must be free and unfettered so that he can apply his talents in a practical and useful manner. It is my opinion that the job cannot be done by any bureaucracy, whether it be the Government or big business.

The performance history and low-cost operation record of small business in war production, by comparison with the waste, inefficiency, and high cost of Government-operated plants or Government-owned plants operated by fixed-fee contractors, should prove that bulk and size usually create waste and inertia, that the basic foundation of our past and future progress is related to the know-how expressed in the operations of the small business, and this is because we crave individualistic expression and personal success. You can't have progress, you can't have freedom without us.

In an effort to prepare for things to come, I have held on to the nucleus of an organization, and amongst the people retained are those who possess talent and the know-how which together we will use in providing a place for ourselves and employment for others. It being unthinkable to me that I was to be expected to take a vacation or to mark time pending the signing of an armistice, I set about to design and to develop a number of new products utilizing surplus and salvage materials which we had and equipment which could be converted to the purpose in mind.

After creating a number of items and finding that we were ready to offer them for sale so that we might test our markets, we find that the policies and the workings of O. P. A., W. P. B., and W. L. B. have not anticipated problems concerned with the reversing of wartime regulatory practices. I was absolutely amazed to find that not one of the five pricing methods used by O. P. A. could be applied to a new product or to something which had not been built before except on the basis of an arbitrary opinion on the part of someone in a regional office or in Washington who could not, by the wildest stretch of imagination, intelligently analyze all viewpoints, thereafter measuring the valueor the cost of the product so that an intelligent price-fixing solution could be found.

A typical case in point is one which concerns a greenhouse, a picture of which we are presenting to you as an exhibit.

(Photograph referred to by the witness is filed with the committee.) This greenhouse was to be made through the employment of a new rib-making process which was a development of ours. It would be made largely from left-over and salvage materials and could be manufactured and sold now because it would not require the use or the allocation of any critical material. The labor element being nominal, it could be made now because less than 50 men would be employed.

An application was filed with the local office of O. P. A. and the local gentlemen in this office were extremely courteous and kind in an attempt to help. It was soon discovered they had no authority to establish a price on the article and that the application would have to bẹ transmitted to the regional office, which in turn would examine it and ask more questions, and thereafter it would have to go to Washington. Because their set-up provides only for the pricing of comparable items, for instance victory models which represent situations whereby someone desires to make something worse and sell it for as much or more than a standard product, they are unable to determine a price on a basis of comparison, because they haven't anything to compare the new article with.

For instance, the greenhouse could not be compared with a steel unit, which have not been built for several years, because there was no price on a steel unit available at the time of the freeze. Also because it is largely personal preference or opinion that determines whether a wooden laminated structure or a steel structure is more suitable, no fair comparison can obtain. Because the old-fashioned greenhouse was nothing more than a lot of loose millwork parts sold usually on a direct-to-consumer basis, no fair basis of comparison could be had with such a product. Because there would be a variable in the ratio of erection labor as between a prefabricated unit and one which was built to order or made up from parts, no basic comparison could obtain in this instance. Because we propose to merchandise this product through department stores as a specialty item, selling to the stores through jobbers, which as far as greenhouses are concerned has never been done before, our pricing structure has to support the normal and natural mark-up concerned with these well-established channels of trade.

In the past, greenhouses as such have been sold direct, and the natural channels of distribution which I refer to were disregarded. Considering this, no fair basis of comparison can be had between what has happened and what is about to happen. Because it is a fundamental fact that regardless of the skill and experience of the manufacturer, he very seldom can determine the degree of acceptance of his product prior to offering it for sale. It is the public alone that will determine whether or not there is value by expressing their approval or disapproval through the factor of acceptance.

Sometimes an article clicks and sometimes it becomes just another idea. Because the law of supply and demand has established averages of margins, mark-ups, ratios of cost to consumer price on various articles in various degrees dependent largely upon the amount of sales effort required and whether or not the article is in the nature of a commodity or specialty item, I cannot see how anyone in Washington, even though he be a Frankfurter or a Tugwell, can be smart enough to analyze all of these angles in order that he may fairly, and without bias, determine the price at which the article may be sold. Because few manufacturers, if any, can previously determine their actual production costs through estimates, how can anyone in Washington tell whether our cost projections are sound or unsound?

The facts, as I have stated them to you and a lot more, have been communicated to the local O. P. A. office and they have attempted to convey them to the regional office, and the result has been a new adaptation of the famous Washington brush-off, and this is in the nature of a communication from the regional office whereby they questioned the right of the consumer to acqu're the greenhouse because it would come under some W. P. B. limitation order.

In the first place, they have no business to police W. P. B. restrictive orders. In the second place, it is my opinion they did this only because of a desire on their part to stall or brush us off. Perhaps there is a burden placed upon the consumer to secure permission from W. P. B. prior to the erection of the greenhouse, but this certainly can be no concern of the O. P. A., because it has nothing whatever to do with the establishment of a price.

From what I have said, which is only a part of the whole story, it has to be understood that those of us who are trying to test a market, who

are trying to utilize surplus, who are trying to prepare for the future, and who are trying to do all of those things which your committee is interested in, are being made to feel that we are as useless as was Don Quixote when he was fighting the windmill. I do not know whether it is a conspiracy, ignorance on the part of the policymakers, or what, but I do know that what affects me must affect thousands of others who have been or are trying to do the same thing or who, in the very near future, will be required to establish the momentum concerned with the actual transition.

Another case in point has to do with a summerhouse unit, a picture of which I am presenting to you as an exhibit.

(Photograph referred to by the witness is filed with the committee.) This we have designed and created so that it can be made almost entirely out of spare parts, reject materials, and used surpluses left over from our Hut production. Practically no new materials are required, and little if any new labor'would be utilized in making these units available to the public. Both O. P. A. and W. P. B. are floundering around with their systems and regulations in an attempt to clear it for us. Because the unit would have to sell for over $1,200 were it produced out of new materials or built by a contractor, and because we want to sell this, knocked-down, to the consumer at $850, there doesn't seem to be anything in the book to provide for a formula for the pricing of this product. Again O. P. A. has passed the buck to W. P. B., and regardless of the fact that the unit is made up almost entirely of used materials, W. P. B. in Washington cannot make up their minds whether the project should be cleared.

The local district and regional offices understand the story and could make a decision were their hands not tied. It seems to be physically impossible to get the complete story across to Washington without a personal contact, and inasmuch as we only have enough materials to make 75 to 100 such units, and inasmuch as transportation across the country is a difficult procedure, I have no desire to fight my way through the red tape involved by making a trip to Washington, although I am convinced that were I allowed the opportunity of presenting all of the evidence and telling the complete story, the project would be cleared. This is another instance of waste and loss of useful materials, resulting from cockeyed planning and bureaucratic administration.

As another example, it might be interesting for your committee to know that in connection with the stabilization of wages and salaries by the War Labor Board and the Treasury, there is no provision for adjusting organizations to a flexible personnel structure required when lay offs occur, and during the new organizational period.

For instance, I have been operating on a set organizational structure for 2 years, with wage-rate ranges properly established and formalized, with an organizational structure designed to provide qualifications as between the jurisdictional rights of W. L. B. and the Treasury as to workers paid by the hour and those paid on a salary. For instance, with just a nucleus of an organization, I today have a salaried employee who happens to be a foreman, with five men working for him, and who spends less than 20 percent of his time performing the work his men are doing. Accordingly, he is under the jurisdiction of the Treasury. Tomorrow, because there is something else for him to do he has no men working for him and he spends

his entire 8 hours performing physical labor. Consequently, he then becomes subject to the jurisdiction of the War Labor Board, and if the law is interpreted literally, he must be paid a salary for yesterday and be paid by the hour for today, and as I understand it, you cannot legally pay a man a salary for less than his pay period. Then you run into the problem of how to calculate time when he is paid on an hourly basis, and someone must know how to count days during the week in order to find out whether Saturday is an overtime day or not. True, the situation is silly, and of course it is unworkable, but it is the law.

It seemed to us that the only perfectly legal approach to the problem would call for the filing of a form 10 every day, wherein we would set forth the status of our organization as of yesterday, and ask their approval. Were we to do this, it would require an additional employee, and no doubt the services of one person on a permanent basis would be required in the W. L. B. office and the Treasury office, in looking after our case. Multiply this by thousands of similar cases, and I think you will see what I mean.

The situation was presented to the local War Labor Board, and they came up with an answer which was to the effect that for a limited period they would relinquish jurisdiction to the Treasury over the individuals affected, and suggested that I file a new form for their approval based upon the new organization. This may seem fine, but it just cannot be done because I do not know what I am going to do or how I am going to do it, what the organization is going to be this week or next week, whether we will have anything to make or whether we will be able to secure a price so that we may sell what we make. I know one thing, and that is I will not sell anything without a price determination approved by O. P. A., and I will not manufacture anything unless I am cleared by W. P. B., and I won't make any changes in wages or salaries unless approved by the Treasury or the W. L. B. I do know there are thousands of people who are in similar circumstances who are paying no attention whatever to the restrictions. Perhaps we would call this bootlegging, perhaps it is the only thing they can do. But, if they have ever had any experience with the punitive, persecuting, Gestapo-like activities of some of the enforcement branches of the various agencies, they would soon learn that the only safe way for one to protect himself is for him to do nothing.

I apologize to the committee for presenting my problems in such detail. However, I do ask your indulgence as I know you must realize that my problems are common to all small businessmen, as they must affect all others in similar circumstances, and everyone who undertakes to change his product or his business.

Gentlemen, we have come pretty close to creating a Frankenstein, and unless we view the monster, so far created in a most realistic manner, things might come to pass whereby it destroys itself. I know that you are thinking that anyone who presents a problem should also attempt to provide a solution, and I have a few things to suggest: 1. Because the relationship of the Government as it affects the people is becoming increasingly misunderstood, I should suggest that every employee of our Government, appointive or otherwise, be required to read and study until he has learned the full meaning of the text of the Constitution and of the Bill of Rights, so that he may

understand that our system was designed so that our Government is "by the people" and not Government "of the people," as far too many of our Government employees seem to assume. An employee of the Government should understand that he works for you and me, and that he is a servant of the people, and that he is not a storm trooper or a representative of any dictatorship.

2. Policies as made in Washington must be adjusted so that they can operate on a flexible basis to the end that local interpretation and local decisions may be had. I know that I am not smart enough to brief properly any case for presentation to someone in Washington who, even though I briefed the case properly and carefully, could not understand it.

I do know that were I allowed an opportunity of presenting my case to an impartial board composed of local citizens, neighbors, friends, or even enemies, I would have a fair chance of presenting all of the facts together with the personal angle so that my case would be understood. In this suggestion I am not referring to the creation of boards whereby the operation is star-chambered by allowing only contact therewith through a hired Federal employee who at the time offers to take it up with the board but infers that "you had better do as he says because the board will always back him up."

3. Remove price restrictions as applicable to new products. Limit this, if you wish, to products offered to the market for testing purposes or in quantitites which will support introductory advertising and promotional expenses. Remove restrictive orders as they apply to surplus materials owned by private individuals, and which are already on hand, so that they may be converted into useful purposes instead of allowing them to waste or rot as is now the case. Limit this, if you will, when it concerns the utilization of the few remaining materials which are still critical. Allow the local W. P. B. office to decide instead of obliging it to pass the buck to Washington.

4. Do something to stop the buck-passing technique employed in practically every Government office whereby different offices, branches, divisions step beyond their bounds whereby they think up an excuse to pass the case on to some other department for a decision respecting something absolutely irrelevant because they do not themselves want to do the deciding.

5. Stop, some way, the tendency on the part of Government offices to apply the brush-off through the passing out of forms which, as a rule, are meaningless to the recipient because they usually do not apply to his case and, if they did, he couldn't understand them, and if he could, and when he had filled them out, the chances are the office couldn't understand them. This form business is, in my opinion, a new technique applied to develop in further manner the principle of the brush-off, and unless it is stopped, most of us are soon going to be "form happy.'

Perhaps this committee is not representative of the makers of our policies. I should, however, assume you have some control over the situation and therefore I commend to you the thought that the planners who have undertaken to plan every plan for us to plan by have neglected to include a recognition of fundamental problems which result from the operation of natural laws and will have to be considered if we are to accomplish the purpose which brings your committee to our city. I cannot conceive that the system we are talking about has "been planned that way", but sometimes I wonder.