in the Senate and in the House, as explained by Representative Monroney, the other sponsor of the bill; and with knowledge of the unfavorable conditions under which the Senate concurred in the elimination by the House of section 126 prohibiting special committees, as explained by Senators Barkley and Lucas, your committee is convinced that the clear intent of the Senate, formulated and expressed after long hearings and studies, was to avoid the creation of special committees except in matters of vital consequence, such as those relating to atomic energy. Reason and intelligence and knowledge of the conditions that existed must lead to the conviction that it was the intent of the Senate that special committees should be discontinued.

Eight of the nine select and special committees of the Senate, which were in existence when the Joint Committee on the Organization of Congress recommended abandonment of the practice of creating special committees, have since been allowed to expire. The one exception is the Special Committee on Reconstruction of Senate Roof and Skylights and Remodeling of Senate Chamber, which stands in a different light because of its nonpublic character.

The functions of six of those former special committees have been officially assumed by standing committees and the Special Committee on Atomic Energy has been superseded by a joint special committee. As has already been pointed out, the Senate always allowed an exception to be made for atomic energy, which is considered of vital consequence to national security.

The last special committee to expire was the Special Committee on Small Business, which terminated on January 31 of this year.

IV. ORIGIN OF A SPECIAL COMMITTEE ON SMALL BUSINESS

The original Committee on American Small Business was created in October 1940, pursuant to a resolution offered by the distinguished senior Senator from Montana, Mr. Murray. The resolution directed a study and survey of the problems of small business enterprise and the securing of the necessary facts and information which might aid the Congress in enacting remedial legislation in the interest of preserving independent small business enterprise in America. The purpose was commendable. The Senate had not yet taken a position against establishing special committees. In fact, special committees were very much in vogue. Before this resolution was adopted, Germany had declared war against England, France, and other democracies which had our national sympathy.

Our Nation was gearing its industrial capacity with a view to furnishing supplies to friendly nations, and the possibility of our eventual involvement in the war was ever present in the minds of Members of the Senate. Far-seeing Members of this body could foresee that it was imperative to lay the ground work; to gather information in order to mobilize eventually the productive facilities of small business for our national security; the interests of friendly nations; and, perhaps in the near future, for the successful prosecution of a war of our own. Small enterprise had to be protected against being squeezed out of business by their large competitors receiving Government contracts. Standing committees would be swamped with emergency or war legislation. The resolution appeared sound

under then existing circumstances; it had instant appeal and it was approved by this body;

V. MAJOR ACHIEVEMENTS OF THE SPECIAL COMMITTEE ON SMALL

BUSINESS

Your committee would be the last to deny that the Small Business Committee did perform an invaluable task during the war years in cushioning the shock of the war on small business. Under the fine leadership of Senator Murray, it helped small independent business as the war-preparedness program got under way.

Among its greatest boasts are its claims to having obtained relief for those caught by the conversion from a peacetime to a war economy, to having secured assistance in carrying interest charges, and having regulated disposal of goods for wholesalers and retailers whose stocks and funds were frozen, and to having secured passage of legislation setting up the Smaller War Plants Corporation, which channeled war contracts into small business establishments. Those were the accomplishments stressed mostly by Senator Murry when the chairman of your committee questioned him on the floor of the Senate on January 13, 1947, at a time when the question of renewing the Small Business Committee was under discussion. Those accomplishments head the list of the special committee's record of achievements contained in its latest report filed on January 31 of this year (S. Doc. No. 7, 81st Cong.).

It is true that Senators Murray, Maloney, Ellender, Mead, Stewart, Capper, and Taft did jointly sponsor and introduce S. 2315 in February 1942. This bill was entitled "An act for the relief of dealers in certain articles or commodities rationed under authority of the United States." This bill allowed the Reconstruction Finance Corporation, through a system of purchases and loans, to prevent and relieve distress among dealers in articles or commodities which were rationed in connection with the war effort.

This bill was referred to the Committee on Banking and Currency on February 25, 1942. On February 26, 1942, it was referred to the Subcommittee on RFC Matters. On that same date it was referred to the Treasury, Reconstruction Finance Corporation, and War Production Board for the usual departmental reports. The Office of Price Administration suggested amendments.

Hearings were held on April 8 and 22, 1942. On April 23, 1942, it was reported by Mr. Brown, with amendments (S. Rept. No. 1272). On April 27, 1942, it passed the Senate. On April 28, 1942, it passed the House (H. R. 6995, companion bill). The enactment was approved on May 11, 1942, and became Public Law 549.

This detailed explanation has been given simply to point out that it was necessary for your committee to consider this recommendation anew, to hold hearings, and to amend the bill, just as though the special committee had never considered it.

Let us consider the other practical aid which the special committee claims it has given to small business. Again in February 1942, Senators Murray, Maloney, Ellender, Mead, Stewart, Capper, and Taft jointly sponsored and introduced a bill (S. 2250) entitled "An act to mobilize the productive facilities of small business in the interest of successful prosecution of the war and for other purposes."

This bill, in general, empowered the Chairman of the War Production Board and made it his duty, through a deputy to be appointed by him, to mobilize aggressively the productive capacity of all small business concerns, and to determine the means by which such concerns could be most efficiently and effectively utilized to augment war production.

The bill created the Smaller War Plants Corporation to aid in carrying out this program.

This bill was referred to the Senate Banking and Currency Committee on February 5, 1942. On February 6, 1942, it was referred to the War Production Board, the War Department, the Navy Department, Treasury, and Federal Loan Agency for the usual departmental reports. On February 6, 1942, it was referred to the Subcommittee on RFC Matters. Hearings were held on February 17, 18, 19, 24, 26, and on March 4, 1942. The hearings were printed in two volumes, part I containing 262 pages, part II consisting of 363 pages, or a total of 625 pages of hearings. The House held 250 pages of hearings. The bill was reported by Mr. Hughes with an amendment on March 26, 1942. It passed the Senate on March 30, 1942. Senate agreed to the conference report on June 4, 1942. ment was approved on June 11, 1942 as Public Law 603.

The

The enact

Once more, the development of this legislation has been recited in detail to point out that it was necessary for the Banking and Currency Committee to hold hearings anew-625 printed pages of hearings-to call the same and new witnesses, to get departmental views, and to amend the bill before it could fully execute its duty and report the bill.

Former Senator Barkley pointed out very clearly the inherent shortcomings of a special committee, during the debate on the continuation of the Special Committee on Small Business on January 24, 1947. At that time the then senior Senator from Kentucky stated:

The resolution requires the committee to report to Congress its findings and recommendations for legislation; but after it has made its findings and recommendations it cannot report a bill to the Senate. Whatever legislation it recommends must be properly introduced and then referred to the Committee on Banking and Currency. The special committee is not a legislative committee. It cannot report a bill. It may make a recommendation for legislation, but it cannot report a bill; and no bill introduced can be referred to it.

Every proposal for legislation recommended by the committee at the termination of its life must then be referred to the Committee on Banking and Currency, of which the Senator from New Hampshire is chairman. That committee must then consider the legislative proposal, taking advantage of whatever information the Small Business Committee may assemble. But it must consider the legislation ab initio. It may hold additional hearings. If a bill dealing with small business were introduced while the Committee on Small Business was still in existence, under the rules that bill would have to be referred to the Committee on Banking and Currency, even though the Committee on Small Business had reported.

The Committee on Small Business, as proposed to be established, could not lend money to any small business enterprise. That is the function of the Reconstruction Finance Corporation, which comes under the jurisdiction of the Committee on Banking and Currency in regard to legislation. The Committee on Small Business could not enforce the antitrust laws against large combinations which are seeking to drive small business out of the field. Legislation on that subject would go to the Committee on the Judiciary (Congressional Record, Senate, January 24, 1947, p. 587).

Your committee knows that those measures sponsored by members of the special committee were of great assistance to small enterprises

throughout the country. However, two observations are pertinent. It cannot be reasonably asserted that the standing committees would not have heard the pleas of small business and afforded them relief, if those standing committees had not shared part of their duties with the special committee. Furthermore, it is obvious that the efforts of the Banking and Currency Committee were largely duplicated by the special committee with regard to the legislation just discussed.

There can be no doubt that the Senate had those evils of duplication and overlapping in mind when it voted to discontinue special committees through passage of the La Follette-Monroney bill.

Continuing a discussion of its accomplishments in aiding small business, the special committee states in its report submitted on January 31 of this year:

We helped to provide the same facilities within the War and Navy Departments. We policed the regulatory machinery set up by the control agencies, War Production Board, Office of Price Administration, etc., breaking many bottlenecks inimical to small business and obtaining relief when failure seemed imminent.

Without seeking to disparage the work of the special committee in this respect, your committee observes that is a function which is performed regularly by the standing committees and which was performed by the Banking and Currency Committee among others during the war as well, and with the same results as those achieved by the special committee.

In fact, the Legislative Reorganization Act of 1946 specifically provides as follows:

LEGISLATIVE OVERSIGHT BY STANDING COMMITTEES

SEC. 136. To assist the Congress in appraising the administration of the laws and in developing such amendments or related legislation as it may deem necessary, each standing committee of the Senate and House of Representatives shall exercise continuous watchfulness of the execution by the administrative agencies concerned of any laws, the subject matter of which is within the jurisdiction of such committee; and for that purpose, shall study all pertinent reports and data submitted to the Congress by the agencies in the executive branch of the Government.

VI. THE BANKING AND CURRENCY COMMITTEE AND THE SMALLBUSINESS MAN

Small-business men regularly appear before the Banking and Currency Committee seeking amendments to laws or complaining of bottlenecks in or unfair treatment by Government departments or agencies. They always receive sympathetic treatment from your committee's Subcommittee on Small Business or from the full committee. Very often your committee succeeds in straightening out their difficulties by discussing their problems with the agencies concerned. For instance, last summer small-business men contacted your committee and complained of the fact that regulations of the Board of Governors of the Federal Reserve System interpreting consumer credit legislation practically destroyed the trade custom of selling products on a demonstrator basis. It was pointed out that this affected the small-business man adversely, because he could not afford large store windows to demonstrate his goods. Regulations of the Board required a down payment before a radio or washing machine could be sent out on a demonstrator basis for a few days

if the sale was made in anticipation of credit. The problem was brought to the attention of the Board by the committee. The Board, always seeking to be fair, cooperated and promptly amended its regulations to allow goods to be left on a demonstrator basis for 10 days at the home of the consumer without a down payment. Your committee cannot escape the conclusion that your committee's concern with the stringency of consumer-credit controls, in view of the present production and manufacturing levels, and your committee's recent inquiry into the situation caused the Board of Governors of the Federal Reserve System to act as promptly as they did last week in relaxing regulation W in a way that benefited the smallbusiness man and millions of his customers. Such instances are of

frequent occurrence. Your committee deals daily with problems and complaints of small-business men who contact your committee directly or whose correspondence is referred to it by Members of Congress.

At times, it is necessary to pass special legislation to extricate the small-business man from his difficulties. For instance, at the last session of Congress, there was pending before your committee, S. 1857, a bill to ratify and confirm amendments to certain contracts for the furnishing of petroleum products to the United States. The Comptroller General of the United States gave an adverse report on the legislation. He believed in upholding the strict contractual rights of the Government.

A large number of small contractors had been "caught in the squeeze," as they expressed it, when price controls were suddenly and unexpectedly removed. They were interested in this legislation. Your committee's Subcommittee on Small Business recommended approval with an amendment. Your committee reported the legislation favorably to the Senate as amended. The companion bill (H. R. 4659) passed the House and upon the recommendation of your committee it was passed by the Senate on June 12, 1948. It is now Public Law 770. The Senate bill had been sponsored by Senators Holland and Pepper of Florida. Under this law, a considerable number of small-business men were saved from ruin, by allowing the Government to adjust upward the price it was to pay for oil already under contract.

Upon all important legislation pending before your committee small-business men throughout the country make known their views. They appear as witnesses. Their problems are always taken into account in the legislation which your committee reports to the Senate.

VII. OTHER ACCOMPLISHMENTS OF THE SPECIAL COMMITTEE ON SMALL
BUSINESS

Continuing the record of its achievements, the special committee states in its report of January 31, 1949:

We obtained passage of the Federal Reports Act, setting up a control mechanism, which cut Government red tape by two-thirds in dealing with the Nation's business (Report, S. Doc. No. 7, Jan. 31, 1949).

Public Law 831 (77th Cong.) was sponsored by members of the special committee and reconsidered and reported favorably by the Committee on Education and Labor.