The CHAIRMAN. In this connection, I call your attention to the llowing excerpts from the Steel Products Industry Advisory Comittee meeting for September 15, 1953, at which time Mr. Crabtreeso informed the committee that he has insisted that any contemplated changes the organizational structure be cleared with industry to give it an opportunity voicing its views.

Discussion of the functions and organization of the new organization revealed e consensus of the committee to be that the industry is wholeheartedly behind e manning of the Iron and Steel Division, provided that the Director of that ivision in the successor agency to NPA shall report directly to the Assistant cretary of Commerce for Domestic Affairs. The committee members were so emphatic in pointing out that the relative importance of the steel industry arrants the action which is advocated.

Despite that strong recommendation the industry divisions noneeless report to you and not to the Assistant Secretary of Commerce r Domestic Affairs?

Mr. HONEYWELL. That is correct, sir. I report to the Assistant ecretary, and the divisions report to me.

The CHAIRMAN. I understand. You stated Mr. Honeywell, on ecember 2, 1954, at an industry advisory committee meeting of fraconal horsepower motors and generators the following:

The chief aim of the Department of Commerce
Isiness.

** is to be of service to

My question is whether the organization and functions of the BDSA e designed to further this chief aim of the Department? You say at is the chief aim of the Department of Commerce.

Mr. HONEYWELL. Mr. Chairman, the Business and Defense Services dministration is a joining of the former office of Industry and ommerce and the National Production Authority. I was speaking f the record there, merely to explain to these industry representaves who had come to Washington the other side of bur basic responbilities, that of the Department of Commerce to foster and promote siness.

The subject matter of this particular IAC was a defense matter rictly. But I was speaking merely to inform them as to the overall tivities of the Department.

The CHAIRMAN. You seek to rectify that a bit. You don't say le chief aim of the Department of Commerce is to be of service to usiness.

Mr. HONEYWELL. I do, sir. The chief aim of the Department of ommerce is to serve business.

The CHAIRMAN. You still adhere to that?

Mr. HONEYWELL. Yes, sir.

But BDSA is only a segment of the Department of Commerce.
The CHAIRMAN. All right.

Now, Mr. Teetor is Under Secretary of Commerce; is that correct? Mr. HONEYWELL. Assistant Secretary of Commerce for Domestic ffairs.

The CHAIRMAN. Mr. Teetor said with reference to BDSA that it hould be considered

s listening post and sounding board for bringing to the direct attention of the Department business information and business opinion on vital matters of Jutual interest to Government and industry.

The CHAIRMAN. A little more specifically is it fair to state that it, BDSA, has three major functions, and I quote from the minutes of a Chemical Task Force of September 23, 1953:

(1) administration of defense priorities and allocation controls heretofore handled by NPA;

(2) activities connected with full mobilization requirements and planning (including postattack production planning); and

(3) business services.

Would you adhere to that statement?

Mr. HONEYWELL. Yes, sir.

The CHAIRMAN. With respect to the latter function, business services, is it fair to say that you stated before an industry advisory committee meeting (Fractional Horsepower Motors and Generators, December 2, 1954):

The function of services to business is a revival of President Hoover's concept of the role of the Department, namely, that it be the protagonist for business just as the Departments of Agriculture and Labor promote the interests of their respective segments of the economy.

Do you still adhere to that point of view?

Mr. HONEYWELL. Yes, sir.

The CHAIRMAN. Do you agree with Mr. F. C. Talbott, Jr., former Director of the Forest Products Division, speaking at a meeting of the National Lumber Manufacturers Association when he said:

We hope you will think of the Forest Products Division as your home in Government, a place where you will be assured of a warm welcome and sympathetic interest that the word "home" implies. Your home stands on a two-way street, with constant movement between Government and industry, constant inerchange of ideas and information. And the more traffic there is on this street, the better we will like it, and the better service you will get.

Do you adhere to that opinion? Would you approve of that opinion?

Mr. HONEYWELL. That is the first time I have heard that statement on the part of Fred Talbott, but I can't find anything at the spur of the moment to take umbrage with.

The CHAIRMAN. I want to build up the purposes of this organization, how this organization functions and gives these opinions. Mr. HONEYWELL. That is right, sir.

The CHAIRMAN. Mr. Honeywell, you said in a speech before the Chicago conference delivered at the Palmer House, Chicago, Ill.:

In setting up our service to business programs, many conferences were held with business leaders. And with the help of Government and trade experts the plans for carrying out these programs were arranged very carefully so as not to duplicate or conflict with any activities of trade associations or Washington representatives. We did our best to eliminate any excuse for the operations of the 5 percenter.

What did you mean by that?

Mr. HONEYWELL. We believe that, historically, there has been some abuse of influence in Government by individuals who are employed by industry. We are merely attempting to make possible to industry the appointments with appropriate agencies of Government with whom industry may have problems that they wish to take up. act as a clearinghouse, if you please, to assist industry to get such appointments with appropriate parties in appropriate agencies.

We

The CHAIRMAN. You feel that the BDSA has tended to eliminate the activities of these so-called 5 percenters?

Mr. HONEYWELL. I couldn't say that they have eliminated them and I don't now know to what extent we have been successful. We have attempted to be helpful.

The CHAIRMAN. Would you say that the BSDA is a sort of direct pipeline for business into Government?

Mr. HONEYWELL. I don't follow the intent of that question, sir, as far as the pipeline.

The CHAIRMAN. Could industry get advance information as to priorities?

Mr. HONEYWELL. No, sir.

The CHAIRMAN. Do you take any steps to eliminate that?

Mr. HONEYWELL. The only people in industry who would know anything about our work being done on priorities would be those members of IAC's or task-force groups because they are consulting with us to help us to prepare those regulations.

The CHAIRMAN. I don't say that is the case. I am asking questions to elicit information. Would it be possible for members of any of these task groups or WOC's, who are in turn employed by companies interested in priorities, to get advance information and submit that information to their employer?

Mr. HONEYWELL. The minutes of these IAC's are made available generally, sir, to any industry who was interested.

The CHAIRMAN. Could they get advance information?

Mr. HONEYWELL. No; because there would be nothing finalized at the time they had attended the meeting. They are a consultative and an informative group only.

The CHAIRMAN. I refer to a speech by Mr. Carl F. Oechsle, Deputy Assistant Secretary for Domestic Affairs, Department of Commerce, before the Chemical Market Research Association and Division of Chemical Marketing and Economics of the American Chemical Society at the Shoreham Hotel, Washington, D. C., on Wednesday, November 18, 1953, in which he said:

BDSA is set up as a two-way transmission belt for an exchange of ideas and services between Government and business. It is a clearinghouse for Government technological and marketing information, and it is a direct pipeline through which you can report your problems to the Commerce Department for appropriate action.

There the word "pipeline" was used and that is why I phrased my question as I did. In that sense as it was used, would you agree? Mr. HONEYWELL. Yes, I agree to the philosophy that the Department of Commerce is here to help stimulate and develop industry. The CHAIRMAN. This same gentleman who is the Deputy Assistant Secretary for Domestic Affairs, Department of Commerce said that the BDSA was a megaphone, and the quotation is as follows:

In the BDSA you have a powerful new megaphone for recommending measres which you believe the Government should undertake in solving your problems. You can make your views known while governmental policies are being discussed and formulated.

Would you agree with that statement?

Mr. HONEYWELL. I don't know what he had in mind by the use of the word "megaphone." I would say it is quite appropriate for industry to have an opportunity to express a point of view on any matter of legislative or administrative nature in Government.

67271-55-pt. 1-7

The CHAIRMAN. I don't want to make you responsible for all these people's observations. I want to elicit your point of view.

On October 7, 1953, Mr. Oechsle, Acting Assistant Secretary for Domestic Affairs stated:

It is time that businessmen face up to their new responsibilities that have been thrust upon them. Many executives have been so accustomed to looking to Roosevelt and Truman for guidance they are now looking to Eisenhower to call the signals.

They have not yet realized that they are now the quarterback of their own teams.

Have you any idea of what is meant by "calling the signals"?
Mr. HONEYWELL. No, sir, that is a new one to me.

The CHAIRMAN. We are now at 25 minutes to 1. I would like to ask you Mr. Honeywell, would you care to come back tomorrow at 11 or Friday?

Mr. HONEYWELL. Your choice, sir; I am at your disposal.

The CHAIRMAN. We will make it 11 o'clock tomorrow morning and the hearing will now be adjourned.

Mr. Scorr. Could I just ask one question?

The CHAIRMAN. Yes.

Mr. ScoTT. To your knowledge does not the Department of Agriculture have advisory councils?

Mr. HONEYWELL. I believe they do but I cannot speak authoritatively on that.

Mr. Scorт. Department of Labor likewise?

Mr. HONEYWELL. Yes, sir.

Mr. SCOTT. When you appear tomorrow would it be convenient for you to secure and give us the information as to advisory councils and WOC employees in the Department of Labor and Department of Agriculture so we may have a comparative or perspective view? Mr. HONEYWELL. What is that, do they have WOC's? The CHAIRMAN. We have requested that information.

Mr. HONEYWELL. Direct?

The CHAIRMAN. We have requested the Departments directly for that information.

(This information is in the files of the subcommittee.)

Mr. Ray, I want to state this: You have an opportunity to put in the record any statement that you care to relative to my opening views wherein I expressed disapproval and laid some heavy strictures upon the Department.

We will be glad to furnish you with a copy of my statement and you have a right to respond and that will be made a part of the record if you wish.

Mr. RAY. I will be very glad to have the opportunity in addition to what I said spontaneously there, to consider your views and statements and I am sure they will be very helpful and I would like to reserve that opportunity.

The CHAIRMAN. Have you any idea whether the Secretary of Commerce will appear before this committee?

Mr. RAY. I have not.

The CHAIRMAN. Will you confer with him, please?
Mr. RAY. I shall be glad to.

I might point out that we received Friday late a letter suggesting eral dates. The Secretary had already departed from the city to ke a speech and that will be brought to his attention in due course. The CHAIRMAN. Any other questions? The meeting will now adrn until 11 o'clock tomorrow morning.

Whereupon, at 12:40 p. m., the committee adjourned, to reconvene 1 a. m., Tuesday, July 26, 1955.)

The Department of Commerce subsequently furnished the followinformation:)