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"The Kansas Landscape and Nursery Co., Salina, Kans., another participating firm in the Associated Seedling Growers of Kansas, reports that ‘field counts show that we have 1,088,300 seedlings ready for distribution for spring 1954.

“This evidence indicates that as soon as the threat of Government competition is removed from this field of the production and distribution of tree and shrub seedlings for farm use, the commercial nurserymen then step into the field and supply the demand adequately.

“The result is a saving to the Federal Government of appropriations needed under section 4 of the Clarke-McNary Act for the support of Federal-State nurseries. A matching amount, or usually more, is saved for the taxpayers of the respective States. Furthermore, the participating nursery firms contribute additional tax moneys on their operations to the local, State and Federal Governments.

“The farmers get the tree and shrub seedlings which are needed at a competitive cost since this field is a highly competitive one and will become more so if more States and the Federal Government would remove the Federal competition involved distributing these commodities at a subsidized cost.”

With the real need for additional reforestation on public lands, both Federal and State, at the headwaters of our major watersheds, it is our belief that the Federal and State agencies could profitably devote all of their efforts in the planting of trees on public lands for timber production and watershed protection, withdrawing from activities on the local level. They still would have a long-time job ahead of them, but at least their total effort would be concentrated and not scattered.

This would leave to the commercial taxpaying nurseries the farm market for shelterbelt, soil erosion and farm woodlot plantings. The commercial lumber concerns are already doing a highly commendable job in the timber producing areas on land that they control.

It would seem that if a division of effort could be agreed upon, as outlined above that vastly more trees and shrubs would be planted annually, having its beneficial effect on checking erosion, disastrous floods, and maintaining our public and private forest lands in a productive state.

We recommend to the committee that steps be taken along these lines.

Mr. OSMERS. We have a statement, which I think is more of a letter, addressed to our chairman, from the National Federation of Independent Business, over the signature of George J. Burger, vice president.

(The statement follows:)


INDEPENDENT BUSINESS In view of the hearings now being held on H. R. 8832, it would be our desire to appear personally and present statement orally, but due prior commitments on the Senate side it will be impossible for me to be present and make the presentation.

Let it be understood for the record that no officer or group of officers of the federation is permitted to speak officially for the federation on any legislative or economic problems until the entire nationwide membership is polled on the proposition. In this procedure, the federation's position is strictly neutral. The pro and con is presented in a neutral way giving both sides to the proposition in a fair and impartial manner. We state this in view of the fact that the federation doesn't attempt to present the proposition in such a manner as to obtain a directed answer. The members themselves make up their own minds pro.or con.

On the present bill before your committee, the proposition was presented to our nationwide membership through its official publication, the Mandate, No. 203.

You will note in presenting this question to the members, the pro read:

Federal agencies are in so many business-type activities that they are a threat to private industry and labor, endanger our tax structure, and are, in many industries, a step toward socialism. Many of these businesses employ thousands of people and have capital assets running into billions upon billions of dollars. Actually, Uncle Sam is our largest insurer, our largest holder of grazing land, our largest owner of grain, our largest warehouse operator, our largest shipowner, and our largest truck-fleet operator. This competition should be curtailed or eliminated.'

The con read:

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"Weigh this bill carefully. It would vastly increase Presidential power, diminish the power of Congress. Many Government business programs are based on legislation passed by Congress. If they are to be eliminated, Congress should kill the underlying legislation. It could mean, too, increased costs, reflected in higher taxes. Aluminum scrap people last year urged the military to get out of scrap processing. But investigation showed Government was doing the job for far less than private industry could. Are we willing to risk these dangers at this time?''

This poll reached at least 100,000 independent business and professional men. It was nationwide in its coverage. The result of the poll, as disclosed in mandate No. 204, was: 80 percent for; 17 percent against; 3 percent no vote. I would also like to have this made part of the record of the hearing.

During war emergencies there may be some justification for the Government to actively engage in the business world. However, such operation should be confined to an emergency and when the emergency is over the Government's operation in business should cease.

In most instances the real victims of Government in business are the independent producers and independents in the distribution field.

We have watched the development of the post exchange and ships' stores by the armed services. They have their rightful place to serve the armed services under certain conditions, but when the operations of these post exchanges and ships' stores go beyond this it results in further inroads of the Government in businessall tending to reduce the position of independent business.

The above example, to a degree, is miniature compared with the overall effects of Government operation in business. Whether the operation is large or small it should be curbed or eliminated.

We have watched another example. We have been continually petitioned by many members of the federation as to the alleged unfair practices of the Rural Electrification Administration where it appears from the reports we receive that certain practices are being pursued by that agency, direct or indirect, tending to eliminate independent businesses in certain commodities.

Mr. Chairman, these are facts as reported from the grassroots our nationwide membership, and due to the direct nationwide vote of our members, as quoted above, we urge the approval of the legislation.

Mr, OSMERS. We have a statement giving support from Howard S. Miller, a Member of Congress from Kansas. (The information is as follows:)


Washington, D. C., July 10, 1954. Hon. FRANK C. OSMERS, Jr.,

House of Representatives, Washington, D. C. DEAR COLLEAGUE: I am in hearty sympathy with the overall provisions of H. R. 8832. In my opinion there should be no Government competition in private business except for the purpose of preventing monopolies, and then limiting to the accomplishment of that purpose. I thank you for having called my attention to this bill. Very truly yours,

HOWARD S. MILLER, Member of Congress. Mr. OSMERS. We have another statement from Congressman Dondero of Michigan.

The CHAIRMAN. Why not put them all in the record?

Mr. OSMERS. I hope you will have them all included in the record. I just mention those from whom they come. (The information is as follows:)



Washington, D. C., July 12, 1954. Hon. FRANK C. OSMERS, Jr., House Office Building,

Washington 25, D. C. DEAR FRANK: Your letter of the 9th has been received in regard to H. R. 8832. The bill proposes to take the Government out of competition with its citizens wherever that is possible.

I am wholeheartedly in favor of that principle. Private enterprise and private capital built this country, not Government ownership nor Government control. Let us keep this cardinal principle in the fabric of our Republic. It is timetested and has never been found wanting. Sincerely yours,


Member of Congress. (Mr. Osmers produced and submitted for the committee's consideration, telegrams and letters, some addressed to him, some to the chairman. The wires and the letters will be considered as a part of the record, but inasmuch as it seems to be axiomatic that the Government should not compete with its taxpaying citizens, and as there is need for economy in legislative as well as in executive procedures, we will simply. state that these wires and letters convey, in substance, the thought that the writers vigorously protest competition by the Government. An examination of communications received indicates that at least three average-sized volumes would be needed if, as is sometimes done, these protests were printed in full. The wires and letters were received from those named below, and perhaps from some others:) Steve Stahl, coordinator, National Conference of State Taxpayer Executives,

Oklahoma City, Okla. Marvin Pincus, president, Niagara Apparel Co., Inc., 77 Swan Street, Buffalo,

N. Y. Stanley J. Cummings, executive secretary, National Association of Uniform

Manufacturers, New York, N. Y. Ralph W. Sanborn, general counsel, Contract Carrier Conference of Ohio Truck

ing Association, Columbus, lio. John C. Stafford, manager, Public Information Department, Rockford Chamber

of Commerce, 100 West Jefferson Street, Rockford, Ill. James G. Cross, president, Bakery and Confectionery Workers' International

Union of America, Chicago, Ill. Charles M. Isaac, executive vice president, American National Retail Jewelers

Association, New York, N. Y. H, T. Moland, general manager, Moland Bros. Trucking Co., Duluth, Minn,

Mr. OSMERS. That covers the statements I have here.

Mr. Chairman, I know that the staff has received a very interesting communication. It is addressed to Mrs. Harden from the American Institute of Laundering.

The CHAIRMAN. We will summarize those. I can see no necessity for putting them all in, because, as I stated before, unless you think there is some necessity for introducing evidence into the record showing the unsoundness of the policy of the Government engaging in business in competition with private business, that issue, I assume, is over the dam.

Mr. Osmers. I am afraid that we should. For example, take the communication which I hold here, from the American Institute of Laundering. The Government is now operating 311 laundries.

The CHAIRMAN. That is nothing. Next week it may be 400.

Mr. OSMERS. That is right. That is the direction in which it is going, Mr. Chairman. Certainly a communication like this, which contains new material and directly quotes amounts and places and so on, that we do not have, should go into the record.

(The information is as follows:


Washington, D. C., July 12, 1954. Hon. CECIL M. HARDEN, Chairwoman, House Government Operations Subcommittee,

Washington 25, D. C. DEAR MRS. HARDEN: The committee staff very kindly notified this office that you would like a statement from the institute to be included in the record of your ž- or 3-day hearings scheduled on the subject of Government competition with private industry.

The American Institute of Laundering is the national trade association for the power laundry industry and over a period of years this association has cooperated with other national trade associations of our sister industries, such as linen supply, industrial laundries, diaper service laundries, dry-cleaning plants, and rug-cleaning plants; together these industries form the textile maintenance industries.

Under date of June 5, 1953, this office directed a letter on this same subject to your attention and we hope this letter of June 5, 1953, has become a part of the committee's record on this subject.

While the latest figures put out by the Bureau of the Census on the census of the service trades dates back to 1948, projecting these Government figures with other figures from our industry indicates that in the year ending December 31, 1953, there were approximately 6,400 power laundries with an annual sales volume of $1,265 million and approximately 311,000 employees. These laundries comprise power laundries such as the regular commercial laundry, the linen supply laundries, and the industrial laundries, but they do not include diaper-service laundries, hand laundries, Chinese laundries, or the self-service laundries. The figures for the laundries above are those types of laundries with which the Government laundries are in competition.

From the above figures you can see that the average laundry does from $200,000 tp $250,000 of business a year or from $4,000 to $5,000 a week and they do it with approximately from 40 to 50 employees. The plant investment in such a laundry would be just under $100,000.

As to the extent of Government-owned and operated laundries, we have the following tabulations in this office:

Laundries Veterans' Administration.

178 Public Health Service

7 Federal Bureau of Prisons.

26 District of Columbia Reformatory.

1 Army

41 Navy

32 Air Force

18 Interior Department, on Indian reservations

8 Total...

311 This figure is entirely misleading, however, because it does not include the socalled exchange or PX° laundries operated by the military: The Navy alone to our knowledge has more than 50° of the exchange laundries in operation and almost as many are in operation by the other military services. These, of course, operate not on appropriated funds but on revolving funds, but they are nonetheless in competition with commercial enterprise and at some time or another appropriated funds were necessary to set up and put in operation these laundries. Therefore, our total estimate of Government-owned laundries in operation in the continental United States, not including Alaska, is approximately 400 laundries. Assuming that these laundries are average laundries, this would indicate an investment of some $40 million and an annual sales at commercial prices of some $80 million. While we do not have any figures in this office as to the total amount of income taxes collected from the operation of commercial laundries, certainly the addition of some $80 million a year to the annual sales of commercial plants would provide a substantial income-tax revenue for the Federal Government.

Utilizing the figure of some 400 Government laundries would indicate that the Government has about 6 percent as much capacity as commercially owned and privately operated laundries in the country. We are confident that the excess capacity generally in the country is very much in excess of this military load although at individual lɔcations the situation might vary. So far we have had very few instances where sufficient commercial capacity has not been available to handle the Government loads usually on a 1-shift basis and most certainly on a 2-shift basis.

We realize there are certain areas where Government-operated laundries are necessary, such as where clothes are contaminated at Atomic Energy Commission installations or at the Government leprosarium. There may be other types of contamination which could not be handled by commercial plants. We also recognize there is a problem in disciplinary institutions of providing occupational therapy for the inmates. However, these cases are relatively small in number and this volume of business is not of concern to the commercial laundry plants in the country

We understand also that there are some laundries at Government-owned ordnance plants which are operated by private companies for the Government.

The listing of the number of laundries operated by the various Government agencies shown above does not include to our knowledge inactive plants which are not currently in operation. We do not know how many of such plants there are which are owned by the Government but are presently shut down, nor do we know whether these plants have an investment in equipment which is idle and which might be transferred to other Government-operated plants.

If your committee will refer to our previous letter of June 5, 1953, on this subject you will find a rather detailed recitation of the efforts we have made in the

ast, particularly with the military, to prevent this Government competition with our industry. In recent months we feel that the military regulations calling for a reexamination of their facilities, such as laundry and dry-cleaning plants, is a big step toward eliminating Government competition with industry and particularly we are impressed with the fact that the military has finally realized that there are a lot of elements of cost in the operation of Government-owned laundry facilities which heretofore had not been taken into consideration when estimating costs.

Again we might state that there is, of course, an extra cost to the taxpayer by having many Government-owned laundries operated by the individual departments, supervised by duplicated overhead management groups in the various department headquarters. Such laundries as the Government may of absolute necessity be compelled to operate seemingly could be grouped under one agency, such as the General Services Administration, to provide a corresponding service in overhead, purchasing, and inventory.

We respectfully request that this letter be made a part of the committee's hearings. We thank you most sincerely for the opportunity of submitting this statement. Respectfully yours,


Manager, Washington Office. The CHAIRMAN. I agree with the witness this morning; it is just absolutely impossible to find the extent of the Government's holdings in private business or its payroll. I asked Mr. Ward to obtain information for us, if he could-and I guess he has not been able to do iton the amount of tax that the Government loses, where it engages in business, tax not only from the business corporation but from the workers who would pay the income tax. If we could get some figures on that to show the extent of this thing it would help.

Mr. Osmers. I was just glancing at this letter.

The CHAIRMAN. We will put them all in. If you want to read parts of it it is all right.

Mr. OSMERS. I just thought it would be interesting to point out that there are 6,400 power laundries with an annual sales volume of $1,265 million, and they employ approximately 311,000 employees, which makes it one of our largest service industries.

The CHAIRMAN. If we could have the amount of income tax, which of course we cannot get, that those workers would pay in, it would be helpful. We could then get to the extent of the Government's operations.

Mr. OSMERS. They make the statement here, and again, as the chairman has pointed out, it is difficult to prove out these things absolutely, but they estimate that the Government laundry work has the unbelievable annual volume of $80 million a year.

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