by the many Federal laws and regulations, is an additional burden upon these men who are untrained in anything but the physical production of lumber and the possible balancing of a bank checking account at periodical intervals. This state of affairs cannot be overlooked in a consideration of this industry's problems at this time. When the House Small Business Committee recommended the creation of a Log and Lumber Policy Committee, it did so in the full belief that the establishment of such a committee would provide a medium for the solution of just the type of problems now apparently confronting the southern pine industry. It is evident by the recommendations of that Policy Committee to the Office of Price Administration that it feels the Office of Price Administration has a duty to perform in respect to such recommendations, as have the other agencies represented on that committee to whom recommendations in their respective fields have previously been made by the Policy Committee. The inability of the Office of Price Administration to immediately comply with those recommendations is evidence that insufficient ground work was done by someone prior to the submission of these recommendations to the Office of Price Administration. The view of the Office of Price Administration that the performance of this ground work is the sole obligation of the industry may be correct, provided that it can be shown that the industry was adequately informed by the Office of Price Administration that this function was solely the obligation of the industry. It is apparent, however, from a review of the history of the relations between the Office of Price Administration and the Southern Pine Advisory Committee that this advisory committee had, on several occasions, been led to believe that it had received a verbal approval of its recommendations by the price executive of the Lumber Branch of the Office of Price Administration and that such verbal approval would be followed shortly by a formal approval of their recommendations by the Administrator of the agency. (See exhibit G.) An industry advisory committee is a legally recognized body under the terms of the Emergency Price Control Act. Its duties are defined as advisory and the right to consult with and make recommendations to the Administrator, when deemed necessary in the opinion of the advisory committee, are specifically outlined in that act. Under the terms of the Emergency Price Control Act and subsequent amendments thereto, evidenced by such Executive orders as order 9328 (the "hold the line" order) and under the terms of the internal procedures of the Office of Price Administration itself, many of which are held confidential and are not issued to industry advisory committees for their guidance, there is no evidence that it is the duty of the industry advisory committee in this instance to have prepared a study based upon attested cost data prior to the submission of their advisory recommendations to the Office of Price Administration. Consequently, if securing of these data in attested form was the obligation of the industry and not of the Office of Price Administration, it would have seemed incumbent upon the price executive of the Lumber Branch, in his capacity as principal contact man with the industry, to inform the advisory committee several months ago as to just what the Office of Price Administration required in the way of specific information from the industry. The responsibility for the production of essential war items is not alone the responsibility of the War Production Board. Its determination of essentiality of certain items, its analysis of reasons for production decline and its recommendations to the Office of Price Administration for affirmative action by the latter agency which it is felt would prevent further production decline, or even increase production, are not recommendations which can be disregarded or even treated lightly by the Office of Price Administration. In speaking for the War Production Board and its Log and Lumber Policy Committee, Mr. Boyd expressed the official views of that agency in respect to measures held immediately necessary by that agency to prevent a further drop in the production of southern pine lumber. The Office of Price Administration may look with caution at any recommendations coming from the industry itself which urges large price increases, but it cannot regard the recommendations of the Log and Lumber Policy Committee with exactly the same viewpoint as it regards the recommendations of others. To hold that it is now the sole responsibility of the industry to initiate the securing of this required cost data and to not actively collaborate with the industry in the securing of this data would ill become the Office of Price Administration at this stage of affairs. The Government, of which the Office of Price Administration is but an integral part, is at war and requires the full production of the southern pine industry according to all qualified witnesses. An attitude of "show me" instead of "let's get the facts as fast as we can" has evidently been the prevailing attitude on the part of the Office of Price Administration on this matter in the past. Such an attitude of apparent indifference to the urgency of the problem presented can only arouse antagonism, cast discredit upon the motives of the employees of the agency and lessen the confidence of all in the over-all operations of the various Federal agencies involved. In fairness to all concerned, however, this committee does not feel that the southern pine industry should be absolved of all blame for not having supplied the required statistical data to the Office of Price Administration. The members of the Southern Pine Industry Advisory Committee, after more than 2 years of close association with the Office of Price Administration have had a considerable period of time in which to become versed in the standard requirements of that agency. Therefore, the foregoing comments directed at the Office of Price Administration should not be construed as exoneration of the industry for its lack of forehandedness in having available the required data for official consideration at the time of requesting certain price advances or changes of rulings. Regardless of who may be at fault in this connection, the present situation is obviously critical and requires immediate attention. No responsible persons in industry or Government recommend the abandonment of price-control measures now. Many feel, however, that the agency now charged with this function must demonstrate a greater understanding and a more sympathetic approach to the problems of the lumber industry and thus demonstrate that this agency, as well as other agencies, is aware of the war's needs and that production and equitable distribution require an aggressive consideration by the agency instead of the continuation of the role of passive observer. In this view, the House Committee on Small Business unhesitatingly concurs. RECOMMENDATIONS In view of the foregoing and after careful perusal of the testimony submitted to the committee in public hearings and subsequent conferences, the House Committee on Small Business desires to make the following specific recommendations, the adoption of which, it feels, would do much to solve the problems now confronting the southernpine industry: 1. The adoption by the Office of Price Administration as an interim measure of all of the recommendations made to that agency by the Log and Lumber Policy Committee as evidenced by Mr. Boyd's letter to Mr. Slocum. (See exhibit F.) 2. The securing by the industry, with the active cooperation of the Office of Price Administration, of attested cost figures requested by the agency; said figures to be used as a basis for a decision for a considered ruling by the agency to supplant the above-suggested interim measure. 3. The immediate exemption from the draft of all workers engaged in logging or its collateral woods activities of an essential nature; this to be accomplished by one of two suggested methods: (1) The reclassification of all such persons as agricultural workers under the Tydings amendment to the Selective Service Act or (2) the granting of draft deferment to all such persons by means of a directive by Selective Service headquarters to all local draft boards. 4. The suspension by the Secretary of Labor of the provisions of the Walsh-Healey Public Contracts Act whenever, in the opinion and upon recommendation of the Corps of Engineers, War Department, the need for such suspension is indicated in order to expedite production of lumber required in the war effort. (See exhibit H.) 5. The securing of additional trucks and replacement parts for allocation to the lumber industry and the acceleration of processing of priority applications for same and of rationing applications for gasoline and tires by the proper agencies concerned with such matters. (See exhibit I.) 6. A broader interpretation by the Secretaries of War and Navy of the renegotiation law as it affects the lumber industry. (See exhibit J.) 7. The amendment of the Internal Revenue Code in accordance with the recommendations to that effect made by the Forest Industries Committee on Timber Valuation and Taxation. (See exhibit K.) APPENDIX EXHIBIT A STATEMENT OF CONCLUSIONS REACHED BY SUBCOMMITTEE ON LUMBER, HOUSE COMMITTEE ON SMALL BUSINESS, JUNE 16, 1943 1. Production of lumber in the United States in 1943 will fall short of meeting minimum national requirements of an essential nature for both military and civilian use by at least 6,000,000,000 board feet. 2. The lumber industry is one of the few major industries in the Nation which is expected to produce less of its product in 1943 than it produced in 1942. 3. Even though the estimated shortage of 6,000,000,000 feet represents approximately one-fifth of a normal annual production of around 30,000,000,000 feet, no serious effort has yet been made to return to production the 9,740 sawmills of the Nation which are now idle for other than seasonal reasons. This large group of potential producers, principally located in the Southern States, represents approximately one-third of the Nation's total number of sawmills and more than 15 percent of the producing capacity of the country. 4. Approximately 45 percent of lumber requirements for 1943 is scheduled to be used in boxes, packing, and crating. During the past few months, the estimated figures on requirements for this type of lumber have soared from 6,000,000,000 feet to more than 15,000,000,000 feet due to the steadily increasing demands of the armed forces for use in overseas shipment of ammunition and other implements of war. 5. Essential war goods already manufactured and destined for overseas shipment are likely to remain in factory warehouses or at Quartermaster Corps depots for an indefinite period if new supplies of lumber for packing and crating cannot be developed immediately. 6. The lumber problem has not heretofore been given sufficient recognition by the chiefs of the various Federal agencies who are charged with its various phases although the department chiefs within the agencies have been aware of the problem and need for greater interagency cooperation on lumber matters for some time past. 7. Because the lumber problem principally involves production and because production is governed by a number of factors, such as price control, procurement, industry wages, manpower shortage, etc., this committee recommends the immediate creation of a central Lumber Policy Committee, to consist of the chiefs of the various lumber divisions or departments within the agencies, such as War Production Board, Office of Price Administration, War Labor Board, War Manpower Commission, Forest Service, and Central Procuring Agency of the War Department. This Policy Committee should be supreme in all matters concerning lumber such as price control, wages, production, procurement, and other collateral matters and should be vested with authority to act on all these problems, subject only to the veto of the Director of War Mobilization and the Director of Economic Stabilization on matters which come within their respective provinces. 8. The heart of the lumber problem lies in the logging camps and is evidenced by the present shortage of logs, bolts, and pulpwood. Lack of manpower due to inability of logging operators to meet competitive wage scales under existing price ceilings; lack of control over stumpage prices; lack of utilization of the services of wholesalers and retailers in assembling the needed supplies of lumber essential to the war effort; lack of widespread distribution of procurement information by both Federal and private buyers; and a general lack of foresight on the part of all persons connected with the lumber problem in both Federal and private offices, have all combined to bring about the above condition. 14 9. The situation in the Southern States is infinitely worse than in the Pacific coast and mountain area due to a lack of coordinated action by the Federal agencies in the South where production is now at least 17 percent below the production figures of a year ago. This is in contrast to the results secured in the Western States where a coordinated program for lumber production was instituted on a local basis several months ago, and is now showing good results in approaching the volume of production previously attained by the industry in that area. EXHIBIT B RECOMMENDATION BY THE OFFICE OF PRICE ADMINISTRATION THAT A LUMBER POLICY COMMITTEE BE CREATED OFFICE OF PRICE ADMINISTRATION, Washington, D. C., June 10, 1943. Hon. HENRY M. JACKSON, Chairman, Subcommittee on Lumber, Select Committee on Small Business, House of Representatives, Washington, D. C. DEAR MR. JACKSON: The Office of Price Administration approves the recommendations to the Patman committee with two qualifications. The first of these is concerned with point 5 under "Reasons for existence of problems." The statement now reads, "The 'hold the line' order has prevented wage increases which are essential to keep men in the lumber industry." This statement as it now stands is too broad. Wage increases may be required in some segments of the industry in some parts of the country, but it does not follow that wage increases are generally required throughout the industry. As a matter of fact, the statement that the "hold the line" order prevents necessary wage increases may be questioned generally on the grounds that a procedure has been established whereby wage increases may be made where wages are substandard, where increases have not been equal to the "Little Steel formula," where gross inequities exist, or where increases are required for the effective prosecution of the war. The second point which this Office qualifies is that having to do with point 7 under "Recommendations," which states, "Equalization, where possible of the income of workers in the forest industry with that of labor in other war industries through extension of overtime opportunities and adjustment of wages." This Office agrees with the statement, subject to the qualification that any action along these lines should be taken in accordance with the policies that have been agreed upon between the War Labor Board and the Office of Economic Stabilization and the administrative determinations that have been made in accordance with these policies by the War Labor Board. Subject to these qualifications, the representatives of the Office of Price Administration attach their signatures to the recommendations to the Patman committee. As to the specific question of authority to represent the Office of Price Administration, we have consulted the appropriate officials, and they have stated that the price executive or acting price executive is authorized to speak for the Office of Price Administration on topics with which the Lumber Committee will deal, Of course, any formal action will have to be cleared in the usual way, but the price executive ordinarily will be able promptly to ascertain the views of his superiors, so that the position of the Office of Price Administration can be established in advance, and without delaying the action of the Lumber Committee. Respectfully submitted, ARTHUR LARSON, Acting Price Executive, Lumber Branch, A. C. NEAL, Chief Economist, Lumber Branch, Office of Price Administration. 94162-44- -3 |