such a board will provide an orderly way for the Director of Economic Stabilization to efficiently function in the picture as he has authority to do.

(b) The statute should contain a directive requiring the industrial advisory committees to submit their advice and recommendations to the Administrator in writing, and when the Administrator declines to adopt or follow such advice or recommendations the Administrator should be required to render a report in writing to such committee setting forth his reasons for rejecting their advice or recommendations. If his reasons are based on economic data, his statement of reasons should include the economic data and its source upon which his decision was grounded. It seems elemental that such procedure is essential if the purpose of the statute creating the industrial advisory committees is to be carried out as intended by Congress. It would insure the useful functioning of such committees. It will build respect and tend to strengthen public confidence in the administrative organization.

(c) The statute should provide a directive requiring the Administrator to make fair and equitable adjustments in his price schedules simultaneous all along the line at the various levels of production and distribution when he adjusts the price ceiling at any one level.

Too often the Administrator changes a price ceiling at the processor's level and makes adjustments at other levels when he gets around to it, if at all. An entire industry such as the independent wholesale grocers can be financially ruined quickly if the price ceilings of the processors from whom he buys are raised without at the same time fairly adjusting the wholesaler's price ceilings.

If a board of review is created as herein urged, then the board could function in these problems, and such procedure would remove some of the fear now definitely present in the minds of industry.

(d) The statute should provide a directive prohibiting the Administrator from assessing punitive damages and publicizing relatively small violations unintentionally committed.

It is now the policy of the Administrator to assess punitive damages in addition to the amount involved in the unintential violation and to publicize it. This is grossly unfair. A wholesale grocer handling something like 2,000 items and burdened with a great volume of difficult and complicated regulations, and harassed by manpower problems, cannot hope to do a perfect job, with the best will and the best intentions in the world. If relatively small violations occur and if they are unintentional and if they are corrected it is literally tragic to impose a fine and to publicize the incident. Wholesale grocers and others are doing an enormous amount of necessary additional work required by the regulations and are doing an enormous amount of educational work in behalf of O. P. A. and the war effort. To thus unfairly stigmatize them is to build up resentment and to foster lack of cooperation. Here again a board such as suggested above could be given jurisdiction as a check against overenthusiastic investigators. It is essential, if the cooperation of the public is to be achieved, that the public and members of industry are convinced of the fairness of the administration of the act.

(e) The statute should contain a directive prohibiting the Government for advertising or promoting advertising of the various classifications of retail stores in the food industry which the Administrator has set up, and the price applicable to each classification, when such publication has the effect of misleading the consumer to believe that the consumer's food costs are less in the big and the powerful organization, leaving out of consideration service, credit, and many other factors.

We join the 500,000 independent retail grocers in the Nation in bitterly protesting this sort of Government publication.

In the first place, it violates the mandate of the act which has for one of its purposes the protection particularly of the small independent enterprise. Such advertising, copies of which are submitted with this presentation, has the effect of inviting the consumer to patronize the large and powerful business house. When the Government does this sort of thing it is tragically and surely inviting the public to put out of business the small enterprise.

In the second place, the advertising is substantially false in its presentation. Small independent enterprise has, by and large, offered additional services, such as personal help in the selection of food, delivery, credit, and other services. This sort of service on the part of small independent enterprise has been a substantial element in our way of life. It is reprehensible for the Government itself to conduct or be part of advertising campaigns which have the effect, if not the purpose, of destroying small independent enterprise in the food industry, and which have the effect of bringing to an end this character of local service in a local community which has always been considered a simple but precious part of our community living.

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Although this is primarily a problem of the independent retailer, the independent retailer is our honored customer, and we join with him in his vigorous protest at this unfairness.

We have presented our protest against such sort of advertising to O. P. A. It is our understanding that they are sympathetic with our point of view and informally expressed plans to stop it. However, this is such a vital matter that it is our conviction that a statutory directive would aid O. P. A. in effectively stopping it and preventing its recurrence.

There are many other defects in the administration of the act that might be cured by directives in the statute, but would, we feel confident, be cured if a review board were created as a forum, as suggested above, to which industry could promptly go for relief, and in which industry could expect and get a prompt decision. Fear and a feeling of helpless futility in the face of threatened disaster, plagues the minds of industry. For example, present margins on 1943 volume may be adequate to enable the wholesale grocer to live and do his important job in the emergency. But, if there is less food available for distribution by the wholesaler by as much as 20 percent in sales volume in the current year of 1944, then it is practically certain that every wholesale grocer in th the land will be operating at a loss, with a consequence of failures and chaos in distribution. This is a matter of life and death to the thousands of independent enterprises in every trade area of the United States, and it is a matter of the utmost importance to the war effort. It is true that the Administrator has power to correct such a situation, but industry should be given assurance that there will not be tragic delay. The right to appeal to the review board, with assurance of prompt decision, would go a long way toward dispelling the uncertainties and the fears of the present.

There are many instances where O. P. A. has reached conclusions, for example, on historical prices which industry is convinced are erroneous. It is not disclosed to industry what factual data was used in reaching the decision. The Administrator and his staff patiently listen to arguments and presentations, but industry has a feeling of uncertainty. There is no provision at present for insuring action when prompt action is imperative. A board of review with adequate powers, such as suggested above, would go a long way toward curing situations such as this.

We respectfully urge your earnest consideration of these suggestions. They are born of experience and they have for their purpose improvement in administration and better acceptance on the part of the public. We speak for independent enterprises in the stream of distribution of food products. These independent enterprises occupy a precarious position in these days of scarcity. They are being inexorably squeezed by the bulge of prices at the producer level against the inexorable line being held at the consumer level. We do not draw your attention to this squeeze out of self-interest alone; on the contrary we believe that self-interest is completely overshadowed by the danger to the public interest of two spectors which can merge into one of the worst forms of menace to our democratic system, namely, a break-down in our established distribution system in the food industry, maldistribution of food, and the monopoly of food distribution. The combination of price squeeze and scarcity of food products can prove fatal to the small food distributors operating in the field, and