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Factual accomplishments on loan program; period, September 1942–March


Number Amount D. Net funds authorized: Loans $256,247,702 Leases-- 19,833,958 Total---------------------------------------------------------------------------- 1276,081,660 E. Funds disbursed on loans: Loans $.” ---------------------------------------------------------------------- 121,656,031 Loans (bank participation).----------------------------------------------|---------- 28,480, 130 Total.---------------------------------------------------------------------------- 150, 136, 161 Disbursements on lease commitments------------------------------------|---------- 15, 508,182 Total disbursements---------------------------------------------------|---------- 165. 644,343 F. Repayments on loans and leases: Repayments on direct loans---------------------------------------------- 80, 506,326 Repayments on bank loans---------- 19,458,394 Interest on direct loans-------------- 1,239,961 Compensation on bank loans 51.963 Rental on leases--------------------------------------------------------- 2,031,918 Total repayments------------------------------------------------------|---------- 103.288,552 G. Monthly income (based on average of January, February, and March, 1945): Monthly interest payments, loans------------------------------- - 102,000 Monthly rental, leases------------- 221,400 Total.---------------------------------------------------------------------------- 323,450 H. Losses on loans: On June 30, 1944, the Corporation had disbursed $40,276,000, out of which our servicing agents, Defense Plant Corporation, estimated a loss of $514,970, or 1.28 percent. However, recoveries have been greater than anticipated and comparable figures from the same source as of Mar. 31, 1945, indicate disbursements $150,136,161, with an estimate of losses by the Defense Plant Corporation, as servicing agents, of $623,605, or 0.41 percent. Estimated loss to Smaller War Plants Corporation---------------------|---------- 623,605 Ratio of loss to total disbursements on all Smaller War Plants Corporation loans as of Mar. 31, 1945: *...*-04, percent loss. I. Largest loan (maximum outstanding amount allowable, $1,089,165) 4,261,950 Smallest loan----------------------------------------- 250

* Net after cancelations, modifications, etc.

Size of financial assistance authorized, cumulative through Mar. 31, 1945

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Note.—63 percent of the total authorized was for $25,000 or less, 75.2 percent was for $50,000 or less, 91.1

percent was for $200,000 or less, with only 8.9 percent of the loans over $200,000.




Mr. MAVERICK. Mr. Chairman, is it all right for me to say a few words at this time? , Mr. CANNON. Yes; we will be glad to have you do so. , Mr. MAVERICK. I want to start out by citing an example of the things that I was mentioning to Mr. Woodrum yesterday. During the morning I read the newspapers, and usually the commercial journals also. * am going to read some headlines, and ask to insert one or two brief writings in the record here. I am not going to clutter up the record too much. The news in the papers this morning from an economic viewpoint is extremely important and concerns the Smaller War Plants Corporation and our work to a very large extent. Now, here is a headline in the Saturday, April 28, 1945, issue of the Journal of Commerce, and the headline says: “Restoration of ‘spot plan’ leads adjustment to one-war basis.” Then it says: “Initial W. P. B. move lifts curbs on communications industry,” and so forth. I was before another committee just before now and it is covered by the news. In this other headline in this same Journal it says:

Small business assured of tools. Maverick reveals Smaller War Plants Corporation program for financial aid where necessary.

I would like to include that article in the record.
The CHAIRMAN. Without objection, it may be included in the record.
(The article referred to is as follows:)

[Bureau of Journal of Commerce]


WASHINGTON, April 27.-Declaring that “there will be enough surplus tools for all,” Maury Maverick, Chairman of the Smaller War Plants Corporation, today outlined what his organization proposes to do to help small business gets its share.

Mr. Maverick told the Senate Small Business Surplus Property Subcommittee that Smaller War Plants Corporation will help small business finance purchases of surplus machine tools, buy the tools and lease them to small business, and also buy the tools for resale to small business.


He said that 'Smaller War Plants Corporation district offices already are recording the wants of small-business proprietors for surplus machinery and machine tools. Later Smaller War Plants Corporation will conduct a survey of all small metal-working plants to determine the total wants, he added. In order to match stated requirements with available supplies, Smaller War Plants Corporation will put a representative in each office of the Reconstruction Finance Corporation, which is the disposal agent for most machine tools, Mr. Maverick said. He expressed the opinion that a Surplus Property Board regulation giving small business some preference in the purchase of surplus tools is needed. Meanwhile, he added, Smaller War Plants Corporation will exercise its priority rights in behalf of small business. Mr. Maverick said Smaller War Plants Corporation's board of directors has authorized its field agents to help small business to buy surplus machine tools at 15 percent down, with the balance to be amortized in 5 years at an interest rate of 4 percent on the unpaid balance. Experience may show a need for more liberal terms, he said. The directors also are extending Smaller War Plants Corporation authority to lease surplus tools to small business at 1% percent per month with option to buy. WILL FOSTER ENTERPRISE

He said these terms would “foster new enterprise” and also “stimulate the acquisition by small plants of many tools which they may be hesitant to buy outright as they convert from war to peace.”

Mr. Maverick pointed out that the Surplus Property Act authorizes Smaller War Plants Corporation to help small business finance “enterprises in connnection with the acquisition, conversion, and operation of plants and facilities which have been determined to be surplus property.” He declared that “facilities” was a broad enough term to include machines, machine tools, and equipment.

Mr. MAVERICK. Then I want to take up the Wall Street Journal of Saturday, April 28, 1945, and it says: “Foreign merchants.-As War speed; up they flood mails seeking trade with United States firms,” and so forth.

This is the break-through on the matter of foreign trade in which we are interested as well as anyone else.

Then in the Journal of Commerce of Friday, April 27, one of the headlines says: “War Production Board establishes 1945–46 production goal for one-front war effort at $48,000,000,000.”

Another headline mentions reconversion pricing of the O. P. A.

Here’s a headline in the Baltimore Sun of April 28, 1945, which says “Civilian goods get ‘go’ sign.”

And the o: says: “W. P. B. makes spot reconversion plan Nation-wide.”

The Washington Post had the original article in it that went to all of the press associations. It says: “W. P. B. restores ‘spot plan' for reconversion,” which entire article I would like to put into the record.

(The article referred to is as follows:)

(By Fred Brandeis)

The War Production Board yesterday took another major step toward reconversion by restoring throughout the Nation its spot authorization plan for civilian production.

Under the plan, developed last August by Donald M. Nelson, manufacturers who can show their regional War Production Board offices that they have machinery and can obtain labor not needed for war work, will receive permission to resume making civilian goods.

When munitions requirements were suddenly boosted after the German push last December, the plan was suspended in 184 group 1 and 2 tight labor areas, which included most of the country's industrial centers.


The program was restored, War Production Board chairman J. A. Krug said, as part of the Board's adjustment to reduced military demands, and specifically as a means of preventing the idleness of facilities and manpower released by contract cancelations.

While controlled metals—steel, copper, and aluminum—will not become immediately available for allotment to authorized civilian manufacturers, as was intended in the original spot plan, War Production Board noted that “idle and excess” stocks in inventory may be used for authorized production. In addition, many of the material controls are expected to be dropped within 6 months after the German collapse. Even in its curtailed form, the spot plan has already provided several thousand authorizations, resulting in more than $700,000,000 worth of home-front goods, including refrigerators, stoves, and electric irons.


“Because of continued heavy demands for textiles, lumber, rubber products and chemicals, some controls will probably have to be maintained until the end of the war in the Pacific,” King said.

At the same time War Production Board announced the restoration to the farm machinery program of almost all of the tonnage slashed from Second and third quarter allocations 2 weeks ago.

This move provides about 55,000 extra tons of steel for the current quarter, and 53,000 for the third quarter, and enables manufacturers to return to their first quarter output, in which 256,000 tons of steel was consumed.

The restored tonnage reflects recent munitions cut-backs, and was made, War Production Board stated, in response to an appeal by the War Food Administration. War Food Administration said that maximum output of farm machinery is essential to continuously stepped-up needs of farm products both on the war and home fronts.


Mr. TABER. You do not mean that has been put into effect?

Mr. MAVERICK. That is in effect this morning, it went into effect last night.

r. TABER. How much does it amount to?

Mr. MAVERICK. A tremendous amount. It opens the doors to little business and it actually gives us many times as much work as we had last night when I was in here talking to you. . It is a good thing because it is a sensible adjustment right in the middle of the war. It is a preparation for the future.

I am one of the vice chairmen of the War Production Board. I have been out of town and up on the Hill lately, but I know earnest conversations have taken place at the W. P. B. meetings and intelli

nt conclusions have been reached under the leadership of Mr. #. Chairman of the W. P. B. But I am prefectly frank in saying to you that the spot reconversion order should never have been repealed. It always did good. It was in the excitement that occurred during the “bulge fight” in Belgium when some people were trying to prove that the American people were complacent and did not know a war was going on, that the order was repealed.


Now that materials are going to be offered, I want to bring something up which is very important. I want to say that under the War Mobilization and Reconversion Act, the S. W. P. C. is en#. to see that little business gets its share of materials, and that ittle business gets its quotas.

Let me proceed on the newspaper article. It goes on to say that the spot reconversion order has already started in operation. Then it shows that the control of aluminum, copper, and other materials is still in effect; we of the S. W. P. C. are specifically told and ordered by Congress to see that small business gets a proper share of o, It is absolutely essential that this be done; if it is not

done, there will be huge stock piles and hoarding of materials by big concerns, which will keep the little ones from getting started, and keep free enterprise and competition from even getting on their feet. So, we have additional duties since we were here last night.


Here is the New York Times of Saturday, April 28—that's this morning. I want to just read a headline from it. It says: “W. P. B. revives order for civilian goods,” and then it says one thing which is extremely interesting: Further easing of controls depends on war gains—more steel for farm machinery. At this time I do not understand the actual meaning of that, except that there should be more farm machinery both in America and for export, because we can make a lot of money on export. France, for instance, has not had any new farm machinery or fertilizers for 5 years. At the same time small business needs this steel, and we may have to make a fight to see that small business gets it. There are a lot of small manufacturers of farm implements, some of them in New York State. - The New York Times of the same date, Saturday, April 28, has an editorial in it entitled, “The Hard Days of Peace.” And many newspapers today contain editorials calling attention to the fact of the serious problems to come. But let me conclude this statement: First, the Smaller War Plants Corporation issues no orders or regulations of any kind whatsoever. We are not a restrictive body. We try to assist small businessmen who are unable to come to Washington, who are unable to hire expensive lobbyists, or representatives, whatever you want to call them. We try to make it so that they can understand and cope with the orders being issued by the other agencies. This includes orders issued by the W. Department, the Navy Department, the W. P. B., the W. F. A., the O. P. A., the O. D. T., the F. E. A., and the War Labor Board. That is partly what our job is. So, I am making, I think, a relevant reply to Mr. Taber yesterday when he suspected our o might stop people from getting things. What we are trying to do is the opposite from that. We are not a regulatory body, and we are trying to be helpful.


The second point I want to make again is that we are not a disposal agency. Small business, as well as large business, goes to the disposal agencies to acquire the surplus that is being sold. In other words, we are not an agency which interferes with that. People do not have to come to our office. No organization has to come to our office at all, but under the instructions of Congress in the surplus bill we try to see that, when surplus is sold, small business secures its share. e try to find the needs of small business. Through our operations in surplus property the small businessman is enabled to satisfy his needs in the surplus market without wasting limited capital and expensive travel to points of sale, and so forth.

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