GOVERNMENT: Storm Help

When Small Business Administrator Wendell B. (for Burton) Barnes, 45, was vacationing with his wife and four children near Jacksonville, Fla. a fortnight ago, Hurricane Carol began kicking up off the Florida coast. Right away, Barnes packed his family into the car and headed north. He reached his desk just in time. One of Barnes’s major tasks is to make emergency loans in disaster areas. The morning after Carol smashed across the New England coast, Barnes declared disaster areas in six states (New York, Connecticut, Rhode Island, Massachusetts, New Hampshire, Maine).

Last week he opened emergency-loan offices in Providence, New Bedford, Mass., four other hard-hit cities, and flew off to New England to check on loan requests. Among them: a Kittery (Me.) lobsterman wanted $1,500 to replace his lost boat; a Providence clothing store wanted $10,000 to replace its ruined merchandise; a New Bedford cotton mill wanted $75,000 to repair wrecked machinery. At week’s end SBA offices were getting ready for more disaster loans for damage caused by Hurricane Edna (see NATIONAL AFFAIRS).

After the Storm. Coping with disaster is an important but infrequent duty for Wendell Barnes, who heads the first independent agency in U.S. history to serve the nation’s 4,000,000 small businessmen. An Oklahoma attorney and ex-small businessman himself, Wendell Barnes took over last November from William Mitch ell (no kin to Labor Secretary James Mitchell), whose tight-fisted policies had convinced businessmen that SBA loans were only for defense or what Mitchell considered “essential” civilian industries.

SBA helps businessmen in three ways: direct loans, getting Government contracts, technical aad management advice.

Congress, in cheating SBA 14 months ago, set up a revolving fund of $80 million for loans. But SBA avoids competing with private bankers, keeps its interest rate at 6% (v. about 3% for comparable private loans) and advises every applicant to try local banks first. If the bank can take part of the loan, SBA will take the balance. Its requirements for collateral are more lenient than those of private banks, but every borrower must prove his good character, have substantial money of his own invested, show that he can operate successfully. Says Barnes: “We don’t make a loan if there’s no chance for repayment.” In all, the agency has approved 731 loans (less than half the requests) for a total of $34,739,000.

Too Many Mice. Congress also directed SBA to help small firms get a bigger share of Government contracts. The meas ure of its success is that, despite the decline of defense spending, contracts to small firms have been going up. To keep the small businessman abreast of good management techniques. SBA has also put out 53 booklets on topics ranging from “How to Build Your Sales Volume” to “Care of Hydraulic Systems.”* Staff specialists help with individual problems, e.g., a paraplegic veteran looking for markets to unload his overproduction of white mice, a soda-fountain supplier looking for new confections to round out his line.

SBA has even worked out a plan to give small businessmen college courses in practical management.

*A brassiere manufacturer, evidently under some misapprehension, wrote for the SBA pamphlet titled “Packaging Pointers.”