THE KREMLIN REACTS TO A SOLAR PLEXUS BLOW

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000200160040-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 16, 2016
• Document Release Date: March 30, 2004
• Sequence Number: 40
• Content Type: OPEN

 1413 I 'F%PRI-QOA66RoODWJD160040-8
i;:!.tn!in have shown us that the whole purps.e of establishing the
v hat fact. new system, to provide the kind of serv-
ni}' tom :nipression, based oil the Ice that is so much needed and not now
-11 to the;e messages over Radio ,available. This being true, there are
ntlon. that the regime in power is l two features of the bill which, to my
i raid. The Kremlin is as afraid, as we t mind. are essential to the success of this
!i ix' hopeful, that the peoples of the 1 system. First, financing decisions will
filet Union will once again find a way 1 be made by local investment assoeia-
awerar'v and freedom and help to tions. comprised of local citizens who
.,,Iii :t better world. Let us hope that will back their judgments with a por-
\aInpie et by the Constituent As- tion of their own money.
nt,i} mill serve as a beacon of hope Second. provision is made for local
the people of Russia out of the Investment groups to build up private
of dictatorship into the light capital In the system, to return the
::bc:'ty. Cover?nment funds and take over com-
plete ownership and management of the
system. This it seems to me is the main
','Al,'. Bt'Sltii'SS: AN INVESTMENT objective. and the only real solution to
l : AMERICA'S STRENGTH the problem. What we are trying to do
,Mr. ROOSEVELT tasked and was here Is to i.tet started a private-enter-
_,ven permission to extend his remarks prise service which will stand on its
:,t this point in the RsCOsD.1 own feet and make a profit by supply-
\Ir ROOSEVELT. Mr. Speaker, yes- ins a needed service where none now
-he Small Business Committee intro-
,. :r-.(l i bill in ',vhich I have both a deep
fn r,u:tal concern and strong Intellectual
ror.virtfOz'is. This is the bill to create a
:t.(-in ni mall Business Capital banks.
I tm hapii>_ to have been able to par-
:r:nate ~a ttis.drafting of the bill to
c:i rate a system tsf, Small Business Capi-
t:al banks and to the work and study
a n.ch came before. Since the rules of
the I louse do not pcrmit'Members to join
the !r.trodnction of a bill, but require
.,at , .,en Member who would put his
i;ame to a bill introduce it in- his own
me. I '.,aye : o introduced thewbill to
care a system ui Small Business Capi-
ial banks. i endorse the bill completely.
U. presents a most felicitous solution to a,
most unhappy problem. In fact, I can-
nit rr ?d1 a bill so satisfying as this bill.
i sincerely hope that both Its terms and
its liich principles will be acceptacle to
timost everybody. And yet it contains
is compromises; it does not ask for haif-
measures. And what is most satisfaC-
+.ory, the bill meets head on a problem
which hangs like an ominous cloud over
or country.
"VIMO-L OF SMALL SUSINLSS CArrrAL 1AW S
the Small Business Capital Bank Sys-
!,,m but one purpose. That is to
:e.aIC a practical and workable means
.., le'r+'uv smail business may fairly bid
,-r investment funds. Thus what the
.1111 hoc's is ro . et up a system of Invest-
-lent banks which will do for small firms
.hat the investment bankers and the
-united ::ecui sties markets such as are
? ittt red at Nall Street do for big firms.
riot:` this vstem of Small Business
..ti,it.tl tmiiki, a small firm may obtain
t stritent hands in either of two ways.
inns- obtain loan funds, under speci-
d Tins for r el'aytnent and at a spe-
'e of ii;tcrest. Or the small firm
--trick :_::G
r~..ueetg r.ia~ it,ll stood to -
%
c` ... ni a - . .
S
:P: r:c?co .;.alai .......
r naynnent th;.a :C
'..1110114 to
inciued, that i.:
Approved For Release 24P
in recent Years the Federal Govern-
ment has operated llevernl programs for
making loans to small firms, such as
In the Smaller War Plants Corporation.
the RFC. the Small Defense Plants
Administration and now the Small Busi-
ness Administration. But these have all
been stopgap measures, taken because
of the extreme urgency of the problem.
A Federal bureau making loans to in-
dividual small businesses was never in-
tended. I think. to offer any permanent
solution to the problem.
Now, how will the funds to capitalize
these small business capital banks be
raised? Some Federal funds are called
for-approximately $150 million, which
-is a most modest amount considering
the purpose they are to serve. As has
been-.. pointed out, use of these will not
require. appropriations, and it will not
Increase,the Federal debt.
The bill"calls for the transfer of cer-
tain funds from the Federal Reserve
System whisk are not now earama in-
terest. These consist in part of the un-
committed portion - of the funds pro-
vided in 1934, under section 13 obi of
the Federal Reserve Act: from which the
reserve banks were to make loans to
small firms. The Federal Reserve
Board feels that the Federat..Reserve.
System is the wrong agency to'gperati,
this prow ram, and the board has recom-
mended to Congress. within recent
months, that the Federal Reserve Sysa,
tem. be relieved of both the program
and the funds. It is entirely appropri-
ate, then. that the funds be transferred
to a place where they will be used a
carry out the objective for which th. ?1
were provided.
in addition. the bill calls for trun -
icr of $10 million from the surpl'..,
-'count of each of the Federal Reserve
'hese accottn LS. -.is I :..nd,r?tand
teen accumulated riots ni.t rest
: r:: r_h.atcu titate3 Government
i,n i.enl for comparison. I will
itecosn a summary table of
its a :'.rates t iovernmeiit's appro-
:-:.liar:r iml celnm.ttients for foreign
.d.
r.
arr
on_
--------------------- ---
I .) 01111,an for the : m.u1 Ti ,lc....
?'al :."k },.tern wnu!ry ;,tn?!..,'
:.3 e! ;xrcert of alx,ve total.
.... ,. CCI,I 4E-.3 NZEIM Op1'URTI -7t'rY
HANDOUT
ev i .'hould like to dwell 1ir;;?;1r
::aturt' of the problem which
^r:dcd to solve. The probh?rn i,; i
.:w one. We have known or a In
...e that there is a need for some in:
tonal mechanism whereby nauall fir
ri bid for the available investni+
. ?mall firms with good earn
:r?-rds and bright prospects c-nl
:e
_%t any reasonable cost-t!
Jars who would invest in their ::t(
71 share In the fortunes of the
r can the investors-at reason;;
Ind and get to know the
ns. The same is true with refelt?!
sal where the risk Ls :.n.
or the term for repays'
u is the case (f bit its we
rcr.11 banks can make. [ills
iiironic condition that is ..
o the whole community of
both old ones and new of,;,:,
nlnded. The subcommit! 0 1.1
:art Business Committee of '. ?riic,
.air.nan has run up a:;ain
.,,a chshcartening fact ever; _
rlled.
::robiem we have inresti
....-k at least In part. to th.s p:
:,staining adequate amount:;
The problem is rapidly
wig ..ore acute!, and It will
continua-A0 so -very year. almost every mot
_. :a._U3 more capital equipment fu
Lusin,ass ilrm to carry on a given volt:
of t;t:sinesis. to sal nothing of increzs
:-and - xpanding the volume. More i
mines are needed, more office vol.
ntent, and more labor-saving devlee~
all lands. This is as it should be.
one would wish our business enterpr
to t:, run by hand methods. Yet dui
the last several years of business p.
with business firms generally
?'est#ng in unprecedented amounts
apitjl..f :_nodernization and expunr
;tali 1 xt... have not been able to I
pace. Theg could not obtain the ne
::;fry capital-funds. And small-busil
allures have berm Increasing.
,'L'A ECONOMIC s'i'exEX tat AT A CR1"5B1t0A
Dun & Bradstreet. reported 333 i
news failures last weft, which was
greatest number of fallbres in in
since 1940.
In the whole of last yerr.- there
13.739 business failures accn, ding to
& Bradstreet's count. Also, accordir
Dun it Bradstreet's count these:
tares amounted to a failure :;ire
Approved For Release 2004/05/13 : CIA-RDP91-00965R000200160040-8