Press Conference

THE PRESIDENT: I think you might as well all come in. It will save you running around to get a little piece here and a little piece there, getting an inaccurate story as a result, which you would otherwise have to do. Am I right, Fred [Mr. Essary]?

Q. [Mr. Essary] Do it often.

Q. It will also preserve Steve's [Mr. Early's] sleep too.

THE PRESIDENT: That's right.

Well, the story—let me put it this way: About a month ago it became apparent that we were coming to the end of the study period, and had learned thereby of certain needs. During the past month the various methods of organization to meet those needs have been studied, and all manner of suggestions have been received. There were two or three cardinal principles; and one of them is the fact that you cannot, under the Constitution, set up a second President of the United States.

In other words, the Constitution states one man is responsible. Now that man can delegate, surely, but in the delegation he does not delegate away any part of the responsibility from the ultimate responsibility that rests on him.

The second principle is that this is a Government of laws as well as of men; and the administrative procedure has to follow as closely as possible the laws of the United States, or there must be changes in the laws—one or the other. If it is possible to accomplish better organization through existing laws without asking for changes, that's the method of procedure.

The third criterion is the thing that is so often forgotten by amateurs, and that is in every process of production there are three elements, which in practically no case are present in any one individual's experience.

Let's take, as an illustration, any article: a gun, an airplane, an office desk, or a lamp. The three elements are, first, the combined element of the buyer and the user. Now, it is very important to turn out articles which are satisfactory for the buyer and the user. In the case of the national defense program the buyer and the user, because it is military and naval, are the two defense departments, the War Department and the Navy Department. That is one element.

The other two elements are things we have talked about and written about-they are nothing new. They are management and labor. Number two is management, and number three, labor. Into the production of every article there go those two elements. As I said before, it is impossible to find any one "Czar" or "Poobah" or "Akhoond of Swats," who combines all three of those elements in his own person. Therefore, the amateurs who talk about sole responsibility in one man, prove their ignorance. Nobody ever found that paragon yet, and as I explained the other day, nobody did in the World War either. Fred [Mr. Essary] knows. I always use Fred because Fred and myself are contemporaries. The rest of you are just children.

And, therefore, with those two primary considerations in mind, first, that if I could, I had to operate under existing law and, secondly, find some kind of organization to represent those three elements, I looked around and found what most everybody had forgotten. That was that a couple of years ago, in the first Reorganization Bill, wasn't it, Harold? [addressing Budget Director Harold Smith]—in the first Reorganization Bill, we provided a father for certain fatherless children. One of them was the Budget Bureau, as it was called in those days, and it had no father. So, under the Reorganization Bill, we set up in the office of the President of the United States, several offices, one of them the Bureau of the Budget, with a Director. There was another orphan, the National Resources Committee, as it was called at that time. It didn't belong to anybody. The Secretary of the Interior was on it but, obviously, it was doing as much work for other departments and agencies as for the Interior Department, so we set up that as an office under the President. And then there were certain remains of what used to be called the National Emergency Council, which had to be preserved, but it didn't belong in any one existing department of the Government. So we put the Office of Government Reports under the Executive Office of the President.

There are the Administrative Assistants, that is another. Then there was a clause called Clause Six, which said—I can't quote, but in effect, "There is hereby authorized an Office for Emergency Management in the office of the President." But I told Congress at that time that there was no sufficient emergency to set it up. All I wanted was authority to set it up in case at any time in the future we needed it. So, there it is on the statute books, with very broad powers-real powers.

Now, in that Office for Emergency Management, because of the powers given to it, I can do a number of things. And I am setting up in that authorized Office for Emergency Management a new organization called the Office of Production Management for Defense. You can leave off the two words "for Defense" if you want to. It will be called the "Office of Production Management."

We then came down to the problem of how to simplify and concentrate responsibility. And coming back to the parable of the desk and the gun, or whatever it is that is made for defense, we still have those three elements. And therefore the Office of Production Management will consist of those three elements, divided among four people—the Director, Mr. Knudsen, and the Associate Director, Mr. Hillman. That gives you the two elements of management and labor; and the third element, which is what I call the buyer and the user, will be the Secretary of War and the Secretary of the Navy, because the two of them put together are the buyer and the user of all these things that are turned out. You see the point?

So from now on, the responsibility for turning out this production and purchasing, and priorities, those are the three important things—production, purchasing and priorities-will be in the Office of Production Management.

Q. What becomes of the Defense Commission?

THE PRESIDENT: I am coming to that now.

The Defense Commission, the Advisory Commissioners to the Council of National Defense, remain just as they are exactly, because in the case of almost every one of the seven they have a great many functions, each one, which do not directly relate to production management, such as-well, I will give you some examples.

For example: Stettinius, in his office, is responsible for the coordination of the entire steel production of the United States, of the problem of keeping on hand enough copper at all times, of providing enough wool at all times. Now, when you think of it, the majority of all steel produced goes to civilian and not to defense purposes. The overwhelming bulk of all copper that is used in the United States goes to civilian and not to defense purposes. The same thing is true of wool. The overwhelming majority of all the wool used goes into the clothing of the one hundred and twenty-five million people who are not in uniform.

The same is true in the case of Chester Davis. The great bulk of all agricultural produce goes into civilian use rather than into Army and Navy use.

The same thing is true of transportation—Ralph Budd. I suppose when this program gets going at its maximum capacity of production, somewhere between five and ten per cent of the transportation of this country will be defense transportation. The other ninety or ninety-five per cent will be normal civilian transportation.

And so it goes. That is why there is a very definite need for the continuation of the work of these Advisory Commissioners. But they act strictly in accordance with what I have just said. The Advisory Commissioners, seven of them, each one responsible for his own field, in the coordination of the civilian life of the nation with this Office of Production Management.

Now, there are three main heads that fall under the Office of Production Management. One is the actual production of more munitions, which would probably run as one organization—I mean, as one office, or two offices, or three offices—with some of the people who are at work at the present time. For instance, it might include Biggers. It might include Stettinius on the production of steel castings, aside from the collection of raw materials, which is a different thing. Anyway, it is separate. It is—what shall I say? what is the word? I hate the word "Bureau."

Q. A Subdivision?

THE PRESIDENT: It is a subdivision under this Office of Production Management, and it might have several bureaus in it.

Then there is number two—the office with a director for defense purchasing, which will be headed, as it is today, by Don Nelson.

Then there is the third subdivision, called the Defense Priorities Board, which may shift from time to time in its personnel. But at the present time it would be composed of Mr. Knudsen and Mr. Hillman; and Mr. Henderson on prices, because prices and priorities are intimately related. It would include Mr. Stettinius in that portion of his field which relates to raw materials, and Mr. Nelson, so that there will not be any clash between different articles. It would be run by an Administrator, who would carry out the orders of that Priorities Board.

The reason is this—I will give you some simple examples for the sake of argument:

Suppose the production office wanted to buy some desks, and there was an awful shortage, and at the same time Mr. Nelson in the Division of Purchases wanted to buy a lot of desks. In view of this shortage there would be a conflict of priorities, and the two of them would take it to this Priorities Board, thresh the thing out, reach a decision and tell the Administrator how those desks were to be delivered.

Now, that is the simplest thing. If you could have seen some of the charts, and suggestions and plans that have been made, you would give me a vote of thanks for having gotten out this simple evolution of the program.

Q. Mr. President, will this be effective immediately?

THE PRESIDENT: Yes. In other words, this being a Holiday Season, with Christmas coming, it will take a little time to get the wording of the Executive Orders—it will be done by Executive Order—and the total length of time to put it into actual effect will be eight, or say, ten days. And the orders will be coming along from time to time.

Q. Mr. President, could I ask one question? You mentioned that Management and Labor are co-equal. Will Mr. Knudsen and Mr. Hillman have more or less co-equal positions on this?

THE PRESIDENT: I think it is fair to assume you will get unanimous agreement.

Q. Mr. President, in outlining these three subdivisions, you gave us a Director for defense purchasing and the membership of the Defense Priorities Board. Is there an actual Director of the Purchasing Commission?

THE PRESIDENT: That I carefully did not give you the details on. I used the illustration that we might have one office or we might have one office with several bureaus in it. It is a matter of pure detail.

Q. Mr. President, when you were describing it you named the Secretaries of War and Navy both. Does that mean they will vote as one, or have two votes?

THE PRESIDENT: No, they will agree. They won't vote. I don't think you will ever find a vote taken.

Q. Mr. President, will Mr. Nelson have contract signing powers for the Army and Navy?

THE PRESIDENT: No, you can't do that under the law. He will plan, schedule and coordinate all defense purchases, and clear all contracts prior to execution. But, under the law, those contracts have to be signed by the Army and Navy.

Q. Mr. President, is that designed, for example, to do away with conflicts which have arisen when Hillman, for example, did not know that a contract was to be awarded to the Ford Motor Company?

THE PRESIDENT: Look here. [Holding up chart] That is all down on this line. Look at this chart. These three subdivisions-everything that is done—goes on up here between Knudsen and Hillman, and the War and Navy. Everything goes up that way.

Q. Mr. President, does it seem to you that you have ample personnel at the present time to carry through this program?

THE PRESIDENT: I should say so.

Q. Mr. President, will the Commission continue to meet with you every week as it has been?

THE PRESIDENT: I don't know.

Q. Will they have headquarters in the White House by any chance?

THE PRESIDENT: No, they will not.

Q. Mr. President, do you think there will be a material speeding up of the program as a result of this?

THE PRESIDENT: I didn't say that, because the program has been speeding up every twenty-four hours. Therefore, I would not put it that way. You see what I mean? And let me talk off the record to you on one other thing:

The thing we talked over at the meeting just now is the kind of thing you can't print because people would say it was a slam at somebody. Do you realize that sometimes people have to get the country excited? Now, all right. The country needed to get excited. Therefore, I was tickled to death when Bill Knudsen told those people the other day that his airplane program was thirty per cent behind. Behind what? Did you ever think of that? He was trying to impress the United States with the need for speed, the need for pushing this thing. Grand! So I was very much pleased. But what is he behind? Let us analyze.

He was behind an estimate, thirty per cent behind an estimate made back last August. Now, anybody that knows anything about it knows that he could have put it the other way around. If he wanted to, he could have said, "Last August when we didn't know anything about it, our estimate was thirty per cent too high. We estimated thirty per cent higher than the country could have done."

Now, somewhere in there, actually in between the two, lies the real truth. And, personally, I think that the estimate of last August was impossible for human beings to have carried out. It was too high. Hold it to a rule of thumb-let's say it was fifteen per cent too high. Then we ought, if perfect, to have been fifteen per cent better than we have been. But the objective which he had in mind, which was a good one, was to get the people in this country a bit scared. He let them believe that we were actually thirty per cent behind and that we have to speed up to catch up.

The reason I say "off the record" is that it is so terribly difficult to explain a thing like that in a story or radio speech to anybody else. But a psychological method like this is a very good one.

Q. Mr. President, are they very off schedule? What do you expect to get?

THE PRESIDENT: Well, it is the old story. You have heard it before, and I think it started with T. R. He said, "Always ask for twice as much as you expect to get."

Q. Mr. President, as this now stacks up, will you be the top?

THE PRESIDENT: No, I am not the top, except constitutionally. You cannot divest yourself of the responsibility of that. It rests in this office of which Knudsen is Director and Hillman Associate Director, and the Secretaries of War and Navy, who are the orderers and users, are the other two people.

Q. Mr. President, just to what extent can you divest yourself of responsibility?

THE PRESIDENT: I can't, under the Constitution.

Q. Mr. President, will this Board have power to make decisions and all that, without referring them to you?

THE PRESIDENT: Yes, sir.

Q. Mr. President, you don't have to give the final approval?

THE PRESIDENT: No, no, but believe me, if they make some kind of a decision which goes wrong, and I say that it is contrary to the national interest, I shall probably call them in and say, "Here, here, what is this?"

Q. Mr. President, will they have power to make long-range policy decisions and do planning on a broad gauge, such as increasing the ratio of planes that we are supplying to Britain?

THE PRESIDENT: No, that is a military question. That is purely a military question. In other words, the policy is definitely outlined. Today we give everything to England that we can possibly spare in the judgment of the military experts.