Senator CLARK. Do you have comparative figures for last year? Mr. BARNES. Yes, sir; and I believe Senator CLARK. Would you read them into the record at this point? I am referring to the figures comparable with the figures 5,804 Government purchases and the $378 million. Mr. BARNES. By month, July 1957 Senator CLARK. You can furnish them later if you need to do some adding. I would like to have the comparable figures in the record both as to the number of Government purchases and the dollar volume for the first 6 months of fiscal 1957, to compare with the figures in your statement for the first 6 months of fiscal 1958. Mr. BARNES. All right, sir. We will furnish it through April. We have the figures through April. Senator CLARK. In other words, you will be giving us 9 months. Mr. BARNES, Yes, sir. Joint set-aside program activity, fiscal year 1958 versus fiscal year 1957, by months In some instances cumulative figures reflect adjustments applicable to prior months. 93527-58-pt. 2——3 Awards under joint set-aside program, by States, current month and cumulative through March 1958 Source: Office of Controller, Budget and Reports Division, May 12, 1958. Mr. BARNES. The set-aside totals for this reporting period are made even more impressive by the fact that overall Government procurement declined so sharply that the dollar amount of Government purchases available for screening by the agency's representatives was one-fourth less than in the same 6 months of fiscal year 1957. Government purchases set aside for small business in April 1958 amounted to more than $178 million, almost 311⁄2 times the amount set aside for the same month last year. May I add parenthetically at this point that it is our present estimate that the set-asides will go over $1 billion this year, for the first time. I cite these figures because to me they clearly demonstrate that the demand and the need for SBA's services in this particular area are dramatically increasing. Last June I discussed at some length the reasons why, in my view, the Small Business Administration should be established as a permanent agency. Similar reasons are set out in House Report No. 555. These reasons were persuasive in 1957 and are even more persuasive today. This agency cannot carry out its mission as effectively if it must operate on a year-to-year basis. In his budget message submitted to the Congress early this year, the President pointed out that— The Small Business Administration has been providing extensive financial and technical assistance to small businesses, as well as disaster loans to businesses and home owners under temporary authority expiring July 31, 1958. The experience of its first 4 years has demonstrated the importance of these programs. Accordingly, I recommend that the limitation on the life of the Administration be removed *** The act amending the Small Business Act of 1953, H. R. 7963, passed by the House is, as I have said, an excellent bill in almost every respect. I urge, however, that this committee give earnest consideration to a revision of three provisions. The bill contains three major changes which are not included in either S. 1789 introduced by Senator Thye or S. 1762 introduced by Senator Sparkman. First, H. R. 7963 would abolish the present Loan Policy Board and substitute a National Advisory Board. Under the present statute, the Board's function is to establish general policies (particularly with reference to the public interest * * * and with reference to the coordination of the functions of the Small Business Administration with other activities and policies of the Government) which shall govern the granting and denial of applications for financial assistance by the Administration. The lending of Federal funds to private business concerns to be used in their endeavors for private gain can be justified only if such lending is in the public interest. It is axiomatic, therefore, that legislation on this subject assure that the public interest will neither be minimized nor lost sight of in the Government's program of financial assistance to small-business concerns. Equally essential is the other function mentioned in the foregoing statutory quotation; namely, the coordination of the functions of the Administration with other activities and policies of the Government. It is, of course, highly desirable that whatever the Government agency does will not conflict with or nullify either the overall policies of the Government or the efforts of other Government agencies in carrying out such policies; and, obviously, coordination of the lending functions with other activities and policies of the Government designed to aid small business is as desirable as it is both logical and necessary. In order to assure that both of these essentials will be effectuated, the present provision relating to the Loan Policy Board should be retained. A board entrusted with these essential functions should be composed exclusively of Government officials and not of persons who can devote only a limited amount of time and whose primary concerns are elsewhere. Certainly, in order to assure the impartiality and objectivity which such a board must have, no member should be actually or potentially a beneficiary, directly or indirectly, of any policies established by the Board. From my own experience as a member of the Board I can say without qualification that the Board has in no way stifled the financial assistance programs of SBA. To the contrary, the Board has invariably developed new policies when our experience has indicated the need for a policy change. Retention of the Loan Policy Board is therefore earnestly recommended. Senator CLARK. Maybe we ought to get a little amplification of that, Mr. Barnes, because this is probably a pretty controversial matter. Mr. BARNES. Yes, sir. Senator CLARK. Why do you object to having some businessmen who are personally familiar with the problems of small business, join the Loan Policy Board? You are not going to lose anything in coordination, because you will still have the Government members. All the House provision does is to expand the Board, and I would think you would find those business representatives extremely helpful. They are out in the trenches, so to speak, and they know the problems of small business. So I would think they would bring to your bureaucracy-and I do not use that phrase in any invidious sense at all-a fresh and new point of view from private industry. Mr. BARNES. The point is not that I would object to any businessman being on the Board. Actually the present Board itself is composed of people who have had banking experience and financial experience. When men become Government officials they do not lose the benefit of their previous experience and background. We presently have what I think is a very excellent system. We have a National Advisory Board composed entirely of businessmen, men with financial experience, and other people who we feel, have special qualifications to assist us in our programs. Then we have these regional boards that meet in some areas on a State basis, and in some on a regional basis. On each of these boards we have a liberal sprinkling of bankers and businessmen. They are perfectly free at any of these meetings to criticize or make suggestions as to any policy of the Loan Policy Board. This is a very wide sampling. There are almost 1,000 people on these various boards, and they pass resolutions, and they act formally as members of these boards. But even beyond that, businessmen and bankers being of the disposition they are generally, if any of them think we are wrong they pick up the telephone and call me, or write letters. This then gives me a chance to bring this before the official Board here in Washington and have a little bit more deliberate and mature consideration of the suggestions and changes of policy. This does not in any way limit the businessmen or bankers from expressing their opinions, but it gives advice from men in the field all the time, who are very well versed not only on our policy, but on what is going on in various areas of the country. Senator BUSH. Are these committees you mentioned-the regional and other committees, including some thousand people-are those all committees you have set up? Mr. BARNES. Yes, sir. Senator BUSH. Without being directed to by law? Mr. BARNES. No; the present law authorizes the creation of such advisory boards as the Administrator deems helpful. Senator BUSH. And it is under that provision that you formed these committees ? Mr. BARNES. Yes, sir. Our Loan Policy Board meets regularly each month and reviews all of the statistical figures to see what is happening in the financial program. It does not concern itself with anything except loan policy. It does not get into administration, but it reviews the applications, the number of applications filed, the delinquencies, and the whole story as to loans. It never acts on an individual loan, and never considers an individual case. Senator CLARK. That Board consists of three individuals, does it not? Mr. BARNES. Yes, sir; three individuals. Mr. BARNES. Yes. Senator CLARK. And in point of fact, neither the Secretary of the Treasury nor the Secretary of Commerce ever come to meetings; do they? Mr. BARNES. The law authorizes them to designate people to attend in their places. Senator CLARK. And they have done that? Mr. BARNES. And they have done that. Senator CLARK. So they have never appeared in person at any time in the last year, have they? Mr. BARNES. Not during the last year, but at times when we have had a major change in loan policy we have had meetings at which they would be present, and the entire proposed change would be discussed with them. They have executed the policy statement, or expressed their own views. Senator CLARK. On what level in Treasury and Commerce are the representatives whom they send to attend these meetings? Mr. BARNES. The Assistant Secretary level. It calls for a designee at a level appointed by the President, and, of course, this implies being confirmed by the Senate. Senator CLARK. Is it always the same individual, or are they different people? Mr. BARNES. It is always the same individual. The presence of these men in Washington has enabled me at times, when a change was needed promptly, or an extraordinary meeting was needed quickly, to get them together, or even to consult by telephone on certain matters and have prompt decisions. I just do not think that this other type of board would act as quickly in a functioning program that continues from day to day and involves a big volume. Senator CLARK. Yes, but you do not have policy changes every day. Mr. BARNES. We consider them every month, and there may be variations of one kind or another almost every month. Few businessmen want to serve on a board where they will have to come in here every month. The other National Advisory Boards meet not oftener than twice a year, and sometimes once a year. But the field boards meet quarterly sometimes. We get constant readings on their policy. Senator CLARK. I think you have answered my question. Do other |