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trying to save money by eliminating sorting." "Are you eliminating sorting?” “I don't know.”'

Mr. KARSTEN. As a Member of Congress, I have had complaints, and I have referred this same type of complaint to the Postmaster General, with the same result, the same type of result you obtained there.

I wonder if this bill, from Congress, would require the Postmaster General to change this rule and go back to the old system.

Mr. OPOLINER. Let's say it might give him the urge to stay friendly to Congress.

Mr. KARSTEN. It would surprise you to know that I have never received an answer from the Postmaster General. It is Mr. Abrams. I have never received a letter from Mr. Summerfield that I recall.

Mr. OPOLINER. Mr. Abrams signs the letters written by various people under him. As a matter of fact, he doesn't even sign them. Every letter signed by Mr. Abrams is signed in a different handwriting

Mr. OSMERS. We will recess until 2 o'clock.
Mr. OPOLINER. Do you want me to return at 2 o'clock?
Mr. OSMERS. I believe so, if it is convenient.
Mr. OPOLINER. Thank you, sir.

(Whereupon, at 12:20 p. m., the hearing was recessed until 2 p. m., of the same day.)

AFTERNOON SESSION

(The hearing reconvened at 2:05 p. m., Hon. Clare E. Hoffman presiding.)

The CHAIRMAN. The committee will be in order.

There will be a rollcall in the House. We will all have to go, but you may proceed.

FURTHER STATEMENT OF ALBERT G. OPOLINER, REPRESENTING

THE TILLMAN-LENNETT DISTRIBUTING SYSTEM, INC.

Mr. OPOLINER. May I make some remarks about what Mr. Osmers said this morning?

Mr. Osmers mentioned that in his particular post office there has been, to his knowledge, no overtime or additional carriers required to handle that mail.

Mr. OsmERS. Just to correct you
Mr. OPOLINER. Yes, sir.
Mr. Osmers. I am not certain at all about overtime.

Mr. OPOLINER. I said “to your knowledge," the best of your knowledge, though.

Mr. OsMERS. I would have assumed there would have been some overtime.

Mr. OPOLINER. I won't quibble over a few dollars one way or another.

Mr. OSMERS. But no additional personnel.
Mr. OPOLINER. Well, say additional labor expense.

may be in many cases no additional labor is required. In many other cases additional labor is required, but the fact that the post office may be able to absorb this additional business, to my mind, does not justify their doing it.

It

By the same token, a man who sells stamps at the window could also absorb the handling of cigarettes and candy, if you want to try to bring in more revenue to the post office. He is sitting there. Let him sell cigarettes. You will have no additional labor cost.

I don't think the ability to absorb additional business justifies that absorption, that handling of additional business, when that business is in competition with private enterprise.

Mr. OSMERS. Mr. Chairman, I am not going to disagree with the statement that the gentleman has made about that, because if you carry a thing like that to its logical conclusion they would be in everything

I have three questions I want to ask you, Mr. Opoliner, and I am going to ask every witness from now until we stop having hearings these same three questions.

First, do you feel Congress should establish some place in the executive department where business may state its case and an affected Government department may do the same?

Mr. OPOLINER. I would say yes, with this qualification, sir: Such a place—I don't know whether it should be done in the executive branch or somewhere in the legislative branch; but if it is done in the executive branch it should be subject to close scrutiny by Congress.

Mr. OSMERS. All right; the second question: Do you feel any department, Government department, establishing a new competitive activity should be made to prove its case before it enters into the competitive business activity?

Mr. OPOLINER. Of course.

Mr. OSMERS. The third question is: Do you feel the executive should be made to report annually to Congress on progress made in ending competitive activity?

Mr. OPOLINER. That sounds like a very good activity, sir.
Mr. OSMERS. Those are the questions.

The CHAIRMAN. How far would you go in requiring the executive to make a report?

We now require him to give us a message on the state of the Union.

Are you going to require him to report on all of the executive departments, what they did, what it cost, what they make and sell?

Mr. OPOLINER. No, sir. That sounds rather impractical, but couldn't this agency report directly to Congress, this agency Mr. Osmers refers to?

The CHAIRMAN. Why couldn't every agency of the executive department do so?

Mr. OPOLINER. I am not that familiar with government operations, sir.

The CHAIRMAN. Of course, every group brings its complaints to individual Members of Congress and the proper committees, and it is the duty of the Congress to try to correct any inequities that may exist. What I can't understand is how you are going to get any further along the road toward getting Government out of business by making complaints to an executive department when you can now make them to Members of the Congress, which can correct the whole procedure.

Mr. OPOLINER. I would say this, sir: We have made complaints to Congress; we have made complaints to the Post Office Committees of the Senate and the House and to the Small Business Committee.

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The CHAIRMAN. And you didn't get very far?
Mr. OPOLINER. And we didn't get very far.

The CHAIRMAN. What assurance have you that you are going to get any further making complaints to the executive department, which is carrying on the business?

Mr. OPOLINER. None, sir; but there would certainly be one centralized place where these complaints can go, and perhaps in the wisdom of Congress it can be given some teeth, whereas these committees have no teeth,

Mr. OSMERS. Mr. Chairman, I would like, first, to read from H. R. 9890, where it deals with the report:

SEC. 6. The President shall make an annual report to the Congress concerning operations under this Act, together with such information, comments, recommendations as he may deem appropriate for furthering the policy declared in section 2 of this Act.

Mr. Chairman, I submit that is not an onerous requirement upon the Executive, and I think that this Congress should have such a report made to it.

Now, I would like to deal with one other point.

The CHAIRMAN. Before you proceed, I want to go a little further in answering that particular argument.

Mr. OSMERS. Yes, sir.

The CHAIRMAN. Of course, that would come from the department which was interested, and you would get the same thing we get now. Every single executive department comes up with an argument, a statement of what they think are facts justifying their position.

Mr. Osmers. The other point, Mr. Chairman, that you touched upon, and I would like to make a comment, if I may, was the question about the comparison which you were making between a businessman, such as Mr. Opoliner, coming to a committee of Congress. It might be the Post Office Committee. It might be the Small Business Committee. It might be the Committee on Government Operations. It might be the Harden subcommittee. The poor fellow wouldn't know where to go.

I know he has been to the Harden subcommittee, and we said, "We are sorry; we are dealing with scrap iron this week, or paint, or something else, and you have just no place to go.”

I would like to submit, Mr. Chairman, the committees of Congress are established primarily for the purpose of drafting legislation and to conduct certain watch-dog functions over the executive branches of the Government, and I do not believe any present committee of Congress is in a position, meeting on a 12-month basis, to sit, receive these complaints, to hear the departments, to weigh all the factors, to make the necessary investigation, if it is an executive function, and I feel Congress should clearly, by legislation, place it in the hands of the executive.

The CHAIRMAN. I would agree, and that is what the objective of 9835 was, as written.

I have no further questions.
Mr. OsMERS. No further questions.
The CHAIRMAN. All right; let's have another witness.
We might just as well go over now for the rollcall.

(Whereupon, at 2:14 p. m., due to a rollcall vote, a 28-minute recess was taken.)

Mr. OSMERS (presiding). Gentlemen, in the absence of the chairman, I feel he would not want me to delay the witnesses and, If there is no objection, we will proceed with hearing the witnesses.

Have you concluded your statement, Mr. Opoliner?

Mr. OPOLINER. I think I have, sir, unless there are some further questions.

Mr. OSMERS. Do you have any questions, Mr. Chudoff, you would like to ask?

Mr. CAUDOFF. I have no further questions.
Mr. OSMERS. Mr. Hillelson.
Mr. HILLELSON. I have none.
Mr. OSMERS. Mr. Lipscomb.
Mr. LIPSCOMB. I have no questions. Thank you, Mr. Chairman.
Mr. OSMERS. Thank you very much for your statement.
Mr. OPOLINER. Thank you for your time, sir.

(Albert G. Opoliner's prepared statement follows:) STATEMENT OF ALBERT GOPOLINER, REPRESENTING THE TillMAN-LENNETT

DISTRIBUTING SYSTEM, INC. We have been engaged in the business of house-to-house distribution of circulars for the past 26 years. In that time we have survived depression, inflation, and wars. Throughout the years our business has provided employment for several thousand unskilled men. We have also provided a medium of advertising to small local merchants that cannot use other media.

Now, we're faced with a threat that we cannot meet by ourselves. The Post Office Department has instituted the delivery of advertising circulars by the so-called simplified address system. Although the Post Office Department has done this to save handling costs on the bulk mail volume it already had, without diverting business from other media, the actual effect has been a diversion of our customers.

From the post office's point of view, millions of advertising circulars that were never seen in the post office before are now going through the mails. Letter carriers are now burdened with these circulars, to the detriment of higher class mail. Thus, instead of decreasing the work of the post office, its work is increased, and the possibility of a deficit in third-class mail operations is heightened.

From our point of view, we, as a taxpaying business, are faced with tax subsidized competition. To date, in only the few months since order No. 55337 was promulgated, over 50 percent of our business has been switched to the post office. A continuation of this trend will mean shutting our doors after 26 years of business.

Every decrease in business to us means a decrease in the number of men employed. At present, we are able to give many of our employees, who are members of the A. F. of L., only 1 or 2 days work a week, and have been forced to lay off many others. Since the men employed in this industry are primarily older men who have no other skills, those laid off immediately make applications for relief, and some are just existing on their unemployment insurance until that runs out.

So, now instead of the welfare agencies calling on us to employ their cases, our employees are now going to the welfare agencies for their existence.

Distributing companies all over the country are feeling the pinch of this Government competition. One company in Newark has informed us that it has lost 40 percent of its volume to the post office. A Los Angeles company reported 45 percent of its volume was lost. In New York, every major distributor has lost between 40 and 50 percent of its volume.

This situation has been called to the attention of the Post Office Department. To justify its retention of the postal order making circular distributors of the letter carriers, the postal authorities have made many statements that do not tell the whole story.

In a letter to us, copies of which were sent by the Post Office Department to various Congressmen, the Assistant Postmaster General stated that the purpose of this postal order was to eliminate unnecessary sorting of circulars.

In a letter to Local 28 BB, A. F. of L., to which our employees belong, the Assistant Postmaster General stated that the action was taken for this purpose, and not to divert advertising from other media.

In a conference with the Small Business Administration, the Post Office stated that advertising distributors have not been significantly harmed by the post office's action.

Actually, the post office's purpose has not been served. The great majority of unaddressed circulars that have gone out through the mail are not circulars that formerly were addressed. They are circulars that were formerly handled by house-to-house distributing companies. Thus, there has been no significant elimination of sorting. There has been a significant diversion of revenue from private enterprise. The post office charges less than the cost to distribute, so that each piece distributed adds to the postal deficit, instead of saving the taxpayer's money.

In some suburban areas, where distributing companies formerly enjoyed a large volume of work, and εre now doing nothing, the post office is required to pay carriers overtime, and add additional carrier routes to handle this new business. One postmaster informed us that the number of permit holders in his post office has doubled since the post office went into our business.

That this is a clear-cut case of tax-subsidized competition with texpaying private industry is obvious. We ask that your committee take whatever steps it can to bring this immoral and unjustifiable diversion of revenue from private enterprise to a halt.

Mr. OSMERS. The next witness is James E. Jackson.

Mr. CASTLE. Pardon me, sir. That is an error. Mr. Jackson is taking part of my time.

I am Benjamin F. Castle of the Milk Foundation.

The clerk was under a misunderstanding. I had Mr. Jackson come from Atlanta, and he will testify as soon as I have completed my statement.

Mr. Kellogg is my assistant. If you don't mind his sitting here
Mr. OSMERS. Thank you.
Which gentleman is going to make the statement?

Mr. Castle. I am going to make a statement, and then it will be supplemented by Mr. Jackson, of Atlanta.

Mr. OSMERS. About how long is your statement?
Mr. CASTLE. Mine will be about 6 minutes.
Mr. OsmERS. I didn't get your name. I am sorry.
Mr. CASTLE. Benjamin Franklin Castle.
You have my statement before you, I believe, sir.
Mr. OSMERS. All right.
Mr. CASTLE. We furnished a hundred copies.
Mr. OSMERS. Thank you, sir.

STATEMENT OF BENJAMIN F. CASTLE, EXECUTIVE VICE

PRESIDENT, MILK INDUSTRY FOUNDATION

Mr. Castle. My name is Benjamin F. Castle, and I reside in Washington, D. C. I come here as executive vice president of the Milk Industry Foundation to express our approval of H. R. 8832, which we understand has for its purpose the cessation of Government competition with American private industry.

Mr. Hoffman has well said, and I quote:

It is obvious that, inasmuch as the Government depends upon tax dollars for its existence, using those dollars to lessen or destroy the business of individuals or private organizations which pay taxes means national suicide.

The Milk Industry Foundation is the national trade association of fluid-milk processors throughout the United States. Our members are found in practically every town and city across the Nation from Maine to southern California.

The business of milk processing and delivery is highly competitive as is shown by the fact that the average net profit after taxes was

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