be listed as income. Increased value of farm lands increases the net worth of farmers, but does not increase their income.

The price of stocks is not a good statistic to introduce into a study attempting to determine which investor is better off. The prices of stocks in 1966 were 512 times what they were in 1959. Capital gains resulting from increased price of stocks should not be compared to capital gains from increased value of farmland. Stocks may be sold by merely making a telephone call. Disposal of farmland is a much more complicated matter and, as indicated, more often than not the farmer doesn't want to sell his land unless he wants to retire and get out of farming altogether.

It is ridiculous to compare the entrepreneur in the farm business with the factory worker. It is like comparing apples with oranges. Even if farm operators and farmworkers are compared with manufacturing workers there are factors such as age which would prohibit the farm worker from getting a job in any manufacuring industry. The study admits that the median age of farmers in various groups is from 462 years to 70 years. It seems to us the proper approach would be to compare an agricultural entrepreneur with a manufacturing entrepreneur. This is not attempted in the study.

After introducing hundreds of statistics, on page 37 of the report the authors virtually admit their study is no good. They admit a wide range of error. They discuss the impossibility of the task of coming up with parity returns as a primary measure of economic well-being. They say in order for their conclusions to be valid they must have a regular collection of data and not rely on 5-year periodic publications. They say that they have had to rely on "bits and pieces of information subject to a wider range of error than is generally considered acceptable." They further say that relying on only 5-year reports would "seriously impair public condence in the accuracy and objectivity of the parity returns calculations." With these last two statements we agree.

ATTACHMENT "B"

Net farm income by years according to U.S. Department of Agriculture Statistics (Including Government payments, but not other income)

USDA estimates that farm income for 1969 will be somewhat lower.

Net farm income by years according to economic indicators

NATIONAL FEDERATION OF INDEPENDENT BUSINESS

By JOHN W. HARDER

We appreciate your request that we furnish to your committee our views on the economic issues which concern the Nation and our membership. We would point out, that these views originate directly with our more than 265,000 member-firms actively involved in smaller, independent business and professional pursuits-which comprise a valid cross section of our country's 5.1 million unit small business sector. This sector's importance cannot be overestimated. Its members provide jobs for more than half of our civilian labor force. They generate an estimated 70 percent of national retail sales, 73 percent of wholesale sales, 83 percent of the construction activity, 80 percent of the service function, and 34 percent of the manufactured value added to the economy each year. Continuing federation economic surveys suggest strongly that this sector played a major role in reducing the unemployment rate from 6.1 percent in 1960 to under 4 percent today.

The issues which concern our membership are many and varied, but they can be summed up as all things affecting the ability of small business to expand and modernize, in the process creating additional job openings. Our members feel that decisions by Congress and the executive branch in the areas of labor, taxes, antitrust, and representation vitally affect this concern.

First, in the field of labor they face many problems, but currently chief among these is the affect of the minimum wage law. In our 1967 and 1968 surveys we questioned members about the effect of the 1966 revisions on their employment. Among those reporting it lower than 1 year earlier, the proportion ascribing the reduction to the wage law rose from an average 15 percent in 1967 first quarter to 36 percent in 1967 fourth quarter, then leveled in the area of 25 percent for 1968. This year we are questioning members specifically about teenage employment. Our first subsample suggests that as many as 42 percent of all small businesses employed teenagers in 1966, with such employment averaging three young people each. However, of this group only 54 percent report their teenage employment today at 1966 levels. Among the balance the average reported employment drop is 1.1 each, and 40 percent of these hold the minimum wage responsible directly or indirectly.

For these reasons our members recommend that Congress: (1) rescind the second phase of the 1966 enactment which has lowered the minimum wage dollar volume exemption from $500,000 annually to $250,000 annually; (2) provide relief from the law's requirements in the cases of workers of marginal productivity; (3) liberalize regulations affecting the employment of teenagers and simplify accompanying paperwork burdens; and (4) refrain from further expansions in the law.

Second, studies show that we will have to produce 1.7 million new jobs annually in the years ahead. At the same time federation surveys have indicated that new and additional jobs are provided through small business expansions and modernizations. But these depend on financing. And here we get into the area of taxes, for studies show that smaller firms depend importantly on internal sources for funds for business improvements (in our first subsample for 1969 we find that only 30 percent of respondents received business loans within the past half year). At the same time we find, and authoritative economic studies concur, that constantly rising tax rates, are eroding seriously the strength of these internal sources. Concurrently, our economic data indicate a series of constant increases in the cost of goods, which in turn reflects on investment in both inventories and receivables.

Because of the foregoing, and in an effort to cut through the current economic squeeze, our members recommend strongly that Congress, in its current overhaul of the tax structure, enact a "plowback” allowance which would permit them to reinvest in their operations, tax free, up to 20 percent ($30,000 ceiling) of their additional yearly investment in additions to inventory and receivables (we might note that in the 7 percent investment credit, small business has, in effect, a "plowback" for investments in depreciable equipment).

Third, and further in the area of taxes, our members are concerned with the plight of people in economically depressed areas. They are concerned with the problem of the ghettos. But they feel that there can never be an end to the ghetto problem unless action is taken to restrict the migration from rural to urban areas. They have seen (as reflected in our surveys) how well tax incentives have worked in encouraging job-producing expansions and modernizations, and they urge that this concept be expanded and extended, as proposed by Congressman Joe L. Evins, yourself, and others, in the form of the rural development bill which provides an extra 7 percent credit and other features for firms locating new plants in underdeveloped nonurban

areas.

Fourth, as your committee has pointed out in the past, the goals of the Employment Act cannot be reached without there being a free, competitive economy. This, as you said, cannot exist without strong enforcement of the antitrust laws. Reports being received from federation members indicate considerable concern over the rash of conglomerate mergers which has beset the economy and bedeviled small business through the resultant increase in concentration in our economy. Equal, if not greater, concern is being expressed over the growth of dual distribution in the many industrial classifications of the country which so often results in unfair competition with supplier-retailer selling in the same markets with his independent distributors at prices which approximate their buying costs. And, concern is voiced over our stop-start antitrust policies under succeeding administrations, much of which is due to the fact that the position of Assistant Attorney General in charge of antitrust seems to be but one seat in a game of musical chairs.

To correct these situations in antitrust enforcement, our members recommend that Congress: (1) insist that the Federal Trade Commission complete as quickly as possible its current study of the con

glomerate merger problem, with recommendations that where necessary the laws be strengthened; (2) make it clear to the Justice Department that enforcement procedures be expedited; (3) enact legisÎation which will bring manufacturers who compete directly with their own independent channels of distribution under the RobinsonPatman Act; and (4) provide some permanency of tenure for the post of Assistant Attorney General in charge of antitrust, the same as is enjoyed by the Comptroller General.

Finally, Mr. Chairman, for our members it has become steadily clearer that in order to achieve the consideration their sector deserves, it is vital that they be represented in the councils of Government effectively. They have nothing but praise for the fine jobs done over the past 28 years by the Small Business Committees of House and Senate, but feeling that their problems, those which are the concern of Government, will increase rather than decrease they urge that these bodies be strengthened, by at most granting legislative authority to both bodies or at least bringing up to parity in permanency with the Senate committee the House committee. Further, they appreciate the services rendered by the Small Business Administration. But they are concerned over its own stop-start record in lending, the restrictions on its lending, the uncertainties which have arisen regarding its future, and its operations at times without an appointed Administrator. They feel that these defects demand congressional as well as executive branch attention, and demand prompt remedy.

These, then, are among the chief concerns of our membership. They do not exhaust areas of interest. But action on them is certain to provide a more favorable climate of growth for small business and strengthen the fabric of our economy.

24-833-69-pt. 4-13

NATIONAL FEDERATION OF INDEPENDENT UNIONS

BY DON MAHON, EXECUTIVE SECRETARY

Speaking in behalf of the unions affiliated with the National Federation of Independent Unions our greatest concern is with regard to the impact of inflation and continually rising taxes on the future of American workers and our country.

Referring to the report filed by President Johnson on January 16, 1969, we note that the proposed budget calls for the extension of the income tax surcharge, at its current rate of 10 percent, for 1 year from July 1, 1969, to June 30, 1970. It is our position that this income tax surcharge should be eliminated as of its expiration date on June 30, 1969. We feel that this tax is most burdensome on those least able to pay; namely, workers and wage earners in the lower brackets who must use the major portion of their earnings for day-to-day family and living expenses.

The original intent of the surtax, as previously stated by the Johnson administration, was to curtail inflation. Actually, Government spending has increased since that time. Thereby, and as one direct result, inflation has also increased. In this respect the additional tax revenue has been self-defeating so far as controlling inflation was concerned.

We believe that the closing of many existing tax loopholes, that have permitted those in higher income brackets to evade or avoid their fair share of taxes, is most important. By shifting the tax burden more equally to those most able to pay it will also increase the buying power of workers. As a result middle and lower income families will be able to buy and consume more goods and thereby bring about the higher employment and maintain the greater productivity that is so essential to our country.

For the purpose of obtaining more economic stability we believe that encouraging more labor-management cooperation can result in greater benefits for all concerned and especially the general public. This cooperation will result in higher employment as well as greater price stability. The Government can enhance this positive program by endorsing progressive policies with regard to eliminating waste, duplication, and unfair competition. Also, the sponsorship of worker training programs. This will help close the gap between supply and demand for skilled workers. As a result, those displaced through automation and industrial changes, with regard to plant location and other economic factors, will be greatly assisted.

Referring to the international economy: We suggest a reappraisal of the present situation so as to protect American workers from competition resulting from the imminent flood of products of the so-called Iron Curtain countries.