of major national importance and believe that when hostilities cease our economy will be able to reach new levels in the use of advanced technology, providing a diverse choice of consumer goods and expanding employment opportunities. My company's interest in the question of conversion is general, rather than specific. That is, it follows principally from our involvement as corporate citizens in our community, rather than from the nature of our economic activities as a company, since only a relatively small proportion of our business is related to the military and we have a very limited involvement with respect to operations in Vietnam. The present administration, like the administration before it, is giving extensive consideration to the questions raised and the challenges posed by post war conversion. A number of business groups have done the same. In particular, you are no doubt familiar with the excellent report, "After Vietnam," which was published by the U.S. Chamber of Commerce Ad Hoc Committee on the Economic Impact of Peace After Vietnam in March 1968. From what we have seen to date it seems to us that existing governmental agencies, acting under the guidance and with the encouragement of the Congress and the executive branch, should be able adequately to deal with the questions of conversion without the establishment of a new commission, as proposed by S. 1285. While the problems are important and complex, we believe they can be best handled without an official planning agency and that private business firms, in a favorable economic environment and with the general encouragement of governmental authorities, are the best means for handling these problems as they arise. We think that the genius of the American economic way is the flexibility and adaptability of individual companies responding to a variety of specific and localized market conditions as they emerge. We know of no way in which a government agency can do this in advance and we would be concerned that planning ahead-even by the best planning talent available—would inevitably create rigidities which could impair rather than promote a successful conversion. We would also be concerned that the immediate problems of conversion might be transformed before a commission into a highly controversial effort to establish national priorities. Since our national goals necessarily involve the coordinate branches of government we believe that they would transcend the capabilities of a specially appointed commission and must necessarily be resolved through broad participation of all of the organs of government. Sincerely, C. D. MIMS, President. STANDARD OIL CO. OF INDIANA, Hon. ABRAHAM RIBICOFF, Chairman, Subcommittee on Executive Reorganization, U.S. Senate, Washington, D.C. MY DEAR SENATOR RIBICOFF: We have given considerable thought to your inquiry about bill S. 1285, which would establish a National Conversion Commission. Our director of urban affairs has also discussed it with Mr. Danaceau of your subcommittee staff. Our operations in manufacturing are primarily in the field of petroleum and petrochemicals and consequently do not lend themselves to the sort of conversion possibilities that are inherent in acrospace and similar industries. We have been active in research to eliminate pollution from our own refinery operations. Further, we are engaged in a joint research venture with other oil and auto companies which has the reduciton or elimination of harmful exhaust emissions as its objective. Beyond these, I see little opportunity for us to engage in any kind of systems approach to the solution of social problems unless we were to broaden considerably the scope of our corporate operations. This would, of course, be possible. However, I am extremely skeptical that the systems methods and the mounting of large-scale organized industrial effort that worked so well in the defense and aerospace industries would be as effective in dealing with urban problems and other social ills. I don't believe we have yet reached the degree of sophistication that will permit us to develop computer programs capable of dealing with human emotions. Most of our social problems involve so great an interplay of social, political, cultural, and economic forces that they simply cannot be dealt with by using the same techniques employed in advancing the state-of-the-art in technology. This is not to say, however, that there is no role for business and industry in the solution of social problems, nor that there should not be business-government cooperation in solving them. Certainly business can make an enormous contribution to the elimination of poverty by training the unskilled for the jobs that are available. It can do this, to a limited extent, without government support. It can do so to a greater extent with government support so that no individual company must place itself in a noncompetitive position because of the unproductive training costs that it incurs. I would like to assure you that as far as this company and its subsidiaries are concerned we are deeply committed, within the limitations. described above, to doing what is appropriate to preserve an environment in which individuals and business organizations can flourish. Urban affairs is a major staff function in our company, and we are broadly involved in programs in employment, training, education, minority enterprise, support for national and community organizations in the urban-racial field, and similar efforts. We intend to search for new ways in which we can become responsibly involved. I hope this is responsive to your inquiry. Your concern with these problems is commendable, and I only wish it were more widely shared in government and the private sector, as well. Sincerely yours, J. E. SWEARINGEN, Hon. ABRAHAM RIBICOFF, STANDARD OIL CO. OF NEW JERSEY, Chairman, Subcommittee on Executive Reorganization, Committee on DEAR SENATOR RIBICOFF: By your letter of August 26, 1969, you requested our advice in response to seven questions which you posed in connection with S. 1285, a bill to establish a National Economic Conversion Commission. In terms of net value of military prime contract awards for fiscal year 1968, our company and its affiliates stood 25th on the list, with a total of $274,377,000 of prime contracts. We differ, however, from most of the other companies occupying high positions on this list in two important respects. In the first place, the products that we supply to the military are, in general, manufactured in the same identical facilities in which we manufacture the great bulk of our products for the civilian market. In the second place, while the U.S. defense establishment is a highly valued customer, the total of these awards represented a relatively small percentage (less than 2 percent) of our total worldwide sales and operating revenue for the calendar year 1968. As a consequence, while a cessation or substantial reduction of hostilities in Vietnam would involve local readjustments in the activities of our Far Eastern affiliate, it would not have a pronounced effect on our U.S. domestic manufacturing activities, nor can we visualize any other possible change in the defense program that would have such an effect. This means that we are not faced with the the kind of "spinoff" or conversion effort that would be the case if a substantial part of our domestic manufacturing facilities were engaged in specialized military production. With respect to your questions regarding possible Federal action to improve our capability to contribute to the solution of urban problems, we are, once again, not in a position to be of any real assistance to you. This is for the reason that, while all segments of society are consumers of petroleum products, it is difficult to see how the provision of a guaranteed market or other Federal action to promote the sale of petroleum products, and in of itself, would make a contribution to the solution of this particular problem. I greatly appreciate your having written me, but trust that under the circumstances you will agree that we should yield to others who are in a better position than we ourselves are to give you the kind of information you are seeking. Sincerely yours, MICHAEL L. HAIDER, J. P. STEVENS & Co., INC., New York, N.Y., September 11, 1969. Hon. ABRAHAM RIBICOFF, Chairman, Subcommittee on Executive Reorganization, U.S. Senate, Washington, D.C. DEAR SENATOR RIBICOFF: Please accept my apologies for this delayed response to your letter of August 26 regarding S. 1285, a bill to create a National Economic Conversion Commission. I have, along with a few of my associates, reviewed S. 1285 for its possible applicability to our company and the textile industry generally. Our opinion is that it would not apply to our company, and we know of no other textile company where it might apply. J. P. Stevens & Co., Inc. is one of the largest suppliers of textile products to the Government; on the other hand, all of the products we have produced for the Government for military and space programs are made on equipment which is readily usable for producing civilian goods. As a matter of fact, it is completely interchangeable. I have a very high regard for forward planning land feel that the problem you are attacking is certainly one that needs investigation. to determine if legislation is required to assure maximum conversion and use of facilities, skills, products and technology to the civilian sector. In conclusion, I want you to know that I and my associates will give additional thought to your letter and the draft legislation and will follow its progress with interest. Should we have anything further to add, I would appreciate having the opportunity to communicate with you on this subject. With highest regards. Sincerely yours, Hon. ABRAHAM RIBICOFF, JAMES D. FINLEY. SUN OIL Co., Philadelphia, Pa., October 9, 1969. Chairman, Subcommittee on Executive Reorganization, DEAR SENATOR RIBICOFF: I am pleased to submit this reply in response to your letter of August 26, 1969, addressed to Mr. J. Howard Pew regarding S. 1285, a bill to create a National Economic Conversion Commission. The general purpose of the bill, to provide the means through which the skills, products, and technology developed in the defense and space programs may best be converted to civilian applications, is highly desirable. This has been done effectively by NASA through dissemination to the private and public sectors of the Nation of all technical and related information as soon as it was declassified. A similar program by the proposed National Economic Conversion Commission could be of considerable value. Concerning S. 1285, I believe that domestic projects and needs can be most effectively achieved with the broadest benefits to all concerned, if they are met by the Federal Government in collaboration with private industry under conditions compatible with our basic free enterprise system. Sun Oil Co. has not as yet been engaged in any significant "spinoff" or conversion efforts. We have found the reports of various federally supported research agencies such as Office of Coal Research, the Bureau of Mines, and others, to be useful in our own research programs. Also, technologies developed in our own research program have been found to have applications in other fields than those for which originally developed. Since our experience in conversion activities has been limited, we have not encountered specific financial or governmental obstacles. However, this reply would be remiss if it did not mention the detrimental effects our present inflationary conditions have upon technological developments, both public and private. There is much information, many ideas, significant organizational talent and an unlimited array of skills in private industry which could be directed toward the solution of urban problems. Realization of benefits from the application of these resources will require much more effective coordination between governmental, public and private organizations than presently exists. Specifically, I refer to more effective communications and dialogs for identification of specific targets and objectives, politically achievable means of implementation and maintenance of reasonable benefits to private industry for its efforts. I would not favor a guaranteed market as an incentive. Industry needs opportunities to make its contribution within our competitive system and properly designed incentives to encourage the dedication of technologies to the public interest would be helpful. Government can effectively serve the areas of health, education, housing, transportation. To the greatest degree possible, however, these should be related to the development of private enterprise business opportunities for minority and other disadvantaged groups. I believe that one of the areas where the Federal Government could give firm evidence of leadership is in the field of oceanic development. This activity offers an opportunity for the coordination and utilization of technologies developed in the space program as well as in defense areas. The opportunity exists for technological development of tremendous benefit to the Nation in the oceanic field. I am in accord with the general purpose of S. 1285. I believe that the most beneficial results can be attained through leadership, programs and activities on the part of the Federal Government which stimulate private enterprise. Sincerely yours, ROBERT G. DUNLOP, President. SWIFT & Co., Hon. ABRAHAM RIBICOFF, Chicago, Ill., September 25, 1969. Chairman, Subcommittee on Executive Reorganization, U.S. Senate, Washington, D.C. DEAR SENATOR RIBICOFF: I regret that extensive travel commitments have prevented my responding sooner to your letter of August 26, 1969. Set forth below are my comments on the seven questions posed in your letter.1 1. S. 1285 appears to be a commendable bill in the respect that it restricts the awarding of contracts or grants to the extent that there will not be a gap in the economy should there be a necessary adjustment in security needs. 2. We have been planning the conversion of numerous defense related food programs, but in some areas there are limited opportunities for conversion. 3. No critical obstacles have been encountered. 4. The major difficulty is the lack of high risk capital. 5. A guaranteed market would improve the situation to the extent that capital is available. 6. The guaranteed market could work through a step-up in food purchases through the USDA on food for peace, poverty, and school lunches. This could be supplemented by cooperation with Senator 1 The questions that were asked by the subcommittee staff can be found in letter dated Aug. 26, 1969, p. 13, of this committee print. |