I understand Mr. Wimmer was to present the paper and that Mr. Wimmer's plane was grounded and he is not here, but that Mr. Burger has the paper and will present it.

Mr. BURGER. Yes, sir.

STATEMENT OF GEORGE J. BURGER, DIRECTOR, NATIONAL FEDERATION OF SMALL BUSINESS, IN CHARGE OF THE WASHINGTON OFFICE, WASHINGTON, D. C.

Mr. BURGER. I am reading this statement for Mr. C. Wilson Harder, president, National Federation of Small Business, Inc.

The CHAIRMAN. Mr. Burger, would you identify yourself, please? Mr. BURGER. George J. Burger, director of National Federation of Small Business, Inc., in charge of the Washington office at 715 Bond Building, Washington, D. C.

The CHAIRMAN. All right.

Mr. BURGER (reading): My name is C. Wilson Harder, president of the National Federation of Small Business, Inc., a national organization comprised of independent small businessmen throughout the Nation. For the National Federation of Small Business, Inc., which has the largest individual membership of any business organization in the United States whose head office is in San Mateo, Calif., and with district offices in Chicago, Ill., and Washington, D. C., I would like to express to the committee our sincere thanks in granting us the privilege of appearing here to state our views before this important body.

I think, before I go into my complete statement, that we owe a debt of gratitude to the foresight of the Congress in creating the Small Business Committee in the Seventy-seventh, Seventy-eighth, Seventyninth, and Eightieth Congresses.

During the war years, small business of this Nation had the help of the Small Business Committees in the Congress. It is a safe conclusion in stating that most of the small businesses would have been eased out for the duration of the war without this aid. I think it safe to say that in Great Britain small business did not have this kind of help during the war years and found itself in a very precarious position and some industries, the bulk of them small business people, were eliminated for the duration of the war.

I think, also, at this time it is important and is important and proper to pay tribute to Senator Taft who was an active member of the Small Business Committee of the Senate in the Seventy-seventh and Seventy-eighth Congresses, and at the same time, Congressman Wright Patman who served in a like capacity on the House side on their Small Business Committee. In our opinion, it was these two important committees in the Congress that saved the day for small business of this Nation, and I am glad to have this opportunity to make our position publicly

known.

I believe, in opening my remarks, it is important to know that we feel this committee has an important obligation on their hands to save the economy of the Nation-more important, the free enterprise system on which this Nation was built. The importance of this committee's undertaking is typified in a letter that I recently noted in the New York Times under date of June 21 which I quote:

PLACE OF SMALL BUSINESS-ITS IMPORTANCE STATED AND PROTECTION AGAINST BIG ENTERPRISES URGED

To the Editor of the New York Times:

The recommendation in the report of the Committee for Economic Development for improving the plight of small business enterprises are encouraging because they have long been needed. It is hoped that means will be found to put them into effect with reasonable dispatch.

The report points out that 98 percent of all American business qualifies as "small business." So long as these little enterprises remain comparatively sound and active there need be little fear of an over-all business slump.

Over the years, America developed the strongest industrial economy the world has known through the combined work of her thousands of small, widely scattered enterprises. To further strengthen the place long held by small business, steps should be taken to keep the small enterprise harmless from the encroachment of the large enterprise which, by one means or another, would take over the little fellow or force him out of business. As big business gets larger and more centralized the balance which has kept America financially strong swings toward economic unstability.

Some much needed improvement in our patent laws should be considered by the committee so as to protect small enterprises which are pioneering new inventive ideas. It should not be possible for big business to sit quietly on the side lines until by hard work and sacrifice an invention is proved successful and then to throw up legal barriers against its manufacture and sale.

Regardless of the ability of big business to spend more time and money on research and development, once they get the inventive idea no subsequent advancement made possible by greater facilities and manpower, except in rare cases, should be permitted to deprive the original sponsor of rights vested in him by his patent. Americans are prolific and resourceful inventors and, from the beginning, in most cases, in order to obtain recognition they have been obliged to commercialize their work the hard way. That is how small enterprises are born.

NEW YORK, June 13, 1947.

EDWARD F. CHANDLER.

We agree with this and the statement recently released by the Committee for Economic. Development in which they state, in part: "We do so fully aware of the fact that small business in most lines has been unusually vigorous and prosperous since the war." Their statement continues, "but the boom times of 1946 and early 1947 will not last forever."

It is our opinion that the latter condition is slowly approaching the crisis. It is our opinion that if our Nation had not opened its arsenal in supplying the world since VJ-day, due to increased production facilities, small business of this Nation would find itself in a precarious position. In some industries it appears that that has already come about. The federation, speaking for its members, insists and demands strong and healthy competitive conditions.

You note I mention healthy competition; there is a big difference between healthy and unfair competition. We seek no special privilege for any of the people we represent, but if it is true, as the Committee on Economic Development states, that 98 percent of firms operating in this country are small business, and further states that this is the foundation upon which our whole system of business enterprise is built, then it behooves this committee to check and doublecheck why in normal times the majority of the 98 percent of firms operating in this country are in a precarious position.

It must be true that a healthy small business structure must mean much to the fabric of American life. It must be true that small firms help to keep big firms on their toes. It must be true that the little fellow frequently forces competition in price, design, and efficiency.

It is well to note in the letter we quoted from the New York Times of June 21 that this is brought out very forcefully by the writer as to the expectations he hopes the committee will bring about. I don't think it is a wrong or improper statement to state that many of the major improvements in industry, to a large degree, originated in the minds and the thoughts of some small business institution. Two members of this committee, Senator Taft and Congressman Patman, know that during the early part of the war, in 1942, it was the small business interests of a major industry that created a program, later endorsed and put into effect by a special governmental committee, that went a long way toward solving a serious wartime transportation problem. I think that you on this committee will agree that the small local business institution has an intimate knowledge of the home community and has a personal stake in it. They have this interest because, after all, they are a part of the community and it is necessary for their own self-preservation that they have this home-town spirit in their individual businesses throughout the Nation.

It is my opinion that the purpose of this committee, to a large degree, is to dig into production and competition in the Nation's industry which will, after all, bring about a healthy competitive structure and bring prices more in line so that the consumer will be in a position to purchase his necessary requirements. I must commend the chairman for putting some questions to the preceding witness, the first witness. The first question, as I remember it, was, "So you still do not suggest what the committee should do?" and the second question was in regard to antitrust laws. That is what we are primarily concerned with and we thought the witness answered what the committee could do.

I do not believe that the trend in our Nation's business structure tends to bring about fair and healthy competition. That is not my belief only. I refer to the reports of the Senate Small Business Committee in the Seventy-ninth Congress, Document No. 206, Economic Concentration and World War II.

Then again, the same committee reports, Seventy-ninth Congress, second session, Committee Print No. 16, Future of Independent Business, and again, United States Versus Economic Concentration and Monopoly, a staff report to the Monopoly Subcommittee of the Committee on Small Business, House of Representatives, Seventy-ninth Congress.

Then again appearing in the press, July 1, 1947, was a United Press story stating that in 1947 they list 45 American firms in the "Billion Dollar Club." The total assets of these 45 American firms in 1947 totaled $103,456,016,995.

It would be foolish to suppose that this economic concentration in the hands of 45 leading corporations would not have some serious effect preventing a healthy, fair, honest, competitive condition in the Nation's industry. There is a danger, and a serious danger, unless this committee is insistent that small business is given the proper protection to function in fair competition in which the public will be the beneficiary.

Senator O'MAHONEY. It may be appropriate to interrupt you and say it is no longer a billion-dollar club, it is a $2,000,000,000 club, and the total assets of these 45 agencies happen to be a very considerable sum more than the national debt.

Mr. BURGER. It is less than the national debt.

Senator O'MAHONEY. The national debt is $253,000,000,000.

Mr. BURGER. We may reach a point in our Nation's economy where it will end in socialization of most of the industries, and we for one, speaking for small business, will fight to the very end any such attempt. This economic concentration situation must be serious when Mr. B. C. Forbes recently stated the following:

Dinosaurs, too big, became extinct. The Roman Empire, overexpanded, fell. And the far-flung British Empire is shrinking. Is it possible for ambitious American industrial, financial, and other leaders to overdo expansion?

I have an uneasy feeling that the time has come for the brainy stalwarts administering these massive organizations to give very serious thought to their future policy. Should they reach out unrestrainedly, acquiring vaster and vaster interest, travel farther along the road toward monopoly, dominance? Or should they pause to reflect on what the final consequences of unrestrained growth may be?

These questions deserve the most serious, long-visioned pondering.

It would appear to us in reports we received from our members, our field staff, and others, that there is a great worry in the minds of small business if they dare to attempt to force competition. As many state, they will end up with price wars or, again, their source of supply no longer available.

Having the closest contact with small business of this Nation through our membership, these reports we are receiving every so often show the fear felt by small producers and small independent retailers, of what will happen if they attempt to bring about real competition in which, indirectly, the public will be the principal beneficiary.

Our members believe that production sparks competition and that competition in turn sparks production when both are uninhibited by either business or governmental checks. If this condition comes about, our Nation's economy will be in fair and healthy competition and fear of retaliation from suppliers will no longer hinder small business of this Nation.

It is interesting to note that on July 5, 1947, the American Federation of Labor recommended to its Nation-wide membership the setting up of cooperatives. This must all lead to a fact that this economic concentration in the hands of a few corporations controls and dictates the price structure throughout the Nation. It is not my intention to state that these leaders in big business get together and plan. but it is my opinion that the power in the hands of a few corporations acts for them as a warning or deterrent, so that the great numbers in industry don't step out of line.

The Committee on Economic Development in its recent report confirms what I have just said when they stated:

The growth of big business in the last 50 years undoubtedly has taken place, in part, at the expense of smaller concerns.

They further state that "some large firms undoubtedly have taken unfair advantage of smaller competitors." We might as well look the facts in the face. We are never going to bring about a real competitive condition in the Nation's industry until this economic concentration is broken up for the maintenance and reestablishment of many thousands of small businesses. It is my honest conviction that the public in this way will get lower prices and better commodities.

It is not our intention to ask this committee for any protective measure for the inefficient small businessman. We have no interest

in the inefficient small business institution; that is, provided his inefficiency is due to his own negligence.

It is possible that the Government itself has been at fault or negligent in its administration and enforcement of the antitrust laws. Possibly big business has been aware of the situation.

Just a few months ago the former Assistant Attorney General, the Honorable Wendell Berge, stated in substance before the Senate Civil Service Committee that for the past 35 or 40 years the administrations have been giving merely lip service to the enforcement of the Sherman Act.

Bear in mind, members of this committee, this is not my statement; this is the statement of the then Assistant Attorney General in charge of antitrust. Unfortunately the Nation's press did not carry his complete testimony. I ask, How are you going to bring about real and healthy competition within the Nation's industries in which the public is the present beneficiary unless law enforcement takes place and is done immediately?

It is significant to note that the Federal Trade Commission has been appealing to the Congress for nearly 20 years, requesting an amendment to the Sherman-Clayton Acts that would prevent or prohibit corporations in the same line of endeavor to merge.

Up to the present time, Congress has not seen fit to pass such legislation; witness the merger upon merger of corporations in the same lines of industry during the past 10 years. The result is that you are adding more to the Billion Dollar Club in our Nation's economic structure, and through this will stifle and prevent healthy competition. It is my opinion that if there is to be a future for small business of this Nation, with the public being the principal beneficiary, the main and foremost action of this committee should be vigorous and immediate antitrust enforcement.

Senator O'MAHONEY. You are aware, of course, that Congressman Kefauver's bill to amend the Clayton Act has been approved by the House Committee on the Judiciary and is now pending action by the Rules Committee.

Mr. BURGER. Yes, sir.

I need not tell you the effects on small producers when they see corporation upon corporation merging in their respective lines of industry. You will know what this must mean to the thinking of a small producer and even more important, to the small retailer.

Senator O'MAHONEY. I may interrupt, myself, and say I know what it is.

Mr. BURGER. It is not my own industry, the rubber tire industry, but all industries.

So it is my intention to make as the No. 1 issue the recommendation, before anything else is done, to bring about free competition and the preservation of small business. Antitrust laws must be enforced; not merely lip service, but by a directive of this joint committee to the respective agencies.

A glaring example of the depressing effect of alleged anti-trust-law enforcement is the action of the Federal court in Sioux City, Iowa, June 24, 1947. I quote: