if you would care to have them read into the record, as to just what actually is being accomplished, and is being done.

In other words, I have examples of the action phase of this policy. Thus in accordance with the sound administrative practice, a clear policy for getting the Department of Defense out of commercial and industrial activities has been laid down, and definite criteria have been delineated by the Secretary of Defense, sound guidelines have been laid down for its implementation and an orderly execution is being accomplished by the military departments concerned with the entire system remaining at all times responsible to flexibile military control.

The next part of my testimony deals with the bills which we have already discussed. Again, in the interest of time, I will skip over page 5 of my testimony. We make reference, of course, to the fact that the Hoover Commission is at work in this field.

Finally, gentlemen, I would say to you that the Department of Defense wholeheartedly agrees and supports the basic philosophy expressed in these bills. I would like to read that sentence agair:

The Department of Defense wholeheartedly agrees with and supports the basic philosophy expressed in these bills

and more importantly at this stage of the game, the men in the Office of the Secretary of Defense, from the Secretary of Defense down through the individuals I named earlier, are in accord, and, furthermore, we are actually doing something about it.

However, it is strongly recommended that we be permitted to proceed with what we firmly believe to be a sound program presently in operation and now gaining momentum which will accomplish the common objectives quickly and effectively.

If the committee, in its discretion, feels that legislation on this subject should be reported favorably, it is strongly recommended that any such legislation recognize the peculiar problems of the Department of Defense outlined herein, and that every effort be made in drafting such legislation to permit the Department to continue with its present program in this area.

I have with me here today representatives from the three military departments who are prepared to answer any questions which the committee may have regarding specific facilities, or activities.

The CHAIRMAN. About all the Congress can do is to give you a pat on the back, and wish you good luck.

Mr. PIKE. I do not think it is quite all that good.

The CHAIRMAN. You do not recommend anything else. At least, I understand it so.

Mr. PIKE. I did not read all of my testimony, Mr. Chairman.
The CHAIRMAN. Well, all right.

Mr. DAWSON. I would like to ask in reading off the list of businesses to which you have directed our attention, whether you mentioned that of banking. There are a lot of complaints that banks are being set up by the Army on Army posts in competition with the neighborhood banks.

And has your Department looked into that situation?

Mr. PIKE. It was not my intention to convey the impression that in the first two increments and in the third one which we have under preparation that we have touched upon all the commercial and indus

trial type activities. If, indeed, we are in the banking business, that will come along in due course.

Mr. DAWSON. You would entertain a complaint where such a complaint was made?

Mr. PIKE. Yes; we would, indeed.

Mr. DAWSON. Mr. Kyes testified before the committee last year, and he promised at that time to look into this matter, and to do something about it. He is no longer with the Department, is he?

Mr. PIKE. That is correct.

Mr. DAWSON. Who occupies the place now?

Mr. PIKE. The Deputy Secretary is now Mr. Robert Anderson. Mr. DAWSON. Well, I do want to say that you have made a very fine statement. and it seems that you are doing something about the matter which should be the concern of everyone in your Department. I wish to congratulate you on your statement.

Mr. PIKE. Thank you, sir.

Mr. FOUNTAIN. Mr. Pike, I would like to say that I, too, agree with the philosophy which you have stated, that every effort should be made to get Government out of any business which is in competition. with private enterprise, especially where private enterprise could do the job as well, and as efficiently.

I am interested in knowing and getting your opinion as to what authority this legislation would give any agency of the executive branch which it does not already have.

Mr. PIKE. I do not think in the Department of Defense, sir, that we, with the programs which we have underway, which have been brought forth under the leadership of the present Secretary, presently need any additional authority. Of course, I am mindful that men come and go in Government, and that there may be, possibly, some need for permanent legislation such as I was discussing here this morning, but I would say, certainly, as long as the present administration is in office in the Department of Defense, our whole team over there is dedicated to pushing this program forward.

Mr. FOUNTAIN. Then, you would look upon this legislation or such legislation as would embody the philosophy which you have expressed, as more or less a declaration of congressional policy, approving a program which you have already enunciated, and put into effect? Mr. PIKE. Yes, sir; that is quite possible.

Mr. FOUNTAIN. I have no further questions, Mr. Chairman.

Mr. OSMERS. Mr. Chairman, I would like to call the attention of the members of the committee to pages 2 and 3 of Mr. Pike's prepared statement.

He mentions on pages 2 and 3 some of the criteria that are to be used in establishing or maintaining a competitive type activity.

Now, the criteria listed in subsections a through g in my opinion are excellent, and probably are as well written as to definition as they can possibly be, but I would like to call attention of the members of the committee to section h, which reads as follows:

Any other factor clearly demonstrating a particular Government operation to be in the public interest.

I would like to point out to my practical colleagues that section h has a way of getting around sections a through g, if an administrative official desires it done.

We have seen so often from the legislative standpoint, Mr. Pike, that when you use the words "public interest," this immediately becomes a matter of opinion, and I recognize that you come into fields that are very difficult to define, but I would like to point out to the committee that despite this excellent statement about an excellent job that has been done, and continues to be done, there is nowhere, for example, mention made of the banking situation.

There is no procedure there for a banker to follow, except to go to this competitor in the Defense Department, and complain about the competition. He does not have any place where his complaint can be handled.

Mr. DAWSON. The Department of Commerce could be contacted, and they would then take it up with the Department of Defense. Í think the BDSA has clearly established a facility to reach that subject

matter.

Mr. OSMER. They may do that. BDSA may decide to accept the complaint, and they may get in touch with the Secretary of Defense and they may not, but I say that they should not have to write their congressman, or guess about it, or talk to their competitor. I think they should have a place established by law where they could go, and lay the facts before them.

Mr. DAWSON. Do you not like to have your constituents write to you?

The CHAIRMAN. Off the record.

(Discussion off the record.)

Mr. OSMER. To a certain extent; yes, sir.

Mr. Pike, would you not say that the activities of the Bonner subcommittee of this committee, and the Harden subcommittee of this committee, have had an influence upon some of the policies in the Department of Defense in this field?

Mr. PIKE. I should think undoubtedly so; yes, sir.

Mr. OSMERS. Most of the things which have been pointed out here this morning, Mr. Pike, are matters of hope, and up to now very few competitive activities have been dropped by the Department of Defense or its component agencies.

Mr. DAWSON. His report does not say that.

Mr. PIKE. Mr. Chairman, I wonder if in reply to that comment I might give you a few more specific examples?

The CHAIRMAN. I am sure we would like to have them.

Mr. PIKE. This information is very current, and has been supplied me in the first instance here by the Department of the Army, in preparation for this testimony. I asked each one of the Departments to supply me with a working progress report on just what they were doing, and where they were at, as of today, on this overall program. Under the provisions of DOD instruction 4100.16, the Department of the Army is currently surveying 88 commercial and industrial type facilities. Of that first increment, the Army has inventoried a total of 88 which are engaging in this field, and these include 6 scrap metal baling facilities, the Army clothing factory, the survey of which will be completed August 8, 1954, 3 coffee-roasting plants, which will be surveyed by October 15, 1954; 31 bakeries, 3 clothing reclamation shops, 3 furniture-repair shops, and 41 laundries and/or dry-cleaning plants, which will be surveyed by March 8, 1955.

The Army has concurrently prescribed that except in an emergency, wooden boxes will not be manufactured in Army facilities when it is possible to obtain such products from commercial sources.

Prior to the present review, the Army had already discontinued or curtailed numerous commercial and industrial type facilities. For example, last fall, 5 clothing-reclamation shops, and 5 furniture-repair shops were discontinued. In December 1953; a coffee-roasting plant in Chicago, Ill., was phased out of operation. Eleven scrap metal baling facilities were discontinued between October 1953 and February of this year. Since October 1952, 5 Army-owned telephone systems have been sold to private companies and the sale of 11 such systems is being negotiated. In the last fiscal year ending 1954; Army contracts for refuse collection increased from 28 to 50, and in the transportation field the Army is continuing the use of commercial air, rail, truck, and bus transportation. The military bus service of the Military District of Washington will be eliminated and commercial buses substituted by August 17 of this year.

In the past 2 years 10 Army bakeries, 2 laundries, and 3 dry-cleaning plants have been changed to commercial contract.

Mr. OSMERS. I am very much impressed by the list which you have read, but I still want to say that for the most part, and this is not necessarily critical, but most of the matters undersurvey, or due for reporting and so on, the Members of Congress are concerned about the receipt of the report, or the conclusion as a result of the surveys, and the action which will be taken on the activity.

I am not going to try to press for that at all, but these activities have a very important bearing upon private enterprise.

Looking at it from a congressional standpoint, I am glad to know that so many activities are under consideration.

Mr. PILCHER. Will the gentleman yield?

Mr. OSMERS. Yes.

Mr. PILCHER. The Government Operations Subcommittee will always be in existence to ride herd on them to see that they do this. Mr. OSMERS. Well, we have had 22 years of experience in it.

Mr. DAWSON. It took us only 4 years to get this program working. The Harden subcommittee and the Bonner subcommittee went into this matter, and the Department, of its own volition, began to do something about it.

That is very healthy, and it is better to have that type of action than to have a lot of laws on the books.

Mr. OSMERS. I do not want a lot of laws either, Mr. Dawson, but I would like to point out on page 7 of Mr. Pike's statement that he states H. R. 9835 and H. R. 9890 are not objectionable.

Mr. DAWSON. As long as they state only a policy, we could go along with that, but pinpointing legislation would be entirely out of order. We are agreed on that; are we?

You and I agree on that; do we not?

It was a very, very nice statement, Mr. Pike.

Mr. OSMERS. On that, I have no further questions.

Mr. FOUNTAIN. Mr. Chairman, I have one further question: Mr. Pike, based upon your study and the study of the individual departments, have you and your colleagues been able to arrive at the approximate sum of money which you feel might be saved by the Government if all business enterprises in which the Government now

engages or participates in competition with private enterprise were completely turned over to private enterprise?

Mr. PIKE. No, sir; I am sorry that I do not have that information. We have not progressed far enough along with our study of these individual cases to be able to give you even a wild guess on that. Mr. FOUNTAIN. You feel that money would be saved?

Mr. PIKE. Yes; I think money will be saved.

Mr. FOUNTAIN. And, in addition, of course you are doing the just thing in turning these matters over to private enterprise?

Mr. PIKE. In general, I will also say, or I will always say that private enterprise will do a better job, and more cheaply than the Government.

Mr. DAWSON. Should the Government go out of competition wherever you can find private business to do the job, and do it as cheaply? You did not say "cheaper," but you said "as cheaply."

Mr. FOUNTAIN. I said, in addition to doing the just thing of turning it over to private business, private enterprise should be able to do it cheaper, or as cheaply.

Mr. PIKE. We do not have sufficient information yet for me to answer that question with anything but a wild guess.

Mr. JUDD. Mr. Chairman, I want to concur in the statements of commendation to Mr. Pike in representing the Defense Department, because the Defense Department has been in the past, quantitatively, at least, the worst offender. It is bigger, and it spends more money and its people are scattered all over the world, and it does need to do more things under its own control, and the tendency to expand is harder to resist in your Department.

So, therefore, I think you deserve, all the more, commendation.

It is true as the chairman said earlier that you have always had the authority and you have had the power to do this, but sometimes there has not been the will, and that is the one question, as to whether the Congress not only ought to give you orders, so to speak, to use the authority and the power that you already have. But that is for us to decide.

Mr. PIKE. Thank you.

The CHAIRMAN. Mr. Pike, if you remember, there is another witness who has a complaint, but in between we have scheduled a representative from the Department of the Treasury, and I have his letter here, and I note that the Treasury Department has no comments to submit on the provisions of H. R. 8832, H. R. 9834, and H. R. 9835. He does not mention H. R. 9890.

Mr. Pike, if you will remain here, we have another witness, Mr. Eugene P. Hubbard, secretary-treasurer of Local 246 of the Milk Drivers and Dairy Employees for Greater Washington, whom we would like to hear at this time, and we would like for you to listen to his complaint.

STATEMENT OF EUGENE P. HUBBARD, BUSINESS AGENT, SECRETARY-TREASURER, LOCAL 246, MILK DRIVERS AND DAIRY EMPLOYEES FOR GREATER WASHINGTON AREA

The CHAIRMAN. You may proceed in your own way, Mr. Hubbard. Mr. PILCHER. Mr. Chairman, could I make one comment? I want to again say that the Democrats want to say something nice about