requirement was needless, or set up a task more difficult than the results warranted, he in turn could ask Congress that he be relieved of that provision, so you would not feel that that sentence, or similar language, would place an undue burden upon the Executive?

Mr. BRUNDAGE. No, indeed. I do not see any objection to it. Mr. OSMERS. I do not have any other questions, Mr. Chiarman. The CHAIRMAN. Mr. Dawson.

Mr. Dawson. Mr. Brundage, you appreciate the fact this system has grown up through the years, do you not?


Mr. DAWSON. And that much of it is the result of the various war activities engaged in to protect this country?


Mr. Dawson. And you appreciate the fact that the Hoover Commission is now making a study of this entire matter, do you not?

Mr. BRUNDAGE. Particularly in the Defense Department.

Mr. Dawson. Do you appreciate the fact that a subcommittee has been doing a lot of work on this particular subject matter?


Mr. Dawson. Do you not think in the light of the fact that this thing has been growing throughout the years to such an extent that the President has made it a part of a study of the Hoover Commission, and do you not think in the light of the fact that another subcommittee has been handling this matter, that it is rather strange that this full committee in the closing days of this session, when some of the members themselves have not given exhaustive study to this matter-do you not think that the best thing we could do would be to give to the Hoover Commission and to those who can study the matter an indicatiln of policy? Do you not think that is the step that should be taken at this late date?

Mr. BRUNDAGE. Whether you would give a statement of policy?

Mr. Dawson. H. R. 9835 is a statement of the policy of the Congress toward this matter to take Government out of business. We all know that there are many activities of the Government that we call business activities that are legitimate activities and pose no contest, or no challenge to business as such. We know that. There are some activities that are called business activities that we do not want to take away from the Government. Then under those circumstances, since the Hoover Commission is made up of experts from all areas of business and otherwise and is making a study of this, do you not think at this date, in respect to them and in respect to the committee that bas already been studying this matter and is not handling it now, that the best we can do or the thing we ought to do, would be to declare a statement of policy of the Congress? If Congress will adopt it at this late date, it would indicate to them how we feel about it. Should we not do that rather than try to write specific legislation which may be contrary to the findings which those other bodies may eventually bring out after their long and exhaustive study, a study that this committee cannot make and has not had the time to make?

Mr. BRUNDAGE. If I correctly understood you, I think that I agree

We said that we had no objection to a general statement of policy such as appears in H. R. 9835 and 9890, but we do not want to have a blueprint set up.

with you.

Mr. Dawson. That is right. So, at this late date, trying to get it through Congress when we know it is almost impossible to pinpoint certain activities and certain responsibilities upon certain executives, to my mind it would be going a little too far in the light of the study now being made and the recommendations that will come.

Mr. BRUNDAGE. I agree with you.
The CHAIRMAN. Mr. Pilcher.
Mr. Pilcher. No questions.
The CHAIRMAN. Mr. Judd.
Mr. Judd. No questions.
The CHAIRMAN. Mr. Lipscomb.
Mr. LIPSCOMB. No questions.
The CHAIRMAN. On page 3 of your statement you say:

We believe that the executive branch already possesses adequate machinery to perform the functions assigned to the Board, and that the establishment of the new agency is unnecessary and undesirable.

You are speaking there of the Board created by H. R. 8832?

The CHAIRMAN. You agree, do you not, that the Government should not be in business with those who pay the taxes?

Mr. BRUNDAGE. I agree; yes.

The CHAIRMAN. Otherwise, if we keep on, the Government will be doing all the business, if they can get the money somewhere, but they will not be able to get funds.

Mr. BRUNDAGE. That is right. The only objection is to the machinery provided by H. R. 8832.

The CHAIRMAN. Do I understand you to say that a broad, general statement of general approval of getting the Government out of business would be all right?

Mr. BRUNDAGE. I think that it would be. I think that it would be helpful.

The CHAIRMAN. Such a statement as is in H. R. 9835?
Mr. BRUNDAGE. Yes; and H. R. 9890, too, I think.
The CHAIRMAN. It is in H. R. 9890?
Mr. BRUNDAGE. Yes; the declaration of policy in H. R. 9890.
The CHAIRMAN. It says in that declaration of policy:

Therefore, it is declared to be the policy of the Congress that the Federal Government shall not engage in business-type operations competitive with private enterprise except where it can be demonstrated that it is necessary for the Government itself to perforin such operations in furtherance of national programs and objectives legally established.

Is there any objection to that?

Mr. BRUNDAGE. I think that is a broad enough statement. I am in entire sympathy with it.

The CHAIRMAN. What about this provision: You will find it in section 4 of H. R. 9890:

It shall be the duty of the Secretary of Commerce, acting under the instructions, rules, and regulations issued by the President, to receive from the public and examine specific complaints of Government competition with private enterprise and, where the facts warrant, consult and cooperate with officers of the Government supervising the Government business-type operations complained about in order to suggest, where appropriate, the termination or limitation of Government co npetition through the utilization of private facilities, products, or services in lieu thereof.

Is there any objection to that?
Mr. BRUNDAGE. No; I have no objection at all.

Mr. OsMERS. Mr. Chairman, are you reading form a print that I do not have available?

The CHAIRMAN. I do not know. I have my own print.
Mr. Osmers. Do you have a secret document there, Mr. Chairman?

The CHAIRMAN. No. I am trying to ask if he has objections to certain provisions. Do you have any objection to section 6, which is is found in 9890?

Mr. BRUNDAGE. I do not.
The CHAIRMAN. Or section 7?
The CHAIRMAN. I think that is all.

Mr. OSMERS. I have one kind of a roundup question that I would like to ask, particularly with reference to the questions that Mr. Dawson directed to you.

I do not think that it would be worthwhile, in view of the attitude of the administration and the expressed opinion of most of the members of this committee, to pass a declaration of policy on Capitol Hill in the short time that we have available to us. I do not feel in good conscience that I could go to the leadership and ask them to take that time because there is no lack of a policy on the part of the administration, and no member of the committee has urged that we must continue needless Government activities.

Do you not feel if we are going to consider legislation in these remaining days, that we should at least require a report designating some official in the executive department to review the complaints of business, and that we should ask the Director of the Budget, or someone else, to carefully screen all new proposals to enter into competitivetype activities?

Mr. BRUNDAGE. I do, yes.

I understood that Mr. Dawson's questions related to a specific setting up of machinery, like this board. I do not think that is desirable. But a general statement and a general provision such as is included in both of these bills I think would be helpful.

Mr. OSMERS. Fine. I want to say as the author of H. R. 8832 that I am not seeking at this time, and today-so we do not need to waste time and question all of the witnesses about it—to establish the board provided for in H. R. 8832. I have been convinced that would be cumbersome and unnecessary, and I withdraw it as an active proposal.

The CHAIRMAN. Mr. Ward, who obtained the testimony for the Harden subcommittee, has a few questions that I wish you would reply to, if you will.

Mr. WARD. Mr. Brundage, have you had an opportunity to investigate the cost-accounting systems in the executive branch to decide whether or not they are adequate to do a reasonable job on these activities?

Mr. BRUNDAGE. For this purpose, you mean?
Mr. WARD. Yes.

Mr. BRUNDAGE. I think that we could obtain the information as to the operations of the Government-type operations, yes.

Mr. WARD. The Defense Department gave the committee quite a list of statutes which seem to require that they engage in commercial

type activities. Has the Bureau had an opportunity to examine those statutes, or ask other Government agencies to compile such a list so that it is possible to tell whether or not the agencies must engage in those activities?

Mr. BRUNDAGE. I do not happen to know. Mr. Finan of our staff might be able to answer that.

Mr. FINAN. We are not familiar with the items that you are referring to, Mr. Ward. Can you call them specifically to our attention? I am not familiar with the list of statutes that you are referring to.

Mr. WARD. The Navy called our attention to a long list of statutes that seem to require them to do a number of these commercial activities. It looks like it might be a good idea if a list were made governmentwide.

Mr. Pilcher. Mr. Brundage, I know that you were a senior partner in Price, Waterhouse for many years, and I assume that you are a certified public accountant.


Mr. Pilcher. Do you feel that the accounts now being kept on these Government business-type activities regarding cost and so forth, for budgetary purposes, are sufficient?

Mr. BRUNDAGE. They are not ideal, no, sir.
Mr. PilchER. What is your agency doing about this?
Mr. BRUNDAGE. Well, I think we are working on it all the time.

Mr. PILCHER. Can you speed up the program which has been underway now for several years and made little progress or borne little fruit as far as we can see on Capitol Hill about costs? You know, when we ask about what a certain thing costs.

Mr. BRUNDAGE. I am working on it personally, sir.
Mr. PilchER. Thank you.
The CHAIRMAN. Thank you, Mr. Brundage. .
We will hear the next witness.

Mr. WARD. The next witnesses will be from the Department of Commerce, Mr. Teetor and Mr. Honeywell.



Mr. TEETOR. Mr. Chairman, my name is Lothair Teetor. I am Assistant Secretary of Commerce for Domestic Affairs.

For quite a few months the Commerce Department has been taking a very lively interest in this matter of Government competition with private enterprise. We consider it one of the important responsibilities of the Department of Commerce, and particularly the Business and Defense Services Administration, which is a part of the Department of Commerce.

We have been trying over the months to get the facts about Government competition with business, with private enterprise, and wherever we felt that the case warranted it we have urged that agency of Government which was competing with private enterprise to discontinue that competition. We in Commerce are firm believers in

private enterprise and feel they should do the job of producing materials for the Government whenever and wherever they can.

I am glad to say that considerable progress has been made along this line. It has been due principally to the cooperation of the Department of Defense, which has worked very closely with our Business and Defense Services Administration. They have given us the information we have asked for and many of the things they were doing have been discontinued.

On the matter of legislation, we rather doubt at this time if anything particularly effective might be accomplished.


Mr. TEETOR. We doubt if anything particularly effective could be accomplished at this time because of the work that we are doing in the Department of Commerce.

Now, Mr. Honeywell is going to say more about this, Mr. Chairman, when I finish with my introductory remarks, but through his division, the Business and Defense Services Administration and the group that he has working on this, they are making excellent progress now. I think that it would be wise to let us go ahead with this and do the things that we have in mind doing now. We believe that it will not be too long until there will be very little criticism of the Government being in competition with private business.

The CHAIRMAN. If I may interrupt you there, I understand that as early as the 1930's a congressional committee criticized Government in business, and then the Bonner subcommittee followed along with a somewhat similar report. Then, as we know, the Hoover Commission took a hand at it, and then the President himself has been saying something about it. However, the complaints continue to come in to us from our home folks who are deprived of their opportunity to do business and pay taxes to the Federal Government, so perhaps we are too impatient, is that what you are saying, or is this something new, maybe?

Mr. TEETOR. This is something new, Mr. Chairman.
The CHAIRMAN. Off the record.
(Discussion off the record.)
Mr. TEETOR. This is a rather new operation.

The CHAIRMAN. They have changed some of the fellows in the departments. They have given Mr. Wilson a few new Secretaries of Defense, but every time some fellow comes up here he brings with him someone who has been down there the last 10 or 15 years, which makes me wonder if perhaps the old policies, despite our endeavors, are not still in force.

Mr. TEETOR. Some are, but some have been changed, but the important thing is this—there is now a desire on the part of public officials to stop this practice.

The CHAIRMAN. Which ones?

Mr. TEETOR. The Department of Defense and the Post Office Department.

The CHAIRMAN. Do you mean those at the top, or all down through?

Mr. TEETOR. It must start with the top, and if the top really believes in it and wants those policies practiced, the top can put them into effect and we have watched them work in that direction.

The CHAIRMAN. This morning I received a letter from some 20 organizations- I think it is interested in the Navy--and they all want

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