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Mr. OSMERS. Mr. Fountain..

Mr. FOUNTAIN. I have been listening with a great deal of interest particularly to your question with respect, I assume, to the subject matter of section 4 of your bill. I imagine that is what you have in mind.

Mr. OSMERS. 9890, Mr. Fountain?
Mr. FOUNTAIN. 9890.

I am inclined to agree with you. The only thing that disturbs me is the fact that, as you say, in order for it to be effective and in order for these complaints to be properly and effectively and honestly heard, it appears you have almost got to have another agency or another bureaucracy of some kind: but, assuming for purposes of argument, that we set up such an agency which can deal with these complaints in an impartial manner, what is it going to amount to, if it doesn't have some teeth or some means of enforcing the rulings which it may make?

Mr. OSMERS. I feel, Mr. Fountain, that the Executive, under the Constitution and under many, many of the laws that we pass here, has authority to act in this field.

Mr. FOUNTAIN. All right.

Mr. OSMERS. No one has raised the question at all before the committee, or before the subcommittee, about the President's authority. I believe that it is in fairness to the Executive, whoever he might be, that he, himself, cannot sit in judgment on each case. It would seem to me that we, by congressional direction, could establish some person or board,

or group. My original bill, H. R. 8832, I like much better than I do H.R. 9890, even though it set up a board, because it seemed to me a little broader and probably it would work out just as well.

H. R. 9890 designates the Secretary of Commerce, and he has certain very specific duties given to him in the bill; additional ones can be given to him by the President, and I feel, Mr. Fountain, ånd the rest of the members of the committee, that if the Secretary of Commerce, following the procedure set up in H. R. 9890, or the Anti-Government Competition Board established by H. R. 8832, places on the President's desk a recommendation that the United States Government not engage in aluminum sweating in the continental United States, it would be my opinion that any Executive that we might have would not permit aluminum sweating to be conducted in the continental United States.

Now, that is just my feeling about the type of man that is President of the United States, that if he had an intelligent report placed before him, by someone who was not directly concerned in it, but that everybody had been heard, I feel the Executive, the average Executive that we will have, will act properly and in accordance with the recommendations.

I think some of the witnesses here—take, for example, the warehouse people may be oversanguine about what may happen to them. I don't know but what the Government is going to continue to do a lot of warehousing, and some of it, I assume, they will have to do at all times.

Are there any other questions?
If not, thank you very much, Mr. Maudlin, for your statement.
Mr. Hibben.

Mr. WARD. Mr. Hibben, of the International Association of Ice Cream Manufacturers, has a statement, I believe, that he wants to insert in the record.

STATEMENT OF ROBERT C. HIBBEN, EXECUTIVE SECRETARY, INTERNATIONAL ASSOCIATION OF ICE CREAM MANUFAC. TURERS

Mr. HIBBEN. My name is Robert C. Hibben. I am executive secretary of the International Association of Ice Cream Manufacturers.

We have a membership of 920 corporations operating 2,235 plants. Our members manufacture over 80 percent of the ice-cream manufactured in the United States.

We appeared before the Harden committee and presented a brief and a survey, and I would like to have this brief-it may not be possible to repeat it in these hearings, but make a notation, refer back to our previous testimony. (See Harden committee report, pt. 1, pp. 153–158.)

Mr. OSMERS. All of that testimony by reference is going to become a part of this record.

Mr. HIBBEN. I didn't become too interested in this hearing, having previously testified, until I received the first increment of commercial and industr al facilities to be reviewed, continental United States, Department of Defense, instruction 1400.16, from the Department of Defense, on which page 11 they show that the Department of Defense only manufactures ice cream in three places in the United States.

Mr. Chairman, in our survey we find that our ice-cream manufacturers, small, medium, and large compete with the Federal Government in 36 States, the District of Columbia, Hawaii, Philippine Islands, and it comprises 168 ice-cream plants operated by the Federal Government, and there may be more.

Analyzing these, you will find that 82 of these are being operated by the national defense and not 3 as they say in their statement.

Mr. OSMERS. Mr. Hibben, this might be a d fficult question for you to answer. Maybe you are going to touch on it, anyway, later on, but are you in a position to tell us how many of the total number of plants that you have mentioned are located in what might be called competitive ice cream markets?

Mr. HIBBEN. Yes, sir; I can tell you.
Mr. OSMERS. That is where two or three major suppliers are.
Mr. HIBBEN. I can tell you right now, they are all in competitive

Now, with the Army and the Navy we don't want to in any way stop their manufacture of ice cream on the battlefield of Korea, or on a battleship.

We even have a liquid and a dry mix that the dairy industry furnishes those establishments.

There is even a competitive area in the Philippine Islands, Cook Field, because we are an international association and have a member there, and that is one of the complaints coming from a Philippine ice cream manufacturer, that he is deprived of that business.

You will find that every one of these 168 are here on the continental United States and are in areas where they are in competition with us in the different towns and cities.

areas.

We, as I stated, find 82 of these establishments in national defense and 79 in the Veterans' Administration.

We have worked on this a year. We find it is a matter of frustration.

I feel sorry for a small-business man; he doesn't know where to go to find out how to stop such competition, because up to date, the only place you can go to is the Department of Defense, Veterans Administration, or the agencies which are competing against you.

We were told that they can manufacture our product from 40 to 50 cents a gallon less than we can. We will in no way criticize the Government's method of cost accounting. However, we have offered to actually pay, as they did in Honolulu, for a separate survey on costs, on an outside agency, using their system of cost compared with the industry's, and we have been turned down.

Then we have another proposition that has been thrown up to us all over town and the different places I have contacted, namely that we, the Government, are not competing with the dairy industry, "That our organization is buying ice cream mix, and all we are doing is freezing it. Therefore, there is no competition.”

Well, you have about half of the ice cream plants, the smaller ones in your district buy that ice cream mix from creameries, flavor it and freeze it and harden it and distribute it.

Even though the Government buys ice cream mix and from this mix makes ice cream, it is in competition with the ice cream industry.

I came here to review these situations and, if you will study exhibit A, you will find the Federal Government in competition with the ice cream industry in 36 States.

And, Mrs. Harden, there are none in Indiana.
Mrs. HARDEN. I just checked that.

Mr. HỊBBEN. But you will find the biggest offender is California, where there are 23 ice cream plants operated by the Federal Government.

Mr. McDONOUGH. That is a big country out there.
Mr. OSMERS. They must have a sweet tooth out there, Mr. Hibben.

Mr. HỊBBEN. We want legislation that will designate some place to go to solve our problem.

I have gone to your committee people. I have talked to your committee people. I have talked to the Hoover Commission. I have talked to the Department of Commerce. Now, again I just say I am frustrated.

Now, coming to your two bills-frankly, I like both of them, and I am referring to the Hoffman bill, 9835, and also H. R. 9890. Í like it a bit better than 8832 because it is a little bit more definite.

Now, H. R. 9890 should include some of the language in the Hoffman bill for this reason: This machinery is set up in H. R. 9890 but the direction is not there; 9835 tells the President of the United States, If you are carrying on business that is competing with business for profit and it doesn't interfere with the operations of the Government, get out.

Now, we could have a little bit more of this in H. R. 9890. However, H. R. 9890 fills the bill, as does H. R. 8832, because you

have an actual place to go to lay your cards on the table.

The only thing I don't like about H. R. 8832 is that commission, the large commission, as I understand, that will be formed.

H. R. 9890 places the responsibility of solving this problem in the Department of Commerce.

Now, another thing in H. R. 9890—when the Government reports to the Bureau of the Budget, that should be a public report because a Government agency can report to the Bureau of the Budget and if there is a report on a certain ice cream establishment, or some other establishment out in the country, the industry would never know about it.

For example, when the different agencies report to the Bureau of the Budget on statistical surveys, we are informed, and we have the privilege of going over and discussing it with the Bureau of the Budget. Because of such a policy, industry has saved—the industry through the trade associations particularly have saved—the Government thousands of dollars on helping them with their surveys, and they could do the same thing here.

I don't know whether you are going to get legislation through this session because you folks, I know, hope to get out of here August 1; but this legislation should be No. 1 on the docket next year, at the next session, because our people are definitely interested in solving this problem.

Now, you study this exbibit—you will find a little post or a little town, or a field, or a PX-well, that doesn't mean much on paper, but if you were a small-business man—and we have got over 200 in the association-manufacturing from fifty to seventy-five thousand gallons a year, and he loses a 10,000-gallon account in a PX, or other Government agency, it means something to him.

Mr. OSMERS. Yes, it does.

Mr. HIBBEN. Now, in all fairness to the Army, we sell millions of gallons to the Army. They are buying a lot of ice cream for the commissaries and PX's. It is only in these certain cases that they are going into the manufacture of ice cream.

The Navy is a larger offender, having ice cream plants in the continental United States.

That is my statement, Mr. Chairman.
I will be glad to answer any questions.

Mr. OSMERS. Mr. Hibben, there is one phase you touched on there that I would like to develop with you for just a minute. You mentioned that if the job was turned over to the Secretary of Commerce, as proposed under 9890, the Secretary would unquestionably establish a section within the Department of Commerce to handle this matter and, as one of my colleagues here, when we discussed this earlier in the day, said, that would cost some money. Now, obviously, it would. It would require personnel. It would require personnel of judgment, wisdom and experience, and it might cost thousands of dollars; but I would just like to have your statement on the amount of tax revenue—not in dollars, but the comparative amount of tax revenuethat the Government could pick up by getting the Government out of some of these unnecessary competitive activities and have private business perform them and pay taxes.

Mr. HIBBEN. Well, I have not that figure in mind, sir.
Mr. OSMERS. No one does.

Mr. HIBBEN. But if this goes forward into legislation I have right in my mind a questionnaire that I can send out to my members to secure the desired information, and when you consider some other

statements made here today it runs into the thousands of dollars, the loss in taxation.

Mr. OSMERS. Obviously, if we are dealing with things like laundries doing 70, 80 million dollars of laundry business a year, the corporate income taxes that would bring into the Government, if private industry took that over, for example, would 10 times over repay any personnel we might employ here in the Government to sit in judgment on the matter.

Mr. HIBBEN. You see, Honolulu is the worst example, and we have five members over there, and they write to me, and similar to the letter that Colonel Castle got, that they have an ice-cream plant, and they deliver ice cream to every military establishment in the Army on that island. Our members have been struggling for years to get rid of such competition, and have never been able to do it.

Mr. OSMERS. In other words, it is just a straight out-and-out business, commercial-type activity of the Government in a competitive private market?

Mr. HIBBEN. And I neglected to say we have other agencies. There is an ice-cream plant right over in the South Building of the Agriculture that supplies all their cafeterias.

Mr. OSMERS. We don't have to go to Honolulu?
Mr. HIBBEN. No.
Mr. OSMERS. Are there any other questions for Mr. Hibben?
If not, thank you very much, Mr. Hibben, for your statement.
Mr. WARD. We have another witness, Mr. Cerin.

Mr. OSMERS. At this time I would like to insert in the record the statement of Mr. L. R. Sanford, president of the Shipbuilders Council of America.

(The statement referred to is as follows:)

STATEMENT OF L. R. SANFORD, PRESIDENT, SHIPBUILDERS COUNCIL OF AMERICA

I am president of the Shipbuilders Council of America, a trade association of the shipbuilding and ship-repairing industry which includes in its membership, in addition to shipbuilding and ship-repairing companies, allied industries which specialize in the design and manufacture of marine machinery and equipment. I appear here today in response to your telegraphic request that the organization which I represent testify at this hearing on the subject of Government competition with private industry.

The principal Government competition with which private shipbuilding and ship-repairing yards are concerned is that of the naval shipyards, of which there are 10 located in various parts of the country, 6 on the east coast and 4 on the west coast. Those on the east coast are located at Portsmouth, N. H.; Boston, Mass.; New York, N. Y.; Philadelphia, Pa.; Norfolk, Va.; and Charleston, S. C. Those on the west coast are located at Long Beach, Calif.; San Francisco, Calif.; Vallejo, Calif., on the Sacramento River about 20 miles from San Francisco; and Bremerton, Wash., across Puget Sound from Seattle.

It should be noted at the outset that the shipbuilding and ship-repairing industry does not in any way advocate the elimination of the naval shipyards as they are recognized as facilities necessary to the operation of the Navy, both in peacetime and during a war. All that the industry has ever advocated is that the function of the naval shipyards be considered, not as a primary source of naval shipbuilding and ship repair, but as a necessary auxiliary to the private industry, and that they be operated in such a manner as to permit the private industry a reasonable share of naval shipbuilding and ship repairing rather than as a monopolization of such work to the exclusion of the private industry. Such a procedure would be consistent with the practice of the British Admiralty in the operation of its royal dockyards.

It has been conclusively established that in time of national emergency or war, the Navy must rely upon the private shipbuilding and ship-repair yards for the

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