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The CHAIRMAN. My thought when Mr. Osmers came to me and advised it was his purpose to get out a bill was that this matter was coming up and would need the attention of the full committee.

Isn't that right?
Mr. OSMERS. That is right.
The CHAIRMAN. And only the full committee can report a bill.
Mr. OSMERS. Yes.

The CHAIRMAN. And as the preliminary work had been completely done by the Harden subcommittee, I said, "Let's put it in one package and do it."

Mr. JUDD. May I ask another question?

The CHAIRMAN. Certainly. Don't ask permission. Just do as everybody else does, go ahead.

Mr. JUDD. Do the chairman and the members of the Harden subcommittee prefer that the full committee not hold these hearings? Are they opposed to this? Do they feel that they can handle it better or adequately?

The CHAIRMAN. I can't speak for the Harden subcommittee, but when a bill comes up, as Mr. Osmers' did, for final action, of course, it has to come before the full committee. I can see no reason for holding further subcommittee hearings because they have gone over the subject exhaustively. They have a whole library of information. Moreover the basic issue is very simple. Shall the Government, using tax dollars--it has no others-compete with the taxpayers upon whom it depends for existence? Mr. RIEHLMAN. Mr. Chairman, may I be heard? The CHAIRMAN. Yes, sir.

Mr. RIEHLMAN. If we are going to have a problem of discussing what we are going to do in the committee and what action it is going to take, I move we go into executive session.

Mr. ÍKARD. I second the motion.
Mr. LANTAFF. I second it.

The CHAIRMAN. Unless there is an objection, we will go into executive session.

Much as I regret it, we have to ask our witnesses to leave the room.

Mr. Dawson of Illinois. I did want to ask Mr. Emmons some questions later on as to his thinking; but if it is inconvenient to him to remain

Mr. EMMONS. Do you want me to stand by, Mr. Chairman?
The CHAIRMAN. If you please.

(Whereupon, at 10:50 a. m., the hearing was recessed, the committee meeting in executive session.)

(The hearing reconvened at 11:40 a. m., Hon. Clare E. Hoffman presiding.)

The CHAIRMAN. The committee will be in order.
Mr. Lantaff, you had some statement you wanted to make.
Mr. LANTAFF. I don't care to make a statement.
The CHAIRMAN. All right.
Mr. BROWNSON. Mr. Chairman.

Mr. BROWNSON. Inasmuch as Mr. Emmons has been excused, may I ask the staff if they will write to Mr. Emmons and ask him one question. I also ask consent to have the question and answer included in the hearings.

(The letters referred to follow :) During the hearing Congressman Charles B. Brownson asked: “Does your association actually mean liquidation of all Government corporations, including the Federal Deposit Insurance Corporation, Federal Crop Insurance Corporation, etc.?”—the answer is “Yes, it does." Please find enclosed a copy of the full text of the resolution, adopted by the membership of the National Small Business Men's Association at its 17th annual membership meeting on April 5, 1954, on which the legislative recommendation was based. Sincerely yours,

BLYTH EMMONS, Director, Washington Office.



GOVERNMENT IN BUSINESS 1. The Government of the United States shall not engage in any business, professional, commercial, financial, or industrial enterprise except as specified in the Constitution, and that such projects in which the Government is presently engaged be liquidated or sold.

2. That Congress appropriate no more money for building Federal work intended solely for the generation of power, and no more money for multiple-purpose projects unless Congress requires that power output be leased to private industry or to cities, States, or State-managed regional authorities.

3. Recognizing that Government ownership of land is one of the first steps to socialism, we recommend that title III, public lands, acquired under the BankheadJones Act (not a part of a public park or forestry reserve) be offered for sale for private use, in order to

(a) Return of sale values to the Public Treasury;
(b) eliminate expense of administration of these lands;

(c) return land to the tax rolls of the political subdivisions where they are located. The CHAIRMAN. Yes. Will you give it to them after the hearings? Mr. BROWNSON. Yes, thank you Mr. Chairman. The CHAIRMAN. Mr. Stringfellow. Mr. Stringfellow, I have been urged by various members of the committee to make a statement. The only statement I care to make myself is one of apology for the inconvenience I have caused you or which the committee has caused you.

You may proceed, Mr. Stringfellow.



Mr. STRINGFELLOW. My name is George E. Stringfellow, of West Orange, N. J. I appear here as president of the New Jersey Taxpayers Association, an organization that is partisan only to the taxpayers.

Our association works at all levels of government-local, State, and Federal. With respect to the Federal level, its annual program, adopted by the statewide membership, calls for sound Federal finance, including:

(a) A balanced Federal budget and improved congressional facilities to study the budget.

(6) Reduction or elimination of Federal subsidies to State and local government, business, and agriculture.

(c) Curbing of the trend toward Federal competition with private industry.

The bills before us this morning touch upon all three of these interrelated objectives. They bring into focus fundamental questions as to the nature and purpose of the Federal Government.

Today the Government is engaged in multifarious business operations ranging from coffee roasting to great transportation enterprises, and totaling more than 100 widely diversified activities. These constitute a major deviation from the role envisaged by the framers of our Constitution. That document leaves with the States and the people all powers not specifically delegated to the Federal Government. Nowhere does it indicate governmental preemption of the fields of private enterprise. It casts government in the role of an arbiter, and not as an entrepreneur.

In this connection, we in New Jersey are concerned over the threatened increase in the statutory debt limit above the present $275 billion. We, of course, realize that this threat derives from the belief held by some that the Federal income is such that later this year it may not give the Treasury a satisfactory working balance. Assuming this to be the case, our question is, What are the alternatives to increasing the debt limit?

If there are such, we believe they should be utilized.

While we realize that it is impracticable to take the Government out of competitive business and place this business upon a taxpaying basis abruptly, nevertheless, we can only conclude that one of the causes of the present fiscal situation is that the Government has denied itself the tax income that would normally result if its heterogeneous industrial empire were operated as private enterprise.

Industry—the work of men-is the root of wealth. As we look back over the years when men have been free to devote their ingenuity and their efforts in the production of wealth, we see our Nation assuming preeminence among the nations of the earth, and its people enjoying the highest living standard the world has ever known.

When we ponder the extent to which the Federal Government has entered the fields traditionally reserved to private initiative, we have grave misgivings for the future of our way of life.

The free-enterprise system provides the life-blood of the national economy. It is productive; it is regenerative; it pays taxes. The right of individuals to answer the call of economic opportunity will always spur men on to great achievement, but Government ownership and operation of the instrumentalities of production are the essence of socialism and the genesis of dictatorship, corruption, and national degeneration.

In the field of private enterprise it is the responsibility of management to produce products that are acceptable to the public; to keep the cost of production under control; to pay local, State and Federal taxes; to conserve capital investment and to replace and expand it as necessary; and to give stockholders a reasonable return upon their investment. These are challenges which call for the best efforts that men can give. Through the resulting prosperity, the Nation prospers.

Usurping the role of industrial manager, Government reduces the volume of private business, while competing unfairly with its own citizens. It deals largely with a captive market. It is able to avoid many of the rigors of cost control. It consumes taxes; it produces

It may call upon the taxpayers of the Nation to replace and expand its capital structures, and it is not responsible to pay the stockholders, who are the taxpayers, a return upon their investment.


Ignoring the tax and other responsibilities of private enterprise, the Government assumes a fallacious accounting out of which it contrives so-called yardsticks of cost and service charges. These it hurls like spears at taxpaying industry in an insatiable effort to widen its domain.

We in New Jersey are appalled at the size and complexity of the Federal Government's operations and their rapid growth in recent years in competition with taxpaying business. True, there may be certain specialized businesses that the Federal Government must carry on for itself; but the vast scope of the Federal Government's industrial empire and its far-flung bureaucracy spell socialismsocialism which crept at first, but which now assumes a cyclonic velocity, sweeping before it the basic values of a worthy national heritage.

In recent years, under the abnormal pressures of a great depression and a second World War, Government has explored many methods of promoting the general welfare. Some of the results of these explorations have been good; others bad. Now it is appropriate that these methods be reviewed; the good retained and the bad discarded.

Your committee now has before it three bills that have been introduced in the House of Representatives. I am pleased to note that one of these is by Representative Frank C. Osmers, Jr., of New Jersey, and has a counterpart in a bill introduced by Senátor Robert C. Hendrickson, also of our State.

Here it should be noted that various phases of the general subject are also under study by the Second Hoover Commission.

I do not propose to set forth a detailed critique of the relative merits of these bills, nor of any specific proposals to the same end. I am here to express our association's conviction respecting the general purpose of all of the efforts in this category.

We want the Federal Government to reembrace the philosophy which has made our country great.

We want the trend toward socialistic control of business reversed.

We want the Federal Government to get out of competition with private enterprise.

These are the purposes of the bills which you have before you. We applaud the efforts you are making, which are documented in the official publications of your committee and its subcommittee, to find the most logical, the simplest and the best way of accomplishing these purposes.

We realize that many Members of the Congress, in both the House of Representatives and the Senate, are pledged to these same ends.

I appear before you this morning to present these views held by the organized taxpayers of New Jersey. We have faith that you of the Congress will prove equal to the challenge at hand.

Thank you, sir.

Mr. OSMERS (presiding). Thank you very much for your statement, Mr. Stringfellow.

Are there any questions from any of the members of the committee?
Mr. BROWNSON. Mr. Chairman.
Mr. OSMERS. Mr. Brownson.

Mr. BROWNSON. I would like to compliment Mr. Stringfellow on the thoughtfulness and moderate tone of his statement and to say that his

reputation, both in industry and in fraternal affairs has traveled even as far as the great State of Indiana.

Mr. STRINGFELLOW. Thank you, sir.
Mr. BROWNSON. It is a pleasure to have you here.

I wondered about one thing: Do you get frequent complaints in your taxpayers' group from members of industry who protest specific examples of Government encroachment in the field of private business?

Mr. STRINGFELLOW. We do, sir.

Mr. BROWNSON. Do you happen to recall offhand the nature of a few of those complaints?

Mr. STRINGFELLOW. No, but I would be glad to send you a list in the next day or so.

Mr. BROWNSON. I would appreciate it if you would. .

In addition to the wholesome philosophy of your general statement, I think it would be helpful if we had some specific idea of the type of encroachment, or a few examples of such Government encroachment, which your people in New Jersey have found burdensome.

Mr. STRINGFELLOW. Our problem is general, not specific, because we represent all segments of our people, political, economic, and religious segments. We just represent the taxpayers as a whole and not any individual group of taxpayers.

There are 21 counties in the State. We have a county association, and then we have subdivisions of that. We have probably 60 or 70 associations.

Mr. KARSTEN. How many members are in your organization, sir? Mr. STRINGFELLOW. That would be an estimate.

The reason I say that—I would have to go down to the smaller communities.

I would say probably 12,000.
Mr. KARSTEN. Do you hold regular meetings?
Mr. KARSTEN. Or just how do you keep in touch with them?

Mr. STRINGFELLOW. We hold annual meetings and we hold other meetings.

Mr. KARSTEN. And did you hold a meeting on the endorsement of these three bills specifically?

Mr. STRINGFELLOW. Yes, sir. Mr. KARSTEN. And did your association vote on that? Mr. STRINGFELLOW. This is a part of the association's program. This is taken out of a platform. We have a platform, and everything I have said here today coincides with the platform of the association which is adopted annually.

I turned that over to our general counsel to see that I did not go afield in sofar as that is concerned.

Mr. KARSTEN. But your association has never actually discussed any of the three bills, has it, as such?

Mr. STRINGFELLOW. Not as such.
Mr. KARSTEN. Which one would you prefer?
Mr. STRINGFELLOW. Well, I don't wish to express a preference.
Mr. KARSTEN. Do you think they are all good?
Mr. STRINGFELLOW. Well, I think parts of all of them are good.
Now, don't ask me to give you the particular part.

Mr. KARSTEN. We are trying to write legislation, and that is what we are really going to have to have if we are going to write legislation.

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