The Senate passed a bill designed to provide production materials and orders to small businesses. With a vote of 81 to 0, it was sent to the House for approval on April 1.

The goal is to create a Smaller War Plants Corporation that would exist under the War Production Board (WPB). A total of $100 million would be allotted to the corporation to assist small businesses with loans or advances. The money could then be spent on conversion, expansion, or working capital.

Chairman of the Senate Committee of Small Business, Senator James Murray, said that small business was “at the lowest ebb in the history of our country.”

Morris Kreider, a Pennsylvania hardware-store owner, has transitioned from selling goods to the public to producing parts for defense plants. Congress hopes to help people like him with its new small-business bill. Photograph by Marjory Collins, from Library of Congress.

Originally drafted by the Special Business Committee of the Senate, the bill was passed following a series of amendments. The amendment offered by Senator Josiah Bailey specified that the money provided to small businesses must only be used for the manufacturing of “articles essential to the national defense.”

Senator Bailey questioned the loan policies under the bill. “Five unknowns could lend money for any purpose, anywhere, absolutely without check,” he said. “Whose money is this, the people’s or Congress?”

Senator Prentiss Brown echoed the concerns about when small businesses would pay back their loans, but he said he agreed “to go along” with it. Brown stated that the majority believed the aid would help troubled small business and the war.

WPB chief Donald Nelson will appoint five directors to a board by that will focus on transitioning small businesses into war production. The new board will then have the power to approve loans for new plants and equipment under contracts obtained from the Army, Navy, or other agency.

In addition to the board, Nelson will appoint a special deputy to look out for the welfare of small companies. The Smaller War Plants Corporation is authorized to use small banks as financial agents.


“Senate votes $100,000,000 to help small business make war goods.” (1942, Apr 02). New York Times.

“Senate to act on small war plants today.” (1942, Apr 01). The Washington Post.

“Senate votes $100,000,000 agency to mobilize small business.” (1942, Apr 02). The Washington Post.

“Senate passes bill to speed war output of small business.” (1942, Apr 02). Wall Street Journal.