contain provisions which will make it easier for manipulators to forestall or circumvent the markets or defeat the law of supply and demand. HOUSE CLEANING Is a good thing-suffice at this time to say that house cleaning be not confined to any one section of any one group or to any one group. A SUGGESTION Now what I am going to say to you will sound egotistical. Let me assure you, however, that it is not, but regardless of the length of this story, for which I apologize, I have unfolded to you only a partial view of this great picture, and if I were asked to make a suggestion, it would be that the Government money would be well spent if you, Mr. Reed, and Chairman Flanagan would come to Omaha (incognito if you wish) prepared to stay a week, when we together could personally and daily discuss this great problem. After which, I feel sure you would return to Washington prepared and equipped, regardless of pressure groups, to write, suggest, and recommend legislation of which you would be proud and which would be of untold benefit to our great Nation, and of lasting credit to yourselves and the Administration. That statement cannot be called partisan because this writer is not a Democrat. IN CONCLUSION Permit me to repeat words expressed by me at the regular meeting of our exchange members in July. "I may lose my health, I may lose my wealth, and worst of all, I may lose my friends, but if all that should happen to me and I could still feel that I had in some small way contributed toward saving our great open competitive livestock markets, toward saving our democracy, or toward saving America for Americans, I will feel that I have gained a victory." Respectfully submitted. Mr. N. R. BRYSON, N. R. BRYSON. HOUSE OF REPRESENTATIVES, COMMITTEE ON AGRICULTURE, Washington, D. C., September 16, 1946. Bryson Bros., Inc., Stockyards Station, Omaha 7, Nebr. DEAR MR. BRYSON: This will acknowledge receipt of your letter of August 5 incorporating certain suggestions and recommendations relative to the tentative draft of proposed amendments to the Packers and Stockyards Act. I am placing your suggestions and recommendations on file so that they may be considered together with suggestions received from others in connection with this matter. With all good wishes, I am, Federally inspected hogs at South Omaha and their source, 1945 Federally inspected slaughtered hogs at South Omaha. 1,765, 235 1, 509, 152 256, 083 With the number slaughtered, 1,765,235 representing---. And the directs through United States yards, 759,758 representing__. And the directs not through United States yards, 256,083 representing_ It leaves packers purchase in the United States yards__ Percent 100.00 43.05 14. 49 42. 46 Loss of yardage to United States Yard Co., and commission to marketing agencies, account of direct hogs at Omaha Through United States yards, 759,758, at 10 cents per head__ Total____ $75, 975. 80 43, 534. 11 253, 960. 25 373, 470. 16 Source of record information: War Food Administration, Bureau of Animal Industry. (Prepared by N. R. Bryson, January 1946.) Mr. BRYSON. Do you want to ask me any questions? Mr. BUFFETT. We have your statement for the record. You might state in general what the subject of your testimony has been. Mr. BRYSON. The general tenor of it is centered around the direct marketing of slaughter livestock. The Packer and Stockyard Act became law in 1921, since which time the packers have undertaken and do buy a tremendous amount of their livestock off the markets. Up until about 1921 hogs were selling at considerably higher than fat cattle. I am speaking of fat hogs and fat cattle on the Chicago market. The figures I have given you are taken from the Department of Agriculture records prior to about 1921 or 1922, beginning at 1900. During that period cattle sold at considerably lower than hogs and. after the packers started buying direct hogs began to sell lower than cattle. That change of hog sales being lower than cattle amount to several billion dollars to the farmer. Mr. FORISTEL. Does this statement of yours suggest a remedy, as well as stating the facts? Mr. BRYSON. I am glad you asked that question. It does. The correspondence I have had with the Congressman does carry a suggestion. It also carries a bill I would like to see introduced and made law. Mr. BUFFETT. We thank you. (Witness excused.) TESTIMONY OF CHARLES A. PETERS, ON BEHALF OF NEBRASKA SMALL BUSINESSMEN'S ASSOCIATION (The witness was duly sworn and testified as follows:) Mr. BALLINGER. What is your name? Mr. PETERS. Charles A. Peters. Mr. BALLINGER. What is your business? Mr. PETERS. Field director of the Nebraska Small Businessmen's Association. Mr. BALLINGER. Tell me, Mr. Peters, when this organization was started in Nebraska. Mr. PETERS. About 2 years ago. We have nearly 700 members across the State of Nebraska. Our ambition is to do what we can to protect free enterprise as it applies to small-business men. I would like to say one point in particular that we are interested in is the preventing of further controls or restrictions which eliminate the most important phase of democracy and free enterprise. We would like to see free enterprise encouraged. I would like to mention very briefly the situation as mentioned previously today in reference to the shortage of steel. Here is a report submitted to Senator Wherry's committee on the shortage of steel and I would like to have that inserted in the record. Mr. BALLINGER. May that be introduced and made a part of the record? Mr. BUFFETT. Yes. (The matter referred to follows:) STATEMENT OF TESTIMONY OF HOWARD W. SHINROCK, MANAGER OF THE INDUSTRIAL DEPARTMENT OF THE OMAHA CHAMBER OF COMMERCE, AND CHARLES A. PETERS, FIELD DIRECTOR OF THE NEBRASKA SMALL BUSINESSMEN'S ASSOCIATION, SETTING FORTH DETAILS OF THE STEEL SHORTAGE AND ITS EFFECT ON THE SOCIAL AND ECONOMIC HEALTH OF OMAHA AND THE STATE OF NEBRASKA 1. In a tremendous number of industries current receipts of steel are far below requirements: (a) Grand Island Furnace & Supply Co.: 1. 1946 receipts totaled 100 tons. 1947 receipts totaled 240 tons. 1948 receipts totaled none to date. 2. Require 100 tons per month. (b) Standard Furnace & Supply Co. (Omaha): 1942 receipts totaled 308 tons. 1947 receipts totaled 1,287 tons. 1948 receipts totaled 66 tons to date. 2. Require 250 tons per month. 2. This lack of steel is causing serious unemployment in steel-using industries: (a) Grand Island Furnace & Supply Co.: 1. Normal employment, 35. 2. Present employment, 14. (b) Standard Furnace & Supply Co.: 2. Present employment, 32. (c) In discussing this matter with a large number of other steel-using industries in Nebraska they have indicated an unwillingness to disclose figures pertaining to their steel receipts for fear of worsening their position with their suppliers. However, all industries surveyed were frank to admit that the lack of steel has seriously curtailed their production similar to those outlined above. 3. This dislocation is having a serious effect on the future of the steel industry here, as the unemployed workers are moving into other industries. (a) Mr. Allen Dowling, of the Resources Division of the State of Nebraska, stated recently that a survey completed by his division in the end of 1947 indicated that 6,000 employees in Nebraska were not working at their normal employment because of steel shortages. Mr. Shinrock completed a check of the industry in Omaha last week which indicates that the situation is becoming more severe. 4. Many new industries are being forced out of business due to the use of the "historical" quota allocation. This allocation basis often precludes shipments of any steel to industries which did not exist prior to the war. (a) The Associated Manufacturers, Inc., of Omaha, have had to reduce their operation by 40 percent because of lack of steel from legitimate suppliers. 5. Industries which are suffering from the present situation are attempting to produce vitally needed items for agriculture, home construction, and other vitally needed parts of our economy. (a) Grand Island Furnace & Supply Co. manufactures: (1) Irrigation dams; (2) furnace heating pipe, duct work, etc.; (3) registers and grills. (b) Standard Furnace & Supply Co. manufactures: (1) Furnace and heating pipe and fittings; (2) duct work; (3) rain goods. 6. Industrial expansion necessary for a more balanced economy is being seriously curtailed due to the fact that branch plants and new plants in Nebraska cannot get adequate amounts of steel in this area. Several plants desiring to open operations in Omaha were forced to shelve their plans and in some cases expanded in the steel-producing region so that they could get more ample supplies of steel. Gibson Refrigerator Co. abandoned plans to because of their inability to obtain steel here. Lakes region where they could get steel. open an operation in Omaha They expanded in the Great 7. One important reason for a shortage of steel in Nebraska is the removal of the Colorado Fuel & Iron Corp. from most of this State. (a) Many steel users depended on this source. (b) These firms have been unable to secure delivery from other mills. 8. Another important reason for the shortage in Nebraska is the expansion of existing industries and the establishment of new industry without an accompanying increase in shipments in due proportion. 9. Conclusion: (a) It is our observation that the present situation will return the farm West to an agrarian economy. (b) That this will reverse the trend, recommended by all economists, of balancing the economy of this area by introducing more industry into the area. (c) That our industry must be maintained and expanded to meet demands of our consumers. (d) That this is consistent with the policy of decentralizing industries for reasons of national defense and stabilized employment. (e) That there exists a tremendous supply of skilled workmen trained during the war which can staff an expanded industrial activity. (f) Therefore it is strongly urged that the Congress take necessary action to instruct the Reconstruction Finance Corporation to assist in the financing of a steel-rolling mill in Omaha, Nebr. (1) This is required to meet the situation described above. (2) That transportation facilities are readily available by railroad, barge, and truck. (3) That the demands for the products of such a mill are real and urgent. (4) That a supply of skilled workmen is available. (5) That the management, land, and finances are available. (6) That with the assistance of the Reconstruction Finance Corporation this mill can be a reality and its establishment will be a tremendous factor in the industrialization of the Midwest. Respectfully submitted this 1st day of March 1948. HOWARD W. SHINROCK, Field Director, Nebraska Small Business Men's Association, Omaha, Nebr. Mr. PETERS. I would like to read very briefly some material furnished by Senator Wherry recently which points out the situation as it applies here in regard to monopolistic practices. We have no evidence of monopolistic practices to offer. We do say that Nebraska is discriminated against very sharply so far as the supply of steel is concerned and many of our industries are suffering very sharply as indicated by these figures. On the basis of a survey conducted by Senator Wherry's committee, the smaller the firm in the steel-using business, the greater the suffering has been. The larger the firm, the less the suffering. In other words, the allocation has been a larger percentage in each case of many thousands surveyed for large firms, and it has been decreasing in the last 3 years for the smaller firms. Obviously in Nebraska with new industry growing up, it is a very serious situation. I want to suggest that the committee look into that further. I do not have the answer as to what we can do about the steel shortage. The question of collusion arises again on the basis that the basingpoint system and Government allocations, especially Government allocations, have not taken into consideration, as Mr. Ammon has said, the industry that has grown up here since the war. The collusion that exists is, I think, a very natural collusion to do business with existing old lines, encourage old-line firms, also encouraged by the Government. That is not something that can be corrected by legislation but by enforcement of existing legislation. It certainly is a heresy that the Government encourages the continued increase of allocation to big industry and decreases supplies to small industries. Mr. BALLINGER. The big industry is located in the East? Mr. PETERS. I think that is true. We think all industries in the Midwest would conform to all the definitions of small business, including those of the Department of Commerce, which says 500 employees is the criterion. Mr. FORISTEL. During the war you had a lot of people who did Government work, especially military work, who used steel? Mr. PETERS. Yes, sir. Mr. FORISTEL. Today you have here in Omaha and the nearby territory many people who still bid on Government procurements? Mr. PETERS. Yes. Mr. FORISTEL. Especially military procurements? Mr. PETERS. Yes. Mr. FORISTEL. I want to tell you for your information and for the information of your members that back in January our committee found only 7 percent of the total military procurement went to firms of under 500 employees dollarwise. In other words, only $19,000,000 of approximately $284,000,000 worth of military procurement was being awarded to companies having less than 500 employees. That was 7 percent. This committee in its study urged that new regulations be written and on the 19th of May they were written. They seemed to be fairer, because now 90 percent of the total dollar procurements is by competitive bidding. Further along we found that small business still did not want to bid because they knew if they were successful they could not get steel. During the closing days of the Congress our chairman, Mr. Ploeser, introduced an amendment to the Draft Act which provided that the President could furnish steel to the holder of any defense contract, be he large or small. This involved about 1,200,000 tons of steel, or about 2 percent of our production. This afternoon at luncheon we had the opportunity of meeting with about a dozen of the steel fabricators in this area. They have told us they have used this amendment to great benefit to themselves. They have received war contracts and they have been able to get steel. Mr. PETERS. We read of Mr. Ploeser's amendment and we are very much pleased with it, I can assure you, although we hope and trust that the situation can be improved on more basically so that we do not have to operate with legislation. |