Senator Jonseox of Colorado. Yes. ir. The irst meeting of the subcommittee was called for this morning it 2016.

On October 5 I called Donald M. Nason Lud med him if he word make available to this committee & ornare from the Tar Production Board in charge of the requisitioning of mimad lines. Mr. Nelson responded to that request by phone ini afterward by letter. and I will read the letter. This is from the fee of Donald M. Nelson Chairman of the War Prod tction Boart drei Cenicer 3. 192 [Reading:]

DEAR MR. SENATOR: Pursuant to your eonverutan vid n sendry Saturday afternoon, I am asking Mr. J. Widman Bertin to appear before your Mominee on Tuesday, October 6, at 15:36 a. m., to discLa le süljeer matter of your Inquiry with respect to requisitioning of rais fir Government use in the war program.

Mr. Bertch, who has been directing this program, is Thief of the Special Projets Section of the Conservation Division.

him members of other sections of the War Prodiethen Bearl who are overned with other aspects of the problem.

Sincerely yours,

DONALD M. NELSON.

That letter was addressed to me. We have Mr. Bertch present here and we will be glad to hear from him now. If he has any prepared statement to make or if he wants to respond to our questions or in whatever manner he desires to proceed. why, we will try to accom modate him.

STATEMENT OF J. WIDMAN BERTCH, CHIEF, SPECIAL PROJECTS SALVAGE SECTION, WAR PRODUCTION BOARD, WASHINGTON, D. C.

Mr. BERTCH. As I understand it, the purpose of this investigation is to cover the whole subject, as well as examining the whole subject of our requisitioning of railroads. I think that the purpose might be best served if I outline the whole subject, the need, how it arose, the various steps that have been taken to meet it and the necessity of requisitioning as one of those steps, if that is agreeable. I will cover that as rapidly as possible.

Senator JOHNSON of Colorado. I think that is the way to proceed. Mr. Bere. May I inquire how much time we have here so that I can gage how much detail I will go into, unless you wish to ask questions about the details.

Senator JOHNSON of Colorado. Personally, I am very anxious to have all the details.

Mr. Beren. Wine. Then I will proceed.

I think I should first review the activities which led up to the situation we now face.

Senator Rep. Mr. Chairman, may I make a request of Mr. Bertch? Senator JonNSON of Colorado. Certainly.

Sonator Rurn. I have had a great deal of difficulty in obtaining information definitely about what is what and who is who and why

is why.

Mr. Beuren. I plan to outline that whole subject.
Senator Bern. Are you going to outline the set-up?
Mr. Beren. Yes, sir.

Senator Reen. And the way these matters are handled?

Mr. BERTCH. Yes, and the way the suggestions are handled.
Senator REED. Very well.

Mr. BERTCH. I thought that was the first thing you would want to know.

Senator REED. That is the first thing; not the last.

Mr. BERTCH. The war plants created an enormous need for rail. It was urgent and immediate. The Army and Navy naturally preferred new rail, but when the situation was examined they agreed to accept relay rail for their immediate needs.

Early in the year the armed forces were alarmed for fear the supply would not be adequate in spite of all the efforts that were made to expedite the flow of relay rail from the normal sources. It was felt that it might become necessary to requisition under the act of October 1941. The Army, the Navy, and the War Production Board all had power to do that. The Army and Navy requisitioned some roads. Their facilities were inadequate. They had problems of financing and budget. The process was slow.

So, we had a meeting of the Army and Navy and the War Production Board, and we all felt that the program should be unified and coordinated and safeguarded. It had to be prompt. It had to be related to the all-over program of war transportation. We felt that the War Prouction Board had the best facilities for rapid, organized action. The Special Projects Section had been set up on the 1st of March to handle programs of this kind.

Perhaps I had better describe just what we are. We were set up as one of the several salvage activities. Within the Conservation Division of the War Production Board there is a general Salvage Section which deals with public and household and farm scrap and an industrial section which deals with industry; the automobile graveyard section, which is self-explanatory and deals with the automobile graveyard problem, and the Special Projects Section which was set up to expedite the movement of salvageable materials that existed in large structures, and were impeded by various kinds of problems, finance, legal, and other problems that required considerable investigation and negotiation.

There was also available for our purpose the Metals Reserve Company, which is a subsidiary of the Reconstruction Finance Corporation. They had funds available, and they were authorized to buy and sell metal. The Army and Navy had considerable difficulty with budgetary matters in financing these transactions, so we felt that we were in a position to establish a procedure here by which we might act. I will outline that and the relationships of the various agencies which were involved.

It was obvious that the Army had to be consulted as to the military needs involved; to answer the question, Is the railroad in question essential to the war program, where it is? The Army set up machinery to answer this question as quickly as possible. They made a physical investigation. I understand that some 14 different divisions of the Army took up the problem and certified to the answer.

Senator REED. Pardon me. May I interrupt you, Mr. Bertch?
Mr. BERTCH. Yes.

Senator REED. You say 14 different divisions. You mean divisions in the field or administrative divisions?

Mr. BERTCH. I mean such divisions as Ordnance, Quartermaster, the Engineers, operating divisions, various divisions within the Army. Senator REED. No wonder there was confusion, when there were 14 of them.

Mr. BERTCH. Well, they are all involved and they all have to check, because some of them have to do with problems of strategic materials that are involved and with various war plants and industries that may be involved, and with the operational plans that the Army may have. There are a great many problems that the Army must consider, and they set up to answer them very carefully, as I remember.

Senator JOHNSON of Colorado. That whole thing heads up in the office of Under Secretary Patterson, does it not?

Mr. BERTCH. Yes; transmission is made to us by letter in answer to our questions. We ask the Army if a road in question is considered indispensable to the war effort from a military standpoint, and the reply comes back to us from the Under Secretary's office. We have a written and signed clearance on each of these things.

Senator REED. Later, Mr. Bertch, do you or some representative of the Army intend to give the committee the formula or the basis on which they make a determination as to whether or not a particular segment of railroad is essential to the war effort? What sort of a basis does the Army have for that determination?

Mr. BERTCH. Well, I don't know that I would be qualified to try to describe that in detail. My impression is, from some conversation we have had, that they go into somewhat more extensive inquiry than I would imagine that they might. They seem to cover not only their own operations, their own tremendous, essential plants, but they seem to consider quite broadly the other aspects of it-the critical-materials aspects of it. We know that they make a physical inspection. I think if you wanted more information than that, I would not be qualified to give it to you.

Senator REED. Well, we want it from somebody. Now, if you cannot give it to us, why, of course, we will have some other representative of the War Production Board here.

Mr. BERTCH. The other fundamental question involved was the matter of the over-all picture of war transportation. It seemed obvious that war transportation must keep abreast with war necessities.

Senator REED. I agree with that, Mr. Bertch, but may I inquire what you include in your term "war transportation"?

Mr. BERTCH. I think I can answer that as I go on. If it is not answered, you remind me.

The Office of Defense Transportation has been set up by Executive order to exercise the responsibility for war transportation.

Senator JOHNSON of Colorado. Before we leave the other point, Mr. Bertch, I think Mr. Yinkey has a thought that he would like to express with respect to the Army.

Mr. YINKEY. I don't know whether Senator Reed's question about war transportation was answered or not.

Senator REED. No; not yet. Of course, if that comes later, that is perfectly agreeable to me.

Mr. YINKEY. That particular point I don't think, as Mr. Bertch said, we are qualified to answer, but it undoubtedly would be. Senator REED. Well, someone is.

Mr. YINKEY. Yes; war transportation is.

Senator REED. Now, let me suggest this to you, gentlemen, and you be thinking it over. My understanding is that the only test applied by the War Department to these railroads is whether or not they are necessary for the transportation of troops or of war materials, primarily munitions and critical materials and things of that kind. Is that in line with your understanding?

Mr. YINKEY. Not entirely. In one specific instance we were told that it was necessary to move tomatoes over the railroad for the Army. Now, for that reason the railroad could not be taken up.

Senator REED. That is perishable material, but is it critical material? Mr. YINKEY. Well, I don't know whether it is, as far as the Army is concerned, or not. I presume it is.

Mr. BERTCH. Generally speaking, Mr. Yinkey, is the formula that I have stated correct, in a general sense?

Mr. YINKEY. Well, depending on the definition of "critical material." I don't know how extensive that is with the War Department. Senator REED. The committee would like to have information that would make all of these points clear. There has been very much confusion and a good deal of dissatisfaction because of this confusion and uncertainty and the purpose of this committee and the purpose of the resolution is to clear up this confusion and uncertainty, to find out where we are at and why these things are being done.

Mr. BERTCH. Let me say this, that we recognize the necessity for this Army clearance. We accept the finding. We have confidence in their ability to give us an answer, and their method of doing it. As I say, it has seemed to us, from some of these things such as the one Mr. Yinkey just mentioned, that they go into it rather thoroughly.

Senator REED. From their standpoint, of course, Mr. Bertch.
Mr. BERTCH. That is right, from their standpoint.

The other standpoint is the question of the over-all needs of war transportation. The Office of Defense Transportation had both the responsibility for this and the facilities, we thought, to answer our question as to whether a railroad we were considering was indispensable to war transportation needs. Because they had the responsibility and because they had the facilities, we did not think that we should set up any duplicating facilities. We thought it was appropriate for us to ask them that question.

The plan in operation works something like this: I will make that just as clear as I can and in just as much detail as you want it. If I do not, please ask me.

The need is examined first, the needs of the Army and Navy, and their own activities are presented to the Transportation Equipment Branch of the War Production Board. They allocate this relaying rail. They have reports from the railroads as to repair stocks. They get monthly statements from the railroads as to their replacement stocks. I believe those are sworn statements.

The Special Projects Section gets these supply and demand figures from the Transportation Equipment Branch. Senator REED. That is your branch.

Mr. BERTCH. That is my activity.

Senator REED. That is the Special Salvage Branch?
Mr. BERTCH. Special Projects Salvage Section.
Senator REED. Special Projects Salvage Section.

Mr. BERTCH. In addition to that, there has been an informal meeting of something we call the relaying-rail group, the various people who are interested. This group meets informally from time to time to review trends and demands. We found from the outset that this demand had grown enormously and beyond any of the predictions that had been made or any needs that could be foreseen, so that in addition to trying to review what the demand is going to be for a 6-months' period, we get together and review, as it seems necessary, how the trend is going and whether we are on sound ground or whether we must increase our activities to develop more relay rail.

Senator REED. Now, let me inquire there, if it does not disturb you, is anybody else included in that besides your section and this other section?

Mr. BERTCH. That is the meeting of the representatives from the Army, the Navy, the Transportation Equipment Branch, ourselves, the Maritime Commission. Does that cover it?

Mr. YINKEY. And the Defense Plant Corporation and others.

Mr. BERTCH. Various people may come in. It is not a fixed committee. It is a meeting of the people who may have an interest in this subject and may have a need that they want to present. Does that answer your question, Senator Reed?

Senator REED. Yes; for the present.

Mr. BERTCH. Now, the Special Projects Salvage Section endeavors to search for all the relaying rail that might possibly be available any place. We are sort of an investigating and collecting agency in this process that goes on.

Senator REED. I think you have got a very good man on that job, Mr. Bertch-Mr. Yinkey.

Mr. BERTCH. I think so.

Senator JOHNSON of Colorado. Before you go into that question, may I.interrupt to ask you to clarify just a little further the function of the Office of Defense Transportation?

A moment ago you said that the Army and the Navy and other military branches were called upon to set forth the military needs of a line that was about to be dismantled. Now, when you go to the Office of Defense Transportation, what is the specific thing that you ask them?

Mr. BERTCH. We ask them to tell us whether or not this railroad is necessary, where it is, and whether or not it is essential to the war transportation requirements.

Senator JOHNSON of Colorado. You ask them more than that, do you not?

Mr. BERTCH. No; I don't think so.

Senator JOHNSON of Colorado. You ask them something about the civilian population.

Senator REED. I beg your pardon, Mr. Chairman, if I may suggest we will have somebody up here from the Office of Defense Transportation.

Senator JOHNSON of Colorado. Certainly we will.

Senator REED. But I understand the situation to be just exactly what Mr. Bertch has said, that even the Office of Defense Transportation considers this subject wholly from the needs of military transportation.