appreciated and that they must be assisted when possible. But I am sorry to say that it is my observation that in the past 3 or 4 years, in spite of all of the clamor about doing something for small-business men, and in spite of Government assistance, if any, it seems to me that they have been getting smaller and smaller.

Mr. BURGER. That is true.

Mr. JENKINS. That is why I want to ask you about your organization. For instance, what kind of independent businessmen do you represent? Do you represent all kinds?

Mr. BURGER. All kinds, beginning with the corner grocer, the bootblack, the filling station, and right up the line. I should have included producers.

Mr. JENKINS. Do you care to tell me how many members you have? Mr. BURGER. Our mailing goes out every month to approximately 136,000.

Mr. JENKINS. How widely distributed is that?

Mr. BURGER. It is practically Nation-wide.

Mr. JENKINS. Nation-wide?

Mr. BURGER. Yes, sir.

How can I

Mr. JENKINS. You do not have that broken down. find out how many you reach in the State of Ohio? There are several organizations like yours that operate in the State of Ohio. I receive their mail, and I wonder whether there is not a lot of duplication there.

Mr. BURGER. I can say this much, Mr. Congressman, in answering your question. The basic principle behind the operation of the National Federation is to protect the free enterprise system and independent business. Its first premise is to protect that segment of our economy, with all emphasis on antitrust enforcement.

Mr. JENKINS. Now, I do not want to hurt anybody's feelings, but I think that this business of trying to do something for the little businessman is greatly overworked, and that there are a lot of people who claim to be doing a lot of things that they do not do and the little businessman gets no benefit from them. I have no way to prove that, but that is always in my mind.

I will give you an illustration of something that happened. Being a Republican, I naturally would be inclined to criticize a little; but I find that the Government men in Washington, most of them, I think, are trying to do a good job. I know of a case where a little business organization in my congressional district, just two small fellows in a foundry, employing only 20 or 30 people, bid against one of the biggest companies in this country about 3 months ago on a proposition that involved 21⁄2 million dollars. They were $550,000 cheaper than the big concern. The Government gave or was about to give the job to the big concern. It sent inspectors to look over this little outfit, and they said that they were too small. They appraised the property and this outfit of 20 or 30 very determined and very competent young men, and found that they could not do this job. The Government was ready to give the work to the big company, one of the biggest companies in the Nation.

Now then, these men from our district and I got together and went down before the Government authorities, and they sent out two other men to investigate these boys. They found that they were all right and that they could do the job. They gave them the job and saved the Government $550,000. Now, there was no small-business

men's organization around that place to help them; they helped themselves.

I appreciate that the Government must deal with big business and I also know that many of these little business organizations are anxious to do their part. Do you not think that the situation with the smallbusiness man is getting better rather than getting worse?

Mr. BURGER. Congressman, I think I can answer that question by saying that we had very good experience in World War II with the efficiency of constructive, independent business. In the early spring of 1942 this Government faced a serious situation to keep in use 20 million or 30 million automobiles. About 15 or 18 small independent businessmen appeared before the House Small Business Committee and later the Senate Small Business Committee and laid the groundwork, to a large degree, for the program that was introduced by the Baruch committee. Mind you, that program came out of the minds of independent businessmen.

As a second experience, when the air services in World War II were created, they were faced with gigantic expenditures. It was an independent businessman from Minneapolis who was able to propose or give to the Government a formula that cut down the tremendous expenditures that the Government would have had to make. That thing can be carried right down the line if independent business is given the opportunity.

Mr. JENKINS. I do not want to detain you nor the committee any further. I do appreciate and I think everyone else does-that the Government needs all the work that anybody can give it and that there are a lot of these small fellows that have to be encouraged. They are willing and ready to go; they want to go. Now then, as I said before, I have had fears that organizations similar to yours lure off these little business fellows and do not do anything for them.

Mr. BURGER. If you please, Congressman, we have to live by results; and we are making no apologies for the results delivered to the membership of the National Federation of Independent Business. I am not a professional trade association secretary. I owned and operated a business in the city of New York for 30 years, and I say that the operations of the National Federation of Independent Business is the best business insurance, something long overdue.

Mr. JENKINS. I hope you are right about it.

Mr. BURGER. I want to be right, because I am not the type to be kidding.

Mr. JENKINS. We are glad to have had your testimony, and I hope you are absolutely right."

The CHAIRMAN. Mr. Burger, I have been very much interested in your statement. You paint a rather vivid picture with respect to small business and express considerable fear as to the future of small business.

Mr. BURGER. Exactly so.

The CHAIRMAN. That is your position?

Mr. BURGER. Yes, Mr. Chairman.

The CHAIRMAN. I am sure that everyone here is a friend of small and medium-size business. I for one should be especially interested because the district I represent has many, many small businesses in it. Every county of the nine counties that I represent has small businesses

in it.

Now, when you talk about small business, do you mean individual, partnership, and corporate businesses?

Mr. BURGER. I mean all of them; yes, sir.

The CHAIRMAN. In what part of the country and in what lines of business are these small-business men engaged that you say are now in distress? The district I represent, as I stated, has many small businesses. We have small furniture manufacturers, small textile mills, small hosiery mills. Almost every line of small business is represented by factories in the counties which I represent.

Now, the hardware stores, the department stores, and all of the businesses of the district I represent seem to be fairly prosperous, and some of them appear to be especially prosperous. I do not know of any bankruptcy proceedings or anything of that kind. I never see any account of that in the papers. Everybody seems to be employed. I am just wondering where this distress you speak of is found? It is not present in the district I represent, or, if it is, I have not found out about it. Everything indicates to the contrary. We only have two or three large businesses in my district. Outside of them, all the businesses of the district I represent are small businesses, either individually owned, partnerships, or corporations. There are thousands of them. Now, where is the distress?

Mr. BURGER. Mr. Chairman, I did not want to take up the time. of the committee, but believe me when I say that I think I could have produced for the record factual cases from constituents of your district and from the districts of almost every member of this Committee on Ways and Means, people who are coming to the federation. And I assure you that we are not looking for work.

I believe that most of these people are honest in their contentions and are not trying to get more of the raw materials. I wish that I could recall right now, Chairman Doughton, cases from your own district. Let me say that I am not talking so much about retailers. I am talking about small fabricators. It has not gotten down as yet to the retailers.

The CHAIRMAN. I mentioned several kinds of small fabricators such as textile mills, hosiery mills, and furniture manufacturers. There are stores of all sizes and dimensions that seem to be prosperous, as prosperous as I have ever known them to be, and employment is full. There is no unemployment. People are leaving the farms by the thousands and going to the mills and factories in the towns to work.

Of course, I do not say that there may not be some individual concern that is having difficulties. There has never been a time in the world but that somebody is being hurt. But, generally speaking, the conditions in the district I represent does not agree at all with the picture you have painted.

Now, you seem to have two special fears. One is of higher taxes. and the other is that small businesses won't get materials.

Mr. BURGER. That is the idea. I think the effect has not as yet reached from the middleman and the fabricators down to the ultimate consumer; but at the rate it is going it will not be many weeks or months before the consumer will feel it.

The CHAIRMAN. The question of materials is not one that should come before this committee, but the question of taxes is a problem for this committee.

Mr. BURGER. Exactly.

The CHAIRMAN. In your statement you have quoted from your testimony before the Senate committee in which you expressed a willingness to do your part. Now, just what is that part?

Mr. BURGER. We want to use all of our efforts.

The CHAIRMAN. The last tax bill was based on peacetime needs, peacetime conditions, while now we are in an emergency. Would you consider that you should pay additional taxes on account of the emergency, that is, more than in peacetime?

Mr. BURGER. Mr. Chairman, I am not a tax expert. The Department of Commerce announced the other day that there are 4 million small businesses throughout the Nation. If a goodly percentage of those small businesses should close their doors, it would come back to this Committee on Ways and Means at an early date, the problem being to take care of the lack of income that theretofore had been coming in from that group.

The CHAIRMAN. Is there a great threat that that condition will obtain if small business is reasonably prosperous, or is making a substantial profit? As I understand it, you are dealing in your discussion mainly with profits and do not distinguish between individual enterprises and corporate businesses. Now then, we want to tax profits. As long as we only want to tax profits, there is no great danger of putting a company out of business, is there? In the case of corporations, as you no doubt know, we allow them to make $25,000 before the surtax is applied.

Mr. BURGER. We appreciate that. The reserve that the Committee on Ways and Means gave to small business has been very helpful to them.

The CHAIRMAN. What suggestions do you have as to our problem of raising additional revenue? What class of business do you suggest we get this additional revenue from? We are all in favor of reducing unnecessary expenditures, but the President has said that we cannot go any further. He has dared us to go any further.

But you recommended the curtailment of expenditures. Tell us just where we can do that.

Mr. BURGER. Well, Mr. Chairman, I can only give you my reaction to an interesting piece of news that appeared in the paper a day or two ago. I have heard the same thing discussed on the train back and forth from New York and in hotels here in Washington. This matter was the sale of butter the other day, over 1 million pounds of butter, at a price, as reported in the press, charged the foreign government of around 15 cents a pound. The price on the Commodity Exchange in New York was, I think, around 90 cents a pound. I am only citing that as one example, Mr. Chairman. I do not know whether that comes within the province of this committee.

The CHAIRMAN. That would properly come before the Committee on Appropriations.

Mr. BURGER. I am citing that as a case of unnecessary expenditure. The CHAIRMAN. I believe that matter should be brought to the attention of the Committee on Appropriations.

Mr. BURGER. I am only saying that there are unnecessary expenditures at these times along that pattern.

The CHAIRMAN. On page 4 of your prepared statement, in the next to the last paragraph, there is something that I did not fully understand. There you say:

Now, even before any further increase in taxes, all of these stumbling blocks to continued small and independent business are greatly magnified.

I do not understand that. I thought you were emphasizing these stumbling blocks. Now you say that they are magnified. What does that mean?

sir.

Mr. BURGER. As I would read those two lines

The CHAIRMAN. Did you prepare this statement?

Mr. BURGER. It was prepared for me under my supervision; yes,

The CHAIRMAN. That needs a little clarification.

Mr. BURGER. I think that the intent there is that the opposition is magnifying these stumbling blocks.

The CHAIRMAN. Have you not been emphasizing the stumbling blocks to small businesses in this statement? I am not arguing with you. I just want to see what you meant by that.

Mr. BURGER. The opposition says that the cries of small business with regard to the tax load and all of these other things are being magnified. We do not say that they are being magnified.

The CHAIRMAN. They contend that the complaints you set forth are magnified. Is that what that means?

Mr. BURGER. The opposition is saying that. That is apparently the result, Mr. Chairman, of a hurried job in preparing this statement. The CHAIRMAN. In your statement, as I said before, you quote from your testimony before the Senate Finance Committee, emphasizing the fact that small business is willing to do its part. Now, just what is its part?

Mr. BURGER. First, we want to stay in business if it is efficient, and secondly, we want to give all our services to the Government. That is what small business is willing to do as its part.

The CHAIRMAN. But not to pay any more taxes?

Mr. BURGER. Well, to the degree that

The CHAIRMAN. I want you to understand me clearly; I am not debating this with you at all. I am just trying to learn your position.

Mr. BURGER. Mr. Chairman, it is a difficult thing for small business to build up reserves. I think the economy would be better off to have many active, successful, independent small businesses remain; and that can be done without any great hardship on the tax income of the Government.

The CHAIRMAN. At the top of page 5 of your prepared statement you recommend certain things. The first is: "We should refuse to raise taxes on small and independent business or to raise them to the confiscatory levels suggested so far."

Now, as I understand it, you object to raising taxes at all on small business. Yet small businesses are making perhaps more money or as much money as they have ever made.

Mr. BURGER. They will pay their proportion.

Mr. CHAIRMAN. Suppose a business is making considerable profits, extraordinary profits, abnormal profits. Then would you say that it should not pay any more taxes in this emergency?

Mr. BURGER. I think small business, what we call small business, is paying more than its proper share.