Evening star., 1939-04-04

have been produced from time to
time, but as rule, they have not
covered the capital needs and have
dealt only with the merit of appllca-
tions for credit, usually Short-term
bank credit.
The announcement, therefore.
that a comprehensive study OF the
whole question of capital financing
has been undertaken by the Tempo
rary National Economic Committee
and that the Securities and Ex-
change Commission is to get the
facts is of major Importance as a
development in bringing the con-
troversy toward climax.
There is room for difference of
opinion as to what it is that causes
small businesses to fail, and it is 4
vicious circle often propounded
that small businesses are bad credit
risks when, in truth, it is often the
case that they are bad credit risks
because they do not have adequate
capital financing in the first in
stance.
l.
1t is acknowledged that small
businesses when operating on wide
scale furnish extensive opportunl-
ties for employment and that in
small businesses lie the opportuni-
ties fer the preservation of the
competitive system. This is the
angle which touches the Temporary
National Economic Committee,
= sometimes referred to as the Anti
monopoly Committee If large cor
porations have an advantage over
smaller ones because their credit or
capital facilities are better than
those of smaller competitors, is
there anything which can be done
to provide capital mechanism for
these smaller operations?
Senator OMahoney of Wyoming,
who is chairman of the committee
has been deeply interested for some
time in the flow of capital into and
out of various areas of the United
States, and the problem of capital
financing is one that he believes
should be penetratingly canvassed.
Indeed the committee is slowly but
surely turning its labors to con-
structive phases of the economic
system, thus refuting the notion
prevalent last year that the COM
mittee inquiry would turn into
witch hunt
The Senate has just appropriated
100000 for the committee to con-
<tirue its studies and the prospects
are that a report will be available
at the January session of Congress,
but in the meantime it is probable
that the results of the survey of the
credit and capital needs of small
businesses will be made public in
time for Congress to consider action
at this session.
Bills Already introduced.
Bills have been introduced in Con-
gress to enable small businesses to
get long-teym loans through existing
rprivate bank facilities, the plan be-
ing for the Government to help in
sure the loans somewhat as is the
case in the Federal Housing Ad-
ministration-a device that is work.
ing out we'll Senator Mead of New
pYork and Representative Robert AL
len of Pennsylvania and other men,
bers of Congress are active in the
effort to get some legislation on this
question at the present session of
Congress, and it is likely that what
the Securities and Exchange Com
mission discloses will have an i'm
portant bearing on the attitude of
Congress toward the proposals.
Thus, Jerome Frank, acting chair
man of the Securities and Exchange
Commission, held a special con-
ference with the press this week to
outline the commissions study OF
the capital needs of small business
This is a marked departure from
previous emphasis which has pic
tured the commission as largely
interested in problems growing out