9. SHARES OF ASSETS, VALUE ADDED, AND PROFITS OF MANUFACTURING CORPORATIONS, CLASSIFIED BY VALUE OF ASSETS, TABLES Nos. 825, 826, AND 827, STATISTICAL ABSTRACT OF THE UNITED STATES, 1975 (JULY 1975)

NO. 825. LARGEST MANUFACTURING CORPORATIONS-SHARE OF ASSETS HELD: 1948 TO 1973
[In percent. Corporations ranked on value of assets in each year. Prior to 1969, excludes newspapers]

1221

17 23

27

30

1965 1968

1 Data not comparable with earlier years due to internal changes.

Source: U.S. Federal Trade Commission, Bureau of Economics, unpublished data.

2243

30

37

1947 1954 1958 1962 1963 1966 1967

49.1 60.8

NO. 826. LARGEST MANUFACTURING COMPANIES-SHARE OF TOTAL VALUE ADDED BY MANUFACTURE: 1947 TO 1972

In percent. 1962, 1966, and 1970 based on annual survey of manufactures, other years on census of manufactures. Largest companies are those which were largest in each of the specified years in terms of value added. See also "Historical Statistics, Colonial Times to 1970," series P 177-180.]

Company rank

Largest 50 companies..
Largest 100 companied.
Largest 150 companies.
Largest 200 companies..

1969 1970

35

48.2 60. 1

24

32

36 40

2334

25

37

41

48.5 48.9 47.6
60.4 61.0 60.0

3332

1971

25

38

42

Source: U.S. Bureau of the Census: "Concentration Ratios in Manufacturing Industry: 1972."

(89)

1972

1970

23345

1973 1

38

NO. 827. CORPORATE MANUFACTURING ASSETS AND PROFITS, BY ASSET SIZE; 1960 TO 1974
[Corporations and assets as of end of 4th quarter; profit for entire year. For comparability of data from year to year
see source for 4th quarter, 1974. Dollar amounts in millions]

Source: U.S. Federal Trade Commission, “Quarterly Financial Report for Manufacturing Corporations."

10. STATEMENT OF RICHARD J. HANSCHEN, PARTNER, NEW BUSINESS RESOURCES-VENTURE CAPITAL PARTNERSHIP, DALLAS, TEX., ExCERPTS FROM JOINT HEARINGS BEFORE THE SELECT COMMITTEE ON SMALL BUSINESS AND THE SUBCOMMITTEE ON FINANCIAL MARKETS, COMMITTEE ON FINANCE, U.S. SENATE, 94TH CONGRESS, 1ST SESSION, JUNE 17, 18, AND 19, 1975

SMALL BUSINESS TAX REFORM

JOINT HEARINGS

BEFORE THE

SELECT COMMITTEE ON SMALL BUSINESS

AND THE

SUBCOMMITTEE ON FINANCIAL MARKETS

OF THE

COMMITTEE ON FINANCE
UNITED STATES SENATE

NINETY-FOURTHI CONGRESS

FIRST SESSION

ON

STUDY OF THE BUSINESS TAX STRUCTURE AS
IT AFFECTS SMALL BUSINESS

JUNE 17, 18, AND 19, 1975

Printed for the use of the Select Committee on Small Business and the

Committee on Finance

STATEMENT OF RICHARD J. HANSCHEN, PARTNER, NEW BUSINESS VENTURE CAPITAL PARTNERSHIP, DALLAS, TEX.

RESOURCES

Mr. HANSCHEN. Thank you, Mr. Chairman, and Senators.

My remarks, I hope, will not duplicate too much of Dave's, and they are more aimed at the specific cases of my own activities in venture capital.

In 1969, we started Mostek as a new company based on the introduction of new processing technology, ion implantations, for manufacturing and processing a completely new form of semiconductors. Since that time, Mostek has paid $11 million in corporate taxes, has created 2,640 jobs in the United States, and those employees pay over $4 million in income taxes.

It takes, in our company, approximately $16,000 of assets per employee to generate the volume of business that we do. During that same time, no dividends have been paid to any of the stockholders, and I think probably 90 percent of the original private placement stockholders are still intact and have not realized any gains on their positions.

And as a specific way of amplifying Dave's remarks that you must be very patient investors in venture capital, these are not quick opportunities to do what we call a rollover type of investment. Probably more important, Mostek, through this process, was the very first company in the world to put all of the circuits necessary for a calculator on one single little chip of silicon.

This technological advance sharply reduced the labor content of calculators and other similar electronic equipment and was the keystone for the U.S. industry to marshal their forces and reestablish their dominant picture in the worldwide electronics industry.

If you will recall, in the beginning of the 1970's, there was a great concern that we were losing our industry to other countries of the world that had lower labor, and I can say, I think, that we have had a significant contribution.

Now, if you go back to technology and its impact---I will just review in time a little bit. Lee DeForest, with his invention of the vacuum tube, and Milo T. Farnsworth innovating into the cathode ray tube,

created the TV industry, and of course, the tube created the radio industry--that is quite well known.

Some of you are familiar with the contributions of what was then a new company in the early 1950's, Texas Instruments, a company I spent a dozen years with, in bringing the transistor from a laboratory experimental level to commercial reality. The impact on industry during the 1950's created the central computer industry and the military instrumentation industry, which was known then as the black box industry. And they put these instruments together to form avionics packages and missile packages, made possible things like the Minuteman Missile.

Then the further invention by Texas Instruments of the integrated circuit brought about the electronics being simplified so it pervaded all of industry.

But new industry such as Dave has been mentioning, the minicomputers, made by new companies, names that were not heard of before-Ken Olson starting Digital Equipment, Data General, Computer Operation, Modular Computer, SEL, possibly as many as 20 other companies that I could mention in the United States who have not only done the same thing that we talk about in Mostek, creating jobs and taxes, but minicomputers are probably the major factor in improving the productivity of our industry.

One of the most exciting things in medical electronics just introduced is based upon minicomputer technology, and it is this new brain scanner and body scanner through X-ray techniques that put it all in electronic equipment, so that a surgeon can quickly survey a patient. It is probably the most radical advance in medical aids for surgeons that has taken place in the last two decades.

Senator BENTSEN. Mr. Chairman, may I interrupt for a moment? One of the frustrations of a Senator is having to be at two places at one time.

Mr. HANSCHEN. I understand, sir.

Senator RENTSEN. I am going to have to go, although I find your statement and the others most interesting. I am going to take them with me and study them. I appreciate your comments about my legis lation. And let me say further that Senator Nelson and I and the rest of us did a tremendous amount of work on that pension bill, and I have a deep concern with respect to your point about the prudent man rule. I think you are going to find people just feeling free to invest in very major corporations where they think no one would question them if they have a failure, and be reluctant to go into "Widget Corporation" that no one ever heard of. I think we are going to have to make some changes to try to see that venture capital is available, and I certainly will put myself to work to see if we cannot make that a more workable provision than it is.

Senator NELSON. Thank you, Senator Bentsen. Mr. Hanschen, please go ahead.

Mr. HANSCHEN. Now, in going on into these new technologies such as the MOS-LSI that I mentioned. In addition to calculators and watches, the technology has spawned a completely new industry, starting up--these industries, almost all of them-when I talk about the new emerging companies, they are all-you can trace them back exclusively to being financed by venture capital organizations.