The supply of savings and credit is never large enough to provide all businesses, large and small, with all the funds wanted since some businesses must go unsatisfied and since small business is at some disadvantage relatively to large units, it is apt to suffer more from a lack of capital than the larger units.

In order to compare the past financial experience of industrialists in obtaining funds with the current situation, manufacturers were asked, "Have you, during the past decade, (1939-49) failed to obtain additional funds when you needed them?" The most striking fact revealed by the replies to this question (see table 10 and chart VI) is that on the average only 7 percent (225 out of 3,221 replies) said they had failed to obtain the funds needed during the past decade. This is a smaller percentage than for those who need funds immediately. It is also interesting to observe that the smaller the concern the greater the percentage that failed to get funds when they were needed. Nine percent of those with 50 or fewer employees failed to secure funds as compared with 4 percent for those with more than 250 employees. This would seem to indicate that the smaller the size of the business, the greater the difficulty encountered in obtaining the funds needed. It is quite significant that 93 percent of all manufacturers who replied to the questionnaire, said they did not fail to obtain the funds during the period 1939-49 when they were needed.

TABLE 10.-Availability of funds in 1939–49, by size of business

To what extent are those who need funds currently, the same businesses which failed to get funds in 1939-49? Of the 225 who needed funds during the past decade, 142, or 63 percent, are still in need of funds. While it is not possible to give a specific figure, there is certainly no doubt that a number of those who need funds are cases whose needs are either continuous or arise periodically. The striking fact is revealed that 2,750, or 85 percent, of reporting members neither need funds now nor did they fail to obtain funds during 1939-49. These facts are brought out more fully in table 11.

TABLE 11.-Respondents who needed funds both during 1939 to 1949 and at present

1 Of the 225 respondents who failed to obtain needed funds during the decade 1939-49, there were 142 who stated that they now need additional funds.

FIRMS WITH
EMPLOYEES OF:

50 OR LESS

Chart VI. AVAILABILITY OF FUNDS TO BUSINESS, 1939-1949,
BY SIZE OF BUSINESS

6

8

10

Types of industry and the need for funds

The amount of funds needed varied considerably from one industry to another. Thirty percent of the respondents engaged in the toy, novelties, and sport-goods industry expressed a desire for additional funds. While this was the highest percent reported for any industry, the largest aggregate number (537 respondents) was found in the machinery and tools industry. According to the questionnaire returns, there was a high demand in the autos and aircraft, the electrical and electronic equipment and leather industries. More than the average demand (12 percent for all industries) was expressed by the respondents engaged in apparel and textiles, chemicals and drugs, and the plastic industries.

The lowest percent (5) was registered by the petroleum industry. Other industries in which only a small percent wanted additional funds are: optical, medical, and scientific supplies; nonferrous metals, and stone and glass industries. The breakdown by industries is shown in table 12.

85072-51-15

TABLE 12.-Need for additional funds, classification of respondents by types of

industry

The types of funds needed by industrialists who responded to the questionnaire varied considerably. Term loans were preferred by 175 respondents or 39 percent of the total manufacturers who were in need of funds. Twenty-seven percent wanted short-term or commercial loans and another 20 percent were seeking funds through mortgages or the sale of bonds. Only 12 percent expressed a preference for funds by a sale of stock. (See table 13 and chart VII.) On the basis of the number of employees (see table 14 and chart VIII) there was a large demand for both term loans and commercial loans. On the basis of amount needed there was a high concentration for term loans and commercial loans and a somewhat smaller demand for funds through the sale of bonds and mortgages. (See table 15 and chart IX.)

TABLE 14.-Types of funds preferred, by size of business

1 Does not add across to total number of respondents, due to duplications. Some respondents preferred one type of funds for one purpose and another type for another purpose.