Arizona sun., 1950-06-09
Waller Bimson Says
Private Banking 9 Can
Be Depended Upon

BE DepenQeQ upon
That the private banking system
can be counted upon to provide the
credit needs of small business with
out unreasonable losses to the lend
ers and without cost to the Govern
ment, was expressed Monday in an
address by Walter r. Bimson, Pres
ident of the Valley National Bank,
before the members of the Califor-
MIA Bankers Association at their
annual meeting in San Diego. The
subject of BimSon's address was
The Financial Problems of Small
Business"
Stressing the Importance of
small business in our economy,
Bimson stated: "When we realize
that small business, as defined by
the Department of Commerce, con-
stitutes 80 percent of all business
establishments in the country,
accounts for the employment of
As per cent of all people engaged
in business and is responsible for
one-third of the dollar output OF all
business, we realize that small
business is of vital Importance to
our national economy and must
be preserved in a healthy condition.
"But there is more to it than the
econmic factors involved. From
the social point of view, small bus
mess is very important in preserv-
ing our American way of life. It
was a favorite theme of Jefferson
that economic power must be wide
ly distributed among many inde-
pendent proprietors, and he warned
against the dangers that Industrial
ization might lead to propertyless
citizenship. He wanted to preserve
a society in which the hired man
might look forward to becoming
the proprietor of his own business"
Speaking of the needs of small
business for short and long term
credit, Bimson stated; can impor-
tant need of many small businesses
is for longer-term credit for capi-
tai expenditures, such as purchase
or modernization of plant, purchas-
es of equipment and tools and for
working capital. While many small
businesses do obtain term loans
from banks for such purposes, it is
difficult to obtain such loans un-
less the business has adequate equi-
ty capital or sufficient value in
plant and equipment to secure
longer term financing. Unfortu-
nately many small businesses can
not meet these requirements.
Bimson, member of the Depart
ment of Commerce Small Business
Advisory Committee, described the
work of that Department as "de-
voted exclusively to the Aid of
Small Business. A Small Business
Advisory Committee composed of
Is men representing many types of
business interests and geographical
areas advise with the Secretary of
Commerce about the problems and
needs of small business.
Stating that private banks
should provide the funds for the
credit needs for small business,
Bimson slater further: "It is deSir-
able that the private banking sys-
TENS be encouraged to finance
small business, whether the need
is for current working funds or
for longer-term capital. Local
banks having an intimate know
ledge of local concerns their per-
sonnel, their sources of supply,
their outlets, their relationship to
the local economy-are in a much
better position to appraise the
hazards and opportunities than
distant lending agency"
1.-THE Small Business Advisory
Committee has therefore consider
ed it advisable to suggest plan for
the consideration of Congress, and
a plan was devised and presented
to the joint committee on the Eco
nomic Report at hearing held in
Washington December 6, 1949.
eff it is the desire OF Congress to
give aid to small businesses which
are unable to secure adequate cred
it, this should be done, the Com
mittee said, not by the establish
ment of new and additional gov
ernmental lending agencies but,
rather by a plan that will enable