Mr. BURGER. I know it was in six figures. I don't know exactly.. Mr. Hiestand? Mr. HIESTAND. Mr. Burger, I know your position on behalf of this and other legislation and I am happy to concur with it. I do seek information from you firsthand because of your contact with many small-business groups and associations. Do you know of the number of loans, that is to say, financial assistance, which have been procured by small business from private sources, banks, and so forth, as a result of advice and counsel from the Small Business Administration? Mr. BURGER. Yes, sir, I think in one instance-last summer-there was an institution in the Twin Cities of Minnesota, and they were completing a project, and I think the invested capital was a little in excess of $500,000, and they went to SBA here in Washington and I must state that it came through Senator Thye's office. When they left the SBA office in Washington, they were not very optimistic about getting relief. Twenty-four hours elapsed and the SBA was able to get in touch with the bank in Chicago, and through that bank the mortgage was raised, some 25 or 50 thousand dollars. So that eliminated, in that instance, any need for SBA to loan that money, and through the help of SBA that situation was changed. We have another one pending now in Bloomington, Ill. I don't know how that is going to come out. Mr. HIESTAND. You see the reason I am trying to bring this out is that there is a lot of achievement on the part of SBA, which was organized as a result of action by this committee, which can't show in the report statistically. Is it your impression that the SBA is doing a good job? Mr. BURGER. I think I will answer your question this way. I think there is considerable and consistent progress being made in the administration of SBA. Mr. HIESTAND. Well, would you rate it good, fair, or poor? Mr. BURGER. Well, here are two instances. I am finding no fault. Here is a letter from a feed store in Auxvasse, Mo. The letter is dated May 6. It came to me unsolicited. DEAR SIR: Sometime back I wrote you a letter asking for information about loans from the Small Business Administration. You sent me the information. and asked that I let you know how we are doing. I have been about 3 months securing this decision. The loan was turned down because of inadequate coilateral. I am enclosing under separate cover my financial statement, made by a certified public accountant, also the appraisal of the building and equipment. The banks and private individuals have confidence enough in our business to loan $20,000 to us on open notes. I can still secure this $20,000 from independent sources, on open notes. If this party should die, I probably would be required to take up these notes, which would leave me in a very insecure position. I wish you would look into these statements, and write your comments to me on them. I did write a letter, and I sent everything to the head office in Washington, D. C., for their review. It was my understanding that all loan applications must eventually reach the head office at Washington before they are finally rejected, I don't know what happened. Here is one that came in this morning. Mr. HIESTAND. May I interrupt? I don't care so much for the detail. I wanted a generalization, as to what your group feels about it. Mr. BURGER. Well, we know this much, to the credit of SBA, that in excess of 5,000 loans have been made to small business that would not have been made unless the Small Business Administration was created by the Congress. Mr. WIDNALL. Mr. Burger, in the instance you just cited, was the application for $20,000 or for an amount greater than that? Mr. BURGER. That I could not answer. I think it was around $20,000. Mr. WIDNALL. You don't know whether it was a refinancing of credit? Mr. BURGER. I don't know. We never go into the credit standing unless these things come in. The CHAIRMAN. Mr. Rutherford? The CHAIRMAN. That concludes the examination. Your recommendations are very clear, Mr. Burger. You want the agency extended indefinitely and you want the abolishment of the policy board. Those are your recommendations? Mr. BURGER. That is correct. The CHAIRMAN. Any further questions? Mr. PATMAN. I didn't finish, Mr. Chairman, I was waiting until you got back to me. The CHAIRMAN. I will recognize Mr. Patman. Mr. PATMAN. Mr. Burger, what do you think about dollar-a-year men being used in the Small Business Administration? Would you favor that? Mr. BURGER. I think I can only say that I was a close observer at the hearings before the Committee on the Judiciary of the House, and although I am a New Yorker by birth, I am still from Missouri, with no disrespect to the dollar-a-year men, when it comes to that, but I just can't reconcile dollar-a-year men. Perhaps during a severe emergency. Mr. PATMAN. In case of war of great emergency? Mr. BURGER. Yes, sir. Mr. PATMAN. I share your views on that. You only find them in certain agencies. There are certain ones that you find them in and there are certain agencies that they are not interested in. Of course, I am not impugning their motives, I assume they are doing what they consider a good patriotic, civic-minded job, but I believe the matter of conflict of interest could be considered, and that they should not be allowed. About the taxes, Mr. Burger, you are acquainted with H. R. 777 that I introduced and that small business over the country endorsed. Mr. BURGER. Yes, sir. Mr. PATMAN. Are you in favor of that type of bill? Mr. BURGER. We voted on it and I think the vote showed a great majority in favor of that bill. Mr. PATMAN. That is a graduated income tax? Mr. BURGER. Yes, sir. Mr. PATMAN. It is not proposed to reduce the aggregate amount of taxes that the Government will collect, but it will take off the top enough to compensate for the loss at the bottom. In other words, by reducing the taxes on the little man, enough is taken off the top brackets to compensate for it. The CHAIRMAN. That is before the Rules Committee. Mr. PATMAN. I know it is, but he represents the small business people and I am sure he is interested in that, too. Do you consider price discrimination one of the greatest problems the small-business man has? Mr. BURGER. Well, I was in my own business from 1909 to about 1941, and I know what happened in the rubber-tire industry, and I know what happened when that contract was made, between the Goodyear Tire & Rubber Co., in 1925 and Sears Roebuck, and the effect of that contract, price discrimination, ruined hundreds of small rubber companies, and ruined many thousands of independent tire dealers and created cancers in that industry which were never corrected, and there was an alleged $41 million differential price discrim ination. I am well acquainted with it, and I find from my overall experience, that the thing that is destroying small business is the total disregard of the Robinson-Patman Act, and the failure, and I repeat, the failure of the Federal Trade Commission, these past 21 years, to vigorously enforce that law. In no other way can small business exist. Mr. PATMAN. Can you reconcile Mr. Barnes' views as working for No. 1, being in the position he is in, working in the interests of small business, and yet appearing before committees in opposition to a bill which will prevent price discrimination? Mr. BURGER. To answer your question, I could not reconcile myself to his position. Mr. PATMAN. That is all. Mr. BROWN. Mr. Chairman. The CHAIRMAN. Mr. Brown. Mr. BROWN. Don't you think we ought to give the Administrator some tools to carry out the wishes of Congress? Mr. BURGER. Exactly. Mr. BROWN. Why would you be against a dollar-a-year man? Mr. BURGER. Well, Congressman Brown, I don't want to indict or pass on people, but I suppose there must be patriotic citizens in the United States that would consider the welfare of the country paramount. Maybe there are reasons why the dollar-a-year men can be utilized by the Government. But I am speaking my personal views, and I just can't get it through my thick brain. Mr. BROWN. Don't you think the present Administrator is an honorable and a good Administrator? Mr. BURGER. Let me answer the question this way. Mr. Multer, chairman of the subcommittee of the House Small Business Committee, knows our position as we found it in the advisory groups of the Small Business Administration, honorary positions. Not all, but there were some on that advisory group that actually never belonged in that category, because they represented big business, and they would have no interest in small business problems. Mr. BROWN. Don't you think if he is a capable and honest man he ought to have a right to select his assistants? Mr. HIESTAND. Mr. Burger, if I understood you correctly, you said there must be some honorable men among these dollar-a-year men. One or two. Would you say that 99 percent were otherwise? Mr. BURGER. I wouldn' go that far. Mr. HIESTAND. Would you say that 50 percent were otherwise? The CHAIRMAN. I understand there is a group of schoolchildren who are constituents of Mr. Betts now in the room. We want to congratulate them on having an opportunity to come to Washington and see their Government in operation, and we also wish to congratulate them on the representation they have here in Mr. Betts, who is an able and conscientious Congressman and looking after your interests all the time. Mr. BETTS. Thank you, Mr. Chairman, that is more than I expected. Thank you. Mr. WIDNALL. Mr. Chairman. The CHAIRMAN. Mr. Widnall. Mr. WIDNALL. Mr. Burger, if I have had one complaint in my district, I have had many about the competition of discount houses. They are complaining about that more than because of alleged lack of enforcement of the Robinson-Patman Act. Yet most of the discount houses are small business, aren't they? Mr. BURGER. Well, I wouldn't say in large metropolitan areas they are small business. We were plagued with them for years in the city of New York. We would never look upon them as small business. But it is true that many people are being plagued by these discount houses, and I will answer that they exist primarily due to possibly unscrupulous independents supplying them with merchandise. But if the Robinson-Patman Act was enforced, I am sure many of these discount houses would not exist, because I remember distinctly in California, in one of my visits, in southern California, where the members of the federation were much concerned about some of the big electrical appliance companies having no regard for their regular distributors in the area, but indirectly setting up smokescreens to unload surplus merchandise. So the responsibility of the existence of discount houses rests in three categories, in my opinion, unscrupulous manufacturers, or manufacturers with no sales policy, and a minority in the wholesale and retail field. Mr. WIDNALL. Well I think that is probably true, Mr. Burger, in a number of instances, but it has also been my own observation that many of these discount houses start as small businesses. We are always talking about what big business does to little busiLittle business is hurting little business through the discount house today. Mr. BURGER. Well, I think that the discount houses in the United States, and I know New York City is as good an example as any other place, we had them for years, long before this great uproar coming up in the last few years, and consequently they existed, they generally had an office on a second or third floor of a building and samples, and they had the source of supply, and I still say, and this is from practical experience, I wouldn't indict small business. It is true probably that at the start they are small business, but they certainly expand, right here in the city of Washington. Mr. WIDNALL. It is interesting to see how some small businesses can expand and other businesses claim they are kept down because big 92432-57--9 business is always grinding them under the heel. Some people seem to have either the initiative or ability to provide healthy growth without always running to the Government to do it for them. Mr. BURGER. Well, when you have been in business for 40 or 50 years, you find a lot of tricks can be pulled at the expense of independent business, I am talking about efficient business. Mr. WIDNALL. Thank you. Mr. TALLE. Mr. Chairman. Mr. TALLE. There are some things that are difficult to define. Is that not true, Mr. Burger? Mr. BURGER. Correct. Mr. TALLE. We know as individuals what they are, but when we are asked to define them, especially in law, it is very difficult to do. Do you have any trouble in defining small business? Mr. BURGER. In defining small business? Mr. TALLE. Yes, sir. Mr. BURGER. Well, I heard some questioning yesterday when Mr. Barnes was on the stand, and I would think that the true position should be stated, as to what position that particular party or concern is in with respect to industry. Is he small or large? I don't think you can go by number of employees. I would say it depends on what position he is in in his respective industry, small or large. Mr. TALLE. That is right, because the number of employees in a large hydroelectric plant is small in relation to the capital investment. Mr. BURGER. That is right. Mr. TALLE. And a small steel plant, in the industry, might again be big as measured against a corner grocery. Mr. BURGER. That is right. That is why it is difficult to define. Mr. TALLE. So we will have to keep that in mind. Mr. BURGER. Correct. Mr. HIESTAND. Since Mr. Burger mentioned a minute ago a very famous mail-order house, I am just wondering whether he is aware that mail-order house, representing so-called big business, does more business with small business than any other company in the United States, to the benefit and profit of those small business houses? Mr. BURGER. I will answer your question this way. It is true that when that contract was canceled, some 30 or 60 days after the enactment of the Robinson-Patman Act, and at that time the chairman of the board announced that in keeping with the law, he couldn't justify the price, and the contract was canceled. Since that time, that same mass distributor or buyer has placed his business with most of the small companies in the rubber-tire industry. I don't know what he is doing with the other, but I do know that. Mr. HIESTAND. And even at that time that company did more business with small business than any other company in the United States! Mr. BURGER. Well, I wouldn't be in a position to answer that question, but I do know this much, that up until that contract was made Mr. HIESTAND. And to the advantage of small business Mr. BURGER. Up until that contract was made with the Goodyear Tire and Rubber Co., the annual sales or purchases of that company, in tires, was about 800,000 units a year, and 12 months after that con |