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of prices on merchandise today is not because a man is an evilhearted manufacturer or merchant and wants to bring ruin to this country, but because if he has merchandise on his shelves and if he needs money for his pay roll, he cannot get it. He has to go to the chain stores and the department stores and sacrifice his goods.

And, Members of Congress, those buyers of those large department stores and chains can tell from looking at the face of the seller immediately what is troubling him.

They say to him, "Yes; you take this price; this is our price, and we are going to run a sale next week and use this merchandise ", and so the manufacturer who has slaved in his business has lost on that transaction. The department store or the chain store will advertise in full-page advertisements saying that this is a closingout sale of goods from the manufacturer. There is your story.

If we have a bad week's business-there was a time when, if I had a bad week's business, I used to go into the bank and say to the banker: "Mr. Jones, you know my account that I have here. I need $1,000 to discount my bills this week." It was raining or snowing, or something else happened that made it a bad week, and I would say to the banker: "I want to discount my bills, and I would like to have a loan for 30 days or 60 days."

Today that merchant either goes to the chiseler and pays 42 percent, or he turns over his accounts receivable and pays 30 percent.

The buyers of these chain and department stores know that the manufacturer has to take advantage of such opportunities to dispose of his goods, and he never get a penny on his sales to the department stores and chains.

Members of Congress, I wish television was so perfected that you could creep into the hearts of these small merchants and see the tragedy going on among the middle class and smaller merchants and manufacturers. The banks have taken away what we had in liquid capital, but we still hang on to our little business and the few employees we have. And many times when Saturday comes around the pay roll cannot be met, and we will say to the fellow who is supposed to get $22 a week, "We will go 50-50 with you and we will give you $11 now, and maybe during the week some checks will come in, and then we will give you the balance." That is the situation.

I contend that any business man who has borne the brunt of the struggle of this depression for the last 4 years and still has the courage and the mental fortitude to hang on to his little business is just as sound today as the Pennsylvania Railroad Co. or the United States Steel Corporation.

Members of Congress, you must come to our rescue today. I tell you the little fellow is being wiped out; the medium-class merchant and manufacturer is being wiped out.

If you will go through our cities you will see vacant stores everywhere. Why? Because the little merchant who knows his business just as well as Gimbel Bros. know their department-store business, can buy just as judiciously as the big fellow. But when he needs $500 to enable him to buy right, he cannot get it. But the other fellow who needs half a million dollars to close out something, does get that.

I hope you gentlemen will not consider me a man of radical views. I am not. I am conservative. I still say this is the greatest coun

try in the world, in spite of all they can say. What a wonderful thing it is to live here!

But they are choking us, they are stifling us.

If we have had a bad week, where can we turn? We go to our men and women, our employees, and tell them we have the merchandise, but we cannot get it to work, because we have been confronted with a pay roll. So we have to tell them to go home, and say to them, "When we get the money we will send for you.”

You must help us, Members of Congress, you must come to our


I think Congressman Kopplemann will receive the blessings of millions of merchants and manufacturers because of this piece of legislation.

I have allowed credits, Members of Congress, to concerns throughout the world. I pride myself, as a little fellow, that I ship merchandise out of the port of Philadelphia of American-made goods to almost every trade center in the world.

I have studied it, and I know what the financial requirements are, and I say to you that if Congressman Kopplemann's bill goes through in this House and in the Senate, it will be a godsend to us.

I cannot stand here and quote you statistical figures. I am not cut out that way. I am mingling with my fellowmen on the highways and byways of life. I sit down and discuss our problems with them from a practical standpoint, and not in an abstract way.

We know what is affecting us. We know that if we owe a bank some money we will go through the tortures of hell, but we will pay it. We do not very often run to the cover of section 77 (a) or (b) and take advantage of the moratorium that Congress provided last year.

It is the big fellow who has the advantage. I do not stand here and criticize the big fellow. Whatever he says is right, or is supposed to be right.

But the little fellows do not do those things. We pawn our wives' jewels in order to meet our obligations. That is the way we are meeting our obligations, because we have embodied that wonderful tradition of this great country, because we feel that we have an opportunity to go out and make a decent living.

But in the last 3 or 4 years the ground has been cut from under us, and wherever we go the banks laugh at the little fellow.

Do you know, Members of Congress, that when the little fellow goes into a bank today to ask for a little accommodation, the bank says to him, "Go out of business; there is no more room for the little fellow in this country."

That cuts us to the heart. And may I be frank with you and say here that I was going to punch the face of a vice president of a bank because he said that to me.

I have been in business for so many years, and have worked together with my wife, and I need $500, and he told me to get out of business because there is no more room for the little fellow.

That is contrary to every precept of this great Nation.

They do not want to take our accounts in the banks today. First, the banks take away all we have, and now, if we have a thousand dollars and we go into a bank, they say, "Your account is too small for us to be bothered with."

There was a run on a bank, and a friend of mine, a customs house broker, came to me to ask me about it. I said, "No; leave your money there. There is no sense in making runs on banks."

He said, "But my next door neighbor had money in that bank, but he took it out of there."

I said, "You leave your money there." Governor Norris, of the Federal Reserve Bank, broadcast a speech at that time. They asked me to do the same thing. They asked me to go on the platform and make a speech, broadcast a speech, telling the people to stand by the bank.

Governor Norris broadcast a speech and advised the people to be calm. They did remain calm, until the bank closed.

Then this broker friend of mine came to me and said, "Practically, who is the smartest patriot, the man who took his money out of the bank before it closed, or the man who left it there?"

That is the situation today. That is the story, and I know it is true, because of my experience as chairman of the National Depositors' Committee, and I know the tragedy that has come to many people of the country who did that.

I traveled over 7,000 miles last fall in many States, speaking on the question of the closed banks. They tell me I am "nuts " on that subject. But I feel it, I see it, I mingle on the highways and byways of life, and I see what is going on. I see how we are getting choked and stifled.

You have been very kind to me, and I appreciate it most profoundly. I am not going to take advantage of you Members of Congress.

But I want to leave this thought with you.


I know the machinery of legislation and how it works. speed this machinery. You do not know what this bill of Congressman Kopplemann's means in everyday life to millions of merchants and manufacturers.

Talk about increasing employment! If you will take $1,000,000 and put it in the Philadelphia area and loan it to the small merchants and manufacturers in loans of a thousand dollars, and give me 3 months' time, you will have 20,000 men and women working at decent wages, with or without the N. R. A. There is no need for any statistics on that; those are the facts.

You will see stores reopened; you will see new life and light and hope created among millions and millions of men and women who have become great factors in this country from one end of the country to the other, in little communities and in large cities. And they are the safety valve between the "soapbox" orators and the other extreme. That is the middle-class fellow who has brought up his family and become attached to the community. It is of the chain store, the head of the concern who stays I am not talking against him; if God provided hir him have it. But you must provide something fo Members of Congress will do that for us, let us s from it. I tell you the people will benefit most fr We are not asking you to take chances with us

I came across a bill known as "Senate b becoming quite proficient in distinguishing w what is a House bill-and Senate bill 2367


farmers, and that is very fine. And I see that House bill 7042 provides that the R. F. C. may loan money to small fishermen and take as collateral the small fishing boats. That is all right. The small fisherman has to be helped.

Everyone in this great country has become a part and parcel of the great system of the United States, and we should let him go out and get assistance in his business, so he can go out and make a living.

I am not so struck on giving them a meal ticket; I am not so struck on the proposition of giving them charity. Whether a man is a naturalized citizen or a native, it is not a charity proposition; give him a chance to go out and work, and he is the happiest human being on the face of the earth, and I have seen them everywhere.

I am about finished. I hope that if God inspired me to stand up here and tell you a story that emanates from the recesses of my heart, and from the recesses of the hearts of those millions of men and women who are engaged in small industry and small business, from one end of the country to the other, I pray that my appearance here will have the proper result.

I thank you most profoundly for the attention you have given to me, and I most profoundly hope and pray that in a short time I will read in the newspapers that Congress has done something for this class of American citizens.

Mr. WILLIAMS. We are very glad to have had your statement. Mr. FORD. May I make a comment, Mr. Chairman?


Mr. FORD. Out in Los Angeles there happens to be a man who was probably the largest wheat grower in America. We all know who he is. He is the man who financed the big wheat project during the war. He is known in Los Angeles as a very successful business man even prior to his entering the wheat business.

The other day he went to one of the banks with a letter from Mr. Wallace, saying that in 10 or 15 days-whatever the period of time was they would be sending him a check for $22,000 for wheat that he did not raise. He wanted to get $1,500 on his note, on the assurance of that payment. The answer was that they could not give it to him because they did not know whether the United States Government would keep its word and send that money. If that is not sabotage on the part of the banking fraternity of the United States, then I do not know what the word means.

Mr. WILLIAMS. The next witness we have is Mr. E. S. Bullock, of Williamsport, Pa., a lumber manufacturer. Mr. Bullock, we shall be glad to hear you at this time.


Mr. BULLOCK. Mr. Chairman and gentlemen of the Banking and Currency Committee, it is a privilege and an honor to come before you here in support of

Mr. KOPPLEMANN (interposing). Mr. Bullock, before you start, will you tell us something about yourself and your business?

Mr. BULLOCK. I was just coming to that. I come here in support of Mr. Kopplemann's bill for an intermediate credit corporation to help small business.

I started in business in 1907, and I imagine you all know what year that was. I started with one small mill. A banker at that time agreed to lend me $2,500.

From that capital investment, in 7 years, I built up an individual organization operating seven mills, with a balance sheet of $100,000 liquid.

Unfortunately I became the victim of circumstances at the hands of banks and bankers. I was persuaded to finance a partnership. It was not known to me at that time that the bank, or a director of the bank, practically owned the plant. That is to say, a director of the bank owed the bank $105,000 and the bank sold this plant for $115,000.

The reason I let them get me into this deal was that they approved an appraisal showing that the plant was worth $150,000.

Mr. WILLIAMS. What period is this that you are talking about now?

Mr. BULLOCK. 1923. The bank agreed to take a first mortgage on that plant, and I figured that if the bank would take a first mortgage for $100,000 it was a good buy at $115,000, and I endorsed a collateral note for $100,000, individually.

Mr. WILLIAMS. Did you not investigate the property yourself? Mr. BULLOCK. I did.

Mr. WILLIAMS. You were satisfied with it on your own judgment? Mr. BULLOCK. I was satisfied, as far as I knew the business. That was the beginning of my downfall.

In 1927 I was forced out of business individually on account of this partnership business; it was not incorporated.

My thought in coming here today in support of this bill is to try and show you gentlemen as briefly as I possibly can that the little business man is fighting with his back to the wall for a small credit accommodation. I say small-even five or ten thousand dollars. I am going to tell you about my experience with the R. F. C. in the past 30 days.

Mr. WILLIAMS. You are still in the lumber business?

Mr. BULLOCK. Yes, sir.

Mr. WILLIAMS. In what form?

Mr. BULLOCK. I am a manufacturer and a wholesaler in hardwoods. That is, I wholesale lumber. I buy lumber from the South and from the West, and I sell it all over the country from Cleveland to Boston. I have an established trade, or have had, since 1921. Mr. WILLIAMS. And you are also in the manufacturing end of the business?

Mr. BULLOCK. Yes, sir.

Mr. WILLIAMS. Where are your mills?

Mr. BULLOCK. In Centre County, close to Bellefonte, Pa. Also, there are one or two mills that should be operating, and those are near Williamsport.

Mr. DRISCOLL. You manufacture lumber? I ask the question because I live in that vicinity.

Mr. BULLOCK. Lumber; yes, sir. I purchase the output of small mills. In other words, I am representing_not_only my small company but others with whom I have contacted and whom I have talked to in reference to Mr. Kopplemann's bill here.

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