of the shareholders owning two-thirds of its stock, apply to the Board for approval to extend the period of its corporate existence for a term of not more than thirty years, and upon approval of the Board as provided in section 101 hereof such company shall have its corporate existence extended for such period unless sooner dissolved by the act of the shareholders owning two-thirds of its stock, or by an Act of Congress or unless its franchise becomes forfeited as herein provided. (h) Nothing in this Act or in any other provision of law shall be deemed to impose any liability on the United States or in any Federal Reserve bank with respect to any obligations entered into, or stocks issued, or commitments made, by any company organized under this Act. TITLE II-CHANGES IN FEDERAL RESERVE AUTHORITY REPEAL OF SECTION 13B OF THE FEDERAL RESERVE ACT SEC. 201. Effective one year after the date of enactment of this Act, section 13b of the Federal Reserve Act (12 U. S. C. 352a) is hereby repealed; but such repeal shall not affect the power of any Federal Reserve bank to carry out, or protect its interest under, under agreement theretofore made or transaction entered into in carrying on operations under that section. RETURN OF FUNDS TO TREASURY SEC. 202. (a) Within sixty days after the enactment of this Act, each Federal Reserve bank shall pay to the United States the aggregate amount which the Secretary of the Treasury has heretofore paid to such bank under the provisions of section 13b of the Federal Reserve Act; and such payment shall constitute a full discharge of any obligation or liability of the Federal bank to the United States or to the Secretary of the Treasury arising out of subsection (e) of said section 13b or out of any agreement thereunder. (b) The amounts repaid to the United States pursuant to section 202, and any remaining balance of the funds set aside in the Treasury for payments under section 13b of the Federal Reserve Act shall be covered into miscellaneous receipts. AUTHORITY TO SELL ASSETS TO NATIONAL INVESTMENT COMPANIES SEC. 203. Any national investment company organized under this Act may purchase from any Federal Reserve bank, and any Federal Reserve bank is authorized to sell to any such company, at such reasonable price ass may be agreed upon, any or all of the assets heretofore or hereafter acquired by such Reserve bank under the provisions of section 13b of the Federal Reserve Act. TITLE III-MISCELLANEOUS PROVISIONS PENALTIES SEC. 301. Title 18, United States Code, section 1014, is amended by inserting the phrase "a national investment company organized under the National Investment Company Act of 1957," after the words "National farm loan association,". GEOGRAPHIC APPLICABILITY SEC. 302. The authority provided in this Act shall be applicable in the United States, including the District of Columbia and the Territories and possessions. RIGHT TO AMEND THIS ACT SEC. 303. The right to amend, alter, or repeal this Act is hereby expressly reserved. [S. 2184, 85th Cong., 1st sess.] A BILL To amend the Small Business Act of 1953 to direct the Small Business Administration to make extensive, comprehensive, and continuing studies of certain problems of small business and to file semiannual reports on the results of such studies Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Small Business Act of 1953, as amended, is hereby amended by adding the following new section: "226. (a) The Administration is directed to make extensive, comprehensive, and continuing studies to accomplish the following aims: (1) to identify and define the principal problems which affect or may affect the growth, stability, and competitive strength of the small business segment of the economy, (2) to identify both the strengths and weaknesses inherent in small business concerns, (3) to identify the fields of endeavor in which small business is best equipped to compete and prosper, (4) to gather information which can be used by small business to improve its competitive strength and to expand its contribution to the national economy, and (5) such other objects as the Administrator may deem desirable in the interests of small business. In making such studies the Administration shall distinguish and give separate consideration to the problems of small business concerns engaged in the manufacturing or distributive or service trades. The Administration also shall give consideration to, among others, the effect on such small business concerns of inflation and deflation, availability of credit, availability of materials and supplies, cost factors, labor problems, management and personnel problems, the development of new manufacturing techniques and equipment, the development of new merchandising methods, research and development problems, automation, nationwide distribution, advertising, atomic development, foreign competition, Government regulation including the activities of regulatory agencies, taxes, and any other factors which may affect the competitive strength and growth of small business. "(b) In making such studies the Administration is authorized and directed: (1) to utilize on a reimbursable basis the information, services, and facilities of any Government agency, and (2) to employ by contract private persons and organizations to conduct appropriate studies, perform research or direct programs determined by the Administration to be necessary and appropriate under subsection (a) of this section. "(c) The Administration shall make a report on December 31 and June 30 of each year to the President, the President of the Senate, and the Speaker of the House of Representatives on the activities conducted by the Administration under this section. Such report shall include a description of studies undertaken by the Administration pursuant to this section, a detailed description of the results of such studies as they are available, a statement of future programs and studies planned by the Administration and such other information, comments, and recommendations as the Administrator may deem appropriate." [S. 2185, 85th Cong., 1st sess.] A BILL To amend the Small Business Act of 1953 to authorize the Small Business Administration to make loans to local private nonprofit organizations formed to assist, develop, and expand the economy of the area Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 207 of the Small Business Act of 1953, as amended, is hereby amended by adding the following new subsection: "(c) The Administration is empowered to make loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) to local private nonprofit organizations (including industrial foundations, development credit corporations or similar groups) formed to assist, develop, an expand the economy of the area: Provided, however, That all such loans shall be of such sound value or so secured as reasonably to assure repayment: And provided further, That no such loans including renewals and extensions thereof may be made for a period or periods exceeding twenty years." [S. 2286, 85th Cong., 1st sess.] A BILL To assist State programs for small business, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 207 of the Small Business Act of 1953, as amended, is hereby amended by adding the following new subsections: "(c) The Administration is empowered to purchase investment securities issued by State chartered development credit or finance corporations formed to assist, develop, and expand the economy of a State. The Administration shall not purchase investment securities in an amount in excess of the amount of such securities which are held by purchasers other than the Administration, but in no event shall the Administration purchase more than $5,000,000 of investment securities in any one State. Investment securities purchased by the Administration shall bear interest at a rate not less than the total of one-quarter of 1 per centum per annum added to the rate of interest paid by the Administration on funds obtained from the Secretary of the Treasury as provided in subsection (d) of this section, and shall have maturity dates of twenty years or less. The term 'investment securities' as used in this subsection shall mean obligations evidencing the indebtedness of any State chartered development credit or finance corporation in the form of bonds, notes, and/or debentures as may be further defined by regulations of the Administration. "(d) In order to finance activities under subsection (c) of this section, the Administration is authorized and empowered to issue to the Secretary of the Treasury, from time to time and to have outstanding at any one time, notes and other obligations in an amount not exceeding $27,500,000. Such obligations shall be in such forms and denominations, have such maturities and be subject to such terms and conditions as may be prescribed by the Administration, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States of comparable maturities as of the last day of the month preceding the issuance of such notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Administration to be issued hereunder, and for such purpose the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Funds borrowed under this section and any proceeds shall constitute a revolving fund which may be used by the Aministration in the exercise of its functions under subsection (e) of this section." SEC. 2. Effective one year after the date of enactment of this Act, section 13b of the Federal Reserve Act (12 U. S. C. 352a) is hereby repealed; but such repeal shall not affect the power of any Federal Reserve bank to carry out, or protect its interest under, any agreement theretofore made or transaction entered into in carrying on operations under that section. Within sixty days after the enactment of this Act, each Federal Reserve bank shall pay to the United States the aggregate amount which the Secretary of the Treasury has heretofore paid to such bank under the provisions of section 13b of the Federal Reserve Act; and such payment shall constitute a full discharge of any obligation or liability of the Federal bank to the United States or to the Secretary of the Treasury arising out of subsection (e) of said section 13b or out of any agreement thereunder. The amounts repaid to the United States pursuant to this section and any remaining balance of the funds set aside in the Treasury for payments under section 13b of the Federal Reserve Act shall be covered into miscellaneous receipts. SEC. 3. Subsection (b) of section 207 of the Small Business Act of 1953, as amended, is amended by adding the following new subparagraph: "(6) to make grants to any State government, or any agency thereof, State chartered development credit or finance corporations, land-grant colleges and universities, and colleges and schools of business, engineering, commerce, or agriculture for studies, research, and counseling concerning the managing, financing, and operation of small business enterprises and technical and statistical information necessary thereto in order to carry out the purposes of subparagraph 4 of this section by coordinating such information with existing information facilities within the State and by making such information available to State and local agencies. Only one such grant shall be made within any one State in any one year, and no such grant shall exceed an aggregate amount of $40,000. Not to exceed $2,000,000 annually shall be made available from the revolving fund provided in section 204 (b) of this Act for the purposes of this subpara graph." (The departmental reports referred to follow :) SMALL BUSINESS ADMINISTRATION, OFFICE OF THE ADMINISTRATOR, Hon. J. W. FULBRIGHT, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SENATOR FULBRIGHT: Further reference is made to your letters of January 14, 1957, requesting the comments of this agency on S. 55, S. 246, and S. 300, all bills "to give the Small Business Administration permanent status." The Small Business Act which authorizes the establishment of the Small Business Administration was passed by the Congress in 1953. The original legislation provided that all authority under the act would terminate June 30, 1955. In that year, Congress amended and extended the act to July 31, 1957, at which time this law will terminate. Experience under such temporary legislation has revealed a number of difficulties which seriously hamper the efficient operation of the Small Business Administration. These liabilities do not appear to be balanced by the advantages, if any, of a termination date. This is particularly true since the agency may at any time be terminated by Congress if it so desires. It appears, for example, that some business organizations and Government agencies tend to regard SBA programs as temporary expedients. As the expiration date of the Small Business Act approaches, we believe some banks hesitate to join with the agency in participation loans. This hestitation may be based on the fear, among others, that a bank committed to a long-term loan will incur unanticipated expenses arising out of the shift of responsibilities from SBA to a successor agency. Government agencies, too, may be reluctant to embark on longer range programs with SBA because they may find themselves burdened with additional duties which they are not prepared to assume if SBA should be terminated. A short-range temporary agency encounters personnel problems which can be alleviated by longer tenure. The demand for SBA loans has almost doubled within the past year and it is anticipated that this sharp increase will continue into the future. It has been difficult to obtain a sufficient number of qualified financial specialists to carry forward the Agency's financial assistance program. If one trained employee is lost today, he may be replaced only with extreme difficulty because such employees are not attracted to a Government agency operating under a termination date effective in the near future. For the same reason there is no incentive for longer range training programs to increase the efficiency of the agency. SBA would benefit from a policy of temporary transfer of employees between regions in order to exchange ideas and develop better techniques; but the expenses and inconveniences of such job rotation do not appear to be justified for a short-range program. It is clear that the Small Business Administration will have important and continuing responsibilities in any defense program. However, integration of the Small Business Administration into national defense planning is made difficult because of the temporary nature of the agency. And finally, experience has indicated that better relations with the business world can be established if it is clear that the Administration's small business program is a continuing one. S. 1789, a bill to further amend the Small Business Act of 1953, introduced by Senator Thye and others, has been referred to your committee for consideration. This bill establishes the Small Business Administration as a permanent agency and materially strengthens the present Small Business Act. I recommend, therefore, that your committee give favorable consideration to the enactment of S. 1789. The Bureau of the Budget has no objection to the submission of this report. Sincerely yours, WENDELL B. BARNES, Administrator. Hon. J. W. FULBRIGHT, SMALL BUSINESS ADMINISTRATION, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SENATOR FULBRIGHT: This is in further reply to your letter of January 24, 1957, requesting my views and comments on S. 244, a bill to authorize loans by the Small Business Administration to alleviate unemployment in areas of substantial labor surplus. S. 244 would enlarge the present authority of the Small Business Administration to make disaster loans and would authorize such loans in those areas which the Secretary of Labor determines to be an area of substantial labor surplus. The financial assistance program contemplated in S. 244 in general is similar to that proposed in S. 1433, the Area Assistance Act. However, S. 1433 is an integrated program designed to deal with the problems of persistent unemployment by utilizing the resources of several Government agencies. This approach would be more effective in meeting the needs of the surplus labor areas referred to in S. 244; therefore, S. 1433 is recommended over S. 244. For the foregoing reason, I do not favor the enactment of S. 244. WENDELL B. BARNES, Administrator. SMALL BUSINESS ADMINISTRATION, Hon. J. W. FULBRIGHT, OFFICE OF THE ADMINISTRATOR, Chairman, Committee on Banking and Currency, United States Senate, Washington, D. C. DEAR SENATOR FULBRIGHT: Further reference is made to your letter of January 15, 1957, requesting the comments of this agency on S. 545, a bill relating to the Loan Policy Board of the Small Business Administration. S. 545 would amend the Small Business Act of 1953, as amended, by deleting section 204 (d) and thereby abolishing the Loan Policy Board of the Small Business Administration. This Board is composed of the Administrator, Small Business Administration, who serves as Chairman, the Secretary of the Treasury and the Secretary of Commerce, or their designees. The Board is charged with the responsibility for establishing general policies, particularly with reference to the public interest, which govern the overall operation of the Small Business Administration's financial assistance program. The Loan Policy Board performs an essential function for SBA by establishing policies which assist the Small Business Administration to meet the credit needs of small concerns. In addition, the Board provides a means for coordinating this agency's lending policies with those of other Government departments. The Board does not supervise the administrative activities of the Small Business Administration nor does it take any part in its management. The Board functions only in developing the overall lending policy of the agency. The Small Business Administration in lending public moneys must be guided by considerations of the public interest. The determination of what constitutes the public interest can best be made by the collective judgment of Government representatives who have substantial responsibilities in the business and fiscal affairs of the Nation. I have found the Loan Policy Board to be of immeasurable assistance in the administration of SBA's lending program. Its deliberations and actions have been marked by a spirit of cooperation and harmony. I, therefore, do not recommend any legislative changes in the Small Business Act which would eliminate the present Loan Policy Board. S. 1789, a bill further to amend the Small Business Act of 1953, introduced by Senator Thye and others, has been referred to your committee for consideration. This bill establishes the Small Business Administration as a permanent agency, materially strengthens the present Small Business Act, and retains the Loan Policy Board. I recommend that your committee give favorable consideration to the enactment of S. 1789. The Bureau of the Budget has no objection to the submission of this report. Sincerely yours, WENDELL B. BARNES, Administrator. |