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you really mean everybody connected with the Government and I quote from page 3 of your statement-have the attitude “to hell with the taxpayer." I don't think you really mean that, do you?
Mr. Emmons. Not everybody; no, sir; but there are enough of them, and particularly, if I may say, up to the administration previous to 1952 the attitude of the bureaucrat was, “Well, why are you here?”
I say that based on actual experience.
How can you make that distinction when so many of those who were in before are still in?
Mr. EMMONS. Mr. Chairman, there is a change of attitude. There has been a definite change of attitude.
The CHAIRMAN. Then it must be due to conversion on the part of those who are in, because practically all of those who are operating the Government, actually doing the work of operating the Government, are the same today as they were before.
Mr. EMMONS. Yes, but there is a change of attitude, and you can
The CHAIRMAN. That is fine, if it is for the better.
Mr. CHUDOFF. I want to ask you one more question. I presume, as head of this organization of small-business men, you have some statistics.
Mr. Emmons. I am not the head. I am just the Washington leg man.
Mr. CHUDOFF. Let me finish.
Mr. CHUDOFF. You are familiar with the amount of business these small-business men are getting who are members of your association. Would you let me know how much more business the small-business men of America are getting since 1952 than they got in the prior administration?
Mr. EMMONS. I couldn't answer that now, sir. Mr. CHUDOFF. You couldn't answer it? Mr. EMMONS. Not right now. Mr. CAUDOFF. But do you think they are getting more? Mr. EMMONS. The opinions, the letters, I get in the Washington office, as the Washington man for this association, indicate that the doors are open, wider open.
Mr. CHUDOFF. You are talking about Government contracts, aren't you?
Mr. EMMONS. Yes.
Mr. CHUDOFF. Why is my mail heavier now than it was before 1952, complaining that General Motors is getting all the business and they can't get any of it?
Mr. EMMONS. Well, of course, we are national and we are getting an overall picture, overall information and requests. So, I would have to make that statement based on what the situation is in a national sense rather than in any particular district.
Mr. CHUDOFF. As a matter of fact, I had a committee of small manufacturers of electronic products in Philadelphia come to me and
cry because they couldn't get any business from the Government, and they said in the previous administrations they were able to get it. How do you explain that?
Mr. EMMONS. I can't, sir.
Mr. CAUDOFF. Then maybe you are not so sure of your statement. Isn't that true, Mr. Emmons?
Mr. EMMONS. I am reasonably sure on an overall basis.
Mr. KARSTEN. May I ask a question on this to-hell-with-the-taxpayer attitude?
You said you spoke with experience. I assume you know some bureaucrat who made such a statement or issued such a statement; is that correct?
Mr. EMMONS. Not in the actual wording of it, sir, but in the attitude, in going in and trying to get information and trying to do business with them at that time.
Mr. KARSTEN. I am trying to find out where you got the words "to hell with the taxpayer.” Is that your own interpretation?
Mr. EMMONS. That is my own interpretation, sir.
Mr. KARSTEN. And you put some words into the mouth of a bureaucrat; is that what you are attempting to do?
Mr. EMMONS. No; I am not, sir. I am intending to describe an attitude.
Mr. McCORMACK. Do you say the small-business man is better off today than he was in November 1952?
Mr. EMMONS. I would say that he certainly isn't any worse off, sir,
Mr. McCORMACK. He has just as much employment and as much business as he did then?
Mr. EMMONS. It seems as if our group seems to be happier.
Mr. McCORMACK. Do you favor the repeal of the Small Business Administration?
Mr. EMMONS. The repeal of the
Mr. McCORMACK. On making loans, Government loans, to small business.
Mr. EMMONS. They are trying for
Mr. McCORMACK. I am for the bill. I was strongly for the bill, but I want to get your views.
Mr. EMMONS. If you are going to have such a thing, we don't think you should have such an organization in the Government, basically.
Mr. McCORMACK. In other words, you favor its repeal?
Mr. McCORMACK. That is a frank answer to my question, and I must say I am constrained to admire your frankness. Under the
circumstances, however, I have to disagree with you; but I respect your
frank answer. Mr. Brown of Ohio. Would the gentleman yield? The Small Business Administration
The CHAIRMAN. Wait a minute. There seems to be a misunderstanding here.
(Off the record.)
Mr. BROWN of Ohio. Mr. Chairman, I asked the gentleman from Massachusetts to yield. I think we both supported the Small Business Administration legislation when it was before the House.
It is my understanding—I wonder if the witness understands it the same way—the Small Business Administration was primarily created for the purpose of making loans to small business organizations where the local banks, themselves, couldn't carry the loans, but joined in the request for the loan in order to continue some small business in operation and to continue the employment in those particular concerns.
That is just a little bit different from being in competition. The banks join in. They don't compete with the banks, but, rather, they join with the banks in making these loans.
Isn't that correct?
Mr. McCORMACK. My understanding is that would be a substantially correct statement. There might be some little variation, but I think that statement is as a broad statement, substantially correct.
Now, Mr. Emmons, I want you, if you want, to clarify the questions I asked you, because I don't consider that I am cross examining any witness. I am trying to get facts, and part of the facts is to get a state of mind, and that is why I asked of you the questions I did.
Now, if, upon looking over your answers to my questions you want to clarify them, so far as I am concerned, you have permission to do so, because my understanding is the small businessmen of the country pretty strongly supported that legislation.
You see, the RFC was abolished and then we put through last year legislation which established the Small Business Administration, so that the small businessmen would have an opportunity, where they couldn't get equity capital or loans, to carry on their business, where a bank didn't approve their loan, or in cooperation with a bank, pretty much along the lines of the RFC, in connection with a limitation, I think, of $150,000. There is a maximum. Some of us thought it should be more, or be stronger, but that is immaterial. The law is on the statute books. I mean it is immaterial as far as this discussion is concerned.
They were also to cooperate with small businessmen, to try to help them in some other ways, such as advice, etc. We also intended to try to help them get their proper share of Government contracts.. They were to be something more than a loan agency.
Mr. BROWN of Ohio. That was the second responsibility.
Mr. McCORMACK. They were to go far beyond that. They were to give advice to small businessmen.
We recognize that large corporations can employ men to do their research work, and that is no criticism of the large corporation.
They are in a position financially to do so, and the difficulty is with the small businessman.
So, they were to be, in a sense, justifiably, their advocate, in order to have a proper distribution of business to small businessmen.
So, if my questions have caught you off guard, I want you to know you can clarify the answers you gave to me.
Mr. EMMONS. I would like to, sir, if I may.
Mr. BROWN of Ohio. Will the gentleman yield, just to clarify this a little further? I think
will find the banks, most of the banks, of the country were also in support of the Small Business Administration legislation because these loans made to small business are not made where the banks, themselves, can handle the loans.
The banks over the country are restricted under our banking laws, in making capital loans such as are necessary for some small business concerns, and they may underwrite a part, as much as they are permitted by law, and then the Small Business Administration makes a further loan.
In most of these cases—and I have had some experience just recently with them—the banks, the Small Business Administration and the Government all cooperate together to accomplish the desired result.
So, I don't think that is a matter of competing with local financial institutions; but, instead, simply a matter of expanding their possibilities to be of service to the people of the community.
Mr. McCORMACK. I am sure my friend from Ohio will admit my questions were pertinent onces. Mr. BROWN of Ohio. Oh, certainly; certainly.
Mr. OSMERS. Mr. Chairman, somewhere in the course of the hearings I think we should probably say that, with due respect to the expression by Mr. McCormack, the type of competitive activity that would be covered by any of the bills under discussion here would not include an activity such as the Small Business Administration, which is set up by an individual act of Congress, and that the only way that the Small Business Administration would be enlarged, curtailed or eliminated would be by an act of Congress, just as it was established by an act of Congress; and I think probably it would be helpful to you, sir, and to other witnesses and to members of the committee, for me to say, as the author of a couple of the bills, that I recognize the machinery that is proposed here and the legislative action that is desired will not change acts of Congress with respect to the establishment of certain activities. That, of course, will have to be changed by the Congress. Mr. EMMONS. Thank you, sir.
Mr. CONDON. Mr. Chairman, could I direct an inquiry to the gentleman from New Jersey?
The CHAIRMAN. Mr. Condon.
Mr. CONDON. Yesterday I believe you said, Mr. Osmers, that you discussed this with the administration people and, because of the lack of time, you were told there was very little likelihood of them allowing any bill along the lines of the 3 or 4 we are considering to come to the floor for action at this session, and you indicated you were going to see them again to see whether or not they would change their position and allow such a bill to be considered at this session. Have you done that yet?
Mr. OSMERS. I would like to try, if I may, to clarify my recollection of those events.
The chairman of the committee mentioned that it was his understanding, after talking with the House leadership, that this matter would not be acted upon at this session.
I made two statements following that: One was that I hoped I would be able to persuade the House leadership to act upon it because of the great need for the legislation and, I feel, a generally favorable attitude on it by Members of Congress, based on mail and expression I have had from them.
Third, I made this expression: That I had been over to the executive department to discuss my bill, H. R. 8832, and that, as a result of those discussions, I introduced H. R. 9890, for the reason I wanted to place before the Congress and before the Committee a slightly different approach to it than my original bill.
I take the attitude that our chairman has taken, who also has put in a couple of bills here, that there are a number of different avenues that we might use to approach this objective-and I have a couple in; he has a couple in—and I think, after we hear these witnesses, we will be in a better position then to decide which way, if any, we want to use.
Now, the disadvantage expressed by the executive department representatives to my Ħ. R. 8832 is simply that it sets up another board, as you pointed out yesterday, which reports to the President, and that is a disadvantage which the executive department sees.
So far, from hearing witnesses, I am not yet convinced that is not the right way to do it, even though it has that legislative disadvantage of establishing another board within the Government.
Mr. CONDON. I just wanted to make this observation: If the fact is we are not going to have legislation at this session, whether it is any of these bills or something like them, we are holding extensive hearings and, frankly-I am on Mrs. Harden's subcommittee, as is the gentleman from New Jersey-we are covering much the same ground we have already covered in taking a thousand or 1,200 pages of testimony; and the suggestion was made yesterday, even in instances of specific complaint, this committee is not going to hear from the departments to answer those specific instances of complaint, but this record is going to be referred to the Harden committee to run these things down.
I am just wondering, for the sake of saving the time of the full committee, the time of all of these witnesses, if all of these bills might not properly be referred to the Harden subcommittee and let them go forward with their thorough investigation, which they have been doing.
I hate to have to spend 3 days and use up everyone's time on a subject about which we are not going to legislate at this session and a subject which has already been almost exhaustively surveyed by Mrs. Harden's committee.
I still am of the feeling that all of these bills ought to be referred to Mrs. Harden's committee, where we have heard from many of these same people, and certainly in the course of these hearings we are going to duplicate the cordage people, the paint people, and all of the people who have been before the Harden committee, and I throw it out as a suggestion, at least, that it might be appropriate to refer all these bills to Mrs. Harden's committee and let that committee com-plete its task and come back with some recommendations.