Evening star., 1950-05-10

about another kind of activity
through which we can create new
frontiers of opportunity
This is the program to stimulate
and strengthen small business which
I recommended to the Congress
last week.
Small and independent businesses
are important to the growth of the
economy. They are a constant
source of new ideas. They are a
constant source of new jobs.
New businesses are also impor-
tant TO the health of the econ
Expansion Stressed.
The task of economic expansion
requires using all the resources OF
this great Nation. OF the nearly
four million business concerns in
our country, more than 80 per cent
are usually classified as small
These small concerns provide jobs
for over 20 million people-roughly
half of private, non-farm employ
ment. -
We need big business in this
country as well as small business
of course. We all benefit from the
tremendous output at low cost OF
large, efficient enterprises. But the
stimulus of new and vigorous COM
petitors is necessary to keep old
enterprises efficient, and to bring
the greatest benefit to consumers
and the public.
Since the passage of the Sherman
Antitrust Act. so years ago, we
have sought to keep monopoly from
sitting the growth of new business
The effectiveness of the antitrust
laws has varied over the years with
changes in our national administra-
ton. Right now, the antitrust laws
are being enforced as actively as at
any time In history.
But we must supplement that ap-
proach-and we must act soon-with
which will challenge the
power of monopoly, not in the courts
but in the market place. The
force of vigorous, effective COM
petition is the best way to prevent
monopoly.
3 Principles Recommended.
The recommendations 1 have
made to the Congress rest upon
three simple principles. These are
that the small businessman needs
long-term credit; he needs venture
capital. and he needs technical
assistance.
These things are needed SO that
the independent businessman can dc
more for himself. They do not in
volve Government controls. They
will cost the Federal Government
very little.
In the field OF credit, I propose
that we should insure bank loans
to small businesses, such as drug
stores, filling stations, and retail
stores. The local banks would de-
eide whether or not to make the
loan in each case and would share
some OF the risk. But on the major
part of the loan the bank would be
insured against loss. This means
that banks will be able to make
safely good loans which they now
find too risky.
Thus, bankers would be able to
give greater consideration to the
human element in deciding whether
or not to help a home town busi-
neSsman pull through tight period,
They wouldn't have to be quite so
hard boiled in demanding gilt
edged collateral.
Housing Aid Recalled.
This proposal is similar to the
that has been provided
for years under Title I of the Ma
tional Housing Act for home i'm
provement loans In that case 1t
has helped the banks, helped the
home owners, and the Government
has made money from it. -.
Furthermore, I propose that
special investment companies be
set up to make venture capital and
long term loans available to help
small businesses expand when they
have proved their ability. This would
provide a way to pool the savings
OF people who cannot individually
make such investments, but who
can, through investment companies,
put them to work in growing
businesses.
This proposal is generally the
same as that incorporated in a bill
introduced several months ago by
your fellow townsman, and my good
friend, Senator Joe O'Mahoney.
In addition, I propose that the
Reconstruction Finance Corp. be
given broader authority to handle
cases which offer a good chance of
success but cannot obtain private
on reasonable terms.
In the field of technical assistance,
small businessmen are often at a
serious disadvantage. They cannot
afford specialists on their payrolls
to keep up with the latest develop
ments in accounting and manage
ment. They find it difficult to learn
about the latest research develop
ments that affect their business.
Under these circumstances, I pro-
pose that the Department of Com
merce should expand the work it
now does in providing technical and
research assistance to small busi-
ness. Thus, we would provide in
dependent businessmen with the
same kind of research assistance
and skilled advice which We have
provided successfully to farmers
for many years.
At the same time, propose that
we should make the Department OF
Commerce the central Government
agency for small business, as well
as other business, just as the De-
partment of Agriculture is the
central agency for farm ac-
tivitieS.
These proposals to help small
business to obtain credit, risk CAPT.
tai, and technical assistance should
do much to increase effective COM