Mr. Chairman, this committee will encounter a lot of criticism. There are persons who for their own purpose use the word “business" and “big business” particularly as if that had some invidious meaning. I think that the same voices that are carping against business and big business are carping against politics and politicians, and they are also telling how much better things could be if we had something other than the American system.

I believe, Mr. Chairman, if you would permit me, I would like to read one brief excerpt, and that would be my conclusion. It is about H. R. 8832, which does set up this body, which does report both to the executive branch and to the legislative branch of the Government.

That this bill does not set up a supergovernment. It does not restrain the powers of Congress. It does not have the final decisions on whether Government projects should be undertaken or not. It would seem, therefore, that this bill makes a reasonable and intelligent start toward the desired ends of having Government perform the functions which it is best qualified to do and look to the American private enterprise to render its best services for Government.

Mr. Chairman, may I reiterate in final conclusion that I am bringing the thanks and appreciation of businessmen to you and your committee. I thank you, sir.

The CHAIRMAN. Any questions? Mr. Osmers. Mr. Griffith, what do you feel the continued activity of the Government in business will mean in the field of invested capital, risk capital; and, after answering that, in connection with free labor?

Mr. GRIFFITH. Well, I think that the Government going into business is a deterrent to investment capital. Congressman, you know, up in New York we have an exact example of that in our city transportation system. There we had the private capital. They could get the money for the Interborough and for the Rapid Transit Co., and it was invested funds. Then along came this theory that the Government ought to own that, so the city takes it over. What happens? We just simply send those companies bust. They are in bankruptcy. Now the city is having its difficulties. It had to turn it over to a transit authority. And they are actually now considering coming down to this Congress and saying, "We would like you to subsidize transportation in the city of New York." That is the next thing

The CHAIRMAN. We would probably do it.
Mr. GRIFFITH. I beg your pardon?

The CHAIRMAN. We would probably do it. You have so many people up there who came from abroad, undoubtedly we ought to take them around to various points, wherever they want to go.

Mr. GRIFFITH. Can I put in a suggestion as to the destination where they ought to go or be sent?

The CHAIRMAN. Of course, you have the sole responsibility for that. I always say they can go there if they want to. I never suggest they do, but leave it free to them.

Mr. OSMERS. Mr. Griffith, I believe----
Mr. GRIFFITH. I wanted to answer your question.
Mr. OSMERS. I wanted to finish my question.
Mr. GRIFFITH. Yes, sir.

Mr. OSMERS. About the private operation in subways, I know John F. Hylan and many succeeding political figures of note in New York City always ran out of the fights on fares platform. Now they are

on a 15-cent fare and are still in trouble. Government ownership of itself does not guarantee a cheaper ride.

Mr. Griffith. No, sir. Somebody pays for it.

We are having identically the same thing with the Niagara power. Remember, Congressman, they are regulated by the public service commission.

The CHAIRMAN. Did the Congress not decide in favor of private business? Did we not pass that bill?

Mr. RIEHLMAN. The House passed it.

The CHAIRMAN. Yes. We have been converted and have acted on that one.

Mr. GRIFFITH. That is very encouraging, also.
Have I answered your question, sir?

Mr. OsMERS. Yes, you have. I have no further questions, Mr. Chairman.

The CHAIRMAN. The witness who testified just before you suggested that because of his experience in the legislature he believed it would help if the Congress declared the policy, and perhaps went as far as it could to enact a law which would state that the Government should not engage in competition with any business.

Forget that. If we do not give them any more money, if we can learn who is really competing and refuse to give them any more money in our appropriation bills, have we not got them?

Mr. RIEHLMAN. Could I speak to that point?
The CHAIRMAN. Maybe we had better discuss that tonight.

Mr. RIEHLMAN. I would just like to make this observation, Mr. Chairman

Mr. GRIFFITH. Just a horseback opinion on that, Mr. Chairman: . We have had instances in this country where the President has said:

Congress can enact a bill; now let it enforce it; I will not.

The CHAIRMAN. But they cannot operate if we do not give them any more money.

Mr. GRIFFITH. That is the point.
The CHAIRMAN. We have a control on that if we want to.

Mr. Griffith. You see, if they do not have any money when they say

Go ahead and enforce it. it will not be enforced.

The CHAIRMAN. But they will not have any money to operate the private businesses.

Mr. GRIFFITH. That is correct. You are absolutely correct.

The CHAIRMAN. They cannot work without the dollars which we give them.

Mr. GRIFFITH. That is right, sir.

Mr. RIEHLMAN. The observation I wanted to make, sir, is this: I have certainly no objection to the proper type of legislation which can be written and passed by the House to make effective some type of program to eventually eliminate the Government from business, but I think that one of the effective things that has been done in the past and is still being done is the work of the committees of the House, which are constantly probing into these matters and are writing constructive reports. I think right on your own committee that you have had several reports written by subcommittees which had good effect.

The CHAIRMAN. From your committee.
Mr. RIEHLMAN. Not mine. I am not talking about my committee.

Mr. RIEHLMAN. I am talking about Mrs. Harden's committee, and others, which have written constructive reports. I am sure that the effect of those reports has been good and will continue to be good in keeping the Government from expanding in its activities. Some of them at this time are going out.

I am sure what Mr. Curtis had to say this morning was very timely in respect to this legislation, and I am sure that his experience on that subcommittee in the past 3 or 4 years up to the present time has been very valuable, although he is not now on it but is on the Ways and Means Committee. I think Mr. Osmers, the author of one of these bills, is on that subcommittee.

Mr. Ward, who is counsel and I guess director of the committee's activities, has done excellent work.

I certainly want to see something done in a very constructive way. Whether it can be done through legislation of this type or not I do not know.

May I make one other observation? You have in the House today a Small Business Committee composed of about 9 or 11 Members of the House. We have a staff which is constantly working here and is always willing to accept from Members of the House or their constituents their problems, and immediately go to work on them; and I know they have been very successful in solving many of them.

I do not know just exactly what should be done, but I am hopeful that when the hearings are concluded we can come up with either some constructive legislation or recommendations which can be followed through carefully. These matters have to be constantly probed, because you just cannot take what the outsiders are saying. The Congress itself has a responsibility to constantly follow through and see what is going on within the various departments of Government, pointing these things up. Maybe if we do have someone we can point them up to, to indicate them more impressively than giving them just to the administration in power that may be the way.

I think that the time is well spent, Mr. Chairman, in the consideration of these different bills before the committee here today.

Mr. OSMERS. Mr. Chairman?

The CHAIRMAN. I might add for the record that the hearings and reports of the subcommittee have all been incorporated in the record. Mr. RIEHLMAN. Very good.

The CHAIRMAN. That is why we were not devoting so much time to the question of the necessity of Goyernment getting out of business. I have assumed all along that is axiomatic; they have not any business there.

Mr. RIEHLMAN. I agree.

Mr. OSMERS. That is very true on that particular theory, if it were just that way. If that were put as a resolution on the floor of the House it probably would carry unanimously. The difficulty arises, Mr. Chairman, from the fact that in applying it in detail, for example, there might not be a need for a commissary in the middle of the city of Washington, but out at some desert location there might be a need for the Government to engage in the grocery business. I just point that out as an example of how conditions and circumstances vary


I was very much impressed by what Mr. Pilcher, a member of the committee, said this morning about turning some of these supply matters over to predatory private interests. We must always have the ability and maintain the sovereignty of the Government to control any kind of situation of that sort.

The appropriating machinery of the Congress, which we may not like to admit, is geared up to appropriating $5 billion or $10 billion a year. When we have budgets of $70 billion or $80 billion a year some of the picture is painted in rather broad strokes. Even members of the Appropriations Committee itself, let alone the average Member of Congress, are not quite certain exactly where all the money is being spent.

Mr. Chairman, at this time I would like to put into the record 1 or 2 small items.

Mr. Taber, the chairman of the Committee on Appropriations, has written to me:

I am glad to see the introduction of H. R. 8832, to limit the activities of Government in competing with private enterprise. I shall be glad to support the bill.

We also have a telegram from Herbert Hoover. We hoped that we might have Mr. Hoover testify here. He has wired to Chairman Hoffman it will be impossible for him to be here, but that he has the subject under exhaustive investigation by three of the task forces of the Hoover Commission, which is now reviewing the activities of the executive branch.

Also, we have received statements from the Chamber of Commerce of the United States. (The information is as follows:)

STANFORD, CALIF., July 13, 1954. Congressman CLARE HOFFMAN, Chairman, Government Operations Committee,

House of Representatives, Washington, D. C.: I have made important committments which will keep me on the west coast until August 15th and therefore I wish to be excused. This whole subject is under exhaustive investigation by three of our task forces and their members do not wish to make any statements until the investigation is completed in the late autumn, I hope that after that time we can be of real service to you.



Washington, D. C., July 13, 1954. Hon. CLARE E. HOFFMAN, Chairman, Government Operations Committee,

New House Office Building, Washington, D. C. DEAR MR. HOFFMAN: As we advised you Monday, Clem Johnston of the national chamber is in the Far West this week and therefore unavailable for testimony on bills relating to Government competition with business.

I am attaching a statement on this highly important subject, which I would appreciate having you place in the record of your current hearings. Cordially yours,


STATEMENT OF THE CHAMBER OF COMMERCE OF THE UNITED STATES The Chamber of Commerce of the United States is strongly opposed to Government competition with private enterprise and recommends enactment of legislation along the lines of H. R. 8832, H. R. 9834, and H. R. 9835.

The chamber members have long studied the problem created by the Government's commercial and industrial type activities which compete with private taxpaying enterprise. They have gone on record with a general statement of policy which is attached as appendix A.

The commercial and industrial type activities of the National Government cover a wide range of products and services, many of which should be discontinued. Your Subcommittee on Intergovernmental Operations has made a significant contribution by compiling an excellent list of case histories in this field.

The advantages to the Government of divesting itself, where feasible, of commercial and industrial type activities are manifold.

First, the Government will receive compensation as its industrial facilities are sold. This will contribute toward reducing the national debt and taxes.

Second, once in private hands such facilities would become subject to taxation. To the extent that decreased Government competition allows private business to expand, the tax base will be expanded.

Third, there will be indirect savings to the Government. For example, redui tions in overhead costs will result as a Government agency divests itself of these enterprises. Therefore, additional budgetary savings resulting from reduced payrolls, etc., will be realized.

While there are many business-type activities that the Government must, of necessity, continue to operate (for example, housing and other services on some military and other Government installations that are remote and not easily accessible), there are many other areas where curtailment of such activities wouli reduce Government expenditures and provide room for the expansion of taxpaying private business.

The national chamber believes that each of the bills-H. R. 8832, H. R. 9834, and H. R. 9835—incorporate features which are to be commended and, if properly combined into a single bill would help to resolve this problem.

With regard to H. R. 8832, which calls for establishing an Anti-Government Competition Board whose membership would be the Secretary of the Treasury, the Secretary of Commerce, the Director of the Bureau of the Budget, and the Comptroller General, the national chamber believes that the bill should be amended, as follows:

(1) The organization should be referred to as the Anti-Government Competition Council;

(2) The Council should be comprised of five members. The fifth member should be the Secretary of the Interior;

(3) The Secretary of Commerce should be Chairman of the Council and in his absence, the order of protocol for chairman should be Secretary of Treasury, Secretary of the Interior, Director of the Bureau of the Budget, Comptroller General. Were conditions such that none of the above members could attend a Council meeting, then such meeting should be postponed until one of the above designated members could sit as chairman.

The national chamber further believes that section 1 should be amended, as follows:

The President should require through an Executive order that:

1. each of the executive departments establish a program of examination of each of its commercial and industrial type facilities. Initially, this would require each executive department to compile a complete inventory of all of its commercial and industrial type facilities;

2. the Bureau of the Budget establish a program of review and analysis of each of the programs of the other executive departments, and that such reviews and analyses be made available to the Anti-Government Competition Council for decision as to the continuance or discontinuance of each Government commercial type facility;

3. the Bureau of the Budget set forth appropriate criteria for the guidance of each of the executive departments as to

(a) the policies of the administration with regard to the continuance and discontinuance of commercial type facilities,

(b) a reasonable definition of what is considered to be a commercial or industrial type facility,

(c) a tentative schedule of work progress to be followed by each of the executive departments. The national chamber strongly endorses section 9 of H. R. 8832 requiring that such an Anti-Government Competition Council submit a report of its operations every 6 months to the President, the President of the Senate, and the Speaker of the House of Representatives.

We are presenting herewith two additional appendixes:
Appendix B: Government competition: Problem and perspective.
Appendix C: Reprivatizing public enterprise.
(Exhibits B and C in committee files.)

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