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The committee's printed list shows that the Post Office Department makes most of its own mailbags, but there is no mention of the fact that it also manufactures locks at a plant in southeast Washington.

An overseas radio communications service, having set up a worldwide system, has now been practically put out of business by a duplicate service established by the three services. The Railway Express Agency fights for its life as parcel post changes it rules to grab more of that business.

Out at Walter Reed Hospital there is a neat little factory where false teeth are made, to run alongside the wooden leg and spectacle shops that the armed services boastfully present as the Nation's biggest.

Contractors and builders complain that Government shuts them out of many of its jobs, and bureaucrats give preference to nontaxpaying cooperatives over taxpaying companies like my own when there is grain to be stored or shipped abroad.

If there were no commercial coffee roasters it would be easier to understand why the Army, the Navy, and the Air Force all insist that they cannot get the right kind of coffee without their own plants-but the fact that the Veterans' Administration satisfies its clients with commercial coffee, as reported by your committee, destroys most of the argument for Government's keeping on in this business.

Outside of the electric powerplants, the steamship lines, the railroads at Panama and Alaska and the prison industries, the biggest competitive business operator of them all is the Defense Department. A recent listing of commercial and industrial facilities was made by the Department of Defense for review-and action.

That list shows, Mr. Chairman, that the Army has 41 laundries and drycleaning plants, the Navy has 36 and the Air Force has 18; that the Army has 52 bakeries, the Navy has 18 and the Air Force has 4; that the services have also such wholly extraneous enterprises as motion-picture studios, scrap-metal baling plants, clothing reclamation shops, and ice-cream factories whose avowed purpose, at least in part, is to sell ice cream to soldiers in their hours off duty-in direct competition, mind you, with the corner grocer or druggist who is trying to make a living.

We are told that other lists will follow soon.

So far, Mr. Chairman, I have been talking mostly about the Government's commercial and industrial activities. Let's take a look now at the financial institutions, which are also highly competitive because they take business away from our taxpaying banks and financial institutions. The investment in federally owned and operated lending agencies is even greater than in commercial activities-but it is no more excusable. Let me say first, we are not criticizing these activities as such. Many of these financial activities I shall list, are useful, and necessary services of the Federal Government. We say only that capital should be raised from private sources wherever possible, with or without the guaranty of the Federal Government-but in all cases going interest rates should be charged and provision should be made for orderly retirement of the Federal investment. There are, for instance, the institutions of international credit-the ExportImport Bank of Washington, with billions of your dollars already lent to finance foreign trade and more billions available; and the World Bank with billions to lend to foreign countries for postwar reconstruction and economic development. There are the Government insurance corporations which insure banks and savings and loan associations against losses. There are seven separate outfits to provide agricultural credit and insurance at Government expense-the Commodity Credit Corporation which now has 6 or 8 billion dollars invested in surplus grain, cotton, butter, and so forth, so that farm prices will be maintained at a high level; the Farmers' Home Administration; the agriculture disaster loan fund; the Federal Crop Insurance Corporation; the Federal intermediate credit banks-12 of them; the Production Credit Corporations-12 of these, too; and 13 banks for cooperatives.

In the field of housing credit and insurance there are six lending agencies, with billions of dollars involved.

Public power is represented by the $6 billion Tennessee Valley Authority, and also by the Army Corps of Engineers, the Bureau of Reclamation, the Bonneville Power Administration, the Southeastern and Southwestern Power Administrations. The Rural Electrification Administration represented a Government investment of over $2 billion as of June 30, 1953, and had made commitments of more than half a billion more. The Atomic Energy Commission had spent 81⁄2 billion by the middle of last year, and had nearly 3 billion more on hand for expansion.

And in the miscellaneous list we find such items as veterans' life insurance, the Alaska Railroad, the Panama Canal Company, the Puerto Rico administration, the revolving fund of the Bureau of Indian Affairs, the Army, Navy, and Air Force industrial funds, the Bureau of Mines helium plants, the Small Business Administration, and one or two others including the Virgin Islands Corporation, whose principal function up to very recently was making rum out of molasses. Unfortunately, Mr. Chairman, most of these Government businesses operate with practically no supervision. The Senate Committee on Government Õperations published a few months ago the Audit Reports of Government Corporations and Agencies, and the shocking statement was made that it was not until 1945 that most of the 78 businesses investigated were required to keep a business-type' budget or to have their accounts officially audited.

Small wonder that these Government businesses are abominably run-and that the taxpayers' money is recklessly wasted. Time Magazine has told the ridiculous episode of one of the Navy's ventures into the scrap-metal business. The Defense Department authorized its 3 forces to spend $10 million a year reclaiming their scrap. The Navy's Pensacola Air Station promptly spent $25,000 on a scrap press and $5,000 to install it. Nearby was a bigger private press which in 10 days' time could have smashed and baled all the scrap the base had.

Your own committee records tell how the Government spent $43,369 to haul $4,368 worth of scrap iron from Alaska to California, and even that report is mild in comparison with the incident-again to be found in your committee's recent reports-in which a whole field of wornout airplanes was sold to a scrap processor who found in the tanks enough gasoline to recoup the entire amount of his purchase price.

I have told you enough, I believe, to prove that Government should get out of business and stay out. You may ask: Can it be done?

The answer is yes. And the proof of that "yes" is that it is being done.

The Mississippi Barge Lines have been sold to a company that will pay Federal income tax on its earnings.

World War II's synthetic rubber plants will be sold to private, taxpaying companies at the year's end. Thirty-seven companies recently submitted 76 bids for, the 13 rubber plants.

The Muscatine, Iowa, alcohol plant has been sold.

The Defense Department is selling or closing a Navy clothing factory, all of its sawmills and some of its bakeries.

The Reconstruction Finance Corporation's loans are being liquidated to banks, and insurance companies and the big lending agency is closed up ***. Mind you, Mr. Chairman, most of Government's businesses were established under Executive order and they can be closed by Executive order.

But the Congress must initiate the policy that these competitive enterprises are no longer in approval-that the Congress wishes Government to get out of business and to stay out.

H. R. 8832 will accomplish that purpose and end. The Anti-GovernmentCompetition Board will provide a needed forum, where taxpaying business may express itself-and the power of veto recommendation will give strength to those who believe that we should begin to save the taxpayers' money and not throw it around like a lot of drunken sailors.

In closing this earnest recommendation that H. R. 8832 be reported by the committee and passed by the Congress before the end of this session, let me read into the record two paragraphs from a report by the Budget Bureau. It was issued last week in connection with another matter, but fits perfectly the issue now before you:

"There are many activities now performed by private enterprise for the Federal Government which the Government, because of its freedom from taxes and its' enormous credit resources, could seem to perform more cheaply under a concept that nonpayment of taxes by the Federal Government is a true saving in cost. "This concept ignores the consideration that when a commercial-type operation does not pay taxes, it leaves a larger amount of taxes to be absorbed by other taxpayers. If this concept were accepted and if it were also considered sound to provide funds through Government borrowing, the Government might propose to take over these activities on grounds that they would cost less under Government operation. Such action would be contrary to our basic conception of a private enterprise economy."

That, Mr. Chairman, is the end of the Budget Bureau's statement. It is not the end of the demand of business that Government get out of business and stay out to the happy end that business may once more be free, that taxes on earnings

may be lowered, and that the American system of free enterprise may be restored to its successful stature.

Mr. KILE. The membership of National Associated Businessmen is made up of both big and small businesses, most of them deeply concerned by the competition of the Government in their own lines of enterprise. On their behalf I am appearing in favor of H. R. 8832, the Anti-Government-Competition Act, and, as of today, we extend that approval, with some reservation, to H. R. 9890, which was introduced yesterday.

The purpose of these bills is in general about the same; the machinery by which the Government would be taken out of business is different.

In H. R. 8832 we especially like the firm declaration of national policy by the Congress that Government should get out and stay out of competitive business. We like the proposed Anti-GovernmentCompetition Board of Cabinet rank, and we very greatly approve the powers and authority given to that Board-to require the listing of all business activities engaged in by the various boards and agencies; to hear the complaints of businessmen who are being harmed by bureaucratic competition; and to recommend veto of proposed new business activities by any Government agency when they are contrary to the public interest.

Those powers, Mr. Chairman, to demand a full and complete listing of all Government's businesses and to urge veto of further expansion, exist nowhere today-not even in the White House or in the Bureau of the Budget. We consider them of the utmost importance the very essence, in fact, of this effort to get Government out of competitive business. It may be that they can be written into H. R. 9890, if the committee deems it desirable to vest full authority in the Secretary of Commerce and the Director of the Budget, but we should not favor any proposal that omitted the forum for the hearing of businessmen's complaints, or the annual report to the Congress of all Government businesses, or the preliminary consideration of proposed new Government businesses, with the power to recommend veto.

What we want, Mr. Chairman, is a law that will preserve the freedom of private enterprise and protect our people from the socialistic system into which so much of the world is slipping. H. R. 8832 would stop further expansion of Government in business as of now-and that is what we want.

It is an amazing fact that no one knows the size or complexity of Government's enterprises in the fields of commerce, industry, and finance. No one knows, within X billions of dollars, how much money has been invested in these various businesses. Estimates of their current value vary from $25 billion to $50 billion or more. There is not even a responsible figure as to the number of persons employed in these bureaucratic activities.

This should not be so-but it is so and it has been so for a very long time.

Twenty-two years ago the Shannon committee of the House of Representatives investigated what Government was doing in business. A competent report was submitted, listing about 100 enterprises which appeared to be in competition with privately-owned business. But nothing was ever done to correct the unfair competitive situation that was shown to exist.

In 1952 the Bonner subcommittee held exhaustive hearings on Government's competitive business enterprises.

The CHAIRMAN. What was that committee?

Mr. KILE. The Bonner committee. B-o-n-n-e-r.

The CHAIRMAN. I know. That was a subcommittee of this committee.

Mr. KILE. What is that?

The CHAIRMAN. I think that was a subcommittee of this committee. Mr. KILE. Four thick volumes of testimony were printed; about 100 enterprises were listed; and a report was written, with recommendations for action. But the report was never printed or publicized and again, nothing whatsoever was done to correct the situation.

Happily, the story is different this year. Mrs. Harden's Subcommittee on Intergovernmental Relations has held hearings; a vast amount of evidence has been presented; findings have been published and given wide distribution and out of this study have come H. R. 8832, H. R. 9890, and other bills.

I shall not attempt to state here the types of business that Government is engaged in. The list of commercial and industrial-type activities in the Federal Government, 1953, to be found on page 12 of your committee's excellent report of The Government in BusinessPart 1, dated February 9, 1954, is astonishing, but as you well know it is by no means complete. In the months since our organization has been studying this competitive situation in our own independent way, there has been hardly a week that our attention has not been called to some other unlisted activity which is stepping on someone's taxpaying toes.

Unfortunately, Mr. Chairman, most of these Government businesses operate with practically no supervision. The Senate Committee on Government Operations published a few months ago the Audit Reports of Government Corporations and Agencies, and the shocking statement was made that it was not until 1945 that most of the 78 businesses investigated were required to keep a business-type budget or to have their accounts officially audited.

Small wonder that these Government businesses are abominably run-and that the taxpayers' money is recklessly wasted. There is the ridiculous episode of one of the Navy's ventures into the scrap-metal business. The Defense Department authorized its forces to spend $10 million a year reclaiming their scrap. The Navy's Pensacola Air Station promptly spent $25,000 on a scrap press and $5,000 to install it. Nearby was a bigger private press which in 10 days' time could have smashed and baled all the scrap the base had.

Your own committee records tell how the Government spent $43,369 to haul $4,368 worth of scrap iron from Alaska to California, and even that report is mild in comparison with the incident-again to be found in your committee's recent reports-in which a whole field of worn-out airplanes was sold to a scrap processor who found in the tanks enough gasoline to recoup the entire amount of his purchase price.

I have told you enough, I believe, to prove that Government should get out of business and stay out. You may ask: Can it be

done?

The answer is "Yes." And the proof of that "yes" is that it is being done.

Mind you, Mr. Chairman, most of Government's businesses were established under Executive order and they can be closed by Executive order.

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But the Congress must initiate the policy that these competitive enterprises are no longer in approval-that the Congress wishes Government to get out of business and to stay out.

We believe in these bills that have been introduced that with the right teeth and force in them we can accomplish this end.

Thank you very much.

The CHAIRMAN. When did you get H. R. 9890?

Mr. KILE. Why, it was introduced last night.

The CHAIRMAN. When did you get it?

Mr. KILE. We got it this morning.

The CHAIRMAN. Had you seen it before?

Mr. KILE. I had not seen it before.

The CHAIRMAN. Did you have anything to do with the writing of it? Who wrote it?

Mr. OSMERS. That was written in connection with this by myself and some people from the executive department.

The CHAIRMAN. Who?

Mr. OSMERS. Over in the Bureau of the Budget. I cannot say, Mr. Chairman, in fairness; and I would like to have the record show that this is an approved bill of the executive department or of the Bureau of the Budget, and I wish that I could identify it that way, but I cannot.

The CHAIRMAN. Who in the Bureau of the Budget helped draw it? Let it go. Get a subpena for whoever had anything to do with it. I want to know who drew it. Is there any secret about it?

Mr. OSMERS. There is no secret about it. I do not know whether this gentleman wants his name put in the record or not. He sent it over to me. I am not authorized to put that in the record by him. I do not want to cause him any embarrassment. There is no secret about it.

The CHAIRMAN. There is no reason why the members should not know?

Mr. OSMERS. No. I do not think it improves the bill or takes anything away from the bill whether Shakespeare wrote it or whether I wrote it. I think it is important and it is a good thing for the Congress to pass.

: The CHAIRMAN. What is in it is important. of

Mr. OSMERS. I do not think we should make a dime novel mystery out of who wrote the bill.

The CHAIRMAN. I am not trying to. I asked you a simple question. Mr. OSMERS. I am not authorized to use the gentleman's name. I do not want to embarrass him. I had a long talk with the Director of the Budget, Mr. Hughes, about the subject matter of it, and it was at my request this was offered.

The CHAIRMAN. You said, if I understood you correctly, that these businesses to which you object were authorized by Executive order, and by Executive order they could get out of business?

Mr. KILE. A great many of them can; yes.

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