can be solved were it better equipped, and the better equipping is where Senate Resolution 104 comes in.

Even more important than this, they do not like, as they feel they are being, to be ignored. This feeling is even more distressing when they believe that the voice of big business and big labor is increasingly dominant in the political discussion of our time.

This whole testimony can best be summed up by a quote from Mr. Kenneth A. Staley, Staley Grocery, Charlevoix, Mich., who states: "In this bicentennial year nothing could be more fitting than to recognize the role small business has played in our Nation's growth." That, Mr. Chairman, is exactly why NFIB feels that this resolution should be passed, and should be passed now.

I thank you.

Senator BYRD. Thank you, Mr. Burger.

I have a statement from Senator Hatfield, which he has supplied to me, and that statement will be passed on to the official reporter for inclusion in the record. [See p. 36 of these hearings.]

Senator Griffin regrets that he has been unable to attend the hearings. He is a member of the subcommittee, and he is the minority member. The subcommittee consists of only three members. He will closely examine the record, and he has asked that the record be left. open until after the recess so that some additional statements may be entered into the record.

I have already indicated that that will be done, but I thought I should state for the record that Senator Griffin wishes it to be done. Dr. Samuel Z. Cardon, president of the American Association of Small Research Companies.

Mr. Cardon, would you please proceed?

STATEMENT OF DR. SAMUEL Z. CARDON, PRESIDENT, AMERICAN ASSOCIATION OF SMALL RESEARCH COMPANIES

Mr. CARDON. Thank you.

In addition to being president of the American Association of Small Research Companies, I am an officer in General Technical Services, Inc., a small research and development company located in Upper Darby, Pa.

The officers and board of directors of the association are all executives in small research and development and high technology companies. The purpose of the association is to work for improving the competitive posture of our community of companies. It was started some years ago, partially in response to criticism from Small Business Administration personnel that there appeared to be wide differences of opinion among us as to what the key problems of our community of companies are.

With support from SBA, NSF, NASA, and the Commerce Department, we ran two conferences in 1972, and workshops in 1974 and 1975. We are preparing a conference for ERDA on Business Opportunities for Small R. &. D. Companies at ERDA, which will be held here in Washington next month-March 24 and 25, at the Shoreham Hotel. Our conference have come up with a total of a dozen or so recommendations of reasonable actions the Government could take to improve the chances of survival and growth of the small R. & D. and

high technology company. Several of the recommendations were incorporated in the report of the Commission on Federal Procurement Policy, but as yet little has been done to implement them.

I feel that the main reason it has been so difficult to get things done in the interest of small business is that despite protestations to the contrary, we have been very low on the priority lists of both the legislative and executive branches of Government.

The Small Business Administration when called upon to plead a small businessman's case in the Administration, finds itself opposed by agencies headed by Cabinet members, far more influential than an SBA Administrator in high Government councils.

One SBA official some years ago, now retired, chided me for my impatience about getting changes in procurement regulations which would benefit small R. & D. companies, by noting that there are very few in Washington seriously interested in small business and changes have to be forced.

The situation, however, has changed somewhat. The President noted in his state of the Union message that the public is disillusioned with big business, big government, and big education.

There appears to be considerable sympathy for bringing the small company and independent inventors back into the mainstream of the economy to help solve some of the problems in energy primarily and in other problem areas as well. There is the fear that the big boys, with heavily vested interests, will not only be less directly effectual, but may in the furtherance of their own interests actually work to stall and bury needed new technical developments.

You gentlemen are undoubtedly aware of legislation introduced last week by Congressman Mottl in the House and Senator McIntyre in the Senate, entitled "The Energy Research and Development Free Enterprise Act of 1976." The bills' purpose, as stated by Congressman Mottl,

is to

increase small business and individual inventor participation in Federal energy R. & D. programs, reverse the trend towards monopolization of our new energy field, stimulate innovation and competition in the energy industries, and improve the distribution of Federal R. & D. funds.

This bill thus reflects the public's feeling that small business is likely more trustworthy and effectual than their large competitors.

We believe that in order to take advantage of this mood in the country, the Senate Select Committee on Small Business must be given legislative authority to allow it to act directly on legislation like the bill cited above, rather than go through committees which have primary responsibilities in other areas and only incidental interests in the small business community.

Incidentally, I would like to point out that the best thing that can be done for small companies is to help them get more business. Their chances for survival and growth would thereby be improved, and all the other problems would become less important and critical.

Banks would be more willing to provide needed capital; it would be easier to get competent employees; we could pay taxes; we would not mind paying taxes. In my own company I have not really had the problem that much because I have not made enough profit to worry about taxes-we could hire competent management, and all these other problems that people talk about that the small businessman has.

Our problem is not primarily banking, though this is a problem under the current conditions. We have much bigger problems in marketing, promotion activity, Government business practices, and so on, though incidentally, especially in R. & D. and high technology field there is convincing evidence that we can outperform our big competitors in technical output, cost, and other performance criteria, if given the chance.

To deal with all our problem areas we require a special Senate committee that not only considers all our problems but will also have authority to legislate possible solutions.

The House last year gave legislative authority to its Small Business Committee. We in the American Association of Small R. & D. Companies urge the Senate to give its Small Business Committee the same authority.

Thank you.

Senator BYRD. Thank you, Dr. Cardon.

[The written statement of Dr. Cardon follows:]

STATEMENT OF DR. SAMUEL Z. CARDON, PRESIDENT, AMERICAN ASSOCIATION OF SMALL RESEARCH COMPANIES (AASRC), WASHINGTON, D.C.

In addition to being president of AASRC, I am an officer in General Technical Services, Inc., a small R. & D. company located in Upper Darby, Pa. The officers and board of directors of the Association are all executives in small R. & D. and high technology companies. The purpose of the Association is to work for improving the competitive posture of our community of companies. It was started in 1972 partially in response to criticism from Small Business Administration personnel that there appeared to be wide differences of opinion among us as to what the key problems of our community of companies are.

With support from SBA, NSF, NASA, and the Commerce Department, we ran two conferences in 1972 and workshops in 1974 and 1975. We are preparing a conference for ERDA on Business Opportunities for Small R. & D. Companies at ERDA, which will be held here in Washington next month-March 24 and 25, at the Shoreham Hotel: Our conferences have come up with a total of a dozen or so recommendations of reasonable actions the Government could take to improve the chances of survival and growth of the small R. & D. and high technology company. Several of the recommendations were incorporated in the report of the Commission on Federal Procurement Policy but as yet little has been done to implement them.

I feel that the main reason it has been so difficult to get things done in the interest of small business is that despite protestations to the contrary, we have been very low on the priority lists of both the legislative and executive branches of government. The Small Business Administration when called upon to plead a small businessman's case in the Administration, finds itself opposed by agencies headed by cabinet members, far more influential than an SBA administrator in high government councils. One SBA official some years ago (now retired) chided me for my impatience about getting changes in procurement regulations which would benefit small R. & D. companies, by noting that there are very few in Washington seriously interested in small business and changes have to be forced.

The situation however has changed somewhat. The President noted in his State-of-the-Union message that the public is disillusioned with big business, big government, and big education. There appears to be considerable sympathy for bringing the small company and independent inventors back into the mainstream of the economy to help solve some of the problems in energy primarily and in other problem areas as well. There is the fear that the big boys, with heavily vested interests, will not only be less directly effectual, but may in the furtherance of their own interests actually work to stall and bury needed new technical developments. You gentlemen are undoubtedly aware of legislation introduced last week by Congressman Mottl in the House and Senator McIntyre in the Senate, entitled "The Energy Research and Development Free Enterprise Act of 1976". The bill's purpose as stated by Congressman Mottl, is to "increase small business and individual inventor participation in Federal Energy R. & D.

programs, reverse the trend towards monopolization of our new energy field, stimulate innovation and competition in the energy industries, and improve the distribution of Federal R. & D. funds". This Bill thus reflects the public's feeling that small business is likely more trustworthy and effectual than their large competitors.

We believe that in order to take advantage of this mood in the country, the Senate Select Committee on Small Business must be given legislative authority to allow it to act directly on legislation like the Bill cited above, rather than go through committees which have primary responsibilities in other areas and only incidental interests in the Small Business community.

Incidentally, I would like to point out that the best thing that can be done for small companies is to help them get more business. Their chances for survival and growth would thereby be improved, and all the other problems would become less important and critical. Banks would be more willing to provide needed capital; it would be easier to get competent employees; we could pay taxes; we could hire competent management, etc., etc.

Our problem is not primarily banking, though this is a problem under the current conditions. We have much bigger problems in marketing, promotion activity, government business practices, etc., though incidentally, especially in the R. & D. and high technology field there is convincing evidence that we can outperform our big competitors in technical output, cost, and other performance criteria. To deal with all our problem areas we require a special Senate Committee that not only will consider all our problems but will also have authority to legislate possible solutions.

The House last year gave legislative authority to its Small Business Committee. We in the American Association of Small R. & D. Companies urge the Senate to give its Small Business Committee the same authority.

Senator BYRD. The list of witnesses includes the following named persons who have not yet appeared:

Mr. Joe Denson, District of Columbia Chamber of Commerce, District of Columbia;

Mr. Jose Aceves, Latin American Manufacturer's Association:

Mr. Oliver O. Ward, president, Smaller Business Association of New England, Inc.

Are any of those gentlemen persent?

[No response.]

Senator BYRD. Very well.

Their statements will be included in the record, if supplied to the subcommittee.

Mr. Burger, what is your definition of small business?

Mr. BURGER. In the context of our membership, sir?
Senator BYRD. Yes.

Mr. BURGER. Any firm that is independently owned and operated, and not dominated in its industrial classification, regardless of its location, of its participation on any particular level, retail, wholesale, manufacture, regardless of its form of business organization.

Senator BYRD. What is your definition, Dr. Cardon?

Mr. CARDON. We accept most, in general, what the SBA has laid down for rules for service organizations, and I think in the R. & D. field they say under 500 employees, and the same thing, they are not dominant in their field, and primarily are service organizations that are doing R. & D. for others, for customers, whether the Government or private industry.

Senator BYRD. There is no line drawn with respect to the amount or volume of business?

Mr. CARDON. I think SBA, in some of their service classifications say under $2 million now for business. Most of our members actually are in the 1 to 10 employees class, technical employees, although one of our members does have 200 employees.

Mr. BURGER. Senator, most of our members' gross sales run about $200,000 or under, but we do have some that are rather large. I recall one meatpacker responding to a survey some years ago who had 1,500 employees.

Now, this is not a tiny business, but compared to Armour, Swift, it is not dominant in its line of industry.

Senator BYRD. All right.

Is there any other witness who wishes to testify for or against Senate Resolution 104?

[No response.]

Senator BYRD. Very well.

Gentlemen, we thank you for your testimony and, as I have stated, the record will remain open until after the recess for further

statements.

That concludes today's hearings on Senate Resolution 104. and the subcommittee will stand in recess awaiting the appearance of certain Senators and other witnesses perhaps who will wish to testify with respect to Senate Resolution 109.

Additional statements on Senate Resolution 104, received by the subcommittee, are as follows:]

STATEMENT OF OLIVER O. WARD, PRESIDENT, GERMANIUM POWER DEVICES CORP., AND PRESIDENT OF THE SMALLER BUSINESS ASSOCIATION OF NEW ENGLAND

Mr. Chairman: Whether or not Senate Resolution 104 should be acted on favorably should rest on what is in the overall best interests of the small business community.

We fully understand the sensitivity factor that prevails on Capitol Hill when there is a move underway to modify the rules that affect the jurisdiction of a Congressional committee. We believe that jurisdictional changes should be treated with great care. There would be certain legislative chaos if the Congress had constantly to referee disputes in committees over what is and what is not their given responsibilities.

We have heard that Banking and Currency feels it should have legislative authority over the SBA because that Committee is responsible for "financial aid to commerce and industry". We submit that financial assistance is only one of several areas of responsibility outlined in the Congressional mandate establishing the SBA. Programs of management assistance, procurement assistance and advocacy, are equal to or perhaps even more important than the financial assistance programs. This is clearly so with the vast preponderance of small business who do not go to the SBA for money.

It has been our experience that the activities of the Small Business Subcommittee have been almost completely addressed to financial assistance programs at the expense of all the other responsibilities that the Agency is charged with. The Subcommittee has shown limited imagination in terms of short and long range problems of small business in today's changing world.

Under the Chairmanship of Senator Gaylord Nelson, the Senate Small Business Committee has overtaken an aggressive and imaginative role in preserving free enterprise. Numerous tax hearings have been held and positive benefits already resulted during the past year. The Small Business Committee has also aggressively taken on such crucial problems as the paperwork burden, smail business as it relates to the economic and social ideals of American life, reporting burdens of small pension plans, hearings on SBA surety board guarantee, procurement, solar small business development to note the most critical. SBANE believes the same attention to the operation and responsiveness of all the SBA programs as they impact on small and medium sized businesses on a constant and in-depth perspective is needed for the SBA. We believe that only a committee that is committed solely to small business is the only hope that the SBA will receive the attention it deserves.

There is a very positive momentum taking place throughout this country to do more than just express sympathy for the wants and needs of small busi