S. 3651 (also referred to as the committee print bill). Staff memorandum, examples of private financial institutions instituted Barnes, Wendell B., Administrator, Small Business Administration__ Brennan, Francis P., conference chairman, Northeast Conference of Clark, John, Arthur D. Little, Inc., New York, N. Y.. 244 331 Davis, Archie K., chairman; accompanied by C. Cheever Hardwick, 287 Davis, Dean Tyrus, formerly head of school of commerce, Bellarmine 270 Gadsby, Edward N., Chairman, accompanied by Andrew Downey Orrick, Commissioner, and Harold C. Patterson, Commissioner, George, Edwin B., director of economics, Dun & Bradstreet, Inc., Graham, Thomas, president, The Bankers Bond Co., Louisville, Ky.; accompanied by Dean Tyrus Davis, formerly head of school of commerce, Bellarmine College, Louisville, Ky. Hardwick, C. Cheever, member, finance committee, United States Martin, William McChesney, Jr., chairman, Board of Governors; accompanied by Ralph A. Young, Director, and Albert R. Koch, Assistant Director, Division of Research and Statistics, Federal McCormick, Edward T., president, American Stock Exchange. Moore, Geoffrey H., associate director of research, National Bureau Palamountain. Joseph C., Jr., associate professor of government, Robbins, Laurence B., Assistant Secretary of the Treasury. 265 363 163 168 399 407 217 Schweiger, Irving, associate professor, school of business, University Smith, Dan Throop, Deputy to the Secretary of the Treasury. Williams, Howard, chairman, capital bank committee, Small Business Letters, statements, memorandums, etc., submitted for the record by- Clark, Joseph S., a United States Senator from the State of Pennsyl- Commerce Department: 1,801 communities with industrial develop- Davis, Archie K., chairman, finance committee, United States Cham- Definitions of size of borrowers developed for use in tabulating results of Federal Reserve surveys of member bank loans to What is meant by a "small" business - Government portion of funds for any new program. General Accounting Office: Report on S. 3191, S. 2160, and S. 3651- George, Edwin B., director of economics, Dun & Bradstreet, Inc., Ratio of business failures 411 Number of business failures__ 412 Palamountain, Joseph C., Jr., associate professor of government, Wesleyan University, Middletown, Conn.: Statement-- Payne, Frederick G., a United States Senator from the State of Maine: Rockefeller report: Excerpt, Encouragement of small business.. Sarles, Harvey J., president, Business Development Corporation of Rhode Island: Memorandum, Operations of a development credit Letter and charts on organization and staffing of SBA. Smith, S. Abbot, president, Thomas Stranahan Co., Chelsea, Mass.: 92 Treasury Department: Letter supplementing testimony on S. 3643_ 184 192 Weissman, Rudolph L., economist and senior security analyst, research 229 FINANCING SMALL BUSINESS MONDAY, APRIL 21, 1958 UNITED STATES SENATE, COMMITTEE ON BANKING AND CURRENCY, SUBCOMMITTEE ON SMALL BUSINESS, Washington, D. C. The subcommittee met, pursuant to call, in room 301, Senate Office Building, at 10 a. m., Senator Joseph S. Clark (chairman of the subcommittee) presiding. Present: Senators Clark, Fulbright, Sparkman, Proxmire, Capehart, Beall, and Case. Also present: Senator Bush. Senator CLARK. The subcommittee will be in session. These hearings are being held to assist the committee in its consideration of S. 2160, S. 2185, S. 2286, S. 3191, and a committee print bill, which has been prepared after consultation by the staff with a number of the Federal agencies, and which will be introduced in the Senate today (S. 3651). These bills propose to solve some of the long-term credit and equity capital problems of small businesses. In a sense, the subcommittee is continuing hearings held on this same subject last year when three of these bills-S. 2160, S. 2185 and S. 2286-were then under consideration. One result of last year's hearings was their contribution to a decision by the Federal Reserve System to study the financing problems of small businesses. The first two parts of this very elaborate and most helpful study are complete and have been printed jointly by the Banking and Currency Committees and the Select Committees on Small Business of the Senate and the House of Representatives. I should like to express my very deep appreciation to the Chairman. of the Federal Reserve Board for expediting this study and to the Federal Reserve System's research staffs, and the scholars who have participated in the first two parts of this study. This work will be of great benefit to the Congress as it develops legislation necessary to increase the availability of long-term credit and equity capital for small businesses. One of the new bills before the committee, which is labeled a committee print, and is the one I referred to a moment ago, is a direct result of this Federal Reserve study. This bill was prepared by the staff of this committee at the direction of Chairman Fulbright, and attempts to deal with the problem in ways suggested by an evaluation of the first two parts of the study (S. 3651). The other new bill before us, S. 3191, introduced by Senator Johnson of Texas, proposes a new and bold approach. Much of the evidence presented in our hearings last year, and in fact, I think it is fair to say a preponderance of the evidence, and much of 1 the information contained in the new Federal Reserve study supports the conclusion that existing financial institutions are not adequately supplying the long-term credit and equity capital needs of small business. We will be taking further evidence on this point. If it is concluded that there is need for new institutions, the question must be dealt with as to the nature and scope of the new financial institutions to be established. I think our major philosophic problem is to determine whether it is an appropriate function of the Federal Government to initiate the establishment of such institutions, and I will be very much interested in the views of the Chairman of the Federal Reserve Board on that phase of the matter. Accepting for a moment the premise that Federal assistance is usually considered to be a last resort, we must weigh whether there is, indeed, any other way of getting the the job done, except through the intervention of the Federal Government, and whether there is any very real need. We have before us the legislative proposals of Senators Sparkman, Fulbright, Johnson, Humphrey, O'Mahoney, Kefauver, Hill, and others. I think it is correct to say that this committee is open-minded on all of these proposals. Parenthetically, the committee, I think, from the extreme left side of the table in front of me to the near right side of the table at which I sit, has pretty nearly the entire spectrum of opinion throughout the country with respect to the need for Federal assistance, not only in the small-business field, but in a number of other areas which are within the jurisdiction of the Senate Banking and Currency Committee. So any witness who appears before us is almost sure to find a friend at this table, although perhaps not unanimity in the thinking of the committee. There is a bill labeled a committee print which Senator Fulbright was responsible for having put together, but I think I speak for him when I say that the committee is not necessarily committed to it. We want to hear testimony with respect to all of this legislation. We already have before us the comprehensive and provocative study by the Federal Reserve Board, and we will receive during these hearings the views and ideas of Federal officials, national organizations, and individuals with expert knowledge of this question. I am confident that the Committee on Banking and Currency can produce a bill which will help solve the financing problems of small businesses, and which will deserve the favorable consideration of the Congress. At this point I will insert in the record copies of all the bills under consideration and the Government agency reports received to date. As other reports are received, they will likewise be inserted at this point in the record. I will ask Mr. Cash to clear with the reporter to be sure that all of the bills appear. (The bills and agency reports referred to follow :) [S. 2160, 85th Cong., 1st sess.] A BILL To make capital more readily available for financing small business and thus to promote, foster, and develop the domestic and foreign commerce of the United States, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, |