An Act to amend the Small Business Investment Act of 1958, and for other purposes
PL 87-341 (S.902), enacted 10/03/1961

752 
PUBLIC LAW 87-341-OCT. 3, 1961 
[75 S T A T . 
October 3, 1961 
[S. 902] 
Small 
Business 
I n v e s t m e n t Act 
A m e n d m e n t s of 
1961. 
72 Stat. 690. 
IS u s e 662. 
Definitions. 
15 u s e 681. 
Debentures. 
15 u s e 682. 
Borrowing power. 
15 u s e 683. 
74 Stat. 196. 
15 u s e 684. 
Equity capital. 
Public Law 87-341 
' 
AN ACT 
To amend the Small Business Investment Act of 1958, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That this Act may 
be cited as the "Small Business Investment Act Amendments of 1961 . 
SEC. 2. Section 103 of the Small Business Investment Act of 1958 
is amended— 
(1) by striking out paragraph (3) and inserting in lieu thereof 
the following: 
"(3) the terms 'small business investment company', 'company', 
and 'licensee' mean a company approved by the Administration 
to operate under the provisions of this Act and issued a license 
as provided in section 301(c);"; and 
(2) by striking out "and" at the end of paragraph (5), by 
striking out the period at the end of paragraph (6) and inserting 
in lieu thereof "; and", and by adding after paragraph (6) the 
following new paragraph: 
" (7) the term 'license'^means a license issued by the Administra-
tion as provided in section 301(c)." 
SEC. 3. (a) Section 302(a) of the Small Business Investment Act of 
1958 is amended by striking out the second sentence and inserting in 
lieu thereof the following: "In order to facilitate the formation and 
growth of small business investment companies, the Administration is 
hereby authorized, notwithstanding any other provisions of law (but 
only to the extent that the necessary funds are not available to the 
company involved from private sources on reasonable terms), to pur-
chase the debentures of any such company in an amount not to exceed 
the lesser of $400,000 or the amount of the paid-in capital and surplus 
of the company from other sources; but debentures of a small business 
investment company may be purchased by the Administration under 
this subsection only during such j)eriod (m no case ending more than 
three years after the date of the issuance of its license under section 
301(c) or the date of the enactment of the Small Business Investment 
Act Amendments of 1961, whichever is later) as may be fixed by the 
Administration." 
(b) Section 302(b) of such Act is amended by striking out "1 per-
cent of its capital and surplus" and inserting in lieu thereof "2 percent 
of its capital and surplus". 
SEC. 4. (a) The first sentence of section 303(b) of the Small Business 
Investment Act of 1958 is amended by inserting after "is authorized" 
the following: "(but only to the extent that the necessary funds are 
not available to the company involved from private sources on reason-
able terms)". 
(b) Tho, second sentence of section 303(b) of such Act is amended 
to read as follows: "The total amount of obligations of any one com-
pany which may be purchased and outstanding at any one time by the 
Administration under this subsection (including commitments to pur-
chase such obligations) shall not exceed 50 percent of the paid-in 
capital and surplus of such compan^/^ or $4,000,000, whichever is less." 
(c) Section 303 (bj of such Act is further amended by adding at 
the end thereof the lollowing new sentence: "All loans made by the 
Administration under this subsection shall be of such sound va,lue as 
reasonably to assure repayment." 
SEC. 5. Section 304 of the Small Business Investment Act of 1958 
is amended by adding at the end thereof the following new subsection: 
"(d) Equity capital provided to incorporated small business con-
cerns under this section may be provided directly or in cooperation 
76 STAT.] 
PUBLIC L
A
W 87-341-OCT. 3, 1961 
753 
with other investors, incorporated or unincorporated, through agree-
ments to participate on an immediate basis." 
SEC. 6. Section 305(b) of the Small Business Investment Act of 
1958 is amended by striking out "other lending institutions" and 
inserting in lieu thereof "other lenders, incorporated or unincor-
porated,". 
SEC. 7. (a) Section 306 of the Small Business Investment Act of 
1958 is amended by striking out the matter following "exceed" and 
inserting in lieu thereof the following: "(1) 20 per centum of the 
combined capital and surplus of such small business investment com-
pany authorized by this Act, or (2) $500,000, whichever is the lesser." 
(b) The amendment made by subsection (a) shall apply only with 
respect to obligations and securities acquired by a small business 
investment company on or after the date of the enactment of this Act; 
except that such amendment shall not apply with respect to any obliga-
tions or securities so acquired pursuant to a commitment issued before 
such date. 
SEC. 8. Section 308(a) of the Small Business Investment Act of 
1958 is amended to read as follows: 
" (a) Wherever practicable the operations of a small business invest-
ment company, including the generation of business, may be under-
taken in cooperation with banks or other investors or lenders, incor-
porated or unincorporated, and any servicing or initial investigation 
required for loans or acquisitions of securities by the company under 
the provisions of this Act may be handled through such banks or 
other investors or lenders on a fee basis. Any small business invest-
ment company may receive fees for services rendered to such banks 
and other mvestors and lenders." 
SEC. 9. Title III of the Small Business Investment Act of 1958 is 
amended by adding after section 308 the following new sections: 
SUSPENSION o r 
L I C E N S E S ; CEASE A N D DESIST ORDERS 
"SEC. 309. (a) A license may be suspended by the Administration— 
"(1) for false statements knowingly made in any written state-
ment re(]^uired under this title, or under any regulation issued 
under this title by the Administration, for the purpose of obtain-
ing the license; 
"(2) if any written statement required under this title, or 
under any regulation issued under this title by the Administrator, 
for the purpose of obtaining the license, fails to state a material 
fact necessary in order to make the statement not misleading 
in the light of the circumstances under which the statement 
was made; 
" (3) for willful or repeated violation of, or willful or repeated 
failure to observe, any provision of this Act; 
"(4) for willful or repeated violation of, or willful or repeated 
failure to observe, any rule or regulation of the Administration 
authorized by this Act; or 
" (5) for violation of, or failure to observe, any cease and desist 
order issued by the Administration under this section. 
"(b) Where a licensee has not complied with anv provision of this 
Act, or of any reflation issued under this Act by the Administration, 
the Administration may order such licensee to cease and desist from 
such action or failure to act; and the Administration may further 
order such licensee to take such action or to refrain from such action 
as the Administration deems necessary to ensure compliance with 
the Act and the regulations. The Administration may also suspend 
72 Stat. 693. 
15 u s e 685. 
Limitation. 
IS use 686. 
15 u s e 687. 
eooperation with 
banks or other in-
vestors. 
15 u s e 687. 
754 
PUBLIC LAW 87-341-OCT. 3, 1961 
[75 STAT. 
the license of such licensee until the licensee has complied with such 
order, 
"(c) Before suspending a license pursuant to subsection (a), or issu-
ing a cease and desist order pursuant to subsection (b), the Adminis-
tration shall serve upon the licensee involved an order to show cause 
why an order suspending the license or a cease and desist order should 
not be issued. Any such order to show cause shall contain a statement 
of the matters of fact and law asserted by the Administration and the 
legal authority and jurisdiction under which a hearing is to be held, 
and shall inform the licensee that a hearing will be held before the 
Administration at a time and place stated in the order. 
If after 
hearing, or a waiver thereof, the Administration determines on the 
record that an order suspending the license or a cease and desist order 
should issue, it shall promptly issue such order, which shall include 
a statement of the findings of the Administration and the grounds 
and reasons therefor and specify the effective date of the order, and 
shall cause the order to be served on the licensee. 
Subpena. 
^^(d) The Administration may require by subpena the attendance 
and testimony of witnesses and the production of all books, papers, 
and documents relating to the hearing from any place in the United 
States. Witnesses summoned before the Administration shall be paid 
by the party at whose instance they were called the same fees and 
mileage that are paid witnesses in the courts of the United States. In 
case of disobedience to a subpena, the Administration, or any party 
to a proceeding before the Administration, may invoke the aid of any 
court of the United States in requiring the attendance and testimony 
of witnesses and the production of books, papers, and documents. 
Petition, 
«^g^ j^j^ order issued by the Administration under this section 
shall be final and conclusive unless within thirty days after the service 
thereof the licensee appeals to the United States court of appeals for 
the circuit in which such licensee has its principal place of business 
by filing w^ith the clerk of such court a petition praying that the 
Administration's order be set aside or modified in the manner stated 
in the petition. After the expiration of such thirty days, a petition 
may be filed only by leave of court on a showing of reasonable grounds 
for failure to nle the petition theretofore. 
The clerk of the court 
shall immediately cause a copy of the petition to be delivered to the 
Administration, and the Administration shall thereupon certify and 
file in the court a transcript of the record upon which the order com-
plained of was entered. If before such record is filed the Administra-
tion amends or sets aside its order, in w^hole or in part, the petitioner 
may amend the petition within such time as the court may determine, 
on notice to the Administration. The filing of a petition for review 
shall not of itself stay or suspend the operation of the order of 
the Administration, but the court of appeals in its discretion may 
restrain or suspend, in whole or in part, the operation of the order 
pending the final hearing and determination of the petition. 
The 
proceedings in such cases in the court of appeals shall be made a pre-
ferred cause and shall be expedited in every way. The court may 
affirm, modify, or set aside the order of the Administration. If the 
court determines that the just and proper disposition of the case 
requires the taking of additional evidence, the court shall order the 
Administration to reopen the hearing for the taking of such evidence, 
in such manner and upon such terms and conditions as the court may 
deem proper. The Administration may modify its findings as to the 
fsicts, or make new findings, by reason of the additional evidence 
so taken, and it shall file its modified or new findings and the amend-
ments, if any, of its order, with the record of such additional evi-
dence. No objection to an order of the Administration shall be con-
Enforcement. 
75 S T A T . ] 
PUBLIC LAW 87-341-OCT. 3, 1961 
755 
sidered by the court unless such objection was urged before the 
Administration or, if it was not so urged, unless there were reason-
able grounds for failure to do so. The judgment and decree of the 
court affirming, modifying, or setting aside any such order of the 
Administration shall be subject only to review by the Supreme Court 
of the United States upon certification or certiorari as provided in 
section 1254 of title 28, United States Code. 
f use 1254. 
"(f) If any licensee against which an order is issued under this 
section fails to obey the order, the Administration may apply to the 
United States court of appeals, within the circuit where the licensee 
has its principal place of business, for the enforcement of the order, 
and shall file a transcript of the record upon which the order com-
plained of was entered. 
Upon the filing of the application the court 
shall cause notice thereof to be served on the licensee. 
The evidence 
to be considered, the procedure to be followed, and the jurisdiction of 
the court shall be the same as is provided in subsection (e) for appli-
cations to set aside or modify orders. 
The proceedings in such cases 
shall be made a preferred cause and shall be expedited in every way. 
(( 
INVESTIGATIONS 
"SEC. 310. The Administration may make such investigations as it 
deems necessary to determine whether a licensee or any other person 
has engaged or is a/bout to engage in any acts or practices which 
constitute or will constitute a violation of any provision of this Act, 
or of any rule or regulation under this Act, or of any order issued 
under this Act. 
The Administration shall permit any person to file 
Avith it a statement in Avriting, under oath or otherwise as the Admin-
istration shall determine, as to all the facts and circumstances con-
cerning the matter to be investigated. 
For the purpose of any 
investigation, the Administration is empowered to administer oaths 
and affirmations, subpena witnesses, compel their attendance, take 
evidence, and require the production of any books, papers, and docu-
ments which are relevant to the inquiry. Such attendance of witnesses 
and the production of any such records may be required from any 
place in the United States. In case of contumacy by, or refusal to 
obey a subpena issued to, any person, including a licensee, the Admin-
istration may invoke the aid of any court of the United States within 
the jurisdiction of which such investigation or proceeding is carried 
on, or where such person resides or carries on business, in requiring 
the attendance and testimony of witnesses and the production of books, 
papers, and documents; and such court may issue an order requiring 
such person to appear before the Administration, there to produce 
records, if so ordered, or to give testimony touching the matter under 
investigation. 
Any failure to obey such order of the court may be 
punished by such court as a contempt thereof. 
All process in any 
such case may be served in the judicial district whereof such person 
is an inhabitant or wherever he may be found. 
"INJUNCTIONS AND OTHER ORDERS 
"SEC, 311. (a) Whenever, in the judgment of the Administration, a 
licensee or any other person has engaged or is about to engage in 
any acts or practices which constitute or will constitute a violation of 
any provision of this Act, or of any rule or regulation under this 
Act, or of any order issued under this Act, the Administration may 
make application to the proper district court of the United States or 
a United States court of any place subject to the jurisdiction of the 
United States for an order enjoining such acts or practices, or for an 
order enforcing compliance with such provision, rule, regulation, or 
756 
PUBLIC LAW 87-341-OCT. 3, 1961 
[76 STAT. 
order, and such courts shall have jurisdiction of such actions and, 
upon a showing by the Administration that such licensee or other 
person has engaged or is about to engage in any such acts or practices, 
a permanent or temporary injunction, restraining order, or other 
order, shall be granted without bond. The proceedmgs in such a case 
shall be made a preferred cause and shall be expedited in every way. 
"(b) In any such proceeding the court as a court of equity may, 
to such extent as it deems necessary, take exclusive jurisdiction of 
the licensee or licensees and the assets thereof, wherever located; and 
the court shall have jurisdiction in any such proceeding to appoint a 
trustee or receiver to hold or administer under the direction of the 
court the assets so possessed." 
15 use 696. 
SEC. 10. Section 502 of the Small Business Investment Act of 1958 
is amended— 
(1) by striking out "$250,000" in paragraph (3) and inserting 
in lieu thereof "$350,000"; and 
(2) by striking out "ten" where it first appears in paragraph 
(5) and inserting in lieu thereof "twenty-five". 
SEC. 11. (a) Section 301(a) of the Small Business Investment Act 
1
5 use 681. 
Qf 3^953 ig amended to read as follows: 
"(a) A small business investment company shall be an incorporated 
body, organized and chartered under State law solely for the purpose 
of performing the functions and conducting the activities contem-
plated under this title, which has succession for a period of not less 
than thirtv years unless sooner dissolved by its shareholders and 
possesses the powers reasonably necessary to perform such functions 
and conduct such activities. 
The area m which the companv is to 
conduct its operations, and the establishment of branch offices or 
agencies (if authorized by the articles of incorporation), shall be 
subject to the approval of the Administration." 
( D ) ( 1 ) The second sentence of section 301(c) of such Act is 
amended by striking out "In determining whether to approve the 
establishment of such a company and its proposed articles of incorpora-
tion" and inserting in lieu thereof "In determining whether to approve 
such a company's articles of incorporation and permit it to operate 
under the provisions of this Act". 
(2) The last sentence of section 301(c) of such Act is amended to 
read as follows: "After consideration of all relevant factors, if it 
approves the company's articles of incorporation, the Administration 
may in its discretion approve the company to operate under the provi-
sions of this Act and issue the company a license for such operation". 
(3) Section 301 of such Act is further amended by striking out 
subsections (d) and (e). 
1
5 use 687. 
(c) The second sentence of section .308(b) of such Act is amended 
by striking out "organized under this Act" and inserting in lieu thereof 
"operating under the provisions of this Act". 
(d) Section 308 of such Act is amended by striking out subsections 
(e) and (f) and redesignating subsection (g) as subsection (e),and 
by striking out "organized under this Act" in the subsection so redesig-
nated and inserting in lieu thereof "operating under the provisions 
of this Act". 
1
5 use 688. 
(g) Section 309 of such Act (relating to approval of State chartered 
companies for operations under this Act) is repealed. 
1
5 use 691. 
(/) Title IV of such Act is repealed. 
(g) (1) The table of contents of such Act is amended by striking 
out 
"Sec. 309. Approving State chartered companies for operations under tliis Act." 
and inserting in lieu thereof 
75 S T A T . ] 
PUBUC LAW 87-342-OCT. 3, 1961 
757 
"Sec. 309. Suspension of licenses; cease and desist orders. 
"Sec. 310. Investigations. 
"Sec. 311. Injunctions and other orders." 
(2) The table of contents of such Act is further amended by striking 
out 
"TITLE IV—CONVEBSION OF STATE CHABTEia:D INVESTMENT COMPANIES AND STATE 
DEVELOPMENT COMPANIES". 
(h) (1) Section 202 of such Act is amended by striking out " ( a ) " 
where it appears immediately after "SEC. 202.", and by striking out 
subsection (b). 
(2) Section 20 of the Small Business Act is amended by inserting 
before the period at the end thereof the following: "other than those 
for which appropriations to the revolving fund are authorized by 
section 4(c)". 
(3) So much of the first sentence of section 4(c) of the Small Busi-
ness Act (as amended by section 3 of the Small Business Act Amend-
ments of 1961) as precedes "not to exceed" is amended to read as 
follows: "The Administration is authorized to obtain money from 
the Treasury of the United States for use in the exercise of its func-
tions under sections 7(a), 7(b), and 8(a) and under the Small Busi-
ness Investment Act of 1958 (including the payment of administrative 
expenses in connection with such functions), . 
(4) Section 4(c) of such Act (as so amended) is further amended 
by striking out the fourth sentence. 
SEC. 12. Section 4(c) of the Small Business Act (as amended by 
section 3 of the Small Business Act Amendments of 1961) is further 
amended— 
(1) by striking out "$1,125,000,000" each place it appears and 
inserting in lieu thereof "$1,200,000,000"; and 
(2) by striking out "$250,000,000" and inserting in lieu thereof 
"$325,000,000". 
Approved October 3, 1961. 
15 u s e 633. 
15 u s e 672. 
15 u s e 631 note. 
Ant a, pp. 167, 
666. 
Ante, p. 666. 
j f e . p . 
15 u s e 636, 637. 
72 Stat. 689. 
IS u s e 661 note. 
Public Law 87-342 
AN ACT 
To strengthen the Federal Firearms Act. 
Be it enacted by the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That section 1 of the 
Federal Firearms Act, as amended (52 Stat. 1250; 15 U.S.C. 901-909), 
is further amended by repealing paragraph (6), by deleting the words 
"crime of violence" m paragraph (7) and inserting in lieu thereof 
the words "crime punishable by imprisonment for a term exceeding 
one year", and by renumbering paragraphs (7) and (8) as paragraphs 
(6) and (7). 
SEC. 2. Section 2 of such Act is amended by deleting the words "crime 
of violence" in subsections (d), (e), and (f) and inserting in lieu 
thereof the words "crime punishaole by imprisonment for a term 
exceeding one year". 
Approved October 3, 1961. 
October 3, 1961 
[S. 1750] 
Transport a t i o n 
of firearms.