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fair to the Federal Establishment in every way and, we believe, successfully would negate the threat of future Federal competition with our industry. We frankly do not know what is the best approach, but we deeply believe that he who hesitates is lost and that, in some way or another, Congress ought to act, and to act with reasonable promptness, to kill off Federal competition with private, taxpaying business.
The CHAIRMAN. We certainly appreciate the efficient way in which you gentlemen have come up with such complete statements when you have been informed of this on such short notice.
Mr. BLOCHER. Yes, sir.
Mr. OSMERS. I would like to say, proceeding along the lines of the suggestion made by Mr. Lipscomb off the record before, which I consider to be a good one, that as close as we can get to discussing the legislation the better informed the committee will be.
You know the committee has before it four bills, Mr. Blocher, all with the same objective, and a little different method. In addition to the four bills there has been a fifth version prepared and now also before the committee.
The CHAIRMAN. Off the record. (Discussion off the record.) Mr. OSMERS. I have three questions to ask you, Mr. Blocher. They deal directly with the legislation we may pass. Do
you believe there should be established in the executive branch of the Government some place where private business and free labor may present its case against some competitive activity of the Government, and where the appropriate Government department may make a reply?
Mr. BLOCHER. We very definitely do. It is the only way we can reach that problem.
Mr. OsMERS. Do you also believe before any Government department is permitted to start a new business type of competitive activity, that they should be made to prove their case to some impartial executive branch of the Government, such as the Director of the Budget, before they can go into that activity?
Mr. BLOCHER. I would say so; yes.
Mr. OSMERS. Third, do you feel it would be in the public interest to require the President of the United States to make a report annually to Congress and to the people of this country about the progress being made in this field?
Mr. BLOCHER. The report should be made; that is correct.
The CHAIRMAN. With whom, if anyone, have you talked about these three propositions that Mr. Osmers asked you about before you testified?
Mr. BLOCHER. With whom?
Mr. BLOCHER. It has been worked on by our association for 5 years now.
The CHAIRMAN. No. I mean these three questions that were asked you now. With whom, if anyone, have you talked about those three propositions, to be specific?
Mr. BLOCHER. No one.
The CHAIRMAN. Have you talked to Mr. Courtney about the bill? Mr. BLOCHER. No, sir.
The CHAIRMAN. Have you seen the last three bills that were introduced ?
Mr. BLOCHER. Yes, sir.
Have you any questions, Mr. Lipscomb?
Mr. LIPSCOMB. I believe the three questions Mr. Osmers is asking are incorporated in 9890; isn't that right?
The CHAIRMAN. That is right.
Mr. OSMERS. The critical question, the most important one of the three questions is the one concerning the place in the Government where business may take its case. Mr. Blocher by endorsing 8832 must have discussed in good detail with his organization one of the three questions, which is that dealing with the place in the executive establishment where business and industry may take their complaints.
Mr. BLOCHER. I would like to make one statement. We have in our business some connection with Joint Committee on Printing, since some of our members are in the printing business as well as the blueprinting business, and we have had some experience and know that that type of place to report is very helpful to our industry. They have belped us to some degree.
The CHAIRMAN. Your organization has advocated a reduction in taxes; have you not?
Mr. BLOCHER. Yes, sir.
The CHAIRMAN. You want a simplification as much as you can get it; do you not?
Mr. BLOCHER. That is correct.
Mr. OSMERS. Mr. Chairman, before we have the next witness, there is a telegram and a couple of statements that I would like to ask leave to put in the record.
The CHAIRMAN. Surely.
Mr. OSMERS. One is from W. C. Birthright, general president of the Journeyman Barbers and Hairdressers International Union. He says:
The Journeyman Barbers and Hairdressers International Union representing 80 percent of the trade urges you to report H. R. 8832 favorably. PX barber shops offer unfair competition in many places. H. R. 8832 would create the medium that could correct a grave injustice.
The CHAIRMAN. I have a number of those which came in, I believe, a year or more ago from the Southwest and down in Alabama, where they have a PX competing with these people—not only the barbers, but novelty people and everybody else.
Mr. OSMERS. That is one from the general president of the Journeyman Barbers and Hairdressers International Union. gest that we put that one in.
I would sug
I have another telegram from Mr. L. M. Raftery, general president of the Brotherhood of Painters, Decorators, and Paperhangers of America, wherein he says:
: I have your wire expressing desire that our organization testify Friday, July 16, 10 a. m., at hearing, room 1501, New House Office Building, on H. R. 8832, Anti-Government Competition Act. Regret that press of business in connection with our brotherhood's approaching national convention and other matters makes it impossible for me to be in Washington on July 16. As your wire indicates, large number of witnesses will submit testimony. Sincerely trust representative presentation on questions affected by H. R. 8832.
I have a letter from the Marking Device Association addressed to the chairman, and another statement from the Metal Treating Institute.
Also a statement here, Mr. Chairman, that I would like to ask unanimous consent that it be made a part of the record, which is a statement from Congressman Stauffer, of Pennsylvania.
The CHAIRMAN. Without objection, it will be made a part of the record and filed. (The documents referred to are as follows:)
MARKING DEVICE ASSOCIATION,
Evanston, Ill., July 14, 1954. Hon. CLARE E. HOFFMAN, Chairman, Government Operations Committee,
House of Representatives, Washington 25, D. C. DEAR MR. HOFFMAN: In response to your telegram, I am glad to give you a statement regarding Government competition in the marking device field.
It is impossible, in the short space of time allocated, to provide you with complete documentation, but I assure you we have such in our files and I am enclosing a few representative ones.
Ours is a small industry, but it's an important industry and has been declared essential to 2 wars and 1 police action. Marking and identification has been recognized by all branches of the Government as being necessary for proper distribution of ordnance. The problem then becomes one of whether or not our industry can provide proper service, or whether it is necessary for the Government to go into the business of making rubber stamps and rubber printing plates in order to provide some service which we cannot offer. In every case where we have had an opportunity to investigate Government facilities manufacturing rubber stamps or rubber printing plates, we have never been able to find any justification for the Government being in business. The ries, that it is necessary to provide service and quick action which our industry cannot furnish, are completely without foundation and have been so proven whenever we have had a chance.
We have in our files a number of copies of various requests for materials and supplies for federally owned and federally operated facilities for the manufacture of rubber stamps, printing plates, or other marking devices. This list includes the United States Department of Agriculture Soil Conservation Service in Indianapolis, Ind.; United States Naval Missile Test Center, Point Mugu, Calif.; National Fireworks Ordnance Corp., Shoemaker, Ark.; Procter & Gamble Defense Corp.; Milan Arsenal, Milan, Tenn.; and many others. Those mentioned are just a few of the requests received thus far this year.
We also call your attention to the Government printing and binding regulations, published by the Joint Committee on Printing of the Congress of the United States, No. 6, dated July 1, 1953. Calling your special attention to page 3, authorizing the manufacture of rubber stamps or rubber printing plates under the class B printing plants. These particular plants represent the most outstanding instances in which the Government has undertaken the manufacture of products formerly produced by the marking-device industry.
On page 22 of the same pamphlet you will find a list of the class “B” printing plants which would ordinarily purchase their materials for marking from the small businesses which our industry represents. The great majority of these Air Force bases listed on page 22 are near some town which has a rubber-stamp plant. There is no obvious reason why these Air Force installations should not patronize these industries closest to their location if they wish effective and fast service.
We are also submitting a copy of a letter from the Assistant Secretary of Defense, signed by C. F. Thomas to Senator Saltonstall, containing what we believe to be misleading and incorrect statements. An appropriate refutation is attached thereto. In essence, this letter by Mr. Thomas indicates that the necessity for speed in the use of rubber printing plates prohibits private enterprise from manufacturing the necessary item. This we cannot see to be true, however, because the markings on all Government boxes need blueprint specifications prior to the manufacturing of the printing plates. These blueprints are usually made some weeks or months in advance of the actual packaging and shipping of the particular supplies in question. If all of the offices involved were operating efficiently, then there should be ample time to distribute these blueprints to the manufacturers of rubber printing plates outside the Government offices.
An underlying assumption seems to be that because the Government has authorized numerous printing plants at various Air Force bases and defense departments throughout the United States, the establishment of the same, therefore, is above question.
It is because of this philosophy that we desire to strike at the heart of the Government performing industrial services.
We call your attention, too, to the Department of Commerce pamphlet MC39C, covering the 1947 census of manufacturers. What is shown is the total number plants, personnel, volume of business, etc., as of 1947.
We conduct a survey of our industry and, projecting this monthly survey on a yearly basis, we believe we have about a $50 million industry, of which probably $30 million represents rubber stamps.
We also present a brochure of our industry which clearly shows all of the various products and services offered in peace and war. This gives only an indication of the immensity and complexity of the fields covered by skilled and experienced personnel in our industry.
We also offer our 1954 membership roster of the association which gives you the names and location of various members who comprise at least 90 percent of our total industry, both manpower and dollars and cents volume. You will find here ample distribution of facilities throughout the country. We are also enclosing a resolution, which has been adopted by the Marking Device Association at their various district meetings throughout the year, decrying the present state of conditions brought about by Government entry into our industrial field. In 1952, we had the privilege of appearing before the subcommittee of the
Committee on Expenditures in the Executive Department of the House of Representatives, meeting in St. Louis, Mo. This, at that time, was called the Bonner committee.
We would refer you to this report wherein we have given a complete and documented story of Government competition with our own facilities at that particular time. Our report starts on page 157 and continues to page 191.
We believe that our industry is capable of maintaining fast and efficient service to all the armed services and Federal agencies desirous of obtaining rubber stamps or other marking devices. The unnecessary duplication of operations by Government agencies, given evidence hereto, is wasteful activity from the point of view of both equipment and manpower. It deprives the Government of experienced industrial services given by our industry which possesses the knowledge to manufacture better quality items less expensively. Furthermore, we ask why is it necessary to invade the premises of this scope of small business to deprive these skilled workers of their livelihood, and also use these same taxpayers' money to set up plants in competition with them?
We hope that we have given you sufficient information to enable you to take proper action upon the Anti-Government Competition Act now before the House of Representatives.
We appreciate your consideration and assure you of our desire to cooperate at all times. Sincerely yours,
JOHN SCHWEIZER, Chairman, Committee on Government Competition.
ELMER F. WAY, Secretary and General Manager, Marking Device Association.
STATEMENT OF Hon. S. WALTER STAUFFER, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF PENNSYLVANIA Mr. Chairman, I appreciate very much this opportunity to present a statement to this committee on H. R. 8832 known as the Anti-Government Competition Act.
Government competition with private enterprise is contrary to every concept of our free-enterprise system and cannot be justified in any way, except in rare cases of national emergency or unavailability of products from private enterprise. It is particularly harmful to small business and it is in this connection that I wish to call the attention of the committee a situation in my own district.
Piezo electric quartz crystals are used in the field of communications, electric counters and calculators, timing devices and so forth, and are very necessary in this field. In times of rational emergency or war large quantities of these crystals are used by the Armed Forces. The manufacture of Piezo electric quartz crystals in this country originated in my aistrict at Carlisle, Pa. Over a period of years the companies engaged in this business have built up their plants and developed special equipment used in the manufacturing process. Due to a scarcity of crystals in the Second World War, the Government purchased equipment from these manufacturers for use by the Armed Forces for their own manufacturing operations.
As is usual in the case of Government competition with private enterprise, the practice of manufacturing crystals has been continued by certain branches of the Årmed Forces. In addition, the Government either loaned or financed equipment for a number of companies which came into the field during World War II, and these companies have continued their operations.
Following the war, the demand for crystals dropped off materially and today, the old-line companies are suffering from Government competition and from the competition of manufacturers financed by the Government. The companies in my district may be forced to close their operations which, in my opinion, is contrary to the best interests of the country and our whole defense setup.
I am sure there are other instances which duplicate the experience of the crystal manufacturers at Carlisle, Pa., but to relate them would only add to a record already filled with such incidents.
I was very glad to learn that your committee had taken this matter under consideration and that a bill had been prepared to at least make a start in removing this threat to our private-enterprise system. I heartily endorse H. R. 8832.
STATEMENT OF KEITH SEEGMILLER, NATIONAL ASSOCIATION
OF COUNTY OFFICIALS
Mr. SEEGMILLER. Mr. Chairman, the events of the last few days have prevented me from preparing a statement. I would like to make a 3-minute oral summary, with your permission, and file a statement next week.
The CHAIRMAN. You do not need to. You tell us about it today and we will not be waiting for it.
Mr. SEEGMILLER. In very summary fashion I would like to tell
The CHAIRMAN. What I am trying to get at is, I do not want to duplicate your statement.
Mr. SEEGMILLER. No, there will not be any duplication.
I am Keith L. Seegmiller, executive secretary of the National Association of County Officials. Our association is made up mostly of county commissioners and supervisors of the Nation's 3,050 counties.
We are interested in the phase of these bills before the committee that has to do with tax exemption on Federal property.
H. R. 8832 contains a sentence that summarizes our interest very well. It says that it further deprives the people of the opportunities for private employment and enterprise and thereby reduces the ability to pay taxes, without which the Government cannot exist. This is one phase of the broader problem of Federal tax exemption on its property.