Sims, Seth D., Assistant to the Secretary of Agriculture, Wash- Willard, Rex, regional agricultural analyst of the Bureau of Agri- cultural Economics, United States Department of Agriculture, Berkeley, Calif__ West, Frank, president, Preservative Paint Co., Seattle- Woods, Rufus, publisher, Wenatchee World, Wenatchee, Wash.. Perkins, W. C., representing the West Coast Minerals Associa- PROBLEMS OF AMERICAN SMALL BUSINESS WEDNESDAY JULY 26, 1944 UNITED STATES SENATE, SPECIAL COMMITTEE TO STUDY AND SURVEY Seattle, Wash. The committee met, pursuant to notice, at 1:30 p. m., in room 315, Chamber of Commerce Building, Seattle, Wash., Senator James E. Murray (chairman) presiding. Present: Senators Murray and Wherry. Also present: John Nelson, assistant executive secretary, and W. C. Broadgate, technical consultant. OPENING STATEMENT OF SENATOR JAMES E. MURRAY, OF ΜΟΝΤΑΝΑ Senator MURRAY. Ladies and gentlemen, before we open the conference I should like to introduce a few of my colleagues who are present with me at this conference. First, I want to present my able and distinguished colleague in the Senate of the United States, Senator Kenneth S. Wherry, of Nebraska. Senator Wherry is a member of the Senate Small Business Committee and has been one of the most active members of the committee. I want to say in opening this hearing that these meetings are being conducted by the Senate committee in line with the policies we have pursued ever since the creation of this committee. We have worked in Washington with the greatest of harmony. The committee is made up of seven Democrats and five Republicans, and on this committee no man has been more diligent and more helpful than the very able gentleman who is sitting on my left here today, Senator Wherry. I take great pleasure in introducing to you Senator Wherry. STATEMENT OF SENATOR KENNETH S. WHERRY, OF NEBRASKA Senator WHERRY. Mr. Chairman, I deeply appreciate the gracious words spoken by our chairman, United States Senator Jim Murray, of Montana. I don't want it to appear that we are trading places-we do that in Nebraska once in a while but I shouldn't want to do it in Seattle-but the reason that our committee has functioned so well is because of the leadership of our distinguished friend from Montana. He has assigned all sorts of things for me to do and has given me various responsibilities. It is because of such cooperation that, even if we are Republicans, we have been able to do a lot of the business on this committee. He has had me consider most of the complaints that have come before the committee. I want the people of the Northwest-and I think I speak for all of the members of the committee, including Senator Murray-to know that I am intensely interested in the preservation of small business, and that it is necessary to see what is happening, and what we can do to protect business in the future. Figures don't mean very much. There are figures in the press continuously showing that business is making a great deal of money, and that small business is a great success, making huge profits; and I suppose they can back those statements up by showing in dollars and cents that small business has made huge profits throughout the United States. However, the last figures we have from the Commerce Committee show that since December 1, 1941, to December 1, 1943, 554,000 small business firms have closed their doors. It is our job to discover the reason; it is our job to see what we can do to help small business not only now but during the post-war period; and it is for that reason that this committee headed by Senator Murray has been gathering information throughout the country. We have come out here to get information from anyone who wants to give it, and to get clues or ideas for the legislation that will help small business. By the way, there is a bill now in the Senate with my name on it and it is about the fourth or fifth bill that has been presented. It was introduced by Senator Murray, and we think small business will be benefited not only now, but in the post-war period. So, if you have anything in the way of constructive criticism we certainly shall appreciate your comments and your ideas. The thing to stress-at least that is the way I feel about it-is that small business have the opportunity in this country that it has had throughout our history, and by means of which we have become the greatest Nation on earth. Our business enterprises have built the economy of this country, and we have grown by it. I believe in it, and I think it is fundamental; and we must see that centralization, which has been a tendency in the last few years, is not increased, and that small business is given its share of contracts, and other benefits that can be assigned; and we must also see that they are amply financed, and in no way handicapped. Small business deserves an opportunity as well as big business. Finally, I believe that in the United States all unnecessary regulation and regimentation of small business should be eradicated, and as quickly as possible. I think that alone would be a boon to small business when the time comes. I want to thank the people who came to the depot this morning and took us out to Boeing Field; and I want to thank all of you for the gracious courtesies extended. I for one deeply appreciate it. I am looking forward to a visit here in Seattle today and tomorrow, and I should like to talk with you personally, any of you, if you have any ideas that your might want to give me. I thank you. Senator MURRAY. We also have with us two Members of the House of Representatives. It gives me great pleasure to introduce to youI don't believe he needs any introduction to a Seattle audienceCongressman Magnuson, who has taken a great interest in problems of small business. The House of Representatives has a small business committee, and no Member of the House of Representatives has been more diligent and more active in attempting to preserve the American system of enterprise than Congressman Magnuson. I take pleasure in presenting to you Congressman Magnuson. STATEMENT Of warren G. MAGNUSON, UNITED STATES REPRESENTATIVE IN CONGRESS Mr. MAGNUSON. Thank you, Senator; and may I take this opportunity to welcome both you and Senator Wherry to my district and to the State, and I know that Congressman Norman will do the same for his district and the State. I know you have a great deal to do here, and I shall not take up much of your time. There are people here who know the problems of small business, and will have something to say about it. I know that the plight of small business in this area has been somewhat of a peculiar one. We have, since the war broke out, become, in the Puget Sound area, one of the most concentrated producers of naval ships and naval auxiliaries throughout the country. We also have the Bremerton Navy Yard, Senator, across the bay, employing approximately 47,000 people. And this morning you visited our other great war plant, the Boeing aircraft plant. Because we have become a strategic place for manpower, and because of the necessities of supplying those great industries in this area, small business has found itself without manpower. Also, we have become subject to regulations in order to keep the three great industries going at full speed, which has added another burden to the already difficult problems of small business. We are out here on the Pacific coast, and because of that we will be servicing the war effort, the Army and the Navy, until the last shot is fired. Small business in this area can't hang on unless we get some help. We can't stop our large war industries, because they are engaged in the war effort and must go forward with full speed until the termination of the war. Those in the East will have a better chance to adjust their problems than those in the West. However, we hope we will not find ourselves after the war is over standing all alone when the rest of the country has had an opportunity to relax and get into stride for the post-war problems. It is very fitting that you are here. We have a problem here confronting small industry and small business that is peculiar not only to the congested areas of the United States, but it will become more acute as time goes on. I am sure you gentlemen are going to do an excellent job. There are some things that need to be done in the abolishment of regulations which small business has to face; we will need help in financing small business; and, above all, when war production ends, and factories are released for the production of civilian requirements, we need help to get small business going and to keep it going in order to have a well-rounded community. These industries have to be put into the production of some kind of consumer goods or we may find ourselves in a situation similar to that of Nebraska, a one-crop community. I know you appreciate that, Senator Wherry. Senator Wherry knows the problems of small business, because he comes from a State where there are many small businesses. Senator Wherry is a businessman of no small repute in his own State, and he knows the small businessman's problems. So I am doubly glad that you are both here today, and I know some good will come out of it. Senator MURRAY. We also have with us Congressman Fred Norman of the Third District. Congressman Norman, like Congressman Magnuson, is vitally interested in the problems that we are to consider at these conferences. It gives me great pleasure to introduce to you, Congressman Norman. STATEMENT OF FRED NORMAN, UNITED STATES REPRESENTATIVE IN CONGRESS Mr. NORMAN. Thank you, Senator Murray. I deeply appreciate the opportunity to sit in with the committee during the sessions at Seattle. As a Member of the House of Representatives I am greatly interested in the problems of small business, not only in this State but in the Nation as a whole. I happen to be a small businessman myself, and have many friends who are engaged in small business, so what is being considered here is something that is of vital interest to me personally as well as to my constituents. Sometime during these hearings I wish to present to you a bill which is known as the pilot-plant bill, designed to utilize fully the resources of the Northwest and other parts of the country, especially in relation to woods, since a great part of the tree is being wasted in all parts of the United States. I think, if we can add to the opportunities of small business as well as to its protection, we shall help solve the problems of small business that Congressman Magnuson has so well outlined. I hope these hearings shall help me in my work in Congress, so that I can go back there better understanding the problems we have to serve, and be given some idea as to what measures should be taken to protect small business to the fullest extent. You may be sure that anything I can do to assist in this worthy undertaking will be gladly and promptly done. FURTHER STATEMENT OF SENATOR MURRAY Senator MURRAY. This is the first of a series of conferences being held on the Pacific coast by the Special Senate Committee on Small Business problems. Seattle and the Puget Sound area are not just places on the map for me. For many years I have been familiar with them, observing the development. I am very happy to be here again, since I have always regarded Seattle as one of those great American cities where promise and achievement have been ever present. The rapid growth of Seattle, as a great American port and manufacturing center, has surprised and gratified the whole Nation. People everywhere have admired and applauded Seattle's spectacular war contribution. The great bombers which now range over Japan, the output of the Boeing, will, in the near future, help to bring about complete victory. The purpose of these conferences is to exchange information and acquaint our committee with the problems-the needs-and the hopes of the people of this area. Our primary purpose is to secure from you-Seattle's representatives of business, industry, and labor-those |