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have analyzed this bill, it may be they have some suggestions, recommendations for amendments, or corrections or deletions, and things of that kind, which would be helpful to the committee.
The CHAIRMAN. Perhaps a word of explanation is necessary ir view of what was said by the gentleman from California and the gentleman from New Jersey, Mr. Osmers.
When this matter first came to the attention of the committee, I referred it to the Harden subcommittee, which, as has been stated, held exhaustive hearings.
Then, and before I learned from the leadership that no action would be taken on legislation at this session, Mr. Osmers suggested the further hearings. I stated that, because I thought the subject had been exhausted by the Harden subcommittee, the full committee should not have a hearing as to the details of these different businesses in which Government is in competition with private industry, but that they get a summary or table of contents of what had transpired before, and then take up the bills and report.
In view of the fact that the leadership told me there probably would be no legislation, and in view of the statement of Mr. Osmers that he hopes to get legislation in any event, here we are. We are not duplicating the work of the Harden subcommittee at least that was not my intention--but acting as a full committee on proposed legislation. The difficulty in that situation grows out of the fact that, in addition to the original bill introduced by Mr. Osmers, Mr. Osmers has, after consultation with the executive departments, introduced another bill. On July 8, I introduced two bills that had been on my desk for many months, but had been left tbere because we hadn't reached the point where we were considering specific legislation.
We have this article, and I want to include it in the record, from the New York Times, showing what the executive department is doing along the same line.
(The article referred to is as follows:)
UNITED STATES Will Cut ROLE AS ENTREPRENEUR-WHITE HOUSE MOVING TO TURN OVER TO PRIVATE BUSINESS MANY FEDERAL ENTERPRISES
By Anthony Leviero
(Special to The New York Times) WASHINGTON, July 11.-Federal agencies spend billions of dollars yearly doing a lot of things, like roasting coffee and building battleships. Now the Eisenhower administration is planning to turn many of these enterprises over to private industry.
The plan has some highly attractive aspects. One project heard in Congress would apply all revenue from liquidated capital assets to the reduction of the national debt.
The Federal payroll and budget would be reduced, and tax revenue would be increased by any large scale reduction of Federal commercial-type services and manufacturing operations.
Private industry could perform most of the operations more cheaply. So say the proponents of this concept, which is making headway in these ways:
A Presidential directive is in the drafting stage that would require all Federal departments and agencies to make an inventory of commercial-type operations that might be performed more economically in private hands.
A subcommittee of the House Government Operations Committee will begin hearings Wednesday on a bill to establish an antigovernment competition board, and on other measures that would authorize the President to liquidate commercialtype enterprises.
The Defense Department already is pioneering the plan. It has completed a preliminary inventory of thirteen services and operations of a commercial nature, such as bread baking and laundering, that are being performed by the Army, Navy, and Air Force in 237 defense establishments within the United States. It also has called for an inventory of eighteen other operations that could be performed by commercial concerns adjacent to the posts, camps, and stations.
The Commission on Organization of the Executive Branch of the Government, headed by former President Hoover, has set up a subcommittee to study business enterprises in the Defense Department. Joseph B. Hall, president of the Kroger Co., a food chain, has been appointed chairman. He is familiar with the task, being head of a Defense Department committee on the same subject. He also is a member of the Defense Secretary's Committee on Departmental Fiscal Operations.
Comparatively little actual progress has been made in getting the Government out of business, but the plan is in accord with President Eisenhower's philosophy of having the Federal Government do only those things that private industry and local governments cannot do by themselves. Hence some officials expect the movement to gain momentum as the implications of it are better understood.
So far as the Government as a whole is concerned, the concentration on the project right now is in the Budget Bureau. Rowland R. Hughes, the Budget Director, is working on a directive, or Presidential order, that would require all Federal agencies to submit an inventory of their commercial-type services.
This directive would produce a comprehensive survey of an enormous number of enterprises and ultimately would require the agencies to justify their retention of the operations or yield them to private industry.
The proposal still is in the early stages in the Budget Bureau. But as now contemplated, it would spell out a basic policy relating to Federal competition with private enterprise, define "commercial-type activities,” set standards for rejection or liquidation of the enterprises and establish in the Budget Bureau the machinery for reviewing the governmentwide program.
In the absence of a comprehensive survey, there is no factual basis for an estimate. But Senator Robert C. Henderickson, Republican of New Jersey, told the Senate recently that estimates of the sale value of the Government's commercialtype enterprises to private owners varied from $25 to $40 billion.
Another estimate is that in the Defense Department alone the gross annual sales of all military commercial and industrial-type operations is about $10 billion.
There is no estimate of the capital investment behind this figure, but the $10 billion sales estimate is of the magnitude of the sales of the General Motors Corp. last year. Many of the projects under prospective attack had their genesis in depression
For instance by 1945, under the impact of the war, there were 101 separate Government corporations with gross assets of $299,600,000,000. About 80 of the corporations are still in existence.
Most of them are looked on with disfavor by the General Accounting Office because it cannot make these corporations repay an illegal or improper expenditure, a power it holds over Government departments and agencies.
Some points of progress already made by the Eisenhower Administration are:
Liquidation of the Reconstruction Finance Corporation, which has been carried out by the Treasury Department.
Disposal of tin and rubber facilities (but President Eisenhower had to create a new Government corporation to do this).
The New York Naval Shipyard at Brooklyn closed its uniform factory last year, apparently influenced by agitation in some quarters to turn over the whole navy yard, regarded as the largest manufacturing facility in New York State, to private industry.
Coffee roasting in the Armed Forces has been reduced somewhat.
Paint manufacturing has been reduced to a special formula "bottom paint" for ships. Some sawmill operations have been eliminated.
WATERWAY COMPANY Sold One other notable action was the sale of the Inland Waterways Corporation of the Commerce Department to the Federal Waterways Corp., a subsidiary of the St. Louis Shipbuilding & Steel Co., for $9 million
This progress is only a drop in the bucket, however. The preliminary inventory in the Defense Department is fragmentary, but here are the operations it showed in the 237 establishments:
Aluminum sweating (salvage of aluminum), 9; scrap metal baling, 29; clothing factories, 2; coffee roasting, 5; motion picture studios, 5; paint factories, 2; ropemaking, 1; sawmills, 3; bakeries, 74; clothing reclamation, 6; furniture repair, 3; ice cream manufacturing, 3; and laundries and dry cleaning, 95.
The Defense Department has issued a directive requiring an inventory of these 18 services and manufacturing operations.
Chain, acetylene, automotive repair shops, cafes and restaurants, caustic soda, cement mixing, chlorine, cobbler shops, ice plants, office equipment repair shops, oxygen and nitrogen, power line construction, power plants, tire retreading, tree and garden nurseries, wood preservation and argon and freon manufacturing.
The problem of divesting the Government of commercial-type operations is not simple, even with an administration that is more than eager to take industry's guidance in implementing its plan.
For instance, the single rope-making plant in the Federal service is in the Boston Navy Yard. It is the famous "ropewalk” established in 1820. When the suggestion was first made that it be given up, Members of Congress from that area rose in protest.
Other operations like bread-baking will continue to be done by Federal establishments in remote areas or in places where private concerns cannot do the work cheaper.
However, the project is getting carnest study with the aim of economizing, reducing espenditures, increasing revenue and releasing more military manpower for combat-type assignments.
The CHAIRMAN. I had thought there seemed to be no dispute or no opposition to the broad, general principle that the Government shouldn't be in competition with its taxpayers in private business, and that our difficulty was in finding just how we might remedy that situation.
So far as I am personally concerned, I don't care whether we hold hearings for 5 more minutes. If anyone desires to make a motion that the hearing be discontinued until next session, it is all right; but I would like to ask that all Republicans be here to vote on the motion.
Mr. CONDON. Mr. Chairman, I won't make that motion. I raised the problem--I still feel we are impinging on the work the Harden committee has done.
The CHAIRMAN. Pardon me, if you will let me interrupt—and on the work of the Commission which was created here by the Congress this year.
Mr. Condon. The Intergovernmental Relations Commission?
The CHAIRMAN. Yes, and also on the work the executive department says it is trying to do.
Certainly we are to a certain extent duplicating it.
Mr. CONDON. And I can say, from the list of witnesses, we are going into paint, cordage, milk and PX's, commissaries and all the other things the Harden committee has been over; but I do wish the witnesses here would follow out Mr. Fountain's suggestion and at least address part of their remarks not to the broad philosophy, but to the specific legislation which is pending before us, so that we can see what they think is a means of correcting it in terms of a bill that we can all look at. Mr. Dawson of Illinois. Would the gentleman yield? Mr. CONDON. I vield.
Mr. Dawson of Illinois. Knowing, as we do, how our chairman is very thorough in the things he does, he waited upon the leadership before these hearings were set, and the leadership notified him that there would be none of this new legislation considered at this session of the Congress.
Now, Mr. Osmers' statement was made that he would endeavor to see that the leadership did consider this matter.
You asked the question whether or not anything had been done since that statement was made to give us a different view of the attitude of the leadership, and that question hasn't been answered yet. So, the statement of our chairman still stands, unchallenged, that this matter will not be considered at this session of the Congress.
Then, in the light of that, with these various Congressmen as busy as they are, I cannot see, for the life of me, why these matters should not be referred to the committee that had been studying this matter of the Government in business instead of bringing as many Congressmen here every day, taking them from their various duties and why it is necessary to do that this late in the term when we are expecting to adjourn, I understand from the leadership, by the 31st.
The CHAIRMAN. Will you yield right there, please?
The CHAIRMAN. The fault is all mine because I have complied, to a great extent, with the individual wishes of the members. I haven't been arbitrary enough.
Mr. DAWSON of Illinois. You haven't been considerate of the people. Why should we be compelled to come here and sit and listen to this matter that cannot be determined?
The CHAIRMAN. There is an answer to that. I only yielded to those who asked me, and apparently the others didn't ask. If you will ask for something, I will be glad to try to help. Moreover there is now a chance that a bill be through and it is my desire to make the effort to get a bill through the House.
Mr. Dawson of Illinois. I think this is a matter that should be referred to the regular subcommittee that has done as fine a work as any subcommittee I have ever seen in the history of this Congress. I think they have gone into this matter exhaustively. I have read the reports they have put out, and I think, out of courtesy to that subcommittee, any legislation on the subject matter that has been before them for the length of time they have been engaging in it ought to be referred to that subcommittee.
The CHAIRMAN. To do what?
Mr. Dawson of Illinois. For study, especially since it isn't going to the floor and nothing can be done on the legislation at this session of the Congress.
I make that as a suggestion.
The CHAIRMAN. We didn't know that until just now, when this matter first came up.
Mr. JUDD. Can I contribute a nickel's worth?
I am less busy now than I have been for the past 3 or 4 months. I would like an opportunity to sit in on these hearings because the major legislation of my other committee has now been taken care of. I would like to go ahead with the hearings. I am learning a lot.
The CHAIRMAN. Ilave you read the Harden subcommittee hearings? Mr. JUDD. No; I haven't.
The CHAIRMAN. If you read those and read the reports, you will have a comprehensive view of the issue.
Mr. Dawson of Illinois. Exactly.
The CHAIRMAN. My thought when Mr. Osmers came to me and advised it was his purpose to get out a bill was that this matter was coming up and would need the attention of the full committee.
Isn't that right?
The CHAIRMAN. And as the preliminary work had been completely done by the Harden subcommittee, I said, “Let's put it in one package and do it."
Mr. Judd. May I ask another question?
The CHAIRMAN. Certainly. Don't ask permission. Just do as everybody else does, go ahead.
Mr. JUDD. Do the chairman and the members of the Harden subcommittee prefer that the full committee not hold these hearings? Are they opposed to this? Do they feel that they can handle it better or adequately?
The CHAIRMAN. I can't speak for the Harden subcommittee, but when a bill comes up, as Mr. Osmers' did, for final action, of course, it has to come before the full committee. I can see no reason for holding further subcommittee hearings because they have gone over the subject exhaustively. They have a whole library of information. Moreover the basic issue is very simple. Shall the Government, using tax dollars—it has no others-compete with the taxpayers upon whom it depends for existence? Mr. RIEHLMAN. Mr. Chairman, may I be heard? The CHAIRMAN. Yes, sir. Mr. Riehlman. If we are going to have a problem of discussing what we are going to do in the committee and what action it is going to take, I move we go into executive session.
Mr. İKARD. I second the motion.
The Chairman. Unless there is an objection, we will go into executive session.
Much as I regret it, we have to ask our witnesses to leave the room.
Mr. Dawson of Illinois. I did want to ask Mr. Emmons some questions later on as to his thinking; but if it is inconvenient to him to remain
Mr. EMMONS. Do you want me to stand by, Mr. Chairman?
(Whereupon, at 10:50 a. m., the hearing was recessed, the committee meeting in executive session.)
(The hearing reconvened at 11:40 a. m., Hon. Clare E. Hoffman presiding.)
The CHAIRMAN. The committee will be in order.
Mr. BROWNSON. Inasmuch as Mr. Emmons has been excused, may I ask the staff if they will write to Mr. Emmons and ask him one question. I also ask consent to have the question and answer included in the hearings.