It appears to me to be completely sensible to give the President a tool necessary to meet unanticipated economic problems that may not fall within the scope of any area assistance legislation. It does not seem to me to be desirable to require special legislation each time a different economic problem occurs.

I know I express the views of all Members of Congress when I say I would not like to see this Nation depend, for its economic strength, on a handful of giants. The community businessman cannot hold out indefinitely. He looks to this session for leadership in rolling back or at least stemming the tide of bigness.

The trickle-down principle-the notion that if the giant corporations are booming prosperity will seep down to farmers and independent businessmen is false and mindful of the Republican policies which led to the 1929 slump and depression can lead to a bust again. Dangerous downward trends already affect small business and farming, and in many areas local depressions exist.

I can attest that the plight of small business is of grave concern in the Fourth Congressional District of Oregon.

The CHAIRMAN. Mr. Porter, we are glad to have your testimony. The next witness before the committee is Congressman Andersen of Minnesota. Will you come forward, please?

STATEMENT OF HON. H. CARL ANDERSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

Mr. ANDERSEN. Thank you, Mr. Chairman.

In the 4 years the Small Business Administration has been in existence. I have observed the operations of this service agency rather closely. I should like to comment briefly on the fine performance and progress of the Small Business Administration and to speak not only for its extension but also on the plausibility of establishing the agency as a permanent organization to continue its service to the Nation's 4 million small businesses.

This agency has done a very creditable job in an area of increasing importance to this country, particularly in view of the fast-moving economic changes. With the advent of atomic power and the jet plane, automation and other changes so vast it is difficult to comprehend, it is reasonable to assume that the small-business segment of our economy will be hard pressed to keep pace with these changes and will need every possible guidance in maintaining the economic well-being of this country.

The Small Business Administration has made tremendous strides in bolstering, advising and encouraging the many independent firms and in maintaining the expressed wishes of our leaders and our people that economic power be kept distributed among many independent proprietors. All of us, I am sure, are interested in seeing that small business in this country is given every possible measure of assistance and encouragement by the Federal Government. The Small Business Administration has done just that-and I am convinced under permanent status could do an even better job.

The four major service programs of the agency, assigned to it under the Small Business Act of 1953 and designed to assist the small businesses of America, have been remarkably successful even in this short

time. They actually reveal the great potential for playing a still greater role in fortifying this increasingly important segment of our economy without which this country could not exist today. These four basic services include:

1. Financial assistance and counseling;

2. Assistance to small businesses in obtaining a fair share of Government orders for goods and services for both defense and nondefense departments and agencies;

3. Loans to small businesses and homes damaged or destroyed by floods and hurricanes, and other natural disasters; and

4. Assistance to small businesses in their management and technical problems.

I feel the agency is making substantial progress in its regular business-lending activities without encroaching on banks or other private lending institutions. More than $278,534,000 in loans have been approved for some 5,896 worthy small businesses. Two-thirds of these loans have been made in participation with banks.

Recently, the Small Business Administration launched a special small-loan program designed to help the little retailer, wholesaler, and service trades operators. The plan is already extremely popular and should expand rapidly in the future.

In my own State of Minnesota the agency has assisted 186 firms in obtaining loans totaling $6,168,440. In the Seventh District alone, $699,000 has been loaned to help small firms solve their financial problems.

One of the Small Business Administration's most urgent and important services is the humanitarian and practical task of making funds available to victims of floods, hurricanes, and other natural disasters throughout the country. The agency has consistently moved with dispatch in putting into operation emergency loan offices where needed and otherwise quickly aiding in the rehabilitation of the damaged businesses, thus contributing greatly to local and national welfare. To date more than $60,719,000 in disaster loans have been made to 5,503 disaster victims.

The Small Business Administration has also accomplished a great deal for small businesses in helping them to obtain a fair share of Government contracts. Under the agency's set-aside program, the agency has working agreements with the Department of Defense and seven civilian purchasing agencies in determining what purchases may be set aside for exclusive competitive award to small firms. More than $1,600,000,000 in Government prime contracts have been reserved for small-business competitive award. Thousands of small concerns have also been helped to obtain contracts through the Small Business Administration's contracts referral services, and through specifications assistance.

The agency's management and technical assistance services, and its other special programs, provides leaflets and booklets on solutions to the particular problems of small business. Their business-management courses have been attended by more than 7,600 business managers and owners and have been, I am sure, of real value to those business people.

I believe the Small Business Administration has done a remarkable job in meeting the responsibilities assigned to it by the Congress, and

with adequate funds and permanent status, it can and will provide a type of service that will repay this country many times over.

To sum it up, Mr. Chairman, I believe the Small Business Adminis tration has done a good job, and that it should be made a permanent agency with all the tools it needs to do a still better job. Although I personally have a bill before you to accomplish this, I have no pride of authorship and only hope the committee will report out a good bill we can all support.

The CHAIRMAN. We are glad to have your statement, Mr. Andersen. The next witness is Congressman Hale of Maine.

STATEMENT OF HON. ROBERT HALE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MAINE

Mr. HALE. Mr. Chairman, lady and gentlemen of the committee, my name is Robert Hale. I represent the First Maine District. I am appearing here today in behalf of my bill, H. R. 671, to give the Small Business Administration permanent status.

I'm certain this committee is well aware that the Small Business Administration has given valuable aid to small-business concerns throughout the country.

Since this agency was first created by the 83d Congress, it has approved 5,605 business loans totaling $253,432,000 and 5,069 disaster loans totaling $57,575,000. It has worked with other Federal agencies to set aside $1.5 billion worth of Government contracts for award to small firms on a competitive basis. And it has provided small business with management and technical advice.

This assistance undoubtedly has done much to enable the small-business man to compete successfully with larger concerns in this age of bigness. The large corporations often have unlimited funds at their disposal. They can always hire the best managerial and technical talents.

On the other hand, the small-business man oftentimes finds it difficult to obtain capital. He may as yet be inexperienced. He probably cannot afford management and technical advice.

The role of the Small Business Administartion is to help these entrepreneurs so they can help themselves. As a result, they can contribute substantially to our economic growth and stability.

I should like to emphasize the importance of small business in the economic structure of this country. Oftentimes we are led to believe that the large corporation is the sole foundation of our economic strength. This just isn't so. Of course, General Motors, United States Steel, and other large concerns play an important role. But they aren't the whole show.

Statistics bear out this contention. The 1954 census of manufacturers revealed that of 288,144 manufacturing establishments, 261,228 or over 90 percent, employed less than 100 workers.

Actually, in some States such as Maine, the manufacturing community is composed predominantly of small business. Of 3,015 industrial establishments there, all but about 100 employed less than 300 workers. Some 1,701 of these concerns hired only from 1 to 4 employees. These figures graphically illustrate the importance of small

business in my State. Without it, we should be in a sorry economic position. The same is true in many other States.

Furthermore, and contrary to a common impression, the number of small businesses throughout the country has been increasing steadily in the past few years. In the period from 1947 to 1954, the number of manufacturing establishments employing less than 100 increased by 43,600, raising the national total, as I noted above, to 288,144.

Thus the need of a special agency within the Government to assist the growing number of small-business men is apparent. The SBA has demonstrated its value in Maine as well as elsewhere.

Since September of 1953 in Maine it approved 32 business loans totaling $1,758,000 as of March 31, 1957, and 81 disaster loans totaling $97,000. In addition, it helped small concerns obtain 62 Government contracts worth $3,504,000. The program has been stepped up considerably the past year. Almost $500,000 was loaned in that period. Just last month in Maine the SBA instituted a "circuit rider" gram providing financial, production, and management assistance for small-business men. This new service is another example of the continued efforts of SBA to help small business in every way possible.

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During its initial trial period the SBA has done a commendable job. Its future should be assured. I sincerely hope that this committee and Congress will take favorable action on this legislation to make the Small Business Administration a permanent agency.

STATEMENT OF HON. JAMES G. FULTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. FULTON. I am submitting this statement in favor of giving the Small Business Administration permanent status, as I believe small business is the backbone of American industry and progress, and that our fine, upstanding, independent small-business men need the assistance of our Federal Government.

In a constantly expanding economy small business often suffers from lack of adequate information which is available to larger organizations. In many circumstances, through the counseling service given by financial specialists in SBA, small-business people may gain sufficient knowledge of their own financial status to procure financial assistance directly from banks or other lending institutes without the participation of ŠBA.

From the financial standpoint, SBA has participated in commercial loans to retailers, wholesalers, and small fabricating and manufacturing plants where there was a lack of credit from banks on commercial loans. Money was and is more readily available in participation with SBA through both small banks and their correspondents.

When money is tight, as has been the case for the past 8 months, the limited loan participation plan makes commercial loans available to small-business men otherwise unable to obtain funds from banks. Because of the paperwork involved, banks are inclined to make larger loans of greater dollar volume, leaving no money for the smaller loans. In the present economy more dollars are needed to do business because of increased prices on material, labor, and so forth. For this. reason more money must be made available, and this can be accom

plished through SBA in participation with banks by taking up the slack to supply the needs of small business.

The intent of the Congress in establishing SBA was to assist small business and strengthen the free-enterprise system, but in no way to compete with private lending. The SBA, through its administrative personnel with experience in the business field, attempts to carry out this intent of Congress and insure that the Government is in the lending business only in a supplementary manner to take up the slack where private lending facilities of private enterprise cannot handle the situation.

There is an ever-increasing demand for assistance from SBA as evidenced by the number of loans and dollar volume. In region III which covers Pennsylvania, Delaware, the southern half of New Jersey, and the 7 counties known as the panhandle in northern West Virginia, approximately $14 million have been made available through SBA loans. Sixty-nine percent of these loans have been in participation with the banking institutions in the region. As of April 30, 1957, business-loan approvals numbered 6,443 or dollar volume of $294,618,000. In addition, disaster loans numbered 5,829 amounting to $63,126,000. During the month of April 784 business loans over the country were approved for $38,760,000, 61 percent of these being approved in the regional offices under delegated authority.

Through the Procurement and Technical Assistance Division the SBA has been able to bring to the attention of small businesses those things being acquired both by civilian and military purchasing offices. As a result the Government has found additional potential bidders and through additional competitive bidding the Government has been able to save millions of dollars.

The joint determination program has been a factor. Arrangements have been made with 140 purchasing offices over the country whereby the purchasing officer and representatives of SBA jointly determine those contracts or portions of contracts that shall be set aside for small business. Many of the small businesses have been made more sound financially and have continued as strong entities in our everexpanding national picture by the acquisition of Government work to fill the gaps in needed production for their free time. As time goes on, small business will receive a greater percentage of the overall Government business that has come as a result of these set-asides. Another factor is the certificate of competency where millions of dollars have been saved the Federal Government by the issuance of certificates of competency to the low bidders, when originally the purchasing office in its prea ward survey had classified them as either technically or financially unable to produce said contract. After a thorough check, in many cases SBA has been able to issue certificates of competency that give the low bidder his just deserts and resulted in savings to the Government.

In the phase of the procurement program having to do with referrals, in many cases proposals can be referred to small business to produce the article, although they were unaware that it was in demand by a particular civilian or military agency.