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PARTICIPATION OF SMALL BUSINESS IN

FOREIGN TRADE AND FOREIGN AID

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A RESOLUTION CREATING A SELECT COMMITTEE TO
CONDUCT A STUDY AND INVESTIGATION OF THE

PROBLEMS OF SMALL BUSINESS

JULY 14 AND 15, 1959

WASHINGTON, D.C.

Printed for the use of the Select Committee on Small Business

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SELECT COMMITTEE ON SMALL BUSINESS

WRIGHT PATMAN, Texas, Chairman JOE L. EVINS, Tennessee

WILLIAM M. MCCULLOCH, Ohio ABRAHAM J. MULTER, New York

ARCH 4. MOORE, JR., West Virginia SIDNEY R. YATES, Ilinois

WILLIAM H. AVERY, Kansas TOM STEED, Oklahoma

H. ALLEN SMITH, California JAMES ROOSEVELT, California

HOWARD W. ROBISON, New York CHARLES H. BROWN, Missouri

EDWARD J. DERWINSKI, Illinois 1
BRYAN H. JACQUES, Staff Director
EVERETTE MACINTYRE, General Counsel
WM. SUMMERS JOHNSON, Chief Economist
IRVING MANESS, Assistant Counsel
JUSTINUS GOULD, Assistant Counsel
RICHARD L. MITCHELL, Assistant Counsel
MARIE M. STEWART, Clerk
JANE M. DEEM, Administrative Assistant
VICTOR P. DALMAS, Adviser to Minority Members

SUBCOMMITTEE ON FOREIGN TRADE AND FOREIGN AID

SIDNEY R. YATES, Illinois, Chairman JOE L. EVINS, Tennessee

ARCH A. MOORE, JR., West Virginia ABRAHAM J. MULTER, New York

EDWARD J. DERWINSKI, Illinois i
IRVING MẠNESS, Counsel
KATHERINE C. BLACKBURN, Research Analyst

1 Appointed to committee July 28, 1959.

II

CONTENTS

102
102

Testimony of—

Barnes, Wendell B., Administrator, Small Business Administration.-

Kearns, Henry, Assistant Secretary of Commerce for International

Affairs, accompanied by Loring K. Macy, Director of the Bureau of

Foreign Commerce; John C. Borton, Director of the Office of Export

Supply of the Bureau of Foreign Commerce; E.E. Schnellbacher,

Director of the Office of Trade Promotion; Robert E. Simpson,

Director of the Office of Economic Affairs; and Walter S. Shafer,

Director of the Office of International Trade Fairs.-

Mena pace, Hon. Robert B., Acting Managing Director, Development

Loan Fund
Perry, Hart, Deputy Managing Director, Development Loan Fund_-
Saccio, Leonard J., Deputy Director, International Cooperation Ad-

ministration, accompanied by Carl Flesher, Acting Deputy Director
of Private Enterprice, and Charles Richards, Director, Small Busi-
ness Office -

Waugh, Samuel C., President, Export-Import Bank-

Zenick, Manuel, development officer, Development Loan Fund --
Additional information-

Compilation of the mutual security program funds spent for nonmili-

tary commodities in the 312 years ending June 3, 1957_-

Credits authorized 1934 to March 31, 1959, inclusive, classified by

purposes, Export-Import Bank.----

Regulation 1 (as amended November 1957), International Coopera-

tion Administration --

Statement on advisability of a requirement to set aside for small busi-

ness a certain share of procurement financed under Development

Loan Fund --

Credits by size groups authorized on request of U.S. exporters or finan-

cial institutions, fiscal year 1959, Export-Import Bank..

73

49

102

3

181

52

ness in U.S. Foreign Trade, Department of Commerce_

Appendix H. Engineers employed by ICA-

Appendix I. ICA construction contracts.

Appendix J. Engineering firms used by Development Loan Fund -

175

177

178

179

403SU

XL
9/01 31150-200 NULB

BENDNO

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PARTICIPATION OF SMALL BUSINESS IN FOREIGN

TRADE AND FOREIGN AID

TUESDAY, JULY 14, 1959

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE No. 3 ON FOREIGN TRADE,

FOREIGN AID AND BASIC METALS OF THE
SELECT COMMITTEE TO CONDUCT A STUDY AND
INVESTIGATION OF THE PROBLEMS OF SMALL BUSINESS,

Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 1304, New House Office Building, Hon. Sidney R. Yates (chairman of the subcommittee) presiding.

Present: Representatives Yates, Evins, Multer, Brown, and McCulloch.

Also present: Irving Maness, counsel; Victor P. Dalmas, adviser to minority members, and Katherine C. Blackburn, research analyst.

Mr. YATES. The committee will come to order.

These are the hearings of subcommittee No. 3 of the House Small Business Committee, of which I am chairman, and Hon. Joe L. Evins, Hon. Abraham J. Multer, and Hon. Arch A. Moore are members. It has general jurisdiction over problems of small business in the fields of foreign trade, foreign aid, and basic metals.

At the outset of the 86th Congress, the subcommittee determined that it would place particular emphasis in its studies on the economic impact on small business in the international trade field. Billions of dollars have been spent through Federal aid programs.

Substantial purchases have been made by American companies in foreign plants, and private American investments abroad are constantly increasing. It would be well if we could learn the full consequences of the investment of American capital abroad in order to protect the interests of small business. It is important to determine whether opportunities exist in the foreign trade markets for small business and, if so, what are the obstacles precluding its participation.

It would appear that small business has not taken advantage of the profit potential in the foreign trade market and the opportunities for expansion.

This subcommittee, in its present studies, will attempt to determine why small business has not achieved its potential in foreign markets. We are interested in making a full and complete study of the consequences of the investment of private American capital abroad with a view to determining the extent of such investment, the changes which have occurred therein in recent years, and the effect on domestic industries—with particular emphasis on small business.

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