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SMALL BUSINESS ACT OF 1950

THURSDAY, JUNE 22, 1950

UNITED STATES SENATE,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D.C. The Committee met pursuant to call, at 10 a. m., in room 301 Senate Office Building, Senator Burnet R. Maybank (chairman) presiding.

Present: Senators Maybank, Robertson, Sparkman, and Capehart. Also present: Senator Benton.

The CHAIRMAN. I would first like to make a short statement for the record. There have

been several conflicting statements about the hearing on these bills. That was due to the fact that there have been many changes in the procedures of the Policy Committee of the Senate as to what is to be done in this session.

On yesterday it was decided to bring up the tax bill, that is, the removal of the excise taxes and some form of taxation otherwise to replace those taxes if they should be removed.

I notice by the paper, and also in the Congressional Record, Senator George thinks we will probably have to have 2 weeks of hearings on it after it comes over from the House.

Speaking only for myself, it is my judgment it is going to take quite a little while in the Senate to get the so-called tax bill through.

So, as chairman of this committee if the other members of the committee do not concur with me, of course that is their business, and I will be guided by what the majority says—but it is my judgment in view of the fact that the Congress is not going to recess at any time shortly, we will have ample time this year to complete hearings on all of these small-business bills, S. 529, S.2943, S. 2947, S. 2975, S. 3386, and S. 3625, which I am going to put in the record, and on which we are going to start hearings today.

(The bills referred to follow :)

[S. 529, 81st Cong., 1st sess.) A BILL To promote maximum employment, business opportunities, and careers in a free

competitive economy Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the “Veterans Economic Development Corporation Act of 1949.”

STATEMENT OF OBJECTIVES

SEC. 2. (a) The purposes of this Act are

(1) to create a corporate entity charged with the direct responsibility of promoting the interests of veterans who are unemployed, veterans who had no employment prior to their war service, veterans who have no particular occupation, disabled veterans, the dependents of disabled veterans and the

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dependents of those who gave their lives to preserve our country, so as to enable them partially to recoup losses in time, seniority, and opportunities, and in financial and technical advancement, sustained by them as a result of their service in the armed forces by aiding them in their establishment in gainful occupations and careers in business, industry, trades, professions, agriculture, foreign trade, scientific development, research and education under our system of competitive free enterprise without displacing others;

(2) to utilize unused facilities and surpluses throughout the Nation and abroad that are suitable and can be employed profitably to afford opportunities for unemployed veterans, to help reduce the backlog of demand for goods and services, and to help meet the shortages and increasing new demands throughout the world for American goods and services.

(3) to create profitable business, professional, and occupational self-sufficient opportunities for veterans toward reducing to a minimum the need for unemployment compensations and bonuses;

(4) to foster an ever-expanding economy and prosperity toward preserving our system of government, our freedoms and our national security by utilizing fully our veterans who were selected from the cream of the crop of American manhood and womanhood;

(5) to assist qualified veterans engaged in useful and profitable enterprises, services, professions or trades in other countries, thereby cultivating those countries to become increasingly our friends and customers ;

(6) to stimulate profitable activity so as to attract the investment of private-risk capital in enterprises within areas in industry, business, agriculture, service trades, transportation, education, foreign trade, and in scientific fields, which in their present state of development do not attract the investment of such capital toward increasing employment of veterans;

(7) to assist State, community, and private agencies in financing selfliquidating projects which will utilize profitably the services of unemployed veterans ;

(8) to stimulate enterprises and projects where gainful work opportunities, occupational therapy, and self-reliant careers will be opened to disabled veterans;

(9) to invite public subscription to the funds of the Corporation in order that the people of the Nation may be partners in this interprise ;

(10) to stimulate the maximum utilization and development of abundant natural resources in all geographical areas within the United States, its Territories, and possessions, so as to afford opportunities for veterans and to enrich the Nation; and

(11) to facilitate the establishment of necessary, useful, and profitable new enterprises in the various communities of the Nation that will insure the veterans against unemployment in recessions or depressions and to assure the fullest possible development of all our Nation's peacetime resources to stimulate an ever-expanding base of our national economy for the increasing

benefit of all our people. (b) Nothing contained in this Act shall be construed to authorize the Corporation created under section 5 hereof itself to engage in the operation of any plant, facility, or other business undertaking.

DEFINITIONS SEC. 3. As used in this Act

(a) The term “veteran” means any person who has served as a member of the armed forces of the United States during any war in which the United States has been engaged and who has been separated from such service under conditions other than dishonorable, and includes a dependent of a disabled veteran and a dependent of a person who died while serving as a member of the armed forces or as a result of injuries incurred or illness contracted while serving as a member of the armed forces.

(b) The term "Corporation” means the Veterans' Economic Development Corporation created under section 5 of this Act.

FUNCTIONS OF THE CORPORATION

SEC. 4. The Corporation is empowered

(a) to make loans to veterans who are engaged in agriculture or in a business, trade, or profession, or who desire to engage in agriculture or in a business, trade, or profession, for the purpose of enabling them to acquire facilities, including land and buildings, equipment, and supplies, or to obtain necessary working capital;

(b) to make loans to veterans or to other persons who furnish such assurances as the Board of Directors may require that the proceeds of such loans will be used in a manner which will furnish substantial employment opportunities for veterans through the establishment of new businesses, the expansion of existing businesses, the construction or operation of multiple tenancy industrial structures or the conversion of existing plants or other structures for such uses, the furnishing of technical, research, business, accounting, or other services to small business enterprises, the conduct of industrial and other research designed to provide new and increased employment, or through other means;

(c) to make loans to municipalities or other public bodies for the construction of needed self-liquidating public works, where such municipalities or other public bodies furnish such assurance as the Board of Directors may require that such construction will furnish substantial employment to, and otherwise inure to the benefit of, veterans or their families ;

(d) to make loans to educational institutions, including trade schools, where it is shown to the satisfaction of the Board of Directors that a shortage of facilities exists which impedes the educational program provided

der title II of the Servicemen's Readjustment Act of 1944 as amended, and that the proceeds of such loans will be used to make additional educational facilities available to veterans ;

(e) to make loans to veterans or other persons who furnish such assurance as the Board of Directors may require that the proceeds of such loans will be used in the construction or acquisition of housing for veterans and their families;

(f) to render technical advisory service to applicants for, and recipients of, loans under this Act, including the furnishing of information concerning business, vocational, and professional opportunities, methods and techniques, and other matters which, in the opinion of the Board of Directors, will contribute to the soundness of the projects or enterprises for the purpose of which loans are made, in the rendering of which service the Corporation shall utilize, wherever possible, the existing informational, research, technical, and other services and facilities conducted by other departments and agencies of the Government;

(g) to conduct such studies, investigations, research, and planning as may be necessary to enable it effectively to provide the advisory and other services authorized under paragraph (f) and otherwise to carry out its functions under this Act;

(h) to perform, upon request of the Administrator of Veterans Affairs, any of the functions or powers conferred upon the Administrator under title III of the Servicemen's Readjustment Act of 1944, as amended;

(i). to cooperate with the War Assets Administration or its successor, and with agencies which own or are designated to dispose of surplus property, to make surveys from time to time, and to bring to the attention of such agencies the needs and requirements of veterans and any cases or situations which have resulted in or would effect discrimination against veterans in the purchase or acquisition of surplus property by them and in the disposal thereof by the agencies ;

(j) to purchase any surplus property for resale to veterans, upon credit or otherwise, when in the judgment of the Board of Directors such disposition will aid in carrying out the purposes of this Act; and

(k) to guarantee loans made by banks or other lending institutions, the proceeds of which are used for any of the purposes for which the Corporation

is authorized to make loans under this section. Loans made by the Corporation under this section shall be made upon such terms and conditions as the Board of Directors shall deem reasonable and necessary (a) to enable the Corporation to carry out its functions under this Act without financial loss to the United States, and (b) to make certain that the proceeds of such loans will be used only for the purposes for which made and in a manner consistent with the objectives of this Act. The Corporation is authorized, upon application by a bank or other lending institution and upon such terms and conditions as the Board shall deem reasonable and necessary, to sell, transfer, and assign to such bank or lending institution any note, mortgáge, or other evidence of indebtedness arising out of any such loan and any rights of the Corporation in connection therewith.

THE CORPORATION

SEC. 5. There is hereby created a body corporate under the name “Veterans Economic Development Corporation” (hereinafter referred to as the “Corporation"). The principal office of the Corporation shall be located in the District of Columbia, but the Corporation may establish such branch offices in other places as may be determined by the Board of Directors.

CAPITAL STOCK

SEC. 6. The Corporation shall have a capital stock of $500,000,000, subscribed for by the United States through the Secretary of the Treasury, payment for which shall be subject to call in whole or in part by the Board of Directors of the Corporation. For the purpose of enabling the Secretary of the Treasury to make payment for such capital stock, the Secretary is authorized to use as a public-debt transaction the proceeds from the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under the Second Liberty Bond Act, as amended, are extended to include any purchases of the Corporation's capital stock hereunder. Receipts for payment by the United States for or on account of such capital stock shall be issued by the Corporation to the Secretary of the Treasury and shall be evidence of the stock ownership by the United States.

THE BOARD OF DIRECTORS

SEC. 7. The management of the Corporation shall be vested in a Board of Directors consisting of seven members, not more than four of whom shall be members of the same political party, to be appointed by the President by and with the advice and consent of the Senate. The term of office of directors shall be four years except that (1) the terms of office of the directors first appointed shall run from the date of enactment hereof and shall expire, two at the end of the second year, two at the end of the third year, and three at the end of the fourth year; and (2) a director appointed to fill a vacancy caused by the death, resignation, or removal of a director prior to the expiration of the term of such director shall be appointed only for the remainder of such term. The Board of Directors shall select a chairman and a vice chairman from among the members of the Board. The Chairman shall receive compensation at the rate of $17,500 per annum and the Vice Chairman at the rate of $16,000 per annum. The other members of the Board shall receive compensation at the rate of $15,000 per annum. A majority of the membership as constituted at any time shall constitute a quorum, and vacancies in the membership shall not affect the power of the remaining members to execute the functions of the Board.

CORPORATE POWERS

SEC. 8. The Corporation shall have power to adopt, alter, and use a corporate seal, which shall be judicially noticed ; to make contracts; to lease such real estate as may be necessary for the transaction of its business; to accept gifts or contributions or services, money or property, real or personal; to sue and be sued, to complain and defend, in any court of competent jurisdiction, State or Federal; to select, employ, and fix the compensation in accordance with the civil-service laws and regulations and the Classification Act of 1923, as amended, of such officers, employees, attorneys, and agents as shall be necessary for the transaction of the business of the Corporation; to define their authority and duties, require bonds of them and fix the penalties thereof, and to dismiss at pleasure such officers, employees, attorneys, and agents; and to prescribe, amend, and repeal, by its Board of Directors, bylaws, rules, and regulations governing the manner in which its general business may be conducted and the powers granted to it by law may be, exercised and enjoyed, including provision for such committees and the functions thereof as the Board of Directors may deem necessary for facilitating its business under this Act. The Board of Directors of the Corporation shall determine and prescribe the manner in which its obligations shall be incurred and its expenses allowed and paid. The Corporation shall be entitled to the free use of the United States mails in the same manner as the executive departments of the Government. The Corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, including any field service thereof, or by

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