Outlook for Small Business in
1959 Considered Bright by SBA
Mm
mi
By A. ROBERT SMITH
Mail Tribune
Washington Correspondent
Washington (Special) The
outlook for small business
during the coming year is con-
KTsidered brieht
'"V, ?sby economists
Eiof the S m a 1 1
EBusiness
Administration
I who keep their
Ifinger on the
nation's econo
mic pulse.
They foresee
a p e r i o a oi
a Buhl imith greater swmi-
ity in the small business field
with a healthy decline in the
number of small business fai
lures. They doubt that credit
will be tightened any further
by actions of the Federal Re
serve Board in the coming
year. They believe the infla
tionary movement has slack
ened and will not show any
substantial acceleration in the
year ahead.
These forecasts plus the
fact that SBA is now in a
stronger position to offer fi
nancial assistance to small
business firms because of re
cent legislative action are in
marked contrast with the past
year when small business fai
lures hit a post-war high due
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to the recession
Estimate Failures
SBA estimates the number
of failures for 1958 will run
around 15.000, compared with
13,739 failures in 1957, 12,
676 in 1956, 10,969 in 1955,
11,086 in 1954 and 8,862 in
1953. The peak of failures was
reached last March when
1,495 firms folded.
General building contrac
tors who collapsed during the
building decline of the past
year or more, notably in resi
dential housing, accounted for
many of the small business
failures. During the first half
of this year, failures were
higher also in lumber and
lumber products, printing and
publishing, metalworking, re
tailers of furniture and home
furnishings, apparel and ac
cessories, auto dealers and gas
stations, SBA reported.
Two Relevant Factors
While critics of the admin
istration's now-a b a n d o n ed
tight money policy blame it
for the excessive failures, a
charge SBA economists don't
directly challenge, SBA points
out two relevant factors
which must me weighed in
evaluating what's been hap
pening to small business.
One Is that the average
number of failures in small
business enterprises over the
past 50 years has been be
tween 13,000 and 14,000 a
year so the 15,000 expected
failures of this year , is not
much out of line. This ave
r a g e, of course, includes
heavy failures during the
Great Depression, but it also
includes wartime years when
failures were few. Surprising
ly, failures during the Roar
ing Twenties were much high
er over 23,000 in 1922 and
in 1928, for example than to
day's collapses.
The second factor is that the
number of firms has increased
greatly. The number of con
struction firms nearly doubled
from 1946 (244,000) to 1957
(477,000). In 1946, there were
139 failures of construction
businesses, whereas last year
there were 2,105.
"Weeding Out" Period
In a broad sense, the past
year or two has been a "weed
ing out" period for the host
of new enterprises launched
after the end of World War
II when consumer demand
shot sky high. Only those en
joying some favorable econo
mic position or those strong
enough to withstand the on
set of a competitive economy
a buyers' market instead of
a sellers' m a r k e t are des
tined to survive.
Another factor making for
a prediction of greater econo
mic stability for small busi
ness in the period ahead is
that the average age of small
businesses in this country is
now about seven years, where
as after the war when so
many new enterprises were
started the average age was
only three years. This means
there is relatively more busi
ness experience guiding these
surviving successful com
panies.
Business Loans
During the period of reces
sion, an increasing number of
companies turned to SBA in
quest of credit. Applications
for business loans went from
about 300 to 400 a month to
800 to 1,000 a month. This,
SBA officials say, reflected an
insufficiency of available pri
vate credit from banks. SBA's
rate of approval of loan appli
cations now runs around 65
per cent, a slight increase.
SBA bumped against its
lending ceiling several times,
but Congress came to the
rescue to provide more funds.
SBA's revolving fund author
ization now has gone up from
$530 to $650 million, and the
amount that can be outstand
ing in business loans has been
increased from $305 to $500
million.
Congress also cut the maxi
mum interest rate from 6 to
5Vi per cent on SBA loans.
When banks participate in a
loan, the interest rate on their
share is not limited. The
maximum amount of a loan to
one firm was raised from
$250,000 to $350,000.
Permanent Federal Agency
SBA, moreover, is now a
permanent federal agency
under the act passed last July,
From its creation in 1953 un
til then, it was regarded ai a
temporary agency to provide
financial help to small firms
getting into defense work dur
ing the Korean war.
During the fiscal year,
which ended last June 30,
SBA made 4,014 business
loans amounting to $194,997,
000, plus 1,559 disaster loans
totaling $17,305,000.
But in July, August and
September, the number of
loans approved sharply in
creased over the same period
of the previous year, indicat
ing that small business firms
will be making use of SBA's
increased lending authority
this coming year. For Septem
ber alone the number of loans
approved was a third higher
than September last year,
Approved In Oregon
During the past year, Octo-
Ask us how to put the house in the picture
Chances are, if you're like most people, the
two important things you need to get a
home are money for a down payment and
a loan to make up the difference. Our asso
ciation specializes in helping you get both
these things. In fact, there's no more ideal
place you could go for home financing
help. And here's why:
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1. We know more about home
loans because we make more of
them last year, one out of every
three home loans throughout the
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2, Yon get friendly understanding- and
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S. You repay your loan just like rent. A
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4. While you're saving- for flit
down payment, your money
earns excellent returns, and is
insured up to $10,000 by the
Federal Savings and Loan In
surance Corporation, an agency
of the U. S. Government.
"Make YOUR Financing Problem OUR Problem"
SAVINGS tr LOAN ASSOCIATION
Sine. ISO
126 East Main
Medford
"Where You Are
Paid to Save"
Approximately 2,000 high
school and college students
from almost every state and
many fcTreign countries as
semble each summer for ar
tistic training at the National
Music Camp near Interlochen
in West Michigan.
ber, 1957, through September,
1958, SBA approved 81 loans
for firms in Oregon. The to
tal amount of these loans was
about $4.5 million, ranging
from a $4,100 loan for a
Myrtle Creek washing and
drying laundry service to a
$275,000 loan to the Oregon
Turkey Growers as Salem Tor
processing the big birds. The
smaller loan was entirely
from SBA, whereas the larger
of the two had the participa
tion of a local lending institu
tion for part of it.
Other Oregon firms to gain
approvals this past jear in
cluded: Jewett Office Supply,
Medford, $15,000; John's
Plumbing and Heating, Myrtle
Creek, $12,000; Myrtle Creek
Building Supply, $25,000;
George and Dean Lewis Log
ging company, Applegate,
$15,000; Gilman's Dairy Farm,
Inc., Medford, $10,000; Ber
nard T. Thompson. Medford
dentist, $15,000.
Fund Presented for
Purchasing Volumes
In memory of the late Mrs
Charlotte Collins, Dr. and
Mrs. Richard B. Stark of New
York City have presented the
Jackson County library with
a fund to purchase memorial
volumes.
Court Records
DISTRICT COURT
Dan O. Talbott. overload, $79;
insufficient binders, S15.
Haywood R. Calkins, failure to
stop. S10.
Vernon Buck, overload. $29.
James D. Whitely, overload, $170.
Dave W. Regan, violation basic
rule. $15.
Tibor J. Zsenbery, no muffler,
$15.
Augustine T. Lewis, overload,
$173.
Shirley R Kelly, failure to itop,
$10.
Robert J. Vaugh, racing on pub
lic highway, $30. .
Glen A. Branch, exceding pos
session limit of dark geese, $30.
Ruth K. Dean, violation basic
rule. $15.
Brewer, overheight
$15: (twice), $5.
Wilburn, failure to
James W.
and overload,
Harold W.
top. $10.
Douglas A:
lie rule, $15.
Harsh, violation b-
CIRCUIT COURT
Mabel F. Silver vs. Alva C. Sil
ver, divorce complaint.
Donna Jean Leaf vs. Chadwick
Oliver Leaf, divorce complaint.
Mr i. Collins own love of
poetry influenced the selec
tion of titles to be placed in
both the children's and the
adult collections 'of .the li
brary in her honor.
Younger readers .will- find
memorial bookplates naming
Mrs. Collins in four favorite
volumes by A. A. Milne:
"When We Were Very
Young," "Now We Are Six,"
"Winnie the Pooh," and "The
House at Pooh Corner."
The publication selected to
honor Mrs. Collins in the" ad
ult literature section is the
new and unusually fine "At
lantic Anthology of British
and American Poetry" com
piled by Edith Sitwell and
the Atlantic Monthly maga
zine staff. All selections nam
eed are now on order from the
publishers. " '
Several other books were
recently placed in the library
in memory of Mrs. Collins by
her son, Robertson E. Collins.
These include the three-volume
Players' edition of Shake
speare's complete works and
the prizewinning children's
For a bit of old Ireland,
there is the town of Erin,
Wis., Donegal Road intersects
Dublin Drive and Shamrock
Road crosses Emerald Drive.
New Jersey has 699 square
miles of inland water, com
prising more than 800 lakes,
ponds, bays and harbors.
books of the year, "Time of
Wonder," by Robert McClos
key and "Rifles for Watie,"
by Harold Keith.
MAIL TRIBUNE, Medford, Oregon, Sunday, October 2, 195S 7
Benson Says Economy
Moves Forward Again
Alma, Wis.-ajPB-Agriculture
Secretary Ezra Taft Benson
yesterday claimed the nation
al economy was moving for
ward strongly again because
the Eisenhower administra
tion avoided "extreme action
urged on it by panicky New
Deal-Fair Deal politicians." -
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