than 7 percent. It is noteworthy that the loans with highest rates tend to be the smaller ones.

In conclusion, it is my conviction that the SBIC program is doing the job that Congress expects of it, and doing it well. In qualitative terms, I think it has already achieved a very significant impact. The man with ideas and little money now has a place to go for capital where the people will let him in the door and listen to his story. If he can sell his story, he gets a chance to realize his ambitions, to turn his ideas into a product or service to offer in the market place. The fastgrowing small business that reaches a point where additional capital makes the difference between stagnation or real growth has a financial institution to turn to where before there was none. With the importance of fast-moving technological innovation in our highly competitive economy, this has tremendous significance for future growth.

Now, with your permission, I would like to turn my attention to title V of the Small Business Investment Act. Mr. Foley has given you the highlights of the State and local development company programs. I would like to add to his comments a few items which I think would be of interest to this committee.

Too often the potential of existing local business is overshadowed by the view that economic development depends entirely upon seeking and attracting new industry into the community. This agency has a firm policy against relocation or pirating since these activities would result in substantial unemployment in another area. We are emphasizing the aspects of the local development company program which deal with modernization and expansion of existing businesses and are encouraging those responsible for industrial development to inventory their existing potentials before seeking new industry. We are cooperating with Federal, State, and local agencies in a program to acquaint both the agencies and the community of the potential of this program. We have encouraged maximum utilization of this program for the benefit of small business concerns located in areas of substantial unemployment. In this connection, the agency has liberalized its size standards and provided for interest rates of 4 percent in these areas. Even though we are all concerned with pockets of poverty, there are areas that do not fall quite within this description but still are in need of economic assistance. This program can and will help all communities throughout the United States to achieve their goal of economic expansion.

The committee has indicated its desire to have statistics available on these programs. For the record, I am providing you with the statistical information on the accomplishments of these programs, broken down into regional and State activities. These statistics show cumulative activities over the short life of these programs.

I appreciate this opportunity to give the committee my views on the investment and development company programs. I will be happy to try to answer any questions you may have.

The CHAIRMAN. Well, thank you, Mr. Kelley; a very comprehensive, very fine statement.

Without objection, the statistical information which Mr. Kelley has provided for the committee will be received for study by the committee and staff, and appropriate portions will be included in the record of the hearings.

(The statistical information follows:)