obtaining a fair share of Government contracts; and assistance to small firms with their management and technical production problems.

FINANCIAL ASSISTANCE

The lending program of the Small Business Administration is divided into three main functions: Providing small-business concerns with advice and active aid in their financial problems; extending needed credit to small businesses for working capital, expansion and other needs; and making loans to victims of floods, hurricanes and other disasters for the restoration or rehabilitation of damaged property.

The business-loan program has been marked by steadily increasing activity since the agency first began accepting applications on September 29, 1953. Of the total of 15,377 business-loan applications for $845,022,000 received through April 30 of this year, 37 percent were received in the first 10 months of the present fiscal year. Currently, slightly over 50 percent of all applications acted upon result in loan approvals.

At the beginning of the present fiscal year it was anticipated that an average of 350 business loan applications per month would be received. Instead, an average of 569 applications per month have been filed, reaching a high of 702 applications in March. Five hundred sixty-two applications for business loans were received in April. Because of this unanticipated increase in demand for business loans, it was necessary to ask Congress to increase the legislative limitation on the agency's business loans outstanding from $150 million to $230 million. This is in addition to the $215 million authorized for disaster loans. The revolving fund for loans was also depleted to the point where formal approval of business loans had to be discontinued from February 1 until April 22, when additional funds were appropriated and approvals could be resumed.

In the operatin of the disaster-loan program, 7,140 applications for $97,636,000 have been received resulting in 5,829 loan approvals for $63,126,000. The heaviest activity occurred in fiscal year 1956 during which, due to extensive floods in New England and on the west coast, 4,006 applications for disaster relief were received.

PRODUCTION AND TECHNICAL ASSISTANCE

The procurement and technical-assistance programs of the Small Business Administration are designed to assist small firms desiring to bid on Government purchases of supplies and services, and related subcontracting opportunities, and to help small-business concerns keep abreast of improved production, management, and marketing techniques.

Highlights and accomplishments of these programs are:

Set-aside actions earmarking Government purchases for exclusive award to small-business firms have increased progressively, both with respect to number of set-aside actions and contracts awarded. These set-asides are made by SMA jointly with the Department of Defense, and civilian procurement agencies, that have entered into this cooperative program.

authorized, draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, or (3) with intent to defraud participates, shares, receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, commission, contract, or any other act of the Administration, or (4) gives any unauthorized information concerning any future action or plan of the Administration which might affect the value of securities, or, having such knowledge, invests or speculates, directly or indirectly, in the securities or property of any company or corporation receiving loans or other assistance from the Administration shall be published by a fine of not more than $10,000 or by imprisonment for not more than five years, or both.

"SEC. 115. (a) The Administration shall not duplicate the work or activity of any other department or agency of the Federal Government and nothing contained in this Act shall be construed to authorize any such duplication unless such work or activity is expressly provided for in this Act.

"(b) All small business functions not heretofore transferred to the Small Business Administration by the Department of Commerce are hereby transferred upon the effective date of this Act.

"SEC. 116. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

"SEC. 117. There are hereby authorized to be appropriated such sums as may be necessary and appropriate for the carrying out of the provisions and purposes of this Act.

"SEC. 118. All laws and parts of laws inconsistent with this Act are hereby repealed to the extent of such inconsistency."

The CHAIRMAN. We have with us this morning Mr. Wendell B. Barnes. He informs me he has a ticket on a plane that leaves at 1:05 and wants to get away not later than 12:15. I told

Mr. PATMAN. Mr. Chairman, would we have another opportunity to question Mr. Barnes? Obviously we can't cover the entire bill this morning.

The CHAIRMAN. Yes. He said he would come back.

Mr. PATMAN. Today is Tuesday. If he leaves at 1 o'clock, when can we talk to him again?

The CHAIRMAN. In the latter part of this week.

Mr. BARNES. I would be back tomorrow and available the day after

tomorrow.

The CHAIRMAN. The day after tomorrow?

Mr. BARNES. Yes, sir.

Mr. PATMAN. That is all right.

The CHAIRMAN. We are here to consider the extension of the Small Business Act. We would hear you, Mr. Barnes. If you have a statement, you may proceed to read it.

Mr. BARNES. Thank you.

The CHAIRMAN. Without interruption, if you so desire.

Mr. BARNES. Thank you, Mr. Chairman.

STATEMENT OF HON. WENDELL B. BARNES, ADMINISTRATOR OF THE SMALL BUSINESS ADMINISTRATION

It is a pleasure to meet with this commitee to discuss in general the programs of the Small Business Administration and to comment on certain legislation now being considered by this committee.

I would like to emphasize the progress which the Small Business Administration has made in each of its major areas of service: Assistance to small-business concerns with their financial problems; financial assistance to disaster victims; assistance to small firms in

obtaining a fair share of Government contracts; and assistance to small firms with their management and technical production problems.

FINANCIAL ASSISTANCE

The lending program of the Small Business Administration is divided into three main functions: Providing small-business concerns with advice and active aid in their financial problems; extending needed credit to small businesses for working capital, expansion and other needs; and making loans to victims of floods, hurricanes and other disasters for the restoration or rehabilitation of damaged property.

The business-loan program has been marked by steadily increasing activity since the agency first began accepting applications on September 29, 1953. Of the total of 15,377 business-loan applications for $845,022,000 received through April 30 of this year, 37 percent were received in the first 10 months of the present fiscal year. Currently, slightly over 50 percent of all applications acted upon result in loan approvals.

At the beginning of the present fiscal year it was anticipated that an average of 350 business loan applications per month would be received. Instead, an average of 569 applications per month have been filed, reaching a high of 702 applications in March. Five hundred sixty-two applications for business loans were received in April. Because of this unanticipated increase in demand for business loans, it was necessary to ask Congress to increase the legislative limitation on the agency's business loans outstanding from $150 million to $230 million. This is in addition to the $215 million authorized for disaster loans. The revolving fund for loans was also depleted to the point where formal approval of business loans had to be discontinued from February 1 until April 22, when additional funds were appropriated and approvals could be resumed.

In the operatin of the disaster-loan program, 7,140 applications for $97,636,000 have been received resulting in 5,829 loan approvals for $63,126,000. The heaviest activity occurred in fiscal year 1956 during which, due to extensive floods in New England and on the west coast, 4,006 applications for disaster relief were received.

PRODUCTION AND TECHNICAL ASSISTANCE

The procurement and technical-assistance programs of the Small Business Administration are designed to assist small firms desiring to bid on Government purchases of supplies and services, and related subcontracting opportunities, and to help small-business concerns keep abreast of improved production, management, and marketing techniques.

Highlights and accomplishments of these programs are:

Set-aside actions earmarking Government purchases for exclusive award to small-business firms have increased progressively, both with respect to number of set-aside actions and contracts awarded. These set-asides are made by SMA jointly with the Department of Defense, and civilian procurement agencies, that have entered into this cooperative program.

From August 1953 through March 1957, a total of 19,123 joint set-asides has been earmarked for small business, from which 14,157 awards were made, resulting in 22,115 contracts to small firms. The value of the contracts awarded is approximately $1 billion. The number of set-aside actions increased 105 percent for the 9 months ending March 1957, compared with the same period of the previous year. Likewise, contract awards resulting from these set-asides for the same period increased twofold.

Increased emphasis placed by SBA on subcontracting is reflected in the 48 percent increase in the number of contacts made during the nine months ending March 1957, as compared with last year.

The number of firms assisted to bid on specific procurements increased 73 percent.

Additional sources of supply furnished for bidders lists on which small-business competition was needed increased 46 percent for the 9 months period being compared.

The number of applications received for certificates of competency increased 34 percent and COC's issued increased 11 percent over the 9 months period of the previous fiscal year.

The increased number of loans and other types of small-business cases involving technical production assistance, is observed in the 46percent increase in loan appraisals and other technical surveys related to these items.

There has been a continued increase in the number of requests received from small firms for Small Business Administration smallbusiness publications; 3,331,600 management and technical publications have been distributed since August 1953.

There has been a 93-percent increase in the number of requests to the agency for products assistance; 802 new products were listed in the agency's products list circular during the 9 months ending March 1957, and 2,956 requests were received by the agency for information and data on the items so listed.

The magnitude of the job of assisting the greatest possible number of small firms is highlighted when one considers that there are more than 4 million small business concerns, including approximately 300,000 small manufacturers. It has been necessary to give the greatest emphasis to activities which are far-reaching in scope and which benefit the largest possible number of small firms. The top priority in the procurement programs has been given to that phase which involves setting aside certain Government purchases for competitive award to small firms.

During the past year the personnel of the Small Business Administration have had to devote the maximum share of their time and energy in meeting an increased demand for the agency's services in the financial and technical assistance fields, and to making refinements in these programs which experience has indicated were necessary. However, in spite of the increased workload under our programs, we have worked diligently to find new ways to further the interest of small business.

Many of the activities of this Agency have been conducted in cooperation with other Government agencies with the Small Business Administration serving as spokesman and advocate of small business.

I would like to mention just a few of the principal areas in which we believe these cooperative efforts have been most effective.

By working with the Securities and Exchange Commission on the revisions of regulation A, we have promoted the extension of simplified registration of security issues to a larger number of small businesses interested in obtaining equity capital.

We have cooperated with the Fish and Wildlife Service of the Department of the Interior in establishing a fisheries loan program. We have worked with the Department of Agriculture on the drought-disaster loan program. I have been serving at the request of the Department of Agriculture as a member of the Committee of Rural Development Program and SBA is taking part in the activities planned by this committee.

With the assistance of the Medical Facilities Branch in the Department of Health, Education, and Welfare, we have developed a program of loans to privately owned hospitals, nursing homes and medical and dental laboratories.

In collaboration with the Departments of Commerce, Justice, Export-Import Bank, Federal Trade Commission, International Cooperation Administration, and Internal Revenue Service, we have developed and published much information of value to small business in the form of management and technical assistance publications, particularly in the fields of income taxation and opportunities for small business in international trade.

The Small Business Administration is giving its full cooperation to the General Services Administration in a comprehensive review of procurement policies and procedures of all Government departments and agencies.

The Small Business Administration and the Department of Commerce jointly are developing plans for a conference on technical research and development and distribution for the benefit of small business to be held in Washington, D. C., on September 24-26, 1957. It is our belief that this conference will carry out the President's objective for widening the opportunities for small business through research both in the field of product development and in the field of marketing and distribution.

The Small Business Administration is cooperating with the Bureau of the Budget in a study of the reports and statistics required of small business by the Government.

Let me turn now to the legislation pending before this committee Since the enactment of the Small Business Act of 1953, there have been several changes made by the Congress in SBA's existing authority. In 1955, for example, the agency's maximum lending authority was increased from $150,000 to $250,000 and was further extended by recommendation of this committee to include a program of pool loans whereby a group of small-business concerns could borrow in excess of $250,000 for the purpose of establishing facilities to produce and secure raw materials or supplies.

In 1955, the disaster-loan authority was extended to include disaster loans to victims of drought. The same legislation fixed a maximum interest rate of 3 percent on disaster loans and a maximum of the "rate prevailing in the area where the money loaned is to be used," but not to exceed 6 percent on business loans.

This act also provided for the Department of Defense to make monthly reports concerning the share of funds going for small