In northwest Iowa, where Berkley Bedell was born and reared, he's a legend. But not so much because he has represented the area in Congress since 1975. Long-time residents think of Bedell -- now 60 years old -- as the "boy wonder" who started a fishing tackle business in his parents' home at age 15 and built it into Berkley and Co., a $25-million operation today.

Like any small businessman, Bedell had to conquer one hurdle after another to succeed -- and he did. He's still chairman, and one of his sons is a top executive with the firm. But in Congress it's been a somewhat different story for the lifelong Republican who became a liberal Democrat after age 50, and started a radically new career at age 53 when he took his seat as a U.S. Representative from Iowa's 6th District.

"I was always able to snap my fingers and things happened at my business," Bedell says. "People told me I'd be frustrated in Congress. But I think I've handled it well. Educating people can take a long time."

What Bedell wants to teach Congress is simple: "We're moving toward a society dominated by a small number of large corporations, and it has become more and more difficult for the small entrepreneur to exist in our economy," Bedell says. "I think the real problem is that the big fish are getting bigger and there are fewer small fish. We're going to end up with nothing but big fish in our pond. That's as clear as I can see if present policies continue."

So far, Bedell has had little success combating the trend, though he chairs a House small business subcommittee with jurisdiction over energy, environmental, and safety issues. But he is able to call hearings and support legislation that might make a difference in his crusade.

And at every chance he gets, Bedell tells Congress what he thinks about its policies on small business, often falling back on his experience running Berkley and Co.During a hearing on how conglomerate mergers affect small business, for example, Bedell challenged an academic expert who said that many small businesspeople start companies with the thought of selling to larger firms.

"I come with some prejudice because that's exactly what I've done -- started a business myself," Bedell retorted. "I hardly know of anyone who, when he starts a business, starts with the thought of building it up to sell to a larger company. I just may not know the right people. If that's what our society wants, it's pretty scary."

It would help, Bedell says, if more members of Congress had a small business background. "I think there's a real need for some business experience in government," he says. "In business you have to demand efficiency, performance, accountability. And one of the big problems is that there aren't such pressures on government organizations."

Bedell's call for more small business congressmen is being heeded to a degree: The National Federation of Independent Business this year counted 32 new members of Congress with small business backgrounds, the most ever in a freshman class. But Bedell worries that the numbers are unlikely to grow.

"It takes lots of time and money to run for office, and generally small businesspeople are involved just trying to survive in business," he says. He ran for Congress "only because I could afford to take about six months off from my business to campaign, and because I put $25,000 of my own money into the campaign. Today that would probably be $50,000. I couldn't have done it otherwise, and that's an indictment of our system." Bedell has voted for public financing of House races, but so far that proposal has died in each session of Congress since he's been in office.

But if Congress doesn't understand small business, Bedell says, small business doesn't understand what it needs from the federal government either. "They're satisfied with government loans and other Band-Aids," he says. Bedell is amazed that so many small businesspeople think that whatever the Chamber of Commerce or the Business Roundtable say is good for business is therefore good for small business. On the Reagan Administration's tax cut, which Bedell opposed, he notes, "Most small businesspeople I talked to supported the plan, thinking it would really help them. They seemed surprised when I said I thought most of the benefits would go to only a few corporations." They also misunderstood other effects of the tax cut, he says: "Maybe the major problems small businesses face are inflation and high interest rates. The size of the tax cut probably means continued inflation and high interest."

Bedell has parlayed his business experience and doggedness into some victories Earlier this year, the Reagan Administration wanted to lower Small Business Administration loan guarantees from 90% to 70%. The proposal found support among House and Senate Republicans. But conversations with small businesspeople and bankers convinced Bedell that lenders would withdraw from the SBA program rather than assume an increased risk. Working with lobbyists from the Independent Bankers Association of America, he won over his colleagues in the House. Then, in a conference committee with intransigent senators, Bedell forged a compromise, keeping the guarantee at 90% for loans under $100,000 and keeping open the possibility of up to 90% guarantees on larger loans.

"Nowhere along the line had anyone at the SBA or the Senate gone to small bankers and asked them what the change would mean," says Marc Rosenberg, Bedell's subcommittee staff director. "Berkley did." Bedell's business background gives him a practical bent lacking in many congressmen, especially the 50% who are lawyers, Rosenberg says. "The lawyers in Congress say, 'There's a law already on the books.' Berkley asks, 'Yeah, but will it work?"

Bedell's legislative proposals, too, are grounded in this real-world knowledge of small business. He recently publicized a multipoint plan for changing tax policy so small businesses can generate enough capital internally to grow, keeping them from having to merge with larger firms. One of the points would ban newly acquired subsidiaries from assuming the parent company's tax status.

"This would discourage a company with a poor earning record from acquiring a healthy, profitable company solely to use its earning stream," Bedell says. "This change would also correct competitive problems that occur when an acquired company uses its parent company's tax status to gain advantages over its still small competitors."

But however grounded they may be in the real world, most of Bedell's major legislative proposals go nowhere. The Small Business Committee lacks prestige and power in Congress. For many years it didn't even have authority to propose legislation; today, it shares jurisdiction with other committees. Tax bills, for example, must go through the Ways and Means Committee. And when small business is pitted against big business, as in the Reagan tax cut fight, small business is usually outmaneuvered. "Big business has so many more lobbyists in Washington working on members of Congress and their staffs," Rosenberg says. "Small businesses are vastly underrepresented here in proportion to their numbers."

Bedell's zealousness may also be part of the reason he doesn't have more influence over his fellow congressmen. "I love the guy," says a former aide, "but maybe a weakness of his is seeing things in black and white. Not all bigness is bad, and not all big businesses are bad."

That zeal in support of his cause also explains Bedell's involvement in issues that at first glance have nothing to do with small business. For instance, he's deeply involved in the Third U.N. Conference on the Law of the Sea, where delegates from over 150 countries are hammering out a treaty governing uses of the ocean. Yet Bedell represents a landlocked district and doesn't serve on any congressional committee with jurisdiction over the treaty.

The issue is tied in Bedell's mind to big company dominance. He says four mining consortia, formed by the likes of U.S. Steel and Kennecott, are trying to dictate the terms of the treaty for their own interests. If the consortia get their way, Bedell says, the treaty could be sabotaged, producing disputes about ocean rights that could lead to future wars. Bedell has pleaded with the Reagan Administration to put to rest rumors that it may "renege" on the Law of the Sea negotiations of four previous presidents. His plea appears to have been ignored. Last year, he urged his colleagues to defeat a bill that would open the way for U.S. mining firms to explore the ocean for mineral riches. The bill was approved overwhelmingly.

Bedell's popularity with the voters back home seems not to be diminished by his inability to get the rest of Congress to see things his way. He was reelected last year with 64% of the vote, despite a legal cloud over Berkley and Co. that his opponent pointed to frequently during the campaign. In 1978, federal customs agents raided the company's offices because of allegations that the firm was importing materials from its Taiwan subsidiary at artificially low prices, to avoid payment of duties. Earlier this year, a federal grand jury indicted company presided Donald Porter and three other current or former employees on charges of conspiring to cheat the government out of import taxes and of filing allegedly false customs declarations.

Bedell was not indicted, and David Hallberg, a former Bedell aide, agrees with others who know the congressman well that he wouldn't break the law. Hallberg concedes the investigation has been hard on Bedell: "It's plain agony for Berk to think that, after the way he's conducted his life, some people might believe he's guilty of a crime," Hallberg says.

Bedell himself says nobody has ever hinted he's the target of a federal investigation. Any doubt about his innocence, he says, should have been removed when he wasn't indicted.

And even Iowa Republicans, who would love to defeat Bedell, don't think Berkley and Co.'s legal problems, or Bedell's concentration on issues with little direct Iowa relevance, have hurt the incumbent. George Wittgraf, a northwest Iowa attorney and Republican county chairman, says Bedell is especially popular among small businesspeople and farmers, "who are traditionally the core of the Republican party here, not the Democratic party." Bedell's 1980 opponent, a GOP state legislator, complained that Bedell was too popular with Republicans, who seemed to have forgotten that the incumbent deserted the party 10 years earlier.

Organized labor supports Bedell, too, despite having suffered four defeats trying to unionize Berkley and Co. -- once when Bedell still ran the business, and three times since his election to Congress.

When he's not preaching to Congress on the virtues of small business, Bedell is preaching to small businesspeople. The most important thing, he tells them, "is to educate yourself on the issues, independently of the Chamber of Commerce and the Business Roundtable," whose views, he says, are those of the giant companies. "The best way to influence members of Congress is through personal contact, and there are plenty of opportunities for that," says Bedell, citing the meetings he holds with constituents in his district and the advisory committees he maintains. "Next best is an individual letter. By far the least effective was is sending a form postcard supplied by one of the business lobbies."

Bedell also encourages small businesspeople to testify at congressional hearings, some of which he holds outside Washington for easier accessibility. "Berkley likes to bring in small business witnesses first," Rosenberg says. "Only after that does he call government officials, so he can test their theories against the real world experience of businessmen."

Rosenberg believe Bedell will survive the jokes that he's a Don Quixote tilting at the big business windmill. "Berkley has the self-assurance from his successful business background to take on unpopular issues," he says. "He isn't looking for parts on the back. He knows he's going to lose often. But that doesn't discourage him. Losing isn't the end of the world if it's something you believe in, something that's important."

Bedell plans to serve a little bit longer in Congress, then go back to being a full-time small businessman. "If I were to try to get my money out of my business," he says, "about the only way would be to sell to a bigger business. That would be a dirty shame, because it would just lead to more concentration. That's what I'm here fighting against."