to evaluate the mechanism for accomplishing this goal or the impact of various requirements on contractors who are more heavily engaged in defense-related work. Although section 5(a) of the act concerning industrial conversion capability would not work a particular hardship on us, identifying this capability would create costs which could be substantial on the part of contractors whose production is largely defense related. These costs would be reflected in the cost of Government procurement. It is our belief that the Employment Act of 1946 adequately covers the contingencies of economic conversion. The events and need, shaping that legislation, appear basically the same as those described in S. 1285, and we believe the objectives of the Employment Act of 1946 by and large continue to be met. Thus, caution should be exercised in creating additional mechanisms for essentially the same purposes. We subscribe to the idea that Government should help define the overall problem areas, the priorities, and determine the degree of financial support it will supply for essential programs. The aim should be the creation of a climate in which the private sector is best encouraged and enabled to solve these problems through normal pursuit of profit. As your letter so well points out, we should be able to make, through the imagination and energy of private industry, the same kind of dramatic contribution in meeting public needs that has been made in the space program. We endorse the attempt to create a climate for widespread use of defense and space technology management systems to solve other pressing national problems. The many problems facing our Nation are not independent in nature, and efforts to solve them independently will at best bring limited results. 2 and 3. Caterpillar has not been involved in a "spinoff" or conversion problem because our defense business consists largely of commercial or modified commercial product. Consequently, we have not experienced financial or governmental obstacles in "spinoff" or conversions. A "spinoff" or conversion situation could conceivably develop in the future but any comment at this time would be completely speculative. 4. The answer is simply-yes. Aside from the technological "spinoffs" of such things as fuel cells and computer technology that evolved from the aerospace industry, there are many resource organization techniques that could be utilized by Government and industry jointly. The systems approaches that have been developed to serve defense and aerospace purposes could be adapted for defining and solving problems in fields such as employment, manpower development, transportation, housing, and pollution control. However, it should be noted that some social and economic obstacles to utilization of such systems do remain. For example: craft unions have rather effectively resisted modern building techniques and this is a particular deterrent to the creation of low- and moderate-cost housing. In addition, limited profit expectations may hold back such applications if it appears that there are other areas where the systems approach can be utilized with a greater return on investment. None f these obstacles is insurmountable, but they should be realistically sidered in any systems approach to the solution of urban problems. 5 and 6. If the term "guaranteed market" means contractual agreements by Government agencies to purchase an assured number of units of product-our feeling would be this is not the best answer. Although a case can be made for such an idea, we believe it would lead utlimately to rigidities and inflexibilities in problem areas that need continual redefining and innovative thinking as to solutions. In the long run, the best answer may well be for Government to continue to define the problems, the priorities, and the programs it will support. Industry, if then allowed to operate in a climate of flexibility, can respond effectively and competitively to the markets that will no doubt be created. 7. Aside from direct welfare, there are few areas of public need that can be met by Government acting alone-and oven welfare efforts should give high priority to placing recipients on productive jobs in the private sector. However, opportunities for joint Government-business approaches to meeting timely public needs are only starting to be explored. These approaches will succeed largely to the degree that they respond to the usual profit motivation of the private sector. Areas of public need which appear to merit high priority include transportation, low-cost single family housing, control of air and water pollution, and manpower development. If "public need" is to include special problems created by economic conversion, then one of the foremost requirements is the development of domestic and overseas markets to absorb the products of "converted" manpower and plant capacity. Domestically, this will require the return to a condition of economic growth without inflation, and the adoption of tax policy that enables capital formation sufficient to achieve national economial goals. Internationally, this will require aggressive U.S. leadership_in achieving continued reduction of international trade barriers so that U.S. industries can at least hold their share of markets as the total of world trade rises. If we can amplify these comments or be of any other assistance, please be assured of our interest and support of your determination to find answers to these problems. Yours cordially, Hon. ABRAHAM A. RIBICOFF, W. BLACKIE, Chairman of the Board. CITIES SERVICE CO., INC., Chairman, Subcommittee on Executive Reorganization, DEAR SENATOR RIBICOFF: My staff has made a very careful study of S. 1285 and the questions posed by your letter of August 26. We find that the company has had so little experience in converting from defense programs to civilian-use programs that our answers to your questions would not be helpful to the committee. We are grateful for your interest in the views of the business community on this important legislation. Sincerely, CHARLES S. MITCHELL, Chairman of the Board. COCA-COLA U.S.A., Hon. ABRAHAM RIBICOFF, Atlanta, Ga., September 12, 1969. Chairman, Subcommittee on Executive Reorganization, DEAR SENATOR RIBICOFF: Reference is made to your letter of August 26 addressed to Mr. Lee Talley, chairman of the board, the Coca-Cola Co., regarding S. 1285, a bill to establish a National Economic Conversion Commission. In Mr. Talley's absence, I am presuming to acknowledge and thank you for your letter. With specific regard to your questions, I doubt if we could furnish much information, since the skills, products, and technology developed in the Nation's defense and space programs have a lesser applicability upon the soft drink industry than in some other areas. As a general observation, however, I think the thrust of your proposed legislation to bring about useful and beneficial rewards to the private and domestic sector from experience in defense and space activities is a desirable goal. I understand that already techniques developed in connection with space exploration, including electronic sensors now used in medical research, are adding to our domestic body of knowledge. So further efforts to improve this conversion are laudable, and I shall look forward to following the progress with great interest. Sincerely, OVID R. DAVIS, Vice President. Hon. ABRAHAM RIBICOFF, CONSOLIDATED FOODS CORP., Chairman, Subcommittee on Executive Reorganization, U.S. Senate, Washington, D.C. DEAR SENATOR RIBICOFF: I was most interested in your letter of August 26, 1969, relating to the hearings that are scheduled with respect to S. 1285. Consolidated Foods Corp., is engaged in the production and sale of both food and nonfood consumer goods and services. Although we have supplied food to various branches of the Government on occasion, there is virtually nothing about the nature of our business that would be relevant to your study directed toward the conversion of the skills, products, and technology developed in the defense and space programs for civilian uses. Consequently, I regret to say that we really have nothing to submit to you that would be of benefit to your study. Respectfully yours, WILLIAM HOWLETT, CPC INTERNATIONAL, INC. Englewood Cliffs, N.J., September 18, 1969. Hon. ABRAHAM RIBICOFF, Chairman, Subcommittee on Executive Reorganization, DEAR SENATOR RIBICOFF: Let me compliment you for your forwardlooking exploration of the ways in which "the better life" might be advanced through the exploitation of what our Nation has produced in its defense and space programs. We heartily concur in the belief that there are ways in which these programs can, through industry, provide the public with significant benefits. For instance, our company is very much interested in learning systems, and we believe that among the most well-developed and best tested training efforts in the world are those conducted by our defense and aerospace programs. The advanced concepts they employ can be put to excellent use by both industry and our educational institutions. This perhaps answers your first and second questions.' The learning systems in which CPC is interested are identified as MIND, Inc., Learning Sciences, Inc., and Information Sciences Inc. (ISI). And it's within the context of these companies that I am answering the remainder of your list of seven questions. Our experience indicates that there are no basic financial or Government obstacles to "spin off" particularly in the learning. Indeed, there have been many encouragements (question No. 3). Our answer to your fourth question is "Yes." All that holds them back-and this is a rather large "all"--is a consensus as to what constitutes the best methods and approaches. This has been answered with great subjectivity until now, and sometimes without careful study. Question No. 5: the market already exists. It could, of course, be furnished with greater attention by offering added incentives to reach the market, but incentives are there already. Perhaps this also answers the sixth question. We believe a number of public needs can be best met by Government. Although you may have assumed that the businessman's reflex reaction is indiscriminate denigration of Government methods, this particular businessman believes that Government has superior competence in dealing with the broad planning and coordination of the attack on urban and reconversion problems. These are problems against which services have to be brought into play on a massive scale. We also believe that in the implementation of Government plans, contracts with private enterprises will work better than operating agencies of Government. By the way, if you are not familiar with the tremendous job the Committees on Economic Development did after World War II, your staff should get that story. In summary, Senator, we applaud your objectives. Sincerely, HOWARD C. HARDER, 1 The questions that were asked by the subcommittee staff can be found in letter dated August 26, 1969 p. 13, of this committee print. 49-327-70-3 Hon. ABRAHAM RIBICOFF, THE DOW CHEMICAL CO., Midland, Mich., September 4, 1969. Chairman, Subcommittee on Executive Reorganization, Committee on Government Operations, U.S. Senate, Washington, D.C. DEAR SENATOR RIBICOFF: Your letter of August 26, 1969, to Mr. Carl A. Gerstacker, chairman of the board, the Dow Chemical Co., Midland, Mich., has been referred to me as the director of Government affairs for action. The Dow Chemical Co. is very interested in exploring ways of converting the skills, products, and technology developed in our defense and space programs for civilian use. We at Dow believe that private industry could achieve great new goals if the Federal Government provided the same kind of support for domestic projects and needs that it has provided for defense and space efforts. The Dow Chemical Co. is now facing conversion problems due to curtailments of space and defense programs. This is particularly true in our space efforts at Cape Kennedy, where we have gone from a high of 1,170 personnel in July of 1968, to the present manpower level of 511. Very little "spinoff" has been realized in the conversion process. The answers to your questions listed on page 2 of your letter have been given from my viewpoint as vice president, director of Government affairs, and are attached hereto. Sincerely yours, A. P. BEUTEL, Vice President, Director of Government Affairs. 1. What is your view with regard to S. 1285? The Dow Chemical Co. strongly supports the purpose of S. 1285. the organization of the National Economic Conversion Commission and the proposed actions of the Commission. We are keenly aware of the heavy economic, scientific, and technical commitments that have been made for defense during the past two decades, especially during the past 5 years of the Vietnam conflict. Dow has supported and been involved with defense efforts beginning with World War I. While Dow does not compare in Government contract volume with the major defense industries, we have been included on one occasion-1967-in the top 100 defense contractors. We also are a major contractor for the Atomic Energy Commission and have been a contractor of NASA in the space program at Cape Kennedy for the past 5 years. Our direct and indirect sales of products to defense agencies have been significant. Our research and development government contracts, while largely nondefense oriented, have made, we believe, valuable contributions to defense efforts. The Dow Chemical Co. endorses a strong national defense posture and at the same time recognizes the need for a balance between defense and general welfare of the United States. A program such as envisioned in the provisions of S. 1285 will |