The CHAIRMAN. What is the matter with the provisions of H. R. 9835, which provides that the President can cause an examination to be made, and that he will be given authority to modify or abolish functions and activities and transfer them and so on and so forth? Why not put the responsibility back on the executive department? Mr. KILE. Mr. Chairman, I am in the legislative branch of the government of the State of Ohio. There are a lot of times that the legislative branch and the executive branch of the government do not agree. I think the legislative branch of the government ought to determine the policy, and, so far as you are able, direct the executive what it ought to do.

The CHAIRMAN. Does H. R. 9835 not do that?

Mr. KILE. I am not acquainted with H. R. 9835.

The CHAIRMAN. Show him a copy. It is 21⁄2 pages long. It was only introduced July 8. It was on my desk for 3 months.

Mr. KILE. I have not read this sufficiently, but I think there is one difference between these two measures.

The CHAIRMAN. I was not concerned about the difference in the measures. I was asking whether or not that bill would put the responsibility back on the executive department.

Mr. KILE. I think that is the case. It would put it back on the executive department.

The CHAIRMAN. In so many words it tells the executive department that the legislative branch does not approve of the executive department carrying on business that could be engaged in by private enterprise; does it not?

Mr. KILE. That is right.

The CHAIRMAN. If we tell the executive departments what they ought to do they will either do it, or we can put it back on their necks, can we not?

Mr. KILE. That is right.

The CHAIRMAN. My point is this. You cited some committee-I believe the Cannon committee. When did they hold their hearings? Mr. KILE. The Bonner committee?

The CHAIRMAN. Before that.

Mr. KILE. The Shannon committee?

The CHAIRMAN. Yes.

Mr. KILE. That was in the 1930's, was it not? 1932?
The CHAIRMAN. Has anything been done since then?
Mr. KILE. Nothing has been done.

The CHAIRMAN. Do you see where we get when we try to write a report and tell them something? So far as I am concerned, the only way we can do anything is to deny the appropriations. Just as long as you give them a dollar they will spend it any way they want to.

Mr. KILE. That is right. If we have a board which reports back to the Congress, which H. R. 8832 provides, if they report back to the Congress these activities then Congress is in a better position to know what the activities are than it is at present. We do not know. As I understand it, you cannot tell from the budget where these activities are or where they get their money.

The CHAIRMAN. You cannot find out, no matter how hard you try. Mr. KILE. This bill gives this board authority to get from the various departments of government these various operations, and where they are located and how much money they spend.

The CHAIRMAN. My experience with the legislative branch has been that when you get a board or a commission it is a long, long time, if ever, before you reach the objective pointed out by the board or commission.

Mr. KILE. It would be in this case, because there is evidently a lot of these operations which nobody knows a great deal about, except the department itself.

Mr. OSMERS. Mr. Chairman?

The CHAIRMAN. Yes, sir.

Mr. OSMERS. As I said this morning, I do not want to debate at this stage of the hearings

The CHAIRMAN. I do not, either.

Mr. OSMERS. The relative merits of these bills. I would like to make this observation about H. R. 9835, which is a perfectly good effort to get the Government out of business: My criticism of it is that it does not provide American free enterprise and free labor with a definite place where they can come in and tell their story and be heard under law.

The CHAIRMAN. The answer to that is that it confers authority upon the President. Of necessity he would have to appoint somebody to act in his place and stead. It would be to that individual or that group that business could go.

Mr. OSMERS. I think we have to say in fairness to the President, Mr. Chairman, that from the evidence we have had in the Department of Defense and elsewhere in the Government that a sincere effort is being made to list and to terminate as much as possible, without clear legislative authority and direction from the Congress, these enterprises, and to keep the Government from entering into new types of competitive activity; but that is not enough. I feel it is a matter where we must plainly put it on the books.

In that I certainly go along with the spirit of your H. R. 9835. I feel that we should go that one step further, Mr. Chairman, and establish within the executive department some place where a man such as the man speaking for the Trucking Association before us this morning

The CHAIRMAN. Or Mr. Pilcher.

Mr. OSMERS. Or Mr. Pilcher with his particular problem will have some place where this matter can be placed squarely before the executive branch for adjustment.

The CHAIRMAN. All I am concerned with is getting it done.
Mr. OSMERS. Right.

The CHAIRMAN. We have been sitting around here ever since I have been here, and we seem to make no progress. If you have any suggestions, or if any witness has any suggestions, about how we can do the job, that is what we would like to know.

Mr. KILE. I think that is one important thing; so that we would have some place to go to present our problem. We need somebody who can make a determination and finding and report to both the President and the Congress what has been found, and make suggestions.

The CHAIRMAN. After you have made the report, if it is something dealing with the Army or the Navy or the Air Force, we will have the head of that Department and his spokesman up here telling us that for national defense that is the only way they can get it and do it; which I do not believe.

Mr. Lipscomb, you have had a world of experience in the California Legislature. Perhaps you could add something to that.

Mr. LIPSCOMB. I cannot right at this time, Mr. Chairman.
The CHAIRMAN. As to how we are going to get at it.

To me, gentlemen of the committee, that is the only issue. I cannot see any argument as to why the Government should continue in these businesses. How can we get it out of them? How can we force it out of them?

Some of you were here when we wrote the unification bill. There was not a thing in that bill that the executive department could not have done of its own volition if it wanted to. Nevertheless we passed that act, and now we are still back here, just the other day, with 15 new secretaries.

All right; I will not take any more time.

Mr. KILE. Thank you.

The CHAIRMAN. I do not believe there would be any difficulty getting a unanimous report out of the committee if they would tell us how to do it.

Mr. RIEHLMAN. I think you are right.

The CHAIRMAN. Mr. Griffith.

STATEMENT OF M. D. GRIFFITH, EXECUTIVE VICE PRESIDENT, NEW YORK BOARD OF TRADE, INC.

Mr. GRIFFITH. Mr Chairman and gentlemen, my name is M. D. Griffith and I represent the New York Board of Trade. I am the executive vice president of that body.

Off the record.

Mr. Chairman, I am here to commend.
The CHAIRMAN. Just a moment.
(Discussion off the record.)

The CHAIRMAN. The statement of Mr. Griffith will be inserted in the record at this point.

(The statement is as follows:)

STATEMENT OF M. D. GRIFFITH, EXECUTIVE VICE PRESIDENT, NEW YORK BOARD OF TRADE, INC.

GENTLEMEN: My name is M. D. Griffith, executive vice president of your petitioner, the New York Board of Trade, Inc. The board is a membership corporation, organized in 1873, and incorporated in 1875 (ch. 565, laws of New York, 1875). Its offices are at 291 Broadway, New York, N. Y.

This appearance is made upon the invitation of the committee chairman to testify at this hearing. It carries out a long-established policy of the board of trade which was reaffirmed by its board of directors, at a meeting on June 1, at which H. R. 8832 was considered.

The board has maintained consistently that Government should not compete with, nor unduly restrict or interfere with business under the American private enterprise system. The concept of democracy in Government finds its counterpart in a private enterprise economic system. The board therefore applauds the expressed declaration of policy of the bill as follows:

"It is the declared policy of the Congress that the Government shall get out and stay out of business-type competition with its people wherever consistent with the national health and security."

In the presentation, our concept of the American Government is an instrumentality or organized human society to exercise authority over the American people, by rules of law which are within the limits of our Constitution.

We think of the science and the arts of government as politics, and one versed or experienced in that science as a politician.

We think of American business as a form of activity that supplies and makes available the things desired by people, under private enterprise, motivated by just and reasonable profit.

There are many thinkers, writers, orators and others who, for purposes of their own, slant these elementary concepts so as to include sinister and evil interpretations. Neither the public official nor the businessman has escaped the biased critic's invectives, in his effort to rationalize a thesis which he supports. Some would have us believe that the terms "big Government", "politics and politicians" are dangerous per se, and that "big business" is antisocial and must be regarded with grave suspicion. Such innuendos are false foundations upon which to build a greater America.

It has long been the conviction of the New York Board of Trade that, basically, Government should stick to governing, and stay out of business risks and the responsibility of business management. It is our equally firm belief that American business should be transacted under the laws enacted by the American Government.

In our recent history there have been emergencies that seemed to justify the Government entering private business enterprises. This bill H. R. 8832 refers to "over 100 business-type activities in competition with its people." The very language employed here and the complete absence of accurate estimates showing the capital invested in Government-owned enterprises suggest that few in Government know precisely how deeply the Government has become involved in business enterprises. The alphabetical arrangements employed in the past three decades have not contributed to clarity.

The time is due when this situation should be thoughtfully examined and corrective measures be undertaken in the public interest.

From our point of view there are cogent reasons why this should be done, other than the politico-philosophic concept of government competing with its people.

The businessmen, for whom we presume to speak, do not believe that Government in business contributes to efficiency, nor does it reduce costs. With their background of training and experience they view our Government as the world's greatest corporation. They look with misgivings at any lack of coordination of effort, careful consideration of costs, especially when that great corporation owes a debt of some 270 billions of dollars. In business corporations, errors of judgment, mismanagement, inefficiency, high-production costs, are quickly discovered, and corrective action is taken at once, otherwise business could not continue. On the other hand, when government enters into the field of business endeavors and especially when the motives are political there is no department making continuous checks, with the result that capital expenditures more often than not exceed anticipation, and there must be supplemental appropriations to complete the costs. The politician often underestimates the final costs.

In government there is no topflight management checking the quality of the product, improved methods, expanded markets, nor, most important, and there ever any accumulated surpluses resulting from the operation.

Another substantial price which the Government pays for going into private industry is the loss of taxes on Government operations. Private industry has established the fact completely that it can supply most of the requirements of Government and still contribute its just share of the taxload.

The New York Board of Trade therefore supports in principle H. R. 8832, which simply puts added responsibilities on to four important officials of Government, namely the Secretary of Commerce, the Secretary of Treasury, the Comptroller General of the United States and the Director of the Bureau of the Budget. The bill would simply direct them to make studies and report to the appropriate officers of the executive and legislative branches of Government. The bill does not set up a supergovernment. It does not restrain the powers of Congress. It does not have final decisions on whether Government projects should be undertaken or not. It would seem therefore that this bill makes a reasonable and intelligent start toward the desired ends of having Government perform the functions which it is best qualified to do, and look to the American private enterprise to render its best services for Government.

This presentation is not intended to be all inclusive. Businessmen regard with sympathy and understanding many activities of the Government and especially when national defense is involved. Arsenals for the armed services should be at the highest point of efficiency. The materials and the secrets of the unfolding atomic era, very properly belong to the Government alone with only such business participation as the Government finds desirable and expedient; projects involving many states are within the realm of Federal Government activity.

The board of trade has no thought of business engaging exclusively in such undertakings. It only expresses a sincere hope that business methods will be employed wherever practical and that the projects will continue under constant review so that business may have the opportunity of cooperating where feasible and desirable.

The New York Board of Trade would be reluctant to petition Government to enact a specific bill. We do applaud and petition that a bill to accomplish the expressed purposes be enacted.

The CHAIRMAN. If you will give consideration to the question of how we can get the Government out of business, that will be helpful. Mr. GRIFFITH. Thank you, sir.

It has long been our traditional thinking that Government should not compete with nor should it unnecessarily harass or interfere with private enterprise.

I would like to emphasize that I did not use the word "free" private enterprise. I do not think in this country we have or should have freedom of enterprise. It has got to be controlled and restrained by the laws which Government does lay down.

It is encouraging, Mr. Chairman, I believe, to businessmen throughout the entire country to have the observations made from the business side of this committee table that I have heard just this morning. I believe it is encouraging to business and that, I think, includes both employers and employees.

We in the board of trade do not believe that there is a sharp line of demarcation that you can draw and say, "If the Government goes over that line we are opposed." It has to be a flexible arrangement. We could not come here in conscience recommending that in times of great emergency the arsenals of our armed services be hindered by the necessity of asking for bids for the immediate movement of goods. There are certain subjects dealing with security, like the atomic age we are now entering, where most certainly it is the function of Government to preserve, and business would certainly do nothing but applaud that. There are projects of interest to many of the StatesI am thinking of flood control and some of the attendant resultswhich seem to us very properly to fall within the province of the Federal Government rather than for private business.

The CHAIRMAN. When you say "Government" do you mean State or Federal?

Mr. GRIFFITH. We mean the Federal Government.

We do feel, however, that there should be created this centralized body. I hesitate to use the word "agency" but there should be some place we can go which would be a lot more comfortable than where we go now, where you can come in and say, "Here are the facts," and somebody will listen to it.

We notice in the language of H. R. 8832 that you refer to over 100 instances where Government is competing. There is not a word in there as to how much money the Government has put into that. I doubt if there are very many places in Washington where you can find out how much capital expenditure the Federal Government has put into operations of this kind.

We believe very firmly that there should be a statement of this policy; that the Government is going to get out and stay out-I think I am quoting the words of the bill-out of business that could be transacted by private enterprise.

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