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Mr. WIGGLEsworth. Will you state that again? - Mr. DENIT. There were 99 promotions of employees who received a base pay of $3,000 or more per annum during the current fiscal year. I am quoting you our letter of April 17 to you, sir. I think you will find that the eight-hundred-odd figure to which you refer represents the number of people in the agency who receive better than $3,000 per annuin. Mr. WIGGLEsworth. That is 822 out of the one thousand-seven-hundred-odd personnel were in the upper brackets, but only 99 of those in the upper brackets received promotions? Mr. DENIT. That is right.


Mr. Wigglesworth. Now, you had $150,000,000 capital to start with. That is, available for loans and expenditures. Mr. MAverick. It has been increased to $350,000,000. Mr. WIGGLEsworth. When was the increase, I forget? Mr. MAVERICK. The increase was the last authorization of the previous Congress, and then we got an additional appropriation of $50,000,000. In other words, we have, you might say, roughly speaking, $200,000,000, and we have for future authorizations, $150,000,000. e have not asked for that because we have not thought it necessary. As soon as this legislation comes in we will ask for it if it is necessary, but not unless it is necessary. Mr. WIGGLEsworth. Of the $350,000,000 you have drawn down in loans, and so forth, to the extent of $200,000,000? Mr. DENIT. We have obtained appropriations for that amount— $200,000,000. Mr. MAVERICK. Yes.


Mr. WIGGLEsworth. Well, as the loans are repaid, do those go into o: * or are the receipts used in the nature of a revolving unc

Mr. DENIT. They are returned to the working capital of the Corporation.

Mr. WIGGLEsworth. Of the Corporation?

Mr. DENIT. Yes.

Mr. WIGGLEsworth. How much do you have available now?

Mr. DENIT. As at March 31 we had cash in the Corporation in the amount of $120,987,420.62. Against that is a reserve of $63,011,396.54 for unpaid commitments on loans and losses. That is, for example, where we have a loan, in which there is a provision that only a certain amount may be outstanding at any one time a funded reserve is set up against our total cash asset value.

Mr. WIGGLEsworth. Can you give for the record a table that will give that over-all picture?

Mr. DENIT. I shall be glad to put in the balance sheet of the Corporation, if you desire it. That reflects the complete picture.

Mr. WIGGLEsworth. All right.

(The matter referred to is as follows:)


ExHIBIT A.—Balance sheet, Mar. 31, 1945

Assets Current assets: Cash on hand and in U. S. Treasury--------------------- $120,987,420.62 Available for loans and leases_______ $52,368,992.35 Reserved for unpaid commitments: Loans and leases------------------ * 63,011, 396. 54 Reserved for administrative expenses: Fiscal year 1943–––––––––––––––––– 771,206. 37 Fiscal year 1944------------------ 372, 516.86 Fiscal year 1945–––––––––––––––––– 4,463,283.50 Petty eash 25.00 Total 120,987,420.62 Accounts receivable: Due from Defense Plant Corporation-------------------- 6, 660, 175.21 Due from Government procurement agencies-------------- 322, 808. 69 Loans receivable-------------------------- $40,156,000. 97 Less: Reserve for loss on loans------------ 623,605.31 39, 532,395.66 Interest receivable ---- 207,206.23 Other receivables - 7, 846.6% Judgments receivable (schedule 1) ----------------------- 5.00 Contract termination charges, reimbursable--------------- 205.259.57 Fixed assets: . Machinery and equipment---------------- $15,461, 512.94 Less: Reserve for depreciation-------- 1, 597,375.42 - 13, 864, 137.52 Office furniture and equipment------------ 499,081. 95 Less: Reserve for depreciation-------- 128,929. 60 - 370,152.35 Total assets--------------------------------------- 182, 157,407.54 ELIABILITIES AND CAPITAL Current liabilities: Accounts payable (schedule 2) ---------------- $38,443.91 Other liabilities (schedule 3).------------------ 13,024, 93 Other payables (administrative).-------------- 711, 735. 57 - 763,204.41 Reserves: Reserve for adjustment of profit on price contract (schedule 4) 78,072. 33 Capital stock and surplus: Capital stock authorized----------------- $350,000,000.00 Capital stock issued and outstanding______ 200,000, 000.00 Deficit: To June 30, 1944, as adjusted_____ 13,646,786.86 Current fiscal period.-------------------- 5,037,082. 34 18, 683, 869. 20 Net worth ---------------------------------------------- 181,316,130.80 Total liabilities and capital.---------------------------- 182, 157,407.54 * See the following table: rdinary loans $8,895, 013. 83 Production loans i8, 138, 181. 41 Deferred participation loans 31, 764. 061.58 Leases 4, 214, 139.66

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I Mowwowoon. Now, you told us you made $40,000,000 of loans, think. Mr. DENIT. We have that many outstanding. Mr. WIGGLEsworth. $40,000,000 outstanding? Mr. DENIT. The approved loan applications actually total $319,380,741. Mr. WIGGLEsworth. How many loans does that represent? Mr. DENIT. That represents 2,834 loans. Mr. WIGGLEsworth. Could you give us a brief statement for the record that would break those loans down into classifications, as to amounts, so to speak, showing the amounts that are out and the security §: h; loans repaid, and the loans defaulted, if any, and the interest rge? Mr. DENIT. Would you care to have that in a summary? You do not want us to list them by the name of the borrower, do you? Mr. WIGGLEsworth. You said there were how many of them? Mr. DENIT. Two thousand, eight hundred and thirty-four applications approved., Mr. WIGGLEsworth. I think if you would take a reasonable number of categories that it would suffice. Mr. DENIT. All right, we could do that. (The matter referred to is as follows:)

Cumulative to March 31, 1945

Net ap- - Undisbursed Approved Canceled proved Disbursed commitments (1) (2) (3) (4) (5) Loans------------------------- $319, 380,741 $63,133,039 || $256,247,702 $151,350,242 $104,897,460 leases------------------------- 22,380,236 2, 546,278 19,833,958 15, 482,004 4, 351,954 Total-------------------- 341,760,977 65,679,317 276,081,660 166,832,246 109,249,414 Aggregate loans and leases (columns 4 and 5 above).------------------------------------------ $256, 247,702 Aggregate security (estimated)--------------------------------------------------------------- 406,000,000 Cl i bo descripti Noor Percent Amount of P t assification of borrower, group description of ap- ap- - - ercen p pools proved approvals 1. Food and kindred products------------------------------- 177 4.8 $15,798, 918 4.6 2. Tobacco manufacturers.--------------3. Textile and other fiber manufacturers---------------------|----------|----------|--------------|-------4. Apparel and other finished products made from fabrics--- 176 4.7 17, 172,824 5.0 5. Lumber and timber basic products----------------------- 220 5.9 12, 119,022 3.6 6. Furniture and finished lumber products --- 255 6.8 15,065, 820 4.4 7. Parer and allied products-------------- - 9 ... 2 834,485 .2 8. Printing and §...; etc.---- - 16 .4 2,078. 390 ... 6 9. Chemicals and allied products-- 160 4.3 13, 358,914 3.9 10. Products of retroleum and coal- 46 1.2 3,811,700 1.1 11. Rubber products------------ 25 .7 1,083,947 .3 12. Leather and leather products 10 ... 3 - ****** --------13. Stone, clay, and glass product 80 2.1 6,635,200 1.9 14. Iron, steel, and their products, munition (except machinery)------------------------------------------------ 1, 342 35.9 96. 501,688 28.3 15. Nonferrous metals and their products- - 90 2.4 299, 186 1.8 15. Electrical machinery----------------- - 282 7.6 49,317, 352 14.5 17. Machinery (except electrical)------- - 168 4.5 27, 187,033 8.0 18. Automobiles and their equipment------------------- - 70 1.9 18, 928, 394 5.5 19. rtation equipment (including airplane parts) 532 14.3 50, 197,012 14.8 20. Miscellaneous industries---------------------------------- 75 2.0 5,276,592 1.5 Total----------------------------------------------- 3,733 100.0 341,760,977 100.0


Employment of concerns assisted

Firms having. -------------- 100 or less 101 to 250 250 to 500 Over 500 Total Number § Number : Number : Number *: Total.----------------- 3,055 81.9 487 13 158 || 4.2 33 .9 3,733 Loans----------------------- 2,422 85.5 310 10.9 89 3.1 - 13 .5 2,834 Leases---------------------- 633 70.4 177 | 19.7 69 || 7.7 20 2.2 8:49


Mr. WIGGLEsworth. What can you give us on the procurement end of things? That has run up to $3,308,682 013. Mr. DENIT. We can put a summary in the record showing the dollar volume and the number of contracts involved in our procurement operation. Mr. WIGGLEsworth. Have there been any cancelations? The Agency does not stand to lose or profit on that branch of the work at all Mr. DENIT. On the lending branch? Mr. WIGGLEsworth. No, in procurement. Mr. DENIT. The Agency would have no profit or operating income derived from that operation at all. Mr. MAVERICK. Other than prime contracts if we take any, and we have taken very few of them. t Mr. DENIT. Yes. Mr. MAVERICK. But we do not make a profit on those either. Mr. DENIT. The only income-producing activity we have in the literal sense of the word, is the loan activity, and we are segregating administrative accounts to the extent to which we can, to compare the income produced with the cost of that operation. If you would care to o it, I would be glad to submit an analysis of that kind for the I'eCOrC1. Mr. WIGGLEsworth. All right. (The matter above referred to is as follows:)

SMALLER WAR PLANTS Col{Por ATION ExHIBIT B.—Statements of operations for the period July 1, 1944, to Mar. 31, 1945 ExHIBIT B.—Statements of operations for the period July 1, 1944, to Mar. 31, 1945—Continued

Operating income:

Interest on loans------------------------------------------ $874,397.56 Compensation earned on deferred participations in bank loans— 42,410.94 Rentals on leased machinery and equipment----------------- 1,655, 865. 39

Total operating income- 2,572, 673. 89


Operating expenses:
Defense Plant Corporation charges for servicing loans and

leases -------------------------------------------------- 390,119.63 Expenses relating to loans and leases absorbed by Smaller

War Plants Corporation --- --- ---- 9,528.50 Depreciation on machinery and equipment------------------ 1, 130, 525.62 Depreciation on office furniture and equipment-------------- 41,800.44 Estimated loss on loans------------------------------------ 176,710. 16 Administrative expenses, corporate operations--------------- 649, 104.26 Other expenses 1,586.28

—Total operating expenses––––––––––––––––––––––––––––––––– 2,399, 374.89

Net operating income -- $173,299.00 Nonoperating expenses: Foreclosure expenses-------------------------------------- 3,884.78 Loss on sale of machinery ---- 3,610.59 Administrative expenses, general--------------------------- 5, 202,885. 97 Total nonoperating expenses------------- ---------------- 5, 210, 381.34 Net loss------------------------------------------------- 5,037,082. 34


Mr. WIGGLEsworth. Now, tell me again with reference to this surplus property business, do I understand that in war your function is just to be the ear and the eye for small business? Mr. MAVERICK. Not altogether, Mr. Wigglesworth. Mr. WIGGLEsworth. Tell me in simple terms what you do because it is not clear yet as to just what your functions are. Mr. MAVERICK. Under the present law we have the power to make private contracts on procurements. That means we can go to the War Department, and say: “We will build all your tanks for you.” or we can go to the Navy and say, “We will build all the battleships for you,” É. we do not do that because we know we would not backed by public opinion or have any success in doing it. Now for comparison, in the surplus property end of it we have the right to buy Fo and sell it. I would not be so vulgar as to say that is a “club,” but it is a moral force, we will say, to be there with the disposal bodies to get the little businessman a square deal. On the basis of that power we are amicably working out regulations with the Surplus Property Board. Mr. WIGGLEsworth. But you have not bought any yet? Mr. MAVERICK. No, we have not bought any yet, and we do not intend to buy any unless it is absolutely necessary. It is just like taking a prime contract, because there is no sense in us setting up big groups .P warehouses all over the United States to compete with the other governmental agencies, and we do not want to do that. We merely want to see that there is a wide distribution of this surplus material.. I wanted to emphasize that. The full facts as to what we do on surplus property can be given by Mr. Lamb if you want them. Mr. Wiggi Esworth. I do not want to encumber the record too much, but I wanted to get clearly in mind just what is the function of this agency, and what the cost is. Suppose I am a small businessman; how are you going to help me in the purchase of surplus goods? Mr. LAMB. If you are a small businessman you have to consider, . the different classes of goods, capital goods and consumers’ goods. We can procure them for you. Mr. Wigglesworth. How do you procure them? * Mr. LAMB. If we exercise the priority provided in the law, which allows us to buy them before public sale, we receive from you a certified check. That certified check with proper endorsement is presented to the disposal agency—in the case of capital goods, the

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