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Mr. CONDON. I wonder if you have any comment about a bill which will give to the Secretary of Commerce, the Comptroller General, the Director of the Bureau of the Budget and the Secretary of the Treasury the right to tell the Department of Defense they have got to cut something down.

Mr. CURTIS of Missouri. I think on this basis, yes; on the basis, as I understand the bill, it is simply a procedural thing, so that if you have proper accounting systems in the Military Establishment, and these companies come forward with their accounting system and they present to the Board that they can do it cheaper, that is the sole finding, how it can be done the cheapest, so it is the least cost to government and to our society.

That is the point.

Now, at present the businesses of this country have no place to go it they want to present their case, except to the Military Establishment, itself.

Now, that is the case I have here at hand of the Department of the Navy.

The CHAIRMAN. They came to their Congressman?
Mr. CURTIS of Missouri. They had to.

The CHAIRMAN. Do you think it is proper for them to come to their Congressman?

Mr. CURTIS of Missouri. They had to.

The CHAIRMAN. And exert pressure on a Government agency? Wasn't that what McCarthy did?

Mr. Curtis of Missouri. I don't exert pressure, if the gentleman please, except the pressure—I hope I don't-of logic and facts.

The CHAIRMAN. I do it every week.

Mr. CURTIS of Missouri. I try to present that sort of pressure; yes, presenting the logic and facts, but I respect the right of the executive department to make its own decision and I do not try to interfere with that decision, except to the extent, I again say, of logic and facts.

This St. Louis concern had already presented this matter to the Navy and didn't even get an answer. At least I got an answer on a high level, but the answer, you will note, is that they want to continue to run their Naval Gun Factory even though this is a more costly proposition; and what I meant to add, which I didn't have a chance to add, is that St. Louis is one of the critical unemployment areas of this country, and we have even gone so far in Congress to try to encourage--and I have not been in favor of this, incidentallymilitary contracts and other contracts to be let in unemployed areas, where there is gross unemployment, to try and equalize it. I am against that for other reasons, but

Mr. McCORMACK. You know the fight on that. The Senate put on an amendment in the last 2 years and there has been a lot of difficulty in that.

Mr. ČURTIS of Missouri. Yes.

Mr. McCORMACK. I agree with you in that proposition, that reasonable consideration should be given to those labor distress areas, within the justifiable limits. I look eye to eye with you on thet.

Mr. CURTIS of Missouri. But the only reason I mention the specific case, though, is to try and bring home the fact that at present, without a bill similar to Mr. Osmers' bill, or the chairman's bill, there is no place where a small business—not just small; any business --can come in and present the fact that they could be doing this operation cheaper than the Government doing it by going into the business itself.

Mr. McCORMACK. Would this particular bill hit that case, Congressman?

Mr. CURTis of Missouri. I think it would, if I read it right. There is a board to which they could present the case.

Might I ask Mr. Osmers, because I am interested.

Mr. OsMERS. Yes. I have been waiting for an opportunity to interrupt you, Mr. Curtis, because I wanted to tell you and the members of the committee I have been very mindful of the objection that Mr. Condon first raised, and which you concurred in, and which I concur in, too, even though I introduced H. R. 8832; and as a result of conferring with the chairman about his views on setting up a board and on talking to people in the executive department last night-it wasn't done deliberately last night, but it happened the bili was ready for introduction last night-1 introduced into the Congress H. R. 9890, copy of which I do not believe anyone in the room has at this time, except the typewritten one I have here. I hope to have copies soon.

The disadvantages of the bills that have been introduced, other than mine, are, in my opinion, that they make a declaration and provide no place where American business that feels they are being harmed by Government competition, or feels they can do a better job, within the framework of Government, can bring their case. Obviously, writing to the Congressman is an old American tradition, but it is not the procedure that a business organization should follow in a case like this.

Mr. Curtis of Missouri. That is right.

Mr. OSMERS. A congressional office does not have the facilities or personnel to sit in judgment upon a case of this kind, and if they find one side is right or wrong a congressional office has no way of proceeding there, no authority, and obviously that authority must rest with the executive department, as it is limited and coexists with the authority of the legislative, and it would be ridiculous for Mr. Curtis in the case of the gun mounts, or whatever it was he referred to, to attempt to sit in judgment on that case.

Mr. Curtis of Missouri. That is right.

Mr. OSMERS. And having sat in judgment, what is he to do about it? Is he then to start writing letters, introducing bills to start awarding contracts to St. Louis concerns?

Therefore, I want to say to Mr. Cordon and to all the others on the committee who feel that we have got too many boards and committees, even though my bill proposes to establish one of the existing members of the Government, that there ought to be some place-and H. R. 9890 is very similar to H. R. 8832, and also similar in some respects to that which the chairman has introduced, except that it provides that the appeal place, instead of being a board, will be the Secretary of Commerce, and he will hold those appeals in abeyance as determined by Executive orders and instructions.

Now, there are some disadvantages to that, too, which I think we probably would be better to discuss when we hear the Government witnesses and when all of the members of the committee have had copies of the bill and have had an opportunity to study them.

We did not intend, as you know, to have Congressman Curtis as one of our first witnesses. We were hoping to hear from the representatives of the public, representatives of industry and representatives of labor groups about the general philosophical subject of competition with private enterprise, and then, at the end of that testimony, to sit with Government representatives and discuss the proper legislative remedy.

However, I just want to ask one or two questions of Mr. Curtis.

First, I would like to ask him whether he feels, in view of his experience here in Congress, that there is a need for legislative action, without trying to write the specific legislation?

Mr. Curtis of Missouri. Yes; I do, and that is what I am here mainly for, to commend this committee for going into this subject. I think something along this line is needed very badly.

This movement from a 9 to 1 to a 5 to 1 ratio has not been anything sudden. There is no blame to be cast. It has been a process that has come about partly because there was no way for private enterprise to come in and present its càse on these individual things, 'and I think if we once build the machinery where they can do this and it will happen every day, and it will be decided, each case, on its own merits, I hope; but at least the procedure will be set up-then we won't have this thing quietly being built up over a period of years without our really realizing what has happened.

That is why I think legislation is badly needed.

Mr. McCORMACK. Mr. Osmers, take the case Congressman Curtis referred to: Would you state where would your bill enable this board to say to the Defense Department, “Look into it,” and if they thought they differed with them they would say, "You should have let this contract with this concern that is located within the Congressman's district”?

Mr. OSMERS. I think that is a good question, Mr. McCormack. Obviously, the success or failure of any of the suggestions or bills that have been put before us would lie within the hands of the Executive.

To take the case that Mr. Curtis has outlined, his constituent concerned would come to the board or to the Secretary of Commerce, whatever Congress might decide would be the procedure. He would state his case, and let's assume it was a strong case. I assume, as a practical matter, the board or the Secretary of Commerce would attempt to secure the cooperation of the Department of Defense in connection with the matter, as a practical governmental day-to-day matter. Let us assume that the Department of Defense was not able to enter in what might be called an adequate defense of what they had done and would not cease the activity. It would, therefore, be up to the board or the Secretary of Commerce, or whatever appeal author. ity had been established here, to place the matter before the President for the issuance of an Executive order, and the Executive order would have the end result of ceasing the operating at the Naval Gun Factory.

Mr. McCORMACK. I can see that picture, but I understand this bill, or your new bill, would give to this board authority to eliminate in the future what is entering into the field of private business where the facts don't justify it.

Mr. CURTIS of Missouri. That is right.
Mr. OSMERS. That is correct, sir.

Mr. McCORMACK. I don't know whether your new bill provides that this board has the power to pass on the contract that has been made for the assignment of work.

I thought this bill had a more basic proposition than that.
Mr. OSMERS. I hope that Mr. McCormack-
Mr. McCORMACK. I am just trying to get information.

Mr. OSMERS. I hope Mr. McCormack will understand my position. I would prefer, because of the interest of time of these witnesses, not to discuss the details of the legislation at this particular time in the hearing, because many people have come long distances.

Mr. McCORMACK. We won't have Mr. Curtis before us again.
Mr. OSMERS. Pardon me.

Mr. McCORMACK. We have him now. · Mr. OSMERS. I am certain Mr. Curtis' views I certainly wouldn't want to speak for him—are the same as yours and mine, Mr. McCormack, and that is we would like to have a place where American business can present its case and we would like to get the Government out of competitive activities and keep them out of them; and I don't think right at this stage is the proper time to discuss the 4 or 5 bills or resolutions that have been introduced to do that.

I believe that any one of these bills that provides a forum where business may go, within the executive department, will be the set of brakes that we need to stop the Government going into new businesses and to gradually get them out.

A great deal has already been done this year, I must say, in fairness to the executive departments. They have made a very imposing record here, but any one of these bills, because they will give legislative expression in the first instance to a declaration of policy and a definition of competitive activity, will be a great step in the right direction.

The CHAIRMAN. Mr. McCormack, may I say I discussed this matter with the leadership of the House and was advised that, because of the limitations as to time, no legislative program would be considered by the House at this session, but hearings were scheduled following that. To go back a little, early in the first session complaint was made to me and I referred the whole matter of Government in private business to the Harden subcommittee, and, as was stated here earlier, they held extensive hearings and put the whole background in the record. You are a member of that committee, so you are familiar with that.

Mr. McCORMACK. I am not a member of the committee, Mr. Chairman.

The CHAIRMAN. You are interested and familiar with it.

Mr. McCORMACK. I am familiar with the committee. They have done very fine work.

The CHAIRMAN. Then the thought here ---

Mr. McCORMACK. I don't have to necessarily agree with everything they have done to say they have done a very fine job.

The CHAIRMAN. Iš that we might get at most a declaration of policy. There are two bills which have been on my desk for some months, 9834 and 9835. The latter was one I drew, and 9834 was prepared by the legislative counsel; but the last one follows the thought I had.

It is obvious that the Government shouldn't be in private business generally. It can't continue in it and continue to exist.

That is up to the executive department, because Congress cannot legislate on

each specific instance that may come up, as to the awarding of contracts or whether this or that is advisable. So, I tried to put that over in the executive department, if you will look at it.

Mr. McCORMACK. The leadership said they will not have the time to bring any bill up this year?

The CHAIRMAN. That is right, to give it consideration on the floor.

Mr. McCORMACK. But these hearings are exploratory, to get the benefit of testimony for consideration probably next session?

The CHAIRMAN. Exploratory in the sense that we want to find the way, and I think Mr. Osmers will agree with me, by which this job, which obviously must be done, can be done.

Mr. McCORMACK. I will agree the introduction of legislation is only an avenue, and it is a good avenue. I recognize Mr. Osmers, Congressman Osmers, and the chairman have introduced the bills, and they are avenues for these hearings, and it is a very desirable course to follow, but I was just wondering in the case of Čongressman Curtis, the case he cited, where under these bills this board would have the authority in that case to say to the Defense Department, “You haven't done the right thing,” or “You have made a mistake and you should have awarded the contract to this company."

I was wondering whether there was the authority to do that.

Mr. OSMERS. The authority, of course, would have to come from the President. They would either have to place it before the President, and he would have to issue the order, or the President would have to delegate that portion of his authority to the board, or to the delegated officer.

I would like to make a comment on what Mr. Hoffman has just said, which I know is exactly what the leadership

Mr. McCORMACK. Is that power contained in the bills for the President to do that?

Mr. OSMERS. No; the power is contained in the Constitution of the United States.

Mr. McCORMACK. I understand that, but we are going to have to go to something more than that.

The CHAIRMAN. If you will take a look at 9835, that puts it up to the President and to the executive departments. Now, it is perfectly obvious the Congress can't legislate or direct the awarding of specific contracts. We know that.

Mr. OSMERS. Obviously.

The CHAIRMAN. So, someone must do it. It is up to the executive department to lay down a broad, general policy and to get the Bureau of the Budget to quit coming to us for money for the departments and to get these departments to quit engaging in these activities.

Mr. CURTIS of Missouri. I would agree with Mr. Osmers, that instead of entering in a discussion and I am as much at fault as anyone—I feel now we should hear these witnesses.

Mr. OSMERS. I feel we should hear the witnesses, too.

I just want to say to you, Mr. Chairman, and to the committee: I am going to make as strong a representation as possible to the leadership of the House and the Senate in an effort to get action even in the limited time we have remaining.

The CHAIRMAN. That is all right with me.

Mr. OsMERS. I may not be successful, but I am going to make every effort to do so.

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