Supplementary statements, exhibits, etc- Page Askins, Jack W., small-business adviser to the Assistant Secretary Barnes, Wendell, Administrator, Small Business Administration___ 25, Burger, George J., vice president, National Federation of Independent 155 Floete, Franklin G., Administrator, General Services Administration_ 132 McKellar, Joseph, Director of Small Business, Department of De- 270,271 Questal, M., Assistant Chief, Office of Navy Small Business, Procure- 359 392 74 Sharp, Dudley C., Assistant Secretary of the Air Force (Materiel). Extracts from existing public laws relating to and governing small busi- Public Law 413, 80th Congress. Public Law 759, 80th Congress. Public Law 774, 81st Congress--. Public Law 163, 83d Congress-. SBA approved loans disbursed October 1, 1956, through December 31, THE SMALL BUSINESS ADMINISTRATION TUESDAY, MARCH 26, 1957 UNITED STATES HOUSE OF REPRESENTATIVES, SELECT COMMITTEE ON SMALL BUSINESS, The subcommittee met, pursuant to call, at 10:10 a. m., in the committee room, George Washington Inn, Washington, D. C., Hon. Abraham J. Multer (chairman of the subcommittee) presiding. Present: Representatives Multer, Evins, Riehlman, Seely-Brown, and Hill. Also present: Irving Maness, subcommittee counsel, Victor P. Dalmas, adviser to the minority, and Katherine C. Blackburn, research analyst. Mr. MULTER. Good morning, ladies and gentlemen. I am sure that most of you know that we are attended here this morning by my colleagues on the committee, starting on the farthest left: Congressman Hill, of Colorado, who is the ranking minority member of the full committee. Then we have Mr. Seely-Brown, of Connecticut; Mr. Riehlman, of New York. On the right side, Mr. Evins, of Tennessee. Then we have Mr. Dalmas, minority adviser, and on my right, Mr. Maness, counsel to the subcommittee, and Miss Blackburn of the staff. With your permission I will make a very brief opening statement. The Small Business Act of 1953, as amended, will expire on July 30, 1957. We have, therefore, scheduled these hearings for the purpose of conducting a complete and comprehensive study of the Small Business Administration and all its operations. The purpose of the House Select Committee on Small Business is to study the problems and I use "study" rather than "investigate" because that is the history of the committee-we attempt to study the problems of small business and try to come up with a solution to them. I think if any committee of the Congress has established a record of, not bipartisanship, but nonpartisanship, the House Select Committee on Small Business has done just that, and we intend to continue to operate that way. In order to do the job that should be done to help small business solve its problems, we need, and invite, the aid of all interested agencies of Government, associations of small-business men, as well as small-business men themelves. In 1953, the Small Business Administration was created to aid and assist and protect insofar as possible the interests of small business concerns in order to preserve free competitive enterprise. In 1955 this committee conducted hearings on the operation of the Small Business Administration and subsequently the act was extended for 2 years. The problem now confronts Congress to determine whether the Small Business Administration should be continued and if so, under what type of organization and law. It is our intent to make a full appraisal of the operation of the Small Business Administration. We start with the premise that we are in agreement that the preservation of small business is important if our cherished system of free enterprise is to be continued. We are now at that crucial point in our economic life where small business either expands from within and grows to meet the increased demands of our markets or remains stagnant and withers. Two years ago when this committee reviewed the operations and policies of the Small Business Administration, the Administrator, Hon. Wendell B. Barnes, who is with us this morning as our first witness, stated: "I am of the opinion that a 2-year extension is desirable since it will give the Congress an opportunity to reappraise the further need for the existence of the agency at the expiration of such period." That point has now been reached. It is the responsibility of Congress to now determine what is to be done with the Small Business Administration and how we can best aid small business to remain an integral part of our free enterprise system. We have invited all interested Executive agencies of the Government to participate in these hearings. It is our plan to sit all day today, tomorrow, and Thursday as time and work on the floor of the House permits. If we do not complete our work this week we contemplate continuing these hearings next week in order that we may complete our work. As far as possible, the sessions will begin at 10 a. m. each day and recess for lunch at 12 noon and resume at 1: 30 p. m. Now then, Mr. Riehlman, would you like to make a statement at this time? Mr. RIEHLMAN. Mr. Chairman, I want to concur in your opening statement. I feel confident that under your leadership as chairman of this subcommittee a very thorough and careful study of the Small Business Administration's operations in the past will be made and that the committee certainly will come up with constructive and sound recommendations when we have concluded our work. Mr. MULTER. Thank you, Mr. Riehlman. Mr. Evins? Mr. MULTER. Mr. Seely-Brown? Mr. SEELY-BROWN. I just want to concur, Mr. Chairman, in the statements made by yourself and by my colleague, Mr. Riehlman, and also advise you that I am serving on this committee under your chairmanship at my own request, which probably indicates better than anything else how happy I am to be with you working on a problem of such real concern to all of us. Mr. MULTER. Thank you. Mr. Hill? Mr. HILL. Mr. Chairman, just a word-I am happy to be able to be here this morning with this subcommittee, and I go along with Congressman Seely-Brown that it is one of the most important commit tees in Congress if not the most important. I am happy to participate and assure you that as far as my time will allow I expect to attend these hearings. Mr. MULTER. Thank you, Mr. Hill. Now we will call as our first witness this morning, Mr. Wendell B. Barnes, Administrator of the Small Business Administration. We are very happy to have you with us again, Mr. Barnes, and you may proceed as you please. You may, if you wish, read your prepared statement and interpose as you go along. If you prefer, we will withhold questions until you complete your main statement. Mr. BARNES. Thank you, Mr. Chairman. STATEMENT OF WENDELL B. BARNES, ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION Mr. BARNES. Mr. Chairman and gentlemen of the committee, it is a pleasure to meet with this committee to review the activities of the Small Business Administration. First, I would like to thank the members of this subcommittee and the staff for the cooperation and interest they have shown the Small Business Administration, and myself and my colleagues. Each of you has at various times consulted with me about important problems, and I am convinced of the sincerity of each member of this subcommittee and you have been very helpful to me and I wish to make this acknowledgment at the start of my testimony. I would like to summarize for you the progress the Small Business Administration has made in each of its major areas of service: Assistance to small business concerns with their financial problems; financial aid to disaster victims; help to small firms in obtaining a fair share of the Government contract awards; and assistance to small firms with their management and technical production problems. During the past year the personnel of the Small Business Administration have had to devote most of their time and energy to meeting an increased demand for the agency's services in these areas, and to making refinements in our programs which experience has indicated were necessary. For example, the agency has broadened its financial assistance and procurement and technical assistance programs in order to be of help to a greater number of small business concerns. areas of expansion will be discussed later. These Although the agency has been faced with a growing workload under its regular programs, we have also worked diligently to further the interests of small business in many other ways. During this past year, many of the activities of the agency have been conducted in cooperation with other Government agencies, with the Small Business Administration serving as a spokesman and advocate of small business. In some instances our own effectiveness has been increased through use of the personnel of other Government agencies to make studies pertaining to the problems of small business. The committee is familiar with the work of the Small Business Administration and its collaboration with the Securities and Exchange Commission on the revision of regulation A. In addition, the agency has set up a continuing liaison with the Commission to permit constant review of the problems of small firms in obtaining equity financing. We have conferred with officials of the Civil Aeronautics Board about methods of improving the financial position of small feeder airlines by loans or by reassignment of routes. We have conferred with officials of the Interstate Commerce Commission regarding financial problems of small firms in the trucking industry and have established liaison with the ICC to obtain from it needed credit information. We have consulted with officials of the Federal Communications Commission to develop information concerning the problems of the smaller ultra-high frequency stations. Close liaison also has been established with the Department of Agriculture on the drought programs of both the Small Business Administration and the Department of Agriculture. Representatives of our agency and the Department of Agriculture have conferred jointly with financial institutions in an effort to meet the credit needs of both businessmen and farmers in the affected areas. I have recently been asked by the Department of Agriculture to serve as a member of the Committee on Rural Redevelopment, along with the undersecretaries of several Government departments. This committee develops policies to improve the economic position of lowincome areas. As you will recall, a substantial percentage of Small Business Administration loans have been made to small business concerns which are closely related to agriculture. Our agency has been working closely with the Housing and Home Finance Agency in connection with its community facilities disposal program, to determine whether Small Business Administration loans may be made available to purchasers of Government-owned business property held for disposal by that Agency. In cooperation with the Departments of Commerce and Justice, the Export-Import Bank, the Federal Trade Commission, the International Cooperation Administration, the Internal Revenue Service, and faculty members of the Harvard University Graduate School of Business Administration, the Small Business Administration has developed information of value to small-business concerns desiring to enter the international trade field. Our agency has issued a publication entitled "Pointers on International Trade" which has received favorable comment and wide acceptance. In the disaster loan program, the Small Business Administration has worked in close cooperation with the Federal Civil Defense Administration, the Housing and Home Finance Agency, and the American Red Cross in providing assistance to the victims of disasters. We have cooperated with the Fish and Wildlife Service of the Department of the Interior in establishing and administering its fisheries loan program. The Small Business Administration develops the necessary credit information for such loans, and the loans are closed and administered through our regional offices. We have consulted with the Medical Facilities Branch of the Department of Health, Education, and Welfare and with representatives of the American Medical Association, American Nursing Home Association, and American Hospital Association in developing a program of loans to hospitals, nursing homes, and medical and dental laboratories which are privately owned and operated for profit. Let me interpolate there by saying I hope I will be questioned more in detail about that particular program. |