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"Weigh this bill carefully. It would vastly increase Presidential power, diminish the power of Congress. Many Government business programs are based on legislation passed by Congress. If they are to be eliminated, Congress should kill the underlying legislation. It could mean, too, increased costs, reflected in higher taxes. Aluminum scrap people last year urged the military to get out of scrap processing. But investigation showed Government was doing the job for far less than private industry could. Are we willing to risk these dangers at this time?”
This poll reached at least 100,000 independent business and professional men. It was nationwide in its coverage. The result of the poll, as disclosed in mandate No. 204, was: 80 percent for; 17 percent against; 3 percent no vote. I would also like to have this made part of the record of the hearing.
During war emergencies there may be some justification for the Government to actively engage in the business world. However, such operation should be confined to an emergency and when the emergency is over the Government's operation in business should cease.
In most instances the real victims of Government in business are the independent producers and independents in the distribution field.
We have watched the development of the post exchange and ships' stores by the armed services. They have their rightful place to serve the armed services under certain conditions, but when the operations of these post exchanges and ships' stores go beyond this it results in further inroads of the Government in businessall tending to reduce the position of independent business.
The above example, to a degree, is miniature compared with the overall effects of Government operation in business. Whether the operation is large or small it should be curbed or eliminated.
We have watched another example. We have been continually petitioned by many members of the federation as to the alleged unfair practices of the Rural Electrification Administration where it appears from the reports we receive that certain practices are being pursued by that agency, direct or indirect, tending to eliminate independent businesses in certain commodities.
Mr. Chairman, these are facts as reported from the grassroots—our nationwide membership, and due to the direct nationwide vote of our members, as quoted above, we urge the approval of the legislation.
Mr. OSMERS. We have a statement giving support from Howard S. Miller, a Member of Congress from Kansas. (The information is as follows:)
HOUSE OF REPRESENTATIVES,
Washington, D. C., July 10, 1954. Hon. FRANK C. OSMERS, Jr.,
House of Representatives, Washington, D. C. DEAR COLLEAGUE: I am in hearty sympathy with the overall provisions of H. R. 8832. In my opinion there should be no Government competition in private business except for the purpose of preventing monopolies, and then limiting to the accomplishment of that purpose. I thank you for having called my attention to this bill. Very truly yours,
HOWARD S. MILLER, Member of Congress. Mr. Osmers. We have another statement from Congressman Dondero of Michigan.
The CHAIRMAN. Why not put them all in the record?
Mr. Osmers. I hope you will have them all included in the record. I just mention those from whom they come. (The information is as follows:)
CONGRESS OF THE UNITED STATES
HOUSE OF REPRESENTATIVES,
Washington, D. C., July 12, 1954. Hon. FRANK C. OSMERS, Jr., House Office Building,
Washington 25, D. C. DEAR FRANK: Your letter of the 9th has been received in regard to H. R. 8832. The bill proposes to take the Government out of competition with its citizens wherever that is possible.
I am wholeheartedly in favor of that principle. Private enterprise and private capital built this country, not Government ownership nor Government control. Let us keep this cardinal principle in the fabric of our Republic. It is timetested and has never been found wanting. Sincerely yours,
GEORGE A. DONDERO,
Member of Congress. (Mr. Osmers produced and submitted for the committee's consideration, telegrams and letters, some addressed to him, some to the chairman. The wires and the letters will be considered as a part of the record, but inasmuch as it seems to be axiomatic that the Government should not compete with its taxpaying citizens, and as there is need for economy in legislative as well as in executive procedures, we will simply state that these wires and letters convey, in substance, the thought that the writers vigorously protest competition by the Government. An examination of communications received indicates that at least three average-sized volumes would be needed if, as is sometimes done, these protests were printed in full. The wires and letters were received from those named below, and perhaps from some others:) Steve Stahl, coordinator, National Conference of State Taxpayer Executives,
Oklahoma City, Okla. Marvin Pincus, president, Niagara Apparel Co., Inc., 77 Swan Street, Buffalo,
N. Y. Stanley J. Cummings, executive secretary, National Association of Uniform
Manufacturers, New York, N. Y. Ralph W. Sanborn, general counsel, Contract Carrier Conference of Ohio Truck
ing Association, Columbus, Ohio. John C. Stafford, manager, Public Information Department, Rockford Chamber
of Commerce, 100 West Jefferson Street, Rockford, Ill. James G. Cross, president, Bakery and Confectionery Workers' International
Union of America, Chicago, Ill. Charles M. Isaac, executive vice president, American National Retail Jewelers
Association, New York, N. Y. H, T. Moland, general manager, Moland Bros. Trucking Co., Duluth, Minn,
Mr. OSMERS. That covers the statements I have here.
Mr. Chairman, I know that the staff has received a very interesting communication. It is addressed to Mrs. Harden from the American Institute of Laundering.
The CHAIRMAN. We will summarize those. I can see no necessity for putting them all in, because, as I stated before, unless you think there is some necessity for introducing evidence into the record showing the unsoundness of the policy of the Government engaging in business in competition with private business, that issue, I assume, is over the dam.
Mr. OSMERS. I am afraid that we should. For example, take the communication which I hold here, from the American Institute of Laundering. The Government is now operating 311 laundries.
The CHAIRMAN. That is nothing. Next week it may be 400.
Mr. OSMERS. That is right. That is the direction in which it is going, Mr. Chairman. Certainly a communication like this, which contains new material and directly quotes amounts and places and so on, that we do not have, should go into the record.
(The information is as follows:)
AMERICAN INSTITUTE OF LAUNDERING,
Washington, D. C., July 12, 1954. Hon. CECIL M. HARDEN, Chairwoman, House Government Operations Subcommittee,
Washington 25, D. C. DEAR MRS. HARDEN: The committee staff very kindly notified this office that you would like a statement from the institute to be included in the record of your 2- or 3-day hearings scheduled on the subject of Government competition with private industry.
The American Institute of Laundering is the national trade association for the power laundry industry and over a period of years this association has cooperated with other national trade associations of our sister industries, such as linen supply, industrial laundries, diaper service laundries, dry-cleaning plants, and rug-cleaning plants; together these industries form the textile maintenance industries.
Under date of June 5, 1953, this office directed a letter on this same subject to your attention and we hope this letter of June 5, 1953, has become a part of the committee's record on this subject.
While the latest figures put out by the Bureau of the Census on the census of the service trades dates back to 1948, projecting these Government figures with other figures from our industry indicates that in the year ending December 31, 1953, there were approximately 6,400 power laundries with an annual sales volume of $1,265 million and approximately 311,000 employees. These laundries comprise power laundries such as the regular commercial laundry, the linen supply laundries, and the industrial laundries, but they do not include diaper-service laundries, hand laundries, Chinese laundries, or the self-service laundries. The figures for the laundries above are those types of laundries with which the Government laundries are in competition.
From the above figures you can see that the average laundry does from $200,000 tp $250,000 of business a year or from $4,000 to $5,000 a week and they do it with approximately from 40 to 50 employees. The plant investment in such a laundry would be just under $100,000.
As to the extent of Government-owned and operated laundries, we have the following tabulations in this office:
Laundries Veterans' Administration.
178 Public Health Service--
7 Federal Bureau of Prisons.-
26 District of Columbia Reformatory
32 Air Force.
18 Interior Department, on Indian reservations ..
311 This figure is entirely misleading, however, because it does not include the socalled exchange or PX laundries operated by the military. The Navy alone to our knowledge has more than 50 of the exchange laundries in operation and almost as many are in operation by the other military services. These, of course, operate not on appropriated funds but on revolving funds, but they are nonetheless in competition with commercial enterprise and at some time or another appropriated funds were necessary to set up and put in operation these laundries. Therefore, our total estimate of Government-owned laundries in operation in the continental United States, not including Alaska, is approximately 400 laundries. Assuming that these laundries are average laundries, this would indicate an investment of some $40 million and an annual sales at commercial prices of some $80 million. While we do not have any figures in this office as to the total amount of income taxes collected from the operation of commercial laundries, certainly the addition of some $80 million a year to the annual sales of commercial plants would provide a substantial income-tax revenue for the Federal Government.
Utilizing the figure of some 400 Government laundries would indicate that the Government has about 6 percent as much capacity as commercially owned and privately operated laundries in the country. We are confident that the excess capacity generally in the country is very much in excess of this military load although at individual locations the situation might vary. So far we have had very few instances where sufficient commercial capacity has not been available to handle the Government loads usually on a 1-shift basis and most certainly on a 2-shift basis.
We realize there are certain areas where Government-operated laundries are necessary, such as where clothes are contaminated at Atomic Energy Commission installations or at the Government leprosarium. There may be other types of contamination which could not be handled by commercial plants. We also recognize there is a problem in disciplinary institutions of providing occupational therapy for the inmates. However, these cases are relatively small in number and this volume of business is not of concern to the commercial laundry plants in the country.
We understand also that there are some laundries at Government-owned ordnance plants which are operated by private companies for the Government.
The listing of the number of laundries operated by the various Government agencies shown above does not include to our knowledge inactive plants which are not currently in operation. We do not know how many of such plants there are which are owned by the Government but are presently shut down, nor do we know whether these plants have an investment in equipment which is idle and which might be transferred to other Government-operated plants.
If your committee will refer to our previous letter of June 5, 1953, on this subject you will find a rather detailed recitation of the efforts we have made in the past, particularly with the military, to prevent this Government competition with our industry. In recent months we feel that the military regulations calling for a reexamination of their facilities, such as laundry and dry-cleaning plants, is a big step toward eliminating Government competition with industry and particularly we are impressed with the fact that the military has finally realized that there are a lot of elements of cost in the operation of Government-owned laundry facilities which heretofore had not been taken into consideration when estimating costs.
Again we might state that there is, of course, an extra cost to the taxpayer by having many Government-owned laundries operated by the individual departments, supervised by duplicated overhead management groups in the various department headquarters. Such laundries as the Government may of absolute necessity be compelled to operate seemingly could be grouped under one agency, such as the General Services Administration, to provide a corresponding service in overhead, purchasing, and inventory.
We respectfully request that this letter be made a part of the committee's hearings. We thank you most sincerely for the opportunity of submitting this statement. Respectfully yours,
Manager, Washington Office. The CHAIRMAN. I agree with the witness this morning; it is just absolutely impossible to find the extent of the Government's holdings in private business or its payroll. I asked Mr. Ward to obtain information for us, if he could-and I guess he has not been able to do iton the amount of tax that the Government loses, where it engages in business, tax not only from the business corporation but from the workers who would pay the income tax. If we could get some figures on that to show the extent of this thing it would help.
Mr. OSMERS. I was just glancing at this letter.
The CHAIRMAN. We will put them all in. If you want to read parts of it it is all right.
Mr. Osmers. I just thought it would be interesting to point out that there are 6,400 power laundries with an annual sales volume of $1,265 million, and they employ approximately 311,000 employees, which makes it one of our largest service industries.
The CHAIRMAN. If we could have the amount of income tax, which of course we cannot get, that those workers would pay in, it would be helpful. We could then get to the extent of the Government's operations.
Mr. OsMERS. They make the statement here, and again, as the chairman has pointed out, it is difficult to prove out these things absolutely, but they estimate that the Government laundry work has the unbelievable annual volume of $80 million a year.
That makes the United States Government probably the largest launderer in the United States, and it seems to me that this type of letter should be included in the record, and I would like to have it placed in the record, as written.
The CHAIRMAN. All right.
The CHAIRMAN. Are there any further questions from any member of the committee?
Mr. HOLTZMAN. Yes, sir, Mr. Chairman, I would like to ask one or two questions.
The CHAIRMAN. You may proceed.
Mr. HOLTZMAN. Mr. Griffith, I think we cau agree that wherever possible we should get Government out of business, but frankly, I am not sure it wouldn't be better to get business out of Government.
Now, from how you spoke of the New York City transit system, I take it that you are opposed to subsidies.
Is that not so?
Mr. HOLTZMAN. I take it that your opposition would apply as well to airlines, steamship companies, newspapers, and railroads; is that correct?
Mr. GRIFFITH. As subsidies, yes, sir.
Mr. HOLTZMAN. You then said, and I did not quite get the inference, that you could suggest where to send these people on the subways. Just what do you mean by that?
Mr. GRIFFITH. May I withdraw it, and retract that?
Mr. HOLTZMAN. That's too bad because the next question would be how shall we send them-by subway, by air, or by boat?
Mr. GRIFFITH. Yes, sir.
Mr. HOLTZMAN. You also said that the very people who used the term “big business” use it invidiously, and that they are the same type of people who undoubtedly feel that there is a better system than the American system.
What did you mean by that?
Mr. GRIFFITH. Well, Mr. Chairman, I do not want to get on this subject, because it has been well aired before another committee of the Congress, but I believe there are people in this country who very probably desire to stir up strife and differences of opinion, and divide us, and I believe that the emphasis of the threat of big business carries connotations of soulless corporations, and soulless individuals, who have no other desire than to get the almighty dollar, by fair means or foul.
I would like to say, Mr. Chairman, that in my personal experience in dealing with business I have not encountered that in any line of so-called big business.
I believe that those statements are made for the purpose of causing dissension and distrust among us.
Mr. HOLTZMAN. In other words, anybody who would disagree with you is committing some unkind act to the country; is that correct?
Mr. GRIFFITH. No, sir.
I think it is time in this country that we accepted the notion that people can disagree without being charged with disloyalty and I